-----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, BYAewVHM93xMJMPDtgft9N+Tvo4sUs3qTx6HEwuAgvk9OVR2Vc4BntliQEtEyuTW Q3uXEFhIXZHt+iYQ9I28eg== 0000950149-97-001861.txt : 19971017 0000950149-97-001861.hdr.sgml : 19971017 ACCESSION NUMBER: 0000950149-97-001861 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971001 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971016 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENLIGHTEN SOFTWARE SOLUTIONS INC CENTRAL INDEX KEY: 0000919175 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943008888 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-23446 FILM NUMBER: 97696409 BUSINESS ADDRESS: STREET 1: 999 BAKER WAY STE 390 CITY: SAN MATCO STATE: CA ZIP: 94404-1578 BUSINESS PHONE: 4155780700 FORMER COMPANY: FORMER CONFORMED NAME: SOFTWARE PROFESSIONALS INC DATE OF NAME CHANGE: 19940217 8-K 1 FORM 8-K FOR ENLIGHTEN SOFTWARE 1 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 1, 1997 ENlighten Software Solutions, Inc. (Exact name of registrant as specified in charter) - -------------------------------------------------------------------------------- California 0-23446 94-3008888 (State or other jurisdiction (Commission File Number) (IRS Employer of incorporation) Identification No.) - -------------------------------------------------------------------------------- 999 Baker Way, Suite 500, San Mateo, California 94404-1578 (Address of principal executive offices) (Zip Code) - -------------------------------------------------------------------------------- Registrant's telephone number, including area code (650) 578-0700 (Former name or former address, if changed since last report) 2 ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS. ENlighten Software Solutions, Inc. (the "Company") completed the sale of the Company's Tandem systems management software product line to New Dimension Software, Inc., a wholly-owned subsidiary of New Dimension Software, Ltd. ("NDS") (the "Transaction") on October 1, 1997. Under the terms of the Transaction, the Company received an initial cash payment of approximately $2.3 million. In addition, the Company will receive of cash royalty payments over the next three years based on the product revenues recognized by NDS of between two and ten percent, based on the type of revenue, and up to an additional $600,000 in cash payments upon satisfaction of certain performance objectives. The Company expects to recognize a one-time pretax gain ranging between $2.3 to $2.8 million in the fourth quarter of 1997. The Company has also agreed not to compete with products that are competitive with the Tandem systems management software product line for a period of five years and not to solicit employees of NDS for a period of three years.. The amount of consideration was determined through arms-length negotiation. There were no material relationships between the Company and NDS prior to the Transaction. In exchange for $100,000 payable in six equal monthly installments, Mr. Peter McDonald, the founder and a current director of the Company, has agreed to assist NDS in establishing business relations with Tandem-related customers and partners and to provide other currently unspecified consulting services to NDS through April 1, 1998. ITEM 7. FINANCIAL INFORMATION AND EXHIBITS. (a) Financial statements of business acquired. Not applicable. (b) Pro forma financial information. The Company intends to file with the Securities and Exchange Commission all required pro forma financial information within 60 days of the date of this report. (c) Exhibits.
Exhibit No. Description ----------- ----------- 10.27(1) Agreement dated as of September 22, 1997 by and among ENlighten Software Solutions, Inc., Peter J. McDonald and New Dimension Software, Inc.. 99.1 Press Release dated September 23, 1997 announcing definitive agreement.
- ------- (1) Confidential treatment has been requested for portions of this exhibit. 2 3 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. ENLIGHTEN SOFTWARE SOLUTIONS, INC. Date: October 15, 1997 By: /s/ Michael A. Morgan ----------------------- Michael A. Morgan Vice President, Finance and Administration, Chief Financial Officer and Secretary 3 4 EXHIBIT INDEX
Exhibit No. Description ----------- ----------- 10.27(1) Agreement dated as of September 22, 1997 by and among Software Solutions, Inc., Peter J. McDonald and New Dimension Software, Inc.. 99.1 Press Release dated September 23, 1997 announcing definitive agreement.
- ------------ (1) Confidential treatment has been requested for portions of this exhibit. 4
EX-10.27 2 PURCHASE AGREEMENT 1 A G R E E M E N T Made and entered into as of the 22 day of September, 1997 Between ENLIGHTEN SOFTWARE SOLUTIONS INC. a corporation organized and existing under the laws of the State of California, with its principal place of business located at 999 Baker Way, 5th Fl., San Mateo, California, 94404 U.S.A. (hereinafter: "ENlighten") of the first part and PETER J. MCDONALD, c/o ENlighten Software Solutions Inc. of 999 Baker Way, 5th Fl., San Mateo, California, 94404 U.S.A. (hereinafter: "Mr. McDonald") of the second part and NEW DIMENSION SOFTWARE INC. a corporation organized and existing under the laws of Delaware with its principal place of business located at 18551 Von Karman Av., Suite 250, Irvine, California 92612-1510 U.S.A. (hereinafter: "NDS") of the third part WHEREAS ENlighten is the sole owner of all proprietary, commercial and any other rights of any kind and nature whatsoever pertaining to certain computer software products listed in SCHEDULE "A" hereof (hereinafter: the "Purchased Products"); and 2 -2- WHEREAS NDS wishes to acquire from ENlighten all proprietary, commercial and other rights pertaining to the Purchased Products, including without limitation, their source codes, customer base, development environments and all other assets associated with the Purchased Products and ENlighten agrees to sell to NDS all such proprietary, commercial and other rights and assets, all subject to and in accordance with the terms and provisions of this Agreement. Notwithstanding the above, both parties acknowledge that all copyrights and other intellectual property rights associated with the name "ENlighten" will remain the sole and exclusive property of ENlighten; and WHEREAS The parties agree that NDS shall also acquire from ENlighten certain computer equipment and software used for the development and support of the Purchased Products as specified in SCHEDULE "B" hereof, that ENlighten shall assign to NDS its maintenance agreements pertaining to the Purchased Products and that certain ENlighten's employees will be transferred to NDS as further specified in this Agreement; and WHEREAS The parties wish to set forth in writing their mutual covenants, agreements and understandings regarding the subject matter hereof. NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, the parties hereby agree as follows: 1. PREAMBLE AND CAPTIONS The Preamble to this Agreement constitutes an integral part hereof. The captions of this Agreement are provided for the sake of convenience only and shall not be used to construe the provisions hereof. 2. DEFINITIONS "ACCLIMATIZATION PERIOD" a period of 180 days commencing on the Execution Date. "BAKER" Baker Street Software Inc., a corporation organized and existing under the laws of the State of California, with its principal place of business located at One Sansome Street, Suite 2000, SF, CA 94104. 3 -3- "CUSTOMERS" ENlighten's current customers that have licensed one or more of the Purchased Products from ENlighten. "DELIVERABLES" Any and all documentation and other data, information and material pertaining to the Purchased Products; "DOCUMENTATION" All design documents, source codes, user manuals, operating manuals, education materials, product descriptions and specifications, technical manuals, supporting materials, and other information relating to the Purchased Products or used in conjunction with the Purchased Products or relating to or used in conjunction with maintenance services to be rendered in respect of the Purchased Products, including technical support logs, whether distributed in print, magnetic, electronic or video format as well as any other written documentation in respect of the Purchased Products which is in the possession of ENlighten. "EFFECTIVE DATE" October 1, 1997. "EMPLOYEES" ENlighten's employees as will be listed on Schedule "E" hereof on the Effective Date. "EXECUTION DATE" The 22 day of September, 1997. "EQUIPMENT" The entire computer hardware and software equipment, other than network cable infrastructure and certain printers, used for the development and support of the Purchased Products (as herein defined) as listed on SCHEDULE "B" hereof. "PURCHASED PRODUCTS" The computer software products listed and described in SCHEDULE "A" hereof and/or any one of them; "RIGHTS" Any and all proprietary and ownership rights, title and interest in and to the 4 -4- Purchased Products and their source codes, including, without exception, and without derogating from the generality thereof, the rights to develop, redevelop, change, modify, enhance, translate, convert, sell, market, distribute, transfer, assign, try and demonstrate any one of the Purchased Products, world wide, and to take any action whatsoever in respect of any of the Purchased Products. Notwithstanding the above, all copyrights and other intellectual property rights associated with the name "ENlighten" will remain the sole and exclusive property of ENlighten. "SIERRA" Robert J. Alvarado, an individual, Ellen J. Alvarado, an individual and Sierra Software Inc., a corporation organized and existing under the laws of the State of New Mexico, with its principal place of business located at 5015 E. Oakhurst Way, Scottsdale, Arizona 85254. "TRANSFER PERIOD" a period of 120 days commencing as of the Effective Date, or any extension thereof provided such extended Transfer Period has been approved by NDS in advance and in writing. 3. ENLIGHTEN'S REPRESENTATIONS As of the Execution Date, except as set forth in SCHEDULE "D" hereof, ENlighten hereby warrants and represents to NDS as follows: 3.1. ENlighten is the sole and exclusive owner of the Purchased Products, their source codes and all Rights pertaining thereto, including, without limitation, any and all intellectual, proprietary and commercial rights in and to the Purchased Products.The Purchased Products and their source codes are free and clear of any third party right or claim of any kind whatsoever. 3.2. Neither the Purchased Products nor the Purchased Products' source codes infringe upon any patent, copyright or trademark or violate any other right whatsoever of any third party. 3.3. To the best of Enlighten's knowledge, there are no pending or threatened actions, suits or claims of third parties against ENlighten regarding or having any material bearing on the Purchased Products and/or the Purchased Products' source codes, including, 5 -5- without limitation, any action or claim alleging infringement referred to in Sections 3.1 and 3.2 herein; 3.4. ENlighten has not granted to any third party any rights whatsoever pertaining, directly or indirectly, to the Purchased Products and/or their source codes or to the use, marketing or commercial exploitation thereof which may materially affect the Rights granted to NDS hereunder. 3.5. Enlighten has entered with Baker into: (a) a Software Purchase Development Marketing and Sales Agreement dated October 11, 1991 and as amended on February 7, 1996, for the product known as Safeguard/Reports Plus, a copy of which has been delivered to NDS (hereinafter: the "SAFEGUARD AGREEMENT"); and (b) a Distribution Agreement dated February 7, 1996, for the product known as Entrust, a copy of which has been delivered to NDS (hereinafter: the "ENTRUST AGREEMENT") (the "Safeguard Agreement" and the "Entrust Agreement" shall be hereinafter collectively referred to as: the "BAKER AGREEMENTS") ENlighten has not entered into any additional agreements with Baker other than the Baker Agreements. 3.6. Enlighten has entered with Sierra into a Software Purchase and Assignment Agreement dated September 9, 1994 and as amended on December 13, 1996, for the SQL product line, a copy of which has been delivered to NDS (hereinafter: the "SIERRA AGREEMENT"); ENlighten has not entered into any additional agreements with Sierra other than the Sierra Agreement. 3.7. The entering into this Agreement or the consummation of the transactions contemplated hereby do not breach or violate any of ENlighten's other undertakings, agreements and/or obligations. 3.8. ENlighten has taken all corporate action as required for the authorization, execution, delivery and performance by ENlighten of this Agreement and the consummation of the transactions contemplated herein. 3.9. ENlighten hereby represents that the Equipment listed on Schedule "B" hereof constitutes the entire equipment used by ENlighten for the development and support of the Purchased Products, other than network cable infrastructure and certain printers. 3.10. The Purchased Products are provided by ENlighten to NDS "As Is". Except as expressly set forth in this Agreement, ENlighten disclaims any and all representations and warranties, express or implied, with respect to the Purchased Products, their merchantability, capacity, suitability or fitness for a particular purpose. 6 -6- 3.11. All agreements with Customers to be assigned to NDS in accordance with the provisions of Section 7 hereunder, will be assigned to NDS free and clear of all charges, liens and encumbrances of any kind whatsoever arising out of or securing any monetary claim by any person, and such agreements materially constitute all agreements concerning the Purchased Products between ENlighten, an affiliate or assignee of ENlighten, and any Customer. ENlighten has performed all of its material obligations under such agreements through the Effective Date, there is currently no unperformed requested maintenance, training and support by any Customer other than routine maintenance, training and support in the ordinary course of business, and there are no material Customer complaints in respect of the Purchased Products or ENlighten's performance of any of its obligations under the agreements assigned which have not been addressed to the apparent satisfaction of the Customer that might have a material adverse effect on NDS. 4. NDS' REPRESENTATIONS AND UNDERTAKINGS NDS hereby warrants and represents to ENlighten as follows: 4.1. NDS has examined the Purchased Products and the Purchased Products' source codes, Documentation and all other data relevant thereto and has found same to be satisfactory in all respects. NDS is acquiring the Purchased Products, the Purchased Products' source codes and the Documentation herein "as-is" and waives any and all claims and causes of action against ENlighten in respect thereto. 4.2. The entering into this Agreement or the consummation of the transactions contemplated hereby do not breach or violate any of NDS' other undertakings, agreements and/or obligations. 4.3. NDS has taken all corporate action as required for the authorization, execution, delivery and performance by NDS of this Agreement and the consummation of the transactions contemplated herein. 4.4. NDS hereby undertakes to further develop, market and support the Purchased Products. 4.5. NDS shall make good faith efforts to assist ENlighten in the collection of any amounts owed to ENlighten by any of its Customers on account of transactions performed prior to the Execution Date. 4.6. NDS agrees to use its best efforts to obtain the employment of all the Employees (as defined in Section 2 above), including but not limited to providing cash compensation and other cash and non-cash benefits comparable to those received by such Employees 7 -7- from ENlighten on the Execution Date. The parties acknowledge that until the Effective Date NDS shall be entitled to delete from Schedule "E" such employees as it may deem fit at its sole and exclusive discretion and only such employees who will be listed on Schedule "E" on the Effective Date will be considered as "Employees" for the purposes of this Agreement. 5. ACQUISITION AND SALE OF THE PURCHASED PRODUCTS AND OTHER EQUIPMENT 5.1. For the consideration specified in Section 11 hereunder and contained elsewhere in this Agreement and subject to the terms and provisions set forth in this Agreement, ENlighten hereby sells to NDS and NDS hereby acquires the Purchased Products, the Purchased Products' source codes, the Documentation and all the Rights pertaining thereto, as well as the Equipment, all as defined and detailed above. 5.2. It is hereby agreed and acknowledged by the parties that as of the Effective Date all of the proprietary, commercial, intellectual property rights and any other Rights of any kind and nature whatsoever pertaining to the Purchased Products and their source codes shall be solely and exclusively owned by and belong to NDS. 5.3. It is hereby further agreed and acknowledged by the parties that as of the Effective Date NDS shall have the sole and exclusive ownership of the registered trademarks and registered tradenames listed on SCHEDULE "C" hereof with respect to the Purchased Products, and that as of the Effective Date ENlighten shall discontinue the use of any of the unregistered trademarks and/or tradenames listed on Schedule "C" hereof, provided however that all copyrights and other intellectual property rights associated with the name "ENlighten" will remain the sole and exclusive property of ENlighten. Notwithstanding the above it is hereby agreed between the parties that NDS shall be entitled to use the name "ENlighten" subject to ENlighten's prior written consent, which consent shall not be unreasonably withheld. It is further acknowledged by the parties that during a period of twelve (12) months as of the Effective Date, NDS shall be entitled to use the name "ENlighten" as it appears in the Purchased Products and/or the Documentation and/or any other Deliverables. NDS acknowledges that it has no license to use or exploit the name "ENlighten" in any manner whatsoever other than as stated above. NDS shall use its best efforts to remove the name ENlighten from all Purchased Products, Documentation and 8 -8- all other materials associated with the Purchased Products within twelve (12) month period immediately following the Effective Date. 6. DELIVERY OF THE PURCHASED PRODUCTS AND OTHER EQUIPMENT By the Effective Date, ENlighten shall transfer and deliver to NDS, FOB ENlighten's premises, the Purchased Products, their source codes and all Rights pertaining thereto, the Documentation and all other Deliverables as herein defined, as well as the Equipment. Upon the Effective Date ENlighten shall furnish NDS with Bill of Sale in the form attached hereto as SCHEDULE "K". 7. ASSIGNMENT OF CUSTOMER AGREEMENTS 7.1. ENlighten hereby undertakes to do its utmost to execute a written assignment assigning and transfering to NDS until the expiration of the initial or any extended Transfer Period, its entire right, title and interest under any agreements between ENlighten and any of its Customers, pertaining to the Purchased Products (including, without limitation, licenses, leases, rental, maintenance and/or trial agreements) and wherever necessary, rigorously encourage such Customers to grant their written consent to such assignment. 7.2. ENlighten further undertakes to execute and deliver any and all documents and instruments which may be requested by NDS to confirm or give effect to the foregoing assignment. 7.3. Concurrently with such assignment NDS shall assume the obligations of ENlighten under each agreement assigned to it hereunder to the extent, and only to the extent, such obligations relate to the Purchased Products. In no event shall NDS assume any obligation under any agreement (including, without limitation, any obligation to provide maintenance or support) with respect to any products other than the Purchased Products. 8. ASSIGNMENT OF THE BAKER AND SIERRA AGREEMENTS 8.1. ENlighten hereby undertakes to assign and transfer to NDS until the expiration of the initial or any extended Transfer Period, its entire right, title and interest under the Baker and Sierra Agreements, respectively, and to the extent necessary, to rigorously encourage Baker and Sierra, respectively, to grant their written consent to such assignment. 8.2. ENlighten hereby further undertakes to do its utmost, until the expiration of the initial or any extended Transfer Period, to cause Sierra to enter into an agreement with NDS pursuant to which Sierra shall provide support and development services with respect 9 -9- to the SQL Product Line, for a period expiring not earlier than December 31, 1998. 8.3. ENlighten hereby further undertakes to do its utmost, until the expiration of the initial or any extended Transfer Period, to cause Baker to enter into a distribution agreement with NDS pertaining to the Entrust for Windows product for a period expiring not earlier than December 31, 1998. 9. TRANSFER OF EMPLOYEES 9.1. ENlighten hereby agrees to do its utmost to transfer the Employees to NDS, until the expiration of the Transfer Period or any extended term thereof and to rigorously encourage such Employees to transfer to NDS' employment and NDS hereby agrees and undertakes to employ such Employees under such terms and conditions as shall be agreed upon between them, subject to the Employees' consent. ENlighten shall be entitled to either transfer to NDS the funds accumulated for each such employee as such liabilities exist per ENlighten's records, for vacation days or to pay such funds directly to the employee, subject to and in accordance with the employee's request. For the avoidance of any doubt it is hereby agreed that any claims or actions by any of the Employees against ENlighten created prior to the Effective Date shall remain the responsibility of ENlighten and ENlighten shall indemnify and hold NDS harmless against any cost, expense or disbursement incurred by it in connection with or as a result of any such claim, demand or action. 10. ADDITIONAL UNDERTAKINGS OF THE PARTIES 10.1. Mr. McDonald hereby warrants and undertakes as follows: During the Acclimatization Period, Mr. McDonald will provide NDS, on a full time basis, consultation, with respect to various matters concerning NDS' acceptance, assimilation and adaptation of the Purchased Products, ENlighten's Employees and Customers and any other aspects of the transactions contemplated herein. Mr. McDonald will sign an appropriate non-disclosure agreement with NDS. 10.2. Mr. McDonald will further assist NDS in the establishment of business relations with Tandem Computers Inc., a Delaware corporation (hereinafter: "Tandem"). 10.3. ENlighten hereby undertakes to use its best efforts to cause Mr. McDonald to assume upon himself the above obligations and 10 -10- undertakings towards NDS and hereby conveys its consent to same. 11. CONSIDERATION In consideration of the Purchased Products and their source codes, the Documentation and other Deliverables, Rights and other Equipment herein purchased by NDS and in consideration for the transfer and assignment by ENlighten to NDS of its Customers and Employees as described above, ENlighten shall be entitled to receive from NDS the following amounts: 11.1. Upon the Effective Date of this Agreement NDS shall pay ENlighten the amount of U.S. $2,960,000 (two million nine hundred and sixty thousand) Dollars less 80% (eighty) percent of the liabilities assumed by NDS for deferred maintenance pertaining to the Purchased Products (hereinafter: the "INITIAL PAYMENT"), and an additional amount of U.S. $300,000 (three hundred thousand) Dollars as an advanced payment on account of royalties due to ENlighten under sections 11.3, 11.4.1 and 11.4.2 hereof (hereinafter: the "ADVANCED PAYMENT") subject to the exclusions specified in Section 11.2 below. 11.2. The amounts listed below shall be deposited by NDS upon the Effective Date, with Fidelity National Title of 7344 Magnolia Avenue, Suite 275, Riverside, CA 92504 (hereinafter: the "Escrow Agent") in an interest-bearing escrow account, together with irrevocable instructions providing for the release of such amounts as follows: 11.2.1. an amount equal to the sum of all annual maintenance fees due under any active, non-assignable maintenance agreement the annual maintenance fees of which equal or exceed U.S. $20,000 as listed in SCHEDULE "F" hereof less 80% of the deferred maintenance pertaining to the Purchased Products associated with the Customers listed on Schedule "F". The amount associated with each individual Customer listed on Schedule "F" together with any accrued interest thereon will be released to ENlighten only upon the assignment of each such agreement to NDS and upon the Escrow Agent's receipt from ENlighten of a written notice advising him of the execution of such an assignment accompanied by NDS' approval of same. The amount associated with any agreement which has not been assigned to NDS by the expiration of the initial or any extended Transfer Period shall be returned to NDS together with all accrued interest thereon; and 11.2.2. an amount of together with all accrued interest thereon - will be released to ENlighten upon its assignment to NDS of the and upon the Escrow Agent's receipt from ENlighten of a written notice 11 -11- advising him of the execution of such an assignment accompanied by NDS' approval of same. In the event the has not been assigned to NDS by the expiration of the initial or any extended Transfer Period such amount shall be returned to NDS together with all accrued interest thereon. 11.2.3. an amount of U.S. together with all accrued interest thereon - will be released to ENlighten upon its assignment to NDS of the and upon the Escrow Agent's receipt from ENlighten of a written notice advising him of the execution of such an assignment accompanied by NDS' approval of same. In the event the has not been assigned to NDS by the expiration of the initial or any extended Transfer Period such amount shall be returned to NDS together with all accrued interest thereon. 11.2.4. an amount of U.S. together with all accrued interest thereon - For each who entered into an with NDS, ENlighten shall be entitled to receive from NDS the amount of U.S. Dollars divided by the total number of (hereinafter: the ). Such amount will be paid to ENlighten upon NDS' entering into an with each such and upon the Escrow Agent's receipt from NDS of a written notice advising him of same. 11.2.5. ENlighten and NDS shall enter into an escrow agreement with the Escrow Agent in the form attached hereto as SCHEDULE "M". 11.3. Within 45 days as of the first anniversary of any between NDS and each one of the actually by NDS, ENlighten shall be entitled to receive from NDS for each such an additional (as herein defined) provided however that such has not been previously terminated by either party Such amounts will be deducted from the Advanced Payment paid to ENlighten in accordance with the provisions of section 11.1 above. 11.4. ROYALTIES 11.4.1. ENlighten shall be entitled to receive from NDS, for a period of three (3) years as of the Effective Date, royalties at the rates specified in SCHEDULE "G" hereof for any and all sales and upgrades of the Purchased Products other than those specified in Section 12 hereunder. 12 -12- The percentages specified in Schedule "G" shall be the percentages applicable upon the date such sale or upgrade occured and will be paid to ENlighten out of all amounts collected by NDS on each sale or upgrade of the Purchased Products, in accordance with the provisions of Schedule "G" hereof. The Purchased Products shall be sold, leased and/or licensed by NDS to Customers for a price per unit to be determined by NDS. NDS further undertakes that in all cases in which the Purchased Products will be distributed to Customers packaged or bundled together with or within the framework of the same business transaction relating to other NDS products, the Purchased Products will not be sold under commercial terms less favorable than those applicable to the other NDS products. For this purpose, the ENlighten's current price list a copy of which is attached to this Agreement as SCHEDULE "H", shall be used as a term of reference to determine the rate of discount granted by NDS with respect to such products, to the extent granted. 11.4.2. Additionally, ENlighten shall be entitled to receive from NDS, for a period of three (3) years as of the Effective Date, royalties at the rates specified in SCHEDULE "G" hereof, of the annual maintenance fees collected by NDS with respect to the Purchased Products. Payment of such amounts shall be made in accordance with the provisions of Schedule "G" hereof. 11.4.3. In addition, ENlighten shall be entitled to receive from NDS, during a period of three years as of the Effective Date of this Agreement royalties at the rate of from all amounts collected by NDS on sales of CONTROL-M for Tandem to ENlighten's customers who were not NDS' customers at the Agreement's Effective Date, as specified in SCHEDULE "I" hereof. Payment of such amounts shall be made once annually within 45 days after the end of each year. 11.4.4. All payments due to ENlighten hereunder shall be made in U.S. Dollars to ENlighten's bank account as shall be designated by ENlighten from time to time. Any such payment will be accompanied by a report specifying the date of each transaction for which payment is made, the Purchased Products involved, the prices charged and the applicable terms of payment. 11.4.5. Any amount due hereunder not paid on time shall bear interest at a rate of PRIME (as published by the U.S. Federal Bank) + 2% (two) percent per annum with respect to the period commencing on the due date and ending on the date of actual payment. The interest shall be paid together with the amount in arrears. 13 -13- 11.4.6. Any withholding taxes, other taxes or duties (excluding any taxes based on NDS' income) which NDS is obliged under law to pay in connection with the transfer of funds to ENlighten under this Agreement shall be deducted from the payments due to ENlighten hereunder. NDS shall provide ENlighten with the official receipt of payment of any such taxes to the relevant taxing authority (as applicable). 11.4.7. Other than as stated above, each party will be responsible for the payment of any and all taxes imposed upon it by any taxing authority in connection with the transaction herein contemplated. 11.4.8. During a period of three years as of the Effective Date of this Agreement, NDS will maintain accurate and up-to-date records pertaining to the Purchased Products containing complete data that is needed to calculate the fees due to ENlighten hereunder, and will preserve and permit ENlighten to audit such records in accordance with the provisions of Section 14 of this Agreement. 11.4.9. In the event that after the expiration of the initial three years after the Effective Date of this Agreement, the amounts due to ENlighten under sections 11.3, 11.4.1 and 11.4.2 hereof shall amount to less than the amount of the Advanced Payment, ENlighten shall return to NDS, immediately upon its first demand, the difference between the Advanced Payment and the amounts so due to it as specified above. 11.5. CONSULTATION FEES. In consideration for the consultation services to be provided to NDS by Mr. McDonald in accordance with the provisions of Section 10.1 herein, ENlighten will receive from NDS U.S. $100,000 (one hundred thousand) Dollars payable in six (6) equal monthly installments. Payment will be made on the 15th day of each month, with the first payment to be made on the 15th day of November 1997. 11.6. ADDITIONAL PAYMENTS. 11.6.1. ENlighten shall be entitled to receive from NDS an amount of U.S. Dollars if, following efforts of ENlighten and Mr. McDonald, and not later than within 24 (twenty four) months after the Effective Date of this Agreement, NDS and will enter into an agreement pursuant to which will sell to NDS its . Such amount will be paid to ENlighten within 60 days after the execution by NDS and of said agreement. 14 -14- 11.6.2. ENlighten shall be entitled to receive from NDS an additional amount of U.S. if, following efforts of ENlighten and Mr. McDonald and not later than within 24 (twenty four) months after the Effective Date of this Agreement, will enter into a reseller agreement with NDS under which shall undertake to distribute and market some or all of NDS' products other than the Purchased Products. Such amount will be paid to ENlighten within 60 days after the execution by NDS and of said agreement. 11.7. PARTICIPATION IN COSTS AND EXPENSES It is hereby agreed between the parties that as of the Effective Date of this Agreement and until such time as NDS shall relocate its employees and the Equipment purchased by it hereunder to a different location, it shall be entitled to use ENlighten's facilities and premises for its operations pertaining to the Purchased Products, in accordance with the legal restrictions and covenants contained in the ENlighten lease entered into with Mariner's Island Limited (and subsequently transferred to BW Corporation) dated April 1, 1995, a copy of which has been delivered to NDS, and in accordance with local business practices. In consideration therefore, NDS shall pay ENlighten, on a monthly basis, the monthly rent and other direct costs and expenses incurred by ENlighten in connection with the on-going maintenance of the facilities and Equipment as detailed in Schedule "L" hereof. 12. ENLIGHTEN TO BE APPOINTED AS NDS' AGENT 12.1. Upon the Effective Date hereof ENlighten shall be appointed as NDS' independent, non-exclusive agent for the sale of the Purchased Products for a period commencing as of the Effective Date of this Agreement and ending January 15, 1998 (hereinafter: the "Agency Period"). As NDS' agent, ENlighten shall be entitled to perform only such sales to such customers and of such Purchased Products listed on SCHEDULE "J" hereof (hereinafter - "PROSPECTIVE CUSTOMERS") but in no event shall ENlighten be entitled to enter into any agreement pertaining to any such sale with any such Prospective Customer (on its own behalf and/or on behalf of NDS) and it is hereby acknowledged by the parties that any and all agreements pertaining to any of the sales listed on Schedule "J" will be solely and exclusively entered into with and executed by NDS. 12.2. It is hereby agreed between the parties that ENlighten shall be entitled to receive royalties at the rate of on new sales and upgrades of any of the Purchased Products (not including first year maintenance) to Prospective Customers made by NDS in accordance with Schedule "J" hereof during the Agency Period. Schedule "J" will be reviewed by ENlighten and NDS on a monthly 15 -15- basis and Prospective Customers listed thereon which turned inactive will be removed therefrom to enable NDS to actively pursue new business with them. 12.3. For the avoidance of any doubt it is hereby clarified that sales of Purchased Products made under the Agency Agreement shall not entitle ENlighten to receive any royalties under section 11.4.1 above. 13. INDEMNIFICATION 13.1. ENlighten shall indemnify and hold NDS harmless against any loss, damage, judgment, expense, including attorney's fees, or any other costs whatsoever incurred by NDS as a result of any claim, demand or legal action brought against NDS by any third party whatsoever, including, without limitation any Customer, arising out of or in connection with any of the Purchased Products and/or their source codes as they exist on the Effective Date. Without derogating from the generality hereof ENlighten further undertakes to defend, at its expense, any action brought against NDS to the extent it is based on a claim that any of the Purchased Products and/or their source codes, as they exist on the Effective Date, infringe upon or violate any patent, copyright, trademark or any other right whatsoever of any third party. 13.2. NDS shall indemnify and hold ENlighten harmless against any loss, damage, judgment, expense, including attorney's fees, or any other costs whatsoever incurred by ENlighten as a result of any claim, demand or legal action brought against ENlighten by any of the Employees, Customers or any other third party arising out of or in connection with the Obligations assigned by ENlighten to NDS herein. Notwithstanding the above, it is hereby acknowledged by the parties that NDS shall not indemnify ENlighten for any loss, costs, expenses or any other disbursments incurred by it as a result of or in connection with any claim, demand or legal action brought against ENlighten by any third party arising out of or in connection with its acting as NDS' agent under Section 12 herein above. 14. AUDITS 14.1. NDS will permit authorized representatives of ENlighten, in compliance with the terms set forth hereunder, upon 30 (thirty) day prior written notice, but not more than once annually, to inspect at NDS' premises all books, records, accounts, journals and ledgers belonging to NDS that pertain to money owed to ENlighten under this Agreement in relation with the Purchased Products. 14.2. Such audits will be conducted by an independent auditor to be agreed upon by the parties who shall have signed an appropriate non-disclosure agreement with NDS. If the parties do not agree on 16 -16- such auditor within 10 (ten) days of submitting an audit request, then such audit will be conducted by one of the "big six" accounting firms to be selected by ENlighten 14.3. It is hereby agreed between the parties that in the event that a discrepancy exceeding 7.5% exists between NDS' revenue reports and the results of ENlighten's audit of NDS books, NDS will remit to ENlighten, within 10 days of its receipt of ENlighten's demand, the outstanding amount due to ENlighten in accordance with the results of ENlighten's audit of NDS' books. Such outstanding amount will be paid to ENlighten together with any interest accrued thereon in accordance with the provisions of Section 11.4.5 hereinabove. In addition, any and all costs of such audit will be borne by NDS. 14.4. This Section shall be in effect for a period of four (4) years as of the Effective Date. 15. NON COMPETE & NON SOLICITATION 15.1. ENlighten hereby agrees and undertakes not to develop, produce, manufacture, offer, sell, distribute, provide consultation or be otherwise engaged in, directly or indirectly, software products which are directly competitive with any of the Purchased Products as they exist upon the Effective Date hereof. This Section shall be in effect for a term of five (5) years as of the Effective Date 15.2. Both parties agree that neither will directly or indirectly hire, recruit, induce or attempt to pursuade any person who is an employee of the other party on the Execution Date hereof or becomes an employee of the other party during a period of three years as of the Execution Date, to terminate his or her relationship with the other party during the term of such employee's employment with the other party and for a period of one year thereafter. 16. CONFIDENTIALITY 16.1. ENlighten recognizes and agrees that as of the Effective Date of the Agreement the Purchased Products and their Documentation, source codes, computer tapes, user manuals or any other materials which will be clearly marked as confidential by NDS (hereinafter: "Confidential Material") will be of a confidential and proprietary nature and the valuable property of NDS. ENlighten therefore undertakes not to disclose and not to allow disclosure to any third party, either individual or corporate entity, of any information regarding the Purchased Products and/or any other Confidential Material. 16.2. Both NDS and ENlighten acknowledge that as a result of this Agreement, each may have access to proprietary materials of the other, apart from the Confidential Material, and therefore NDS and ENlighten each agrees and commits to take the necessary precautions to prevent transfer of such confidential information to any unauthorized third parties. 17 -17- 16.3. This Section shall be in effect for a period of ten (10) years as of the Execution Date. 17. SEVERABILITY If any provision of this Agreement is declared void, the validity of any other provision and of the entire Agreement shall not be affected thereby. 18. WAIVER The failure at any time of either party to enforce any of the provisions of the Agreement, or any right with respect thereto or to exercise any option herein provided, will in no way be construed to be a waiver of such provisions, rights or options, or in any way to affect the validity of this Agreement. 19. COMPLETE AGREEMENT The provisions herein contained set forth the entire Agreement of the parties with respect to the subject matter hereof, and supersede all previous communications, representations or agreements, whether oral or written, with respect to the subject matter hereof, and no addition to or modification of this Agreement shall be binding upon either party unless reduced to writing and duly executed by the parties hereto in the same manner as the execution of this Agreement. 20. PROPER LAW AND JURISDICTION This Agreement shall be exclusively governed by, and shall be construed exclusively in accordance with the laws of the State of California, U.S.A. and the competent courts of San Mateo, California, shall have the exclusive jurisdiction over any dispute or controversy with respect to this Agreement. 21. GOVERNING LANGUAGE The Agreement is in the English language only, which language shall control in all respects. No translation, if any, of this Agreement into any other language shall be of any force or effect in the interpretation of this Agreement or in a determination of the intent of either party hereto. 22. ASSIGNABILITY Neither party may assign or transfer this Agreement or any of its obligations, undertakings and/or rights thereunder to another party other than a party's parent company or such parent company's subsidiaries, or without the other party's prior written consent, which consent shall not be unreasonably withheld. 18 -18- 23. NOTICES Any notice required or authorized to be given hereunder shall be made in writing and shall be served by hand delivery or by certified letter return receipt requested or by fax addressed to ENlighten or NDS (as the case may be), at the following addresses: To ENlighten: ENlighten Software Solutions Inc. 999 Baker Way, 5th Fl., San Mateo, 94404 California, U.S.A. Attention: Mr. Michael Morgan Tel.: 650-578-0700 Fax: 650-592-5452 To NDS: New Dimension Software Inc. 18551 Von Karman Av., Suite 250, Irvine, California 92612-1510 Attention: Mr. Darroll Buytenhuys Tel.: 714-757-4300 Fax: 714-756-3900 Or at such other address as such party may designate by ten (10) days' advance written notice to the other party. Any notice delivered via over night carrier of recognized national stature shall be deemed to have been served on the immediately following day. Any notice given by letter shall be deemed to have been served seven (7) days after the same shall have been posted, not including the day of posting, and any notice given by fax shall be deemed to have been served on the day of sending the message. Proof that such letter was properly addressed and put into the post, and in the case of fax that the message was sent to the correct fax number, shall be conclusive evidence of service. 19 -19- IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first herein written. ENLIGHTEN SOFTWARE SOLUTIONS INC. BY:_________________________________ ____________________________________ PETER J. McDONALD NEW DIMENSION SOFTWARE INC. BY: _________________________________ EX-99.1 3 PRESS RELEASE DATED SEPTEMBER 23, 1997 1 EXHIBIT 99.1 ENLIGHTEN SOFTWARE AND NEW DIMENSION SOFTWARE AGREE TO TECHNOLOGY TRANSFER OF ENLIGHTEN'S TANDEM BUSINESS UNIT. SAN MATEO, Calif. -- (BUSINESS WIRE) -- Sept. 23, 1997 ENlighten Software Solutions, Inc. (Nasdaq: SFTW), and New Dimension Software, Inc., a wholly owned subsidiary of New Dimension Software, Ltd. (Nasdaq: DDDDF - news) announced today that they have entered into a definitive agreement whereby New Dimension will purchase ENlighten's Tandem systems management software product line, effective October 1, 1997. The companies also announced that they intend to enter into a strategic relationship to integrate and distribute ENlighten's ENlighten/DSM product suite for UNIX and Windows NT with New Dimension's enterprise production management solutions. The purchase consideration includes an initial payment of $2.5 million and additional payments over three years based on product revenue and other performance objectives. Commenting on the announcement, David D. Parker, President and CEO of ENlighten, said, "Today's agreement accomplishes our goal of focusing our organization while also establishing a long-term relationship with New Dimension that will be beneficial to both companies. Our newly restructured management team, professional staff, and financial resources can now concentrate on establishing meaningful market share, awareness, and industry appreciation for our ENlighten/DSM product suite for UNIX and NT. "After reviewing several strategic alternatives, we chose New Dimension as the best solution for our Tandem customers, partners, investors, and employees. Their position as a technological leader in cross platform systems management, as well as their dedication to expand their enterprise solutions to the Tandem platform, convinced us that they are well positioned to take advantage of what we've built over the past ten years to continue providing our Tandem customers with high quality products and services." Commenting on the synergies of the companies' planned strategic relationship for UNIX/NT, Mr. Parker said, "Customers are looking for product sets that provide practical solutions to managing the enterprise. Being able to provide a UNIX and NT systems management solution that is tightly coupled with the mission critical areas of production, output and security management will provide our common customers with a significant advantage." "Companies using Tandem systems are typically very large, with complex computing environments. This is precisely our target market," said Darroll Buytenhuys, Chief Operating Officer of New Dimension. "This agreement immediately gives us a large new base of existing customers and expands our total customer base to well over 2,000. We will now have the opportunity to introduce our existing products to these customers, including our unique production control solution that allows the scheduling and management of tasks across Tandem systems and the rest of the enterprise." 5 2 The Tandem product line sale includes an installed base of several hundred customers and the equipment and development environments associated with ENlighten's Tandem product suite. It is currently expected that approximately 12 employees associated with ENlighten's Tandem operations will become New Dimension employees. Peter McDonald, ENlighten's founder and a member of ENlighten's board of directors, will be dedicated to ensuring a smooth transition and to building strong customer relationships. Mr. McDonald, who has extensive experience in the Tandem market, will also be active in guiding the R&D effort to provide practical business solutions that include the ENlighten product line and existing products from New Dimension Software. This press release includes forward-looking statements that involve risks and uncertainties, including, but not limited to, quarterly fluctuations in results, the management of growth, the ability to fund operations, and other risks detailed from time to time in the Company's Securities and Exchange Commission filings. Actual results may differ materially from management expectations. ENlighten Software Solutions, Inc. is a leading supplier of UNIX/NT systems management solutions for open systems distributed computing environments in the range of 50 - 5000 servers/clients. The Company's ENlighten/DSM product suite provides cost-effective systems administration solutions for mixed vendor environments including Sun Microsystems, IBM, Hewlett-Packard, SCO, Silicon Graphics, DEC, and Windows NT. The DSM product suite provides comprehensive functionality with unprecedented ease of use. The DSM product suite is conformant with industry standard frameworks yet allows seamless integration with other vendors' point solutions. ENlighten maintains sales offices in San Mateo, Chicago, New York, and London. For more information, please visit the Company's web site located at http://www.enlighten.sftw.com. New Dimension Software is a leading provider of integrated software solutions that allow information technology organizations to manage data center production flow end-to-end. With the company's family of products, all aspects of production flow are effectively managed, from the automation of applications and systems to the generation and distribution of production output. By managing the flow of information between applications, systems, end users and administrators, this tightly integrated product family helps users achieve their business goals. The company is based in Tel Aviv, Israel, with its North American subsidiary's headquarters in Irvine, Calif. and regional offices throughout the United States, Canada and Australia. Founded in 1983, the company's products are currently licensed to more than 2,000 customers in more than 40 countries. For more information, please visit the company's web site at http://www.ndsoft.com 6
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