-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MP+V697JXrrZVPDM8QDRN86xzxzdqy6C83M6O+HgLNsMaZm0sGoXVsBahX77nv18 TSCqZtSHiDXQeA4019I+yw== 0001193125-03-061000.txt : 20031014 0001193125-03-061000.hdr.sgml : 20031013 20031014113118 ACCESSION NUMBER: 0001193125-03-061000 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 20031010 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20031014 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RADIANT SYSTEMS INC CENTRAL INDEX KEY: 0000845818 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 112749765 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-22065 FILM NUMBER: 03938534 BUSINESS ADDRESS: STREET 1: 1000 ALDERMAN DR STREET 2: STE A CITY: ALPHARETTA STATE: GA ZIP: 30202 BUSINESS PHONE: 7707723000 MAIL ADDRESS: STREET 1: 1000 ALDERMAN DRIVE STREET 2: STE A CITY: ALPHARETTA STATE: GA ZIP: 30202 8-K 1 d8k.htm FORM 8-K Form 8-K

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): October 10, 2003

 


 

RADIANT SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

 

Georgia   0-22065   11-2749765

(State or other

jurisdiction of

incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

3925 Brookside Parkway, Alpharetta, Georgia 30022

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: (770) 576-6000

 

 


(Former name or former address, if changed since last report.)

 



Item 5. Other Events and Regulation FD Disclosure

 

On October 10, 2003, Radiant Systems, Inc. (“Radiant” or the “Company”) entered into a definitive share exchange agreement (the “Share Exchange Agreement”) with Erez Goren, the Company’s current Co-Chairman and Co-Chief Executive Officer, in connection with the Company’s previously announced plan to split-off its enterprise software business. The Board of Directors authorized and approved the transaction based on the recommendation of a Special Committee of the Board of Directors comprised of the Company’s independent directors.

 

The Share Exchange Agreement provides that Radiant will contribute specified assets and liabilities of the Company’s enterprise software business, together with $4.0 million in cash, to a newly formed subsidiary, Wave Enterprise Systems, Inc. (“Enterprise”) and then transfer 100% of the shares of Enterprise to Mr. Goren in exchange for the redemption of 2.0 million shares of the Company’s common stock held by Mr. Goren. The shares to be redeemed represent approximately 7.0% of the Company’s outstanding shares. The terms of the transaction initially approved by Radiant in August provided for the contribution of between $6.0 million to $8.0 million to Enterprise based on the variability in Radiant’s stock price. The amount of cash to be contributed to Enterprise was reduced through the negotiation of the final terms of the Share Exchange Agreement, with the elimination of the variable cash components.

 

The closing of the transaction is subject to the approval of the disinterested shareholders of the Company and certain other customary conditions. The transaction is expected to close by the end of the year. Upon closing of the transaction, Erez Goren will resign from all positions with the Company.

 

A copy of the press release issued by the Company is filed herewith as Exhibit 99.1 and is incorporated herein by reference.

 

Item 7. Financial Statements and Exhibits.

 

(a) Financial Statements: None

 

(b) Pro Forma Financial Statements: None

 

(c) Exhibits. The following exhibits are filed with this Report:

 

Number

  

Exhibit Name


2.1   

Share Exchange Agreement, dated October 10, 2003, between Radiant Systems, Inc. and Erez Goren

2.2   

Form of Separation Agreement

10.1   

Form of Reseller and Services Agreement

10.2   

Form of Noncompetition Agreement

10.3   

Form of Tax Disaffiliation Agreement

10.4   

Form of Employee Benefits Agreement

10.5   

Form of Right of First Refusal and Purchase Option Agreement

10.6   

Form of Sublease and Facilities Agreement

99.1   

Press Release of Radiant Systems, Inc. (October 13, 2003)


SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

RADIANT SYSTEMS, INC.
By:  

/s/ John H. Heyman

 
   

John H. Heyman

Co-Chief Executive Officer

 

Dated: October 14, 2003


EXHIBIT INDEX

 

Exhibit

Number


  

Exhibit Name


2.1    Share Exchange Agreement, dated October 10, 2003, between Radiant Systems, Inc. and Erez Goren
2.2    Form of Separation Agreement
10.1    Form of Reseller and Services Agreement
10.2    Form of Noncompetition Agreement
10.3    Form of Tax Disaffiliation Agreement
10.4    Form of Employee Benefits Agreement
10.5    Form of Right of First Refusal and Purchase Option Agreement
10.6    Form of Sublease and Facilities Agreement
99.1    Press Release of Radiant Systems, Inc. (October 13, 2003)

 

EX-2.1 3 dex21.htm SHARE EXCHANGE AGREEMENT Share Exchange Agreement

Exhibit 2.1

 

SHARE EXCHANGE AGREEMENT

 

by and between

 

RADIANT SYSTEMS, INC.

 

and

 

EREZ GOREN

 

Dated as of October 10, 2003


TABLE OF CONTENTS

 

     Page

Section 1.     Exchange of Enterprise Stock

   2

Section 2.     Certain Changes

   2

Section 3.     Consummation of the Transactions; Closing Date

   2

Section 4.     Representations and Warranties of Shareholder

   2

      4.1     Binding Agreement; No Violation

   2

      4.2     Broker’s and Finder’s Fees

   2

      4.3     Transfer of Title

   2

      4.4     Pending Transactions

   3

      4.5     Projections

   3

Section 5.     Representations and Warranties of Radiant

   3

      5.1     Corporate Organization; Subsidiaries

   3

      5.2     Capital Stock

   3

      5.3     Corporate Power and Authority; Binding Agreement

   3

      5.4     No Violation

   4

      5.5     Brokers’ and Finders’ Fees

   4

      5.6     Opinion of Financial Advisor

   4

      5.7     Interim Operations of Enterprise

   4

      5.8     Title

   4

Section 6.     Additional Covenants and Agreements

   4

      6.1     Best Efforts

   4

      6.2     Shareholders’ Meeting

   5

      6.3     Preparation of Proxy Statement

   5

      6.4     Further Assurances

   6

      6.5     Conduct of Business

   6

      6.6     Notification of Certain Matters

   6

      6.7     Takeover Statutes

   6

      6.8     Tax Disclosure

   6

      6.9     Notice of the Enterprise Expenses

   7

Section 7.     Conditions to Obligations of Each Party

   7

      7.1     No Order Preventing Consummation; Illegality

   7

      7.2     Approval and Recommendation

   7

      7.3     Litigation

   7

      7.4     Shareholder Approval

   7


      7.5     Tax Opinion

   7

      7.6     Opinion of Financial Advisor

   7

Section 8.     Additional Conditions to Obligations of Shareholder

   7

      8.1     Representations and Warranties

   8

      8.2     Agreements and Covenants

   8

      8.3     Related Agreements

   8

      8.4     Resignation of Officers and Directors

   8

      8.5     Certificate of Secretary of Radiant

   8

      8.6     Certificates of Existence

   8

      8.7     Material Adverse Effect

   8

Section 9.     Additional Conditions to Obligations of Radiant

   8

      9.1     Representations and Warranties

   8

      9.2     Agreements and Covenants

   8

      9.3     Resignation

   9

      9.4     Noncompetition Agreement

   9

Section 10.     Termination

   9

      10.1   Termination

   9

      10.2   Effect of Termination

   9

Section 11.     Indemnification

   9

      11.1   Survival of Representations

   9

      11.2   Indemnification Obligations of Shareholder

   10

      11.3   Indemnification Obligations of Radiant

   10

      11.4   Indemnification Procedure

   10

      11.5   Sole Remedies

   12

Section 12.     Miscellaneous

   12

      12.1   Payment of Expenses

   12

      12.2   Publicity and Reports

   12

      12.3   Assignment

   12

      12.4   Governing Law

   12

      12.5   Counterparts

   12

      12.6   Amendment and Waiver

   13

      12.7   Parties in Interest

   13

      12.8   Notices

   13

 

ii


12.9     Entire Agreement

   14

12.10   Headings

   14

12.11   Severability

   14

12.12   Other Remedies

   14

12.13   Specific Performance

   14

12.14   Interpretation; Definitions

   15

 

iii


SHARE EXCHANGE AGREEMENT

 

THIS SHARE EXCHANGE AGREEMENT (this “Agreement”) is entered into as of October 10, 2003, by and between RADIANT SYSTEMS, INC., a Georgia corporation (“Radiant”), and EREZ GOREN, an individual resident of the State of Georgia (“Shareholder”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings assigned to them in Article I of the Separation Agreement (as hereinafter defined).

 

W I T N E S S E T H:

 

WHEREAS, Radiant is the direct owner of all of the issued and outstanding shares of common stock, no par value (the “Enterprise Stock”) of Wave Enterprise Systems, Inc., a Georgia corporation (“Enterprise”), which constitutes all of the issued and outstanding capital stock of Enterprise;

 

WHEREAS, the Board of Directors of Radiant (the “Board”) has established a special committee (the “Special Committee”) comprised of “qualified directors,” as such term is defined in Section 14-2-862(d) of the Georgia Business Corporation Code (“GBCC”), to consider and evaluate the fairness to Radiant and its shareholders of the divestiture of its enterprise software business through a tax free split-off, pursuant to which the Enterprise Business and Enterprise Assets will be transferred to Enterprise and Enterprise will assume the Enterprise Liabilities, on the terms and subject to the conditions of the Separation Agreement between Radiant and Enterprise in the form attached hereto as Exhibit A (the “Separation Agreement”), in each case effective immediately prior to the transfer of all of the Enterprise Stock in exchange for a certain number of shares of common stock, no par value, of Radiant (the “Radiant Common Stock”) held by Shareholder, on the terms and subject to the conditions set forth in this Agreement (the “Exchange”);

 

WHEREAS, the Special Committee has carefully reviewed and negotiated the terms of this Agreement and has unanimously recommended that the Board approve and authorize this Agreement and the Separation Agreement and the transactions contemplated hereby and thereby, which recommendation was based in part upon the opinion of SunTrust Robinson Humphrey (the “Financial Advisor”), financial advisor to the Special Committee, that, as of the date of such opinion and based on the assumptions, qualifications and limitations contained therein, the terms of the Exchange are fair, from a financial point of view, to the shareholders of Radiant other than Shareholder;

 

WHEREAS, the Board has unanimously approved this Agreement and the Separation Agreement and the transactions contemplated hereby and thereby, which approval was based on the recommendation of the Special Committee;

 

WHEREAS, the Board has determined that the Exchange is fair to and in the best interests of Radiant and its shareholders and has unanimously resolved to recommend that this Agreement, the Separation Agreement and the Ancillary Agreements referred to therein (together with the Separation Agreement, the “Related Agreements), the transactions contemplated by Separation Agreement (the “Separation”), the Exchange and the other transactions contemplated by this Agreement and the Related Agreements be approved by Radiant’s shareholders;

 

WHEREAS, the parties hereto intend that the Exchange qualify as a tax-free distribution under Section 355 of the Internal Revenue Code of 1986, as amended (the “Code”), and that the Separation qualify as a tax-free “reorganization” under Section 368(a)(1)(D) of the Code; and

 

WHEREAS, it is appropriate and desirable to set forth the principal transactions required to effect the Separation and the Exchange and certain other agreements that will govern certain matters relating to the Separation and the Exchange and the relationship between Radiant and Enterprise following the Exchange;


NOW, THEREFORE, in consideration of the foregoing recitals and of the mutual covenants and agreements herein contained, the parties hereby agree as follows:

 

Section 1.    Exchange of Enterprise Stock.

 

Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date (as hereinafter defined), (a) Radiant shall assign, transfer and deliver to Shareholder all of its right, title and interest in and to all of the Enterprise Stock, and (b) Shareholder shall assign, transfer and deliver to Radiant TWO MILLION (2,000,000) shares of Radiant Common Stock (the “Radiant Shares”).

 

Section 2.    Certain Changes.

 

In the event that between the date of this Agreement and the Closing Date, Radiant subdivides the outstanding shares of Radiant Common Stock into a greater number of shares, or combines its outstanding shares of Radiant Common Stock into a smaller number of shares, or effects a reclassification of the Radiant Common Stock, or pays a dividend in shares of its capital stock (each an “Adjustment Event”), then the Radiant Shares shall be equitably adjusted to the extent necessary to provide the parties the same economic effect as contemplated by this Agreement prior to such Adjustment Event.

 

Section 3.    Consummation of the Transactions; Closing Date.

 

The consummation of the transactions contemplated herein (the “Closing”) and the delivery of the certificates and acknowledgements called for by this Agreement shall take place at the offices of King & Spalding LLP, 191 Peachtree Street, Atlanta, Georgia, at such time and date (the “Closing Date”) as shall be fixed by mutual agreement of Radiant and Shareholder as promptly as practicable following the satisfaction or waiver of the conditions set forth in Sections 7, 8 and 9 of this Agreement. At the Closing (i) Radiant shall deliver to Shareholder a certificate or certificates representing the Enterprise Stock, duly endorsed in blank or accompanied by duly executed stock powers, and (ii) Shareholder shall deliver to Radiant (x) a certificate or certificates representing the Radiant Shares, duly endorsed in blank or accompanied by duly executed stock powers and (y) a noncompetition and nonsolicitation agreement (the “Noncompetition Agreement”) in favor of Radiant in substantially the form attached hereto as Exhibit B.

 

Section 4.    Representations and Warranties of Shareholder.

 

Shareholder represents and warrants to Radiant that:

 

4.1 Binding Agreement; No Violation.    This Agreement has been, and the Noncompetition Agreement will be as of the Closing Date, duly executed and delivered by Shareholder and constitutes or will constitute (as applicable) the legal, valid and binding obligation of Shareholder, enforceable against Shareholder in accordance with their respective terms. The execution and delivery of this Agreement and the Noncompetition Agreement by Shareholder, and the consummation of the transactions contemplated by this Agreement, will not result in a Conflict (as hereinafter defined) with the provisions of any Law (as hereinafter defined), Order (as hereinafter defined), or Permit (as hereinafter defined) to which Shareholder is a party or is bound.

 

4.2 Broker’s and Finder’s Fees.    Shareholder has not incurred any Liability to any brokers, finders, investment banks, or financial advisors in respect of the matters provided for in this Agreement.

 

4.3 Transfer of Title.    The Radiant Shares are held of record and beneficially owned by Shareholder, free and clear of any Lien (as hereinafter defined). Upon delivery of the Radiant Shares to Radiant as provided in Section 3, Radiant will acquire good and valid title to the Radiant Shares, free and clear of any Liens.

 

2


4.4 Pending Transactions.    Shareholder has fairly represented to Radiant all material pending transactions and proposed business opportunities that exist relating to the Enterprise Business as currently proposed to be conducted. Each prospective customer of the Enterprise Business, other than any Person (as hereinafter defined) who is or has been a party to a Contract (as hereinafter defined) with Radiant, who, as of the date hereof or within the previous year, is or has been in active negotiations, discussions or contact with any of the Enterprise Business management team members listed on Schedule 4.4(a) attached hereto regarding the terms of a commercial relationship with the Enterprise Business, is set forth on Schedule 4.4(b) attached hereto.

 

4.5 Projections.    The projected financial information set forth in the Enterprise Financial and Valuation Analysis dated October 5, 2003 that was furnished to the Special Committee was prepared in good faith by the management of the Enterprise Business, who believe that the assumptions set forth therein underlying such projections were reasonable as of the date thereof; provided, however, that such assumptions are inherently subjective and uncertain and that such projections are not guarantees of future performance; provided further, that the actual results of the Enterprise Business may differ materially from those that might be anticipated on the basis of such presentation.

 

Section 5.    Representations and Warranties of Radiant.

 

Radiant represents and warrants to Shareholder that:

 

5.1 Corporate Organization; Subsidiaries.    Each of Radiant and Enterprise is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Radiant has made available to Shareholder correct and complete copies of the articles of incorporation and bylaws of Enterprise as currently in effect and the minute books and stock records of Enterprise. Enterprise does not have and has never had any Subsidiaries (as hereinafter defined), and does not otherwise own and has never otherwise owned any shares of capital stock or any interest in, or control, directly or indirectly, any other Person or have any ongoing obligation to purchase any shares of capital stock or make any investment or capital contribution with respect thereto; nor is Enterprise responsible in any way for any similar obligation with respect to any other entity.

 

5.2 Capital Stock.    The Enterprise Stock represents all of the issued and outstanding shares of capital stock of Enterprise. There are no issued or outstanding warrants, options, preemptive rights, rights of first refusal or other rights to purchase shares of capital stock of Enterprise. All of the Enterprise Stock has been duly and validly authorized and validly issued. All of the Enterprise Stock is fully paid and nonassessable and is owned by Radiant free and clear of any Liens. Upon delivery of the Enterprise Stock to Shareholder as provided in Section 3, Shareholder will acquire will acquire good and valid title to the Enterprise Stock, free and clear of any Liens.

 

5.3 Corporate Power and Authority; Binding Agreement.

 

(a) Radiant has all necessary corporate power and authority to execute and deliver this Agreement and the Related Agreements, to perform its obligations hereunder and thereunder, and subject to obtaining the approval of this Agreement and the Separation Agreement and the transactions contemplated hereby and thereby by the holders of a majority of the qualified shares pursuant to Section 14-2-863 of the GBCC (the “Radiant Shareholder Approval”), to consummate the Separation and the Exchange and the other transactions contemplated by this Agreement and the Related Agreements. The execution, delivery and performance by Radiant of this Agreement and the Related Agreements, and the consummation by Radiant of the Separation and the Exchange and the other transactions contemplated by this Agreement and the Related Agreements, have been duly authorized by all necessary corporate action (including, without limitation, the unanimous approval of the Board) and no other corporate proceedings on the part of Radiant are necessary to authorize this Agreement or the Related Agreements or to consummate the Exchange or the Separation or the other transactions contemplated by this Agreement and the Related Agreements (in each case other than obtaining the Radiant Shareholder Approval).

 

3


(b) This Agreement has been duly executed and delivered by Radiant and constitutes the legal, valid and binding obligation of Radiant, enforceable against Radiant in accordance with its terms. Each of the Related Agreements, when duly executed and delivered, will constitute the legal, valid and binding obligation of Radiant, enforceable against Radiant in accordance with its terms.

 

5.4 No Violation.    The execution and delivery of this Agreement and the Related Agreements by Radiant, the consummation of the transactions contemplated by this Agreement and the Related Agreements, and compliance by Radiant with the provisions of this Agreement and the Related Agreements do not and will not conflict with, or result in any violation or breach of, or default (with or without notice or lapse of time or both) under, or give rise to a right of, or result in, termination, cancellation or acceleration of any obligation or to a loss of a material benefit under, or result in the creation of any Lien in or upon any of the properties or assets of Radiant or any of its Subsidiaries under, or give rise to any increased, additional, accelerated or guaranteed rights or entitlements under (including any right of a holder of a security of the Radiant or any of its Subsidiaries to require Radiant or any of its Subsidiaries to acquire such security) (any such event, a “Conflict”), any provision of (i) the Articles of Incorporation, as amended, or the Bylaws, as amended, of Radiant or the certificate of incorporation or bylaws (or similar organizational documents) of any of its Subsidiaries, or (ii) any Law or Order, in each case, applicable to Radiant or any of its Subsidiaries or their respective properties or assets.

 

5.5 Brokers’ and Finders’ Fees.    Except for fees and expenses payable to SunTrust Capital Markets, Inc. under the engagement letter dated June 5, 2003, Radiant has not incurred any Liability to any brokers, finders, investment banks, or financial advisors in respect of the matters provided for in this Agreement.

 

5.6 Opinion of Financial Advisor.    The Financial Advisor has delivered to the Special Committee, its written opinion, dated as of October 8, 2003, to the effect that, as of such date and subject to the assumptions, qualifications and limitations set forth therein, the terms of the Exchange are fair, from a financial point of view, to the shareholders of Radiant other than Shareholder. A true, correct, and complete copy of such opinion has been provided to Shareholder prior to or on the date hereof.

 

5.7 Interim Operations of Enterprise.    Enterprise was formed solely for the purpose of engaging in the transactions contemplated by this Agreement and the Related Agreements and has engaged in no business other than in connection with the transactions contemplated by this Agreement and the Related Agreements.

 

5.8 Title.    Upon consummation of the transactions contemplated hereby, Radiant and its Subsidiaries (other than Enterprise) will have transferred to Enterprise all of their respective, right, title and interest in the Products, and Enterprise will have acquired good (and, in the case in tangible assets, marketable) title in and to, or a valid leasehold interest in, each of the Enterprise Assets other than the Products, free and clear of all Liens, other than the Permitted Encumbrances.

 

Section 6.    Additional Covenants and Agreements.

 

6.1 Best Efforts.

 

(a) Subject to the terms and conditions herein provided, each of the parties hereto agrees: (i) to use reasonable best efforts to take promptly, or cause to be taken, all action and to do promptly, or cause to be done, all things necessary, proper or advisable on the part of such party, under applicable laws and regulations to consummate and make effective the transactions contemplated hereby, to obtain all necessary Governmental Approvals and to remove any injunctions or other impediments or delays, legal or otherwise, in order to consummate and make effective the transactions contemplated by this Agreement for the purpose of securing to the parties hereto the benefits contemplated by this Agreement; and (ii) not to enter into, or agree to enter into, any transaction or perform, or agree to perform, any act which would result in any of the representations or warranties on the part of either party not being true and correct in all material respects at and as of the time immediately after the occurrence of any such transaction or event or on the Closing Date or that would be likely to jeopardize the consummation of the transactions contemplated hereby.

 

4


(b) Subject to the terms and conditions herein provided, each of the parties hereto shall use its reasonable best efforts to obtain prior to the Closing all consents under each Contract listed or described in Schedule 6.1(b) attached hereto (other than the payment of money or the deposit of funds from one party on behalf of the other).

 

6.2 Shareholders’ Meeting.    Subject to the fiduciary duties of the Board, applicable law and the other provisions of this Agreement, Radiant shall, in accordance with Georgia Law, its Articles of Incorporation and its Bylaws: (a) duly call, give notice of, convene, and hold a special meeting of its shareholders as soon as reasonably practicable for the purpose of considering and taking action upon this Agreement (the “Shareholders’ Meeting”); (b) include in the proxy statement or information statement prepared by Radiant for distribution to shareholders of Radiant in advance of the Shareholders’ Meeting (the “Proxy Statement”) in accordance with Regulation 14A promulgated under the Exchange Act, the recommendation of the Board that Radiant’s shareholders approve this Agreement, the Related Agreements, the Separation, the Exchange, and the other transactions contemplated by this Agreement and the Related Agreements; and (c) use all reasonable efforts: (i) to obtain and furnish the information required to be included by it in the Proxy Statement, and, after consultation with Shareholder, respond promptly to any comments made by the Commission with respect to the Proxy Statement and any preliminary version thereof and cause the Proxy Statement to be mailed to its shareholders at the earliest practicable time; (ii) to obtain the Radiant Shareholder Approval; and (iii) otherwise comply with all legal requirements applicable to the Shareholders Meeting. Shareholder will promptly provide Radiant with the information concerning Shareholder required to be included in the Proxy Statement.

 

6.3 Preparation of Proxy Statement.    Subject to the fiduciary duties of the Board:

 

(a) Radiant shall, as soon as reasonably practicable, prepare a preliminary form of the Proxy Statement (the “Preliminary Proxy Statement”) and: (i) file the Preliminary Proxy Statement with the Commission; (ii) use reasonable efforts to promptly prepare any amendments to the Preliminary Proxy Statement required in response to comments of the Commission or its staff or that Radiant with the advice of counsel deems necessary or advisable; and (iii) use reasonable efforts to cause the Proxy Statement to be mailed to Radiant’s shareholders as soon as reasonably practicable after the Preliminary Proxy Statement, as so amended, is cleared by the Commission. After the Proxy Statement shall have been mailed to Radiant’s shareholders, Radiant, if required, shall promptly circulate amended or supplemental proxy material and, if required in connection therewith, resolicit proxies; provided, however, that no such amended or supplemental proxy material will be mailed by Radiant without consultation with and review by Shareholder and his counsel. In addition, Radiant shall: (i) promptly notify Shareholder of the receipt of the comments of the Commission and of any request from the Commission for amendments or supplements to the Preliminary Proxy Statement or Proxy Statement or for additional information, and will promptly supply Shareholder and his outside counsel with copies of all written correspondence between Radiant or its representatives, on the one hand, and the Commission or members of its staff, on the other hand, with respect to the Preliminary Proxy Statement, the Proxy Statement, or the Separation or Exchange; and (ii) promptly inform Shareholder and his outside counsel if at any time prior to the Shareholders’ Meeting any event should occur that is required by applicable law to be set forth in an amendment of, or a supplement to, the Proxy Statement, in which case, Radiant, in consultation with Shareholder and his outside counsel, will, upon learning of such event, promptly prepare and mail such amendment or supplement.

 

(b) It is expressly understood and agreed that: (i) Shareholder and Radiant will consult with each other in connection with all aspects of the preparation, filing, and clearance by the Commission of the Proxy Statement and the Preliminary Proxy Statement (including any and all amendments or supplements thereto); and (ii) Radiant shall give Shareholder and his outside counsel the reasonable opportunity to review and comment on each of the Proxy Statement and Preliminary Proxy Statement prior to filing with the Commission and shall give Shareholder and his outside counsel the reasonable opportunity to review and comment on all amendments and supplements to each of the Proxy Statement, and Preliminary Proxy Statement and all responses to requests for additional information and replies to comments prior to filing with the Commission. Each of Shareholder and Radiant agrees to use all reasonable efforts, after consultation with the other, to respond promptly to all such comments of and requests by the Commission.

 

5


6.4 Further Assurances.    Each party hereto, at the request of the other party hereto, shall execute and deliver such other instruments of transfer, conveyance, assignment or other documents and do and perform such other acts and things as may be necessary or desirable for effecting completely and promptly the consummation of the Separation and the Exchange and the transactions contemplated hereby; provided, however, that nothing in this Section 6.4 shall be construed to obligate any party to waive any of the closing conditions set forth in Sections 7, 8 and 9.

 

6.5 Conduct of Business.    During the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement and the Closing Date, Radiant shall use all reasonable efforts consistent with past practices and policies (except to the extent that Shareholder shall otherwise consent or direct) to carry on the Enterprise Business in the ordinary course in substantially the same manner as heretofore conducted, pay its debts and Taxes when due, pay or perform other obligations when due, comply with all applicable Laws and, to the extent consistent therewith, to use all reasonable efforts consistent with past practice and policies to preserve intact the present business organization of and properties of the Enterprise Business, keep available the services of its present officers and employees, preserve its relationships with customers, suppliers, distributors, licensors, licensees, and others having business dealings with it, and maintain its franchises, rights and Permits, all with the goal of preserving unimpaired the goodwill and ongoing business of the Enterprise Business at the Closing Date.

 

6.6 Notification of Certain Matters.    Each shall give prompt notice to the other party of: (a) the occurrence or non-occurrence of any event, the occurrence or non-occurrence of which is likely to cause any representation or warranty of such party contained in this Agreement to be untrue or inaccurate at or prior to the Closing Date, and (b) any failure of such party to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 6.6 shall not (i) limit or otherwise affect any remedies available to the party receiving such notice or (ii) constitute an acknowledgment or admission of a breach of this Agreement; provided, further, however, that no disclosure by a party pursuant to this Section 6.6 shall be deemed to prevent or cure any misrepresentations, breach of warranty or breach of covenant.

 

6.7 Takeover Statutes.    If any “fair price,” “moratorium,” “contral share acquisition,” or other similar anti-takeover statute or regulation enacted under state or federal laws in the United States (“Takeover Statute”) is or may become applicable to the transactions contemplated by this Agreement, the Board (subject to its fiduciary duties) will grant such approvals and take such actions as are necessary so that the transactions contemplated hereby and thereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate the effects of any Takeover Statute on any of the transactions contemplated hereby and thereby.

 

6.8 Tax Disclosure.    Notwithstanding anything in this Agreement to the contrary or in any other agreement between the parties, each party to this Agreement (and each employee, representative, or other agent of each party) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to the taxpayer relating to such tax treatment and tax structure; each party acknowledges that it has no proprietary or exclusive rights to the tax structure of the transaction. The preceding sentence is intended to cause the transaction contemplated herein to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the Code and shall be construed in a manner consistent with such purpose. Each party recognizes that the privilege each has to maintain with respect to the confidentiality of the transaction contemplated by this Agreement or the confidentiality of a communication relating to such transaction, including a confidential communication with its attorney or with a federally authorized tax practitioner under Section 7252 of the Code, is not intended to be waived by the foregoing.

 

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6.9 Notice of the Enterprise Expenses.    Two Business Days prior to the Closing Date, Radiant will prepare and deliver to Shareholder a notice setting forth the proposed amount of the Enterprise Expenses, which shall be accompanied by written documentation substantiating such amount.

 

Section 7. Conditions to Obligations of Each Party.

 

The respective obligations of each party hereto to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by agreement of all the parties hereto (it being understood that each such condition is solely for the benefit of the parties hereto and may be waived in writing by their mutual agreement without notice, liability, or obligation to any Person):

 

7.1 No Order Preventing Consummation; Illegality.    No Order issued by any Governmental Authority (as hereinafter defined) or other Law preventing the consummation of the transactions contemplated herein shall be in effect, nor shall any proceeding brought by a Governmental Authority seeking any of the foregoing be pending. No action taken by any Governmental Authority, and no Law or Order shall have been enacted, entered, enforced, or deemed applicable to the Exchange or the Separation, which makes the consummation of the Exchange illegal.

 

7.2 Approval and Recommendation.    Neither the Special Committee nor the Board of Directors shall have withdrawn its approval or recommendation to shareholders of this Agreement, the Related Agreements, the Separation, the Exchange and the other transactions contemplated hereby and thereby; provided, however, that any such withdrawal shall have been made in good faith based on a determination that such withdrawal is in the best interest of Radiant and its shareholders.

 

7.3 Litigation.    There shall be no Action pending against Shareholder or Radiant, its properties or any of its respective officers or directors arising out of, or in any way connected with, the Exchange, the Separation, or the other transactions contemplated by the terms of this Agreement and the Related Agreements.

 

7.4 Shareholder Approval.    The Radiant Shareholder Approval shall have been obtained at an annual or special meeting of shareholders of Radiant.

 

7.5 Tax Opinion.    Radiant and Shareholder shall have received an opinion from King & Spalding LLP, in the form attached hereto as Exhibit C and subject to the representations, assumptions and limitations set forth therein, to the effect that the Exchange and the related transfer of assets and liabilities pursuant to the Separation Agreement will not result in the recognition of any income, gain or loss to Radiant or Shareholder for federal income tax purposes (except that such opinion shall express no view as to whether Radiant is required to include in its taxable income any advance payments previously received by Radiant but for which Enterprise assumes Radiant’s obligation to provide the associated services or software).

 

7.6 Opinion of Financial Advisor.    The Financial Advisor shall not have withdrawn its opinion delivered to the Special Committee, dated October 8, 2003, or its consent for Radiant to include the name of the Financial Advisor and a description of such opinion in the Proxy Statement.

 

Section 8. Additional Conditions to Obligations of Shareholder.

 

The obligations of Shareholder to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by Shareholder (it being understood that each such condition is solely for the benefit of Shareholder and may be waived in writing by Shareholder in its sole discretion without notice, liability or obligation to any Person):

 

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8.1 Representations and Warranties.    The representations and warranties of Radiant contained in this Agreement shall be true and correct in all material respects (except for those representations and warranties that are by their terms qualified by a standard of materiality, which representations and warranties shall have been true and correct in all respects) as of the date of this Agreement and on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made on and as of the Closing Date, and Shareholder shall have received a certificate to such effect signed on behalf of Radiant by the Chief Executive Officer of Radiant.

 

8.2 Agreements and Covenants.    Radiant shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by Radiant on or prior to the Closing Date, and Shareholder shall have received a certificate to such effect signed on behalf of Radiant by the Chief Executive Officer of Radiant.

 

8.3 Related Agreements.    Each of the Related Agreements shall have been executed and delivered by Radiant and Enterprise.

 

8.4 Resignation of Officers and Directors.    Shareholder shall have received a written resignation from each of the officers and directors of Enterprise effective as of the Closing Date.

 

8.5 Certificate of Secretary of Radiant.    Shareholder shall have received a certificate, validly executed by the Secretary of Radiant, certifying as to (i) the terms and effectiveness of the Articles of Incorporation and the Bylaws of each of Radiant and Enterprise, and (ii) the valid adoption of resolutions of the Board and the shareholders of Radiant approving this Agreement, the Related Agreements, the Separation, the Exchange and the other transactions contemplated by this Agreement and the Related Agreements.

 

8.6 Certificates of Existence.    Shareholder shall have received long-form certificates of existence for Radiant and Enterprise from the Secretary of State of the State of Georgia, dated within a reasonable period prior to Closing.

 

8.7 Material Adverse Effect.    There shall not have occurred after the date hereof any Material Adverse Effect (as hereinafter defined).

 

Section 9. Additional Conditions to Obligations of Radiant.

 

The obligations of Radiant to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions, any of which may be waived, in writing, by Radiant (it being understood that each such condition is solely for the benefit of Radiant and may be waived in writing by Radiant in its sole discretion without notice, liability or obligation to any Person):

 

9.1 Representations and Warranties.    The representations and warranties of Shareholder contained in this Agreement shall be true and correct in all material respects (except for those representations and warranties that are by their terms qualified by a standard of materiality, which representations and warranties shall have been true and correct in all respects) as of the date of this Agreement and on and as of the Closing Date, except for those representations and warranties which address matters only as of a particular date (which shall remain true and correct as of such date), with the same force and effect as if made on and as of the Closing Date, and Radiant shall have received a certificate to such effect signed by Shareholder.

 

9.2 Agreements and Covenants.    Shareholder shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by him on or prior to the Closing Date, and Radiant shall have received a certificate to such effect signed by Shareholder.

 

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9.3 Resignation.    Shareholder shall have resigned, effective upon the Closing, from all employee, officer and director positions held with Radiant.

 

9.4 Noncompetition Agreement.    Shareholder shall have executed and delivered to Radiant the Noncompetition Agreement.

 

Section 10. Termination.

 

10.1 Termination.    This Agreement may be terminated and the transactions contemplated hereby may be abandoned:

 

(a) at any time, by mutual written consent of Radiant and Shareholder;

 

(b) by either Radiant or Shareholder if any Governmental Authority shall have issued any Order prohibiting, enjoining or otherwise restraining the transactions contemplated by this Agreement and such Order shall have become final and nonappealable (provided however, that the party seeking to terminate this Agreement pursuant to this paragraph (b) shall have used reasonable best efforts to remove such Order) or if any Law is promulgated or enacted by any Governmental Authority after the date of this Agreement which prohibits the consummation of the Separation or the Exchange shall be in effect, provided that no party hereto who brought or is affiliated with the party who brought any action seeking the permanent enjoinment of the transactions contemplated hereby may seek termination of this Agreement pursuant to this Section 10.1(b);

 

(c) by Shareholder if any of the conditions set forth in Sections 7 and 8 shall have become incapable of fulfillment and shall not have been waived by Shareholder;

 

(d) by Radiant if any of the conditions set forth in Sections 7 and 9 shall have become incapable of fulfillment and shall not have been waived by Radiant; or

 

(e) by Radiant or Shareholder, at any time on or after January 31, 2004, if the Closing shall not have occurred on or prior to such date; provided, however, that the right to terminate this Agreement under this Section 10.1(e) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the primary cause of, or resulted in, the failure of the Closing to have occurred on or before such date.

 

10.2 Effect of Termination.    Upon termination of this Agreement pursuant to Section 10.1, this Agreement shall become void and there shall be no liability on the part of Shareholder or Radiant. Notwithstanding the foregoing, nothing contained herein shall relieve any party from liability for any willful breach of any covenant or agreement in this Agreement. If this Agreement is terminated pursuant to Section 10.1 (other than Section 10.1(d) as a result of the failure of any of Shareholder’s representations or warranties to be true in all material respects or the breach by Shareholder of any material covenants or agreements hereunder), Radiant shall pay to Shareholder upon demand, payable in same day funds, the reasonable legal fees and related out-of-pocket costs and expenses of Shareholder incurred in connection with this Agreement, the Related Agreements, and the transactions contemplated hereby and thereby.

 

Section 11. Indemnification.

 

11.1 Survival of Representations.    All representations and warranties made in this Agreement shall survive the Closing for a period of twelve (12) months, but, except as provided in Section 10.2, shall not survive any termination of this Agreement; provided, however, that notwithstanding the foregoing, (i) the representations and warranties contained in Sections 4.3, 5.2 and 5.3(a) shall survive the Closing indefinitely (subject to any applicable statutes of limitations). The applicable time periods specified in the preceding provisions of this Section 11.1 are each referred to as an “Indemnity Period.” This Section 11.1 shall not limit any covenant or agreement of the parties hereto in this Agreement or any of the Related Agreements that contemplates performance after the Closing or the surivival of any representation or warranty made by any of the parties hereto in any of the Related Agreements.

 

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11.2 Indemnification Obligations of Shareholder.

 

(a) Subject to the terms and conditions set forth herein, from and after the Closing, Shareholder shall indemnify, defend, and hold harmless Radiant and its officers, directors, employees, and affiliates, and each of the heirs, executors, successors, and assigns of any of the foregoing (collectively, the “Radiant Indemnified Parties”) from, against, and in respect of any and all claims, liabilities, obligations, losses, costs, expenses, penalties, fines, judgments, and damages whenever arising or incurred (including, without limitation, amounts paid in settlement, costs of investigation, and reasonable attorneys’ fees and expenses) (collectively, “Radiant Losses”) arising out of or relating to: (i) any breach or inaccuracy of any representation or warranty made by Shareholder in Section 4 hereof (other than any such breach or inaccuracy of which executive officers or directors of Radiant other than Shareholder or Alon Goren had actual knowledge as of the date hereof); and (ii) any breach of any covenant, agreement, or undertaking of Shareholder in this Agreement.

 

(b) Shareholder’s obligations to indemnify Radiant Indemnified Parties pursuant to Section 11.2(a) hereof are subject to the following limitations: (i) in no event shall the aggregate Liability of Shareholder pursuant to this Section 11.2 exceed the Radiant Shares (valued at the Average Trading Price (as hereinafter defined) for such purposes); (ii) Shareholder shall have the option of satisfying any obligations to indemnify a Radiant Indemnified Party for any Radiant Losses by tendering shares of Radiant Common Stock, which shares, for such purposes, shall be valued at the Average Trading Price; (iii) the amount of any Radiant Losses shall be reduced by any amount actually received by a Radiant Indemnified Party with respect thereto under any insurance coverage (other than self insurance) or from any other party alleged to be responsible therefor; and (iv) Shareholder shall be obligated to indemnify the Radiant Indemnified Parties only for those claims with respect to a breach of a representation or warranty giving rise to Radiant Losses and to which the Radiant Indemnified Parties have given Shareholder written notice thereof prior to the end of any applicable Indemnity Period.

 

11.3 Indemnification Obligations of Radiant.

 

(a) Radiant shall indemnify and hold harmless Shareholder and Shareholder’s Affiliates, heirs, beneficiaries, executors, and assigns (collectively, the “Shareholder Indemnified Parties”) from, against, and in respect of any and all claims, liabilities, obligations, losses, costs, expenses, penalties, fines, judgments, and damages whenever arising or incurred (including, without limitation, amounts paid in settlement, costs of investigation, and reasonable attorneys’ fees and expenses) arising out of or relating to: (i) any breach or inaccuracy of any representation or warranty made by Radiant in this Agreement (other than any such breach or inaccuracy of which Shareholder had actual knowledge as of the date hereof); and (ii) any breach of any covenant, agreement, or undertaking of Radiant in this Agreement. The claims, liabilities, obligations, losses, costs, expenses, penalties, fines, judgments, and damages of Shareholder Indemnified Parties described in this Section 11.3(a) as to which Shareholder Indemnified Parties are entitled to indemnification are hereinafter referred to, collectively, as “Shareholder Losses.”

 

(b) The amount of any Shareholder Losses shall be reduced by any amount actually received by a Shareholder Indemnified Party with respect thereto under any insurance coverage (other than self-insurance) or from any other party alleged to be responsible therefor. Radiant shall be obligated to indemnify the Shareholder Indemnified Parties only for those claims with respect to a breach of a representation or warranty giving rise to Shareholder Losses and to which the Shareholder Indemnified Parties have given Radiant written notice thereof prior to the end of any applicable Indemnity Period.

 

11.4 Indemnification Procedure.

 

(a) After receipt by a Radiant Indemnified Party or a Shareholder Indemnified Party (hereinafter referred to as, collectively, an “Indemnified Party”) of notice by a third party of any complaint or the commencement of any action or proceeding with respect to which such Indemnified Party may be entitled to

 

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receive payment from the other party for any Radiant Losses or Shareholder Losses (as the case may be), such Indemnified Party shall, within ten (10) days, give Radiant or Shareholder, as the appropriate indemnifying party or representative thereof (the “Indemnifying Party”), written notice of such complaint or of the commencement of such action or proceeding and copies of correspondence and documentation relating to any such claim; provided, however, that such failure to so notify the Indemnifying Party shall relieve the Indemnifying Party from liability under this Agreement with respect to such claim only if, and only to the extent that, such failure to notify the Indemnifying Party results in the forfeiture by the Indemnifying Party of material rights and defenses otherwise available to the Indemnifying Party with respect to such claim. The Indemnifying Party shall have the right, upon written notice delivered to the Indemnified Party within twenty (20) days thereafter, to assume the defense of such action or proceeding, including the employment of counsel reasonably satisfactory to the Indemnified Party. In the event, however, that the Indemnifying Party declines or fails to assume the defense of the action or proceeding or to employ counsel reasonably satisfactory to the Indemnified Party, in either case within such 20-day period, then such Indemnified Party may employ counsel to represent or defend it in any such action or proceeding, and the Indemnifying Party shall pay the reasonable fees and disbursements of such counsel as incurred; provided, however, that the Indemnifying Party shall not be required to pay the fees and disbursements of more than one counsel for all Indemnified Parties in any jurisdiction in any single action or proceeding. In any action or proceeding with respect to which indemnification is being sought hereunder, the Indemnified Party or the Indemnifying Party, whichever is not assuming the defense of such action, shall have the right to participate in such litigation and to retain its own counsel at such party’s own expense. The Indemnifying Party or the Indemnified Party, as the case may be, shall at all times use reasonable efforts to keep the Indemnifying Party or the Indemnified Party, as the case may be, reasonably apprised of the status of the defense of any action, the defense of which it is maintaining, and to cooperate in good faith with each other with respect to the defense of any such action.

 

(b) No Indemnified Party may settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without the prior written consent of the Indemnifying Party, unless such settlement, compromise, or consent includes an unconditional release of the Indemnifying Party from all liability arising out of such claim. An Indemnifying Party may not, without the prior written consent of the Indemnified Party, settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless (i) the Indemnifying Party shall pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness thereof; (ii) the terms or effect of the settlement shall not encumber any of the assets of any Indemnified Party thereof, or contain or result in any restriction, interference or condition that would apply to such Indemnified Party or to the conduct of any of its businesses; and (iii) the Indemnifying Party shall obtain, as a condition of such settlement, a complete release of each Indemnified Party.

 

(c) In the event an Indemnified Party shall claim a right to payment pursuant to this Agreement, such Indemnified Party shall send written notice of such claim to the appropriate Indemnifying Party. Such notice shall specify the basis for such claim. As promptly as possible after the Indemnified Party has given such notice, such Indemnified Party and the appropriate Indemnifying Party shall establish the merits and amount of such claim (by mutual agreement or pursuant to paragraph (d) of this Section 11.4) and, within five Business Days of the final determination of the merits and amount of such claim, the Indemnifying Party shall pay to the Indemnified Party immediately available funds in an amount equal to such claim as determined hereunder.

 

(d) If no such agreement can be reached after good faith negotiation, either Shareholder or Radiant may demand arbitration of the matter unless the amount of the damage or loss is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration; and in either such event the matter shall be settled by arbitration conducted by three arbitrators. Any such arbitration shall be held in Fulton County, Atlanta before and in accordance with the Commercial Arbitration Rules then in effect of the American Arbitration Association (the “Rules”). Shareholder and Radiant shall each select one arbitrator, and the two arbitrators so selected shall select a

 

11


third arbitrator. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the extent as a court of competent law or equity, should the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of a majority of the three arbitrators as to the validity and amount of any claim shall be binding and conclusive upon the parties to this Agreement. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrators. The parties agree to comply with any award made in any such arbitration proceedings that has become final in accordance with the Rules and agree to enforcement of or entry of judgment upon such award. Judgment upon any award rendered by the arbitrators shall be entered in any court of competent jurisdiction located in Fulton County, Georgia, and in connection therewith, each party hereto hereby irrevocably and unconditionally (i) consents to submit itself or himself to the personal jurisdiction of any Georgia state or federal court located in the City of Atlanta, (ii) waives any objection to the laying of venue of any such action, suit or proceeding in any Georgia state or federal court located in the City of Atlanta, and (iii) waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

11.5 Sole Remedies.    After the Closing, (a) the indemnification provisions set forth in this Section 11 and (b) the specific performance provisions of Section 12.13, are the sole and exclusive remedy of an Indemnifed Party with respect to any of the matters described in Section 11.2(a) and Section 11.3(a).

 

Section 12. Miscellaneous.

 

12.1 Payment of Expenses.    Except as otherwise specifically set forth herein or in any of the Related Agreements, each party hereto shall pay its own fees and expenses incident to preparing for, entering into, and carrying out this Agreement, the Related Agreements, and the transactions contemplated hereby and thereby.

 

12.2 Publicity and Reports.    Radiant shall coordinate all publicity relating to the transactions contemplated by this Agreement and Shareholder shall not issue any press release, publicity statement or other public notice relating to this Agreement or any of the transactions contemplated hereby, or communicate with analysts or the investment community, without obtaining the prior consent of Radiant.

 

12.3 Assignment.    Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned, in whole or in part, by operation of law or otherwise by either party hereto without the prior written consent of the other party hereto; provided, however, that Radiant may assign all but not less than all of its rights, interests and obligations under this Agreement to any Person in connection with a Change of Control of Radiant. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by, the parties hereto and their respective successors and assigns.

 

12.4 Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed in the State of Georgia, without regard to any laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

12.5 Counterparts.    This Agreement may be executed in one or more counterparts (including by telecopy), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

 

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12.6 Amendment and Waiver.    Except as is otherwise required by applicable Law, this Agreement may be amended by the parties hereto at any time only by execution of an instrument in writing signed on behalf of each of the parties hereto. At any time prior to the Closing Date, Radiant, on the one hand, and Shareholder, on the other, may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations of the other party hereto, (b) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto, and (c) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

 

12.7 Parties in Interest.    No provisions of this Agreement are intended, nor shall be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any client, customer, affiliate, partner of any party hereto or any other Person unless specifically provided otherwise herein.

 

12.8 Notices.    Any notice or communication required or permitted hereunder shall be in writing, shall be effective when received, and shall in any event be deemed to have been received (a) when delivered, if delivered personally or by commercial delivery service, (b) three (3) business days after deposit with U.S. Mail, if mailed by registered or certified mail (return receipt requested), (c) one (1) business day after the business day of deposit with FedEx or similar overnight courier for next day delivery (or two (2) business days after such deposit if deposited for second business day delivery), if delivered by such means, or (d) one (1) business day after delivery by facsimile transmission with copy by U.S. Mail, if sent via facsimile plus mail copy (with acknowledgment of complete transmission), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

If to Radiant, addressed to:

 

Radiant Systems, Inc.

3925 Brookside Parkway

Alpharetta, Georgia 30022

Attention: Mark W. Haidet, Chief Financial Officer

Telephone: (770) 576-6404

Facsimile No.: (770) 360-7627

 

with a copy to:

 

Smith, Gambrell & Russell, LLP

1230 Peachtree Street, N.E.

Suite 3100

Atlanta, Georgia 30309

Attention: Arthur Jay Schwartz

Telephone No.: (404) 815-3500

Facsimile No.: (404) 685-6932

 

with a copy to:

 

King & Spalding, LLP

191 Peachtree Street

Atlanta, Georgia 30303

Attention: Russell B. Richards

Telephone No.: (404) 572-4600

Facsimile No.: (404) 572-5136

 

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If to Shareholder, addressed to:

 

Erez Goren

c/o Wave Enterprise Systems, Inc.

3905 Brookside Parkway

Alpharetta, Georgia 30022

Attention: David Schulman, General Counsel

Telephone: (770) 576-7030

Facsimile No.: (770) 619-4669

 

with a copy to:

 

Kilpatrick Stockton LLP

1100 Peachtree Street

Suite 2800

Atlanta, Georgia 30309

Attention: Larry D. Ledbetter

Bruce D. Wanamaker

Telephone No.: (404) 815-6500

Facsimile No.: (404) 815-6555

 

12.9 Entire Agreement.    This Agreement, together with the Related Agreements, and the documents and instruments and other agreements among the parties hereto referenced herein and therein: (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof; and (b) are not intended to confer upon any other person any rights or remedies hereunder.

 

12.10 Headings.    The section headings and subheadings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

12.11 Severability.    If any provision of this Agreement is held or declared by a court of competent jurisdiction to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible.

 

12.12 Other Remedies.    Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy.

 

12.13 Specific Performance.    The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

 

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12.14 Interpretation; Definitions.

 

(a) When a reference is made in this Agreement to an Article or to a Section, Subsection, Exhibit or Schedule, such reference shall be to an Article of, a Section or Subsection of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words include, includes or including are used in this Agreement, they shall be deemed to be followed by the words without limitation. The words hereof, hereto, hereby, herein and hereunder and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The words “date hereof” shall refer to the date of this Agreement. The term “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Any agreement or instrument defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement or instrument as from time to time amended, modified or supplemented. References to a person are also to its permitted successors and assigns.

 

(b) For purposes of this Agreement,

 

(i) “Average Trading Price” shall mean the average of the daily volume weighted average price of Radiant Common Stock on the The Nasdaq National Market as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time) using the VAP function for each of the thirty consecutive trading days ending on and including the third trading day prior to the Closing Date (adjusted to reflect any Adjustment Event);

 

(ii) “Consents” shall mean any consents, waivers, approvals, or authorizations from, or notification, declaration or filing requirements to, any third party, including a party to any Contract with Radiant or a Subsidiary thereof, other than Governmental Approvals;

 

(iii) “Contracts” shall mean any written, oral or other agreement, contract, subcontract, lease, sublease, mortgage, instrument, indenture, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, memorandum of understanding, letter of intent, promise, arrangement, commitment or undertaking of any nature;

 

(iv) “Governmental Approvals” shall mean any notices, reports, declarations or other filings to be made, or any Permits to be obtained from, any Governmental Authority;

 

(v) “Governmental Authority” shall mean any supranational, national, federal, state, municipal, local or foreign government, any court, tribunal, arbitrator, administrative agency, commission or other governmental official, authority or instrumentality, in each case whether domestic or foreign, any stock exchange or similar self-regulatory organization or any quasi-governmental or private body exercising any regulatory, taxing or other governmental or quasi-governmental authority;

 

(vi) “Law” shall mean all laws, statutes, constitutions and ordinances, and all regulations, rules and other pronouncements issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority having the effect of law of the United States, any foreign country, or any domestic or foreign state, province, commonwealth, city, country, municipality, territory, protectorate, possession or similar instrumentality, or any Governmental Authority thereof;

 

(vii) “Liens” shall mean any pledge, lien, collateral assignment, security interest, deed of trust, mortgage, title retention device, collateral assignment, claim, license or other contractual restriction (including any restriction on the transfer of any asset, the receipt of income derived from any asset or on the possession, exercise or transfer of any other attribute of ownership of any asset), conditional sale or other security arrangement, or any charge, adverse claim of title, ownership or right to use or any other encumbrance of any kind whatsoever;

 

15


(viii) a “Material Adverse Effect” means any state of facts, change, development, effect or occurrence (an “Effect”) that has had, or could reasonably be expected to have, a material adverse effect on the business, assets, liabilities, operations, prospects, results of operations, properties (including intangible properties) or condition (financial or otherwise), taken as a whole, of the Enterprise Business (it being understood that the failure to obtain the Consents for the Contracts listed on Schedule 6.1(b), together with the failure to otherwise provide Enterprise with the material economic benefits under such Contracts, may constitute a Material Adverse Effect); provided, however, that in no event shall any of the following, alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been, or will be, a Material Adverse Effect: (A) actions or omissions of Radiant or any Subsidiary of Radiant taken with the prior consent, or at the direction, of Shareholder; (B) actions or omissions of Shareholder; (C) actions or omissions of management of Enterprise taken with the prior consent, or at the direction, of Shareholder; or (D) any Effect to the extent resulting from the announcement or pendency of the Separation and the Exchange (except for any suit, action, investigation or proceeding if the underlying claim is not dependent on the announcement or pendency of the Separation and the Exchange and except as set forth above with respect to the Consents listed on Schedule 6.1(b));

 

(ix) “Order” shall mean any order, writ, judgment, decree, injunction, ruling, directive or other requirement of any Governmental Authority (in each case, whether preliminary or final);

 

(x) “Permits” shall means all consents, approvals, orders, authorizations, certificates, filings, notices, permits, concessions, franchises, licenses and rights of or issued by any Governmental Authority;

 

(xi) “Permitted Encumbrances” shall mean (i) Liens for current Taxes not yet due or Taxes being contested in good faith, (ii) mechanics’, materialmen’s, warehousemen’s, contractors’, workmens’, repairmens’, carriers’ and similar Liens attaching by operation of law, incurred in the ordinary course of business and securing payments not delinquent or payments which are being contested in good faith, which are not, individually or in the aggregate, material, (iii) imperfections of title, easements and zoning restrictions on real property, if any, which do not materially impair the use of such real property or the operations of the Enterprise Business thereon and (iv) Conflicts arising from the failure to obtain the Consent of any Person.

 

(xii) “Person” shall mean any individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority; and

 

(xiii) “Subsidiary” shall mean with respect to any specified Person, any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided, however that no Person that is not directly or indirectly wholly owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

 

[Signatures follow on next page.]

 

16


IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date and year first above written.

 

RADIANT:

RADIANT SYSTEMS, INC.

By:  

   /s/ Mark Haidet


Name:     Mark Haidet
Title:     Chief Financial Officer

SHAREHOLDER:

/s/ Erez Goren


Erez Goren

 

17

EX-2.2 4 dex22.htm SEPARATION AGREEMENT Separation Agreement

Exhibit 2.2

 

SEPARATION AGREEMENT

 

by and between

 

RADIANT SYSTEMS, INC.

 

and

 

WAVE ENTERPRISE SYSTEMS, INC.

 

Dated as of             , 2003


Table of Contents

 

     Page

ARTICLE I DEFINITIONS

   1

SECTION 1.1.

   General.    1

SECTION 1.2.

   Reference; Interpretation.    8

ARTICLE II THE SEPARATION AND OTHER TRANSACTIONS; CERTAIN COVENANTS

   9

SECTION 2.1.

   The Transfer of Assets and Assumption of Liabilities.    9

SECTION 2.2.

   Adjustment of the Cash Contribution.    9

SECTION 2.3.

   Unearned Revenues.    10

SECTION 2.4.

   Ancillary Agreements.    10

SECTION 2.5.

   Limited Representations or Warranties.    10

SECTION 2.6.

   Witness Services.    10

SECTION 2.7.

   Corporate Names; Trademarks.    10

SECTION 2.8.

   Post-Separation Remittances.    11

SECTION 2.9.

   Non-Solicitation.    11

SECTION 2.10.

   Prohibited Transactions.    11

SECTION 2.11.

   Insurance.    12

SECTION 2.12.

   Further Assurances.    13

SECTION 2.13.

   Directors’ and Officers’ Indemnification and Insurance.    14

SECTION 2.14.

   Late Payments.    15

ARTICLE III INDEMNIFICATION

   16

SECTION 3.1.

   Indemnification by Radiant.    16

SECTION 3.2.

   Indemnification by Enterprise.    16

SECTION 3.3.

   Indemnification Obligations Net of Insurance Proceeds.    16

SECTION 3.4.

   Procedures for Indemnification.    16

SECTION 3.5.

   Additional Matters.    18

SECTION 3.6.

   Remedies Cumulative.    18

SECTION 3.7.

   Survival of Indemnities.    18

ARTICLE IV ACCESS TO INFORMATION

   19

SECTION 4.1.

   Agreement for Exchange of Information.    19

SECTION 4.2.

   Access to Information.    19

SECTION 4.3.

   Reimbursement; Other Matters.    19

SECTION 4.4.

   Confidentiality.    20

SECTION 4.5.

   Privileged Matters.    20

SECTION 4.6.

   Ownership of Information.    21

SECTION 4.7.

   Retention of Records.    21

SECTION 4.8.

   Limitation of Liability; Release.    22

SECTION 4.9.

  

Other Agreements Providing for Exchange of Information.

   22

ARTICLE V DISPUTE RESOLUTION

   23

SECTION 5.1.

  

Negotiation.

   23

SECTION 5.2.

  

Arbitration.

   23

SECTION 5.3.

  

Continuity of Service and Performance.

   23

SECTION 5.4.

  

Other Remedies.

   23

ARTICLE VI MISCELLANEOUS

   24

SECTION 6.1.

  

Complete Agreement; Construction.

   24

SECTION 6.2.

  

Ancillary Agreements.

   24

SECTION 6.3.

  

Counterparts.

   24

 

(i)


SECTION 6.4.

  

Survival of Agreements.

   24

SECTION 6.5.

  

Separation Expenses.

   24

SECTION 6.6.

  

Notices.

   24

SECTION 6.7.

  

Waivers.

   25

SECTION 6.8.

  

Amendments.

   25

SECTION 6.9.

  

Successors and Assigns.

   25

SECTION 6.10.

  

Termination.

   25

SECTION 6.11.

  

Subsidiaries.

   25

SECTION 6.12.

  

Parties in Interest.

   26

SECTION 6.13.

  

Title and Headings.

   26

SECTION 6.14.

  

Governing Law.

   26

SECTION 6.15.

  

Severability.

   26

 

Exhibits


    

Exhibit A

   Reseller and Services Agreement

Exhibit 1.1.17

   Employee Benefits Agreement

Exhibit 1.1.52

   Right of First Refusal and Purchase Option Agreement

Exhibit 1.1.56

   Sublease and Facilities Agreement

Exhibit 1.1.59

   Tax Disaffiliation Agreement

Schedules


    

Schedule 1.1.18(c)

   Transferred Assets

Schedule 1.1.20(a)

   Supply or Vendor Contracts

Schedule 1.1.20(c)

   Other Contracts

Schedule 1.1.21

   Enterprise Expenses

Schedule 1.1.25(a)

   Excluded Assets

Schedule 1.1.25(c)

   Excluded Contracts

Schedule 2.1(c)

   Timing of Delayed Transfer Assets and Delayed Transfer Liabilities

Schedule 2.13

   Indemnification Agreements

 

(ii)


SEPARATION AGREEMENT

 

THIS SEPARATION AGREEMENT (this “Agreement”), dated as of             , 2003, by and between RADIANT SYSTEMS, INC., a Georgia corporation (“Radiant”), and WAVE ENTERPRISE SYSTEMS, INC., a Georgia corporation (“Enterprise”);

 

W I T N E S S E T H:

 

WHEREAS, Enterprise is currently a wholly owned subsidiary of Radiant;

 

WHEREAS, Radiant currently conducts the Radiant Business (as defined herein) and the Enterprise Business (as defined herein), owns the Radiant Assets (as defined herein) and the Enterprise Assets (as defined herein) and is subject to the Excluded Liabilities (as defined herein) and Enterprise Liabilities (as defined herein);

 

WHEREAS, Radiant desires to transfer to Enterprise the Enterprise Business, Enterprise Assets and Enterprise Liabilities so that immediately prior to the Closing Date (as defined herein), Enterprise will conduct the Enterprise Business, will own the Enterprise Assets and will be subject to the Enterprise Liabilities;

 

WHEREAS, the Board of Directors of Radiant (the “Board”), based upon the recommendation of the Special Committee (as defined herein), has determined that the separation of the Enterprise Business from Radiant pursuant to this Agreement and the Ancillary Agreements referred to herein immediately prior to the transfer of the Enterprise Stock (as defined herein) to Erez Goren (“Goren”) in exchange for the Radiant Shares (as defined herein) on the terms and subject to the conditions of the Share Exchange Agreement (the “Exchange Agreement”) dated as of October 10, 2003 between Radiant and Goren (the “Exchange”), is fair to and in the best interests of Radiant and its shareholders;

 

WHEREAS, concurrently with the execution of this Agreement, Radiant and Enterprise are entering into each of the Ancillary Agreements, including the Reseller and Services Agreement in the form attached hereto as Exhibit A (the “Reseller Agreement”), pursuant to which, among other things, (a) Radiant will become a preferred reseller of the Products (as defined herein), and (b) Enterprise will provide service and support for certain of the Enterprise Assets and certain hosting, support and professional services to certain customers of Radiant and its Subsidiaries;

 

WHEREAS, the parties hereto intend that the Separation (as defined herein) qualify as a tax-free “reorganization” under Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”); and

 

WHEREAS, the parties hereto have determined to set forth the principal transactions required to effect the Separation and to set forth other agreements that will govern certain other matters relating to the Separation;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, the parties hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1.  General.    Unless otherwise defined herein or unless the context otherwise requires, as used in this Agreement, the following terms shall have the following meanings:

 

1.1.1 “Action” shall mean any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal.

 

1


1.1.2 “Affiliate” shall mean, when used with respect to any specified Person, a Person that directly or indirectly controls, is controlled by, or is under common control with such specified Person. As used herein, “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract or otherwise. Any contrary provision of this Agreement notwithstanding, neither Radiant nor any of its Subsidiaries shall be deemed to be an Affiliate of Enterprise, and Enterprise shall not be deemed to be an Affiliate of Radiant.

 

1.1.3 “Agreement” shall mean this Agreement, including all of the Schedules and Exhibits hereto.

 

1.1.4 “Agreement Disputes” shall have the meaning set forth in Section 5.1 of this Agreement.

 

1.1.5 “Ancillary Agreements” shall mean all of the written agreements, instruments, understandings, assignments or other arrangements (other than this Agreement and the Exchange Agreement) entered into by the parties hereto in connection with the transactions contemplated hereby, including the Employee Benefits Agreement, the Reseller Agreement, the Right of First Refusal, Purchase Option and Repurchase Right Agreement, the Sublease Agreement, and the Tax Disaffiliation Agreement.

 

1.1.6 “Applicable Rate” shall mean the rate of interest per annum announced from time to time by SunTrust Bank, as its prime lending rate.

 

1.1.7 “Business Day” shall mean any day other than a Saturday, Sunday or a day on which commercial banking institutions located in Atlanta, Georgia are authorized or obligated by law or executive order to close.

 

1.1.8 “Cash Contribution” shall mean FOUR MILLION DOLLARS ($4,000,000.00).

 

1.1.9 “Change of Control” shall mean, with respect to Enterprise, any of the following: (i) any sale or transfer of all or substantially all of the assets of such party; (ii) any merger, consolidation or other business reorganization in which the holders of such party’s outstanding voting securities immediately prior to such transaction do not hold, immediately following such transaction, securities representing 50% or more of the combined voting power of the outstanding securities of the surviving entity; or (iii) the acquisition by any Person (as defined herein), of beneficial ownership (within the meaning of Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 50% or more of the combined voting power of the then-outstanding securities of such party.

 

1.1.10 “Closing Date” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.11 “Competitive Offering” shall mean any software product with the primary purpose of managing retail customer sales transactions at the point of sale in petroleum and convenience stores, retail food service outlets or domestic cinemas, and that automates and tracks the placement and fulfillment of customer orders at the point of sale, integrates with credit and debit card payment processing systems, interfaces with other management information systems associated with the order fulfillment process, and is offered in the Restricted Territory; provided, however, that such term does not include any point-of-sale systems that are web hosted with the software and associated data residing centrally, outside the retail site.

 

1.1.12 “Contracts” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.13 “Consents” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.14 “Covered Persons” shall have the meaning ascribed to such term in Section 2.13.

 

1.1.15 “Delayed Transfer Assets” shall mean Enterprise Assets that are expressly provided in this Agreement or any Ancillary Agreement to be transferred after the date of this Agreement.

 

2


1.1.16 “Delayed Transfer Liabilities” shall mean any Enterprise Liabilities that are expressly provided in this Agreement or any Ancillary Agreement to be assumed after the date of this Agreement.

 

1.1.17 “Employee Benefits Agreement” shall mean the Employee Benefits Agreement by and between Radiant and Enterprise, which agreement shall be entered into prior to or on the Closing Date in the form attached hereto as Exhibit 1.1.17.

 

1.1.18 “Enterprise Assets” shall mean collectively (without duplication):

 

(a) the Cash Contribution;

 

(b) the Enterprise Products (as defined in the Reseller Agreement), including any and all rights in, arising out of, or associated with any: (i) United States and foreign patents and utility models and applications therefor, the inventions, designs and improvements described and claimed therein, patentable inventions, and other patent rights and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof, and equivalent or similar rights anywhere in the world in inventions and discoveries (regardless of whether patents are issued on any such applications and whether or not any such applications are amended, modified, withdrawn, or resubmitted); (ii) trademarks, service marks, trade dress, trade names, brand names, Internet domain names and URLs, designs, logos, or corporate names (including, in each case, the goodwill associated therewith), whether registered or unregistered, and all registrations and applications for registration thereof; (iii) copyrights, including all renewals and extensions, copyrights registrations and applications for registration, and non-registered copyrights and moral rights; (iv) trade secrets, confidential business information, concepts, ideas, designs, research or development information, processes, procedures, techniques, technical information, specifications, operating and maintenance manuals, engineering drawings, methods, know-how, data, mask works, discoveries, inventions, modifications, extensions, improvements, and other proprietary rights (whether or not patentable or subject to copyright, trademark, or trade secret protection); and (v) all computer software programs, including all source code, object code and documentation related thereto, that are embodied in the Enterprise Products;

 

(c) any and all assets set forth on Schedule 1.1.18(c) as assets to be transferred to Enterprise;

 

(d) subject to Section 2.11, any rights of Enterprise under any of the Insurance Policies, including any rights thereunder arising after the Closing Date in respect of any Insurance Policies that are occurrence policies;

 

(e) the Enterprise Contracts; and

 

(f) subject to Section 2.3, Unearned Revenues of the Enterprise Business.

 

Notwithstanding the foregoing, the Enterprise Assets shall not in any event include the Excluded Assets.

 

1.1.19 “Enterprise Business” shall mean (a) the business and operations of (i) the enterprise software business that develops, sells and services business enterprise software programs providing back-office solutions, workforce management and supply chain management (ii) such other business carried on by the Enterprise Software Systems segment of Radiant, and (b) except as otherwise expressly provided herein, any terminated, divested or discontinued businesses or operations that at the time of termination, divestiture or discontinuation primarily related to the Enterprise Business (as described in subsection (a) above) as then conducted, but in any event not the businesses and operations related to the Excluded Assets.

 

1.1.20 “Enterprise Contracts” shall means the following Contracts to which Radiant or any of its Affiliates is a party or by which it or any of its Affiliates or any of their respective assets is bound, whether or not in writing:

 

(a) any supply or vendor Contracts listed or described on Schedule 1.1.20(a);

 

(b) any Contract that is otherwise expressly contemplated pursuant to this Agreement or any of the Ancillary Agreements to be assigned to Enterprise; and

 

3


(c) the Contracts (including any related purchase and sales orders and commitments) and other documents listed or described on Schedule 1.1.20(c).

 

1.1.21 “Enterprise Expenses” shall mean the aggregate amount of the type of Liabilities incurred by Radiant on behalf of Enterprise or Goren set forth on Schedule 1.1.21 attached hereto, which in no event shall include any Liabilities primarily relating to, arising out of or resulting from the operation of the Enterprise Business in the ordinary course at any time prior to the Closing Date.

 

1.1.22 “Enterprise Indemnitees” shall have the meaning ascribed to such term in Section 3.1.

 

1.1.23 “Enterprise Liabilities” shall mean (without duplication):

 

(a) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by Enterprise, and all agreements, obligations and Liabilities of Enterprise under this Agreement or any of the Ancillary Agreements;

 

(b) all Liabilities (other than Taxes and any employee-related Liabilities which are specifically covered by the Tax Disaffiliation Agreement and the Employee Benefits Agreement, respectively) primarily relating to, arising out of or resulting from:

 

(i) the operation of the Enterprise Business or the Enterprise Assets at any time after the Closing Date (including any Liability relating to, arising out of or resulting from any act or failure to act by any director, officer, employee, agent or representative (whether or not such act or failure to act is or was within such Person’s authority));

 

(ii) obligations arising from the Enterprise Contracts after the Closing Date; or

 

(iii) any Liabilities arising from any misappropriation or any infringement by, or conflict of, the Products with any patent, copyright, trade name, trade secret, trademark or other intellectual property rights of any Person other than any member of the Radiant Group, whether occurring prior to, on or after the Closing Date, exclusive of any Liability for claims directly related to and resulting from (A) the modification or enhancement of the Products performed by any member of the Radiant Group with the Tools (as such term is defined in the Reseller Agreement) or otherwise without the express written consent of Enterprise, (B) the use of the Products by a Customer of any member of the Radiant Group other than as permitted under the Reseller Agreement or (C) use of the Products in combination with any other computer software programs, equipment or technology other than in accordance with the Documentation (as such term is defined in the Reseller Agreement); and

 

(c) the outstanding obligations of Radiant to make payments of the “Performance Component” of the “Purchase Price,” as such terms are defined in that certain Asset Purchase and License Agreement dated as of June 30, 2001, between Radiant and Tricon Restaurant Services Group, Inc. which a subsidiary of YUM! Brands, Inc. and is not known as YUM Restaurant Services Group, Inc. (“YUM”), as amended through the date hereof (the “YUM Asset Purchase Agreement”), including such amendments as are set forth in that certain Binding Letter of Intent dated October 6, 2003 between Radiant and YUM (the “YUM LOI”), on the terms and subject to the limitations set forth therein.

 

Notwithstanding the foregoing, the Enterprise Liabilities shall not include the Excluded Liabilities.

 

1.1.24 “Exchange Act” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.25 “Excluded Assets” shall mean:

 

(a) the assets listed or described on Schedule 1.1.25(a);

 

(b) any and all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as assets to be retained by Radiant or any other member of the Radiant Group; and

 

(c) any Contract listed or described on Schedule 1.1.25(c).

 

4


1.1.26 “Excluded Liabilities” shall mean:

 

(a) any and all Liabilities that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be retained or assumed by Radiant or any other member of the Radiant Group, and all agreements and obligations of any member of the Radiant Group under this Agreement or any of the Ancillary Agreements;

 

(b) any and all Liabilities primarily relating to, arising out of or resulting from any Excluded Assets;

 

(c) all Liabilities (other than Taxes and any employee-related Liabilities which are specifically covered by the Tax Disaffiliation Agreement and the Employee Benefits Agreement, respectively) primarily relating to, arising out of or resulting from:

 

(i) the operation of the Radiant Business, as conducted at any time prior to, on or after the Closing Date

 

(ii) except as set forth in Section 1.24(b)(iii), the operation of the Enterprise Business, as conducted at any time prior to the Closing Date (including any Liability relating to, arising out of or resulting from any act or failure to act by any Representative (whether or not such act or failure to act is or was within such Person’s authority) and the ownership of the Enterprise Assets and the performance of the Enterprise Contracts prior to the Closing Date); or

 

(iii) any Radiant Assets, whether arising before, on or after the Closing Date; and

 

(d) any and all Liabilities of Radiant to satisfy its outstanding obligations to make payments of the “Cash Component” of the “Purchase Price,” as such terms are defined in the YUM Asset Purchase Agreement, on the terms and subject to the limitations set forth therein.

 

1.1.27 “GAAP” shall mean United States generally accepted accounting principles.

 

1.1.28 “Governmental Approvals” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.29 “Governmental Authority” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.30 “Indemnifying Party” shall have the meaning set forth in Section 3.3(a) of this Agreement.

 

1.1.31 “Indemnitee” shall have the meaning set forth in Section 3.3(a) of this Agreement.

 

1.1.32 “Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

 

1.1.33 “Insurance Policies” shall mean the insurance policies of Radiant written by any insurance carrier, pursuant to which Enterprise (or its officers or directors) will be an insured party after the Closing Date.

 

1.1.34 “Insurance Proceeds” shall mean those monies: (a) received by an insured from an insurance carrier; or (b) paid by an insurance carrier on behalf of the insured; in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

 

5


1.1.35 “Law” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.36 “Liabilities” shall mean any and all debts, liabilities, obligations, responsibilities, response actions, losses, claims, charges, demands, causes of actions, payments, costs and expenses, sums of money, accounts, reckonings, bonds, specialties, indemnities and similar obligations, exoneration, covenants, contracts, damages (whether compensatory, punitive or treble), fines, penalties and sanctions, controversies, agreements, promises, doings, omissions, variances, guarantees, make whole agreements and similar obligations, and other liabilities and requirements, all contractual obligations, including those arising under this Agreement or any Ancillary Agreement, absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including those arising under or in connection with any Law, Action, threatened Action, order or consent decree of any Governmental Authority, or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or party to this Agreement, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursements and expenses of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.

 

1.1.37 “Notice” shall have the meaning set forth in Section 6.6 of this Agreement.

 

1.1.38 “Person” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.39 “Products” shall mean the Software (as such term is defined in the Reseller Agreement).

 

1.1.40 “Proxy Statement” shall have the meaning ascribed to such term in the Exchange Agreement..

 

1.1.41 “Radiant” shall have the meaning set forth in the preamble to this Agreement.

 

1.1.42 “Radiant Assets” shall mean any assets of Radiant or any of its Subsidiaries (other than Enterprise) other than the Enterprise Assets.

 

1.1.43 “Radiant Business” shall mean (a) the business and operations of (i) the site management systems business that provides (A) open point-of-sale technology for managing site operations of petroleum and convenience store, food service, and cinema businesses; (B) consumer-activated customer self-service systems allowing consumers to purchase tickets, place food orders, pay with a credit card, make inquiries, and view promotions through the use of a touch screen application for the food service, and cinema businesses; and (C) certain back-office systems allowing petroleum and convenience store operators to manage employees and inventory, schedule labor, automate daily reports, analyze costs, and forecast results of individual sites from headquarters; (ii) such other business carried on by the Store Systems segment of Radiant, and (iii) all other businesses (including the businesses and operations related to the Excluded Assets) conducted by Radiant not otherwise included in the Enterprise Business or Enterprise Assets; and (b) except as otherwise expressly provided herein, any terminated, divested or discontinued businesses or operations that at the time of termination, divestiture or discontinuation primarily related to the Radiant Business (as described in subsection (a) above) as then conducted, but in any event not the businesses and operations related to the Enterprise Assets.

 

1.1.44 “Radiant Group” shall mean Radiant, and each Person that is an Affiliate of Radiant immediately after the Closing Date (other than any Affiliate of Enterprise).

 

1.1.45 “Radiant Indemnitee” shall have the meaning ascribed to such term in Section 3.2.

 

1.1.46 “Radiant Shares” shall have the meaning ascribed to such term in the Exchange Agreement.

 

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1.1.47 “Representative” shall mean, with respect to any Person, any of such Person’s former, current and future directors, officers, members, employees, agents, consultants, advisors, accountants, attorneys and representatives.

 

1.1.48 “Restricted Acquiring Person” shall mean any Person that provides a Competitive Offering in the Restricted Territory provided such Person either (a) derives revenues from software associated with Competitive Offerings on an annual basis in excess of $20 million or (b) derives revenues from software and hardware (either independently from, or in addition to, software) associated with Competitive Offerings on an annual basis in excess of $50 million.

 

1.1.49 “Restricted Change of Control Period” shall mean the period ending on the fourth anniversary of the Closing Date.

 

1.1.50 “Restricted Competition Period” shall mean the period ending on the fifth anniversary of the Closing Date.

 

1.1.51 “Restricted Territory” shall mean any state of the United States or any country in which Radiant conducts the Radiant Business as of the Closing Date.

 

1.1.52 “Right of First Refusal, Purchase Option and Repurchase Right Agreement” shall mean the Right of First Refusal, Purchase Option and Repurchase Right Agreement by and between Radiant and Enterprise, which Agreement shall be entered into prior to or on the Closing Date in the form attached hereto as Exhibit 1.1.52 pursuant to which Radiant will grant to Enterprise a Right of First Refusal and Option on certain real property.

 

1.1.53 “Rules” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.54 “Separation” shall mean the transfer of the Enterprise Assets to Enterprise and the assumption by Enterprise of the Enterprise Liabilities, in each case, effective immediately prior to the Closing Date, all as more fully described in this Agreement and the Ancillary Agreements.

 

1.1.55 “Special Committee” shall have the meaning ascribed to such term in the Exchange Agreement.

 

1.1.56 “Sublease Agreement” shall mean the Sublease and Facilities Agreement by and between Radiant and Enterprise, which agreement shall be entered into prior to or on the Closing Date in the form attached hereto as Exhibit 1.1.56, pursuant to which Radiant will sublease a building and lease certain equipment to, and share certain other facilities with, Enterprise.

 

1.1.57 “Subsidiary” shall mean with respect to any specified Person, any corporation or other organization whether incorporated or unincorporated of which at least a majority of the securities or interests having by the terms thereof ordinary voting power to elect at least a majority of the board of directors or others performing similar functions with respect to such corporation or other organization is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one or more of its Subsidiaries; provided, however that no Person that is not directly or indirectly wholly owned by any other Person shall be a Subsidiary of such other Person unless such other Person controls, or has the right, power or ability to control, that Person.

 

1.1.58 “Taxes” shall have the meaning set forth in the Tax Disaffiliation Agreement.

 

1.1.59 “Tax Disaffiliation Agreement” shall mean the Tax Disaffiliation Agreement by and between Radiant and Enterprise, which agreement shall be entered into prior to or on the Closing Date in the form attached hereto as Exhibit 1.1.59.

 

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1.1.60 “Third-Party Claim” shall have the meaning set forth in Section 3.4(a) of this Agreement.

 

1.1.61 “Unearned Revenues” shall mean all deposits, prepayments, amounts billed and unpaid, and other funds that Radiant has received or is entitled to receive on or prior to the Closing Date in connection with products or services sold or performed or to be sold or performed, but that have not been recognized as revenue in accordance with GAAP, including prepaid support billed 90 days prior to the Closing Date.

 

SECTION 1.2.   Reference; Interpretation.    References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phrase “without limitation.” Unless the context otherwise requires, references in this Agreement to Articles, Sections, Exhibits and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Article, Section or provision of this Agreement. Neither this Agreement nor any Ancillary Agreement shall be construed against either party as the principal draftsman hereof or thereof. Unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to the instant immediately prior to the Closing Date regardless of any amendment or restatement hereof.

 

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ARTICLE II

THE SEPARATION AND OTHER TRANSACTIONS;

CERTAIN COVENANTS

 

SECTION 2.1.   The Transfer of Assets and Assumption of Liabilities.

 

(a) Radiant hereby contributes, assigns, transfers, conveys and delivers to Enterprise, and agrees to cause its applicable Subsidiaries to contribute, assign, transfer, convey and deliver to Enterprise, and Enterprise hereby accepts from Radiant and its Subsidiaries, all of Radiant’s and its Subsidiaries’ respective right, title and interest in all Enterprise Assets, other than the Delayed Transfer Assets.

 

(b) Enterprise hereby accepts, assumes and agrees faithfully to perform and fulfill all the Enterprise Liabilities, other than the Delayed Transfer Liabilities, in accordance with their respective terms.

 

(c) Each of the parties hereto agrees that the Delayed Transfer Assets will be contributed, assigned, transferred, conveyed and delivered, and the Delayed Transfer Liabilities will be accepted and assumed, in accordance with the terms of the agreements that provide for such contribution, assignment, transfer, conveyance and delivery, or such acceptance and assumption, after the date of this Agreement or as otherwise set forth on Schedule 2.1(c). Following such contribution, assignment, transfer, conveyance and delivery of any Delayed Transfer Asset, or the acceptance and assumption of any Delayed Transfer Liability, the applicable Delayed Transfer Asset or Delayed Transfer Liability shall be treated for all purposes of this Agreement and the Ancillary Agreements as an Enterprise Asset or an Enterprise Liability, as the case may be.

 

(d) If and to the extent that the valid, complete and perfected transfer or assignment to Enterprise of any Enterprise Assets would be a violation of applicable Laws or require any Consent or Governmental Approval in connection with the Separation or the Exchange, then, unless the parties shall mutually determine otherwise, the transfer or assignment to Enterprise, as the case may be, of such Enterprise Assets, respectively, shall be automatically deemed deferred and any such purported transfer or assignment shall be null and void until such time as all legal impediments are removed and/or such Consents or Governmental Approvals have been obtained. Notwithstanding the foregoing, such Asset shall be deemed an Enterprise Asset for purposes of determining whether any Liability is an Enterprise Liability.

 

(e) In the event that at any time or from time to time (whether prior to or after the Closing Date), any party hereto (or any member of such party’s respective group), shall receive or otherwise possess any asset that is allocated to any other Person pursuant to this Agreement or any Ancillary Agreement, such party shall promptly transfer, or cause to be transferred, such asset to the Person so entitled thereto. Prior to any such transfer, the Person receiving or possessing such asset shall hold such asset in trust for any such other Person.

 

(f) In furtherance of the contribution, assignment, transfer and conveyance of Enterprise Assets and the acceptance and assumption of Enterprise Liabilities set forth in Section 2.1(a) and (b) simultaneously with the execution and delivery hereof or as promptly as practicable thereafter, (i) Radiant shall execute and deliver, and shall cause its Subsidiaries to execute and deliver, such bills of sale, certificates of title, assignments of Contracts and other instruments of transfer, conveyance and assignment as and to the extent necessary to evidence and effect the transfer, conveyance and assignment of all of Radiant’s and its Subsidiaries’ right, title and interest in and to the Enterprise Assets to Enterprise pursuant to Georgia law or the Laws of one of the other states of the United States or, if not appropriate for a given transfer, and for transfers to be effected pursuant to non-U.S. Laws, in such other form as the parties shall reasonably agree, and (ii) Enterprise shall execute and deliver to Radiant and its Subsidiaries such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Enterprise Liabilities by Enterprise, in any such case.

 

SECTION 2.2.  Adjustment of the Cash Contribution.    The Cash Contribution shall be subject to adjustment so as to be reduced by an amount equal to the Enterprise Expenses.

 

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SECTION 2.3.  Unearned Revenues.    Notwithstanding any provision hereof to the contrary, all Unearned Revenues that are attributable to the Legacy Contracts and Reseller Legacy Clients (as such terms are defined in the Reseller Agreement), shall continue to be held by Radiant as security for Enterprise’s obligation to perform the services or deliver the software associated with such Unearned Revenues. Promptly (but in any event, within five (5) Business Days) after receipt by Radiant of Notice from Enterprise that it has performed the services or delivered the software associated with such Unearned Revenues, together with such evidence of performance as shall be reasonably requested by Radiant (which may include customer confirmation), Radiant shall deliver to Enterprise an amount of cash in same day funds equal to such Unearned Revenues.

 

SECTION 2.4.  Ancillary Agreements.    Effective as of the Closing Date, the parties shall execute and deliver all Ancillary Agreements to which it is a party.

 

SECTION 2.5.  Limited Representations or Warranties.    Each of the parties hereto understands and agrees that no party hereto is, in this Agreement, in any Ancillary Agreement or in any other agreement or document contemplated by this Agreement, any Ancillary Agreement or otherwise, making any representation or warranty whatsoever to any other party as to the value, quality or condition of any assets of such party, and all such representations and warranties are hereby disclaimed and negated. The parties also agree and understand that there are no warranties whatsoever, whether express or implied, given by any party to this Agreement, as to the condition, quality, merchantability or fitness for a particular purpose of any of the assets, businesses or other rights transferred or retained by the parties, as the case may be, and all such assets, businesses and other rights shall be “as is, where is” and “with all faults” (provided that the absence of warranties given by the parties shall not negate the assumption of Liabilities under this Agreement and shall have no effect on any manufacturers, sellers, or other third party warranties that are intended to be transferred with such assets). Notwithstanding the foregoing, however, from and after the Closing Date, Radiant shall be solely responsible for Excluded Liabilities, and Enterprise shall be solely responsible for Enterprise Liabilities.

 

SECTION 2.6.  Witness Services.    After the Closing Date, except in the case of an adversarial Action by one party against another party, each party hereto shall use its reasonable best efforts to make available to each other party, upon written request, its respective Representatives as witnesses to the extent that any such Person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) may reasonably be required in connection with any Action in which the requesting party may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting party shall bear all costs and expenses in connection therewith, and a party providing witness services to the other party under this Section 2.6 shall be entitled to receive from the recipient of such services, upon the presentation of invoices therefor, reimbursement for payments made for any out-of-pocket expenses (which shall include the costs of salaries and benefits of employees who are witnesses) as may be reasonably incurred in providing such witness services.

 

SECTION 2.7.  Corporate Names; Trademarks.    Except as otherwise specifically provided in the Reseller Agreement or any other Ancillary Agreement, as soon as reasonably practicable after the Closing Date but in any event within six (6) months thereafter:

 

(a) Enterprise will: (i) at its own expense, remove (or, if necessary, on an interim basis, cover up) any and all exterior signs and other identifiers located on any of its real property or premises or on the real property or premises used by Enterprise (other than the premises occupied by Enterprise pursuant to the Sublease Agreement) which refer or pertain to Radiant or which include the Radiant or any Radiant Subsidiary name, logo or other trademark or service mark or any similar mark or any derivative thereof or other intellectual property included in the Radiant Assets; and (ii) remove from all letterhead, envelopes, invoices, products, product labels, product literature, brochures and other communications media of any kind, all references to Radiant, including the “Radiant Systems, Inc.” name, logo and any other trademark or service mark or other intellectual property included in the Radiant Assets (except that Enterprise shall not be required to take any such action with respect to materials in the possession of third parties); and

 

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(b) Radiant will at its own expense, remove (or, if necessary, on an interim basis, cover up) any and all exterior signs and other identifiers located on the premises occupied by Enterprise pursuant to the Sublease Agreement which refer or pertain to Radiant or which include the Radiant or any Radiant Subsidiary name, logo or other trademark or service mark or any similar mark or any derivative thereof or other intellectual property included in the Radiant Assets.

 

SECTION 2.8.  Post-Separation Remittances.    Following the Closing Date, (i) Radiant will promptly remit to Enterprise, or reimburse Enterprise for, all amounts, and endorse or remit to Enterprise the proceeds of all checks, drafts, notes or other documents, received by Radiant or any of its Subsidiaries, that should have otherwise been paid to Enterprise; and (ii) Enterprise will promptly remit to Radiant, or reimburse Radiant for, all amounts, and endorse or remit to Radiant the proceeds of all checks, drafts, notes or other documents, received by Enterprise, that should have otherwise been paid to Radiant or any of its Subsidiaries.

 

SECTION 2.9.  Non-Solicitation.    For the period ending on the second anniversary of the Closing Date:

 

(a) Enterprise will not, directly or indirectly, solicit or recruit for its employment any employee of Radiant or any of its Subsidiaries (other than Enterprise immediately prior to the Closing Date) without the prior written consent of Radiant; provided, however, that nothing in this Section 2.12(a) shall (i) prohibit the hiring of any natural person who applied for employment with Enterprise solely in response to any public medium advertising or (ii) prohibit the hiring of any natural person whose employment with Radiant or any of its Subsidiaries terminated at least three (3) months prior to the date of such solicitation or recruitment for a bona fide reason not designed or intended to circumvent the provisions of this Section 2.9(a) and so long as such natural person was not solicited or recruited by Enterprise prior to the expiration of such three (3) month period.

 

(b) Radiant will not, and will not permit any of its Subsidiaries to, directly or indirectly, solicit or recruit for its employment any employee of Enterprise immediately after the Closing Date without the prior written consent of Enterprise; provided, however, that nothing in this Section 2.9(b) shall (i) prohibit the hiring of any natural person who applied for employment with Radiant or any of its Subsidiaries solely in response to any public medium advertising or (ii) prohibit the hiring of any natural person whose employment with Enterprise terminated at least three (3) months prior to the date of such solicitation or recruitment for a bona fide reason not designed or intended to circumvent the provisions of this Section 2.9(b) and so long as such natural person was not solicited or recruited by Radiant or any of its Subsidiaries prior to the expiration of such three (3) month period.

 

SECTION 2.10.  Prohibited Transactions.

 

(a) Consolidation, Merger, etc.    Enterprise hereby covenants and agrees that during the Restricted Change of Control Period, it will not engage in or consummate a Change of Control transaction with a Restricted Acquiring Person. In addition to the restriction in the preceding sentence, Enterprise shall not engage in or consummate any Change in Control transaction with any Person, unless such Person is a corporation, partnership, limited liability company or trust that expressly assumes, by a written agreement, executed and delivered to Radiant, in form reasonably satisfactory to Radiant, all of the liabilities, obligations and expenses to be assumed by Enterprise under this Agreement and the due and punctual performance or observance of every agreement and covenant of this Agreement and the Ancillary Agreements on the part of Enterprise to be performed or observed.

 

(b) Restrictive Covenants.    Enterprise covenants and agrees that during the Restricted Competition Period, it will not, in the Restricted Territory, (i) engage in the development or sale of Competitive Offerings on its own behalf, or (ii) own any interest in, or engage in or perform any development of services for any Person other than Radiant that develops or sells Competitive Offerings in the Restricted Territory, either as a partner, owner, consultant, or shareholder, if such Person either (A) derives revenues from software associated with Competitive Offerings on an annual basis in excess of $20 million or (B) derives revenues from software and hardware (either independently from, or in addition to, software) associated with Competitive Offerings on an annual basis in

 

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excess of $50 million. Notwithstanding the foregoing, nothing contained in this Section 2.10(b) shall prohibit Enterprise from (x) entering into strategic alliances, joint ventures or similar contractual commercial relationships with any Person for purposes of marketing, selling and distributing any Enterprise Assets, including the Products, or (y) holding and making investments in securities of any Person whose securities are traded on a national securities exchange or are quoted on Nasdaq or an over-the-counter market, provided that Enterprise’s equity interest in any such Person does not exceed five percent (by voting power) of the outstanding shares of capital stock of such Person.

 

(c) Reliance.    Enterprise acknowledges that Radiant would not consummate the transactions contemplated by this Agreement and the Ancillary Agreements without the assurance that Enterprise will not engage in the transactions and activities prohibited by this Section 2.10 as and for the periods set forth herein. In order to induce Radiant to consummate the Separation and the other transactions contemplated by this Agreement and the Ancillary Agreements, Enterprise agrees to the restrictions set forth in this Section 2.10.

 

(d) Remedies.    Each of Enterprise’s agreements contained in Section 2.9 and this Section 2.10 relates to matters of unique character and peculiar value impossible of replacement, and Enterprise acknowledges and agrees that breach of such agreements by Enterprise will cause Radiant irreparable injury, that the remedy at law for any breach of these agreements would be inadequate and that Radiant, in addition to other remedies available to it, shall be entitled to temporary restraining orders and temporary and permanent injunctive relief or other equitable remedies without the necessity of proving actual damages or of providing a bond so as to prevent a breach or threatened breach of these agreements and to secure the enforcement thereof.

 

SECTION 2.11.  Insurance.

 

(a) Radiant and Enterprise agree to cooperate in good faith to provide for an orderly transition of insurance coverage for the treatment of any Insurance Policies that will remain in effect following the Closing Date on a mutually agreeable basis.

 

(b) Except as otherwise provided in any Ancillary Agreement, the parties intend that the Enterprise Assets shall include all rights that Enterprise or its Affiliates may have as of the Closing Date as a subsidiary, affiliate, division or department of Radiant prior to the Closing Date under any policy of insurance issued to Radiant by any insurance carrier or under any agreements related to such policies executed and delivered prior to the Closing Date, including any rights Enterprise or any such Affiliate of Enterprise may have, as an insured or additional named insured, subsidiary, affiliate, division or department, to avail itself of any such policy of insurance or any such agreements related to such policies as in effect prior to the Closing Date. At the request of Enterprise and at Enterprise’s expense, Radiant shall take all reasonable steps, including the execution and delivery of any instruments, to effect the foregoing; provided, however that Radiant shall not be required to pay any amounts, waive any rights or incur any Liabilities in connection therewith.

 

(c) If, subsequent to the Closing Date, any Person shall assert a claim against Enterprise (including where Enterprise is a joint defendant with other Persons) with respect to any claim, suit, action, proceeding, injury, loss, liability, damage or expense incurred or claimed to have been incurred prior to the Closing Date in, or in connection with, the conduct of the Enterprise Business or the ownership of the Enterprise Assets, and which claim, suit, action, proceeding, injury, loss, liability, damage or expense may arise out of an insured or insurable occurrence under one or more of the Insurance Policies, Radiant shall, on behalf of Enterprise, assert a claim under the appropriate Insurance Policy and collect any related Insurance Proceeds under such Insurance Policy and remit promptly to Enterprise any Insurance Proceeds so collected. At the request of Enterprise, Radiant shall further on behalf of Enterprise assert any and all rights of an insured party under such Insurance Policy with respect to such asserted claim, specifically including rights of indemnity and the right to be defended by or at the expense of the insurer and the right to any applicable proceeds thereunder. From and after the Closing Date,

 

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Radiant shall be solely responsible for administration of the Insurance Policies with respect to all Liabilities (including Enterprise Liabilities); provided, however, that the retention of such administrative responsibilities by Radiant is in no way intended to relieve Enterprise of the primary responsibility for reporting such third-party claim accurately, completely and in a timely manner or of Enterprise’s authority to settle any such third-party claim within any period permitted or required by the relevant Insurance Policy. Radiant may discharge its administrative responsibilities under this Section 2.11(c) by contracting for the provision of services by independent third parties. Enterprise shall pay any costs relating to defending any such claims to the extent such defense costs are not covered under such Insurance Policies. Enterprise shall reimburse Radiant promptly for all disbursements, out-of-pocket expenses and direct and indirect costs of employees or agents of Radiant relating to the administration of the Insurance Policies on behalf of Enterprise as contemplated by this Section 2.11. Enterprise shall not assert any claims under any of the Insurance Policies except through Radiant as provided in this Section 2.11.

 

(d) This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any member of the Radiant Group in respect of any Insurance Policy or any other contract or policy of insurance.

 

(e) Enterprise does hereby agree that no member of the Radiant Group or any Radiant Indemnitee shall have any Liability whatsoever as a result of the insurance policies and practices of Radiant and its Affiliates as in effect at any time prior to the Closing Date, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

 

(f) Nothing in this Agreement shall be deemed to restrict Enterprise from acquiring at its own expense any other insurance policy in respect of any Liabilities or covering any period.

 

SECTION 2.12.  Further Assurances.

 

(a) In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties hereto shall use its commercially reasonable efforts, on and after the Closing Date, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements. Without limiting the foregoing, on and after the Closing Date, each party hereto shall cooperate with the other party, to execute and deliver, or use its best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all consents, approvals or authorizations of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any Consents or Governmental Approvals), and to take all such other actions as such party may reasonably be requested to take by any other party hereto from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transfers of the Enterprise Assets and the assignment and assumption of the Enterprise Liabilities and the other transactions contemplated hereby and thereby (other than the payment of money or the deposit of funds by one party on behalf of the other). Without limiting the foregoing, each party will, at the reasonable request, cost and expense of any other party, take such other actions as may be reasonably necessary to vest in such other party good and marketable title, free and clear of any lien, if and to the extent it is practicable to do so.

 

(b) If the transfer or assignment of any Enterprise Assets or Liabilities intended to be transferred or assigned hereunder is not consummated prior to or at the Closing Date, whether as a result of the provisions of Section 2.1(d) or for any other reason, then the Person retaining such Enterprise Asset or Enterprise Liability shall continue to take the actions required by Section 2.12(a) to consummate and make effective such transfer as soon as practicable after the Closing Date and, in the case of Enterprise Assets, shall use its best efforts to preserve the value of such Enterprise Assets until the time of transfer, and shall hold such Enterprise Asset for the use and

 

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benefit insofar as reasonably possible, of Enterprise. In addition, the Person retaining such Enterprise Asset shall take such other actions as may be reasonably requested by Enterprise in order to place Enterprise, insofar as reasonably possible, in the same position as if such Enterprise Asset had been transferred as contemplated hereby and so that all the benefits and burdens relating to such Enterprise Assets, including possession, use, risk of loss, potential for gain, and dominion, control and command over such Enterprise Assets, are to inure from and after the Closing Date to Enterprise. If and when the Consents and/or Governmental Approvals, the absence of which caused the deferral of transfer of any Enterprise Asset pursuant to Section 2.1(d), are obtained, the transfer of the applicable Enterprise Asset shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement. The parties hereto agree that, as of the Closing Date, each party hereto shall be deemed to have acquired complete and sole beneficial ownership to all of the assets, together with all rights, powers and privileges incident thereto, and shall be deemed to have assumed in accordance with the terms of this Agreement and the Ancillary Agreements all of the Liabilities, and all duties, obligations and responsibilities incident thereto, that such party is entitled or required to hold or assume pursuant to this Agreement.

 

(c) Any disagreement regarding whether any Asset or Liability was or should have been transferred to, retained by or assumed by Radiant or Enterprise shall be resolved in accordance with the provisions of Article V.

 

SECTION 2.13.  Directors’ and Officers’ Indemnification and Insurance.

 

(a) Radiant agrees that all rights to indemnification (and advancement of expenses) and all rights with respect to the elimination or limitation of liability now existing in favor of all persons (hereinafter referred to as “Covered Persons”) who at any time (x) prior to the Closing Date were directors or officers of Radiant, and (y) after the Closing Date, were directors, officers or employees of Enterprise, provided in Radiant’s Articles of Incorporation and Bylaws and under any indemnification agreement or other contract listed in Schedule 2.13 attached hereto, as in effect as of the Closing Date, with respect to matters occurring at or prior to the Closing Date, shall survive after the Closing Date and shall continue in full force and effect for a period of six years after the Closing Date. During such period, Radiant shall not amend, repeal or otherwise modify such provisions for indemnification (and advancement of expenses) and elimination or limitation of liability in any manner that would materially and adversely affect the rights thereunder of Covered Persons in respect of actions or omissions occurring at or prior to the Close of the Separation Date (including, without limitation, the transactions contemplated by the Exchange Agreement), without the written consent of Enterprise, which consent shall not be unreasonably withheld or delayed, unless such modification is required by law; provided, however, that in the event any claim or claims are asserted or made either prior to the Closing Date or within such six-year period, all rights to indemnification in respect of any such claim or claims shall continue until disposition of any and all such claims. Without limiting the foregoing, from and after the Closing Date, Radiant shall indemnify, defend and hold harmless each Covered Person from and against any and all Liabilities of the Covered Persons relating to, arising out of or resulting from any claim of a current or former shareholder of Radiant against any of the Covered Persons made in connection with or related to the execution and delivery of the Exchange Agreement or any of the Related Agreements, or consummation of the Separation and the Exchange, whether asserted or claimed prior to, at or after the Closing Date, and shall pay each Covered Person any expenses, as incurred, in advance of the final disposition of any action relating to such claims; provided, however, that the Covered Persons shall not be entitled to such indemnity if a court of competent jurisdiction issues a final, nonappealable Order (as such term is defined in the Exchange Agreement) that (x) Goren did not provide the Special Committee with the “required disclosure” (as such term is defined in Section 14-2-860(4) of the Georgia Business Corporation Code) to the extent such information was not known by any member thereof, and (y) the Separation and Exchange are not entitled to the protections afforded by Section 14-2-861(b) of the Georgia Business Corporation Code.

 

(b) Radiant shall maintain, on a primary, non-contributory basis, for a period of six years after the Closing Date, directors’ and officers,’ errors and omissions, professional liability, employment practices, fiduciary, ERISA, and/or any other insurance (including all primary, umbrella and excess coverages) that provides coverage on a claims made basis if (but only if) such coverage is now provided on this basis (in at least the same amounts and on terms no less advantageous than the coverage currently provided under such policies) for events or in respect of actions or omissions occurring at or prior to the Closing Date for Covered Persons.

 

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SECTION 2.14.  Late Payments.    Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within 30 days of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to the Applicable Rate plus 2%.

 

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ARTICLE III

INDEMNIFICATION

 

SECTION 3.1.  Indemnification by Radiant.    Except as provided in Section 3.3, Radiant shall indemnify, defend and hold harmless Enterprise and each Person, if any, after the Closing Date who controls Enterprise within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Enterprise Indemnitees”), from and against any and all Liabilities of the Enterprise Indemnitees relating to, arising out of or resulting from the failure of Radiant or any other member of the Radiant Group or any other Person to pay, perform or otherwise promptly discharge any Excluded Liabilities. Subject to the last sentence of Section 6.1, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

 

SECTION 3.2.  Indemnification by Enterprise.    Except as provided in Section 3.3, Enterprise shall indemnify, defend and hold harmless Radiant, each member of the Radiant Group and each of their respective directors, officers and employees, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Radiant Indemnitees”) from and against any and all Liabilities of the Radiant Indemnitees relating to, arising out of or resulting from the failure of Enterprise to pay, perform or otherwise promptly discharge any Enterprise Liabilities in accordance with their respective terms after the date hereof. Subject to the last sentence of Section 6.1, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

 

SECTION 3.3.  Indemnification Obligations Net of Insurance Proceeds.

 

(a) The parties intend that any Liability subject to indemnification or reimbursement pursuant to this Article III will be net of Insurance Proceeds that actually reduce the amount of the Liability. Accordingly, the amount which any party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification hereunder (an “Indemnitee”) will be reduced by any Insurance Proceeds theretofore actually recovered by or on behalf of the Indemnitee in reduction of the related Liability. If an Indemnitee receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds, then the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds had been received, realized or recovered before the Indemnity Payment was made.

 

(b) An insurer who would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed that no insurer or any other third party shall be entitled to a “wind-fall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Nothing contained in this Agreement or any Ancillary Agreement shall obligate Enterprise or any member of the Radiant Group to seek to collect or recover any Insurance Proceeds.

 

SECTION 3.4.  Procedures for Indemnification.

 

(a) If an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) other than Enterprise or a member of the Radiant Group of any claim of or the commencement by any such Person of any Action (a “Third-Party Claim”) as to which such Indemnitee is entitled to indemnification pursuant to Section 3.1 or Section 3.2 of this Agreement, such Indemnitee shall notify the Indemnifying Party in writing, and in reasonable detail, of the Third-Party Claim promptly (and in any event within fifteen (15) Business Days) after becoming aware of such Third-Party Claim; provided, however, that

 

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failure to give such notification shall not affect the indemnification provided hereunder except to the extent the Indemnifying Party shall have been actually prejudiced as a result of such failure. Thereafter, the Indemnitee shall deliver to the Indemnifying Party, promptly (and in any event within ten (10) Business Days) after the Indemnitee’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim.

 

(b) If a Third-Party Claim is made against an Indemnitee, the Indemnifying Party shall be entitled to participate in the defense thereof and, if it so elects in accordance with this Section 3.4(b), to assume the defense thereof with counsel selected by the Indemnifying Party. Should the Indemnifying Party so elect to assume the defense of a Third-Party Claim, the Indemnifying Party shall, within thirty (30) days (or sooner if the nature of the Third-Party Claim so requires), notify the Indemnitee in writing of its intent to do so, and the Indemnifying Party shall thereafter not be liable to the Indemnitee for legal or other expenses subsequently incurred by the Indemnitee in connection with the defense thereof; provided, however, that such Indemnitee shall have the right to employ counsel to represent such Indemnitee if, in the written opinion of such Indemnitee’s outside counsel, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such claim that would make representation of both such parties by one counsel inappropriate under applicable standards of professional responsibility, and in such event the fees and expenses of such separate counsel shall be paid by such Indemnifying Party; provided, further, however, that the Indemnifying Party shall not be obligated to pay the fees and expenses of more than one separate counsel for all Indemnitees in each jurisdiction in a single proceeding. If the Indemnifying Party elects to assume such defense, the Indemnitee shall have the right to participate in the defense thereof and to employ counsel, subject to the proviso of the preceding sentence, at its own expense, separate from the counsel employed by the Indemnifying Party, it being understood that the Indemnifying Party shall control such defense. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the Indemnitee for any period during which the Indemnifying Party has failed to assume the defense thereof (other than during the period prior to the time the Indemnitee shall have given notice of the Third-Party Claim as provided above). If the Indemnifying Party so elects to assume the defense of any Third-Party Claim, all of the Indemnitees shall cooperate with the Indemnifying Party in the defense or prosecution thereof, including by providing or causing to be provided, Information and witnesses as soon as reasonably practicable after receiving any request therefor from or on behalf of the Indemnifying Party.

 

(c) If an Indemnifying Party elects to assume the defense of a Third-Party Claim as provided above, in no event will the Indemnitee admit any liability with respect to, or settle, compromise or discharge, any Third-Party Claim without the Indemnifying Party’s prior written consent; provided, however, that the Indemnitee shall have the right to settle, compromise or discharge such Third-Party Claim without the consent of the Indemnifying Party if the Indemnitee releases the Indemnifying Party from its indemnification obligation hereunder with respect to such Third-Party Claim and such settlement, compromise or discharge would not otherwise adversely affect the Indemnifying Party. If an Indemnifying Party elects to assume the defense of a Third-Party Claim as provided above, the Indemnitee will agree to any settlement, compromise or discharge of a Third-Party Claim that the Indemnifying Party may recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability in connection with such Third-Party Claim and releases the Indemnitee completely in connection with such Third-Party Claim; provided, however, that, notwithstanding the foregoing, the Indemnitee shall not be required hereunder to agree to any such settlement, compromise or discharge involving the stipulation of facts or the adjudication of any question that the Indemnitee determines in its discretion would have an adverse effect on the Indemnitee in any other proceeding or otherwise would affect adversely the Indemnitee. If an Indemnifying Party elects not to assume the defense of a Third-Party Claim, or fails to notify an Indemnitee of its election to do so as provided herein, such Indemnitee may compromise, settle or defend such Third-Party Claim, and such Indemnitee may recover the Indemnifiable Losses in connection with such compromise, settlement or defense from the Indemnifying Party.

 

(d) Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume the defense of any Third-Party Claim (and shall be liable for the fees and expenses of counsel incurred by the Indemnitee in defending such Third-Party Claim) if the Third-Party Claim seeks an order, injunction or other equitable relief or

 

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relief for other than money damages against the Indemnitee which the Indemnitee reasonably determines, after conferring with its counsel, cannot be separated from any related claim for money damages. If such equitable relief or other relief portion of the Third-Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages.

 

(e) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim.

 

SECTION 3.5.  Additional Matters.

 

(a) Any claim on account of a Liability which does not result from a Third Party Claim shall be asserted by written notice given by the Indemnitee to the related Indemnifying Party. Such Indemnifying Party shall have a period of 30 days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such 30-day period, such Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If such Indemnifying Party does not respond within such 30-day period or rejects such claim in whole or in part, such Indemnitee shall be free to pursue such remedies as may be available to such party as contemplated by Article V of this Agreement.

 

(b) In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third Party Claim against any claimant or plaintiff asserting such Third Party Claim or against any other person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

 

(c) In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnified Party or Indemnifying Party shall so request, the parties shall endeavor to substitute the Indemnifying Party for the named defendant if at all practicable. If such substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in this section, and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or settlement, and the cost of any interest or penalties relating to any judgment or settlement.

 

SECTION 3.6.  Remedies Cumulative.    The remedies provided in this Article III shall be cumulative and shall not preclude assertion by any Indemnitee of any other rights or the seeking of any and all other remedies against any Indemnifying Party.

 

SECTION 3.7.  Survival of Indemnities.    The rights and obligations of each of Radiant and Enterprise and their respective Indemnitees under this Article III shall survive the sale or other transfer by any party of any Assets or businesses or the assignment by it of any Liabilities.

 

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ARTICLE IV

ACCESS TO INFORMATION

 

SECTION 4.1.  Agreement for Exchange of Information.

 

(a) Radiant agrees to provide, or cause to be provided, at any time after the Closing Date, as soon as reasonably practicable after written request of Enterprise therefor, any Information in the possession or under the control of Radiant that (i) relates to (x) Enterprise, the conduct of the Enterprise Business up to the Closing Date or the ownership of the Enterprise Assets up to the Closing Date, or (y) any Ancillary Agreement (other than the Tax Disaffiliation Agreement), (ii) Enterprise reasonably needs (A) to comply with reporting, disclosure, filing or other requirements imposed on Enterprise (including under applicable securities or Tax laws) by a Governmental Authority having jurisdiction over the requesting party, (B) for use in any other Action or in order to satisfy audit, accounting, claims, regulatory, litigation, Tax or other similar requirements, in each case other than claims or allegations that one party to this Agreement has against the other or (C) subject to clause (B) above, to comply with its obligations under this Agreement, or any Ancillary Agreement; provided, however, that in the event that any party determines that any such provision of Information could be commercially detrimental, violate any law or agreement, or waive any attorney-client privilege, the parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence. Radiant shall arrange, as soon as reasonably practicable following the receipt of such request, to provide such Information (or appropriate copies thereof if Radiant has a reasonable need to retain the originals) in the possession or control of Radiant or any of the Radiant Subsidiaries.

 

(b) Enterprise agrees to provide, or cause to be provided, at any time after the Closing Date, as soon as reasonably practicable after written request of Radiant therefor, any Information in the possession or under the control of Enterprise that (i) relates to (x) Radiant, the conduct of the Radiant Business up to the Closing Date or the ownership of the Radiant Assets up to the Closing Date, or (y) any Ancillary Agreement (other than the Tax Disaffiliation Agreement), (ii) Radiant reasonably needs (A) to comply with reporting, disclosure, filing or other requirements imposed on Radiant (including under applicable securities or tax laws) by a Governmental Authority having jurisdiction over the requesting party, (B) for use in any other Action or in order to satisfy audit, accounting, claims, regulatory, litigation, tax or other similar requirements, in each case other than claims or allegations that one party to this Agreement has against the other or (C) subject to clause (B) above, to comply with its obligations under this Agreement, or any Ancillary Agreement; provided, however, that in the event that any party determines that any such provision of Information could be commercially detrimental, violate any law or agreement, or waive any attorney-client privilege, the parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence. Enterprise shall arrange, as soon as reasonably practicable following the receipt of such request, to provide such Information (or appropriate copies thereof if Radiant has a reasonable need to retain the originals) in the possession or control of Enterprise, but only to the extent such items are not already in the possession or control of Radiant or any Subsidiary thereof.

 

SECTION 4.2.  Access to Information.    From and after the Closing Date, each of Radiant and Enterprise shall afford to the other and its authorized Representatives reasonable access during normal business hours, subject to appropriate restrictions for classified, privileged or confidential information, to the personnel, properties, and Information of such party and its Subsidiaries insofar as such access is reasonably required by the other party and relates to (x) such other party or the conduct of its business or ownership of its Assets prior to the Closing Date or (y) any Ancillary Agreement.

 

SECTION 4.3.  Reimbursement; Other Matters.    Except to the extent otherwise contemplated by any Ancillary Agreement, a party providing Information or access to Information to the other party under this Article IV shall be entitled to receive from the recipient, upon the presentation of invoices therefor, reimbursement for payments made for supplies, disbursements and other out-of-pocket expenses (including attorneys’ fees and disbursements), as may be reasonably incurred in creating, gathering, copying and providing such Information or access to Information.

 

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SECTION 4.4.  Confidentiality.    Neither Radiant nor Enterprise shall use or permit the use of (without the prior written consent of the other) and each such entity shall keep, and shall cause its Representatives to keep, confidential all Information concerning the other party in its possession, its custody or under its control (except to the extent that (A) such information has been in the public domain through no fault of such party or (B) such information has been later lawfully acquired from other sources by such party, (C) this Agreement or any other Ancillary Agreement or any other agreement entered into pursuant hereto permits the use or disclosure of such information, or (D) was independently generated without reference to any proprietary or confidential Information of the other party) to the extent such information, (w) relates to or was acquired during the period up to the Closing Date, (x) relates to any Ancillary Agreement, (y) is obtained in the course of performing services for the other party pursuant to any Ancillary Agreement, or (z) is based upon or is derived from information described in the preceding clauses (w), (x) or (y), and each party shall not (without the prior written consent of the other) otherwise release or disclose such information to any other Person, except such party’s Representatives, unless compelled to disclose such information by judicial or administrative process or unless such disclosure is required by Law and such party has provided the other party with prompt notice of such requirement in order to afford the other party the opportunity to seek an appropriate protective order or other remedy. No party shall release or disclose any such Information to any other Person, except its Representatives who shall be advised of and agree to comply with the provisions of this Section 4.4. Notwithstanding the foregoing, each of the parties may disclose to any and all Persons, without limitation of any kind, the U.S. federal Tax treatment and Tax structure of the transaction and all materials of any kind (including opinions or other Tax analyses) that are provided to the parties relating to such Tax treatment and Tax structure.

 

SECTION 4.5.  Privileged Matters.    The parties hereto recognize that legal and other professional services that have been and will be provided prior to the Closing Date have been and will be rendered for the benefit of Radiant and Enterprise, and that each of the members of Radiant Group and Enterprise should be deemed to be the client for the purposes of asserting all privileges which may be asserted under applicable Law. Except as otherwise specifically provided in the Tax Disaffiliation Agreement with respect to tax matters, to allocate the interests of each party in the information as to which any party is entitled to assert a privilege, the parties agree as follows:

 

(a) Radiant shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Radiant Business, whether or not the privileged information is in the possession of or under the control of Radiant or Enterprise. Radiant shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information that relates solely to the subject matter of any claims constituting Excluded Liabilities, now pending or which may be asserted in the future, in any Action initiated against or by Radiant, whether or not the privileged information is in the possession of or under the control of Radiant or Enterprise.

 

(b) Enterprise shall be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the Enterprise Business, whether or not the privileged information is in the possession of or under the control of Radiant or Enterprise. Enterprise shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which relates solely to the subject matter of any claims constituting Enterprise Liabilities, now pending or which may be asserted in the future, in any Action initiated against or by Enterprise, whether or not the privileged information is in the possession of Enterprise or under the control of Radiant or Enterprise.

 

(c) The parties hereto agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions in this Section 4.5, with respect to all privileges not allocated pursuant to the terms of Sections 4.5(a) and 4.5(b). All privileges relating to any Action, disputes or other matters which involve Radiant and Enterprise in respect of which such parties retain any responsibility or liability under this Agreement, shall be subject to a shared privilege among them.

 

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(d) No party hereto may waive any privilege which could be asserted under any applicable Law, and in which any other party hereto has a shared privilege, without the consent of the other party, which consent shall not be unreasonably withheld or delayed, except to the extent reasonably required in connection with any Action with Third Parties or as provided in subsection (e) below. Consent shall be in writing, or shall be deemed to be granted unless written objection is made within twenty (20) days after notice upon the other party requesting such consent.

 

(e) In the event of any Action or dispute between any of the parties hereto, any party and a Subsidiary of another party hereto, or a Subsidiary of one party hereto and a Subsidiary of another party hereto, either such party, to the extent necessary in connection with such Action or dispute, may waive a privilege in which the other party has a shared privilege, without obtaining the consent of the other party, provided that such waiver of a shared privilege shall be effective only as to the use of information with respect to such Action or dispute between the relevant parties and/or their Subsidiaries, and shall not operate as a waiver of the shared privilege with respect to Third Parties.

 

(f) If a dispute arises between or among the parties hereto or their respective Subsidiaries regarding whether a privilege should be waived to protect or advance the interest of any party, each party agrees that it shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other parties, and shall not unreasonably withhold consent to any request for waiver by another party. Each party hereto specifically agrees that it will not withhold consent to waiver for any purpose except to protect its own legitimate interests.

 

(g) Upon receipt by any party hereto or by any Subsidiary thereof of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject to a shared privilege or as to which another party has the sole right hereunder to assert a privilege, or if any party obtains knowledge that any of its or any of its Subsidiaries’ current or former Representatives has received any subpoena, discovery or other requests which arguably calls for the production or disclosure of such privileged information, such party shall promptly notify the other party of the existence of the request and shall provide the other party a reasonable opportunity to review the information (to the extent such information is available to such party) and to assert any rights it or they may have under this Section 4.5 or otherwise to prevent the production or disclosure of such privileged information.

 

(h) The transfer of all Information and other information pursuant to this Agreement is made in reliance on the agreement of Radiant and Enterprise, as set forth in Sections 4.4 and 4.5, to maintain the confidentiality of privileged information and to assert and maintain all applicable privileges. The access to information being granted pursuant to Sections 4.1 and 4.2 hereof, the agreement to provide witnesses and individuals pursuant to Sections 2.6 and 3.4 hereof, the furnishing of notices and documents and other cooperative efforts contemplated by Section 3.4 hereof, and the transfer of privileged information between and among the parties and their respective Subsidiaries pursuant to this Agreement shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

 

SECTION 4.6.  Ownership of Information.    Any Information owned by one party or any of its Subsidiaries that is provided to a requesting party pursuant to this Article IV shall be deemed to remain the property of the providing party. Unless specifically set forth herein, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such information.

 

SECTION 4.7.  Retention of Records.

 

(a) Radiant shall deliver to Enterprise upon Enterprise’s request all Information that are specifically identified by Enterprise and known by Radiant, after reasonable inquiry, to be in its control or possession relating to Enterprise Assets, Enterprise Liabilities or the Enterprise Business. Except (a) as provided in the Tax Disaffiliation Agreement or (b) when a longer retention period is otherwise required by Law or agreed to in writing, the Radiant Group and Enterprise shall retain in a reasonably retrievable format, for a period of at least six (6) years, all Information relating to the Enterprise Business as of the Closing Date. Notwithstanding the

 

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foregoing, in lieu of retaining any specific Information, Radiant may offer in writing to deliver such Information to Enterprise and, if such offer is not accepted within ninety (90) days, the offered Information may be destroyed or otherwise disposed of at any time. If Enterprise shall request in writing prior to the expiration of such 90-day period that any of the Information proposed to be destroyed or disposed of be delivered to Enterprise, Radiant shall promptly arrange for delivery of such requested Information (at Enterprise’s cost).

 

(b) Enterprise shall deliver to Radiant upon Radiant’s request all Information that are specifically identified by Radiant and known by Enterprise, after reasonable inquiry, to be in its control or possession relating to Radiant Assets, Excluded Liabilities or the Radiant Business. Except (a) as provided in the Tax Disaffiliation Agreement or (b) when a longer retention period is otherwise required by Law or agreed to in writing, the Radiant Group and Enterprise shall retain in a reasonably retrievable format, for a period of at least six (6) years, all Information relating to the Radiant Business as of the Closing Date. Notwithstanding the foregoing, in lieu of retaining any specific Information, Enterprise may offer in writing to deliver such Information to Radiant and, if such offer is not accepted within ninety (90) days, the offered Information may be destroyed or otherwise disposed of at any time. If Radiant shall request in writing prior to the expiration of such 90-day period that any of the Information proposed to be destroyed or disposed of be delivered to Radiant, Enterprise shall promptly arrange for delivery of such requested Information (at Radiant’s cost).

 

SECTION 4.8.  Limitation of Liability; Release.

 

(a) Except as set forth in any Ancillary Agreement, no party shall have any liability to any other party in the event that any information exchanged or provided pursuant to this Agreement which is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate.

 

(b) Effective upon the Closing Date and except as otherwise specifically set forth in this Agreement, each of Radiant and Enterprise releases and forever discharges the other and its Representatives and Subsidiaries, of and from all Liabilities against such other party, its Representatives and Subsidiaries or any of its successors or assigns, which the releasing party has or ever had, which arise out of or relate to events, circumstances or actions taken by such other party prior to the Closing Date; provided, however, that the foregoing general release shall not apply to this Agreement, the Exchange Agreement, the Ancillary Agreements or the transactions contemplated hereby or thereby and shall not affect either party’s right to enforce this Agreement or any of the Ancillary Agreements in accordance with their terms.

 

SECTION 4.9.  Other Agreements Providing for Exchange of Information.    The rights and obligations granted under this Article IV are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange or confidential treatment of information set forth in any Ancillary Agreement.

 

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ARTICLE V

DISPUTE RESOLUTION

 

SECTION 5.1.  Negotiation.    In the event of a controversy, dispute or claim arising out of, in connection with, or in relation to the interpretation, performance, nonperformance, validity or breach of this Agreement or otherwise arising out of, or in any way related to this Agreement or the transactions contemplated hereby, including any claim based on contract, tort, statute or constitution (collectively, “Agreement Disputes”), the management of the parties shall negotiate in good faith for a reasonable period of time to settle such Agreement Dispute; provided, further, however, such reasonable period shall not, unless otherwise agreed by the parties in writing, exceed thirty (30) days from the time the parties began such negotiations; and provided, further, however, that in the event of any arbitration in accordance with Section 5.2, (i) the parties shall not assert the defenses of statute of limitations and laches arising for the period beginning after the date the parties began negotiations hereunder, and (ii) any statute of limitations or any contractual time period or deadline under this Agreement or any Ancillary Agreement shall not be deemed to have passed with respect to such Agreement Dispute until such Agreement Dispute has been resolved.

 

SECTION 5.2.  Arbitration.    If after such reasonable period such management are unable to settle such Agreement Dispute (and in any event, unless otherwise agreed in writing by the parties, after forty-five (45) days have elapsed from the time the parties began such negotiations), such Agreement Dispute shall be determined, at the demand of any party, by binding arbitration unless the amount of the damage or loss is at issue in pending litigation with a third party, in which event arbitration shall not be commenced until such amount is ascertained or both parties agree to arbitration; and in either such event the matter shall be settled by arbitration conducted by three arbitrators. Any such arbitration shall be held in Fulton County, Atlanta before and in accordance with the Rules. Shareholder and Radiant shall each select one arbitrator, and the two arbitrators so selected shall select a third arbitrator. The arbitrators shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrators, to discover relevant information from the opposing parties about the subject matter of the dispute. The arbitrators shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the extent as a court of competent law or equity, should the arbitrators determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of a majority of the three arbitrators as to the validity and amount of any claim shall be binding and conclusive upon the parties to this Agreement. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrators. The parties agree to comply with any award made in any such arbitration proceedings that has become final in accordance with the Rules and agree to enforcement of or entry of judgment upon such award Judgment upon any award rendered by the arbitrators shall be entered in any court of competent jurisdiction located in Fulton County, Georgia, and in connection therewith, hereby irrevocably and unconditionally (i) consents to submit itself or himself to the personal jurisdiction of any Georgia state or federal court located in the City of Atlanta, (ii) waives any objection to the laying of venue of any such action, suit or proceeding in any Georgia state or federal court located in the City of Atlanta, and (iii) waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

SECTION 5.3.  Continuity of Service and Performance.    Unless otherwise agreed in writing, the parties will continue to provide service and honor all other commitments under this Agreement and each Ancillary Agreement during the course of dispute resolution pursuant to the provisions of this Article V with respect to all matters not subject to such dispute, controversy or claim.

 

SECTION 5.4.  Other Remedies.    Nothing in this Article V shall limit the right that any party may otherwise have to seek to obtain from any court of competent jurisdiction (a) preliminary injunctive relief in order to preserve the status quo pending the resolution of a dispute or (b) temporary or permanent injunctive relief from any breach of any provisions of this Agreement. By seeking such relief, a party in no way waives its arbitration rights under this Agreement.

 

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ARTICLE VI

MISCELLANEOUS

 

SECTION 6.1.  Complete Agreement; Construction.    This Agreement, including the Exhibits and Schedules, and the Ancillary Agreements shall constitute the entire agreement between the parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter. In the event of any inconsistency between this Agreement and any Schedule hereto, the Schedule shall prevail. Other than Section 4.5 and Article V, which shall prevail over any inconsistent or conflicting provisions in any Ancillary Agreement, notwithstanding any other provisions in this Agreement to the contrary, in the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of any Ancillary Agreement, such Ancillary Agreement shall control.

 

SECTION 6.2.  Ancillary Agreements.    Subject to the last sentence of Section 6.1, this Agreement is not intended to address, and should not be interpreted to address, the matters specifically and expressly covered by the Ancillary Agreements.

 

SECTION 6.3.  Counterparts.    This Agreement may be executed in one or more counterparts (including by telecopy), all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart.

 

SECTION 6.4.  Survival of Agreements.    Except as otherwise contemplated by this Agreement, all covenants and agreements of the parties contained in this Agreement shall survive the Closing Date.

 

SECTION 6.5.  Separation Expenses.    Except as otherwise set forth in this Agreement or any Ancillary Agreement, each party shall bear its own costs and expenses in connection with the preparation, execution, delivery, printing and implementation of this Agreement and any Ancillary Agreement, the Proxy Statement and the Separation and the consummation of the transactions contemplated thereby, and such costs and expenses shall be deemed to be Enterprise Liabilities or Excluded Liabilities, respectively. Further, except as otherwise set forth in this Agreement or any Ancillary Agreement, each party shall bear its own costs and expenses incurred after the Closing Date, and any amount or expense to be paid or reimbursed by any party hereto to any other party hereto (other than Enterprise Expenses which are reimbursed to Radiant through an adjustment to the Cash Contribution under Section 2.2) shall be so paid or reimbursed promptly after the existence and amount of such obligation is determined and written demand therefor is made.

 

SECTION 6.6.  Notices.    Any notice or communication required or permitted hereunder (each a “Notice”) shall be in writing, shall be effective when received, and shall in any event be deemed to have been received (a) when delivered, if delivered personally or by commercial delivery service, (b) three (3) Business Days after deposit with U.S. Mail, if mailed by registered or certified mail (return receipt requested), or (c) one (1) business day after the business day of deposit with Federal Express, UPS or similar overnight courier for next day delivery (or two (2) Business Days after such deposit if deposited for second business day delivery), if delivered by such means to the parties at the following addresses (or at such other address for a party as shall be specified by like Notice):

 

If to Radiant, addressed to:

 

Radiant Systems, Inc.

3925 Brookside Parkway

Alpharetta, Georgia 30022

Attention: Mark W. Haidet, Chief Financial Officer

Telephone: (770) 576-6404

 

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with a copy to:

 

Smith, Gambrell & Russell, LLP

1230 Peachtree Street, Suite 3100

Atlanta, Georgia 30309

Attention: Arthur Jay Schwartz

Telephone No.: (404) 815-3500

 

with a copy to:

 

King & Spalding LLP

191 Peachtree Street

Atlanta, Georgia 30303

Attention: Russell B. Richards

Telephone No.: (404) 572-4600

 

If to Enterprise, addressed to:

 

Wave Enterprise Systems, Inc.

3905 Brookside Parkway

Alpharetta, Georgia 30022

Attention: David Schulman, General Counsel

Telephone: (770) 576-7030

 

with a copy to:

 

Kilpatrick Stockton LLP

1100 Peachtree Street

Suite 2800

Atlanta, Georgia 30309

  Attention: Larry D. Ledbetter
       Bruce D. Wanamaker

Telephone No.: (404) 815-6500

 

SECTION 6.7.  Waivers.    The failure of any party to require strict performance by any other party of any provision in this Agreement will not waive or diminish that party’s right to demand strict performance thereafter of that or any other provision hereof.

 

SECTION 6.8.  Amendments.    This Agreement may not be modified or amended except by an agreement in writing signed by duly authorized Representatives of each of the parties hereto.

 

SECTION 6.9.  Successors and Assigns.    The provisions to this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns.

 

SECTION 6.10.  Termination.    After the Closing Date, this Agreement may not be terminated except by an agreement in writing signed by the parties; provided, however, that Article III shall not be terminated or amended after the Closing Date in respect of any Indemnitees not a party to this Agreement without the consent of such Persons.

 

SECTION 6.11.  Subsidiaries.    Each of the parties hereto shall cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary of such party or by any entity that is contemplated to be a Subsidiary of such party on and after the Closing Date.

 

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SECTION 6.12.  Parties in Interest.    Except for the right of Indemnitees to enforce the provisions of Article III hereof, this Agreement is solely for the benefit of the parties hereto and their respective Subsidiaries and Affiliates, and no provisions of this Agreement are intended, nor shall be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any client, customer, affiliate, partner of any party hereto or any other Person unless specifically provided otherwise herein.

 

SECTION 6.13.  Title and Headings.    The title and section headings and subheadings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

SECTION 6.14.  Governing Law.    This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed in the State of Georgia, without regard to any laws that might otherwise govern under applicable principles of conflicts of laws thereof.

 

SECTION 6.15.  Severability.    If any provision of this Agreement is held or declared by a court of competent jurisdiction to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any party hereto under this Agreement will not be materially and adversely affected thereby, (a) such provision will be fully severable, (b) this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions of this Agreement will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal, invalid or unenforceable provision, the parties shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic or operational effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

 

[Signatures follow on next page.]

 

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

 

RADIANT SYSTEMS, INC.

By:

 

 


Name:

 

 


Title:

 

 


WAVE ENTERPRISE SYSTEMS, INC.

By:

 

 


Name:

 

 


Title:

 

 


 

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EX-10.1 5 dex101.htm RESELLER AND SERVICES AGREEMENT Reseller and Services Agreement

EXHIBIT 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RESELLER AND SERVICES AGREEMENT

 

BETWEEN

 

RADIANT SYSTEMS, INC.

 

AND

 

WAVE ENTERPRISE SYSTEMS, INC.

 

DATED __________ __, 2003


RESELLER AND SERVICES AGREEMENT

 

This Reseller Agreement (this “Agreement”) is effective as of this ____ day of _________ __, 2003, between Radiant Systems, Inc., a corporation organized and existing under the laws of the State of Georgia, with its principal place of business at 3925 Brookside Parkway, Alpharetta, Georgia 30022 (hereinafter “Radiant”), and Wave Enterprise Systems, Inc., a corporation organized and existing under the laws of the State of Georgia, with its principal place of business at 3905 Brookside Parkway, Alpharetta, Georgia 30022 (hereinafter “Enterprise”).

 

WHEREAS, pursuant to that certain Separation Agreement between Radiant and Enterprise dated as of the date hereof (the “Separation Agreement”), Radiant has transferred to Enterprise the Enterprise Business (as defined therein), the Enterprise Assets (as defined therein) and the Enterprise Liabilities (as defined therein) effective immediately prior to the closing of the transactions contemplated by that certain Share Exchange Agreement (the “Exchange Agreement”) dated as of October 10, 2003 between Radiant and Erez Goren (“Separation”);

 

WHEREAS, the Enterprise Assets include the following computer programs: (i) the Web-based productivity and enterprise management computer programs commonly known as “Enterprise Productivity Suite”; (ii) the integrated workforce management computer programs commonly known as “Visual Labor Management”; and (iii) the labor management, inventory control and reporting computer programs commonly known as “ReMacs Back Office Systems”;

 

WHEREAS, as part of the Separation, Radiant and Enterprise contemplated entering into a comprehensive contractual relationship, the purpose of which includes: (i) Radiant becoming a preferred reseller of the Enterprise Productivity Suite; and (ii) Enterprise providing hosting, support, maintenance and professional services under selected Radiant legacy client contracts which relate to the computer programs identified above which were acquired by Enterprise in the Separation;

 

WHEREAS, Radiant represents that it is in the business of marketing and reselling computer products and providing certain services with respect to computer products and that it has the facilities and staff necessary to: (i) market and offer selected Enterprise computer products to end users; and (ii) provide certain support and maintenance services to end users with respect to such programs; and

 

WHEREAS, Radiant and Enterprise agree that throughout the term of this Agreement they will treat each other in a fair, equitable, and ethical manner.

 

        NOW, THEREFORE, for and in consideration of the mutual premises, warranties and representations set forth in this Agreement and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

 

1.     DEFINITIONS. In this Agreement, the following terms shall have the meanings set forth below:

 

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        1.1 “Additional Enhancements” mean modifications to the Enterprise Products made by Enterprise outside the scope of the support services described in Section 14.1 and the maintenance services described in Section 14.4.

 

        1.2 “Affiliate” shall have the meaning ascribed to it in the Separation Agreement.

 

        1.3 “Application Code” shall mean the Source Code described on Exhibit Y.

 

        1.4 “Batch Hand Held Code” means the Source Code and Executable Code to the “Batch Hand Held” computer program, as more particularly described on Exhibit X.

 

        1.5 “Certification” shall mean Enterprise’s formal approval of a Person as a reseller of Software and Hosting Services and as a provider of Complementary Services, as more particularly described in Section 3 herein.

 

        1.6 “Competitive Offering” shall mean a web-based computer program that contains features or functionality similar to the web-based supply chain or workforce management computer programs included in the Software.

 

        1.7 “Complementary Services” shall mean the installation, consulting, hosting, training, and support services that Radiant or its Distributors may provide to Customers, all as more particularly described in Section 6.1(iii).

 

        1.8 “Customer” shall mean a Person operating within the Market that is permitted by Radiant or a Distributor to use the Software subject to the terms of a Software License Agreement for its own internal use and without further right to sublicense, distribute, transfer or transmit the Software. For the avoidance of doubt, “Customers” shall not include Legacy Clients, Strategic Legacy Clients or Reseller Legacy Clients; provided, however, that if Radiant sells any additional Software or ReMacs licenses to a Reseller Legacy Client pursuant to a Software License Agreement as permitted by Section 7.1(iii)(c), such Reseller Legacy Client shall be deemed to be a Customer with respect to such additional licenses.

 

        1.9 “Customizable Software” means that portion of the Software consisting of computer software modules and libraries that may be modified by Radiant through the use of the Tools, as further provided herein, as more particularly described on Exhibit K.

 

        1.10 “Derivative Works” shall mean a work which is based upon one or more pre-existing works, such as a translation, modification, revision, or any other form in which such pre-existing work is recast, transformed or adapted and which, if prepared without the authorization of the owner of the pre-existing work, would constitute copyright infringement.

 

        1.11 “Distributor” shall mean any distributor, dealer, reseller or similar entity that is certified by Radiant and that Radiant authorizes, pursuant to a Distributor Agreement, to distribute and resell Software licenses, Hosting Services and Complementary Services to Customers.

 

 

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        1.12 “Distributor Agreement” shall mean the distributor agreement between Radiant and a Distributor, pursuant to which the Distributor is granted, among other things, the right to distribute or resell the Software and/or Hosting Services.

 

        1.13 “Distributor Terms” shall mean the terms and conditions that are required to be included in each Distributor Agreement, which terms and conditions are identified on Exhibit B.

 

        1.14 “Documentation” shall mean the operating, training, reference manuals and/or technical specifications relating to the use of the Enterprise Products and any Enhancements, modifications or Upgrades thereto, supplied by Enterprise to Radiant, Customers or Legacy Clients pursuant to this Agreement or the applicable Legacy Contracts.

 

        1.15 “Effective Date” shall mean _________________________________________________.

 

        1.16 “Enhancement” shall mean any change or addition to an Enterprise Product made by Enterprise that, when made, adds new functions or improves the Enterprise Product’s utility, efficiency, functional capability or application. “Enhancement” shall not include separately priced or separately marketed computer programs, even if such computer programs are designed to interface with the Enterprise Product. “Enhancement” shall include all Error Corrections developed by Enterprise.

 

        1.17 “Enterprise Products” shall mean individually, the Software, Tools, VLM or ReMacs products and, collectively, all of such products.

 

        1.18 “Epsilon Code” means the Source Code and Executable Code to the “Epsilon” computer program, as more particularly described on Exhibit A.

 

        1.19 “Error” shall mean any failure of an Enterprise Product to conform in a material respect to the Documentation for such Enterprise Product.

 

        1.20 “Error Correction” shall mean either a modification or addition that, when made or added to an Enterprise Product, establishes material conformity of the Enterprise Product to its Documentation, or a procedure or routine that helps eliminate the practical adverse effect on Customers or Legacy Clients of such nonconformity.

 

        1.21 “Executable Code” shall mean a series of one or more machine-readable instructions executable after suitable processing by a computer or other programmable machine, without compilation or assembly.

 

        1.22 “Host System” shall mean the operating systems, application software, designs, architecture, communications networks, firewalls, load balances, servers, switches, hubs, routers and other hardware and documentation which enable Customers or Legacy Clients to access and use the Software via the internet.

 

        1.23 “Hosting Services” shall mean the application management and hosting services Enterprise makes available to Customers or Legacy Clients to enable them using the

 

 

3


internet to access and use the Software through a Host System, which services are more fully described on Exhibit C.

 

        1.24 “Hosting Terms” shall mean the terms and conditions that are required to be included in any agreement between Radiant (or a third party host) and a Customer pursuant to which hosting services will be provided, which terms and conditions are identified on Exhibit M.

 

        1.25 “Legacy Clients” shall mean those Radiant clients existing as of the Effective Date who are parties with Radiant to the Legacy Contracts and to whom Enterprise will provide one or more Legacy Services.

 

        1.26 “Legacy Contracts” shall mean those Radiant client contracts existing as of the Effective Date which are listed on Exhibit D, and for which Enterprise will provide the Legacy Services pursuant to Section 7.

 

        1.27 “Legacy Services” shall mean solely the following services to be performed by Enterprise following the Effective Date for the Legacy Clients pursuant to Section 7, in each case, as such services relate solely to the Enterprise Products (other than Tools) and/or Hosting Services specified in the applicable Legacy Contracts:

 

(i) For the Software, ReMacs, and the computer programs licensed to Alltel (as defined in Section 4.4(iii)) pursuant to the Alltel Agreement (as defined in Section 4.4 (iii)): (a) Level 3 software support services and software maintenance services (each, as defined in Exhibit P); (b) hosting services; (c) software delivery, installation and consulting services; and (d) custom software development services.

 

(ii) For VLM: any and all services required of Radiant including, without limitation, software support services and software maintenance services, software delivery and installation services, training, certification services and custom software development services.

 

For the avoidance of doubt, support, maintenance, hosting, custom development or other services required to be performed by Enterprise for or on behalf of a Reseller Legacy Client pursuant to a new Software License Agreement (rather than under a Legacy Contract) shall constitute services being performed for or on behalf a “Customer” and shall not constitute “Legacy Services” as such term is used herein.

 

        1.28 “Manufacturer Suggested Retail Price” or “MSRP” shall mean Enterprise’s stated standard retail price for the Enterprise Products and Hosting Services, as revised from time to time by Enterprise pursuant to Section 5.7.

 

        1.29 “Market” shall mean, throughout the world, (a) any Person that engages primarily in one of the following businesses: (i) the sale of fueling products and/or the operation of convenience stores including, without limitation, fuel jobbers, distributors and dealers or grocery stores which offer the sale of fuel or gas to consumers; (ii) food service including, without limitation, table top, quick serve and fast casual restaurants, whether franchised or independently owned, franchisors of such restaurants, or contract food service operators or

 

 

4


management companies; or (iii) entertainment venues including, without limitation, movie theatres, amusement parks and sports arenas; (b) any specific division or business unit (within any Person) that engages primarily in one of the three lines of business identified in subsection (a) of this Section 1.29; or (c) any portion, area, section, unit or department of a business, which portion, area, section, unit or department engages in one of the three lines of business identified in subsection (a) of this Section 1.29. By way of example, a food service outlet that is located in a retail department store shall be considered to be within the Market since the food service outlet falls within category (ii) above, but the other departments within such retail department store shall not be considered to be within the Market unless it falls within one of the three categories above. For the avoidance of doubt, the parties agree that any licenses or services sold by Radiant to a specific portion, division, unit, area, section or department of a business (the “Specific Licensed Unit”), as described in subsections (b) and (c), may not be sold to or used by or for the benefit of any division, portion, unit, area, section or department of such business other than the Specific Licensed Unit.

 

        1.30 “Marks” shall mean the trademarks, service marks or trade names of Enterprise associated with the Enterprise Products, which are identified on Exhibit E.

 

        1.31 “Order” shall mean a written commitment by Radiant, which shall be in the form of Exhibit F, listing the Enterprise Product licenses, subscriptions for Hosting Services and/or services that Radiant wishes to purchase from Enterprise hereunder for Customers or Legacy Clients, as applicable.

 

        1.32 “Permitted Modifications” means modifications to the Customizable Software created by Radiant with the Tools, subject to the restrictions set forth on Exhibit Q.

 

        1.33 “Person” shall mean a natural person, a corporation, a limited liability company, an association, a partnership (general or limited), a joint venture, a trust, or any other entity.

 

        1.34 “Platform Code” shall mean the Source Code described on Exhibit Y.

 

        1.35 “POS Management Module” shall mean the Source Code and Executable Code of the computer programs described on Exhibit G.

 

        1.36 “Radiant Marks” shall mean the trademarks, service marks or trade names of Radiant associated with Radiant’s products or services, which are identified on Exhibit R.

 

        1.37 “Radiant National Accounts” shall mean the selected existing or active prospective clients of Radiant or its subsidiaries listed on Exhibit H.

 

        1.38 “ReMacs” shall mean the labor management, inventory control and reporting computer programs known as the “ReMacs Back Office System” and which includes the module known as the “Corporate Configuration Manager” or “CCM” licensed to Legacy Clients under one or more of the Legacy Contracts. “ReMacs” shall include all Enhancements and Upgrades to ReMacs that are sublicensed to Legacy Clients by Radiant pursuant to Legacy Contracts or licensed by Enterprise pursuant to this Agreement, as the case may be. “ReMacs” shall not include Additional Enhancements to the ReMacs computer programs.

 

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        1.39 “ReMacs/VLM Code” means the Source Code of ReMacs and VLM.

 

        1.40 “Reseller Legacy Clients” means the Legacy Clients to whom Radiant will continue to act a reseller (pursuant to Section 7) after the Effective Date, which Reseller Legacy Clients are identified on Exhibit S.

 

        1.41 “RSL Code” means the Source Code and Executable Code to the “Radiant Site Link” computer program, as more particularly described on Exhibit V.

 

        1.42 “Sales Criteria” shall mean amounts received by Enterprise from Radiant from Radiant’s resale of Software licenses and subscriptions to Customers that in the case of each of the third year of the Initial Term and the First Renewal Term (as defined in Section 23.1), equals or exceeds $2 million. For purposes of this definition, the “amounts received by Enterprise” with respect to a Software subscription shall equal the total non-contingent amounts to be received by Enterprise for such Software subscription during the initial term of the applicable Software License Agreement (but which is not for purposes of this calculation to exceed five years). For the avoidance of doubt, amounts received by Enterprise as a result of performing Legacy Services or other services shall not be included in determining Sales Criteria.

 

        1.43 “Software” shall mean the Enterprise Productivity Suite product described on Exhibit I. “Software” shall include all Time Clock Software related to the Software as described on Exhibit I, Enhancements and Upgrades to the Software that Enterprise provides to or is required to provide to Customers, Legacy Clients or Radiant pursuant to Legacy Contracts or this Agreement, as the case may be. “Software” shall not include Tools, Additional Enhancements, VLM, ReMacs or the POS Management Module.

 

        1.44 “Software License Terms” shall mean the terms and conditions that are required to be included in each Software License Agreement, which terms and conditions are identified on Exhibit J.

 

        1.45 “Software License Agreement” shall mean the license agreement between Radiant and a Customer, pursuant to which the Customer is granted the right and license to possess, access and/or use the Software, and/or receive Hosting Services from Enterprise, all in support of its own business activities, and not for resale, sublicense or distribution.

 

        1.46 “Source Code” shall mean a series of instructions or statements in an English-like high level computer language, C, or JAVA, or in a relatively low-level language such as assembly language for a particular processor, that is normally transformed by an interpreter or compiler into machine-readable Executable Code for actual use on a computer.

 

        1.47 “Strategic Legacy Clients” shall mean those Legacy Clients listed on Exhibit L.

 

        1.48 “Strategic Legacy Contracts” shall mean those Legacy Contracts between Radiant and the Strategic Legacy Clients.

 

        1.49 “Strategic Legacy Services” shall mean those Legacy Services to be performed by Enterprise under the Strategic Legacy Contracts.

 

 

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        1.50 “Time Clock Software” means the computer programs that are intended to be installed on Time Clocks, as more particularly described on Exhibit I.

 

        1.51 “Time Clocks” shall mean those certain time clocks as more particularly described on Exhibit W.

 

        1.52 “Tools” means those certain software tools identified on Exhibit T.

 

        1.53 “Upgrades” shall mean new versions or new releases of an Enterprise Product or Tools, which may include Enhancements, and which are generally distributed to Enterprise’s clients for no additional license fee. Upgrades do not include new versions and new releases of an Enterprise Product or Tools that are either (i) marketed as a new product which may contain new features and functionality, or (ii) contain a substantially new Source Code base.

 

        1.54 “VLM” shall mean the labor management and control system providing integrated business forecasting and budgeting, POS imports into forecasting, time punch collection and validation, labor demand analysis, labor scheduling, employee time and attendance management, payroll import or export, and labor management reporting functionality known as “Visual Labor Management” and any predecessors thereto (i.e. “Minute Man”) licensed to Legacy Clients under one or more Legacy Contracts. “VLM” shall include the Time Clock Software related to VLM (as described on Exhibit I) and all Enhancements and Upgrades to VLM that are sublicensed to Legacy Clients by Radiant pursuant to Legacy Contracts or licensed by Enterprise pursuant to this Agreement, as the case may be. “VLM” shall not include Additional Enhancements to the VLM computer programs.

 

2.     APPOINTMENT OF RADIANT.

 

        2.1 Appointment. Subject to Radiant attaining and maintaining the Certification required hereunder, and/or to Distributors attaining and maintaining certification by Radiant as required hereunder, and subject to the terms and conditions of this Agreement, and only within the Market, Enterprise appoints and authorizes Radiant and its Distributors to market, sell, resell, sublicense and/or distribute to Customers on a non-exclusive basis the Executable Code version of the Software; (ii) Hosting Services; and (iii) Complementary Services. The parties agree that unless otherwise specified herein, Radiant is under no obligation to undertake any such activities and nothing herein shall be construed as a guarantee on Radiant’s part that Enterprise will realize any revenue from the aforementioned appointment.

 

        2.2 Limitations. Radiant acknowledges and agrees that (i) its rights with respect to reselling the Software and Hosting Services are limited to Customers operating within the Market, and (ii) Enterprise shall have the sole and exclusive right to dictate whether the Software will be licensed by Radiant and its Distributors on a subscription basis or on a per-license basis, subject, however, to the restriction that (a) Radiant must receive at least six months prior written notice if Enterprise intends to change the then-current licensing methodology, and (b) any such change shall not affect any offer, contract or arrangement between Radiant and its Customers entered into in writing prior to the effective date of the change (provided Radiant is able to substantiate the submission of the specific written offer, contract or arrangement). Enterprise acknowledges and agrees that it has no right to market, distribute, license or sell any

 

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Software, Hosting Services, or services substantially similar to the Complementary Services to the Radiant National Accounts during the six month period commencing with the Effective Date (the “Reservation Period”). Subsequent to the Reservation Period, Enterprise shall have the right to market, distribute, license and sell any Software, Hosting Services and services substantially similar to the Complementary Services to any or all Radiant National Accounts. Enterprise and Radiant agree that all Persons other than Radiant National Accounts during the Reservation Period will constitute prospective clients for either party and either party shall have the unrestricted right to market and sell products and services to such Persons as it deems appropriate (except as expressly restricted in this Agreement). Notwithstanding the preceding sentence, during the Reservation Period, if Radiant shall offer, market or sell any product to a Radiant National Account that is a competitive alternative to any Enterprise Product, then such Person shall no longer be deemed to be a Radiant National Account and the restrictions herein on Enterprise’s right to freely market, distribute, license or sell the Software and/or any services to such Person shall be waived.

 

        2.3 Reservation of Rights. Except as restricted by Section 2.2, Enterprise reserves the right (i) through its own employees and contractors, or (ii) through other resellers, distributors and co-marketers, to market, distribute and sublicense the Enterprise Products and to market and sell Hosting Services and services substantially similar to the Complementary Services. Other than as set forth in Section 2.2, this Agreement does not, nor is it intended to, address the means, methods and under what conditions, Radiant markets, distributes, licenses and sells its own products and service offerings.

 

        2.4 No Marketing Fees. Radiant acknowledges and agrees that Enterprise is under no obligation to pay Radiant any fees, royalties or expenses in connection with Radiant’s marketing of the Software, Hosting Services or Complementary Services hereunder. Any such marketing activities are undertaken by Radiant in consideration for Radiant’s Certification and Enterprise’s appointment of Radiant as an authorized reseller of the Software and Hosting Services. Radiant further acknowledges and agrees that the fees charged by Radiant for the Complementary Services are the responsibility of the Customers and not Enterprise.

 

3.     CERTIFICATION.

 

        3.1 Training. Radiant agrees to undertake, and to cause its Distributors (collectively with Radiant, the “Resellers”) to undertake, the training that Enterprise deems reasonably necessary for Resellers to become an authorized reseller of the Enterprise Products (other than the Tools) and Hosting Services and authorized providers of Complementary Services. Enterprise’s Certification requirements are set forth in the “Enterprise Certification Document,” as reasonably supplemented or amended from time to time by Enterprise; provided, however, that Enterprise agrees that the Enterprise Certification Document and any supplements or amendments thereto shall apply to Radiant only if they are also applicable to other resellers of the Enterprise Products, shall not have the effect of amending any material term of this Agreement, shall be reasonable and not arbitrary or capricious, and shall relate to Reseller’s obligations hereunder (provided, however, that, notwithstanding anything contained herein to the contrary, certification training requirements may be reasonably modified (in a manner that is reasonable and not arbitrary or capricious) in Enterprise’s sole discretion) or modify the Software License Terms. In the case of training sessions held at Enterprise’s facilities, Radiant

 

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shall bear the responsibility for the expense of travel and living accommodations for its employees. Enterprise will provide the training sessions required herein at Enterprise’s facilities (unless otherwise agreed to by the parties) and at times mutually agreed upon by the parties. Radiant will pay, for itself and its Distributors, at Enterprise’s then-current Certification training rates for such training (subject to the applicable discounts set forth on Exhibit N).

 

        3.2 Certification Compliance. Any benefits and privileges offered by Enterprise to the Resellers hereunder are contingent upon the Resellers being continuously certified during the term of this Agreement.

 

        3.3 Annual Evaluations. To ensure that the Resellers maintain uniformity and high quality standards in distributing and supporting the Enterprise Products (other than the Tools), Hosting Services and Complementary Services, Enterprise may perform annual evaluations of the Resellers’ performance hereunder, such evaluation to include, without limitation, Enterprise’s review of the Resellers’ performance of Complementary Services at the Resellers’ support facilities. All such evaluations of Radiant shall be conducted in accordance with Section 28 herein. If, as a result of such evaluation, Enterprise determines that Radiant has not maintained Enterprise’s Certification requirements, as required, Enterprise shall reasonably decide either: (i) subject to the restrictions on training in Section 3.1, to require Radiant to undergo such additional training as Enterprise deems reasonably necessary, for an additional Certification fee; or (ii) if Radiant fails to undertake and successfully complete the training in subsection (i), to terminate Radiant’s right to act as a reseller of the Software, Hosting Services and provider of Complementary Services or training services, as the case may be; provided, however, that termination under this Section 3.3 shall not affect Radiant’s rights or obligations to resell Enterprise Products to Legacy Clients pursuant to Legacy Contracts. Further, if as a result of such evaluation, Enterprise determines that a Distributor has not maintained applicable certification requirements, Radiant shall, at Enterprise’s written request, (i) cause the Distributor to undergo such additional training as Enterprise deems reasonably necessary, for an additional Certification fee; or (ii) if the Distributor fails to undertake such training, terminate the Distributor’s right to act as a reseller of the Software, Hosting Services and provider of Complementary Services, as the case may be.

 

        3.4 Exception to Certification. Notwithstanding anything to the contrary herein, Enterprise acknowledges and agrees that other than Certification for Radiant to provide (i) hosting services for the Enterprise Products (other than the Tools), and (ii) Level 2 support for the Enterprise Products (other than the Tools), Radiant shall not be required to be certified (including, without limitation, Certification under Sections 3.1, 3.2 and 3.3) (a) during the Initial Term of this Agreement, or (b) during the First Renewal Term or the Second Renewal Term (each as defined in Section 23.1) if Radiant has met its Sales Criteria for each such term.

 

        3.5 Credit Checks. Radiant hereby authorizes Enterprise to request credit reports and/or conduct background information checks on Radiant. Radiant understands that the credit reports may include information derived from any credit bureau and any other public records or other information bearing on Radiant’s credit standing, credit capacity, credit worthiness, general reputation, trustworthiness and/or business practices. Radiant understands that in the event Enterprise receives an unacceptable credit and/or background check, Enterprise shall have the right to discontinue sales on credit to Radiant or modify existing credit terms.

 

 

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3.6 Certification of Distributors. Notwithstanding anything to the contrary herein, at all times that Radiant is a reseller of the Enterprise Products (other than the Tools) and Hosting Services, the Certification process for Distributors shall be the responsibility of Radiant, and not Enterprise, provided, however, that the criteria to be used by Radiant to certify Distributors to resell the Enterprise Products (other than the Tools) and Hosting Service and to be a provider of Complementary Services shall be established by Enterprise, consistent at all times with the then-current Certification criteria used by Enterprise with other similarly situated distributors. Radiant shall have the right to conduct Certification training for Distributors or to send the Distributors to Certification training as offered by Enterprise hereunder, and Enterprise shall have the right to bill Radiant for providing such training services at its standard training rates (subject to the applicable discount set forth on Exhibit N). Radiant agrees that it shall be responsible for and liable for all acts or omissions of its Distributors in connection with each Distributor’s performance of its obligations under its applicable Distributor Agreement.

 

4. GRANT OF LICENSE.

 

4.1 License. Subject to the terms and conditions of this Agreement, Enterprise hereby grants to Radiant the worldwide (subject to export rules and regulations, if applicable), non-exclusive, non-assignable (except as permitted herein), non-transferable (except as permitted herein) and limited right and license to:

 

(i) market, distribute and sublicense the Software and Permitted Modifications to Customers pursuant to a Software License Agreement solely for such Customers’ own internal use and to support such Customers’ own business activities and not for resale or redistribution;

 

(ii) market and resell the Hosting Services to Customers solely to support Customers’ use of the Software;

 

(iii) authorize Distributors to exercise Radiant’s rights as set forth in subsections (i) and (ii) above, but subject to the same restrictions placed upon Radiant with respect to the Software and the Hosting Services and subject to a Distributor Agreement;

 

(iv) receive two copies of the Software and, if it so chooses, install the Software at Radiant’s place of business for purposes of performing demonstrations of the Software, testing the Software as permitted under Section 11, and providing Complementary Services to Customers;

 

(v) make copies of the Documentation for internal distribution and for distribution to Customers;

 

(vi) use the Marks in connection with the license to Enterprise Products granted under this Section 4, and sublicense the applicable Marks to Distributors for use by Distributors as resellers of the Software and Hosting Services, provided such use is consistent with this Agreement, including the provisions of Section 17 below;

 

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(vii) use, market, sublicense and distribute the Enterprise Products (other than the Tools) to fulfill its obligations (existing as of the date hereof or pursuant to amendments to applicable Legacy Contracts as set forth in Section 7.1(xi) hereto) to the Legacy Clients under the Legacy Contracts;

 

(viii) use the Tools to create Permitted Modifications; and

 

(ix) if Enterprise makes Tools generally available to the public (as determined by Enterprise in its sole discretion), market, sublicense and distribute the Tools to Customers pursuant to terms and conditions reasonably determined by Enterprise at that time, it being understood and agreed that, at such time, the parties will cooperate in an effort to amend this Agreement to reflect that the Tools may be resold by Radiant.

 

4.2 Limitations. Except, in each case, for Permitted Modifications or as permitted by Sections 4.4(i), 4.4(iv) and 12 with respect to Source Code released from escrow, Radiant acknowledges and agrees that no license is granted to Radiant to copy, modify or adapt the Enterprise Products, or to prepare Derivative Works based on the Enterprise Products. Radiant also acknowledges, and agrees that no license is granted to Radiant to transcribe or merge the Enterprise Products or any portion thereof. Except as expressly permitted by applicable law, Radiant shall not decompile, disassemble or reverse engineer the Enterprise Products, or attempt to do so.

 

4.3 Reservation of Rights. Radiant acknowledges and agrees that its license under Section 4.1 is non-exclusive and Enterprise retains the right to license the Enterprise Products to Persons other than Radiant National Accounts during the Reservation Period. Accordingly, Radiant’s rights to the Enterprise Products are limited to the express licenses granted hereunder and as necessary to fulfill its obligations under the Legacy Contracts. Except as otherwise expressly provided herein or required by a Legacy Contract, neither Radiant, its Distributors nor its Customers or Legacy Clients shall be entitled to possess copies of the Enterprise Products, whether in Source Code or Executable Code form. Without the express written consent of Enterprise, Radiant shall not alter, modify, remove, obscure or cover any copyright notice, trademark notice or patent notice on the Enterprise Products or Documentation or other proprietary legends placed on or embedded by Enterprise in the Enterprise Products or the Documentation. Without limiting the generality of the foregoing, Radiant shall not be entitled to market or sell the Enterprise Products or Hosting Services on a “private label” basis.

 

4.4 Additional Licenses.

 

(i) POS Management Module. Subject to the terms and conditions of this Agreement, Enterprise hereby grants to Radiant a perpetual, irrevocable, fully paid-up, non-exclusive, non-assignable, non-transferable and limited license to use, modify, enhance, sublicense and create Derivative Works of the POS Management Module in its sole discretion; provided, however, that Radiant’s right to sublicense the POS Management Module shall be subject to the following restrictions: (a) with respect to each sublicense granted during the initial 12-month period following the Effective Date, the client of Radiant that sublicenses the POS Management Module may use the POS Management Module at (1) such client’s retail sites solely for the purpose of cash

 

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reconciliation and end of day consolidation functions, and (2) such client’s headquarters for back office point of sale configuration and administrative functions, and (b) with respect to each sublicense granted after such 12-month period, the client of Radiant that sublicenses the POS Management Module may use the POS Management Module solely at such client’s headquarters for back office point of sale configuration and administrative functions, and not at such client’s retail sites. Radiant agrees to provide copies of any modifications, enhancements or Derivative Works of or with respect to the POS Management Module, if applicable, to Enterprise no less frequently than once per quarter, and to train Enterprise with respect to such modifications, enhancements or Derivative Works, if reasonably requested by Enterprise (subject to the discounted rates applicable hereto set forth on Exhibit N). Radiant acknowledges and agrees that Enterprise shall have no support or maintenance obligations whatsoever with respect to the POS Management Module. Notwithstanding the foregoing, Radiant agrees not to use the POS Management Module to create a product offering which would reasonably be construed as a competitive alternative to any of the Enterprise Products.

 

(ii) RSL Code and Batch Hand Held Code. Radiant hereby agrees to provide Enterprise, no later than the 10th day after the Effective Date, with two (2) full and complete copies each of the RSL Code and Batch Hand Held Code. The RSL Code and the Batch Hand Held Code will each be owned jointly by the parties, and the parties shall have an equal undivided interest therein and thereto. In connection therewith, the parties shall each have the right to use, copy, prepare Derivative Works, modify, distribute copies, publicly perform and display, make, offer to sell, license and otherwise utilize (collectively, “Use”) the RSL Code and Batch Hand Held Code without accounting to, and with no obligation whatsoever to pay any royalties or other amounts to, the other party. Without limiting the foregoing, no royalty or accounting shall be due from one party to the other with respect to the RSL Code or Batch Hand Held Code under any law, rule or regulation regarding copyrights, patents or other intellectual or proprietary rights. Each party shall be entitled to bring any claim, action or other proceeding against third parties (other than licensees, purchasers or other Persons obtaining rights from or through the other party) with respect to any matter relating to the RSL Code or Batch Hand Held Code, including, without limitation, claims or infringement or misappropriation, without the consent or approval of the other party and without the right of the other party to participate in or otherwise be involved in such claim, action or proceeding; and each party hereby disclaims any right to participate in any such claim, action or proceeding brought by the other party. No party offers the other party any warranty, representation or guarantee with respect to the RSL Code or Batch Hand Held Code. The parties acknowledge and agree that neither party shall have any responsibility or liability with respect to any Use by the other party (or by any licensee, purchaser or other Person obtaining rights from or through such other party) of all or any part of the RSL Code or Batch Hand Held Code. The parties further agree to cooperate reasonably with each other in efforts to enforce and/or preserve their respective rights to the RSL Code and Batch Hand Held Code. The parties further agree to use reasonable efforts to avoid the dissemination of the RSL Code or Batch Hand Held Code into the public domain. The parties acknowledge and agree that neither party shall have any obligation to provide updates, upgrades, enhancements or support or maintenance services to the other with respect to the RSL Code or the Batch Hand Held Code.

 

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(iii) Epsilon Code. Radiant hereby grants to Enterprise a perpetual, irrevocable, fully paid-up, non-exclusive, non-assignable, non-transferable and limited license to use, modify, enhance and create Derivative Works of the Epsilon Code solely for the purpose of providing Legacy Services to Alltel Communications, Inc. f/k/a Alltel Information Systems, Inc. (“Alltel”) pursuant to the Alltel Agreement (as defined below). Without limiting the generality of the foregoing, Enterprise shall have the right to create and develop application programming interfaces between Enterprise’s software and the Epsilon Code (the “Epsilon Interfaces”) solely as required for providing support services for Alltel. Enterprise acknowledges and agrees that, after the Effective Date, Radiant shall have no further support or maintenance obligations to Alltel under that certain Radiant Software and Support Agreement dated June 29, 2001 between Radiant and Alltel, as amended (the “Alltel Agreement”) and Enterprise will indemnify Radiant for such support and maintenance obligations; provided, however that Radiant agrees to provide software maintenance and support services with respect to the Lighthouse Point of Sale product to Enterprise, as reasonably requested from time to time by Enterprise, for the purpose of assisting Enterprise with its obligations to provide, in accordance with the terms, including response times, under the Alltel Agreement, Legacy Services to Alltel. Enterprise shall pay Radiant for such support and maintenance services at Radiant’s then-current support and maintenance rates (subject to the discount specified on Exhibit N)). Further, at Enterprise’s reasonable request, Radiant agrees to provide custom development services with respect to the Epsilon Code at Radiant’s then-current professional services rates (subject to the discount set forth on Exhibit N). Enterprise understands and agrees that Radiant is and shall remain the sole and exclusive owner of all right, title and interest in and to the Epsilon Code and all Derivative Works thereof prepared by Enterprise.

 

(iv) Use of Source Code. As used in this paragraph, “Recipient” shall mean (a) Radiant with respect to the Source Code delivered pursuant to the Escrow Agreement or otherwise received by Radiant pursuant to Section 12 (collectively, the “Escrowed Code”) and the POS Management Module, and (b) Enterprise with respect to the Epsilon Code; “Producer” shall mean (x) Enterprise with respect to the POS Management Module and the Escrowed Code, and (y) Radiant with respect to the Epsilon Code. All Source Code with respect to the POS Management Module, Epsilon Code and Escrowed Code (as used in this paragraph, as the context dictates, the “Applicable Code”), and all copies thereof, shall be stored by the Recipient in a limited access locked container, may be accessed by and disclosed solely to employees of the Recipient who have a need to use it as provided above and who have agreed in writing to be bound by the provisions of this Section 4.4 (“Authorized Programmers”), and may be used by the Authorized Programmers for the sole purposes expressed in Section 4.4(i) or 4.4(iii) above, in the Escrow Agreement or as otherwise permitted by Section 12, as applicable. Recipient shall keep an accurate and daily log of all users of the Applicable Code, which log shall contain the names of the Authorized Programmers using the Applicable Code, the date and time of such uses, the purpose for such uses and a description of the modifications made to the Applicable Code, if any. All Authorized Programmers shall be informed that the Applicable Code constitutes the confidential trade secret of the Producer. All use of the Applicable Code shall be conducted on equipment that cannot be accessed by means of a remote terminal or information net or network, and shall be conducted in a limited

 

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access secure location. Recipient shall, and shall cause its employees, including the Authorized Programmers to, treat the Applicable Code as confidential and secret, and neither Recipient nor any of its employees shall disclose or otherwise make available the Applicable Code or any portion thereof to any other person or entity. Recipient shall immediately notify the Producer in the event that all or any part of the Applicable Code is stolen or accessed by anyone other than an Authorized Programmer, use efforts to contain and mitigate the damage that may be caused by such acts and pay all costs and expenses incurred by the Producer in the Producer’s efforts to contain and mitigate such damage. Recipient further agrees not to use the Applicable Code to create a new product offering that would reasonably be construed as a competitive alternative to the executable versions of the Applicable Code.

 

(v) Development of Interfaces. Enterprise acknowledges that Radiant has the right to create and develop application programming interfaces between Radiant’s products and the Enterprise Products.

 

(vi) License of Radiant Marks. Radiant hereby grants to Enterprise the worldwide, non-exclusive, non-assignable (except as permitted herein), non-transferable (except as permitted herein), and limited license to use the Radiant Marks in connection with the performance of Enterprise’s performance of its obligations under this Agreement, provided such use is consistent with the provisions of Section 17 below.

 

5. FEES, INVOICING, PAYMENT AND MOST FAVORED NATIONS PRICING – CUSTOMERS AND RESELLER LEGACY CLIENTS.

 

5.1 Enterprise Products. The fees for the Enterprise Products to be resold to Customers and Reseller Legacy Clients (except to the extent such fees are set forth in applicable Legacy Contracts) are set forth on Exhibit N and are based on Enterprise’s Manufacturer Suggest Retail Price list, a copy of which shall be provided by Enterprise to Radiant on a regular basis or otherwise upon request. Except as otherwise set forth on Exhibit O, and subject to Section 9 herein, the parties shall adhere to the following invoicing and payment policy for all Orders placed under this Agreement:

 

(i) Radiant will issue an Order to Enterprise via overnight mail, hand delivery, e-mail, facsimile, or any other mutually agreed upon mode of delivery;

 

(ii) Enterprise will generate and deliver to Radiant a corresponding invoice for the Enterprise Products; and

 

(iii) Radiant will process the invoice and remit payment of such to Enterprise within 30 days of its receipt of the invoice.

 

5.2 Enterprise Product Support and Maintenance Fees. The fees for support and maintenance services provided by Enterprise to Customers and Reseller Legacy Clients (except to the extent such fees are set forth in applicable Legacy Contracts) are set forth on Exhibit N. Enterprise will invoice Radiant on a monthly basis for such fees, and Radiant will pay such fees within 30 days of its receipt of Enterprise’s invoice.

 

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5.3 Hosting Services Fees. The initial Hosting Services set-up fee and recurring monthly subscription fees for Hosting Services resold by Radiant to its Customers and Reseller Legacy Clients (except to the extent such fees are set forth in applicable Legacy Contracts) are set forth on Exhibit N and are based on Enterprise’s MSRP list for resellers, a copy of which shall be provided to Radiant on a regular basis. Enterprise will invoice Radiant on a monthly basis for such fees, and Radiant will pay such fees within 30 days of its receipt of Enterprise’s invoice.

 

5.4 Other Service Fees. Each party will charge the other party at its then current standard professional services rates (subject to the discount set forth on Exhibit N) for all other services rendered hereunder, including, without limitation, the Certification training services described in Section 3, if applicable, and the sales and marketing support described in Section 14. The party providing the services will invoice the other party on a monthly basis for such service fees, and the party receiving the services will pay such fees within 30 days of its receipt of the invoice.

 

5.5 Expenses. The party receiving services will also pay all reasonable travel, meal and lodging expenses incurred by the party providing services in connection with the provision of any services hereunder. Such expenses shall be paid within 30 days of receipt of an invoice covering same.

 

5.6 Disputed Fees. Each party shall have 10 days after receipt of any invoice from the other party pursuant to this Agreement to dispute such fees by providing written notice to the other party. If such party fails to deliver such written notice within such 10-day period, all invoiced fees shall be deemed accepted, and the party shall pay such fees within 30 days after its receipt of the invoice. Any fees that have been disputed in good faith shall be paid immediately upon resolution of the dispute; provided, however, that interest shall begin to apply to any disputed fees ultimately determined to be required to be paid 30 days after a party’s receipt of the original invoice delivered with respect to such disputed fees. Under no circumstances shall either party be entitled to withhold any payments with respect to undisputed fees, whether or not other fees are subject to dispute.

 

5.7 Price Changes. Except as may be provided on Exhibit N, Enterprise shall have the right, at any time to revise, change, alter or amend its Manufacturer Suggested Retail Price list or any other fees and charges for the Enterprise Products, Hosting Services and other products and services provided by Enterprise to Radiant, including without limitation, the fees set forth on Exhibit N, upon six months notice to Radiant. Notwithstanding the foregoing, with respect to Legacy Clients (other than Reseller Legacy Clients) and Reseller Legacy Clients after the initial 18-month period following the Effective Date, Enterprise may at any time change the pricing to Radiant of support services, maintenance services, Hosting Services or professional services as permitted by applicable Legacy Contracts without Radiant’s consent or approval; with respect to Reseller Legacy Clients, during the initial 18-month period following the Effective Date, Enterprise may at any time change the pricing to Radiant of support, maintenance and Hosting Services as permitted by applicable Legacy Contracts by up to 5% without Radiant’s consent or approval. Price changes for those items under Legacy Contracts are governed by the terms of the Legacy Contracts. Notwithstanding the foregoing, any Orders submitted by Radiant to Enterprise prior to the effective date of the price change shall not be affected by any price change permitted hereunder.

 

5.8 Taxes. All fees and charges are net amounts to be received by Enterprise, exclusive of all sales taxes, use taxes, value-added taxes, withholding taxes, assessments and similar taxes and duties, and are not subject to offset or reduction because of any costs, expenses, taxes, duties, assessments or liabilities incurred by Radiant or imposed on Enterprise in the

 

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performance of this Agreement. Without limiting the foregoing, Radiant shall be responsible for and shall bill, pay and collect directly, any and all taxes and charges of whatever kind incurred in its performance of this Agreement. Notwithstanding the foregoing, Enterprise shall be responsible for the payment of any and all taxes based on Enterprise’s net income. If at any time during the term of this Agreement, new and presently unknown taxes are assessed relating to Enterprise’s provision of the Enterprise Products or either party’s provision of any services hereunder that materially and detrimentally change either party’s financial burden under this Agreement (“New Taxes”), then the parties shall at that time assess ways in which to avoid the New Taxes and/or negotiate in good faith the allocation among them for payment of the New Taxes based on the principles above. Both parties shall work together to reduce each other’s tax liabilities accrued under this Section 5.8.

 

5.9 Customer and Reseller Legacy Client Accounts. Radiant shall be responsible for the billing and collection of all Customer and Reseller Legacy Client accounts, including, without limitation, billing and collection of the purchase price payable by the Customers and the Reseller Legacy Clients for licenses and all recurring fees and charges payable by the Customers and the Reseller Legacy Clients, such as subscription fees for the Hosting Services, and maintenance and support fees. Radiant’s obligation to pay Enterprise amounts due with respect to Customers and Reseller Legacy Clients shall not be contingent upon collection of monies from Customers or Reseller Legacy Clients, as the case may be.

 

5.10 Delinquent Payment. Any amount due one party to the other party which becomes overdue shall bear interest at one percent (1%) simple interest per month, with interest commencing from the date payment was due. If Radiant fails to pay any Hosting Services fees or maintenance and support fees due hereunder for Customers or Reseller Legacy Clients, Enterprise shall have the right to suspend all Hosting Services and support and maintenance services (including the provision of Enhancements or Upgrades to Radiant) with respect to the Customers or Reseller Legacy Clients, as the case may be, for which payment has not been received until past due amounts are paid.

 

5.11 Additional Discounts. The parties agree that on a case-by-case basis, there may be specific client opportunities that will necessitate a deeper discount or pricing adjustment for Radiant. Any such adjustment in the discount percentage or price shall be subject to the written agreement of both parties; provided, however, that Enterprise shall have no obligation to grant any such discount.

 

5.12 Most Favored Nation. Except as otherwise provided in this Section 5.12, during the term hereof, should Enterprise sell standard uncustomized Enterprise Products to another reseller at prices that are lower than the prices contained on Exhibit N (taking into account any volume discount levels described thereon) (as the same may be amended or modified pursuant to Section 5.7 or this Section 5.12), then Enterprise shall notify Radiant of the same reasonably promptly after such sale. Such pricing shall be made available to Radiant for all Orders that do not constitute Accepted Orders (as defined in Section 9.1) and all future Orders, and Exhibit N shall be deemed to be amended to reflect such reduced pricing. If Radiant shall become entitled to such lower prices, but shall have made payment at any prices in excess thereof, Enterprise shall promptly refund the difference in price to Radiant. If Enterprise

 

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shall sell to another reseller new or different variants of the Enterprise Products that are not, at that time, listed on Exhibit N, Enterprise agrees reasonably promptly to notify Radiant and add such variants and their prices to Exhibit N and thereafter to make such variants available to Radiant at the prices made available to the other reseller. Notwithstanding the foregoing, without triggering the adjustment process contemplated in the aforementioned provisions of this Section 5.12, Enterprise shall have the right to sell Software or Hosting Services to a Person (“Strategic Reseller”) who or that has contracted with Enterprise to resell such Software or Hosting Services to one or a few specific prospective strategic clients; provided, however, that if (i) Enterprise shall offer to sell, commit to sell, or sell Software to a Strategic Reseller; (ii) the pricing offered, committed or made available to the Strategic Reseller is lower than the pricing then made available to Radiant; and (iii) Radiant, through its own efforts, is competing with the Strategic Reseller for the same strategic client(s) as the Strategic Reseller, then Enterprise agrees to make available to Radiant the same pricing that is being made available to the Strategic Reseller solely for resale to the strategic client(s); provided, further, however, that Enterprise shall have no obligation to notify Radiant of such prospective strategic relationship and any pricing reductions with respect to such strategic relationship shall not affect the normal pricing made available to Radiant. Further, Enterprise may give special promotional pricing to new, start-up resellers (“Promotional Pricing”), which Promotional Pricing will be made available to Radiant solely for the duration of the applicable promotion (it being understood that the subsequent increase in pricing to the same pre-promotion levels shall not be restricted by Section 5.7). Enterprise will provide Radiant with reasonably prompt notice of any Promotional Pricing. Enterprise agrees reasonably to provide information or materials to Radiant within a reasonable period of time after Radiant requests the same in writing to substantiate Enterprise’s contention that any such pricing constitutes Promotional Pricing. Further, if Radiant and Enterprise are both involved in the same competitive bid opportunity and Radiant is offering the prospective client the identical Software product mix as Enterprise is offering the prospective client, Enterprise will lower its price to Radiant for such Software solely for that competitive bid opportunity to a rate equal to the pricing offered to the applicable end user (but not subject to any discounts).

 

5.13 Franchisor and Co-op Pricing Arrangements. Radiant acknowledges that Enterprise may from time to time grant pricing concessions to franchisors, franchisee co-ops or others for the benefit of defined groups of potential clients (each a “Protected Group”). Any such concessions shall not be taken into account for purposes of determining whether Radiant is entitled to price reductions in accordance with Section 5.12. Enterprise shall maintain a current list of all such Protected Groups and their respective pricing concessions and shall make the list available to Radiant upon reasonable request. Radiant covenants and agrees that should Enterprise and its resellers be contractually prohibited from selling or attempting to sell the Enterprise Products or Hosting Services to any member of a Protected Group at prices that exceed the pricing concessions established for that Protected Group, Radiant and its Distributors shall comply with such prohibitions; provided, however, that the foregoing covenant shall not apply retroactively to binding contractual commitments (as opposed to contract pricing with no commitment to purchase) entered into between Radiant and any Customer or Legacy Client prior to the establishment of the pricing concession.

 

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5.14 Subcontractor Agreements. Periodically, either party may approach the other with a subcontracting opportunity to provide staffing resources, technical expertise, or other services as a subcontractor associated with a larger effort. All such subcontracting agreements shall be established separately per written agreement and shall be billed in accordance with Section 5.4 (subject to applicable discounts set forth on Exhibit N).

 

5.15 Sales by Existing Resellers. The parties acknowledge and agree that, notwithstanding anything contained herein to the contrary, if any Person that is a Radiant reseller as of the Effective Date shall desire to sell any Enterprise Product licenses or services related thereto to a Customer, Radiant shall be required to purchase such Enterprise Product licenses and services thereto on behalf of such reseller at the prices and subject to the discounts described on Exhibit N.

 

6. RADIANT’S OBLIGATIONS.

 

6.1 General Obligations. Subject to the terms and conditions of this Agreement, Radiant agrees to:

 

(i) In its sole discretion, use commercially reasonable efforts to market the Software to Customers;

 

(ii) As applicable, submit Orders for the purchase of subscriptions for the Hosting Services, licenses or subscriptions for the Enterprise Products and/or the purchase of support, maintenance, custom development or other services;

 

(iii) Provide, in a prompt and efficient manner, at Radiant’s discretion, the following Complementary Services (on terms and conditions and at prices determined by Radiant):

 

(a) installation services, including installing the Enterprise Products (other than the Tools) at the Customer’s, Legacy Client’s or a third party host’s data processing facilities and participating with the Customer or Legacy Client in the initial implementation of the Enterprise Products (other than the Tools);

 

(b) training services, including providing training in the functionality and operational aspects and capabilities of the Software to appropriate personnel of each Customer;

 

(c) Level 1 and Level 2 software support services to Customers and distributing to Customers, Error Corrections, Enhancements or Upgrades developed by Enterprise pursuant to its software support and maintenance obligations hereunder;

 

(d) hosting services directly to Customers or resell Enterprise’s Hosting Services (subject to Hosting Terms) to Customers; or

 

(e) configuration services, including, at a minimum, being able to provide customized software configurations upon request by Customers. The foregoing shall not be deemed to authorize Radiant to make modifications to or prepare

 

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Derivative Works based upon the Enterprise Products. Whether or not to pursue such a configuration request is solely at the discretion of Radiant; and

 

(iv) Take all actions necessary or appropriate to protect the ability of either Radiant or Enterprise, or both, to prevent unauthorized Persons from reproducing, copying, marketing, selling, distributing, transferring, translating, modifying, adapting, disassembling or reverse engineering the Enterprise Products, creating Derivative Works based on the Enterprise Products, or misappropriating the Marks.

 

6.2 Software License Agreement. As a condition to Radiant’s right to sublicense the Software to Customers as permitted hereunder, Radiant agrees that each Customer will execute a Software License Agreement, which shall include at a minimum, the Software License Terms. Pursuant to Section 28, Enterprise shall have the right to audit Radiant’s compliance with this Section 6.2 by reviewing and making copies of such Software License Agreements provided Radiant shall have the right to redact from such documents any confidential pricing information.

 

6.3 Form of Complementary Services Agreement. In connection with selling Complementary Services to Customers, Radiant agrees to have each Customer sign an agreement, which may be the Software License Agreement (the “Complementary Services Agreement”), which shall contain the following provisions:

 

(i) Enterprise (referred to either by name or as a licensor) shall not be responsible for providing any of the Complementary Services to Radiant’s Customers, and Enterprise shall have no liability or responsibility to the Customers under the Complementary Services Agreement; and

 

(ii) Enterprise shall be expressly included, by name or named as a licensor, to the same extent as Radiant, in: (a) any limitation of liability provisions (such as disclaimers of warranties and limitations of liability to a specified sum of money); (b) any limitation of remedy (such as disclaimers of consequential, special, and/or punitive damages and lost profits); and (c) any limitation of time period in which legal action or arbitration proceedings may be brought by the Customer.

 

6.4 Failure of Certification. In the event Radiant is no longer Certified to provide specified services that are applicable to a Customer, at Enterprise’s request, Radiant shall discontinue all such specific services to such Customer. In such case, Enterprise may contact the Customer directly and encourage the Customer to purchase such specific services from Enterprise, and Radiant will cooperate with respect to the same.

 

6.5 Distributor Agreement. Radiant agrees that each Distributor will execute a Distributor Agreement, which shall include, at a minimum, the Distributor Terms.

 

6.6 Resale of Hosting Services. In connection with the resale of Hosting Services to Customers as permitted hereunder, Radiant agrees that Exhibit C sets forth the entire scope of the Hosting Services to be provided by Enterprise. Radiant shall not offer services, terms and conditions for Hosting Services in excess of, or more expansive than, those set forth

 

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on Exhibit C and Radiant agrees that each Customer receiving Hosting Services will execute an agreement containing, at a minimum, the Hosting Terms.

 

6.7 Representations by Radiant. Radiant will make no representations, guarantees or warranties about the Enterprise Products, Hosting Services, or the software support and maintenance services provided by Enterprise, unless such representations, guarantees or warranties are contained in materials which are provided by Enterprise to Radiant or are set forth in the Software License Terms; provided, however, that if Radiant desires to offer a prospective Customer a warranty that is different, in any respect, from a warranty Enterprise has provided to Radiant in Section 15 or in the Software License Terms, then Radiant may make a request in writing that Enterprise honor such different warranty, and Enterprise may, in its sole discretion, agree to honor such warranty by accepting such request in writing.

 

6.8 Review of Reseller Activities. Enterprise and Radiant will engage periodically in meetings with Radiant’s executives (“Executive Reviews”) to discuss performance, staffing and support issues, as well as emerging trends and opportunities, relative to this Agreement. These Executive Reviews will also be the mechanism for expanding and/or modifying the terms and conditions of this Agreement. Executive Reviews shall cover such topics as the parties may mutually agree.

 

 

6.9 Installed Customer Base Report. Within twenty (20) days following the end of each calendar quarter, Radiant will provide to Enterprise a report identifying the Customers and Legacy Clients of Radiant and such other relevant information as Enterprise may reasonably request (an “Installed Customer Base Report”).

 

6.10 Customer Satisfaction Surveys. Enterprise and Radiant agree to jointly conduct a minimum of one survey each year beginning on the Effective Date of Radiant’s Customers based on the latest Installed Customer Base Report. Radiant and Enterprise shall have a right to reasonably approve the content of the survey, which approval will not unreasonably be withheld or delayed.

 

6.11 Time Clocks.

 

(i) Purchase of Time Clocks. Enterprise may, from time to time during the term of this Agreement, issue to Radiant orders for one or more Time Clocks, which orders shall identify the number of Time Clocks Enterprise desires to purchase and the aggregate purchase price for such Time Clocks. Upon receipt of a written commitment to purchase Time Clocks, which commitment does not contain any additional or inconsistent terms to those set forth herein, Radiant will accept the order immediately and deliver to Enterprise the Time Clocks within 45 days after acceptance of the order. After delivery of the requested Time Clocks, Radiant will invoice Enterprise such Time Clocks, and Enterprise will pay such fees within 30 days after its receipt of the invoice. Title to all Time Clocks purchased hereunder and risk of loss or damage shall pass to Enterprise upon the earlier of the delivery to the carrier at the place of shipment or Enterprise’s receipt of the Time Clocks at Enterprise’s place of business.

 

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(ii) Pricing of Time Clocks. The Time Clocks shall be priced at the rate and subject to the discounts set forth on Exhibit N. During the term hereof, should Radiant sell a Time Clock to another Person at a price that is lower than the price contained on Exhibit N (as the same may be amended or modified pursuant to this Section 6.11(ii)), then Radiant shall notify Enterprise of the same reasonably promptly after such sale. Such pricing shall be made available to Enterprise for all unfulfilled orders that have not been accepted by Radiant and all future orders, and Exhibit N shall be deemed to be amended to reflect such reduced pricing. If Enterprise shall become entitled to such lower price, but shall have made payment at any price in excess thereof, Radiant shall promptly refund the difference in price to Enterprise.

 

(iii) Price Changes on Time Clocks. Radiant shall have the right, at any time, to revise, change, alter or amend the Time Clock price set forth on Exhibit N upon six months notice to Enterprise. Notwithstanding the foregoing, any orders for Time Clocks submitted by Enterprise to Radiant prior to the effective date of the price change shall not be affected by any price change permitted hereunder.

 

(iv) Warranty. Radiant warrants that the Time Clocks shall conform to the descriptions set forth in Exhibit W, including any requirements and specifications set forth therein, and shall be free from material defects in materials and workmanship for a period of 12 months following delivery of the Time Clocks to Enterprise. If Enterprise believes that there is a defect in a Time Clock such that the Time Clock does not conform to this limited warranty, Radiant must be notified no later than 12 months following delivery of the Time Clock to Enterprise. Enterprise agrees that Enterprise’s or an Enterprise client’s sole remedy for such defect or non-conformity shall be the repair or replacement of the applicable Time Clock. Radiant shall have no obligation under this Section 6.11(iv) should the Time Clocks be modified, altered, or subjected to misuse, neglect, accident or improper use by Enterprise or an Enterprise client or any third party.

 

(v) Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN SUBSECTION (iv) ABOVE, RADIANT DISCLAIMS ALL WARRANTIES OF ANY NATURE WHATSOEVER WITH RESPECT TO THE TIME CLOCKS, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

7. LEGACY CLIENTS.

 

7.1 Services Under Legacy Contracts. As a result of the Separation, it will be necessary for Enterprise to perform the Legacy Services under the Legacy Contracts applicable to each Enterprise Product. Accordingly, Radiant hereby engages Enterprise, and Enterprise hereby agrees to be engaged, to undertake the Legacy Services. Further, it may be desirable for Radiant to sell additional Enterprise Product licenses to Legacy Clients. The provision of Legacy Services by Enterprise and the sale by Radiant of additional Enterprise Product licenses are subject to the following:

 

(i) the Legacy Services for each Legacy Contract are specified therein;

 

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(ii) as they relate to the Legacy Services, Enterprise shall be entitled to all of the benefits and rights of Radiant under each Legacy Contract; provided, that Enterprise’s rights to receive payments for Legacy Services are only as set forth in this Section 7. To the extent necessary to enforce or receive the benefit of such rights and benefits, Radiant, at its expense, will take such reasonable actions as are necessary in order to enforce the applicable Legacy Contracts on behalf of Enterprise;

 

(iii) the following provisions shall apply with respect to Radiant’s right to sell or continue to sell Enterprise Product licenses to Legacy Clients:

 

(a) during the initial 18-month period after the Effective Date, Radiant shall have the right to continue to sell Enterprise Product licenses to Legacy Clients pursuant to the terms (including the pricing therein) of applicable Legacy Contracts, but only if (1) the sale of such additional licenses is permitted by the applicable Legacy Contracts, (2) such sale of additional licenses does not exceed the normal buying patterns of the Legacy Client or represent a material quantity of licenses, and (3) such sale of additional licenses does not create an Additional Enterprise Obligation (as defined below); provided that all revenues that Radiant receives from such additional licenses shall be passed through to Enterprise pursuant to Section 7.1(iv). In the event Radiant is not entitled to continue to sell additional licenses solely as a result of a failure to meet the condition specified in (2) above, Enterprise agrees to consent to such sales of additional licenses unless it reasonably believes that such additional license sales will cause a material hardship on Enterprise;

 

(b) following the initial 18-month period after the Effective Date, Radiant shall have the right to continue to sell Enterprise Product licenses to Legacy Clients pursuant to the terms (including the pricing therein) of applicable Legacy Contracts, but only if the sale of additional licenses is required by the applicable Legacy Contracts; provided that all revenues that Radiant receives from such additional licenses shall be passed through to Enterprise pursuant to Section 7.1(iv), and

 

(c) during the term of this Agreement, Radiant shall have the right to sell ReMacs and Software licenses to Reseller Legacy Clients other than pursuant to subsections (a) or (b) above, provided, that, without the advance written consent of Enterprise, any such sale under this subsection (c) shall be made pursuant to a Software License Agreement containing, at a minimum, the Software License Terms.

 

For purposes hereof, an “Additional Enterprise Obligation” shall mean an obligation of Enterprise to provide services, including, without limitation, consulting and custom development services (but not including hosting, support or maintenance services), additional to the Legacy Services that Enterprise would be required to perform if no such additional licenses were sold. The foregoing provisions are not intended to apply, and shall not apply, to Enterprise Product licenses sold by Legacy Clients to Customers. (See Section 5.15).

 

Notwithstanding anything contained herein to the contrary, Radiant shall not sell ReMacs licenses after December 31, 2004.

 

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(iv) except for revenues received or to be received from Reseller Legacy Clients, and subject to subsection (viii) below, Radiant will pass through to Enterprise all revenues that Radiant receives from such Legacy Clients for the Legacy Services and for Enterprise Product licenses (the Legacy Services and such licenses and subscriptions hereinafter referred to as the “Legacy Items”) and such revenues shall be paid to Enterprise within 10 days of Radiant’s receipt of same from such Legacy Clients (other than Reseller Legacy Clients), although if a Legacy Client (other than a Reseller Legacy Client) disputes fees payable to Radiant and such dispute relates to the Legacy Items, Radiant shall pay such fees to Enterprise promptly after the dispute is resolved. In the event of such a dispute, Radiant will provide Enterprise with documentation substantiating the existence of the dispute. To the extent Radiant wants to compromise all or part of the fees associated with the Legacy Items, Radiant will not do so without the prior written consent of Enterprise, which may be withheld in its sole discretion. Enterprise understands that Radiant has no obligation to pay for the Legacy Items (other than Legacy Services performed by or on behalf of or licenses sold to Reseller Legacy Clients) unless and until it receives payment from the applicable Legacy Clients; provided, however, that, Radiant agrees (i) to bill and attempt to collect the fees associated with the Legacy Items according to the following guidelines unless otherwise expressly stated in the applicable Legacy Contract: (a) support, maintenance, subscription or hosting fees shall be billed no later than the 10th day of the month in which the service is to be provided; (b) software licenses and subscriptions shall be billed within 3 days of notification of product shipment; and (c) professional services shall be billed on delivery of an Order, but in any event, no later than the third business day of the month following performance of the services; and (ii) upon request, to provide an accounts receivable trial balance report for Legacy Clients and, simultaneously with delivery to Legacy Clients, copies of applicable invoices to Enterprise. If any payments are past due more than 30 days, (x) Enterprise shall have the right to contact the delinquent Legacy Client in an effort to cause the Legacy Client to pay Radiant the fees owed and/or, if not prohibited by or in contradiction with the applicable Legacy Contract, suspend Legacy Services to such Legacy Client until such payments are received; and (y) Radiant shall, upon written request from Enterprise, exercise all of its remedies under the applicable Legacy Contract and otherwise diligently pursue its rights to payment thereunder, including, without limitation, by filing a lawsuit (at Enterprise’s cost and expense, including attorneys’ fees and witness fees, as applicable) against the applicable Legacy Client for fees owed; provided, however, that Enterprise agrees that Radiant shall not be required to pursue such remedies or rights to payment if Radiant pays Enterprise all amounts owed to Enterprise with respect to such Legacy Contract, provided, further, that if Radiant files a lawsuit pursuant to this subsection, Enterprise will indemnify Radiant with respect to any counterclaims based on the Legacy Services;

 

(v) the period during which Enterprise shall perform such Legacy Services shall commence on the Effective Date and shall terminate, with respect to each Legacy Contract, on the expiration, or earlier termination, of such Legacy Contract and cannot be extended without the advance written consent of Enterprise;

 

(vi) Radiant may terminate the Legacy Services with respect to a specific Legacy Contract if Enterprise materially breaches its obligations under this Section 7.1,

 

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and fails to cure the breach within 30 days after written notice from Radiant (unless the breach, by its nature, is curable but incapable of being cured within such 30-day period, then, in that event, so long as Enterprise is diligently attempting to cure such breach, within a reasonable period after receipt of such notice) specifying the breach and requesting that it be cured. Enterprise may terminate the Legacy Services with respect to a specific Legacy Contract in the event Radiant fails to pay amounts due under this Section 7.1 for such Legacy Contract and fails to cure the failure within 20 days after written notice from Enterprise specifying the failure and requesting that it be cured;

 

(vii) the Legacy Services shall be performed consistent with each Legacy Contract; provided, however, that Enterprise has no right or authority to bind or obligate Radiant;

 

(viii) Enterprise shall be responsible for all expenses and costs it incurs in performing the Legacy Services, except to the extent such expenses and costs are to be borne by a Legacy Client pursuant to a Legacy Contract, in which case, Radiant shall reimburse Enterprise for all such expenses and costs not reimbursed by the applicable Legacy Client; provided, Enterprise agrees to use reasonable efforts to assist Radiant in recovering such unreimbursed expenses and costs;

 

(ix) Enterprise and Radiant will make no representations, warranties or guarantees to Legacy Clients regarding the Legacy Services without the other party’s prior written consent;

 

(x) the parties agree to allocate the risk of liability with respect to the Legacy Services in accordance with Section 18 below;

 

(xi) Radiant will not amend a Legacy Contract or enter into a new agreement with a Legacy Client (other than a Software License Agreement) without Enterprise’s prior written consent if such amendment would have the effect of modifying, altering or changing the Legacy Services or the economic terms of the Legacy Contract that affect the Legacy Services, requiring Enterprise to otherwise perform additional or different services, increasing Enterprise’s liability thereunder, or requiring Enterprise to sell or license additional or different products or services than as otherwise set forth in such Legacy Contract. Notwithstanding the foregoing, during the initial 18-month period following the Effective Date, Radiant may extend the term of its support and maintenance obligations to a Legacy Client pursuant to the terms of an applicable Legacy Contract if not prohibited by such Legacy Contract; following such 18-month period, Radiant, without Enterprise’s advance written consent, shall not extend the term of such support and maintenance obligations unless the applicable Legacy Contract expressly so requires. Furthermore, upon Enterprise’s request, Radiant agrees to raise prices on all Legacy Services pursuant to each Legacy Contract in connection with such extension or otherwise if permitted to do so under each such Legacy Contract; and

 

(xii) if a Legacy Client requests its desire to terminate its relationship with Radiant in order to license products and receive services from Enterprise, Radiant will

 

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facilitate such change provided the Legacy Client pays Radiant any and all monies due and owing and executes a full release in favor of Radiant.

 

Enterprise hereby confirms that Radiant has made the Legacy Contracts available for Enterprise’s review prior to the Effective Date, and, except as expressly provided in this Agreement, Enterprise is not reliant on Radiant for any information, material or resources in order to perform the Legacy Services. Radiant agrees reasonably to cooperate with Enterprise in connection with Enterprise’s performance of the Legacy Services. For the avoidance of doubt, the parties acknowledge and agree that Radiant shall be responsible for all services under the Legacy Contracts, other than services that constitute the Legacy Services.

 

7.2 Rebates/Credits. The parties acknowledge that pursuant to the terms of selected Legacy Contracts, rebates and/or credits are due, or will become due, to Legacy Clients as a result of product purchases such Legacy Clients made, or will make in the future. To avoid any inequities, the parties agree in good faith to meet within 30 days after the Effective Date, and on a regular basis thereafter, to reconcile and determine with respect to any outstanding rebates or credits, which party should bear responsibility for paying any such outstanding rebates or credits. Additionally, during such meeting(s), the parties in good faith shall develop a mutually acceptable plan for handling such rebates or credits that may arise in the future. The parties agree that in trying to properly and equitably apportion the responsibilities for rebates and credits, they will look to which party receives the most benefit from the Legacy Client’s purchases that triggered such rebates and/or credits.

 

8. OWNERSHIP.

 

8.1 Rights in Enterprise Products. Radiant acknowledges and agrees that, following the Separation, Enterprise will be the owner of the Software, Upgrades, Enhancements, VLM, ReMacs, Tools, Permitted Modifications, the POS Management Module, the Epsilon Interfaces and all Additional Enhancements, and, in each case any modifications, enhancements, additions, upgrades and Derivative Works thereto, whether made by Enterprise, Radiant or a third party with Enterprise’s permission. The parties acknowledge and agree that, following the Effective Date, Enterprise and Radiant will be joint owners of the RSL Code and Batch Hand Held Code (as provided in Section 4.1(ii)). Enterprise acknowledges and agrees that interfaces from Radiant’s products to an Enterprise Product, developed by Radiant after the Separation, that operate in conjunction with the Enterprise Product but contain no portion of the Enterprise Product, shall be the exclusive property of Radiant. Without limiting the foregoing, Radiant understands that in preparing the Software for use by Customers, Radiant or the Customers may be required to configure aspects of the Enterprise Products. Radiant acknowledges and agrees that any such configuration shall be deemed part of the Enterprise Products, shall be the exclusive property of Enterprise, and Enterprise shall have unlimited use of such configurations, now or in the future. Each party (“Obligor”) agrees to transfer, convey and assign to the other party (“Owner”), and to cause its officers, directors, employees and agents to transfer, convey and assign to Owner all right, title and interest in and to any and all intellectual property rights, including, without limitation, patents, trademarks, trade names and copyrights, in which the Obligor acquires an interest which, in accordance with the provisions of this Agreement, including this Section 8.1 and Section 4.4, are owned by Owner. Without limiting the generality of the foregoing, if for any reason, Obligor or its officers, directors, employees or

 

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agents acquires or may be deemed to have acquired any rights in or to any of the intellectual property of Owner, Obligor shall execute, and shall cause each such officer, director, employee or agent to execute such acknowledgments, grants and assignments of rights, including all copyrights, in and to the intellectual property of Owner, as Owner may reasonably request (and which documents are reviewed and approved by counsel for Obligor) for the purpose of evidencing, enforcing, registering or defending its ownership of such intellectual property. Obligor hereby irrevocably appoints Owner as its agent to execute and deliver any such documents that Obligor fails or refuses to execute promptly, this power and agency being coupled with an interest and being irrevocable.

 

8.2 Limitation on Grant of License. Radiant further acknowledges and agrees that, except for Radiant’s limited license described in Section 4 of this Agreement, this Agreement does not grant to Radiant any right, title or interest in the Enterprise Products, in any form or in any copies thereof, including all worldwide copyrights, trade secrets, patent rights and any other confidential or Proprietary Information.

 

8.3 Trademark Rights. Radiant acknowledges and agrees that Enterprise is the owner of all right and title and interest in and to the Marks, and Radiant will not use any of the Marks in any manner whatsoever except as expressly provided in this Agreement. Enterprise acknowledges and agrees that Radiant is the owner of all right and title and interest in and to the Radiant Marks, and Enterprise will not use any of the Radiant Marks in any manner whatsoever except as expressly provided in this Agreement.

 

9. ORDERING AND DELIVERY.

 

9.1 Ordering. Radiant may order subscriptions for the Hosting Services or licenses for the Enterprise Products (other than the Tools) for resale to Customers or, as reflected in Section 7, Legacy Clients by submitting a signed Order to Enterprise for Enterprise’s acceptance. An Order upon which Enterprise has issued an invoice to Radiant or upon which Enterprise has otherwise commenced performance shall be deemed accepted by Enterprise (“Accepted Order”). Only those terms on the face of the Accepted Order that do not conflict with the provisions of this Agreement shall be enforceable. When accepted by Enterprise, an Order shall bind the parties hereto to the terms on the face of the Order.

 

9.2 Delivery. With respect to Customers that do not purchase Hosting Services or Legacy Clients, Enterprise shall deliver the applicable Enterprise Products to the Customer, Legacy Client or Radiant, as determined by the parties, within 30 days of Enterprise’s receipt and acceptance of a completed Order therefor from Radiant. With respect to Customers that purchase Hosting Services, Enterprise shall activate the Customer’s account for the applicable Enterprise Products within 30 days of Enterprise’s receipt and acceptance of a completed Order therefor from Radiant. Notwithstanding the foregoing, if any Accepted Order contains any request that requires Enterprise to customize applicable Enterprise Products or provide any other development work, the 30-day delivery and activation obligations set forth in this Section 9.2 shall not apply and Enterprise shall deliver or activate such applicable Enterprise Products within a time period that Enterprise determines, in its sole discretion, is reasonable under the circumstances or, if applicable, as stated in the Accepted Order.

 

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10. HOSTING SERVICES. In connection with the use of the Software by Customers, Enterprise acknowledges that Customers will have the following options with respect to hosting services:

 

(i) Radiant shall have the right, but not the obligation, to offer hosting services for the Software to a Customer provided (a) Radiant meets Enterprise’s hosting specifications, as published, supplemented and amended from time to time by Enterprise, (b) Radiant has obtained and continues to maintain the required Certification for providing hosting services; and (c) the Customer agrees to be bound by the Hosting Terms applicable to Customers;

 

(ii) Any Customer may request that the hosting be performed at the data processing facilities of the Customer or a third party host approved by Enterprise, which approval shall not be unreasonably withheld; provided, however, that Enterprise shall be deemed to reasonably withhold such approval if such Customer or third party is not certified to host the Software in accordance with Enterprise’s Certification requirements. Enterprise shall not be responsible for any hosting services provided by the Customer or a third party host pursuant to this paragraph, nor shall such hosting services be deemed to be “Hosting Services” under this Agreement. As a condition to such hosting services, (a) the data processing facilities of the Customer or third party host, as the case may be, must meet Enterprise’s hosting specifications, as supplemented or amended from time to time by Enterprise, and (b) if applicable, the third party host must agree in writing to be bound by, at a minimum, the Hosting Terms applicable to third party hosts;

 

(iii) Radiant shall have the right to resell Enterprise’s Hosting Services as permitted herein, subject to, at a minimum, the Hosting Terms, for which Enterprise will be paid fees in accordance with Section 5.3; or

 

(iv) Radiant shall have the right to refer Customers to Enterprise as the preferred vendor for hosting services.

 

Enterprise agrees that in the event it intends to cease providing Hosting Services to Customers, it shall provide Radiant with no less than 120 days advance written notice, and upon Radiant’s request, Enterprise shall provide, at the rates set forth on Exhibit N, Radiant with access to, and information concerning, Enterprise’s Hosting System and all such related equipment, data, files, formats and similar such material, in order that Radiant shall have the capacity and capability to provide such hosting services to the Customers. Nothing in the preceding sentence is intended to be construed so as to permit Enterprise to avoid its contractual obligations to Customers with respect to such Hosting Services.

 

11. TESTING; SUPPORT LIFE. Prior to distribution of a new general release of the Software (i.e. that which is generally distributed to Enterprise’s clients) or an Upgrade thereto, Radiant shall be entitled to test the new general release or Upgrade for a period of 45 days. During such testing, Radiant shall have the right to comment on and make suggestions with respect to the new general release or Upgrade, and Enterprise shall take such comments and suggestions into account prior to releasing the same. The parties agree that the support life cycle

 

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for a new general release or Upgrade shall begin on the date Enterprise generally releases such new general release or Upgrade and will continue for 30 months thereafter.

 

12. DELIVERY AND USE OF SOURCE CODE.

 

(i) Simultaneously with the execution of this Agreement, the parties will enter into a source code escrow agreement (or an amendment to an existing source code escrow agreement (“Escrow Agreement”)) with DSI Technology Escrow Services, Inc. or another escrow agent mutually acceptable to both parties (“Agent”). Radiant shall pay all fees required to be paid in connection with the Escrow Agreement. Reasonably promptly after delivery by Enterprise to a Legacy Client or a Customer of any Enterprise Product or an Upgrade thereto, Enterprise shall deposit with the Agent, on a mutually agreeable media, an accurate and complete copy of the then-current version of the Source Code and Executable Code version of such Enterprise Product or Upgrade, including, if applicable, the Application Code and the Platform Code. The parties acknowledge that the ReMacs/VLM Code has already been deposited with the Agent. For purposes of this Section 12, “Escrowed Items” shall mean the Source Code and Executable Code of Enterprise Products, including the Application Code, the Platform Code and the ReMacs/VLM Code. Enterprise shall provide upgrades to the Escrowed Items to the Agent reasonably promptly after Enterprise makes an Upgrade generally available to other resellers or clients.

 

(ii) The Escrow Agreement shall provide for a mechanism pursuant to which a Customer or a Legacy Client can be added as a beneficiary of the Escrow Agreement if a Software License Agreement or Legacy Contract, respectively, requires the same. Enterprise acknowledges and agrees that, commencing with the Effective Date, it will assume responsibility for adding any Customer as a beneficiary under the Escrow Agreement subject to the payment of any applicable fees. For Legacy Clients who were permitted to become beneficiaries of the Escrow Agreement prior to the Effective Date, but who, for whatever reason failed to do so, Radiant shall retain responsibility for ensuring such Legacy Clients are so added and that it shall reimburse Enterprise for reasonable expenses, administrative and clerical costs (as detailed on Exhibit N) it incurs in assisting Radiant to accomplish the foregoing. Radiant acknowledges its responsibility for depositing the Escrowed Items with the Agent prior to the Effective Date. If Radiant failed to fulfill such responsibility, then upon Radiant’s request, Enterprise shall deposit the Escrowed Items with the Agent and Radiant will reimburse Enterprise for its reasonable expenses, administrative and clerical costs in undertaking such depositing.

 

(iii) The parties understand and agree and the Escrow Agreement shall reflect that the Escrowed Items or portions thereof will be released to Radiant or the applicable Customer or Legacy Client, as the case may be, solely under the following circumstances (except as other expressly provided in a Legacy Contract or related escrow agreement):

 

(a) upon resolution of the dispute resolution procedure in the Escrow Agreement or Legacy Contract or Software License Agreement, as applicable, all of the Escrowed Items will be released to Radiant if Enterprise fails to comply with all or substantially all of its support obligations to all Customers and all Legacy Clients under this Agreement for a period of 7 consecutive days;

 

(b) the Application Code will be released to Radiant upon written request to the Escrow Agent;

 

(c) if the Escrow Agent is required to release any portion of the Escrowed Items to a Legacy Client or Customer (subject to the applicable dispute

 

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resolution procedure, if any, set forth in the applicable Legacy Contract, Software License Agreement, or related escrow agreement), such portion of the Escrowed Items shall be released to the applicable Legacy Client or Customer, as the case may be, and Radiant.

 

For the avoidance of doubt, Radiant acknowledges and agrees that the Platform Code shall not be released, under any circumstances, to Customers (unless expressly permitted by the Software License Terms, in which case, subsection (iii)(c) shall govern).

 

(iv) Notwithstanding the foregoing, if the Application Code is released or has previously been released to Radiant pursuant to subsection (iii)(b) above, any portion of the Escrowed Items is requested to be released by a Legacy Client or Customer pursuant to subsection (iii)(c) above, and Radiant uses the Application Code to provide support and maintenance services for such Legacy Client or Customer, then (1) the applicable dispute resolution procedure in the Escrow Agreement shall continue notwithstanding the fact that Radiant is providing support and maintenance services to such Legacy Client or Customer, (2) Enterprise shall not be required to perform Legacy Services (with respect to any such Legacy Client) or any support, maintenance or other services (with respect to any such Customer) while Radiant is providing support and maintenance services to such Legacy Client or Customer, and (3) Radiant shall pay Enterprise all fees with respect to such services as if Enterprise were in fact performing such services; provided, however, that if it is ultimately determined that the portion of the Escrowed Items was properly released pursuant to the applicable Legacy Contract, Software License Agreement or applicable escrow agreement, then Enterprise will reimburse Radiant for all such fees paid to Enterprise during the period that such services not being performed by Enterprise. Additionally, Radiant shall pay Enterprise all fees with respect to support and maintenance services performed for a Legacy Client or Customer by Radiant using the Application Code, unless Enterprise has failed to comply with all or substantially all of its support obligations with respect to such Legacy Client or Customer for a period of 30 consecutive days, and such failure constitutes a material breach under the applicable Legacy Contract or Software License Agreement, including any applicable cure periods.

 

(v) The parties agree that the following additional terms shall apply to the escrow of the Escrowed Items or portion thereof, the release of Escrowed Items or portion thereof, and the use of the Escrowed Items or portion thereof upon release: (1) if Escrow Agent is required to release Escrowed Items pursuant to subsection (iii)(c) above, only the portion of the Escrowed Items that is required to be released pursuant to the applicable escrow agreement and that affects the applicable Legacy Client or Customer, as the case may be, shall be released (unless the applicable Legacy Contract, Software License Agreement or escrow agreement expressly provides otherwise); (2) Radiant or such other beneficiary of the Escrowed Items or portion thereof will maintain the confidentiality of the Escrowed Items or portion thereof in accordance with Section 19 below; (3) Radiant or such other beneficiary (subject to the terms and conditions to which such other beneficiary is subject) shall be required to return to escrow the Escrowed Items or portion thereof and all modifications thereof promptly to Enterprise upon Enterprise reasonably establishing that the circumstances that triggered the release of the Escrowed Items or portion thereof have been resolved, removed or alleviated; and (4) Escrow Agent shall reasonably permit an independent third party engaged by Radiant and approved in writing by Enterprise (which approval will not unreasonably be withheld), which independent third party shall execute a confidentiality agreement in form and substance reasonably satisfactory to Enterprise, to ensure that the Source Code initially deposited into escrow by Enterprise pursuant to this Agreement and any Upgrades are deposited into escrow; provided, however, that such independent third party must be accompanied by a representative of Enterprise and such review of Source Code

 

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shall only be available for the sole purpose of showing that the Source Code, when compiled, results in Executable Code for the applicable Enterprise Product or Upgrade. Radiant, on a time and materials basis (subject to the applicable discount set forth on Exhibit N), will train Enterprise on modifications made by Radiant to the Escrowed Items or portion thereof. Subject to the terms and conditions of this Section 12 and Section 4.4(iv), Enterprise hereby grants Radiant a non-exclusive, non-assignable, non-transferable and limited license to use the Escrowed Items or portion thereof, when released, solely for the purpose of providing support and maintenance services to Legacy Clients or Customers, as the case may be, pursuant to Legacy Contracts or Software License Agreements. Notwithstanding anything contained herein to the contrary, Radiant agrees that it shall not use the Source Code as a means for substituting itself as the provider of Level 3 support and maintenance services to customers or Legacy Clients except as expressly provided in this Section 12.

 

13. ADDITIONAL TRAINING. Radiant agrees to undertake such training that Enterprise reasonably determines is necessary for Radiant to be an authorized reseller of the Enterprise Products (other than the Tools), Hosting Services and Complementary Services. Enterprise agrees that all such training requirements shall be reasonable in light of the circumstances at the time and shall not be arbitrary or capricious. Enterprise will charge its then-current professional services rates subject to the discount set forth in Exhibit N for any such training.

 

14. SERVICES TO BE PROVIDED BY ENTERPRISE.

 

14.1 Software Support Services. Enterprise and Radiant will provide the support services in accordance with the obligations set forth on Exhibit P; provided, however, that such support shall only be required to be provided by Enterprise to or with respect to Customers that are entitled to receive support services and with respect to which Enterprise has been paid all applicable support and maintenance services fees.

 

14.2 Sales and Marketing Support. Enterprise may assist in the promotion of Radiant’s sales and Complementary Service capabilities to the Customers. All such assistance shall be provided only on the mutual agreement of both parties.

 

14.3 Development Services. Radiant may from time to time request that Enterprise develop Additional Enhancements or undertake other custom development activities (collectively, “development services”). All requests for development services shall be submitted to Enterprise in writing. Upon receipt of the request, Enterprise shall either reject the request in writing or provide Radiant with a “Statement of Work” outlining the deliverables and the fees and payment terms for the requested development services. Development services will be performed at Enterprise’s then-current professional services rates after applying the applicable discount set forth on Exhibit N or as otherwise agreed to in writing by Radiant and Enterprise. Enterprise’s obligation to provide the development services shall not arise until an authorized representative of Radiant executes and returns the unmodified Statement of Work to Enterprise. The Statement of Work shall include, if applicable, the following: (i) scope of work to be

 

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performed; (ii) description of services; (iii) performance standards and criteria; (iv) a timetable; (v) deadlines or other milestones or criteria for performance; (vi) testing processes; (vii) resources to be provided by each party; (viii) fee structure and rates; and (ix) description of functionality to be added to the Software.

 

14.4 Software Maintenance Services. Enterprise will provide Radiant with the software maintenance services in accordance with the obligations set forth on Exhibit P. The content and timing of Enhancements or Upgrades will be determined by Enterprise in its sole discretion. All requests for Enhancements other than those included in a generally released Upgrade shall be submitted to Enterprise in the form of a request for development services, as described in Section 14.3 above, which shall be subject to Enterprise’s acceptance, in its sole discretion. Radiant shall not provide an Upgrade or Enhancement to a Customer or Legacy Client unless the Customer or Legacy Client has a right to receive such Upgrade pursuant to the applicable Software License Agreement or Legacy Contract, as the case may be, and Enterprise has received all amounts required to be paid by or with respect to such Customer or Legacy Client under the applicable Software License Agreement, Legacy Contract (or other applicable agreement) or this Agreement, as the case may be.

 

14.5 Hosting Services. Enterprise will provide Hosting Services to the Customers to which Radiant has resold Hosting Services in accordance with its service offering as described on Exhibit C, as may be modified from time to time by Radiant and Enterprise. Upon reasonable request from Radiant, Enterprise shall provide Radiant with a Hosting Services report providing information on the number of active Customers receiving Hosting Services from Enterprise and the Software modules in use by such Customers.

 

15. WARRANTIES, COVENANTS AND DISCLAIMERS.

 

15.1 Enterprise Products. Enterprise warrants to Radiant that the Enterprise Products will conform to the Documentation for the Enterprise Products, provided that the Enterprise Products are used in accordance with the Documentation. If Radiant believes that there is a defect in the Enterprise Products such that it does not conform to this limited warranty, Enterprise must be notified immediately, but no later than 90 days following the delivery or, in the case of hosted applications, first use of the Enterprise Products to or by the Customer or the Legacy Client (as the case may be) affected by the alleged defect. Radiant agrees that a Customer’s or Legacy Client’s sole remedy for such non-conformities in the Enterprise Products shall be the repair or replacement of the Enterprise Products, with such replacement to be substantially equivalent in functionality to the item replaced. Enterprise shall have no obligation under this Section 15.1 should the Enterprise Products be modified, altered, merged or subjected to misuse, neglect, accident or improper use by Customer or Legacy Clients or any third party.

 

15.2 Professional and Workmanlike Manner, etc. All services to be provided by Enterprise and Radiant hereunder, including, without limitation, hosting services, support and maintenance services and development services, shall be performed in a professional and workman-like manner and in accordance with all applicable laws.

 

15.3 All Rights to Perform. Enterprise represents and warrants to Radiant that: (i) Enterprise has full authority to execute and perform this Agreement; and (ii) Enterprise’s

 

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execution and performance of this Agreement will not violate any law or breach any other agreement.

 

15.4 Warranty Disclaimer. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN THE SOFTWARE LICENSE TERMS, ENTERPRISE DISCLAIMS ALL WARRANTIES OF ANY NATURE WHATSOEVER WITH RESPECT TO THE ENTERPRISE PRODUCTS, THE TOOLS AND THE HOSTING, SUPPORT, MAINTENANCE OR OTHER SERVICES PROVIDED BY ENTERPRISE, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF TITLE, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

 

15.5 Internet Disclaimer. Radiant understands and agrees that the Hosting Services that may be provided by Enterprise hereunder involves the use of, or connection to, the internet which is inherently insecure and potentially unstable and that connection to the internet provides opportunity for unauthorized access by a third party to Enterprise’s, Customer’s or Legacy Client’s computer systems, networks and any and all information stored therein. INFORMATION TRANSMITTED AND RECEIVED THROUGH THE INTERNET CANNOT BE EXPECTED TO REMAIN CONFIDENTIAL AND ENTERPRISE DOES NOT GUARANTEE THE PRIVACY, SECURITY, AUTHENTICITY AND NON-CORRUPTION OF ANY INFORMATION SO TRANSMITTED, OR STORED IN ANY SYSTEM CONNECTED TO THE INTERNET. ENTERPRISE SHALL NOT BE RESPONSIBLE FOR ANY ADVERSE CONSEQUENCES WHATSOEVER OF ANY CUSTOMER’S OR LEGACY CLIENT’S CONNECTION TO, OR USE OF, THE INTERNET AND ENTERPRISE SHALL NOT BE RESPONSIBLE FOR ANY USE BY THE CUSTOMER OR LEGACY CLIENT OR CUSTOMER’S OR LEGACY CLIENT’S WORKERS OF ANY INTERNET CONNECTION IN VIOLATION OF ANY RULE, LAW OR REGULATION.

 

15.6 Warranty Requests. Enterprise and Radiant shall mutually agree upon a methodology for honoring warranty requests from Customers which will include Radiant forwarding all warranty requests to Enterprise.

 

15.7 Compliance with Laws. Each party agrees to obtain all necessary approvals, actions or authorizations by any governmental authority or agency, and to otherwise comply will all applicable laws, rules and regulations, in connection with the performance of its obligations under this Agreement.

 

16. REPRESENTATIONS AND WARRANTIES BY RADIANT. Radiant represents and warrants to Enterprise that: (i) Radiant has full authority to execute and perform this Agreement; (ii) Radiant’s execution and performance of this Agreement will not violate any law or breach any other agreement; (iii) there are no actions, suits, charges, complaints, proceedings, court orders or governmental authority orders or known investigations pending or, to the knowledge of Radiant, threatened against Radiant or its Affiliates, pursuant to, under, or with respect to any Legacy Contract, and there is no basis reasonably known to Radiant for any of the foregoing; and (iv) as of the Effective Date, it has performed, in all material respects, all of its obligations required to be performed in connection with each Legacy Contract, it is not in material breach of any such Legacy Contract, and it is not in receipt of any written claim of

 

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material default or material breach under any Legacy Contract, nor has an event occurred that, with notice or lapse of time, will give rise to such a material breach or material default.

 

17. TRADEMARKS.

 

17.1 Use of Marks. Radiant’s use of the Marks shall at all times be in accordance with guidelines Enterprise may reasonably establish in its sole discretion, including using the appropriate trademark notices and styles. Radiant acknowledges and agrees that this Agreement does not constitute any conveyance of any right, title and interest in or to any of the Marks, except for the limited right of use described in Section 4 herein. Radiant shall submit to Enterprise for Enterprise’s approval, any and all materials bearing or including any of the Marks, at least 15 days prior to Radiant’s first use of such materials. Radiant agrees not to commit any acts, directly or indirectly, which may contest, dispute, or otherwise impair the rights, title or interest of Enterprise in and to the Marks. Radiant agrees not to assert any claim or assert any rights, title or interest in or to the Marks in any way. The parties agree that all uses of the Marks by Radiant shall be in such a manner as to inure at all times to the benefit of Enterprise. Radiant shall not use any language or display any Marks in such a manner as to create the impression that the Marks belong to, or are owned by, Radiant. Upon the request of Enterprise, Radiant agrees to discontinue the use of: (i) any Marks being used by Radiant in a manner that is inconsistent with the guidelines set forth above; (ii) any trademark, service mark or trade name deemed by Enterprise to create a likelihood of confusion with a Mark; or (iii) any Mark which may be the subject of a dispute between Enterprise and a third party.

 

17.2 Use of Radiant Marks. Enterprise’s use of the Radiant Marks shall at all times be in accordance with guidelines Radiant may reasonably establish in its sole discretion, including using the appropriate trademark notices and styles. Enterprise acknowledges and agrees that this Agreement does not constitute any conveyance of any right, title and interest in or to any of the Radiant Marks, except for the limited right of use described in Section 4 herein. Enterprise shall submit to Radiant for Radiant’s approval, any and all materials bearing or including any of the Radiant Marks, at least 15 days prior to Enterprise’s first use of such materials. Enterprise agrees not to commit any acts, directly or indirectly, which may contest, dispute, or otherwise impair the rights, title or interest of Radiant in and to the Radiant Marks. Enterprise agrees not to assert any claim or assert any rights, title or interest in or to the Radiant Marks in any way. The parties agree that all uses of the Radiant Marks by Enterprise shall be in such a manner as to inure at all times to the benefit of Radiant. Enterprise shall not use any language or display any Radiant Marks in such a manner as to create the impression that the Radiant Marks belong to, or are owned by, Enterprise. Upon the request of Radiant, Enterprise agrees to discontinue the use of: (i) any Radiant Marks being used by Enterprise in a manner that is inconsistent with the guidelines set forth above; (ii) any trademark, service mark or trade name deemed by Radiant to create a likelihood of confusion with a Radiant Mark; or (iii) any Radiant Mark which may be the subject of a dispute between Radiant and a third party.

 

17.3 Notice of Infringements. Radiant will promptly notify Enterprise of any and all infringements or attempted infringements of any of the Marks that may come to Radiant’s attention, and Radiant will assist Enterprise, at Enterprise’s expense (unless such infringement was due to Radiant’s negligence or intentional conduct, in which case, Radiant shall bear such expense), in taking such action against the infringers as Enterprise may elect in its sole

 

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discretion. Enterprise will promptly notify Radiant of any and all infringements or attempted infringements of any of the Radiant Marks that may come to Enterprise’s attention, and Enterprise will assist Radiant, at Radiant’s expense (unless such infringement was due to Enterprise’s negligence or intentional conduct, in which case, Enterprise shall bear such expense), in taking such action against the infringers as Radiant may elect in its sole discretion.

 

18. INDEMNIFICATION.

 

18.1 Indemnification by Enterprise. Enterprise will hold harmless, indemnify and defend the Radiant Parties (as defined below) from and against any and all costs, liabilities, losses, damages, claims, demands, penalties, fines, judgments or settlements of any kind, known or unknown, fixed, accrued, absolute or contingent, liquidated or unliquidated, including all reasonable expenses, costs and attorneys’ fees relating thereto (collectively, “Losses”) arising out of, related to, or resulting from:

 

(i) any claim by a Customer or Legacy Client that the Enterprise Products violate or infringe upon any copyright, patent (issued in any country within the European Union, the United States, Japan, Australia or New Zealand), trade secret or other intellectual property right of any third party wherever located or contributes to such violation or infringement;

 

(ii) any claim that a Radiant Party’s use of the Mark(s) infringes the intellectual property rights of a third party, provided such Radiant Party’s use of the Mark(s) is consistent with this Agreement.

 

For purposes hereof, Radiant, its subsidiaries, and their respective officers, directors, employees and agents shall individually constitute a “Radiant Party” and collectively, the “Radiant Parties.”

 

If such claim with respect to the Enterprise Products has occurred or, in Enterprise’s judgment, is likely to occur, Radiant agrees to allow Enterprise, at Enterprise’s option and expense, to: (a) settle or defend against such claim; or (b) replace or modify the Enterprise Products (in each case, so that the resulting products are the functional equivalent to the applicable Enterprise Products) so as to avoid infringement. The indemnification offered in this Section 18.1 with respect to the Enterprise Product will not apply to any claim resulting from the modification of the Enterprise Products performed other than by Enterprise, from the use of the Enterprise Products other than as permitted under this Agreement or from any use of the Enterprise Products in combination with any other computer software programs, equipment or technology other than in accordance with the Documentation. Except as provided in the Separation Agreement, this Section 18.1 states Enterprise’s entire obligation regarding patent, copyright, trade secret or other infringement with respect to the Enterprise Products.

 

18.2 Indemnification by Radiant. Radiant will hold harmless, indemnify and defend Enterprise, and its subsidiaries and their respective officers, directors, employees and agents (individually, an “Enterprise Party” and collectively, the “Enterprise Parties”), from and against any and all Losses arising out of, related to, or resulting from:

 

(i) the failure to include all Software License Terms in a Software License Agreement, modifications to any Software License Terms in a Software License

 

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Agreement, the failure to include all Hosting Terms in an agreement for Hosting Services, modifications to any Hosting Terms in an agreement for Hosting Services, the failure to include all Distributor Terms in a Distributor Agreement, or modifications to any Distributor Terms in a Distributor Agreement;

 

(ii) any statements, claims, representations or warranties made by a Radiant Party about the Enterprise Products or Hosting Services other than as provided in the Documentation or other written materials provided by Enterprise;

 

(iii) any claim by a Person that the Enterprise Products violate or infringe upon any copyright, patent (issued in any country within the European Union, the United States, Japan, Australia or New Zealand), trade secret or other intellectual property rights or any third party wherever located or contribute to such infringement, in each case to the extent such claim is based on or arises from any modifications or enhancements to the Enterprise Products made by Radiant with the Tools or otherwise;

 

(iv) any claim that an Enterprise Party’s use of the Radiant Mark(s) infringes the intellectual property rights of a third party, provided such Enterprise Party’s use of the Radiant Mark(s) is consistent with this Agreement; or

 

(v) any failure on the part of a Radiant Party to pay any taxes, duties or assessments due hereunder.

 

18.3 Indemnification under Legacy Contracts. The following shall apply with respect to the allocation of liability under the Legacy Contracts:

 

(i) Radiant will be liable for and will hold harmless, indemnify and defend Enterprise from and against any and all Losses, including, without limitation, Losses resulting from penalties, required rebates, holdbacks, forfeitures or other payments due, arising out of, related to, or resulting from any Legacy Contract (other than a Strategic Legacy Contract), including, without limitation, the performance or non-performance thereunder, to the extent such Losses were not incurred as a result of Enterprise’s failure to perform or breach in the performance of the Legacy Services (other than Strategic Legacy Services) in accordance with this Agreement;

 

(ii) Enterprise will be liable for and will hold harmless, indemnify and defend Radiant from and against any and all Losses, including, without limitation, Losses resulting from penalties, required rebates, holdbacks, forfeitures or other payments due, arising out of, related to, or resulting from any Legacy Contract (other than a Strategic Legacy Contract) to the extent such Losses were incurred as a result of Enterprise’s failure to perform or breach in the performance of the Legacy Services (other than Strategic Legacy Services) with respect to such Legacy Contract; and

 

(iii) Liability with respect to Strategic Legacy Contracts shall be allocated as follows:

 

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(a) during the initial 18-month period following the Effective Date, each party shall be liable for and will hold harmless, indemnify and defend the other party from and against its share of Pro Rata Losses (as defined below); and

 

(b) following such 18-month period, Enterprise shall be liable for and will hold harmless, indemnify and defend Radiant from and against any and all Losses, including, without limitation, Losses resulting from penalties, required rebates, holdbacks, forfeitures, or other payments due, arising out of, relating to or resulting from any Strategic Legacy Contract.

 

For purposes of this Section 18.3(iii), the following definitions shall apply:

 

“Pro Rata Losses” shall mean:

 

(x) with respect to Enterprise, the amount of any Losses, including, without limitation, Losses resulting from penalties, required rebates, holdbacks, forfeitures or other payments due, arising out of, relating to or resulting from any Strategic Legacy Contract multiplied by a fraction the numerator of which is the Enterprise Revenue, and the denominator of which is the Total Revenue, and

 

(y) with respect to Radiant, the amount of any Losses, including, without limitation, Losses resulting from penalties, required rebates, holdbacks, forfeitures or other payments due, arising out of, relating to or resulting from any Strategic Legacy Contract multiplied by a fraction the numerator of which is the Radiant Revenue and the denominator of which is the Total Revenue.

 

“Enterprise Revenue” shall mean, as of the date the determination of Pro Rata Losses must be made, all amounts received by Enterprise, after the Effective Date, pursuant to or under the applicable Strategic Legacy Contract.

 

“Radiant Revenue” shall mean, as of the date the determination of Pro Rata Losses must be made, all amounts received by Radiant, before or after the Effective Date, pursuant to or under the applicable Strategic Legacy Contract.

 

“Total Revenue” shall mean, as of the date the determination of Pro Rata Losses must be made, the sum of Enterprise Revenue and Radiant Revenue.

 

18.4 Indemnification Procedures. In the event either party is entitled to indemnification (an “Indemnitee”) from the other party (the “Indemnifying Party”) pursuant to the terms of Section 18, with respect to which such Indemnitee intends to seek indemnification thereunder, the Indemnitee and Indemnifying Party shall follow the procedures set forth in this Section 18.4. Promptly after receipt by Indemnitee of notice of the commencement or threatened commencement of any claim with respect to which such Indemnitee may be entitled to receive payment from the Indemnifying Party for any Losses, or to which the Indemnitee believes it is entitled to indemnification hereunder, the Indemnitee shall notify the Indemnifying Party of such claim in writing. No delay or failure to so notify the Indemnifying Party shall relieve it of its

 

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obligations under this Agreement except to the extent that the Indemnifying Party has been materially harmed by such delay or failure. Within 15 days following receipt of written notice from Indemnitee relating to any claim, but no later than five days before the date on which any response to a complaint or summons is due, the Indemnifying Party shall notify Indemnitee in writing whether the Indemnifying Party elects to assume control of the defense and settlement of that claim (a “Notice of Election”). If the Indemnifying Party delivers a Notice of Election relating to any claim within the required notice period, the Indemnifying Party shall be entitled to have sole control over the defense and settlement of such claim; provided, however, that (i) Indemnitee shall be entitled to participate in the defense of such claim and to employ counsel at its own expense to assist in the handling of such claim, and (ii) the Indemnifying Party shall obtain the prior written approval of Indemnitee before entering into any settlement of such claim imposing any obligations or restrictions on Indemnitee, which approval shall not be unreasonably withheld, delayed or conditioned. After the Indemnifying Party has delivered a Notice of Election relating to any claim, if the Indemnifying Party performs its indemnification obligations as set forth in this Agreement, then the Indemnifying Party shall not be liable to Indemnitee for any litigation costs and expenses (including legal fees and disbursements and costs of investigation) directly incurred by Indemnitee in employing its own counsel in connection with the defense of that claim. In addition, the Indemnifying Party shall not be required to indemnify Indemnitee for any amount paid or payable by Indemnitee in the settlement of any claim if (x) the Indemnifying Party has delivered a timely Notice of Election and such amount was agreed to without the written consent of the Indemnifying Party, or (y) the time period within which to deliver a Notice of Election has not yet expired. If the Indemnifying Party does not deliver a Notice of Election relating to any claim within the required notice period, Indemnitee shall have the right to defend the claim in such manner as it may deem appropriate, at the reasonable cost and expense of the Indemnifying Party. The Indemnifying Party shall promptly reimburse Indemnitee for all such costs and expenses. Indemnitee shall cooperate, at the Indemnifying Party’s cost and expense, in all reasonable respects with the Indemnifying Party and its attorneys in the investigations, trial and defense of indemnified claims and any appeal arising therefrom.

 

19. NONDISCLOSURE AND CONFIDENTIALITY.

 

19.1 Definition. For purposes of this Agreement, “Proprietary Information” shall mean all ideas, concepts, techniques, know-how, technical or business information, or other information or material, in whatever form, received by one party to this Agreement from the other, that is either: (a) stamped or otherwise identified in writing as proprietary, (b) if orally disclosed, identified by the disclosing party as proprietary at the time of disclosure, or (c) other information that derives economic value, actual or potential, from not being generally known to others and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Proprietary Information shall include the Enterprise Products (including any Source Code delivered to the Agent under the Escrow Agreement), the Documentation and Software License Agreements.

 

19.2 Covenant. Each party agrees to hold all Proprietary Information of the other party in strictest confidence and not to copy, reproduce, distribute, remanufacture, duplicate, reveal, publish, report, disclose, caused to be disclosed, or otherwise transfer any such Proprietary Information to any third party, except as authorized in this Agreement or otherwise

 

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in writing by the disclosing party, or utilize any such information for any purpose whatsoever other than specifically required under this Agreement, except that each party may disclose Proprietary Information of the other to its employees who have a specific need to know such information and who are advised of the confidential nature of the information and the provisions of this Section 19.2. Each party further acknowledges and agrees that the Proprietary Information of the other party is and shall at all times remain the sole and exclusive property of the other party, and in the event of termination or expiration of this Agreement, for any reason, each party shall immediately return to the other party all Proprietary Information in its possession. The obligations of this Section 19 shall continue for the initial term and any renewal term of this Agreement and for a period of five years thereafter, except to the extent that the Proprietary Information disclosed rises to the level of a trade secret under applicable law, in which case, the obligations of this Section 19 shall continue for so long as such information constitutes a trade secret under applicable law. For purposes of this Agreement, “trade secrets” means Proprietary Information, without regard to form, which: (a) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

19.3 Exclusions. “Proprietary Information” shall not include any information which, as demonstrated by written documentation: (a) is in or enters the public domain without breach of this Agreement through no fault of the receiving party; (b) the receiving party can demonstrate was developed by the receiving party independently and without use of, or reference to, the disclosing party’s Proprietary Information; (c) the receiving party receives from a third party without restriction on disclosure and without breach of a nondisclosure obligation or was otherwise lawfully acquired from other sources by the receiving party; (d) this Agreement permits the use or disclosure of such Proprietary Information, or (e) is required to be disclosed in response to a valid court order, law, rule, regulation (including without limitation any securities exchange regulation), administrative process or other governmental action provided that (x) the disclosing party is promptly notified in writing prior to disclosure of the information, and (y) the receiving party assists the disclosing party, at the disclosing party’s expense, in any attempt by the other to limit or prevent the disclosure of the Proprietary Information.

 

19.4 General. Each party agrees that the other party will have no adequate remedy at law if there is a breach or threatened breach of this Section 19 and, accordingly, such other party will be entitled (in addition to any legal or equitable remedies available to such party) to injunctive or other equitable relief to prevent or remedy such breach. Upon the earlier request of the disclosing party, the receiving party shall (a) at its own expense, (i) promptly return to the disclosing party all information that is in tangible form (and all copies thereof) that is the property of the disclosing party (including pursuant to this Agreement) or that contains any Proprietary Information (collectively, the “Material Information”), or (ii) upon written request from the disclosing party, destroy such Material Information and provide the disclosing party with written certification of such destruction, and (b) cease all further use of any Material Information, whether in tangible or intangible form. Finally, the parties agree that the receiving party obtains no right, title, interest, or license in or to any of the Proprietary Information of the disclosing party except for the rights set forth in this Agreement.

 

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20. INJUNCTIVE RELIEF. Notwithstanding anything to the contrary contained in Section 25 of this Agreement, the parties agree that each party shall be entitled to obtain, without bond, declarations, temporary and permanent injunctions, and orders of specific performance, in order to enforce the provisions of this Agreement relating to other party’s use of the Proprietary Information and trade secrets of such party, and the obligations of other party upon termination or expiration of this Agreement. Such equitable relief may be sought in any court of competent jurisdiction.

 

21. GOVERNING LAW. All matters pertaining to arbitration shall be governed by the Federal Arbitration Act. Except to the extent governed by the Federal Arbitration Act as required hereby or other than federal law, this Agreement shall be governed by and construed in all respects in accordance with the laws of the State of Georgia, which law shall prevail in the event of any conflict of law. The parties agree that all actions arising under this Agreement which may be litigated (as opposed to arbitrated) may be commenced only in a state or federal court of competent jurisdiction in Fulton County, Georgia. Both parties expressly agree that they are subject to the jurisdiction and venue of those courts for purposes of such litigation.

 

22. LIMITATION OF LIABILITY.

 

22.1 DISCLAIMER OF CONSEQUENTIAL DAMAGES. SUBJECT TO SECTION 22.3 BELOW, IN NO EVENT WILL EITHER PARTY, OR ANY OF THEIR AFFILIATES OR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS OR REPRESENTATIVES BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGE OR LOSS OF ANY NATURE, INCLUDING, BUT NOT LIMITED TO, DAMAGES RESULTING FROM DELAY, LOSS OF PROFITS OR LOSS OF GOODWILL WHICH MAY ARISE IN CONNECTION WITH THIS AGREEMENT OR RESULTING FROM THE ENTERPRISE PRODUCTS, OR THE HOSTING, SUPPORT, MAINTENANCE, OR OTHER SERVICES OR OBLIGATIONS TO BE PROVIDED BY EITHER PARTY HEREUNDER, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING, AND WHETHER SUCH LIABILITY IS BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. THE PARTIES AGREE THAT THIS LIMITATION OF LIABILITY SHALL SURVIVE IN FULL FORCE AND EFFECT DESPITE ANY FAILURE OF ANY EXCLUSIVE REMEDY. NOTWITHSTANDING THE FOREGOING, ANY DAMAGES AWARDED OR OBTAINED (WHETHER BY SETTLEMENT, COMPROMISE OR JUDGMENT) AS A RESULT OF THIRD PARTY CLAIMS SHALL BE CONSIDERED DIRECT DAMAGES FOR PURPOSES OF THIS AGREEMENT.

 

22.2 LIMITATION OF REMEDIES.

 

(i) EXCEPT AS SET FORTH IN SUBSECTIONS (ii), (iii) AND (iv) BELOW, AND SUBJECT TO SECTION 22.3 BELOW, IN NO EVENT WILL THE LIABILITY OF EITHER PARTY, OR ANY OF THEIR AFFILIATES OR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS OR REPRESENTATIVES, FOR ANY CAUSE WHATSOEVER RELATED TO THIS AGREEMENT, THE ENTERPRISE PRODUCTS, OR THE HOSTING, SUPPORT,

 

 

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MAINTENANCE, OR OTHER SERVICES TO BE PROVIDED BY EITHER PARTY HEREUNDER, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR IN TORT, INCLUDING NEGLIGENCE OR STRICT LIABILITY, EXCEED THE AMOUNTS RECEIVED BY ENTERPRISE PURSUANT TO THIS AGREEMENT (EXCLUDING FEES RECEIVED FROM THE PERFORMANCE OF LEGACY SERVICES OR THE SALE OF LICENSES FOR ENTERPRISE PRODUCTS TO LEGACY CLIENTS).

 

(ii) THE LIABILITY OF ENTERPRISE RELATING TO THE PROVISION OF ENTERPRISE PRODUCT LICENSES OR HOSTING, SUPPORT, MAINTENANCE OR OTHER SERVICES BY ENTERPRISE TO LEGACY CLIENTS (OTHER THAN RESELLER LEGACY CLIENTS), SHALL BE UNLIMITED.

 

(iii) SUBJECT TO SECTION 22.3 BELOW, IN NO EVENT WILL THE LIABILITY OF ENTERPRISE, OR ANY OF ITS AFFILIATES OR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS OR REPRESENTATIVES, FOR ANY CAUSE WHATSOEVER RELATED TO THE PROVISION OF ENTERPRISE PRODUCT LICENSES OR HOSTING, SUPPORT, MAINTENANCE, OR OTHER SERVICES BY ENTERPRISE TO A RESELLER LEGACY CLIENT PURSUANT TO A SPECIFIC LEGACY CONTRACT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR IN TORT, INCLUDING NEGLIGENCE OR STRICT LIABILITY, EXCEED THE AMOUNT THAT RADIANT AND ENTERPRISE HAVE RECEIVED UNDER OR PURSUANT TO SUCH LEGACY CONTRACT (A) PRIOR TO THE EFFECTIVE DATE, AS A RESULT OF PERFORMING HOSTING, SUPPORT, MAINTENANCE, AND OTHER SERVICES EXPRESSLY RELATED TO ENTERPRISE PRODUCTS, AND (B) FOLLOWING THE EFFECTIVE DATE, AS A RESULT OF PERFORMING LEGACY SERVICES.

 

(iv) SUBJECT TO SECTION 22.3 BELOW, IN NO EVENT WILL THE LIABILITY OF RADIANT, OR ANY OF ITS AFFILIATES OR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS OR REPRESENTATIVES, FOR ANY CAUSE WHATSOEVER RELATED TO THE PROVISION OF ENTERPRISE PRODUCT LICENSES OR HOSTING, SUPPORT, MAINTENANCE, OR OTHER SERVICES BY RADIANT TO A STRATEGIC LEGACY CLIENT, PURSUANT TO A SPECIFIC STRATEGIC LEGACY CONTRACT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT OR IN TORT, INCLUDING NEGLIGENCE OR STRICT LIABILITY, EXCEED RADIANT REVENUE (AS DEFINED IN SECTION 18.3(iii)); PROVIDED THAT, WITH RESPECT TO THE TOTAL FRANCE S.A. STRATEGIC LEGACY CONTRACT, SUCH LIABILITY SHALL BE LIMITED TO RADIANT REVENUE (AS DEFINED IN SECTION 18.3(iii)) MULTIPLIED BY 1.10.

 

22.3 Exclusions. The limitation of liability in Section 22.1 and Section 22.2 above shall not apply to claims arising from a party’s gross negligence or willful misconduct, a party’s indemnification obligations under Sections 18.1 and 18.2 of this Agreement (provided, however, that the limitation of liability set forth in Section 22.1 shall apply to indemnification claims under Section 18.2(ii) and 18.2(v)), to claims arising from breach of a party’s confidentiality obligations under this Agreement, to claims of fraud or intentional misrepresentation under this Agreement, to claims based on the sale by Radiant of Enterprise Products outside the Market, or to claims arising from Radiant’s breach of its license to the Software.

 

23. TERMINATION.

 

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23.1 Term. This Agreement shall be effective as of the Effective Date, and will remain in effect for an initial term of three years (the “Initial Term”). Subject to Section 23.4, this Agreement shall automatically renew for a one-year term (the “First Renewal Term”) if, during the last year of the Initial Term, Radiant meets the Sales Criteria. Subject to Section 23.4, this Agreement shall automatically renew for one additional one-year term (the “Second Renewal Term”) if, during the First Renewal Term, Radiant meets the Sales Criteria during such First Renewal Term. If Radiant fails to meet the Sale Criteria during the applicable period, this Agreement may only be renewed upon the parties’ mutual written agreement to renew this Agreement, which agreement to renew may be withheld by either party in its sole discretion. Radiant acknowledges and understands that any such subsequent renewal may be predicated upon the parties’ development and agreement to a sales plan, which would establish annual sales volume targets for Radiant for sublicensing of the Software during each renewal term.

 

23.2 Termination for Breach. Either party may terminate this Agreement upon the other party’s material breach of any of the provisions herein, which breach has not been cured (a) in the case of non-payment, within 20 days of the breaching party’s receipt of written notice from the non-breaching party setting forth the amount due; or (b) in all other cases, within 30 days of the breaching party’s receipt of a written notice from the non-breaching party setting forth the nature of such breach (unless the breach, by its nature, is curable but incapable of being cured within such 30-day period, then, in that event, so long as the breaching party is diligently attempting to cure such breach, within a reasonable period after receipt of such notice). If, prior to the expiration of the applicable notice period, the breaching party cures such breach, termination shall not take place.

 

23.3 Termination for Certification Failure. Enterprise may terminate this Agreement immediately upon written notice to Radiant if Radiant at any time fails to comply with the Certification requirements, if applicable, of Section 3 hereof.

 

23.4 Competitive Offerings. If (a) (i) a Person that owns or has rights to a Competitive Offering (a “Competitor”) acquires more than fifty percent (50%) of the legal, beneficial or equitable ownership of the capital stock of Radiant or a Radiant Affiliate; (ii) Radiant or a Radiant Affiliate sells all or substantially all of its assets to a Competitor; (iii) Radiant or a Radiant Affiliate acquires more than fifty percent (50%) of the legal, beneficial or equitable ownership of the capital stock of a Competitor; (iv) Radiant or a Radiant Affiliate acquires all or substantially all of the assets of a Competitor; (v) Radiant or a Radiant Affiliate acquires any line of business or other assets from a Competitor that includes a Competitive Offering; or (vi) Radiant or a Radiant Affiliate merges with or into, or is merged with or into, a Competitor (each such event hereinafter referred to as an “Acquisition”); and (b) Radiant or any Radiant Affiliate shall, at any time during the Initial Term, market, offer, commit to sell or sell any such Competitive Offering (other than, as reasonably necessary, to former clients of the Competitor), then the automatic renewal provision of Section 23.1 shall be inapplicable and this Agreement shall terminate immediately upon expiration of the Initial Term. Following an Acquisition, Enterprise may terminate this Agreement during the First Renewal Term or the Second Renewal Term immediately upon written notice to Radiant if Radiant or a Radiant Affiliate markets, offers, commits to sell or sells any Competitive Offering acquired or obtained pursuant to such Acquisition.

 

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23.5 Post-Termination Obligations.

 

(i) Upon termination or expiration of this Agreement for any reason, Radiant shall immediately return to Enterprise all Enterprise property, including, but not limited to, all copies of the Enterprise Products, all Documentation relating thereto and all demonstration systems, except that Radiant may retain such copies to the extent necessary for and during the limited duration of Radiant’s post-termination obligations under existing license, service, support, and maintenance agreements, as set forth below. Termination or expiration of this Agreement for any reason shall automatically accelerate the due date of all undisputed invoices and any other monies due from one party to the other, which shall become immediately due and payable on the effective date of termination or expiration. Termination or expiration of this Agreement shall not affect Enterprise’s or Radiant’s existing obligations under contractual arrangements with Customers such that, among other things, Enterprise Product licenses then-granted to Customers shall continue on the terms thereof; provided, however, that all other business granted herein shall expire and terminate upon expiration or termination of this Agreement. Additionally, termination hereof shall not affect Enterprise’s obligation to continue to provide Legacy Services. Upon termination or expiration of this Agreement for any reason, the provisions of this Agreement providing for the payment of fees to either party, protection of the parties’ proprietary rights, limited express warranties, limitations of liability, and other provisions of this Agreement concerning the ongoing interests of the parties, including, but not limited to, the provisions of Sections 1, 4.4, 5, 7, 8, 9, 12, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 30, 32, 34, 35, 36 and 39, shall continue and survive in full force and effect.

 

(ii) During the period commencing as of notice of termination and ending as of three months after the effective date of termination or expiration of this Agreement, Enterprise will provide transition assistance to the Customers for the transition of the Customers’ data from the Software to the Customers’ computer system of another technology solution provider, as reasonably requested by the Customers. Enterprise may charge for such assistance at then-current rates on a time and materials basis discounted by the amounts set forth on Exhibit N. Notwithstanding the foregoing, Enterprise shall have no obligation to provide such transition assistance to Customers if (a) Radiant is delinquent in the payment of any undisputed monies due to Enterprise hereunder, (b) Radiant is in material breach or default of any obligation under this Agreement, or (c) with respect to any individual Customer, such Customer is in breach or default of any of the Software License Terms.

 

24. DISPUTE HANDLING. Radiant and Enterprise shall endeavor to resolve any dispute, whether arising during the term or at any time thereafter which involves the validity, construction, meaning, performance, termination, expiration or effect of this Agreement, or the rights or liabilities of the parties, promptly and in an amicable and professional manner by negotiations between the parties. Enterprise will not withhold any services as a means of resolving any dispute. Except for fees withheld because they are disputed in good faith by Radiant, Radiant will not withhold payment of any monies due Enterprise hereunder as a means of resolving any dispute.

 

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25. ARBITRATION. Any dispute between the parties arising out of or relating to this Agreement that is not subject to the exception in Section 20, shall be settled exclusively by final and binding arbitration in accordance with the following:

 

(i) Except as specified below or otherwise agreed in writing, the arbitration shall be conducted in accordance with the then-current Commercial Arbitration Rules of the American Arbitration Association or any successor association including, without limitation, the Optional Rules for Emergency Measures of Protection (such organization, the “AAA” and such rules, the “AAA Rules”);

 

(ii) The arbitration shall be conducted in English by a panel of three arbitrators. Unless otherwise agreed in writing to have the dispute resolved by a single arbitrator, Enterprise and Radiant shall each select one arbitrator (who is knowledgeable and familiar and has at least ten years of experience with the information technology industry and contract law), who shall then jointly select a third. All arbitrators shall be neutral, impartial and independent;

 

(iii) Any issue concerning the extent to which any dispute is subject to arbitration, or concerning the applicability, interpretation, or enforceability of the procedures outlined herein, including any contention that all or part of such procedures are invalid or unenforceable, shall be governed by the Federal Arbitration Act and resolved by the arbitrator(s);

 

(iv) Any demand for arbitration or any counterclaim shall specify in reasonable detail the facts and legal grounds forming the basis for the claimant’s request for relief, and shall include a statement of the total amount of damages claimed, if any, and any other remedy sought by the claimant;

 

(v) Upon request of either party, and in the arbitrator(s) discretion, the parties shall be entitled to limited pre-hearing discovery including depositions of testifying witnesses, exchanges of documents and lists of testifying witnesses, and written interrogatories. The arbitrator(s) shall conduct a hearing within 30 days (or such longer time period as the parties may mutually agree) after the end of discovery and shall issue an award, supported by written opinion, within 30 days after the end of the hearing (or such longer time period as the parties may mutually agree);

 

(vi) Any award made shall be accompanied by findings of fact and a statement of reasons for the decision;

 

(vii) All parties will use their best efforts to conclude the arbitration within thirty (30) days from the commencement of arbitration. In the event that any party fails to appear at any properly noticed arbitration proceeding, an award may be entered against such party by default or otherwise, notwithstanding that failure to appear;

 

(viii) Each party shall bear the cost of securing its selected arbitrator (or shall share the cost of a single arbitrator equally), with the costs of the third arbitrator and the proceeding itself shared equally between the parties;

 

43


(ix) All aspects of the arbitration shall be treated as confidential. Neither the parties or the arbitrator(s) may disclose the existence, content or results of the arbitration, except as necessary to comply with legal or regulatory requirements. Before making any such disclosure, a party shall give written notice to all other parties and shall afford such parties a reasonable opportunity to protect their interests;

 

(x) The result of the arbitration will be binding on the parties, and judgment on the arbitrator(s)’ award may be entered in any court of competent jurisdiction;

 

(xi) Each party is required to continue to perform its obligations under this Agreement pending final resolution of any dispute arising out of or connected to this Agreement.

 

26. ASSIGNMENT. This Agreement may not be assigned by either party, by operation of law or otherwise, without the prior written consent of the other party, provided that either party may freely assign this Agreement (i) in connection with a merger or the sale of all or substantially all of such party’s assets, stock or securities, or (ii) to any third party that acquires all of the assets of the division of a party that manages or controls the performance of this Agreement. Subject to the foregoing, this Agreement shall be binding upon and will inure to the benefit of the parties and their respective permitted successors and assigns.

 

27. INDEPENDENT PRINCIPALS. Enterprise and Radiant are independent principals in all actions contemplated by this Agreement. This Agreement shall not be construed to create or authorize any partnership, joint venture or agency relationship, nor to authorize either party hereto to make any commitment or agreement binding on the other party hereto, without such other party’s prior written consent. Neither party hereto shall act as an agent of the other, and neither Enterprise nor Radiant shall guarantee or become in any way responsible for the obligations, debts or expenses of the other. The conduct of each party’s business shall be determined by its own independent business judgment and discretion, subject, however, to the terms and conditions of this Agreement. In addition, each party acknowledges that as independent contractors, neither it nor its employees are covered under the other party’s workers’ compensation insurance or unemployment insurance coverage.

 

28. AUDIT. During the term of this Agreement and for a period of two years thereafter, Enterprise, or its designee, shall have the right to inspect Radiant’s books and records and reasonably perform other evaluations of Radiant’s performance hereunder to verify Radiant’s compliance with the terms and conditions of this Agreement and to ensure that Radiant maintains uniformity and high quality standards in distributing and supporting the Software. Such audits shall take place during normal business hours, upon two days advance notice to Radiant. Enterprise shall not disclose to third parties any Proprietary Information or trade secrets of Radiant that may be determined in the course of such audit, other than as may be necessary to enforce this Agreement. Radiant agrees to retain all records and information relevant to any such audits and Radiant’s performance hereunder for a period of five years after termination of this Agreement. During the term of this Agreement, and for a period of two years thereafter, Radiant shall have the right to inspect Enterprise’s books and records and reasonably perform other evaluations solely to evaluate Enterprise’s performance hereunder and to verify Enterprise’s compliance with Section 5.12 and Enterprise’s obligation to provide the Legacy Services. Such

 

44


audits shall take place during normal business hours, upon two days advance notice to Enterprise. Radiant shall not disclose to third parties any Proprietary Information or trade secrets of Enterprise that may be determined in the course of such audit, other than as may be necessary to enforce this Agreement. Enterprise agrees to retain all records and information relevant to any such audits and Enterprise’s performance hereunder for a period of five years after termination of this Agreement.

 

29. INSOLVENCY. No Person other than Radiant shall have or acquire any right(s) licensed to Radiant hereunder by virtue of any bankruptcy, insolvency or assignment for the benefit of creditors or reorganization proceedings, or any receivership or other such similar legal process, either under attachment, execution or otherwise, or in any manner whatsoever growing out of any proceeding or suit, without the prior written consent of Enterprise. No Person other than Enterprise shall have or acquire any right(s) licensed to Enterprise hereunder (other than with respect to the Epsilon Code) by virtue of any bankruptcy, insolvency or assignment for the benefit of creditors or reorganization proceedings, or any receivership or other such similar legal process, either under attachment, execution or otherwise, or in any manner whatsoever growing out of any proceeding or suit, without the prior written consent of Radiant; provided, however, that any Person that acquires any interest in the Epsilon Code pursuant to this paragraph shall use such interest only to provide support to Alltel. In the event of any such proceeding being had or taken by or against Radiant or any assignee or successor in interest of Radiant under any provision of law, or for the involuntary winding up of Radiant or any assignee or successor in interest of Radiant, without such proceeding being dismissed or such levies released within 60 days therefrom, Enterprise shall have the option of terminating this Agreement immediately. In the event of any proceedings to wind up or dissolve Radiant or any assignee or successor in interest of Radiant, Enterprise shall have the option of terminating this Agreement immediately.

 

30. NOTICES. All notices and other communications required or permitted to be given under this Agreement (other than orders and invoices) shall be in writing and shall be considered effective (i) three days following deposit of same into the United States mail (certified mail, postage pre-paid, return receipt requested) or (ii) on the date of delivery for hand delivery, or (iii) on the date after delivery to an overnight express mail service in each case to the party for whom such writing or communication is intended. All orders and invoices shall be in writing and shall be considered effective: (a) three days following deposit of same into the United States mail (regular mail or certified mail, postage prepaid, return receipt requested); (b) when delivered, if by hand delivery; (c) when receipt is confirmed, if by facsimile, (d) when received, if by e-mail; or (e) on the date after delivery to an overnight express courier service, in each case, to the party for whom such writing or other communication was intended. All such notices shall be addressed as shown below or to such other address as may be designated by a party hereto by written notice to the other party; provided, however, that all invoices submitted by Enterprise shall be addressed or directed to the attention of the Radiant Accounts Payable Manager. Addresses for notices are as follows:

 

 

If to Radiant:

 

If to Enterprise:

Radiant Systems, Inc.

 

Wave Enterprise Systems, Inc.

3295 Brookside Parkway

 

3905 Brookside Parkway

Alpharetta, Georgia 30022

 

Alpharetta, Georgia 30022

 

45


Attention: Legal Department

 

Attention: General Counsel

Facsimile: 770-619-4817

 

Facsimile: [            ]

E-mail: jgraves@radiantsystems.com

 

E-mail: [            ]

With a copy to:

 

With a copy to:

Smith, Gambrell & Russell, LLP

 

Kilpatrick Stockton LLP

Suite 3100, Promenade II

 

1100 Peachtree Street

1230 Peachtree Street, N.E.

 

Suite 2800

Atlanta, Georgia 30309-3592

 

Atlanta, Georgia 30309-4530

Attention: Richard Greenstein, Esq.

 

Attention: James D. Steinberg, Esq.

Facsimile: 404-685-6923

 

Facsimile: 404-541-3399

E-Mail: rgreenstein@sgrlaw.com

 

E-mail: jsteinberg@kilpatrickstockton.com

 

31. FORCE MAJEURE. Neither party will be liable for any default or delay in the performance of its obligations hereunder: (i) if and to the extent that such default or delay arises out of causes beyond its reasonable control, including default or delay of the other party, acts of God, acts of war, acts of governmental authority, acts of public enemy, insurrection, floods, fires, terrorism and riots (each, a “Force Majeure Event”); and (ii) provided such default or delay could not have been prevented by reasonable precautions and cannot reasonably be circumvented by the non-performing party through the use of alternative sources, work-around plans or other means. Upon the occurrence of a Force Majeure Event, each party shall be excused from further performance or observance of the obligations affected so long as such circumstances caused by the Force Majeure Event prevail and the parties use their reasonable efforts to promptly recommence performance or observance of said obligations. The party claiming excuse by Force Majeure so affected in its performance will immediately notify the other by telephone to be confirmed in writing within five days of the inception of the Force Majeure Event and describe at a reasonable level the detail of the circumstances causing such delay. A Force Majeure Event will not relieve either party’s payment obligations hereunder except to the extent banking services are interrupted during the Force Majeure Event.

 

32. COMPLIANCE WITH LAW. Enterprise and Radiant will comply with all applicable international, national, state, regional and local laws and regulations, including, without limitation, the United States Foreign Corrupt Practices Act, in performing their respective duties hereunder and in any of their dealings with respect to the Enterprise Products.

 

33. COMPLIANCE WITH U.S. EXPORT LAWS. Radiant shall comply with all applicable laws concerning the exporting, importing and re-exporting of the Enterprise Products, including, without limitation, the export control laws of the United States of America and prevailing regulations which may be issued from time to time.

 

34. WAIVER. Neither party shall, by mere lapse of time without giving notice or taking other action hereunder, be deemed to have waived any breach by the other party of any of the provisions of this Agreement. Furthermore, the waiver by either party of a particular breach of this Agreement by the other party shall not be construed as, or constitute a continuing waiver of such breach, or of other breaches of the same or other provisions of this Agreement.

 

46


35. SEVERABILITY. If any provision herein is declared invalid by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such invalidity so that the remainder of that provision and all remaining provisions of this Agreement will continue in full force and effect and be enforced to the maximum extent permitted by applicable law.

 

36. PUBLICITY. Subsequent to the Effective Date, neither party shall issue a press release nor make reference to this Agreement in any publicly disseminated advertising or other promotional materials (except for internal company publications for confidential internal purposes), without prior written approval of the other party, which shall not be unreasonably withheld, delayed or conditioned; provided, however, that Enterprise may identify the Legacy Clients as users of its products or services unless expressly prohibited by applicable Legacy Contracts (in which case Radiant agrees to cooperate with Enterprise in an effort to obtain the Legacy Clients’ consent to the same). Each party shall have the right to review and approve all press releases, advertising or promotional materials proposed by the other party that relate to this Agreement or the relationship of the parties hereunder.

 

37. COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed an original and all of which together shall constitute one and the same instrument.

 

38. INSURANCE. Each party, at its own expense, shall provide and maintain insurance during the term of this Agreement as follows:

 

(i) Statutory Workers’ Compensation coverage for all of its employees, including occupational disease coverage, as required by applicable law, and employer’s liability with limits of at least $1,000,000 bodily injury each accident, $1,000,000 bodily injury by disease each employee and $1,000,000 bodily injury by disease in the aggregate. The policy must be endorsed to include “all states” coverage.

 

(ii) Liability Insurance (excluding automobile liability) written on an “occurrence” basis with a combined single limit of at least $1,000,000 per occurrence, and $2,000,000 in the aggregate for bodily injury and property damage in a form providing coverage not less than a standard commercial general liability policy including hazards of operation coverage, broad form property damage liability coverage, products/completed operations coverage and broad form contractual coverage with liability limits equal to at least the above limits. Each party shall add the other as an additional insured under the Liability Insurance policy.

 

(iii) Automobile Liability including protection for automobiles and trucks used by such party, with a combined single limit of at least $1,000,000 per occurrence for bodily injury and property damage. The policy must include coverage for all hired, owned and non-owned vehicles.

 

(iv) Errors and Omissions Liability Insurance with a limit of not less than $2,000,000 per occurrence and in the aggregate. Each party shall add the other as an additional insured under the Errors and Omissions Liability Insurance policy.

 

47


(v) Employee Dishonesty and Computer Fraud Coverage for loss arising out of or in connection with any fraudulent or dishonest acts committed by the employees of such party, acting alone or in collusion with others, including the property and funds of others in their care, custody or control, in a minimum amount of $500,000.

 

All required insurance must be from companies with at least an A.M. Best rating of “A-” or better and a financial category of “VII” or better and legally qualified to issue such insurance. Each party shall furnish the other party with satisfactory evidence of the required insurance prior to the commencement of this Agreement. At least thirty (30) days’ prior written notice must be given to the other party in the event of cancellation or material change to the insurance.

 

39. ENTIRE AGREEMENT.

 

39.1 Review and Acceptance of Terms. Each of the parties hereto acknowledges that it has read this Agreement and understands and agrees to be bound by its terms.

 

39.2 Entire Agreement. Except as expressly provided herein, the parties agree that this Agreement is the complete and exclusive statement of agreement regarding the subject matter hereof, and this Agreement supersedes and cancels all previous understandings, representations, conditions, warranties and all other communications between the parties relating to subject matter of this Agreement.

 

39.3 Exhibits. The terms and conditions of the Exhibits attached to this Agreement are incorporated by reference and made a part of this Agreement.

 

39.4 Amendments. Except as expressly permitted herein to the contrary, this Agreement may only be amended or supplemented by an instrument in writing signed by authorized representatives of both parties.

 

39.5 Arms Length Transaction. The parties have, with the assistance of counsel, entered into this Agreement in an arms-length transaction and it is presumed that all parties drafted this Agreement and no word, term, or provision of this Agreement will be construed against a party on the basis that such party drafted this Agreement.

 

39.6 Reference; Interpretation. References in this Agreement to any gender include references to all genders, and references to the singular include references to the plural and vice versa. The words “include,” “includes” and “including” when used in this Agreement shall be deemed to be followed by the phase “without limitation.” Unless the context otherwise requires, references in this Agreement to Sections and Exhibits shall be deemed references to Sections of, and Exhibits to, this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein” and words of similar meaning when used in this Agreement refer to this Agreement in its entirety and not to any particular Section or provision of this Agreement.

 

48


IN WITNESS WHEREOF, Enterprise and Radiant have caused this Agreement to be executed by their respective duly authorized representatives as of the Effective Date.

 

WAVE ENTERPRISE SYSTEMS, INC.

     

RADIANT SYSTEMS, INC.

By:                                                                             

     

By:                                                                           

(Authorized Signature)

     

(Authorized Signature)

Name (Print):                                                          

     

Name (Print):                                                       

Title:                                                                          

     

Title:                                                                       

Date:                                                                          

     

Date:                                                                       

 

49

EX-10.2 6 dex102.htm NONCOMPETITION AGREEMENT Noncompetition Agreement

Exhibit 10.2

 

NONCOMPETITION AGREEMENT

 

THIS NONCOMPETITION AGREEMENT (this “Agreement”), is made and entered into this              day of                 , 2003, by and between EREZ GOREN, an individual resident of the State of Georgia (“Shareholder”) and RADIANT SYSTEMS, INC., a Georgia corporation (“Radiant”).

 

W I T N E S S E T H:

 

WHEREAS, Radiant and Wave Enterprise Systems Inc., a Georgia corporation and a wholly owned subsidiary of Radiant (“Enterprise”) have entered into a Separation Agreement (the “Separation Agreement”), dated as of the date hereof, pursuant to which Radiant shall contribute the Enterprise Business (as defined therein) to Enterprise as part of the separation (“Separation”) of the Enterprise Business from Radiant;

 

WHEREAS, Shareholder is a current shareholder of Radiant and, pursuant to the terms and subject to the conditions of the Share Exchange Agreement (the “Exchange Agreement”) dated as of October 10, 2003, will be the sole shareholder of Enterprise after the Closing Date (as defined therein);

 

WHEREAS, as a result of the Separation, Radiant will retain the Radiant Business (as defined in the Separation Agreement); and

 

WHEREAS, the execution and delivery of this Agreement is a condition precedent to Radiant’s obligation to consummate the transactions contemplated by the Exchange Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual promises contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

 

Section 1. Noncompetition.

 

1.1 Definitions. Capitalized terms used and not otherwise defined herein shall have the respective meanings as set forth in the Separation Agreement. For the purposes of this Section 1, the following definitions shall apply:

 

(a) “Competitive Offerings” means any software product with the primary purpose of managing retail customer sales transactions at the point of sale in petroleum and convenience stores, retail food service outlets or domestic cinemas, and that automates and tracks the placement and fulfillment of customer orders at the point of sale, integrates with credit and debit card payment processing systems, interfaces with other management information systems associated with the order fulfillment process, and is offered in the Restricted Territory; provided, however, that such term does not include any point-of-sale systems that are web hosted with the software and associated data residing centrally, outside the retail site;


(b) “Confidential Information” means any data or information of Radiant, other than Trade Secrets, which is valuable to Radiant and not generally known to competitors, including, without limitation, general business information, industry information, analyses, and other information of a proprietary nature that relates to Radiant or was developed or compiled by Radiant. Notwithstanding anything to the contrary herein “Confidential Information” shall not include any information that (1) has become generally known to the public through no wrongful act of Shareholder; (2) has been rightfully received by Shareholder from a third party without restriction on disclosure and without breach of an obligation of confidentiality running directly or indirectly to Radiant; (3) has been approved for release to the general public by a written authorization of Radiant; (4) has been independently developed by Shareholder without use, directly or indirectly, of the Confidential Information; or (5) has been furnished to a third party by Radiant (after the date hereof) without restrictions on the third party’s right to disclose the information;

 

(c) “Nonsolicitation Period” means the period beginning the date hereof and ending on the second anniversary of the Closing Date;

 

(d) “Restricted Competition Period” means the period beginning the date hereof and ending on the fifth anniversary of the Closing Date;

 

(e) “Restricted Territory” means any state of the United States or any country in which Radiant conducts the Radiant Business as of the Closing Date; and

 

(f) “Trade Secrets” means information of Radiant, without regard to form, including, but not limited to, technical or nontechnical data, a formula, a pattern, a compilation, a program, a device, a method, a technique, a drawing, a process, financial data, financial plans, product plans, or a list of actual or potential customers or suppliers which is not commonly known by or available to the public and which information: (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

1.2 Trade Secrets and Confidential Information.

 

(a) Trade Secrets. Shareholder hereby agrees that Shareholder will not disclose to any third party, or make use of in breach of Section 1.3(c), any Trade Secrets for so long as the pertinent information remains Trade Secret information under Georgia law (and, in any event, throughout the Nonsolicitation Period), regardless of whether the Trade Secrets are in written or tangible form, without the prior written consent of Radiant. Nothing in this Agreement shall diminish the rights of Radiant regarding the protection of Trade Secrets and other intellectual property pursuant to applicable law.

 

(b) Confidential Information. Shareholder hereby agrees that, during the Nonsolicitation Period, Shareholder will hold in confidence all Confidential Information, and will not disclose or publish to any third party, or make use of in breach of Section 1.3(c), Confidential Information without the prior written consent of Radiant.

 

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1.3 Noncompetition.

 

(a) Acknowledgment. Shareholder acknowledges that Radiant would not consummate the transactions contemplated by the Exchange Agreement, the Separation Agreement and the Ancillary Agreements without the assurance that Shareholder will not engage in the transactions and activities prohibited by this Section 1.3 as and for the periods set forth herein. In order to induce Radiant to consummate the Separation, the Exchange and the other transactions contemplated by the Exchange Agreement, the Separation Agreement and the Ancillary Agreements, Shareholder agrees to the restrictions set forth in this Section 1.3.

 

(b) Trade Name. Except as otherwise specifically provided in any Ancillary Agreement, Shareholder hereby agrees that, during the Noncompetition Period, Shareholder will not, directly or by assisting others, own, manage, operate, join, control, or participate in the ownership, management, operation, or control of any business conducted under any current corporate, product, or trade name or trademark of, Radiant, or name or mark similar thereto, other than any name or mark included in the Enterprise Assets (as defined in the Separation Agreement), without the prior written consent of Radiant.

 

(c) Noncompetition Covenant. Except as otherwise specifically provided in any Ancillary Agreement, Shareholder agrees that, during the Restricted Competition Period, Shareholder shall not, in the Restricted Territory, directly or indirectly (i) engage in the development or sale of Competitive Offerings on his own behalf or (ii) own any interest in, or engage in or perform any development of service for any Person other than Radiant that develops or sells Competitive Offerings in the Restricted Territory, either as a partner, owner, consultant, or shareholder, if such Person either (A) derives revenues from software associated with Competitive Offerings on an annual basis in excess of $20 million or (B) derives revenues from software and hardware (either independently from, or in addition to, software) associated with Competitive Offerings on an annual basis in excess of $50 million. Notwithstanding the foregoing, nothing contained in this Section 1.3(c) shall prohibit Shareholder, directly or indirectly, from (x) entering strategic alliances, joint ventures or similar contractual commercial relationships with any Person (other than Radiant) for purposes of marketing, selling and distributing any Enterprise Assets, including the Products, or (y) holding and making investments in securities of any Person (other than Radiant) whose securities are traded on a national securities exchange or are quoted on Nasdaq or an over-the-counter market, provided that Shareholder’s equity interest in any such Person does not exceed five percent (by voting power) of the outstanding shares of capital stock of such Person.

 

(d) Nonsolicitation. Shareholder hereby agrees that Shareholder will not, during the Nonsolicitation Period, directly or indirectly, solicit or recruit on behalf of Enterprise any employee of Radiant or its Subsidiaries as of the Separation without the prior written consent of Radiant; provided however, that nothing in this Section 1.3(d) shall (i) prohibit the hiring of any natural person who applied for employment with Enterprise solely in response to any public medium advertising, or (ii) prohibit the hiring of any natural person whose employment with Radiant or any of its Subsidiaries terminated at least three (3) months prior to the date of such solicitation or recruitment for a bona fide reason not designed or intended to circumvent the

 

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provisions of this Section 1.3(d), so long as such natural person was not solicited or recruited by Shareholder prior to the expiration of such three (3) month period.

 

(e) Conduct of Enterprise. Shareholder hereby agrees that, during the relevant period, Shareholder will use his best efforts to cause Enterprise to comply with covenants of Enterprise set forth in Sections 2.9 and 2.10 of the Separation Agreement.

 

1.4 Severability. If a judicial determination is made that any of the provisions of this Agreement constitutes an unreasonable or otherwise unenforceable restriction against Shareholder, the provisions of this Agreement shall be rendered void only to the extent that such judicial determination finds such provisions to be unreasonable or otherwise unenforceable with respect to Shareholder. In this regard, Shareholder hereby agrees that any judicial authority construing this Agreement shall be empowered to sever any portion of the Territory, any prohibited business activity or any time period from the coverage of this Agreement, and to apply the provisions of this Agreement to the remaining portion of the Territory, the remaining business activities, and the remaining time period not so severed by such judicial authority. Moreover, notwithstanding the fact that any provision of this Agreement is determined not to be specifically enforceable, Radiant shall nevertheless be entitled to recover monetary damages as a result of the breach of such provision by Shareholder.

 

1.5 Injunctive Relief. Shareholder hereby agrees that any remedy at law for any breach of the provisions contained this Agreement shall be inadequate and that Radiant shall be entitled to seek injunctive relief in addition to any other remedy Radiant might have under this Agreement. Shareholder agrees that if any court of competent jurisdiction should enjoin any breach of this Agreement upon the request of Radiant, Shareholder specifically releases Radiant from the requirement of posting bond in connection with temporary or interlocutory injunctive relief, to the extent permitted by law.

 

1.6 Indemnification. Shareholder hereby agrees to indemnify and hold harmless, to the fullest extent permitted by law, Radiant from, against and in respect of any and all losses, damages, deficiencies, awards, assessments, judgments, fines, penalties, costs and expenses (including, but not limited to, reasonable legal fees and expenses) actually incurred as a result of any breach or default in performance by Shareholder of any covenant or agreement of Shareholder contained in this Agreement.

 

Section 2. Representations and Warranties of Shareholder. Shareholder hereby represents and warrants to Radiant that: (a) Shareholder has the right, power and capacity to execute, deliver and perform this Agreement, (b) this Agreement has been duly executed and delivered by Shareholder and constitutes a legal, valid and binding obligation of Shareholder enforceable against Shareholder in accordance with its terms, and (c) the execution, delivery and performance by Shareholder of Shareholder’s obligations under this Agreement will not, with or without the giving of notice or the lapse of time, or both, (i) violate any provision of any federal, state or local or any foreign statute, law, rule, regulation, ordinance, code, order, judgment, decree or any other requirement or rule of law applicable to Shareholder, or (ii) violate, conflict with, or result in a breach or default under, or cause the termination of, any term or condition of any court order, agreement, document or other instrument to which Shareholder is a party or by which Shareholder is bound.

 

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Section 3. Miscellaneous.

 

3.1 Binding Effect. This Agreement shall be binding upon, and inure to the benefit of Radiant and its successors and assigns, and Shareholder and his heirs, representatives, and assigns; provided, however, that Shareholder shall not be entitled to assign or delegate any of his rights or obligations hereunder without the prior written consent of Radiant.

 

3.2 Governing Law. This Agreement and any claims related to the subject matter hereof shall be governed by and construed in accordance with the domestic substantive laws of the State of Georgia, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

 

3.3 Headings. The section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

3.4 Notices. Any notice or communication required or permitted hereunder (each a “Notice”) shall be in writing, shall be effective when received and shall in any event be deemed to have been received (a) when delivered, if delivered personally or by commercial delivery, (b) three (3) business days after deposit with U.S. Mail, if mailed by registered or certified mail (return receipt requested), (c) one (1) business day after the business day of deposit with Federal Express, UPS or a similar overnight courier for next day delivery (or two (2) business days after such deposit if deposited for second business day delivery), if delivered by such means, or (d) one (1) business day after delivery by facsimile transmission with copy by U.S. Mail, if sent via facsimile plus mail copy (with acknowledgement of complete transmission), to the parties at the following addresses (or at such other address for a party as shall be specified by like Notice):

 

If to Radiant, addressed to:

 

Radiant Systems, Inc.

3925 Brookside Parkway

Alpharetta, Georgia 30022

Attention: Mark W. Haidet, Chief Executive Officer

Telephone: (770) 576-6404

 

with a copy to:

 

Smith, Gambrell & Russell, LLP

1230 Peachtree Street, Suite 3100

Atlanta, Georgia 30309

Attention: Arthur Jay Schwartz

Telephone: (404) 815-3500

 

and with a further copy to:

 

King & Spalding LLP

191 Peachtree Street

 

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Atlanta, Georgia 30303

Attention: Russell B. Richards

Telephone: (404) 572-4600

 

If to Shareholder, addressed to:

 

Erez Goren

c/o Wave Enterprise Systems, Inc.

3905 Brookside Parkway

Alpharetta, Georgia 30022

Attention: David, Shulman, General Counsel

Telephone: (770) 576-7030 

 

with a copy to:

 

Kilpatrick Stockton LLP

1100 Peachtree Street, Suite 2800

Atlanta, Georgia 30309

Attention: Larry D. Ledbetter

Bruce D. Wanamaker

Telephone: (404) 815-6500

 

Unless otherwise specified herein, such notices or other communications shall be deemed given (a) on the date delivered, if delivered personally, (b) one business day after being sent by a nationally recognized overnight courier guaranteeing overnight delivery, and (c) five business days after being sent, if sent by registered or certified mail. Each of the parties hereto shall be entitled to specify a different address by delivering notice as aforesaid to each of the other parties hereto.

 

3.5 Entire Agreement. This Agreement is intended by the parties hereto to be the final expression of their agreement with respect to the subject matter hereof and is the complete and exclusive statement of the terms thereof, notwithstanding any representations, statements or agreements to the contrary heretofore made. This Agreement may be modified only by a written instrument signed by each of the parties hereto.

 

3.6 Consent to Jurisdiction, Etc. Each of the parties irrevocably submits to the exclusive jurisdiction of (a) the state courts of the State of Georgia, located in the City of Atlanta, and (b) the United States District Court for the Northern District of Georgia, for the purposes of any suit, action or other proceeding arising out of this Agreement or relating to the subject matter hereof. Each of the parties agrees to commence any action, suit or proceeding relating hereto either in the United States District Court for the Northern District of Georgia or in the state courts of the State of Georgia, located in the City of Atlanta. Each of the parties irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the subject matter hereof in (i) the state courts of the State of Georgia, located in the City of Atlanta, or (ii) the United States District Court for the Northern District of Georgia, and hereby further irrevocably and unconditionally waives and

 

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agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

 

3.7 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute but 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.

 

RADIANT SYSTEMS, INC.
By:    
 
Name:    
Title:    

 

 

EREZ GOREN

 

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EX-10.3 7 dex103.htm TAX DISAFFILIATION AGREEMENT Tax Disaffiliation Agreement

EXHIBIT 10.3

 

TAX DISAFFILIATION AGREEMENT

 

TAX DISAFFILIATION AGREEMENT, dated as of             , 2003, by and between Radiant Systems, Inc., a Georgia corporation (“Radiant”), and Wave Enterprise Systems, Inc., a Georgia corporation (“Enterprise”).

 

RECITALS

 

A. Radiant is the common parent of an “affiliated group” of corporations within the meaning of Section 1504(a) of the Internal Revenue Code of 1986, as amended (the “Code”), that has filed consolidated federal income tax returns.

 

B. Enterprise is a newly formed, wholly owned subsidiary of Radiant.

 

C. Pursuant to the Separation Agreement, dated as of             , 2003, by and between Radiant and Enterprise (the “Separation Agreement”), Radiant will contribute (or cause its Subsidiaries to contribute) the Enterprise Business (as defined herein), the Enterprise Assets (as defined herein) and cash to Enterprise, and Enterprise will assume the “Enterprise Liabilities” (as defined herein) (such transactions, the “Enterprise Formation Transactions”). Immediately after the Enterprise Formation Transactions, Radiant shall own all of the issued and outstanding common stock of Enterprise (the “Enterprise Stock”), which represents the only class of stock of Enterprise outstanding.

 

D. Pursuant to the Share Exchange Agreement, dated as of October 10, 2003, by and between Radiant and Erez Goren, an individual and resident of the State of Georgia, (the “Share Exchange Agreement”), Radiant will distribute all of the Enterprise Stock to Erez Goren, immediately after the Enterprise Formation Transactions, in exchange for up to 2,000,000 shares of common stock, no par value, of Radiant (the “Radiant Common Stock”) held by Erez Goren (the “Exchange” and, together with the Enterprise Formation Transactions, the “Separation Transactions”).

 

E. Radiant and Enterprise intend that the Separation Transactions will qualify as a reorganization described in Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”) and that the Exchange will qualify as a distribution described in Section 355 of the Code.

 

F. Radiant and Enterprise desire to set forth their rights and obligations with respect to taxes due for periods before and after the Separation Date (as defined herein).

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 


ARTICLE I.

 

DEFINITIONS

 

1.01 “Affiliate” shall mean any Person that directly or indirectly through one or more intermediaries Controls, is Controlled by, or is under common Control with a specified Person.

 

1.02 “Agreement” shall mean this Tax Disaffiliation Agreement dated             , 2003, between Radiant and Enterprise as the same may be amended from time to time.

 

1.03 “Applicable Federal Rate” shall have the meaning set forth in Section 1274(d) of the Code, compounded quarterly.

 

1.04 “Code” shall have the meaning set forth in the Recitals.

 

1.05 “Control” or “Controlled” shall mean, with respect to any Person, the presence of one of the following: (i) the legal, beneficial or equitable ownership, directly or indirectly, of more than 50% (by vote or value) of the capital or voting stock (or other ownership or voting interest, if not a corporation) of such Person or (ii) the ability, directly or indirectly, to direct the voting of a majority of the directors of such Person’s board of directors or, if the Person does not have a board of directors, a majority of the positions on any similar body, whether through appointment, voting agreement or otherwise.

 

1.06 “Controlling Party” shall have the meaning set forth in Section 5.01.

 

1.07 “Enterprise” shall have the meaning set forth in the preamble to this Agreement.

 

1.08 “Enterprise Assets” shall have the meaning set forth in the Separation Agreement.

 

1.09 “Enterprise Business” shall have the meaning set forth in the Separation Agreement.

 

1.10 “Enterprise Formation Transactions” shall have the meaning set forth in the Recitals.

 

1.11 “Enterprise Group” shall mean Enterprise and all entities that are Subsidiaries of Enterprise at any time following the Separation.

 

1.12 “Enterprise Liabilities” shall have the meaning set forth in the Separation Agreement.

 

1.13 “Enterprise Stock” shall have the meaning set forth in the Recitals.

 

1.14 “Enterprise Tainting Act” shall mean (a) any breach of any written representation or covenant relating to the qualification of the Separation Transactions as a reorganization described in Section 368(a)(1)(D) of the Code or relating to the qualification of the Exchange as a transaction described in Section 355 of the Code, which representation or covenant is made by Enterprise in that certain letter dated              addressed to King & Spalding LLP in

 

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connection with the tax opinion of King & Spalding LLP described in the Share Exchange Agreement, or (b) any action or actions of or involving any Person (other than Radiant or any Person that is an Affiliate of Radiant immediately before or immediately after such action or actions), or any omission or omissions of any Person (other than Radiant or any Person that is an Affiliate of Radiant immediately before or immediately after such omission or omissions), of an action or actions available to it, after the Separation Date, if such breach, action or omission described in (a) or (b) contributes to a Final Determination that the Separation Transactions result in the recognition of income or gain to the Radiant Group by virtue of (i) the Separation Transactions failing to qualify as a reorganization under Section 368(a)(1)(D) of the Code, (ii) the Exchange failing to qualify as a transaction described in Section 355 of the Code or (iii) any stock or securities of Enterprise failing to qualify as “qualified property” within the meaning of Sections 355(c)(2) and 361(c)(2) of the Code, including by reason of the application of Section 355(e) of the Code.

 

1.15 “Exchange” shall have the meaning set forth in the Recitals.

 

1.16 “Final Determination” shall mean with respect to any issue (a) a decision, judgment, decree or other order by any court of competent jurisdiction, which decision, judgment, decree or other order has become final and not subject to further appeal, (b) a closing agreement whether or not entered into under Section 7121 of the Code or any other binding settlement agreement (whether or not with the Internal Revenue Service) entered into in connection with or in contemplation of an administrative or judicial proceeding, or (c) the completion of the highest level of administrative proceedings if a judicial contest is not or is no longer available.

 

1.17 “Indemnitor” shall have the meaning set forth in Section 5.02.

 

1.18 “Person” shall mean any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or department or agency of a government.

 

1.19 “Post-Separation Period” shall mean any taxable year or other taxable period beginning on or after the Separation Date and, in the case of any taxable year or other taxable period that begins before and ends after the Separation Date, that part of the taxable year or other taxable period that begins after the close of the Separation Date.

 

1.20 “Pre-Separation Period” shall mean any taxable year or other taxable period that ends on or before the Separation Date and, in the case of any taxable year or other taxable period that begins before and ends after the Separation Date, that part of the taxable year or other taxable period through the close of the Separation Date.

 

1.21 “Radiant” shall have the meaning set forth in the preamble to this Agreement.

 

1.22 “Radiant Common Stock” shall have the meaning set forth in the Recitals.

 

1.23 “Radiant Group” shall mean Radiant and all entities that are Subsidiaries of Radiant at any time following the Separation.

 

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1.24 “Radiant Tainting Act” shall mean (a) any breach of any written representation or covenant relating to the qualification of the Separation Transactions as a reorganization described in Section 368(a)(1)(D) of the Code or relating to the qualification of the Exchange as a transaction described in Section 355 of the Code, which representation or covenant is made by Radiant in that certain letter dated              addressed to King & Spalding LLP in connection with the tax opinion of King & Spalding LLP described in the Share Exchange Agreement, or (b) any action or actions of or involving any Person (other than Enterprise, Erez Goren, or any other Person that is an Affiliate of Enterprise immediately before or immediately after such action or actions), or any omission or omissions of any Person (other than Enterprise, Erez Goren, or any other Person that is an Affiliate of Enterprise immediately before or immediately after such omission or omissions), of an action or actions available to it, after the Separation Date, if such breach, action or omission described in (a) or (b) contributes to a Final Determination that the Exchange results in the recognition of income or gain to Erez Goren by virtue of the Exchange failing to qualify as a transaction described in Section 355 of the Code.

 

1.25 “Restructuring Taxes” means any Taxes resulting from the Separation Transactions including, but not limited to, any Taxes imposed pursuant to or as a result of Section 311 of the Code or Sections 1.1502-13 or 1.1502-19 of the Treasury Regulations (or any corresponding or similar provisions of state, local or non-US. Tax law) and any sales or other transfer Taxes or similar charges imposed with respect to the transfer of the Enterprise Assets and Enterprise Liabilities to Enterprise; provided, however, that “Restructuring Taxes” shall not include any Taxes imposed as a result of a Final Determination that (x) the Separation Transactions failed to qualify as a reorganization under Section 368(a)(1)(D), (y) the Exchange failed to meet the requirements of Section 355 of the Code, or (z) any stock or securities of Enterprise failed to qualify as “qualified property” within the meaning of Sections 355(c)(2) and 361(c)(2) of the Code, including by reason of the application of Section 355(e) of the Code.

 

1.26 “Separation Agreement” shall have the meaning set forth in the Recitals.

 

1.27 “Separation Date” shall mean the date on which the Separation Transactions are consummated.

 

1.28 “Separation Transactions” shall have the meaning set forth in the Recitals.

 

1.29 “Share Exchange Agreement” shall have the meaning set forth in the Recitals.

 

1.30 “Subsidiary” shall mean a corporation, limited liability company, partnership, joint venture or other business entity if 50% or more of the outstanding equity or voting power of such entity is owned directly or indirectly by the corporation with respect to which such term is used.

 

1.31 “Tax” or “Taxes” whether used in the form of a noun or adjective, shall mean all forms of taxation, whenever created or imposed, including, but not limited to, taxes on or measured by income, franchise, gross receipts, sales, use, excise, payroll, personal property (tangible or intangible), real property, ad-valorem, value-added, leasing, leasing use or other taxes, levies, imposts, duties, charges or withholdings of any nature whether imposed by a nation, locality, municipality, government, state, federation, or other governmental body (a

 

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“Taxing Authority”). Whenever the term “tax” or “taxes” is used (including, without limitation, in the context of any duty to reimburse another party or indemnify for taxes or refunds or credits of taxes) it shall include penalties, fines, additions to tax and interest thereon.

 

1.32 “Taxing Authority” shall have the meaning set forth in the foregoing definition of the term “Tax.”

 

1.33 “Tax Returns” shall mean all reports, returns, information statements, questionnaires or other documents required to be filed or that may be filed for any period with any Taxing Authority (whether domestic or foreign) in connection with any Tax or Taxes (whether domestic or foreign).

 

ARTICLE II.

 

TAX RETURNS, TAX PAYMENTS AND TAX SHARING OBLIGATION

 

2.01 OBLIGATIONS TO FILE TAX RETURNS. Radiant shall timely file or cause to be filed all Tax Returns with respect to the Enterprise Group that (a) are filed on a consolidated, combined or unitary basis, (b) include Enterprise or any of its Subsidiaries and Radiant or any of its Subsidiaries, and (c) are required to be filed (i) for any Pre-Separation Period or (ii) for any taxable year or period of the Radiant Group that begins before and ends after the Separation Date. Enterprise shall timely file or cause to be filed any other Tax Return with respect to the Enterprise Group.

 

2.02 OBLIGATION TO REMIT TAXES. Radiant and Enterprise shall each remit or cause to be remitted any Taxes due in respect of any Tax for which it is required to file a Tax Return or which is otherwise due to any Taxing Authority and shall be entitled to reimbursement for such payments only to the extent provided in Sections 2.03 and 2.04.

 

2.03 TAX SHARING OBLIGATIONS AND PRIOR AGREEMENTS.

 

(a) Other than liabilities dealt with elsewhere in this Agreement, Enterprise shall be liable for and shall indemnify and hold the Radiant Group harmless against, on a net after Tax basis, any Tax liability of any member of the Enterprise Group, and of any member of the Radiant Group to the extent that such liability is attributable to the assets, employees, or transactions of the Enterprise Business, for (i) any Post-Separation Period and (ii) any taxable year or period that begins before and ends after the Separation Date in respect of the Post-Separation Period. Enterprise shall be entitled to any refund of or credit for Taxes of the Enterprise Group or amounts owed by Enterprise or for which Enterprise is responsible under this Section 2.03(a).

 

(b) Other than liabilities dealt with elsewhere in this Agreement, Radiant shall be liable for and shall indemnify and hold the Enterprise Group harmless against, on a net after Tax basis, any Tax liability of any member of the Radiant Group, and of any member of the Enterprise Group to the extent that such liability is not attributable to the assets, employees, or transactions of the Enterprise Business, for (i) any Post-Separation Period and (ii) any taxable year or period that begins before and ends after the Separation Date in respect of the Post-Separation Period. In addition, other than liabilities dealt with elsewhere in this Agreement,

 

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Radiant shall be liable for and shall hold the Enterprise Group harmless against any Tax liability of any member of the Radiant Group, and of any member of the Enterprise Group, for (i) any Pre-Separation Period and (ii) any taxable year or period that begins before and ends after the Separation Date in respect of the Pre-Separation Period. Radiant shall be entitled to any refund of or credit for Taxes for any periods that are attributable to the Radiant Group or amounts owed by Radiant or for which Radiant is responsible under this Section 2.03(b).

 

(c) Except as set forth in this Section 2.03 and in consideration of the mutual indemnities and other obligations of this Agreement, any and all prior Tax sharing agreements or practices between any member of the Radiant Group and any member of the Enterprise Group shall be terminated with respect to the Enterprise Group as of the Separation Date.

 

2.04 RESTRUCTURING TAXES; OTHER TAXES RELATING TO THE SEPARATION TRANSACTIONS.

 

(a) RESTRUCTURING TAXES. Notwithstanding any other provision of this Agreement to the contrary, Radiant shall pay, and shall indemnify and hold harmless Enterprise and any member of the Enterprise Group from and against, on a net after Tax basis, any Restructuring Taxes and any reasonable expenses (including, but not limited to, attorney’s fees) incurred in defending any audit or examination with respect to Restructuring Taxes.

 

(b) INDEMNIFICATION FOR ENTERPRISE TAINTING ACTS. Enterprise covenants that neither Enterprise nor any member of the Enterprise Group shall commit or be party to or the subject of any Enterprise Tainting Act which alone would result in any Tax or liability described in the following sentence and payable by Radiant. To the extent that any member of the Radiant Group would not have been liable for the following amounts but for an Enterprise Tainting Act, Enterprise shall pay, and shall indemnify and hold harmless the Radiant Group from and against, on a net after Tax basis, any liability of any member of the Radiant Group for Taxes (together with any reasonable expenses (including, but not limited to, attorney’s fees) incurred in defending against any such liability) resulting from a Final Determination that the Separation Transactions failed to meet the requirements of Sections 355 or 361 of the Code for nonrecognition of income or gain by the Radiant Group, including, without limitation, by reason of (x) any stock or securities of Enterprise failing to qualify as “qualified property” within the meaning of Sections 355(c)(2) or 361(c)(2) of the Code or (y) the application of Section 355(e) of the Code to the Separation Transactions.

 

(c) INDEMNIFICATION FOR RADIANT TAINTING ACTS. Radiant covenants that neither Radiant nor any member of the Radiant Group shall commit or be party to or the subject of any Radiant Tainting Act which alone would result in any Tax or liability described in the following sentence and payable by Erez Goren. To the extent that Erez Goren would not have been liable for the following amounts but for a Radiant Tainting Act, Radiant shall pay, and shall indemnify and hold harmless Erez Goren from and against, on a net after Tax basis, any liability of Erez Goren for Taxes (together with any reasonable expenses (including, but not limited to, attorney’s fees) incurred in defending against any such liability) resulting from a Final Determination that the Separation Transactions failed to meet the requirements of Sections 355 of the Code for nonrecognition of gain by Erez Goren. Erez Goren shall be a third party beneficiary of this Section 2.04(c) and shall be entitled to enforce this provision.

 

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2.05 PERIOD THAT INCLUDES THE SEPARATION DATE.

 

(a) To the extent permitted by law or administrative practice, the taxable year of the Enterprise Group shall be treated as closing at the close of the Separation Date.

 

(b) If it is necessary for purposes of this Agreement to determine the Tax liability of any member of the Enterprise Group for a taxable year or period that begins on or before and ends after the Separation Date and is not treated under Section 2.05(a) as closing at the close of the Separation Date, the determination shall be made, in the case of Taxes that are based upon income or receipts, by assuming that the relevant taxable period ended at the close of the Separation Date, except that any exemptions, allowances or deductions that are calculated on an annual basis shall be apportioned on a time basis. In the case of Taxes that are imposed on a periodic basis, are payable for a taxable period that includes (but does not end on) the Separation Date, and are not based upon or related to income or receipts, the portion of such Tax that relates to the Pre-Separation Period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Separation Date and the denominator of which is the number of days in the entire taxable period.

 

ARTICLE III.

 

CARRYBACKS

 

3.01 Without the consent of Radiant, which shall not be withheld or delayed unreasonably, no member of the Enterprise Group shall carry back any net operating loss or other Tax attribute (unless required to carry back such loss or Tax attribute by law) from a Post-Separation Period to a Pre-Separation Period. Provided that Radiant consents to the carryback or if the carryback is required by law, Radiant (or any other member of the Radiant Group receiving such refund) shall promptly remit to Enterprise any refunds it receives with respect to any such carryback. Any refund of Taxes resulting from any such carryback by a member of the Enterprise Group shall be payable to Enterprise as provided in Section 2.03(a). For purposes of this Article III, it shall be deemed reasonable for Radiant to withhold its consent to any carryback to the extent that Radiant determines in good faith that such carryback will cause an actual increase in the Taxes for which the Radiant Group is responsible or will cause an actual reduction in the amount of any refund of Taxes payable to the Radiant Group.

 

ARTICLE IV.

 

PAYMENTS

 

4.01 PAYMENTS. Payments due under this Agreement shall be made no later than thirty (30) days after the receipt or crediting of a refund, the delivery of notice of payment of a Tax for which the other party is responsible under this Agreement, or the delivery of notice of a Final Determination which results in such other party becoming obligated to make a payment hereunder to the other party hereto. Payments due hereunder, but not made within such 30-day period, shall be accompanied with interest at a rate equal to the Applicable Federal Rate from the due date of such payment.

 

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4.02 NOTICE. Radiant and Enterprise shall give each other prompt written notice of any payment that may be due to the provider of such notice under this Agreement.

 

ARTICLE V.

 

TAX AUDITS

 

5.01 GENERAL. Except as provided in Section 5.02, each of Enterprise and Radiant shall have sole responsibility for all audits or other proceedings (“Tax Controversies”) with respect to Tax Returns that it is required to file under Section 2.01 (the “Controlling Party”). Except as provided in Section 5.02(c) or Section 5.02(d), the Controlling Party shall have the sole right to contest the audit or proceeding and to employ advisors of its choice.

 

5.02 INDEMNIFIED CLAIMS.

 

(a) Radiant or Enterprise shall promptly notify the other in writing as soon as practicable after receipt by such party of any written communication from a relevant Taxing Authority that proposes adjustment to a Tax Return that may result in liability of the other party (the “Indemnitor”) under this Agreement (a “Proposed Tax Adjustment”). If the Indemnitor is not also the Controlling Party, the Controlling Party shall provide the Indemnitor with information about the nature and amounts of the Proposed Tax Adjustments.

 

(b) The Indemnitor shall have 30 days after receipt of such notice from the Controlling Party within which to object to the Proposed Tax Adjustment. If the Indemnitor does not notify the Controlling Party within such 30 day period that it objects to the Proposed Tax Adjustment, Section 5.02(c) and Section 5.02(d) below shall not apply, and the Controlling Party shall have exclusive control over all stages of the Tax Controversy, including full authority to determine whether and in what manner to contest or compromise the Proposed Tax Adjustment.

 

(c) If the Indemnitor notifies the Controlling Party that it objects to a Proposed Tax Adjustment, then the Controlling Party shall not thereafter consent to the adjustment or compromise of such Proposed Tax Adjustment without the consent of the Indemnitor, but shall cooperate with the Indemnitor to resolve the Proposed Tax Adjustment on a basis acceptable to the Indemnitor. Prior to the issuance of any notice raising a Proposed Tax Adjustment or similar stage in the proceedings, however, the Controlling Party shall be responsible for the conduct of the audit, including matters pertaining to such Proposed Tax Adjustment. The Controlling Party shall notify the Indemnitor in advance of any conferences, meetings, and proceedings pertaining to the audit and, at its own expense, the Indemnitor shall have the right to attend all such proceedings with any Taxing Authority, the subject matter of which is or includes such Proposed Tax Adjustment.

 

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(i) Upon the issuance of a notice of proposed adjustment or similar stage in the proceedings, the Indemnitor shall assume the conduct of all further proceedings, with counsel selected by it, at the Indemnitor’s sole expense, insofar as the proceedings relate to a Proposed Tax Adjustment, and thereafter the Indemnitor and the Controlling Party shall jointly be responsible for the conduct of proceedings to contest such Proposed Tax Adjustment.

 

(ii) In the event that the Controlling Party receives a notice of deficiency from the Internal Revenue Service, or a similar notice from any other Taxing Authority, and such notice includes one or more Proposed Tax Adjustments, then:

 

(A) upon receiving a written request from the Indemnitor, given no later than a date reasonably necessary to permit preparation and timely filing of a petition in the United States Tax Court for redetermination of the deficiency relating to the Proposed Tax Adjustment, or a court of similar jurisdiction with respect to a Proposed Tax Adjustment imposed by any other Taxing Authority, the Controlling Party shall timely file such petition (at the Indemnitor’s sole expense); or

 

(B) If (1) the Indemnitor does not request the Controlling Party to file a petition for redetermination of the deficiency pursuant to subsection 5.02(c)(ii)(A) hereof, (2) the Indemnitor requests that the Controlling Party file a claim for refund of Taxes relating to a Proposed Tax Adjustment, and (3) the Indemnitor provides the Controlling Party with sufficient funds to pay the deficiency relating to the Proposed Tax Adjustment, then the Controlling Party (at the Indemnitor’s sole expense) shall file a claim for refund thereof and, if the claim is denied, bring an action in a court of competent jurisdiction seeking such refund.

 

(C) In the event that a judgment of the United States Tax Court or other court of competent jurisdiction results in an adverse determination with respect to the Proposed Tax Adjustment, then the Indemnitor shall have the right to cause the Controlling Party to appeal from such adverse determination at the Indemnitor’s sole expense.

 

(D) The Indemnitor and its representatives, at the Indemnitor’s sole expense, shall be entitled to the extent permitted by law to participate in (1) all conferences, meetings, or proceedings with any Taxing Authority, the subject matter of which is a Proposed Tax Adjustment, and (2) all appearances before any court, the subject matter of which is a Proposed Tax Adjustment. The right to participate referred to in this subsection 5.02(c)(ii)(D) hereof shall include the submission and content of documentation, memoranda of fact and law and briefs, the conduct of oral arguments or presentations, the selection of witnesses, and the negotiation of stipulations of fact with respect to a Proposed Tax Adjustment.

 

(d) If a notice of proposed adjustment raises both one or more issues that would result in Taxes for which the Controlling Party is liable under this Agreement in addition to one or more issues that constitute Proposed Tax Adjustments for which any other party is liable under this Agreement, then the Controlling Party and the Indemnitor shall cooperate with each other to allow each party to conduct the Tax Controversy with respect to those issues that would

 

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result in Taxes for which such party is liable under this Agreement. Each party shall bear the expense of conducting the Tax Controversy with respect to the issues that would result in Taxes for which such party is liable under this Agreement.

 

ARTICLE VI.

 

COOPERATION

 

6.01 Radiant and Enterprise shall cooperate with each other in the filing of any Tax Returns and the conduct of any audit or other proceeding and each shall execute and deliver such powers of attorney and make available such other documents as are reasonably necessary to carry out the intent of this Agreement. Each party agrees to notify the other party in writing of any audit adjustments which do not result in Tax liability but can be reasonably expected to affect Tax Returns of the other party, or any of its Subsidiaries, for a Post-Separation Period. Unless and until there has been a Final Determination to the contrary, each party agrees to treat the Separation Transactions as a reorganization qualifying under Section 368(a)(1)(D) of the Code and the Exchange as a transaction qualifying under Section 355 of the Code.

 

ARTICLE VII.

 

RETENTION OF RECORDS; ACCESS

 

7.01 The Radiant Group and the Enterprise Group shall (a) in accordance with their then current record retention policy, retain records, documents, accounting data and other information (including computer data) necessary for the preparation and filing of all Tax Returns in respect of Taxes of the Radiant Group or the Enterprise Group for any Pre-Separation Period or for the audit of such Tax Returns; and (b) give to the other reasonable access to such records, documents, accounting data and other information (including computer data) and to its personnel (insuring their cooperation) and premises, for the purpose of the review or audit of such Tax Returns to the extent relevant to an obligation or liability of a party under this Agreement. At any time after the Separation Date that the Enterprise Group proposes to destroy such material or information, they shall first notify the Radiant Group in writing and the Radiant Group shall be entitled to receive such materials or information proposed to be destroyed. At any time after the Separation Date that the Radiant Group proposes to destroy such material or information, they shall first notify the Enterprise Group in writing and the Enterprise Group shall be entitled to receive such materials or information proposed to be destroyed.

 

ARTICLE VIII.

 

TERMINATION OF LIABILITIES

 

8.01 Notwithstanding any other provision in this Agreement, any liabilities determined under this Agreement shall not terminate any earlier than the expiration of the applicable statute of limitation for such liability. All other covenants under this Agreement shall survive indefinitely.

 

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ARTICLE IX.

 

DISPUTE RESOLUTION; MISCELLANEOUS PROVISIONS

 

9.01 To the extent not inconsistent with any specific term of this Agreement, Article V (Dispute Resolution) and Sections 6.3 (Counterparts), 6.6 (Notices), 6.7 (Waivers), 6.8 (Amendments), 6.9 (Successors and Assigns), 6.11 (Subsidiaries), 6.12 (Parties in Interest), 6.13 (Titles and Headings), 6.14 (Governing Law), and 6.15 (Severability) of the Separation Agreement shall apply in relevant part to this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

   

RADIANT SYSTEMS, INC.

 

 

   

By:


   

Name:

   

Title:

 

Witness:

 

 


   
Name:    

 

 

   

WAVE ENTERPRISE SYSTEMS, INC.

 

 

   

By:


   

Name:

   

Title:

 

 

Witness:

 

 


   
Name:    

 

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EX-10.4 8 dex104.htm EMPLOYEE BENEFITS AGREEMENT Employee Benefits Agreement

EXHIBIT 10.4

 

EMPLOYEE BENEFITS AGREEMENT

 

BY AND BETWEEN

 

RADIANT SYSTEMS, INC.

 

AND

 

WAVE ENTERPRISE SYSTEMS, INC.

 

Dated as of                     , 2003

 


EMPLOYEE BENEFITS AGREEMENT

 

TABLE OF CONTENTS

 

     Page

Article 1

 

Definitions and References

   1
     1.1  

Definitions

   1
     1.2  

References

   4

Article 2

 

General Principles

   4
     2.1  

Assumption of Liabilities

   4
     2.2  

Enterprise Continuing Participation In Radiant Health and Welfare Plans

   5
     2.3  

Establishment of the Enterprise Mirror Plans

   7
     2.4  

Terms of Participation by Transferred Individuals

   8

Article 3

 

Health and Welfare Plans

   8
     3.1  

COBRA and HIPAA

   8
     3.2  

Leave of Absence Programs

   8
     3.3  

Coverage Under Plans

   8

Article 4

 

Miscellaneous Employee Benefits

   9
     4.1  

Stock Options

   9
     4.2  

Employee Stock Purchase Plan

   10
     4.3  

Bonuses

   10
     4.4  

Paid Time Off

   10
     4.5  

Severance/Separation Pay

   11
     4.6  

Immigration Matters

   11
     4.7  

Enterprise 401(k) Plan

   11

Article 5

 

General

   11
     5.1  

Sharing of Participant Information and Access to Information

   11
     5.2  

Reporting and Disclosure and Communications to Participants

   12
     5.3  

Plan Audits

   12
     5.4  

Requests for Internal Revenue Service Rulings and United States Department of Labor Opinions

   13
     5.5  

Fiduciary and Related Matters

   13
     5.6  

No Third-Party Beneficiaries; Non-Termination of Employment

   14
     5.7  

Consent of Third Parties

   14
     5.8  

Effect if Separation Does Not Occur

   14
     5.9  

Relationship of Parties

   14
     5.10  

Dispute Resolution

   15
     5.11  

Indemnification

   15
     5.12  

W-2 Matters

   15
     5.13  

Confidentiality

   15
     5.14  

Notices

   16
    

5.15

 

Interpretation

   17

 

i


   

5.16

 

Severability

   17
   

5.17

 

Governing Law/Execution

   17

 

Appendix A

 

Enterprise Mirror Plans

Appendix B

 

Radiant Health and Welfare Plans

Appendix C

 

Form of Certification Regarding Enterprise 401(K) Plan

 

ii


EMPLOYEE BENEFITS AGREEMENT

 

This EMPLOYEE BENEFITS AGREEMENT, dated as of the          day of                     , 2003, is by and between Radiant Systems, Inc., a Georgia corporation (“Radiant”), and Wave Enterprise Systems, Inc., a Georgia corporation (“Enterprise”).

 

WHEREAS, Radiant and Enterprise have entered into a Separation Agreement, dated as of                         , 2003 (the “Separation Agreement”) pursuant to which Radiant will contribute to Enterprise certain assets of Radiant and Enterprise will assume certain liabilities of Radiant as particularly described in the Separation Agreement; and

 

WHEREAS, pursuant to the Separation Agreement, Radiant and Enterprise have agreed to enter into this Agreement for the purpose of allocating assets, liabilities, and responsibilities with respect to certain employee compensation and benefit plans and programs between them.

 

NOW, THEREFORE, in consideration of the mutual promises contained herein and in the Separation Agreement, the parties agree as follows:

 

Article 1 Definitions and References

 

  1.1 Definitions

 

For purposes of this Agreement, capitalized terms used (other than the formal names of Radiant Plans (as defined below)) and not otherwise defined shall have the respective meanings assigned to them below or as assigned to them in the Separation Agreement (as defined above):

 

(a) “Action” means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any arbitration or mediation tribunal.

 

(b) “Agreement” means this Employee Benefits Agreement, including all the attached Appendices.

 

(c) “Benefit Transition Period” means the period beginning Immediately after the Closing Date until 11:59 P.M., Eastern Time, May 31, 2004, unless the parties mutually agree otherwise.

 

(d) “Closing Date” has the meaning ascribed to such term in the Separation Agreement.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended, or any successor federal income tax law. Reference to a specific Code provision also includes any temporary or final regulation in force under that provision.

 

(f) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended. Reference to a specific provision of ERISA also includes any temporary or final regulation in force under that provision.

 

(g) “Enterprise Business” has the meaning given that term under the Separation Agreement.

 


(h) “Enterprise Employee” means an employee, director, officer, consultant, independent contractor, contingent worker or leased employee who is employed by or provides services to Enterprise or any Subsidiary of Enterprise.

 

(i) “Enterprise Mirror Plan” means any of the Plans to be established by Enterprise Immediately after the Closing Date as set forth on Appendix A hereto, which Plan shall provide benefits in the aggregate comparable to the benefits provided by the corresponding Radiant Plan.

 

(j) “Governmental Authority” means any federal, state, local, foreign, or international court, government, department, commission, board, bureau, agency, official, or other regulatory, administrative, or governmental authority, including the Department of Labor, the Securities and Exchange Commission, the Internal Revenue Service, and the Pension Benefit Guaranty Corporation.

 

(k) “Health and Welfare Plans,” when immediately preceded by “Radiant” means the health and welfare benefit plans, programs, and policies (including the Reimbursement Plans) which are sponsored by Radiant, including those plans, programs and policies set forth in Appendix B which are sponsored by Radiant as of the Closing Date and in which Enterprise will be a Participating Company through the Benefit Transition Period. When immediately preceded by “Enterprise,” “Health and Welfare Plans” means any benefit plans, programs, and policies (including the Reimbursement Plans) to be established by Enterprise Immediately after the Closing Date or after the end of the Benefit Transition Period.

 

(l) “HMO” means a health maintenance organization that provides benefits under the Radiant Health and Welfare Plans or the Enterprise Health and Welfare Plans, as applicable.

 

(m) “HMO Agreements” means contracts, letter agreements, practices, and understandings with HMOs that provide medical, dental, prescription drug, or vision services under the Radiant Health and Welfare Plans and the Enterprise Health and Welfare Plans, as applicable.

 

(n) “Immediately after the Closing Date” means 12:00 A.M., Eastern Time, on the day after the Closing Date.

 

(o) “Law” means all laws, statutes and ordinances and all regulations, rules and other pronouncements of Governmental Authorities having the effect of law of the United States, any foreign country, or any domestic or foreign state, province, commonwealth, city, country, municipality, territory, protectorate, possession or similar instrumentality, or any Governmental Authority thereof.

 

(p) “Liabilities” means any and all debts, liabilities, obligations, responsibilities, response actions, losses, claims, charges, demands, causes of actions, payments, costs and expenses, sums of money, accounts, reckonings, bonds, specialties, indemnities and similar obligations, exoneration, covenants, contracts, damages (whether compensatory, punitive or treble), fines, penalties and sanctions, controversies, agreements, promises, doings, omissions, variances, guarantees, make whole agreements and similar obligations, and other liabilities and requirements, all contractual obligations,

 

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absolute or contingent, matured or unmatured, liquidated or unliquidated, foreseen or unforeseen, joint, several or individual, asserted or unasserted, accrued or unaccrued, known or unknown, whenever arising, including those arising under or in connection with any Law, Action, threatened Action, order or consent decree of any Governmental Authority, or any award of any arbitration tribunal, and those arising under any contract, guarantee, commitment or undertaking, whether sought to be imposed by a Governmental Authority, private party, or party to this Agreement, whether based in contract, tort, implied or express warranty, strict liability, criminal or civil statute, or otherwise, and including any costs, expenses, interest, attorneys’ fees, disbursements and expenses of counsel, expert and consulting fees and costs related thereto or to the investigation or defense thereof, in each case, whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person.

 

(q) “Participating Company” means any Person (other than an individual) that is a participating employer in a Radiant Plan.

 

(r) “Person” means any natural person, corporation, business trust, limited liability company, joint venture, association, company, partnership or government, or any agency or political subdivision thereof.

 

(s) “Plan,” when immediately preceded by “Radiant,” means any plan, policy, program, payroll practice (including short-term disability, paid time off and all other leave policies), on-going arrangement, contract, trust, insurance policy, or other agreement or funding vehicle, whether written or unwritten, providing benefits to employees or former employees of Radiant or, for periods before the close of the Benefit Transition Period, providing benefits to employees or former employees of Enterprise. When immediately preceded by “Enterprise,” means any plan, policy, program, payroll practice (including short-term disability, paid time off and all other leave policies), on-going arrangement, contract, trust, insurance policy, or other agreement or funding vehicle, whether written or unwritten, providing benefits to employees or former employees of Enterprise.

 

(t) “Reimbursement Plans,” when immediately preceded by “Radiant,” means the Radiant Systems Flexible Benefit Plans. When immediately preceded by “Enterprise,” “Reimbursement Plans” means the health care flexible spending account plan and the dependent care flexible spending account plan to be established or maintained by Enterprise as of the Closing Date pursuant to Section 2.3 that corresponds to the corresponding Radiant Reimbursement Plans.

 

(u) “Separation” has the meaning given that term under the Separation Agreement.

 

(v) “Separation Agreement” is defined in the preamble of this Agreement.

 

(w) “Subsidiary” shall mean with respect to any specified Person, any corporation or other legal entity of which such Person or any of its Subsidiaries controls or owns, directly or indirectly, more than 50% of the stock or other equity interest entitled to vote on the election of members to the board of directors or similar governing body.

 

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(x) “Transferred Individual” means any individual who:

 

(i) is actively employed by, or on a leave of absence (including, but not limited to, a leave due to short-term disability and leave pursuant to the Family and Medical Leave Act of 1993, as amended) from, Radiant in the Enterprise Business as of the Closing Date and, Immediately after the Closing Date, will be actively employed by, or on a leave of absence from, Enterprise

 

(ii) is actively employed by, or on a leave of absence (including, but not limited to, a leave due to short-term disability and leave pursuant to the Family and Medical Leave Act of 1993, as amended from, Radiant in the Enterprise Business as of the Closing Date and will continue to be employed by Radiant for a transition period after the Closing Date, with such period to be agreed upon by the parties (the “Transition Period”), and after the Transition Period will be employed by Enterprise; or

 

(iii) any other employee of Radiant or group of employees of Radiant designated as a Transferred Individual by agreement of the parties.

 

An individual described in (ii) or (iii) above shall become a Transferred Individual as of the first date as of which such individual becomes employed by Enterprise.

 

  1.2 References

 

Unless the context clearly indicates otherwise, reference to a particular Article, Section, subsection or paragraph means the Article, Section, subsection or paragraph so delineated in this Agreement.

 

Article 2 General Principles

 

  2.1 Assumption of Liabilities

 

(a) By Enterprise. Effective as of the Closing Date, Enterprise shall assume and be responsible for

 

(i) all employment and employee benefit-related matters, obligations and Liabilities related to any Enterprise Employee, including any Transferred Individual, and the dependents or beneficiaries of any of them, to the extent arising out of any period of employment with Enterprise or any Subsidiary of Enterprise after the Closing Date;

 

(ii) all obligations and Liabilities related to any Enterprise Mirror Plan, whether incurred before or after the Closing Date;

 

(iii) all obligations and Liabilities to administer leaves of absence and related programs affecting Transferred Individuals for the period after the Closing Date as described in Section 3.2;

 

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(iv) the obligations and Liabilities for quarterly bonuses and commissions as described in Section 4.3;

 

(v) all obligations and Liabilities for accrued and unused paid time off as described in Section 4.4;

 

(vi) the obligations and Liabilities for immigration-related matters as described in Section 4.6; and

 

(vii) all obligations and Liabilities related to or arising out of a claim that any Radiant Plan is a multiple employer welfare arrangement (as defined in Section 3(40) of ERISA) with respect to participation in such plan by Enterprise Employees at any time during the Benefit Transition Period.

 

(b) By Radiant. Effective as of the Closing Date, Radiant shall assume and be responsible for

 

(i) all employment and employee benefit-related matters, obligations and Liabilities, related to any Transferred Individual and the dependents or beneficiaries of any of them, arising out of any period of employment occurring before and ending on or before the Closing Date, whether such matters, obligations or Liabilities arise before, on or after the Closing Date (other than the obligations and Liabilities specifically assumed by Enterprise herein);

 

(ii) the employment and employee benefit-related matters, obligations and Liabilities, related to any employee, director, officer, consultant, independent contractor, contingent worker or leased employee of Radiant or any Subsidiary of Radiant (other than a Transferred Individual) and the dependents or beneficiaries of any of them, whether such matters, obligations or Liabilities arise before, on or after the Closing Date; and

 

(iii) all obligations and Liabilities related to any Radiant Plan, except the obligation to fund benefits and expenses related to coverage of Enterprise Employees during the Benefit Transition Period.

 

From and after the Closing Date, Radiant shall have no obligations and Liabilities with respect to any Enterprise Employee except as specifically provided in (b) above and such obligations and Liabilities that arise out of or relate to its status as plan sponsor, plan administrator or fiduciary of a Radiant Plan described in Section 2.2(a) during the Benefit Transition Period.

 

  2.2 Enterprise Continuing Participation In Radiant Health and Welfare Plans

 

  (a) Participation in Radiant Plans

 

Subject to the terms and conditions of this Agreement, with respect to each Radiant Health and Welfare Plan listed in Appendix B hereto, Enterprise and each of its Subsidiaries shall be a Participating Company in such Radiant Plan during the Benefit Transition Period unless the parties mutually agree to an earlier date as of which Enterprise and its Subsidiaries shall cease to participate in a Radiant Plan.

 

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Radiant shall take such steps as are necessary under each Radiant Plan described in this Section 2.2(a) to permit Enterprise Employees (and their dependents and beneficiaries) to participate in each such Plan through the Benefit Transition Period.

 

Radiant shall cause the Radiant Health and Welfare Plans listed in Appendix B hereto to recognize and maintain after the Closing Date all coverage and contribution elections and designations of beneficiaries made by Transferred Individuals as such elections were last in effect during the period immediately prior to the Closing Date and shall apply such elections for the Benefit Transition Period (subject to applicable election change rights).

 

  (b) Radiant’s General Obligations and Rights As Plan Sponsor

 

Radiant shall continue as the, and shall have all the rights, duties and responsibilities of, plan sponsor of each Radiant Plan described in Section 2.2(a) and shall administer, or cause to be administered, each such plan in accordance with its terms and applicable law during the Benefit Transition Period while Enterprise and its Subsidiaries continue to participate in such plan.

 

Nothing contained in this Section 2.2 shall preclude Radiant from choosing to enter into contracts, insurance policies, HMO Agreements, letters of understanding, or other arrangements with new or different vendors than those in effect as of the Closing Date; provided, if such change is made during the Benefit Transition Period, Radiant shall give Enterprise notice at least thirty (30) days prior to the effective date of such change of any decision to change or add vendors, and if such change results in an increase in premiums, Enterprise may elect to terminate the Benefit Transition Period and to establish Enterprise Health and Welfare Plans to replace the Radiant Plans described in Section 2.2(a) above.

 

  (c) Enterprise’s General Obligations and Rights as Participating Company

 

With respect to each Radiant Plan described in Section 2.2(a), Enterprise and its Subsidiaries shall have all the rights, duties and responsibilities of a Participating Company as set forth in such plan and any written or oral procedures adopted by Radiant in its capacity as plan sponsor or plan administrator thereto.

 

During the Benefit Transition Period, neither Enterprise or its Subsidiaries shall perform any act or fail to take any action that would adversely affect Radiant’s financial arrangements under a Radiant Plan described in Section 2.2(a), except that this prohibition shall not apply to any benefit claims filed by or on behalf of Enterprise Employees (or their dependents); provided, however, it is agreed that nothing shall prevent Enterprise or a Subsidiary of Enterprise from taking reasonable steps at any time to establish Enterprise Mirror Plans for periods after the Benefit Transition Period.

 

  (d) Termination of Participating Company Status

 

Effective as of the close of the Benefit Transition Period, Enterprise and its Subsidiaries shall cease to be a Participating Company in any of the Radiant Plans.

 

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  (e) Sharing of Expenses

 

Enterprise and its Subsidiaries shall bear the entire cost of any benefits provided to Enterprise Employees with respect to their participation in the Radiant Plans during the Benefit Transition Period and its proportionate share of administrative and other expenses associated with the provision of such benefits, provided that if as of the Closing Date, Radiant has prepaid any premiums or expenses for a period that extends beyond the Closing Date and into the Benefit Transition Period, Enterprise shall reimburse Radiant for its proportionate share of any prepaid premiums or expenses relating to the Benefit Transition Period within 30 days of the Closing Date. At periodic intervals, Radiant and Enterprise shall examine their respective payments and receipts for coverages to ascertain whether Radiant or Enterprise has mistakenly made or received payments for coverages with respect to Enterprise Employees. If any such mistaken payments have been made or received by Radiant or Enterprise, such mistaken payments and receipts shall first be netted against each other by Radiant and Enterprise and thereafter such net payments or net receipts shall be further netted against the other party’s net payments or net receipts. The party with the remaining amount of mistaken payments shall transfer such amount in cash to the other party at such time or times as agreed upon by the parties, but not less frequently than quarterly.

 

Radiant and Enterprise shall use their reasonable best efforts to cause each of the insurance companies, HMOs, paid provider organizations and third-party administrators providing services and benefits under the Radiant Health and Welfare Plans and the Enterprise Health and Welfare Plans to maintain the premium and/or administrative rates based on the aggregate number of participants in the Radiant Plans and the Enterprise Health and Welfare Plans, during the Benefit Transition Period, separately rated or adjusted for the demographics, experience or other relevant factors related to the covered participants of Radiant and Enterprise, respectively. To the extent they are not successful in such efforts, Radiant and Enterprise shall each bear the revised premium or administrative rates for health and welfare benefits attributable to the individuals covered by their respective Health and Welfare Plans.

 

Notwithstanding any of the foregoing provisions of this Section 2.2, neither Enterprise nor any of its Subsidiaries shall assume any Liability with respect to any claim incurred by a Transferred Individual under the Radiant Health and Welfare Plans prior to the Closing Date.

 

  2.3 Establishment of the Enterprise Mirror Plans

 

Immediately after the Closing Date, Transferred Individuals shall cease to actively participate in the Radiant 401(k) Profit Sharing Plan and the Radiant Reimbursement Plans. Unless otherwise provided in this Agreement, effective no later than Immediately after the Closing Date, Enterprise shall use its reasonable best efforts to adopt the Enterprise Mirror Plans for the benefit of Transferred Individuals and other Enterprise Employees.

 

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  2.4 Terms of Participation by Transferred Individuals

 

Each Transferred Individual shall receive credit for employment with Radiant or a Subsidiary of Radiant completed as of the Closing Date for purposes of determining eligibility to participate in any Enterprise Mirror Plan and vesting in any benefits accrued under an Enterprise Mirror Plan; provided, however, except as expressly required under the terms of this Agreement, an Enterprise Mirror Plan shall not be required to provide any benefits that are duplicative of the benefits provided by Radiant for any period of employment or service completed on or before the Closing Date.

 

Article 3 Health and Welfare Plans

 

  3.1 COBRA and HIPAA

 

Effective Immediately after the Closing Date and during the Benefit Transition Period, Enterprise shall be responsible for all costs and expenses of Radiant’s administering compliance and providing coverage under the Radiant Health and Welfare Plans in accordance with the health care continuation coverage requirements for “group health plans” under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and the portability requirements (including the requirements for issuance of certificates of creditable coverage) under the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) with respect to all Enterprise Employees (including Transferred Individuals) and former Enterprise Employees and any beneficiaries and dependents thereof who experience a COBRA qualifying event or loss of coverage under the Radiant Health and Welfare Plans after the Closing Date and during the Benefit Transition Period.

 

Following the end of the Benefit Transition Period or, if earlier, the date that Enterprise and its Subsidiaries cease to be Participating Companies in the Radiant Health and Welfare Plans, Enterprise shall be solely responsible for administering compliance and providing coverage in accordance with COBRA and the portability requirements (including the requirements for issuance of certificates of creditable coverage) under HIPAA with respect to all Enterprise Employees and former Enterprise Employees who experience a COBRA qualifying event or loss of coverage under the Radiant Health and Welfare Plans during or after the Benefit Transition Period.

 

  3.2 Leave of Absence Programs

 

Effective Immediately after the Closing Date, Enterprise shall assume sole responsibility for the administration and compliance of all leaves of absences and related programs (including compliance with the Family and Medical Leave Act of 1993, as amended) affecting Transferred Individuals based on programs and policies similar to Radiant’s programs and policies and assuming all periods of employment and service of Transferred Individuals with Radiant shall be counted as employment with Enterprise for purposes of such programs.

 

  3.3 Coverage Under Plans

 

  (a) Eligible Employees

 

(i) Except as otherwise provided in Section 2.2, Enterprise shall recognize and cover under the Enterprise Health and Welfare Plans all eligible

 

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Transferred Individuals covered by the Radiant Health and Welfare Plans (pertaining to Transferred Individuals) as of the Closing Date (determined under the applicable Plan documents).

 

(ii) Enterprise shall provide coverage to Transferred Individuals under the Enterprise Health and Welfare Plans without the need to undergo a physical examination or otherwise provide evidence of insurability, but only to the extent such physical examination or proof of insurability would not have been required under the similar Radiant Health and Welfare Plan.

 

  (b) Reimbursement Plans

 

To the extent any Transferred Individual contributed to an account under the Radiant Reimbursement Plans during the plan year that includes the Closing Date, effective Immediately after the Closing Date, such Transferred Individual shall become a participant in the Enterprise Reimbursement Plan, Enterprise shall recognize any such Transferred Individual’s account balance, determined as of the Closing Date, and Enterprise shall thereafter be solely responsible for making any and all payments relative to such account balance of the Transferred Individual for all claims made after the Closing Date, or made before the Closing Date but not processed before the Closing Date, during such plan year under the applicable Enterprise Reimbursement Plan. All elections by Transferred Individuals in effect immediately prior to the Closing Date shall continue and be recognized by Enterprise, and the Separation alone shall not be considered an event that gives any participant the right to change any prior election. As soon as practicable after the Closing Date, Radiant shall calculate as of the Closing Date the aggregate net balance in the accounts of Transferred Individuals under the Radiant Reimbursement Plans, expressed relative to the contributions received from, and the reimbursements made to, such Transferred Individuals. If the contributions received from a Transferred Individual exceed the reimbursements made to or on behalf of such Transferred Individual by Radiant, the Transferred Individual shall be deemed to have a positive account balance. In turn, if the contributions received from a Transferred Individual are less than the reimbursements made to or on behalf of such Transferred Individual by Radiant, the Transferred Individual shall be deemed to have a negative account balance. If the aggregate net balance in the accounts of all such Transferred Individuals is a positive number, then Radiant shall pay this amount in cash to Enterprise as soon as practicable after the Closing Date, and if the aggregate net balance in the accounts of all such Transferred Individuals is a negative number, then Enterprise shall pay this amount in cash to Radiant as soon as practicable after the Closing Date.

 

Article 4 Miscellaneous Employee Benefits

 

  4.1 Stock Options

 

As of the Closing Date, each Transferred Individual will be treated as having terminated employment with Radiant for purposes of determining his or her eligibility to participate in the Radiant 1995 Stock Option Plan. Accordingly, any stock option held by a Transferred Individual or unexercised portion thereof which was otherwise exercisable on the Closing Date shall expire unless exercised in the time period set forth in the Transferred Individual’s option agreement

 

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granting such option. Any portion of a stock option held by a Transferred Individual which was not exercisable as of the Closing Date shall expire as of the Closing Date.

 

  4.2 Employee Stock Purchase Plan

 

As of the Closing Date, each Transferred Individual will be treated as having terminated employment with Radiant for purposes of determining his or her eligibility to participate in the Radiant 1998 Employee Stock Purchase Plan for any offerings which may be in effect as of the Closing Date. Accordingly, Enterprise will not have any interest in or right to any of the assets of the Radiant 1998 Employee Stock Purchase Plan and will not have any Liabilities with respect to such plan, and Radiant will have full power and authority with respect to the amendment and termination of the Radiant 1998 Employee Stock Purchase Plan. Any amounts contributed by a Transferred Individual to the Radiant 1998 Employee Stock Purchase Plan for an offering in effect as of the Closing Date shall be refunded to such Transferred Individual in accordance with the terms of the plan.

 

  4.3 Bonuses

 

As of the Closing Date, Radiant shall be responsible for (i) all earned but unpaid commissions and bonuses to be paid to Transferred Individuals for periods preceding the quarter in which the Closing Date occurs, (ii) all bonuses to be paid to Transferred Individuals for the quarter in which the Closing Date occurs and (iii) all commissions to be paid to Transferred Individuals directly related to revenues recognized by Radiant for the quarter in which the Closing Date occurs. Enterprise shall assume liability for and shall be solely responsible for any commissions to be paid to Transferred Individuals that are not directly related to revenues recognized by Radiant for the quarter in which the Closing Date occurs and for all periods thereafter. The amount of the quarterly bonuses and commissions for the quarter in which the Closing Date occurs shall be determined in accordance with the usual terms of Radiant’s Plans and shall be payable at the same time as bonuses and commissions are normally payable (“Payment Date”). Radiant shall on or prior to the Payment Date pay to Enterprise the bonuses and commissions for Transferred Individuals for which Radiant is liable pursuant to this Section 4.3 (including the employer’s portion of all FICA, FUTA and other employment taxes) and Enterprise shall as soon as practicable after the Payment Date pay the full amount of such bonuses and commissions to the Transferred Individuals. Enterprise shall assume responsibility for all bonuses and commissions to be paid to Transferred Individuals for quarters commencing on or after the Closing Date. Radiant shall remain responsible for all bonuses and commissions that would otherwise be due and payable to Radiant employees before, on or after the Closing Date, even with respect to contracts assumed by Enterprise and revenue recognized by Enterprise. The allocation of responsibilities set forth in this Section 4.3 assumes that the Closing Date will occur on or before December 31, 2003. In the event that the Closing Date occurs after December 31, 2003, the parties agree to allocate responsibilities for payment of bonuses and commissions in a manner consistent with the intent of this Section 4.3.

 

  4.4 Paid Time Off

 

As of the Closing Date, Enterprise shall assume all liability for the Transferred Individuals’ accrued and unused paid time off as of the Closing Date consistent with the terms of Radiant’s paid time off policy as in effect as of the Closing Date. From and after the Closing

 

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Date, Radiant shall have no further liability with respect to accrued but unused paid time off for Transferred Individuals.

 

  4.5 Severance/Separation Pay

 

Radiant and Enterprise acknowledge and agree that the transactions contemplated by the Separation Agreement will not constitute a termination of employment of any Transferred Individual or any employee whose employment is transferred to Enterprise for purposes of any policy, plan, program or agreement of Radiant or any of its Subsidiaries (including Enterprise) that provides for the payment of severance, separation pay, salary continuation or similar benefits in the event of a termination of employment.

 

  4.6 Immigration Matters

 

From and after the Closing Date, Enterprise shall assume any and all immigration-related rights, Liabilities, interests and obligations of Radiant with respect to Transferred Individuals, including, but not limited to all obligations, liabilities and undertakings of any labor condition applications filed on behalf of H-1B employees. From and after the Closing Date, Radiant shall have no further liability with respect to any immigration-related Liabilities, interests and obligations with respect to Transferred Individuals.

 

  4.7 Enterprise 401(k) Plan

 

Effective Immediately after the Closing Date, Enterprise shall establish and become the plan sponsor of a separate defined contribution plan for Enterprise Employees that shall be qualified under Sections 401(a) and 401(k) of the Code (the “Enterprise 401(k) Plan”). As soon as practicable following the Closing Date, Radiant will cause cash (or, if acceptable to Radiant and Enterprise, in-kind assets credited to the Transferred Individual’s accounts) in an amount equal to the value of the assets attributable to the accounts of Transferred Individuals under the Radiant 401(k) Plan to be transferred to the Enterprise 401(k) Plan; provided, however, that Radiant shall not in any way be obligated to transfer such assets unless it has received a certification from Enterprise regarding the Enterprise 401(k) Plan substantially in the form set forth in Appendix C or such other certification as may be acceptable to Radiant.

 

The Enterprise 401(k) Plan shall recognize and maintain all contribution and investment elections and designations of beneficiaries made by Transferred Individuals under the Radiant 401(k) Plan as such elections were last in effect immediately prior to the Closing Date and shall apply such elections for the remainder of the period(s) for which such elections are by their terms applicable (subject in all cases to applicable election change rights of the Transferred Individuals). Radiant and Enterprise acknowledge and agree that transactions contemplated by this Agreement will not constitute a severance from employment for any Transferred Individuals for purposes of the Radiant 401(k) Plan.

 

Article 5 General

 

  5.1 Sharing of Participant Information and Access to Information

 

Subject to applicable laws on confidentiality, Radiant and Enterprise shall share, with each other and their respective agents and vendors (without obtaining releases) all participant information necessary for the efficient and accurate administration of each of the Radiant Plans

 

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in which Enterprise is a Participating Company through the Benefit Transition Period. All requests for participant information shall be subject to the access to information requirements set forth in Article IV of the Separation Agreement; provided, however, that in applying the provisions of Article IV of the Separation Agreement, May 31, 2004 shall be substituted for the Closing Date with respect to information or records related to any Radiant Plan in which Enterprise is a Participating Company.

 

  5.2 Reporting and Disclosure and Communications to Participants

 

While Enterprise is a Participating Company in the Radiant Plans, Enterprise shall take all actions necessary or appropriate to facilitate the distribution of all Radiant Plan-related communications and materials to Enterprise Employees, participants and beneficiaries, including summary plan descriptions and related summaries of material modification, summary annual reports, investment information, prospectuses, notices and enrollment materials for the Enterprise Plans. Enterprise shall assist Radiant in complying with all reporting and disclosure requirements of ERISA for plan years ending on or before May 31, 2004.

 

  5.3 Plan Audits

 

  (a) Audit Rights with Respect to Information Provided

 

(i) Subject to Section 5.3(a)(ii), each of Radiant and Enterprise, and their duly authorized representatives, shall have the right to conduct audits at any time upon reasonable prior notice, at their own expense, with respect to all information provided to it or to any Plan recordkeeper or third-party administrator by the other party. Subject to Section 5.3(b)(ii), the party conducting the audit shall have the sole discretion to determine the procedures and guidelines for conducting audits and the selection of audit representatives. The auditing party shall have the right to make copies of any records at its expense, subject to the confidentiality provisions set forth in the Separation Agreement, which are incorporated by reference herein. The party being audited shall provide the auditing party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide workspace to its representatives. After any audit is completed, the party being audited shall have the right to review a draft of the audit findings and to comment on those findings in writing within five business days after receiving such draft.

 

(ii) The auditing party’s audit rights under this Section 5.3(a) shall include the right to audit, or participate in an audit facilitated by the party being audited, of any Subsidiaries and affiliates of the party being audited and of any benefit providers and third parties with whom the party being audited has a relationship, or agents of such party, to the extent any such persons are affected by or addressed in this Agreement (collectively, the “Non-parties”). The party being audited shall, upon written request from the auditing party, provide an individual (at the auditing party’s expense) to supervise any audit of any Non-party. The auditing party shall be responsible for supplying, at its expense, additional personnel sufficient to complete the audit in a reasonably timely manner.

 

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  (b) Audits Regarding Vendor Contracts

 

From Immediately after the Closing Date through the Benefit Transition Period, Radiant and Enterprise and their duly authorized representatives shall have the right to conduct joint audits with respect to any vendor contracts that relate to both the Radiant Plans and the Enterprise Plans. The scope of such audits shall encompass the review of all correspondence, account records, claim forms, canceled drafts (unless retained by the bank), provider bills, medical records submitted with claims, billing corrections, vendor’s internal corrections of previous errors and any other documents or instruments relating to the services performed by the vendor under the applicable vendor contracts. Radiant and Enterprise shall agree on the performance standards, audit methodology, auditing policy and quality measures and reporting requirements relating to the audits described in this Section 5.3(b) and the manner in which costs incurred in connection with such audits will be shared.

 

  (c) Audit Assistance

 

To the extent that either Radiant or Enterprise is required to respond to any Governmental Authority, vendor or recordkeeper audit, or otherwise conducts an audit with respect to any provision or obligation of the other party under this Agreement, Radiant or Enterprise, whichever is applicable, shall be required to fully cooperate with the audit, including providing such records and data as may be necessary to respond to any document or data request that may arise by reason of such audit. The party being audited shall provide the auditing party’s representatives with reasonable access during normal business hours to its operations, computer systems and paper and electronic files, and provide workspace to its representatives. To the extent the results of an audit result in any correction to the Liabilities involving any Transferred Individuals, Enterprise shall be solely responsible for all such costs and expenses associated with such Liabilities and any related corrections.

 

  5.4 Requests for Internal Revenue Service Rulings and United States Department of Labor Opinions

 

Enterprise shall cooperate fully with Radiant on any issue relating to the transactions contemplated by this Agreement for which Radiant elects to seek a determination letter or private letter ruling from the Internal Revenue Service or an advisory opinion from the United States Department of Labor. Radiant shall cooperate fully with Enterprise with respect to any request for a determination letter or private letter ruling from the Internal Revenue Service or advisory opinion from the United States Department of Labor with respect to any of the Enterprise Plans relating to the transactions contemplated by this Agreement.

 

  5.5 Fiduciary and Related Matters

 

The parties acknowledge that Radiant will not be a fiduciary with respect to the Enterprise Plans. The parties also acknowledge that neither party shall be deemed to be in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination that to do so would violate any applicable fiduciary duties or standards of conduct under ERISA or other applicable law. Notwithstanding any other provision in this

 

13


Agreement, the parties may take such actions as necessary or appropriate to effectuate the terms and provisions of this Agreement.

 

  5.6 No Third-Party Beneficiaries; Non-Termination of Employment

 

This Agreement is not intended and shall not be construed as to confer upon any Person other than the parties hereto any rights or remedies hereunder. No provision of this Agreement or the Separation Agreement shall be construed to create any right, or accelerate entitlement, to any compensation or benefit whatsoever on the part of any Transferred Individual or other future, present, or former employee of Radiant or Enterprise under any Radiant Plan or Enterprise Plan or otherwise. Without limiting the generality of the foregoing, except as expressly provided in this Agreement: (i) neither the Separation nor the termination of the Participating Company status of Enterprise shall cause any employee to be deemed to have incurred a termination of employment which entitles such individual to the commencement of benefits under any of the Radiant Plans, or any of the Enterprise Plans; and (ii) nothing in this Agreement other than those provisions specifically set forth herein to the contrary shall preclude Enterprise, at any time after the Closing Date, from amending, merging, modifying, terminating, eliminating, reducing, or otherwise altering in any respect any Enterprise Plan, any benefit under any Plan or any trust, insurance policy or funding vehicle related to any Enterprise Plan.

 

  5.7 Consent of Third Parties

 

If any provision of this Agreement is dependent on the consent of any third party (such as a vendor) and such consent is withheld, Radiant and Enterprise shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the full extent practicable. If any provision of this Agreement cannot be implemented due to the failure of such third party to consent, Radiant and Enterprise shall negotiate in good faith to implement the provision in a mutually satisfactory manner. The phrase “reasonable best efforts” as used in this Agreement shall not be construed to require the incurrence of any non-routine or unreasonable expense or liability or the waiver of any right.

 

  5.8 Effect if Separation Does Not Occur

 

If the Separation does not occur, then all actions and events that are, under this Agreement, to be taken or occur before or effective as of the Closing Date, Immediately after the Closing Date, or otherwise in connection with the Separation, shall not be taken or occur except to the extent specifically agreed by Enterprise and Radiant.

 

  5.9 Relationship of Parties

 

Nothing in this Agreement shall be deemed or construed by the parties or any third party as creating the relationship of principal and agent, partnership or joint venture between the parties, it being understood and agreed that no provision contained herein, and no act of the parties, shall be deemed to create any relationship between the parties other than the relationship set forth herein.

 

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  5.10 Dispute Resolution

 

Any controversy or claim arising out of or relating to this Agreement, or the breach hereof, shall be settled pursuant to the dispute resolution provisions described in Article V of the Separation Agreement.

 

  5.11 Indemnification

 

All Liabilities retained or assumed by or allocated to Radiant or any Radiant Subsidiary pursuant to this Agreement will be deemed to be Radiant Liabilities (as defined in the Separation Agreement) and all Liabilities retained or assumed by or allocated to Enterprise or any Enterprise Subsidiary pursuant to this Agreement will be deemed to be Enterprise Liabilities (as defined in the Separation Agreement), and, in each case, will be subject to the indemnification provisions set forth in Article III of the Separation Agreement.

 

  5.12 W-2 Matters; Reimbursements

 

Radiant shall be responsible for preparing and distributing Forms W-2 to all Transferred Individuals for all remuneration earned by such Transferred Individuals through the Closing Date. Enterprise shall assume and be responsible for preparing and distributing Forms W-2 to all Transferred Individuals for all remuneration earned by such Transferred Individuals after the Closing Date.

 

For a period of one year after the Closing Date, Enterprise shall pay to Radiant ratably and on a monthly basis all amounts previously paid by Radiant on behalf of Transferred Individuals with respect to immigration-related matters (including attorneys’ fees) pertaining solely to such Transferred Individuals’ applications for permanent residency prior to the Closing Date, less any premiums collected by Radiant as of the Closing Date pursuant to any reimbursement agreements with Transferred Individuals. Within 10 days after the Closing Date, Radiant shall reconcile all amounts owed to Radiant as of the Closing Date with respect to such immigration-related matters. From and after the Closing Date, Enterprise shall assume Radiant’s rights and obligations under any reimbursement agreements with Transferred Individuals with respect to immigration-related matters.

 

  5.13 Confidentiality

 

The confidentiality provisions contained in Article IV of the Separation Agreement are incorporated herein by reference and unless otherwise expressly specified herein, such provisions shall apply as if fully set forth herein.

 

15


  5.14 Notices

 

All notices and other communications hereunder (each a “Notice”) shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the parties at the following addresses (or at such other addresses for a party as shall be specified by like Notice) and will be deemed given on the date on which such Notice is received:

 

To Radiant:

 

Radiant Systems, Inc.

3925 Brookside Parkway

Alpharetta, Georgia 30022

Attention: Mark W. Haidet, Chief Financial Officer

Telephone: (770) 576-6404

 

With a copy to:

 

Smith, Gambrell & Russell, LLP

1230 Peachtree Street, N.E., Suite 3100

Atlanta, Georgia 30309

Attention: Arthur Jay Schwartz

Telephone: (404) 815-3500

 

With a copy to:

 

King & Spalding LLP

191 Peachtree Street

Atlanta, Georgia 30303

Attention: Russell B. Richards

Telephone: (404) 572-4600

 

16


To Enterprise:

 

Wave Enterprise Systems, Inc.

3905 Brookside Parkway

Atlanta, Georgia 30022

Attention: David Schulman, General Counsel

Telephone: (770) 576-7030

 

With a copy to:

 

Kilpatrick Stockton, LLP

1100 Peachtree Street

Atlanta, Georgia 30309

Attention:    Larry D. Ledbetter

     Bruce D. Wanamaker

Telephone: (404) 815-6500

 

  5.15 Interpretation

 

Words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires. The terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all Appendices hereto) and not to any particular provision of this Agreement. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive.

 

  5.16 Severability

 

The provisions of this Agreement are severable and should any provision hereof be void, voidable or unenforceable under any applicable law, such provision shall not affect or invalidate any other provision of this Agreement, which shall continue to govern the relative rights and duties of the parties as though such void, voidable or unenforceable provision were not a part hereof.

 

  5.17 Governing Law/Execution

 

This Agreement shall be construed in accordance with, and governed by, the laws of the State of Georgia without regard to the conflicts of law rules of such state, may not be assigned by either party without the prior written consent of the other, and shall bind and inure to the benefit of the parties hereto and their respective successors and permitted assignees. This Agreement may not be amended or supplemented except by an agreement in writing signed by Radiant and Enterprise. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original instrument, but all of which together shall constitute one and the same Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

17


IN WITNESS WHEREOF, the parties have caused this Employee Benefits Agreement to be duly executed as of the day and year first above written.

 

RADIANT SYSTEMS, INC.

By:    
 
   

Name:

Title:

 

WAVE ENTERPRISE SYSTEMS, INC.

By:    
 
   

Name:

Title:

 

18


APPENDIX A  

 

ENTERPRISE MIRROR PLANS

 

ENTERPRISE MIRROR PLANS TO BE ESTABLISHED IMMEDIATELY AFTER THE CLOSING DATE

 

Enterprise Flexible Benefits Plan:

Enterprise Before Tax Premium Plan

Enterprise Health Care Flexible Spending Account Plan

Enterprise Dependent Care Flexible Spending Account Plan

 

Enterprise 401(k) Plan

 

Leave of Absence Policies

Enterprise Bereavement, Family/Medical, Jury Duty/Witness Duty, Military Leave, Paid Time Off, and Personal Leave Policies

 

A-1


APPENDIX B

 

RADIANT HEALTH AND WELFARE PLANS

 

RADIANT PLANS IN WHICH ENTERPRISE WILL BE A PARTICIPATING COMPANY THROUGH THE CLOSE OF THE BENEFIT TRANSITION PERIOD

 

Health Plans (ERISA):

Health & Welfare Plan (which includes medical, dental, prescription drug, various HMOs, vision, wellness programs, and employee assistance benefits).

 

Group Insurance Plans (ERISA):

Group Employee Basic Life and Supplemental Life Insurance Plan

Group Employee Accidental Death and Dismemberment Insurance Plan

Group Business Travel Accident Plan

Personal Accident Plan

 

Disability Plans (ERISA):

Employer-Paid Short-Term Disability Plan

Long Term Disability Plan

 

B-1


APPENDIX C

 

FORM OF CERTIFICATION REGARDING ENTERPRISE 401(K) PLAN

 

This certification is made pursuant to that certain Employee Benefits Agreement, dated as of                     , 2003 by and between Radiant Systems, Inc., a Georgia corporation, (“Radiant”) and Wave Enterprise Systems, Inc., a Georgia corporation (“Enterprise”).

 

WHEREAS, Radiant maintains the                                                               (“Radiant 401(k) Plan”);

 

WHEREAS, the Radiant 401(k) Plan is subject to a favorable determination letter from the Internal Revenue Service dated                             ;

 

WHEREAS, Enterprise maintains the                                                               (“Enterprise 401(k) Plan”);

 

WHEREAS, pursuant to Section 4.7 of Employee Benefits Agreement, Radiant is required to cause the Radiant 401(k) Plan to transfer cash (or, under certain circumstances, other assets) equal to the value of the assets attributable to the accounts of certain former employees of Radiant or its subsidiaries described as Transferred Individuals in the Employee Benefits Agreement upon the certification of Enterprise as to the qualification of the Enterprise Plan;

 

NOW, THEREFORE, Enterprise hereby makes the following representations and covenants as an inducement to Radiant to cause the Radiant 401(k) Plan to transfer assets and liabilities to the Enterprise 401(k) Plan:

 

The Enterprise 401(k) Plan was executed on                                                  .

 

The first payroll with respect to which elective deferrals will be (or were) deducted from employee’s pay was on                                     .

 

The terms of the Enterprise 401(k) Plan and its related trust satisfy the requirements of Sections 401(a), (k) and (m) and related sections of the Internal Revenue Code of 1986 , as amended, and the final and temporary regulations promulgated thereunder (the “Code”) and the plan and the related trust is intended to be tax exempt under Section 501(a) of the Code.

 

Enterprise has at all times operated the Enterprise 401(k) Plan in accordance with its terms and applicable provisions of the Code and there is no circumstance that would cause the Enterprise 401(k) Plan to fail to constitute a qualified cash or deferred arrangement as described in Sections 401(k) of the Code from its establishment.

 

Any elective deferrals, qualified nonelective contributions or qualified matching contributions transferred to the Enterprise 401(k) Plan from the Radiant 401(k) Plan will continue to be subject to the withdrawal restrictions of Section 401(k) of the Code.

 

Enterprise will make an application to the Internal Revenue Service for an initial favorable determination letter within the time period permitted for such application under Section 401(b) of the Code and will take all action required, including amending the Enterprise

 

C-1


401(k) Plan, to obtain such a favorable letter, a copy of which will be promptly provided to Radiant.

 

IN WITNESS WHEREOF, the undersigned has caused this Certification to be duly executed this              day of                         .

 

WAVE ENTERPRISE SYSTEMS, INC.

By:    
 
   

Name:

Title:

 

C-2

EX-10.5 9 dex105.htm PURCHASE OPTION AGREEMENT Purchase Option Agreement

Exhibit 10.5

 

RIGHT OF FIRST REFUSAL AND PURCHASE OPTION AGREEMENT

 

THIS RIGHT OF FIRST REFUSAL AND PURCHASE OPTION AGREEMENT (this “Agreement”) is made and entered into as of the              day of             , 2003, by and between RADIANT SYSTEMS, INC., a Georgia corporation (“Grantor”), and WAVE ENTERPRISE SYSTEMS, INC., a Georgia corporation (“Grantee”).

 

W I T N E S S E T H:

 

WHEREAS, Grantor, as Sublandlord, and Grantee, as Subtenant, have entered into a Sublease and Facilities Agreement dated of even date herewith (the “Sublease”) pursuant to which Grantor has agreed to sublease to Grantee, and Grantee has agreed to sublease from Grantor, that certain improved real property located in Fulton County, Georgia commonly known as 3905 Brookside Parkway, Alpharetta, Georgia 30022 (the “Office Building Property”) for an initial term scheduled to expire February 28, 2013; and

 

WHEREAS, the Sublease contains certain early termination rights in favor of each of Grantor and Grantee; and

 

WHEREAS, Grantor has agreed to grant to Grantee a right of first refusal and a purchase option with respect to that certain parcel of real property containing approximately 5.819 acres which is located adjacent to the Office Building Property and is described on Exhibit “A” attached hereto (the “Property”) on the terms and conditions set forth in this Agreement.

 

WHEREAS, the Property is part of an approximate 16.667 acre tract which is described on Exhibit “B” attached hereto (the “Entire Parcel”) (for the purposes of this Agreement, that portion of the Entire Parcel not contained within the Property shall be sometimes referred to herein as the “Adjacent Parcel”).

 

NOW, THEREFORE, in consideration of the sum of $10.00 paid by Grantee to Grantor and the mutual covenants and agreements of the parties contained in this Agreement, and other good and valuable consideration, the receipt and sufficiency of such consideration being hereby acknowledged, Grantee and Grantor hereby agree as follows:

 

1. RIGHT OF FIRST REFUSAL. Grantor hereby grants and conveys to Grantee a right of first refusal (the “Right of First Refusal”) to purchase the Property, subject and subordinate only to the Duke ROFR (as hereinafter defined), in accordance with the terms and subject to the conditions set forth below:

 

(a) Except as otherwise expressly provided in Sections 4 and 13, below, Grantor shall not sell or convey the Property or any interest therein or portion thereof (each, a “Conveyance”) except in accordance with the terms and conditions hereof. In the event during the term of the Sublease, Grantor receives a bona fide offer, an acceptance of any Grantor offer, a counteroffer or other proposal or agreement (each, an “Offer”) from any unrelated person or entity (the “Offer Purchaser”) to acquire all or any portion of the Entire Parcel (the real property that is the subject of any such Offer is herein referred to as the “Offer Property”), such Offer Property includes all or any portion of the Property, and Grantor desires to accept or enter into, or otherwise proceed with a Conveyance on the terms of such Offer, then Grantor shall immediately provide a true and

 


correct copy of such Offer to Grantee and to the beneficiary of the Duke ROFR pursuant to the terms and conditions applicable thereto. Grantor shall also immediately provide written notice to Grantee as to the response to such Offer by the beneficiary under the Duke ROFR upon receipt of any notice from such beneficiary that it elects either to exercise its rights with respect to such Offer or elects not to exercise such rights with respect thereto or, in the absence of any such notice, upon the expiration of the fifteen (15) day refusal period of such beneficiary without such beneficiary having exercised its rights pursuant to the Duke ROFR with respect to such Offer, Grantor shall immediately give written notice thereof to Grantee. The period of time during which Grantee may exercise the Right of First Refusal (a “Refusal Period”) as to the subject Offer shall begin upon the date such notice, along with a copy of the subject Offer, is deemed received by Grantee from Grantor pursuant to the terms and conditions of Section 7, below, and shall expire at 5:00 p.m., Atlanta, Georgia time, on the date thirty (30) days thereafter (with the first day of such thirty-day period being the first business day after the date on which Grantee is deemed to have received such written notice and such copy of the subject Offer).

 

(b) In the event that either: (i) Grantee gives written notice to Grantor of its intent not to exercise its Right of First Refusal as to the subject Offer, or (ii) Grantee does not give written notice to Grantor prior to the expiration of the applicable Refusal Period of Grantee’s exercise of its right to purchase the Property pursuant to the Right of First Refusal with respect to the subject Offer, then Grantor may proceed with a Conveyance of the Offer Property to the Offer Purchaser thereunder (or to any affiliate or assignee of the Offer Purchaser) on terms that are the same, in all material respects, as the terms and conditions set forth in the subject Offer (it being acknowledged that, without limitation of the foregoing, a purchase price less than ninety-five percent (95%) of the purchase price set forth in the applicable Offer shall be deemed to be a Conveyance on terms that are not the same, in all material respects, as the terms and conditions set forth in the subject Offer) such that the closing of such Conveyance occurs, and the deed from Grantor effecting such Conveyance is recorded in the Official Records of the Clerk of the Superior Court of Fulton County, Georgia, within six (6) months following the date Grantor shall have first given a copy of the subject Offer to Grantee (the “Permitted Offer Closing Period”). In the event such closing occurs, and such deed is so recorded, within the applicable six-month Permitted Offer Closing Period, then (i) concurrently with such closing, Grantor shall pay to Grantee one-half of the difference between (A) the effective per acre sales price payable in connection with such closing (whether payable in cash, as a note, or otherwise) multiplied by 5.819 acres, net of reasonable and customary closing costs, prorations, and brokerage commissions payable by Grantor at such closing, less (B) the Option Price, and (ii) this Agreement shall terminate upon the latest to occur of such closing, recordation of such deed, and payment of such amount to Grantee. Furthermore, in the event Duke Realty Limited Partnership (“Duke”) elects to purchase the Offer Property in accordance with the Duke ROFR, as defined in Section 13 hereof, then, under such circumstances, Grantor shall concurrently with the Duke closing, pay to Grantee one-half of the difference between (X) the effective per acre sales price payable in connection with such closing (whether payable in cash, as a note, or otherwise) multiplied by 5.819 acres, net of reasonable and customary closing costs, prorations, and brokerage commissions payable by Grantor at such closing, less (Y) the Option Price, and this Agreement shall terminate upon the latest to occur of such closing, recordation of such deed, and payment of such amount to Grantee. If the closing of such Conveyance does not so occur, or such deed is not so recorded, within such applicable six-month Permitted Offer Closing Period, however, then this Agreement shall remain in full force and effect (including with respect to any

 

2


other Offers and the subject Offer, whether or not then pending), and, without limiting the generality of the foregoing, in the event Grantor desires to proceed with a Conveyance of all or any portion of the Property pursuant to the subject Offer, Grantor shall again give the subject Offer to Grantee and the subject Offer shall be deemed to be a new Offer such that Grantee may again have the opportunity and right to exercise the First Refusal Right with respect thereto pursuant to the terms and conditions of this Agreement.

 

(c) In the event that Grantee gives written notice to Grantor prior to the expiration of the applicable Refusal Period of Grantee’s exercise of its right to purchase the Property pursuant to the Right of First Refusal with respect to the subject Offer, then Grantor shall purchase the Property from Grantor, and Grantor shall sell the Property to Grantee, in accordance with the terms and conditions hereof on or before the date one hundred twenty (120) days after the expiration of the applicable Refusal Period or any earlier date for the closing of such purchase and sale that Grantee may specify in its written notice to Grantor exercising its right to purchase the Property pursuant to the Right of First Refusal. In such event, the closing of such purchase and sale shall occur as follows:

 

(i) the purchase price for the Property (the “Purchase Price”) shall be equal to the Option Price (as hereinafter defined), plus, in the event the effective per acre sales price contained in the subject Offer for the Offer Property exceeds $463,997.25, an amount equal to 2.9095 multiplied by such per acre price excess amount (e.g., if such effective per acre sales price is $1,000,000.00 per acre, then the Purchase Price would be $1,559,500.01 [i.e., the difference between $1,000,000.00 and $463,997.25, multiplied by 2.9095] plus the Option Price); such Purchase Price shall be paid by Grantee to Grantor at the closing of such purchase and sale (the “Closing”) by certified funds or cashier’s check;

 

(ii) the purchase and sale shall otherwise be on the same terms and conditions as set forth in the subject Offer, including, without limitation, any “due diligence” period and termination right afforded to the prospective Offer Purchaser in connection therewith and any provisions regarding remedies (but in all events, (i) if Grantee fails to consummate the purchase and sale of the Property after exercising its Right of First Refusal and such failure constitutes a default by Grantee, Grantor shall be entitled to liquidated damages in an amount equal to the amount of Earnest Money required under the subject Offer that would be forfeited by the Offeror in the event such Offeror failed to consummate the purchase and sale of the Property where such failure would constitute a default by such Offeror under the purchase and sale agreement related thereto (or, in the event no Earnest Money is so required, then an amount equal to $20,000), as its sole and exclusive right and remedy in connection therewith, and this Agreement shall become null and void, and (ii) if Grantor fails to consummate the purchase and sale of the Property after any exercise of the Right of First Refusal by Grantee and such failure constitutes a default by Grantor, Grantee shall, among other remedies, be entitled to seek specific performance);

 

(iii) Grantor shall transfer and convey to Grantee at the Closing, good, marketable and insurable fee simple title to the Property free and clear of all liens, leases, encumbrances, encroachments, restrictions, covenants, assessments, charges, taxes,

 

3


agreements and easements, except for (A) easements, covenants and other restrictions affecting the Property as of the date of this Agreement, (B) such other easements, covenants and restrictions as are hereafter approved by Grantee, in writing (which approval shall not be unreasonably withheld, conditioned or delayed so long as such proposed easement, covenant or restriction would not materially adversely affect the use and development of the Property for office, research, and related uses or the value of the Property) (“Subsequently Approved Encumbrances”), and (C) the lien for taxes and other assessments not then due and payable. Grantor shall be obligated to remove and effect a release of any security title, security lien, security interest, and all monetary liens encumbering the Property on or before Closing. In the event Grantor for any reason cannot convey title to the Property to Grantee in the manner required by this subparagraph, then Grantee may, in addition to all other remedies it might have at law or in equity, either (A) rescind its election to exercise the Right of First Refusal, or (B) elect to cure any defect or defects in title and deduct the expense of curing such defect or defects from the Purchase Price. In relation to the foregoing, Grantor acknowledges and agrees that it shall not further encumber the Property following the date hereof without first receiving Grantee’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing or any other provision contained herein to the contrary, Grantee acknowledges and agrees that Grantor shall have the right, at any time, to grant security interests against the Property and/or the Entire Parcel in connection with any loans hereafter obtained by Grantor and that such granting of security interests against the Property and/or the Entire Parcel shall not be deemed a Conveyance for the purposes hereof nor shall the same constitute an event of default by Grantor hereunder; provided, however, that in no event shall this sentence be deemed to subordinate Grantee’s rights hereunder to any such security interests and such security interests shall in all events be subject and subordinate to the rights of Grantee hereunder; provided further, however, that in the event of a purchase by Grantee pursuant to the terms of this Section 1, Grantor shall remove and effect a release of all such security interests on or before the subject Closing.

 

(iv) At the Closing, Grantor shall execute and deliver the following to Grantee:

 

(A) An owner’s affidavit in form and substance customarily utilized in the State of Georgia and reasonably acceptable to Grantee and Grantee’s title insurance company relating to, among other things, ownership and possession of the Property, the improvements thereon, and the absence of liens on or indebtedness secured by the Property;

 

(B) A limited warranty deed in a form customarily utilized in the State of Georgia and reasonably acceptable to Grantee duly executed by an authorized officer or officers of Grantor for the purpose of conveying title to the Property to Grantee; and

 

(C) Such other documents (including, without limitation, a corporate resolution or other evidence of the authority of Grantor and its signatories to enter into such transaction) as may be reasonably required by Grantee or Grantee’s title

 

4


insurance company to convey title to the Property to Grantee as required by this Agreement or otherwise in connection with the Closing;

 

(v) Any and all ad valorem or similar taxes or assessments on the Property for the year in which the Closing occurs shall be prorated as of the date of the Closing. Grantor shall pay its own attorney fees and the State of Georgia transfer tax, and Grantee shall pay its own attorneys’ fees and the cost of any title insurance obtained by Grantee; each party shall otherwise bear and pay the costs incurred by such party in connection with such purchase and sale and Closing.

 

(d) In the event that Grantor permits any prospective purchaser or its agents to conduct physical inspections or surveys of the Property prior to an Offer (it being acknowledged that a mere “showing” of the Property or a “walk through” by any such prospective buyer or its agents without conducting physical inspections or surveys that a buyer would customarily inspect in connection with its due diligence relating to a property shall not be deemed to be “conducting physical inspections or surveys” pursuant to this subparagraph), Grantor shall immediately give written notice thereof to Grantee and shall permit Grantee to conduct inspections, surveys and other due diligence activities with respect to the Property prior to any Offer.

 

(e) Notwithstanding any other provision contained herein to the contrary, unless Grantee shall have previously exercised its right to purchase the Property pursuant to the terms hereof, Grantee’s Right of First Refusal shall automatically terminate and be of no further force or effect (i) if Grantee, as Subtenant, terminates the Sublease pursuant to Section 2.2(a) thereof, upon the date on which Grantor, as Sublandlord, receives written notice thereof from Grantee, as Subtenant, or (ii) if Grantor, as Sublandlord, terminates the Sublease pursuant to Section 2.2(a) thereof or otherwise terminates the Sublease because of a default thereunder by Grantee, as Subtenant, the date on which the Sublease so terminates. In the event Grantee has exercised its right to purchase the Property pursuant to the terms hereof prior to the date on which Grantee’s Right of First Refusal so terminates, then each of Grantor and Grantee shall proceed to the Closing of the purchase and sale of the Property in accordance with the terms hereof.

 

(f) In the event of the termination of Grantee’s Right of First Refusal and Purchase Option pursuant to Subparagraph (b) or (e), above, Grantee shall execute and deliver to Grantor such documents of release as are reasonable and necessary to remove the encumbrance of this Agreement from the Property and/or the Entire Parcel (if applicable) as may be reasonably requested by Grantor.

 

2. PURCHASE OPTION. In addition to the Right of First Refusal, Grantor hereby grants to Grantee an option to purchase the Property (the “Purchase Option”), subject and subordinate only to the Duke ROFR (as hereinafter defined), at the time, for the consideration, and upon the terms and conditions set forth below:

 

(a) Subject to the provisions below, the term of the Purchase Option (“Option Term”) shall commence upon the date hereof and shall run until the date the term of the Sublease expires or the Sublease is otherwise terminated. Subject to the provisions below, the Purchase Option

 

5


may be exercised by Grantee during the Option Term by written notice of such exercise from Grantee to Grantor delivered to Grantor’s address set forth below.

 

(b) In the event that Grantee exercises its Purchase Option by giving written notice thereof to Grantor during the Option Term, then this Agreement shall become a contract of sale between Grantor and Grantee on all the terms and conditions set forth herein and Grantor shall purchase the Property from Grantor, and Grantor shall sell the Property to Grantee, in accordance with the terms and conditions hereof on or before the date one hundred twenty (120) days after the date on which Grantee gives Grantor such written notice or any earlier date for the closing of such purchase and sale that Grantee may specify in such written notice to Grantor. In such event, the closing of such purchase and sale shall occur as follows:

 

(i) the purchase price (the “Option Price”) to be paid by Grantee to Grantor for the Property shall be Two Million Seven Hundred Thousand and No/100 Dollars $2,700,000.00, and such Option Price shall be paid by Grantee to Grantor at the closing of such purchase and sale (the “Option Closing”) by certified funds or cashier’s check;

 

(ii) Grantor shall transfer and convey to Grantee at the Option Closing, good, marketable and insurable fee simple title to the Property free and clear of all liens, leases, encumbrances, encroachments, restrictions, covenants, assessments, charges, taxes, agreements and easements, except for (A) easements, covenants and other restrictions affecting the Property as of the date of this Agreement, (B) such other easements, covenants and restrictions as are hereafter approved by Grantee, in writing (which approval shall not be unreasonably withheld, conditioned or delayed so long as such proposed easement, covenant or restriction would not materially adversely affect the use and development of the Property for office, research, and related uses or the value of the Property), and (C) the lien for taxes and other assessments not then due and payable. Grantor shall be obligated to remove all monetary liens encumbering the Property on or before the Option Closing. In the event Grantor for any reason cannot convey title to the Property to Grantee in the manner required by this subparagraph, then Grantee may, in addition to all other remedies it might have at law or in equity, either (A) rescind its election to exercise the Purchase Option, or (B) elect to cure any defect or defects in title and deduct the expense of curing such defect or defects from the Option Price. In relation to the foregoing, Grantor acknowledges and agrees that it shall not further encumber the Property following the date hereof without first receiving Grantee’s prior written consent, such consent not to be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing or any other provision contained herein to the contrary, Grantee acknowledges and agrees that Grantor shall have the right, at any time, to grant security interests against the Property in connection with any loans hereafter obtained by Grantor and that such granting of security interests against the Property shall not constitute an event of default by Grantor hereunder; provided, however, that in no event shall this sentence be deemed to subordinate Grantee’s rights hereunder to any such security interests and such security interests shall in all events be subject and subordinate to the rights of Grantee hereunder; provided further, however, that in the event of a purchase by Grantee pursuant to the terms of this Section 2, Grantor shall remove and effect a release of all such security interests on or before the Option Closing.

 

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(iii) At the Option Closing, Grantor shall execute and deliver to Grantee the documents and instruments described in subparagraph (iv) of Section 1(c), above, and the references therein to “Closing” shall be deemed to refer to the Option Closing.

 

(iv) Any and all ad valorem or similar taxes or assessments on the Property for the year in which the Option Closing occurs shall be prorated as of the date of the Option Closing. Grantor shall pay its own attorney fees and the State of Georgia transfer tax, and Grantee shall pay its own attorneys’ fees and the cost of any title insurance obtained by Grantee; each party shall otherwise bear and pay the costs incurred by such party in connection with such purchase and sale and Option Closing.

 

(c) Notwithstanding the foregoing, unless Grantee shall have previously exercised its Purchase Option pursuant to the terms hereof, Grantee’s Purchase Option shall automatically terminate and be of no further force or effect (i) if Grantee, as Subtenant, terminates the Sublease pursuant to Section 2.2(a) thereof, upon the date on which Grantor, as Sublandlord, receives written notice thereof from Grantee, as Subtenant, or (ii) if Grantor, as Sublandlord, terminates the Sublease pursuant to Section 2.2(a) thereof or otherwise terminates the Sublease because of a default thereunder by Grantee, as Subtenant, the date on which the Sublease so terminates. In the event Grantee has exercised the Purchase Option pursuant to the terms hereof prior to the date on which the Purchase Option so terminates, then each of Grantor and Grantee shall proceed to the Option Closing (as hereinafter defined) in accordance with the terms hereof.

 

(d) Further notwithstanding the foregoing, Grantee acknowledges and agrees that in the event it does not exercise its Right of First Refusal with respect to any Offer during the applicable Refusal Period pursuant to the terms and provisions of Section 1, above, and Grantor thereafter accepts such Offer, then Grantee shall have no right to exercise its Purchase Option at anytime during the applicable Refusal Period until the earlier of (i) the expiration of the applicable six-month Permitted Offer Closing Period without the closing of such Conveyance, and the recordation of the deed conveying the Offer Property to the Offer Purchaser, having occurred, or (ii) the termination of the subject Offer or the purchase agreement related thereto. Furthermore, notwithstanding any other provision contained herein to the contrary, Grantee acknowledges and agrees that, in the event the closing with respect to an Offer occurs, and such deed is so recorded, within the applicable six-month Permitted Offer Closing Period, then this Agreement shall terminate with respect to that portion of the Property that is the subject of such closing and deed, as set forth in Subparagraph 1(b), above.

 

(e) During the Option Term, for so long as this Agreement is in effect, Grantee and Grantee’s agents and designees shall have the right to enter the Property for the purposes of inspecting the Property, conducting soil tests, and making surveys, mechanical and structural engineering studies, environmental assessments, and any other investigations and inspections as Grantee may reasonably require to assess the condition of the Property; provided, however, that such activities by or on behalf of Grantee on the Property shall not materially damage the Property; and provided further, however, that Grantee shall indemnify and hold Grantor harmless from and against any and all claims for injury to person or damage to property, to the extent directly resulting from the activities of Grantee or Grantee’s agents or designees on the Property, excluding, however, claims arising out of the discovery of, or the non-negligent accidental or inadvertent release of, any hazardous materials resulting from Grantee’s investigations (unless

 

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such hazardous materials are brought onto the Property by Grantee or Grantee’s agents, employees, consultants or contractors).

 

3. PROFIT SHARING BY GRANTOR. In the event Grantee purchases the Property pursuant to either its Right of First Refusal or the Purchase Option set forth herein and thereafter sells the Property such that the closing of such sale and the recordation of the deed in connection therewith occur within twelve (12) months after the Closing or the Option Closing, as the case may be, then concurrently with the closing of such sale, Grantee shall pay to Grantor one-half of the difference between (A) the sales price payable in connection with such closing (whether payable in cash, as a note, or otherwise), net of reasonable and customary closing costs, prorations, and brokerage commissions payable by Grantor at such closing, less (B) the price paid by Grantee to Grantor for the Property and any out of pocket costs and expenses incurred or paid by Grantee in acquiring the Property.

 

4. GRANTOR RIGHT TO DEVELOP. Notwithstanding any other provision contained herein to the contrary, Grantor and Grantee acknowledge and agree that, subject to the terms of this Section 4, Grantor shall have the right at any time to develop the Property for its own use or sell the Property to a third party for the purposes of the development of the Property in connection with a bona fide sale/lease back transaction by Grantor (collectively referred to as a “Grantor Development Transaction”). For purposes of Section 1 hereof, any Grantee Development Transaction shall not be deemed to constitute an Offer or a Conveyance and Grantee’s Right of First Refusal shall not apply to any such transaction. In the event Grantor desires to pursue a Grantor Development Transaction, Grantor shall provide notice of such election to Grantee (a “Grantor Development Notice”). In the event any remaining portion of the Adjacent Parcel remains a developable lot at the time such Grantor Development Notice is given to Grantee, Grantor shall grant to Grantee a right of first refusal and purchase option to such portion of the Adjacent Parcel as Grantee shall so elect (provided that the remainder of the Adjacent Parcel, if any, remains a developable lot as determined by Grantor in its reasonable discretion) pursuant to the terms and conditions set forth in the second succeeding paragraph of this Section 4.

 

Commencing on the date on which Grantee is deemed to have received such Grantor Development Notice, Grantee may not exercise its Purchase Option with respect to the Property until the earlier of (i) nine (9) months after such date, or (ii) where Grantor is entering into a sale/leaseback transaction with a third party, the date on which the purchase and sale agreement or similar agreement with respect to the Grantor Development Transaction terminates (in the event of any such termination, Grantor shall immediately give written notice thereof to Grantee); provided, however, upon the occurrence of either of (x) the consummation of the purchase and sale of the Property by such third party and the entering into of a binding lease back agreement between Grantor and such third party within such nine-month period, or (y) in the event Grantor develops the Property for its own use, the completion of final plans and specifications for the subject building to be developed by Grantor on the Property and the breaking of ground on the subject Property in connection with such development within such nine-month period shall automatically and forever terminate the Right of First Refusal and the Purchase Option set forth in this Agreement with respect to the Property (but not any such right and option granted with respect to any other portion of the Adjacent Parcel). In the event of the termination of Grantee’s Right of First Refusal and Purchase Option as to the

 

8


Property pursuant to the above provisions, Grantee shall execute and deliver to Grantor such documents of release as are reasonable and necessary to remove the encumbrance of this Agreement from the Property as may be reasonably requested by Grantor.

 

The right of first refusal and purchase option granted on such other portion of the Adjacent Parcel, if any, pursuant to clause (ii) of the final sentence of the first paragraph of this Section 4 shall be on the same terms and conditions as set forth in this Agreement with respect to the Property, except that the purchase option price shall be equal to $463,997.25 multiplied by the number of acres in the tract so selected by Grantee. Furthermore, Grantor shall enter into a written agreement with Grantee evidencing such new right of first refusal and purchase option, which agreement shall be in substantially the form hereof and reasonably acceptable to Grantee, including a short form thereof to be recorded in the Official Records of the Clerk of Superior Court of Fulton County, Georgia. In the event that Grantee again becomes entitled to exercise its Right of First Refusal and Purchase Option with respect to the Property after the expiration of the aforesaid nine-month period or after the date on which the purchase and sale agreement or similar agreement with respect to the Grantor Development Transaction terminates, as set forth in the preceding paragraph of this Section 4 and Grantor confirms the same, in writing, to Grantee, then the right of first refusal and purchase option granted on such other portion of the Adjacent Parcel, if any, shall terminate, and Grantee shall execute and deliver to Grantor such documents of release as are reasonable and necessary to remove the encumbrance of such right of first refusal and purchase option from the such other portion of the Adjacent Parcel as may be reasonably requested by Grantor. If such right of first refusal and purchase option granted on such other portion of the Adjacent Parcel, if any, is exercised by Grantee with respect to such portion of the Adjacent Parcel prior to Grantee so again becoming entitled to exercise its Right of First Refusal and Purchase Option with respect to the Property, then the Right of First Refusal and Purchase Option with respect to the Property shall terminate.

 

5. ASSIGNMENT. This Agreement and the Right of First Refusal and Purchase Option may be assigned by Grantee only with the prior written consent of Grantor; provided, however, that Grantee may assign this Agreement and the Right of First Refusal and Purchase Option without the prior written consent of Grantor to Grantee’s successor-in-interest in connection with any merger, consolidation, restructuring, sale of substantially all of the assets of Grantee involved in the operation of the business then located in the Office Building Property, or similar transaction.

 

6. SHORT FORM OF AGREEMENT. Grantee and Grantor agree to execute and deliver a short-form of this Agreement for recording in the real property records of Fulton County, Georgia in order to place of record and give notice to third parties of the Right of First Refusal and the Purchase Option. The form of such short-form of this Agreement shall be as set forth on Exhibit “C” attached hereto. It is understood that such short-form of this Agreement shall be for purposes of recordation only and shall not in any way modify or amend or otherwise affect this Agreement.

 

7. NOTICE. All notices and other communications hereunder shall be in writing and shall be deemed to have been given and received only if and when (i) personally delivered, or (ii) when delivered (and receipted for) by an overnight delivery service, or (iii) when sent by facsimile or telecopier machine, provided that such facsimile or telecopier machine generates a

 

9


written confirmation of transmission and such notice or other communication is, on the same day as the day of such transmission, also given to the recipient party by one of the methods specified in clause (i) or (ii), above. In all cases, such notices and other communications shall be addressed as follows:

 

If to the Grantor to:

  Radiant Systems, Inc.    
    3925 Brookside Parkway    
    Alpharetta, Georgia 30022    
    Attention: Chief Executive Officer    
    Facsimile: (770) 360-7325    

with a copy in like manner to:

  Smith, Gambrell & Russell, LLP    
    Promenade II, Suite 3500    
    1230 Peachtree Road    
    Atlanta, Georgia 30309-3592    
    Attention: Arthur Jay Schwartz, Esq.    
    Facsimile: (404) 685-6932    

If to the Grantee to:

  Wave Enterprise Systems, Inc.    
    3905 Brookside Parkway    
    Alpharetta, Georgia 30022    
    Attention: Erez Goren, Chief Executive Officer    
    Facsimile: (770) 360-7448    

with a copy in like manner to:

  Kilpatrick Stockton LLP    
    1100 Peachtree Street, N.E.    
    Suite 2800    
    Atlanta, Georgia 30309    
    Attention: Larry D. Ledbetter    
    Facsimile: (404) 541-3276    
    and    
    Attention: Bruce D. Wanamaker    
    Facsimile: (404) 541-3437    

 

The Grantor, on the one hand, and the Grantee, on the other hand, may change the address(es) for the giving of notices and communications to it, as the case may be, and/or copies thereof, by written notice to the other party in conformity with the foregoing, which change of address shall only be effective upon receipt of such written notice by such other party.

 

8. GOVERNING LAW. This Agreement and the rights and obligations of the parties hereto shall be governed by and construed according to the laws of the State of Georgia.

 

9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the parties relating to the terms and conditions of the Right of First Refusal and Purchase Option. This Agreement is intended as a complete and exclusive statement of the terms and conditions of the Right of First Refusal and the Purchase Option and supersedes all prior and concurrent promises, representations, negotiations, discussions and agreements that may have

 

10


been made in connection with the subject matter hereof. No modification or amendment of this Agreement shall be binding upon the parties unless such modification or amendment is in writing and signed by Grantee and Grantor.

 

10. EFFECT OF AGREEMENT. Notwithstanding any provision to the contrary set forth herein, nothing contained herein, express or implied, is intended to, nor shall it: (i) confer on any person or entity other than the parties hereto and their respective heirs, legal representatives, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, or (ii) constitute the parties hereto partners or participants in a joint venture. This Agreement shall run with the land which comprises the Property and no conveyance, transfer or encumbrance of such land shall defeat or adversely affect this Agreement. Accordingly, this Agreement shall be binding on Grantor and Grantor’s successors and assigns and on Grantor’s successors-in-title with respect to the Property.

 

11. SEVERABILITY. In the event any provision of this Agreement is determined to be invalid, prohibited or unenforceable, the remaining provisions of this Agreement shall remain in full force and effect without regard to such invalidity, prohibition or unenforceability.

 

12. TIME OF ESSENCE. Time is of the essence of this Agreement.

 

13. ACKNOWLEDGEMENT OF PRE-EXISTING RIGHTS. Notwithstanding any other provision contained herein to the contrary, Grantee acknowledges and agrees that Grantee’s Right of First Refusal and Purchase Option are subject and subordinate to the rights of Duke in and to the Property and Entire Parcel (the “Duke ROFR”) as granted by Grantor pursuant to that certain Third Amendment to Lease Agreement by and between Grantor and Duke relating to the Office Building Property dated as of December             , 2001. This Section 13 shall not affect the obligation of Grantor to pay Grantee any portion of the sales price payable in connection with any exercise of the Duke ROFR, as set forth in Section 1(b), above.

 

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IN WITNESS WHEREOF, the parties hereto, acting through their duly authorized officers, have executed this Agreement as of the day and year first above written.

 

GRANTOR:

 

RADIANT SYSTEMS, INC.,
a Georgia corporation

 

By:                                                                                                  

Title:                                                                                              

[Corporate Seal]

GRANTEE:

 

WAVE ENTERPRISE SYSTEMS, INC.,
a Georgia corporation

 

By:                                                                                                  

Title:                                                                                              

[Corporate Seal]

 

 

 

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EXHIBIT “A”

 

ATTACH LEGAL DESCRIPTION OF PROPERTY

 


EXHIBIT “B”

 

ATTACH LEGAL DESCRIPTION OF ENTIRE PARCEL

 


EXHIBIT “C”

 

AFTER RECORDING, RETURN TO:

Thomas A. Spillman, Esquire

Suite 3100, Promenade II

1230 Peachtree Street

Atlanta, Georgia 30309-3592

 

SHORT FORM RIGHT OF FIRST REFUSAL AND PURCHASE OPTION

 

THIS SHORT FORM OF RIGHT OF FIRST REFUSAL AND PURCHASE OPTION (this “Short Form Agreement”) made effective as of             , 2003, by and between RADIANT SYSTEMS, INC., a Georgia corporation (hereinafter referred to as “Seller”) and WAVE ENTERPRISE SYSTEMS, INC., a Georgia corporation (hereinafter referred to as “Purchaser”);

 

W I T N E S S E T H :

 

In consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows:

 

1. Property. Subject to the terms and conditions of that certain Right of First Refusal and Purchase Option Agreement between the parties hereto, dated of even date herewith (the “Agreement”), all of which terms and conditions are incorporated herein by reference, Seller has granted and by these presents does hereby grant to Purchaser and Purchaser has accepted, and by these presents does hereby accept from Seller, a right of first refusal and purchase option to purchase that certain parcel of improved real property located in Fulton County, Georgia, the same being more particularly described on Exhibit “A” attached hereto and by reference made a part hereof (the “Property”). Such right of first refusal and purchase option shall expire and terminate on February 28, 2013, subject to earlier termination pursuant to the terms and provisions of the Agreement.

 

2. Incorporation of Right of First Refusal and Purchase Option. The provisions set forth in the Agreement are hereby incorporated into this Short Form Agreement as if set out in full herein. Nothing contained herein is intended to or does change or modify any of the terms or provisions of the Agreement, or the rights, duties, obligations, conditions and agreements created thereby, all of which remain in full force and effect. In the event of any conflict or inconsistency between the terms of this Short Form Agreement and the terms of the Agreement, the terms of the Agreement shall govern and control for all purposes.

 

3. Miscellaneous. This Short Form Agreement is intended to be a Georgia contract and shall be so construed. All capitalized terms used herein shall have the same meaning designated for such terms as in the Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Short Form Agreement to be executed under seal, as of the date first above written.

 

Signed, sealed and delivered in the presence of:

         

SELLER:

 

RADIANT SYSTEMS, INC., a Georgia corporation


Witness

         

By:



Notary Public

         

Title:


             
[AFFIX NOTARIAL SEAL & STAMP]           [Corporate Seal]

 

Signed, sealed and delivered in the presence of:

         

PURCHASER:

 

WAVE ENTERPRISE SYSTEMS, INC., a Georgia corporation


Witness

         

By:



Notary Public

         

Title:


             
[AFFIX NOTARIAL SEAL & STAMP]           [Corporate Seal]

 

2

EX-10.6 10 dex106.htm SUBLEASE AND FACILITIES AGREEMENT Sublease and Facilities Agreement

EXHIBIT 10.6

 

SUBLEASE AND FACILITIES AGREEMENT

(3905 Brookside Parkway, Alpharetta, Georgia)

 

THIS SUBLEASE AND FACILITIES AGREEMENT (“Sublease”) is dated as of the                  day of         , 2003 (the “Effective Date”), by and between RADIANT SYSTEMS, INC., a Georgia corporation (“Sublandlord”), and WAVE ENTERPRISE SYSTEMS, INC., a Georgia corporation (“Subtenant”).

 

1. Demise. Sublandlord does hereby demise and sublet unto the Subtenant and the Subtenant does hereby take and hire from the Sublandlord for the term and upon the terms and conditions set forth in this Sublease, that certain office building located in Brookside Office Park, Fulton County, Georgia, being the entirety of the “Leased Premises” which is the subject of and described in the Lease (as defined in Section 3.1 below), together with all improvements thereon and all licenses, rights, privileges and easements appurtenant thereto (said premises and appurtenances being hereinafter collectively referred to as the “Premises”).

 

2. Term

 

2.1 Term of Sublease. The term of this Sublease shall commence on the Delivery Date (as hereinafter defined) and shall end upon the expiration or earlier termination of the initial term of the Lease, which is presently scheduled to expire on February 28, 2013 (“Termination Date”). Subtenant shall have no renewal or extension options with respect to the term of this Sublease. Rent and other charges payable by Subtenant under this Sublease shall commence on the Delivery Date. For purposes of this Sublease the “Delivery Date” means the date upon which Sublandlord delivers possession of the Premises to Subtenant.

 

2.2 Early Termination.

 

(a) Beginning upon the third anniversary of the Delivery Date, Sublandlord and Subtenant each shall have the right to terminate this Sublease prior to the Termination Date (without the payment of any termination fee or similar compensation) by, on or after such third anniversary, giving the other party eighteen (18) months prior written notice in the manner and to the address set forth in Section 11 hereof (the “Early Termination Notice”); provided, however, that if Subtenant gives Sublandlord the Early Termination Notice, Sublandlord shall thereafter have the right to accelerate the early termination of this Sublease by giving Subtenant one hundred twenty (120) days prior written notice of said accelerated early termination, in which case this Sublease shall terminate on the date one hundred twenty (120) days after Subtenant’s receipt of such written notice from Sublandlord.

 

(b) Subtenant’s right to terminate this Sublease as set forth in Subparagraph (a) above shall be of no further force and effect if Subtenant exercises its first refusal right or option

 

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to purchase the “Property” as set forth in that certain Right of First Refusal and Option Agreement dated of even date herewith between Sublandlord and Subtenant but said right to terminate this Sublease shall be reinstated if Subtenant does not close on the purchase of the Property pursuant to such election.

 

3. Title to Demised Premises; Condition.

 

3.1 Representations and Warranties. As an inducement to the Subtenant entering into this Sublease, and with knowledge that the Subtenant will rely thereon, the Sublandlord represents and warrants as follows:

 

(a) Sublandlord is not the owner of the Premises, but holds possession of the same by virtue of that certain Lease Agreement dated March 17, 2000, by and between Duke-Weeks Realty Limited Partnership, an Indiana limited liability partnership, as landlord (the “Landlord”), and Sublandlord, as tenant, as amended by that certain First Amendment to Lease Agreement dated as of an unspecified date in calendar year 2000, that Second Amendment to Lease Agreement dated as of an unspecified date in calendar year 2000, and that Third Amendment to Lease Agreement dated March 5, 2002 (as so amended, the “Lease”), a true, correct and complete copy of which (including all amendments thereto) is attached hereto as Appendix A.

 

(b) The Lease is in full force and effect, has not been modified, supplemented or amended, or otherwise changed except as set forth in the aforesaid First Amendment, Second Amendment, and Third Amendment, and is the entire agreement between Landlord and Sublandlord with respect to the Premises and the use and occupancy thereof. Sublandlord is not in default under the Lease and to the best of Sublandlord’s knowledge, no circumstance, act, omission, or event has occurred that would cause Landlord or Sublandlord to be in default thereunder with the giving of notice or the passage of time, or both.

 

(c) Sublandlord is the true and lawful owner of all of the right, title and interest of the “tenant” or “lessee” in, to and under the Lease, free and clear of all claims, liens and encumbrances of any kind or nature whatsoever.

 

3.2 Subordinate Position of Sublease. This Sublease is and shall be at all times subject and subordinate to the Lease.

 

4. Lease.

 

4.1 Incorporation by Reference. The terms and conditions of the Lease are incorporated herein by this reference, except for Sections 18.01 (as it relates to “Tenant”), 31.01, 31.02, 31.03 and 31.04 of the Lease. Therefore, for the purposes of this Sublease,

 

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subject to the terms and conditions of this Sublease, wherever in such incorporated terms and provisions of the Lease the word “Landlord” is used it shall be deemed to mean the Sublandlord herein, the word “Tenant” is used it shall be deemed to mean the Subtenant herein, the term “Leased Premises” is used it shall be deemed to mean the Premises herein, and the word “Lease” is used it shall be deemed to mean this Sublease.

 

4.2 Subtenant’s Obligations. Subtenant shall comply with or perform all duties and obligations of the “tenant” or “lessee” under the Lease arising with respect to time periods after the Delivery Date during the term of this Sublease, except to the extent otherwise provided in this Sublease, where the failure to do so would constitute a breach or a violation of any of the terms, covenants or conditions of the Lease or which would cause the Lease to be terminated or forfeited by reason of any right of termination or forfeiture reserved or vested in the Landlord. Notwithstanding the foregoing or any other term or condition of this Sublease, in the event of any conflict or inconsistency between any term or provision of the Lease and any term or provision of this Sublease with respect to the rights, duties, obligations, responsibilities, or liabilities or Subtenant, the terms and provisions of this Sublease shall govern and control. Subtenant agrees to indemnify and hold Sublandlord harmless from all liability, judgments, costs, damages, claims or demands arising out of Subtenant’s breach of the covenants and agreements set forth in this Section 4.2.

 

4.3 Sublandlord’s Obligations. Sublandlord agrees not to amend, modify or otherwise change the Lease in any way whatsoever, or to terminate the Lease or the term thereof, without Subtenant’s prior written approval. Sublandlord agrees to maintain the Lease during the entire term of this Sublease, subject, however, to any earlier automatic termination of the Lease for reasons outside of Sublandlord’s control (e.g., condemnation) (provided, however, that in the event any termination of the Lease is not automatic but may be exercised by the “tenant” or “lessee” thereunder, Sublandlord shall not exercise such termination right without Subtenant’s prior written approval), and to comply with or perform all duties and obligations of the “tenant” or “lessee” thereunder (except to the extent that Subtenant has agreed to perform such duties and obligations under the terms and conditions of this Sublease), including, without limitation, the payment of Base Rental, Additional Rent, and other rent, charges and fees payable thereunder. Sublandlord agrees to indemnify and hold Subtenant harmless from all liability, judgments, costs, damages, claims or demands arising out of Sublandlord’s breach of the covenants and agreements set forth in this Section 4.3.

 

4.4 Sublandlord’s Non-responsibility for Services.

 

(a) Subtenant acknowledges that Sublandlord will not furnish to Subtenant, or bear the cost of, any services or repairs of any kind to be provided by Landlord under the Lease (hereinafter collectively “Landlord Services”), and Subtenant will look solely to the Landlord for the providing and performance of

 

-3-


all Landlord Services, if any, and will not seek or require Sublandlord to provide or perform the same, nor shall Subtenant make any claim upon Sublandlord for any failure or improper performance of such obligation of Landlord respecting such Services unless the same arises out of or in connection with any act or omission of Sublandlord or any breach by Sublandlord of any of the terms or provisions of this Sublease. Sublandlord agrees that it will use all commercially reasonable efforts to enforce the duties and obligations of Landlord under the Lease (including, without limitation, such duties and obligations relating to the provision of Landlord’s Services) and to cause Landlord to perform and comply with such duties and obligations, and any such enforcement shall be carried out by counsel reasonably acceptable to Sublandlord and Subtenant, at Subtenant’s cost and expense (except that if attorneys’ fees or similar costs and expenses are recovered from Landlord, Subtenant shall be entitled to reimbursement for such costs and expenses to the extent of such recovery); Subtenant shall be entitled to participate in directing any such enforcement, and Sublandlord shall reasonably cooperate in good faith with Subtenant in connection therewith. Additionally, Sublandlord shall cooperate with Subtenant in any effort by Subtenant to enforce such duties and obligations or to cause Landlord to perform and comply with same.

 

(b) Without limiting the generality of Section 4.4(a) above, it is agreed that (i) Sublandlord’s obligations to Subtenant hereunder with respect to the Premises shall be no greater than Landlord’s obligations to Sublandlord under the Lease with respect thereto; (ii) Sublandlord shall be required to perform the Landlord’s obligations to the Subtenant hereunder with respect to the Landlord Services only to the extent that Landlord has performed its similar obligations under the Lease with respect thereto; (iii) Subtenant shall have no greater rights against Sublandlord hereunder with respect to the Landlord Services than the Sublandlord would have against Landlord under the Lease with respect thereto; and (iv) if Subtenant shall be entitled to recover damages by reason of any breach or failure with respect to Landlord’s obligations, Subtenant may recover such damages from Sublandlord only to the extent that Sublandlord recovers damages from Landlord in connection therewith, except that such limitation shall not apply to the extent any such breach or failure arises out of or in connection with any act or omission of Sublandlord or to the extent any damages from Landlord are reduced or offset by any act or omission of Sublandlord.

 

5. Rent.

 

5.1 Payment of Base Rental. Commencing on the Delivery Date, Subtenant shall pay to Sublandlord (at the address for Sublandlord set forth in Section 11 below), without notice, demand, set off or deduction, Base Rental at the per annum rate payable by Sublandlord as specified in Section 3.01 of the Lease, which Base Rental shall be payable

 

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in equal monthly installments on the first day of each calendar month during the balance of the term hereof, except that if the Delivery Date occurs on a date other than the first day of a calendar month or the term of this Sublease expires or terminates on other than the last day of a calendar month, then the monthly installment of the Base Rental and other charges shall be prorated for the remaining days of that calendar month.

 

5.2 Additional Rent. During the term of this Sublease, upon receipt of notice from Sublandlord, Subtenant shall pay to Sublandlord (at the address for Sublandlord as set forth in Section 11 below), at the time or times set forth in said notice without set-off or deduction, Additional Rent payable by Sublandlord as set forth in Section 3.02, 3.04 and 3.05 of the Lease; provided, however, that Subtenant shall not be obligated to pay any ad valorem taxes that are abated or otherwise not due and payable with respect to the Premises or any fixtures or personal property therein.

 

6. Permitted Use. Subtenant shall use and occupy the Premises only for purposes that are not prohibited by the Lease and for no other purpose whatsoever.

 

7. Insurance. Any insurance required to be maintained by Subtenant shall name Sublandlord, Landlord and their respective designees in interest as additional insureds, and any waiver of subrogation required under this Sublease shall extend to and benefit both Sublandlord and Landlord.

 

8. Condition of the Premises. Subtenant acknowledges that Subtenant has inspected the Premises and hereby accepts the Premises in its existing condition “AS IS,” “WHERE IS” and “WITH ALL FAULTS.” Subtenant acknowledges that Sublandlord has afforded Subtenant the opportunity for, and that Subtenant has undertaken, investigations, examinations, and inspections of the Premises and has determined that the Premises is suitable for Subtenant’s intended use, and agrees that Subtenant shall bear full responsibility for any special requirements in connection with Subtenant’s use of the Premises for any use other than the use for which the Premises is currently being used and occupied or uses similar to such current use. Sublandlord shall not have any obligation to make any improvements to the Premises as a condition of delivery of the Premises under this Sublease.

 

9. Leased FF&E. In connection with this Sublease, Sublandlord hereby leases to Subtenant (i) all of the furniture, fixtures, and equipment and similar property located in the Premises as of the date hereof (including, without limitation, chairs, desks, conference and other tables, computers, printers, monitors, video and presentation equipment, trade-show equipment, training equipment, telephone equipment, and lab equipment but excluding all mailroom equipment and all of the training equipment and furniture in the training room that is shared by Sublandlord and Subtenant as set forth in Section 10.1 hereof) (hereinafter collectively referred to as the “On-Site FF&E”), and (ii) that certain hosting equipment currently located at                     , Lithia Springs, Georgia, which hosting equipment is referenced in or contemplated by that certain                      Agreement dated                      by and between

 

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Sublandlord and IBM (collectively, the “Off-Site Hosting Equipment”) (the On-Site FF&E and the Off-Site Hosting Equipment are herein collectively referred to as the “Leased FF&E”; Exhibit “A” attached hereto and incorporated herein is intended to describe and list the Leased FF&E, it being acknowledged and agreed, however, that although the parties have attempted to prepare Exhibit “A” to accurately reflect the items included in the Leased FF&E, the parties acknowledge that it may not be entirely accurate, that the Leased FF&E is intended to include all of the property described in clauses (i) and (ii) of this sentence, and that in the event of any dispute or disagreement regarding the accuracy of Exhibit “A”, the parties shall act reasonably and in good faith in order to resolve such dispute or disagreement). Subtenant agrees to maintain, or cause to be maintained, the Leased FF&E in good condition and repair throughout the term of this Sublease, subject to normal wear and tear, casualty, and obsolescence, and, subject to the next paragraph, to return the Leased FF&E to Sublandlord on or before the Termination Date. The leasing of such Leased FF&E shall be deemed included in the rent otherwise payable hereunder by Subtenant, and Subtenant shall not be obligated to pay any base rental, additional rent, or other charge or fee in connection with the use or leasing of such Leased FF&E.

 

During that portion of the term of this Sublease occurring prior to the third anniversary of the Delivery Date, by giving written notice to Sublandlord, Subtenant may purchase all or any portion of the Leased FF&E (other than chairs, desks, conference and other tables, and other furniture) at a purchase price equal to Sublandlord’s then book value therefor. From and after the third anniversary of the Delivery Date, by giving written notice to Sublandlord, Subtenant may purchase all or any portion of the Leased FF&E (other than chairs, desks, conference and other tables, and other furniture) for an aggregate purchase price of One Dollar ($1.00). In the event Subtenant elects to purchase all or any portion of such Leased FF&E pursuant to either of the two preceding sentences, Sublandlord shall convey such Leased FF&E to Subtenant, and in order to effect and evidence such conveyance, Sublandlord shall, upon receipt of Subtenant’s written notice of purchase and the applicable purchase price therefor, execute and deliver to Subtenant a Bill of Sale with respect to such Leased FF&E, which Bill of Sale shall contain a limited title warranty and shall otherwise be in a form and on terms and conditions reasonably acceptable to Subtenant.

 

10. Shared Facilities.

 

10.1 Access to Subtenant’s Facilities. Subject to reasonable scheduling requirements and to Sublandlord’s payment of any postage costs, video conferencing or telephone expenses, or similar costs and expenses incurred in connection with such access, Subtenant hereby agrees to give Sublandlord access to the mail room and training room located on the first floor of the Premises, as approximately depicted on the floor plan attached hereto as Exhibit “B”, including access during non-business hours. During any such access, Sublandlord shall not enter or access other portions of the Premises, access any records or files or any computer(s) or computer system(s) (including, without limitation, e-mail files), and shall not interfere with or disrupt the operation of Subtenant’s

 

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business at the Premises. In the event Sublandlord desires to use such mail room and Subtenant is then using such room for the sorting, storage, or processing of mail, facsimile messages, or other communications or deliveries, Sublandlord’s use of such room shall be subject to reasonable rules and regulations of Subtenant, including the right of Subtenant to provide for Sublandlord to be accompanied by Subtenant or any of its employees, agents, or designees in connection with any such use. Any assignment or other transfer of this Sublease or any sub-subleasing of the Premises by Subtenant shall be made subject to the covenants and agreements of Subtenant set forth in this Section 10.1.

 

10.2 Access to Sublandlord’s Facilities. So long as Sublandlord maintains a fitness center and a cafeteria, Sublandlord hereby agrees to give access to and use of the fitness center, during normal business hours and such additional hours as the fitness center is available to employees of Sublandlord or other persons, and the cafeteria, during normal business hours, located in Sublandlord’s building at 3925 Brookside Parkway, Alpharetta, Fulton County, Georgia for use by Subtenant’s employees at no additional cost to Subtenant except Subtenant’s employees must pay all costs of food and beverage items purchased in the cafeteria. Sublandlord may assign, sublease or transfer the lease relating to such building to a third party and terminate the provisions of this Section 10.2 by giving thirty (30) days prior written notice to Subtenant of such termination in connection with any assignment, sublease or transfer.

 

11. Notice. All notices and other communications hereunder shall be in writing and shall be deemed to have been given only if and when (i) personally delivered, or (ii) three (3) business days after mailing, postage prepaid, by certified mail return receipt requested, or (iii) when delivered (and receipted for) by an overnight delivery service, or (iv) when sent by facsimile or telecopier machine, provided that such facsimile or telecopier machine generates a written confirmation of transmission and such notice or other communication is, on the same day as the day of such transmission, also given to the recipient party by one of the methods specified in clause (i), (ii), or (iii), above. In all cases, such notices and other communications shall be addressed as follows:

 

If to the Sublandlord to:

  

Radiant Systems, Inc.

3925 Brookside Parkway

Alpharetta, Georgia 30022

Attention: Chief Executive Officer

Facsimile: (770) 360-7325

with a copy in like manner to:

  

Smith, Gambrell & Russell, LLP

Promenade II, Suite 3500

1230 Peachtree Road

Atlanta, Georgia 30309-3592

Attention: Arthur Jay Schwartz, Esq.

Facsimile: (404) 685-6932

 

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If to the Subtenant to:

  

Wave Enterprise Systems, Inc.

3905 Brookside Parkway

Alpharetta, Georgia 30022

Attention: Erez Goren, Chief Executive Officer

Facsimile: (770) 360-7448

with a copy in like manner to:

  

Kilpatrick Stockton LLP

1100 Peachtree Street, N.E.

Suite 2800

Atlanta, Georgia 30309

Attention: Larry D. Ledbetter

Facsimile: (404) 541-3276

and

Attention: Bruce D. Wanamaker

Facsimile: (404) 541-3437

 

The Sublandlord, on the one hand, and the Subtenant, on the other hand, may change the address(es) for the giving of notices and communications to it, as the case may be, and/or copies thereof, by written notice to the other party in conformity with the foregoing, which change of address shall only be effective upon receipt of such written notice by such other party.

 

12. Miscellaneous.

 

12.1 Defined Terms. All capitalized terms used herein that are not defined herein shall have the meaning as defined in the Lease.

 

12.2 Construction. Should any provision of this Sublease require judicial or arbitral interpretation, it is agreed that the Court or arbitrator interpreting or construing the same shall not apply a presumption that the terms of any such provision shall be more strictly construed against one party or the other by reason of the rule of construction that a document is to be construed most strictly against the party who itself or through its agent prepared the same, it being agreed that the agents of all parties hereto have participated in the preparation of this Sublease.

 

12.3 Section Headings. The section headings in this Sublease are for convenience only and are not a part of this Sublease and do not in any way limit or simplify the terms and provisions of this Sublease, nor should they be used to determine the intent of the parties.

 

12.4 Governing Law. This Sublease shall be governed and construed in accordance with the laws of the State of Georgia.

 

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12.5 Assignment; Successors and Assigns.

 

(a) Without limiting any other rights of Subtenant to assign this Sublease or to sub-sublet the Premises, Subtenant may, without Sublandlord’s consent, assign this Sublease or sub-sublet the Premises, or any portion thereof, to any person or entity purchasing substantially all of the assets of Subtenant or to the surviving person or entity in connection with any merger or consolidation involving Subtenant; in all events, such right shall be subject to the applicable terms and provisions of the Lease, and Sublandlord shall reasonably cooperate with and assist Subtenant in obtaining any consents or approvals from Landlord that may be required under the Lease. In the event that the consent or approval of Sublandlord is required for any other assignment or sub-sublease, such consent or approval shall not be unreasonably withheld, conditioned, or delayed.

 

(b) This Sublease shall inure to the benefit of and be binding upon the successors and assigns of Sublandlord and Subtenant.

 

12.6 Brokers. Subtenant and Sublandlord each represents and warrants to the other that no real estate broker, agent, commission salesman, or other person has represented Sublandlord or Subtenant in the negotiations for and procurement of this Sublease and of the Premises, and that no commissions, fees or compensation of any kind are due and payable in connection herewith to any real estate broker, agent, commission salesman or other person. Each party agrees to indemnify and hold the other hereunder harmless from and against any claim for any such commissions, fees or other form of compensation by any such third party claiming through the indemnifying party, including, without limitation, any and all claims, causes of action, damages, costs and expenses (including attorneys’ fees) associated therewith.

 

12.7 Parties. Except with respect to indemnification obligations under this Sublease, the term “Sublandlord” as used herein shall mean only the owner or owners at the time in question of “tenant’s” interest in the Lease, and in the event of any transfer of such title or interest, Sublandlord herein named (and in the case of any subsequent transfers then the transferor) shall be relieved of all liability as respects Sublandlord’s obligations arising with respect to periods of time after the effective date of such transfer to the extent the transferee has assumed such obligations, in writing.

 

12.8 Requirements Respecting Consents from Landlord.

 

(a) This Sublease is subject to the written consent of the Landlord pursuant to the terms of the Lease. Sublandlord shall use reasonable efforts to obtain such consent, together with the written agreement of Landlord not to disturb the rights of Subtenant hereunder, which consent and non-disturbance agreement shall be in a form and on terms and conditions reasonably acceptable to Subtenant.

 

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(b) Whenever the Subtenant is required by the terms of this Sublease to obtain the consent or approval of the Sublandlord prior to undertaking any action, such requirement shall be deemed also to require the consent or approval of Landlord to the extent such consent or approval would be required under the Lease prior to the “tenant” or “lessee” thereunder undertaking such action; in such event, Sublandlord shall reasonably cooperate with and assist Subtenant in obtaining any such consent or approval from Landlord.

 

12.9 Submission of Sublease. The submission of this Sublease for examination does not constitute an offer to lease and this Sublease shall be effective only upon execution hereof by Sublandlord and Subtenant and upon the written consent of the Landlord.

 

12.10 Entire Agreement. This Sublease contains the entire and only agreement between the parties with respect to the particular subject matter hereof and no statements or representations or proposals with respect thereto not contained in this instrument shall have any force or effect.

 

[Signatures begin on following page.]

 

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IN WITNESS WHEREOF, Sublandlord and Subtenant have caused this Sublease and Facilities Agreement to be duly executed and delivered in their respective names, as of the date first above written.

 

“Sublandlord”
RADIANT SYSTEMS, INC.
By:    
 

Title:

   
 
“Subtenant”
WAVE ENTERPRISE SYSTEMS, INC.
By:    
 

Title:

   
 

 

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EX-99.1 11 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

FOR IMMEDIATE RELEASE

 

For More Information,

Please Contact

Mark Haidet, CFO – 770-576-6404

Melissa Coley, Investor Relations – 770-576-6577

 

Radiant Systems Announces Final Approval of Proposed

Separation of Enterprise Software Business and Filing of

Preliminary Proxy Statement

 

ATLANTA, October 13, 2003 — Radiant Systems, Inc. (NASDAQ: RADS), a leading provider of site management technology for retail and hospitality businesses, announced today that it has entered into a definitive agreement with Erez Goren, the Company’s current Co-Chairman and Co-Chief Executive Officer, in connection with the Company’s previously announced plan to split-off its enterprise software business. The Board of Directors authorized and approved the transaction based on the recommendation of a special committee comprised of the Company’s independent directors.

 

The agreement provides that Radiant will contribute specified assets and liabilities of the enterprise software business, together with $4.0 million in cash, to a newly formed subsidiary, and then transfer all of the shares of this new company to Erez Goren in exchange for the redemption of 2.0 million shares of common stock of the Company held by Mr. Goren. The shares to be redeemed represent approximately 7.0% of the Company’s outstanding shares. The terms of the transaction initially approved by Radiant in August provided for the contribution of between $6.0 million to $8.0 million to the new company based on the variability in Radiant’s stock price. The cash to be contributed to the new company was reduced through the negotiation of final terms of the agreement, along with the elimination of the variable cash components. The Company will file a copy of the definitive share exchange agreement and the other key separation agreements with the Securities and Exchange Commission (SEC) as exhibits to a Current Report on Form 8-K.

 

The closing of the transaction is subject to the approval of the disinterested shareholders of the Company and certain other customary conditions. The transaction is expected to close by the end of the year. Upon closing of the transaction, Erez Goren will resign from all positions with the Company.

 


In connection with the disinterested shareholder approval for the transaction, the Company also announced today that it has filed a preliminary proxy statement with the SEC for a special meeting of shareholders. Once the preliminary proxy statement is cleared by the SEC, the Company will mail a definitive proxy statement to its shareholders. The date of the special meeting of shareholders and the record date for the meeting will be specified in the definitive proxy statement. For shareholders’ general information, the preliminary proxy statement will be available at the SEC’s website at www.sec.gov and the Company’s website at www.radiantsystems.com.

 

Company Information

 

Founded in 1985, Radiant Systems, Inc. builds and delivers solutions for managing site operations of retail and hospitality businesses. Providing enterprise-wide visibility, Radiant’s back-office and point-of-sale technology enables businesses to deliver exceptional customer service while improving profitability. Headquartered in Atlanta, Radiant (www.radiantsystems.com) has deployed its solutions in more than 55,000 sites worldwide.

 

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to financial results and plans for future business development activities, and are thus prospective. These statements appear in a number of places in this release and include all statements that are not statements of historical fact regarding intent, belief or current expectations of the Company, its directors or its officers with respect to, among other things: the timing of and the Company’s ability to consummate the split-off transaction. The words “may,” “would,” “could,” “will,” “expect,” “estimate,” “anticipate,” “believe,” “intend,” “plans,” and similar expressions and variations thereof are intended to identify forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control. Actual results may differ materially from those projected in the forward-looking statements as a result of various factors. Investors and security holders are advised to read the definitive proxy statement to be filed by Radiant regarding the transaction referenced in this press release when it becomes available, because it will contain important information. Security holders may receive a free copy of the definitive proxy statement when it becomes available and other related documents filed by Radiant at the SEC’s website at www.sec.gov and/or from Radiant at its website at www.radiantsystems.com.

 

Radiant and its executive officers and directors may be deemed to be participants in the solicitation of proxies from shareholders of Radiant with respect to the proposed transaction. Information regarding such officers and directors is included in the preliminary proxy statement referenced above and will be set forth in the definitive proxy statement.

 

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