Exhibit 2.1
Master Separation and Distribution Agreement
Between
3Com Corporation
and
Palm Computing, Inc.
Effective as of
December 13, 1999
TABLE OF CONTENTS
Page
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ARTICLE I SEPARATION................................................................. 2
Section 1.1 Separation Date................................................. 2
Section 1.2 Closing of Transactions......................................... 2
Section 1.3 Exchange of Secretary's Certificates............................ 2
ARTICLE II DOCUMENTS AND ITEMS TO BE DELIVERED ON THE SEPARATION DATE................ 2
Section 2.1 Documents to Be Delivered by 3Com............................... 2
Section 2.2 Documents to Be Delivered by Palm............................... 3
ARTICLE III THE IPO AND ACTIONS PENDING THE IPO...................................... 3
Section 3.1 Transactions Prior to the IPO................................... 3
Section 3.2 Cooperation..................................................... 4
Section 3.3 Conditions Precedent to Consummation of the IPO................. 4
ARTICLE IV THE DISTRIBUTION.......................................................... 5
Section 4.1 The Distribution................................................ 5
Section 4.2 Actions Prior to the Distribution............................... 6
Section 4.3 Sole Discretion of 3Com......................................... 6
Section 4.4 Conditions Precedent to Distribution............................ 6
Section 4.5 Fractional Shares............................................... 7
ARTICLE V COVENANTS AND OTHER MATTERS................................................ 8
Section 5.1 Other Agreements................................................ 8
Section 5.2 Further Instruments............................................. 8
Section 5.3 Additional Transitional Services Agreements..................... 8
Section 5.4 Agreement for Exchange of Information........................... 8
Section 5.5 Auditors and Audits; Annual and Quarterly Statements and
Accounting...................................................... 10
Section 5.6 Consistency with Past Practices................................. 12
Section 5.7 Payment of Expenses............................................. 12
Section 5.8 Foreign Subsidiaries............................................ 12
Section 5.9 Dispute Resolution.............................................. 12
Section 5.10 Governmental Approvals.......................................... 13
Section 5.11 No Representation or Warranty................................... 13
Section 5.12 Non-Solicitation of Employees................................... 14
Section 5.13 Employee Agreements............................................. 14
Section 5.14 Cooperation in Obtaining New Agreements......................... 15
Section 5.15 Property Damage to Palm Assets Prior to the Separation Date..... 16
ARTICLE VI MISCELLANEOUS............................................................. 16
Section 6.1 Limitation of Liability......................................... 16
Section 6.2 Entire Agreement................................................ 16
Section 6.3 Governing Law................................................... 17
Section 6.4 Termination..................................................... 17
Section 6.5 Notices......................................................... 17
Section 6.6 Counterparts.................................................... 17
Section 6.7 Binding Effect; Assignment...................................... 17
Section 6.8 Severability.................................................... 18
Section 6.9 Failure or Indulgence Not Waiver; Remedies Cumulative........... 18
Section 6.10 Amendment....................................................... 18
Section 6.11 Authority....................................................... 18
Section 6.12 Interpretation.................................................. 18
Section 6.13 Conflicting Agreements.......................................... 19
ARTICLE VII DEFINITIONS.............................................................. 19
Section 7.1 Affiliated Company.............................................. 19
Section 7.2 Governmental Approvals.......................................... 19
Section 7.3 Governmental Authority.......................................... 19
Section 7.4 Information..................................................... 19
Section 7.5 IPO Closing Date................................................ 19
Section 7.6 Palm Assets..................................................... 19
Section 7.7 Palm Group...................................................... 19
Section 7.8 Palm's Auditors................................................. 19
Section 7.9 Person.......................................................... 20
Section 7.10 Record Date..................................................... 20
Section 7.11 Subsidiary...................................................... 20
Section 7.12 3Com Group...................................................... 20
Section 7.13 3Com's Auditors................................................. 20
MASTER SEPARATION AND DISTRIBUTION AGREEMENT
This Master Separation and Distribution Agreement (this "Agreement") is
entered into as of December 13, 1999, between 3Com Corporation ("3Com"), a
Delaware corporation, and Palm Computing, Inc. ("Palm"), a California
corporation. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to such terms in Article VII hereof.
RECITALS
WHEREAS, 3Com currently owns all of the issued and outstanding common stock
of Palm;
WHEREAS, Palm is engaged in the handheld computing business and related
businesses as described in the IPO Registration Statement (the "Palm Business");
WHEREAS, the Boards of Directors of 3Com and Palm have each determined that
it would be appropriate and desirable for 3Com to contribute and transfer to
Palm, and for Palm to receive and assume, directly or indirectly, assets and
liabilities currently held by 3Com and associated with the Palm Business (the
"Separation");
WHEREAS, 3Com and Palm currently contemplate that, following the
contribution and assumption of assets and liabilities, Palm will make an initial
public offering ("IPO") of an amount of its common stock pursuant to a
registration statement on Form S-1 pursuant to the Securities Act of 1933, as
amended (the "IPO Registration Statement"), that will reduce 3Com's ownership of
Palm after the IPO and any private placements of securities of Palm concluded
prior to or concurrent with the IPO to not less than 80.1%;
WHEREAS, 3Com and Palm currently contemplate that in conjunction with the
IPO, Palm will reincorporate from the State of California to the State of
Delaware, and will change its name to Palm, Inc.;
WHEREAS, 3Com currently contemplates that, several months following such
IPO, 3Com will distribute, pro rata, to the holders of its common stock, $0.001
par value, all of the shares of Palm common stock owned by 3Com (the
"Distribution");
WHEREAS, 3Com and Palm intend that the Separation and the Distribution will
qualify as a tax-free reorganization under Sections 368(a)(1)(D) and 355 of the
Internal Revenue Code of 1986, as amended (the "Code"), and that this Agreement
is intended to be, and is hereby adopted as, a plan of reorganization under
Section 368 of the Code; and
WHEREAS, the parties intend in this Agreement, including the Exhibits
hereto, to set forth the principal arrangements between them regarding the
separation of the Palm Business.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:
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ARTICLE I
SEPARATION
Section 1.1 Separation Date. Unless otherwise provided in this
Agreement, or in any agreement to be executed in connection with this Agreement,
the effective time and date of each transfer of property, assumption of
liability, license, undertaking, or agreement in connection with the Separation
shall be 12:01 a.m., Pacific Time, February 26, 2000 or such other date as may
be fixed by the Board of Directors of 3Com (the "Separation Date").
Section 1.2 Closing of Transactions. Unless otherwise provided herein,
the closing of the transactions contemplated in Article II shall occur by the
lodging of each of the executed instruments of transfer, assumptions of
liability, undertakings, agreements, instruments or other documents executed or
to be executed with Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx ("WSGR"), 000 Xxxx Xxxx
Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, to be held in escrow for delivery as provided
in Section 1.3.
Section 1.3 Exchange of Secretary's Certificates. Upon receipt of a
certificate of the Secretary or an Assistant Secretary of 3Com in the form
attached to this Agreement as Exhibit A, WSGR shall deliver to Palm on behalf of
3Com all of the items required to be delivered by 3Com hereunder pursuant to
Section 2.1 and each such item shall be deemed to be delivered to Palm as of the
Separation Date upon delivery of such certificate. Upon receipt of a certificate
of the Secretary or an Assistant Secretary of Palm in the form attached to this
Agreement as Exhibit B, WSGR shall deliver to 3Com on behalf of Palm all of the
items required to be delivered by Palm pursuant to Section 2.2 hereunder and
each such item shall be deemed to be delivered to 3Com as of the Separation Date
upon receipt of such certificate.
ARTICLE II
DOCUMENTS AND ITEMS TO BE DELIVERED ON THE SEPARATION DATE
Section 2.1 Documents to Be Delivered by 3Com. On the Separation Date or
such other date as agreed in connection with the Non-US Plan (as defined in
Section 5.8), 3Com will deliver, or will cause its appropriate Subsidiaries to
deliver, to Palm all of the following items and agreements (collectively,
together with all agreements and documents contemplated by such agreements, the
"Ancillary Agreements"):
(a) A duly executed General Assignment and Assumption Agreement (the
"Assignment Agreement") substantially in the form attached hereto as Exhibit C;
(b) A duly executed Master Technology Ownership and License Agreement
substantially in the form attached hereto as Exhibit D-1, a duly executed Master
Patent Ownership and License Agreement substantially in the form attached hereto
as Exhibit D-2 and a duly executed Master Trademark Ownership and License
Agreement substantially in the form attached as Exhibit D-3;
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(c) A duly executed Employee Matters Agreement substantially in the
form attached hereto as Exhibit E;
(d) A duly executed Tax Sharing Agreement substantially in the form
attached hereto as Exhibit F;
(e) A duly executed Master Transitional Services Agreement
substantially in the form attached hereto as Exhibit G;
(f) A duly executed Real Estate Matters Agreement substantially in
the form attached hereto as Exhibit H;
(g) A duly executed Master Confidential Disclosure Agreement
substantially in the form attached hereto as Exhibit I;
(h) A duly executed Indemnification and Insurance Matters Agreement
substantially in the form attached hereto as Exhibit J;
(i) A plan of Reorganization of Operations Outside the US, as
described in Exhibit K;
(j) Resignations of each person who is an officer or director of 3Com
or its Subsidiaries, immediately prior to the Separation Date, and who will be
employees of Palm from and after the Separation Date; and
(k) Such other agreements, documents or instruments as the parties
may agree are necessary or desirable in order to achieve the purposes hereof.
Section 2.2 Documents to Be Delivered by Palm. As of the Separation Date,
Palm will deliver to 3Com all of the following:
(a) In each case where Palm is a party to any agreement or instrument
referred to in Section 2.1, a duly executed counterpart of such agreement or
instrument; and
(b) Resignations of each person who is an officer or director of
Palm, immediately prior to the Separation Date, and who will be an employee of
3Com from and after the Separation Date.
ARTICLE III
THE IPO AND ACTIONS PENDING THE IPO
Section 3.1 Transactions Prior to the IPO. Subject to the conditions
specified in Section 3.3, 3Com and Palm shall use their reasonable commercial
efforts to consummate the IPO. Such efforts shall include, but not necessarily
be limited to, those specified in this Section 3.1
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(a) Registration Statement. Palm shall file the IPO Registration
Statement, and such amendments or supplements thereto as may be necessary in
order to cause the same to become and remain effective as required by law or by
the managing underwriters for the IPO (the "Underwriters"), including, but not
limited to, filing such amendments to the IPO Registration Statement as may be
required by the underwriting agreement to be entered into between Palm and the
Underwriters (the "Underwriting Agreement"), the Securities and Exchange
Commission (the "Commission") or federal, state or foreign securities laws. 3Com
and Palm shall also cooperate in preparing, filing with the Securities and
Exchange Commission and causing to become effective a registration statement
registering the common stock of Palm under the Securities and Exchange Act of
1934, as amended (the "Exchange Act"), and any registration statements or
amendments thereof which are required to reflect the establishment of, or
amendments to, any employee benefit and other plans necessary or appropriate in
connection with the IPO, the Separation, the Distribution or the other
transactions contemplated by this Agreement.
(b) Underwriting Agreement. Palm shall enter into the Underwriting
Agreement, in form and substance reasonably satisfactory to Palm, and shall
comply with its obligations thereunder.
(c) Nasdaq Listing. Palm shall prepare, file and use reasonable
commercial efforts to seek to make effective, an application for listing of the
common stock of Palm issued in the IPO on the Nasdaq National Market ("Nasdaq"),
subject to official notice of issuance.
Section 3.2 Cooperation. Palm shall consult with, and cooperate in all
respects with, 3Com in connection with the pricing of the common stock of Palm
to be offered in the IPO and shall, at 3Com's direction, promptly take any and
all actions necessary or desirable to consummate the IPO as contemplated by the
IPO Registration Statement and the Underwriting Agreement.
Section 3.3 Conditions Precedent to Consummation of the IPO. The IPO
closing is currently scheduled to occur on or before June 2, 2000 (the "IPO
Closing Date"). The obligations of the parties to use their reasonable
commercial efforts to consummate the IPO shall be conditioned on the
satisfaction of the following conditions:
(a) Registration Statement. The IPO Registration Statement shall
have been filed and declared effective by the Commission, and there shall be no
stop-order in effect with respect thereto.
(b) Blue Sky. The actions and filings with regard to state
securities and blue sky laws of the United States (and any comparable laws under
any foreign jurisdictions) shall have been taken and, where applicable, have
become effective or been accepted.
(c) Nasdaq Listing. The common stock of Palm to be issued in the IPO
shall have been accepted for listing on the Nasdaq, on official notice of
issuance.
(d) Underwriting Agreement. Palm shall have entered into the
Underwriting Agreement and all conditions to the obligations of Palm and the
Underwriters shall have been satisfied or waived.
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(e) Common Stock Ownership. 3Com shall be satisfied in its sole
discretion that it will own at least 80.1% of the outstanding common stock of
Palm following the IPO and any private placements of securities of Palm
concluded prior to or concurrent with the IPO. All other conditions to permit
the Distribution to qualify as a tax-free distribution to 3Com, Palm and 3Com's
stockholders shall, to the extent applicable as of the time of the IPO, be
satisfied. There shall be no event or condition that is likely to cause any of
such conditions not to be satisfied as of the time of the Distribution or
thereafter.
(f) No Legal Restraints. No order, injunction or decree issued by
any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Separation or the IPO or any of
the other transactions contemplated by this Agreement shall be in effect.
(g) Separation. The Separation shall have become effective by
execution of this Agreement and the Ancillary Agreements.
(h) Other Actions. Such other actions as the parties hereto may,
based upon the advice of counsel, reasonably request to be taken prior to the
IPO in order to assure the successful completion of the IPO shall have been
taken.
(i) No Termination. This Agreement shall not have been terminated.
ARTICLE IV
THE DISTRIBUTION
Section 4.1 The Distribution.
(a) Delivery of Shares for Distribution. Subject to Section 4.4
hereof, on or prior to the date the Distribution is effective (the "Distribution
Date"), 3Com will deliver to the distribution agent (the "Distribution Agent")
to be appointed by 3Com to distribute to the stockholders of 3Com the shares of
common stock of Palm held by 3Com pursuant to the Distribution for the benefit
of holders of record of common stock of 3Com on the Record Date, a single stock
certificate, endorsed by 3Com, representing all of the outstanding shares of
common stock of Palm then owned by 3Com, and shall cause the transfer agent for
the shares of common stock of 3Com to instruct the Distribution Agent to
distribute on the Distribution Date the appropriate number of such shares of
common stock of Palm to each such holder or designated transferee or transferees
of such holder.
(b) Shares Received. Subject to Sections 4.4 and 4.5, each holder of
common stock of 3Com on the Record Date (or such holder's designated transferee
or transferees) will be entitled to receive in the Distribution a number of
shares of common stock of Palm equal to the number of shares of common stock of
3Com held by such holder on the Record Date multiplied by a fraction the
numerator of which is the number of shares of common stock of Palm beneficially
owned by 3Com on the Record Date and the denominator of which is the number of
shares of common stock of 3Com outstanding on the Record Date.
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(c) Obligation to Provide Information. Palm and 3Com, as the case
may be, will provide to the Distribution Agent all share certificates and any
information required in order to complete the Distribution on the basis
specified above.
Section 4.2 Actions Prior to the Distribution.
(a) Information Statement. 3Com and Palm shall prepare and mail,
prior to the Distribution Date, to the holders of common stock of 3Com, such
information concerning Palm and the Distribution and such other matters as 3Com
shall reasonably determine are necessary and as may be required by law. 3Com and
Palm will prepare, and Palm will, to the extent required under applicable law,
file with the Commission any such documentation which 3Com and Palm determine is
necessary or desirable to effectuate the Distribution, and 3Com and Palm shall
each use its reasonable commercial efforts to obtain all necessary approvals
from the Commission with respect thereto as soon as practicable.
(b) Blue Sky. 3Com and Palm shall take all such actions as may be
necessary or appropriate under the securities or blue sky laws of the United
States (and any comparable laws under any foreign jurisdiction) in connection
with the Distribution.
(c) Nasdaq Listing. Palm shall prepare and file, and shall use its
reasonable commercial efforts to have approved, an application for the
additional listing of the common stock of Palm to be distributed in the
Distribution on the Nasdaq, subject to official notice of distribution.
(d) Conditions. 3Com and Palm shall take all reasonable steps
necessary and appropriate to cause the conditions set forth in Section 4.4 to be
satisfied and to effect the Distribution on the Distribution Date.
Section 4.3 Sole Discretion of 3Com. 3Com currently intends, following
the consummation of the IPO, to complete the Distribution by December 1, 2000.
3Com shall, in its sole and absolute discretion, determine the date of the
consummation of the Distribution and all terms of the Distribution, including,
without limitation, the form, structure and terms of any transaction(s) and/or
offering(s) to effect the Distribution and the timing of and conditions to the
consummation of the Distribution. In addition, 3Com may at any time and from
time to time until the completion of the Distribution, modify or change the
terms of the Distribution, including, without limitation, by accelerating or
delaying the timing of the consummation of all or part of the Distribution. Palm
shall cooperate with 3Com in all respects to accomplish the Distribution and
shall, at 3Com's direction, promptly take any and all actions necessary or
desirable to effect the Distribution, including, without limitation, the
registration under the Securities Act of the common stock of Palm on an
appropriate registration form or forms to be designated by 3Com. 3Com shall
select any investment banker(s) and manager(s) in connection with the
Distribution, as well as any financial printer, solicitation and/or exchange
agent and outside counsel for 3Com; provided, however, that nothing herein shall
prohibit Palm from engaging (at its own expense) its own financial, legal,
accounting and other advisors in connection with the Distribution.
Section 4.4 Conditions Precedent to Distribution. The following are
conditions that must take place prior to the consummation of the Distribution.
The conditions are for the sole benefit of
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3Com and shall not give rise to or create any duty on the part of 3Com or the
3Com Board of Directors to waive or not waive any such condition.
(a) IRS Ruling. 3Com shall have obtained a private letter ruling
from the Internal Revenue Service in form and substance satisfactory to 3Com (in
its sole discretion), and such ruling shall remain in effect as of the
Distribution Date, to the effect that (i) the transfer by the 3Com Group to the
Palm Group of the property, subject to liabilities, held by 3Com of the Palm
Business, and Palm's assumption of liabilities held by 3Com related to the Palm
Business, followed by the distribution by 3Com of all of its Palm stock to the
stockholders of 3Com, will qualify as a reorganization under Sections
368(a)(1)(D) and 355 of the Code; (ii) no gain or loss will be recognized by
3Com on its transfer of property of the Palm Business to Palm; (iii) no gain or
loss will be recognized by Palm on its receipt of property of the Palm Business
from 3Com; and (iv) no gain or loss will be recognized by (and no amount will
otherwise be included in the income of) the stockholders of 3Com upon their
receipt of Palm common stock pursuant to the Distribution.
(b) Government Approvals. Any material governmental approvals and
consents necessary to consummate the Distribution shall have been obtained and
be in full force and effect;
(c) No Legal Restraints. No order, injunction or decree issued by
any court or agency of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Distribution shall be in effect
and no other event outside the control of 3Com shall have occurred or failed to
occur that prevents the consummation of the Distribution; and
(d) No Material Adverse Effect. No other events or developments
shall have occurred subsequent to the IPO Closing Date that, in the judgment of
the Board of Directors of 3Com, would result in the Distribution having a
material adverse effect on 3Com or on the stockholders of 3Com.
Section 4.5 Fractional Shares. As soon as practicable after the
Distribution Date, 3Com shall direct the Distribution Agent to determine the
number of whole shares and fractional shares of common stock of Palm allocable
to each holder of record or beneficial owner of common stock of 3Com as of the
Record Date, to aggregate all such fractional shares and sell the whole shares
obtained thereby at the direction of 3Com, in open market transactions, at then
prevailing trading prices, and to cause to be distributed to each such holder or
for the benefit of each such beneficial owner to which a fractional share shall
be allocable such holder's or owner's ratable share of the proceeds of such
sale, after making appropriate deductions of the amount required to be withheld
for federal income tax purposes and after deducting an amount equal to all
brokerage charges, commissions and transfer taxes attributed to such sale. 3Com
and the Distribution Agent shall use their reasonable commercial efforts to
aggregate the shares of common stock of 3Com that may be held by any beneficial
owner thereof through more than one account in determining the fractional share
allocable to such beneficial owner.
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ARTICLE V
COVENANTS AND OTHER MATTERS
Section 5.1 Other Agreements. 3Com and Palm agree to execute or cause to
be executed by the appropriate parties and deliver, as appropriate, such other
agreements, instruments and other documents as may be necessary or desirable in
order to effect the purposes of this Agreement and the Ancillary Agreements.
Section 5.2 Further Instruments. At the request of Palm, and without
further consideration, 3Com will execute and deliver, and will cause its
applicable Subsidiaries to execute and deliver, to Palm and its Subsidiaries
such other instruments of transfer, conveyance, assignment, substitution and
confirmation and take such action as Palm may reasonably deem necessary or
desirable in order more effectively to transfer, convey and assign to Palm and
its Subsidiaries and confirm Palm's and its Subsidiaries' title to all of the
assets, rights and other things of value contemplated to be transferred to Palm
and its Subsidiaries pursuant to this Agreement, the Ancillary Agreements, and
any documents referred to therein, to put Palm and its Subsidiaries in actual
possession and operating control thereof and to permit Palm and its Subsidiaries
to exercise all rights with respect thereto (including, without limitation,
rights under contracts and other arrangements as to which the consent of any
third party to the transfer thereof shall not have previously been obtained). At
the request of 3Com and without further consideration, Palm will execute and
deliver, and will cause its applicable Subsidiaries to execute and deliver, to
3Com and its Subsidiaries all instruments, assumptions, novations, undertakings,
substitutions or other documents and take such other action as 3Com may
reasonably deem necessary or desirable in order to have Palm fully and
unconditionally assume and discharge the liabilities contemplated to be assumed
by Palm under this Agreement or any document in connection herewith and to
relieve the 3Com Group of any liability or obligation with respect thereto and
evidence the same to third parties. Neither 3Com nor Palm shall be obligated, in
connection with the foregoing, to expend money other than reasonable out-of-
pocket expenses, attorneys' fees and recording or similar fees. Furthermore,
each party, at the request of the other party hereto, shall execute and deliver
such other instruments and do and perform such other acts and things as may be
necessary or desirable for effecting completely the consummation of the
transactions contemplated hereby.
Section 5.3 Additional Transitional Services Agreements. 3Com and its
Subsidiaries and Palm and its Subsidiaries will enter into transitional services
agreements covering the provision of various transitional services, including
financial, accounting, real estate and site services, sales, customer support,
human resources, supply chain services and information technology services by
3Com (and its Subsidiaries) to Palm (and its Subsidiaries) or, in certain
circumstances, vice versa. Such services will generally be provided for a fee
equal to the direct costs and indirect costs of providing such services plus
five percent (5.0%). The transitional services agreements will generally provide
for a term of one year or less. However, some transitional services agreements
may be extended beyond the initial one year term, in which case the fee for such
services shall, generally, be increased to the direct costs and indirect costs
of providing such services plus ten percent (10.0%).
Section 5.4 Agreement for Exchange of Information.
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(a) Generally. Each of 3Com and Palm agrees to provide, or cause to
be provided, to each other, at any time before or after the Distribution Date,
as soon as reasonably practicable after written request therefor, any
Information in the possession or under the control of such party that the
requesting party reasonably needs (i) to comply with reporting, disclosure,
filing or other requirements imposed on the requesting party (including under
applicable securities laws) by a Governmental Authority having jurisdiction over
the requesting party, (ii) for use in any other judicial, regulatory,
administrative or other proceeding or in order to satisfy audit, accounting,
claims, regulatory, litigation or other similar requirements, (iii) to comply
with its obligations under this Agreement or any Ancillary Agreement or (iv) in
connection with the ongoing businesses of 3Com or Palm, as the case may be;
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.
(b) Internal Accounting Controls; Financial Information. After the
Separation Date, (i) each party shall maintain in effect at its own cost and
expense adequate systems and controls for its business to the extent necessary
to enable the other party to satisfy its reporting, accounting, audit and other
obligations, and (ii) each party shall provide, or cause to be provided, to the
other party and its Subsidiaries in such form as such requesting party shall
request, at no charge to the requesting party, all financial and other data and
information as the requesting party determines necessary or advisable in order
to prepare its financial statements and reports or filings with any Governmental
Authority.
(c) Ownership of Information. Any Information owned by a party that
is provided to a requesting party pursuant to this Section 5.4 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.
(d) Record Retention. To facilitate the possible exchange of
Information pursuant to this Section 5.4 and other provisions of this Agreement
after the Distribution Date, each party agrees to use its reasonable commercial
efforts to retain all Information in its respective possession or control on the
Distribution Date substantially in accordance with the policies of 3Com as in
effect on the Separation Date. However, except as set forth in the Tax Sharing
Agreement, at any time after the Distribution Date, each party may amend its
respective record retention policies at such party's discretion; provided,
however, that if a party desires to effect the amendment within three (3) years
after the Distribution Date, the amending party must give thirty (30) days prior
written notice of such change in the policy to the other party to this
Agreement.
(i) No party will destroy, or permit any of its Subsidiaries to
destroy, any Information that exists on the Separation Date (other than
Information that is permitted to be destroyed under the current record retention
policies of 3Com) and that falls under the categories listed in Section 5.4(a),
without first using its reasonable commercial efforts to notify the other party
of the proposed destruction and giving the other party the opportunity to take
possession of such Information prior to such destruction.
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(e) Limitation of Liability. No party shall have any liability to
any other party in the event that any Information exchanged or provided pursuant
to this Section 5.4 is found to be inaccurate, in the absence of gross
negligence or willful misconduct by the party providing such Information. No
party shall have any liability to any other party if any Information is
destroyed or lost after reasonable commercial efforts by such party to comply
with the provisions of Section 5.4(d).
(f) Other Agreements Providing for Exchange of Information. The
rights and obligations granted under this Section 5.4 are subject to any
specific limitations, qualifications or additional provisions on the sharing,
exchange or confidential treatment of Information set forth in this Agreement
and any Ancillary Agreement.
(g) Production of Witnesses; Records; Cooperation. After the
Distribution Date, except in the case of a legal or other proceeding by one
party against another party (which shall be governed by such discovery rules as
may be applicable under Section 5.9 or otherwise), each party hereto shall use
its reasonable commercial efforts to make available to each other party, upon
written request, the former, current and future directors, officers, employees,
other personnel and agents of such party as witnesses and any books, records or
other documents within its control or which it otherwise has the ability to make
available, to the extent that any such person (giving consideration to business
demands of such directors, officers, employees, other personnel and agents) or
books, records or other documents may reasonably be required in connection with
any legal, administrative or other proceeding in which the requesting party may
from time to time be involved, regardless of whether such legal, administrative
or other proceeding is a matter with respect to which indemnification may be
sought hereunder. The requesting party shall bear all costs and expenses in
connection therewith.
Section 5.5 Auditors and Audits; Annual and Quarterly Statements and
Accounting. Each party agrees that, for so long as 3Com is required in
accordance with United States generally accepted accounting principles to
consolidate Palm's results of operations and financial position:
(a) Selection of Auditors. Palm shall not select a different
accounting firm from that used by 3Com to serve as its (and its Subsidiaries')
independent certified public accountants ("Palm's Auditors") for purposes of
providing an opinion on its consolidated financial statements without 3Com's
prior written consent (which shall not be unreasonably withheld).
(b) Date of Auditors' Opinion and Quarterly Reviews. Palm shall use
its reasonable commercial efforts to enable the Palm Auditors to complete their
audit such that they will date their opinion on Palm's audited annual financial
statements on the same date that 3Com's independent certified public accountants
("3Com's Auditors") date their opinion on 3Com's audited annual financial
statements, and to enable 3Com to meet its timetable for the printing, filing
and public dissemination of 3Com's annual financial statements. Palm shall use
its reasonable commercial efforts to enable the Palm Auditors to complete their
quarterly review procedures such that they will provide clearance on Palm's
quarterly financial statements on the same date that 3Com's Auditors provide
clearance on 3Com's quarterly financial statements.
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(c) Annual and Quarterly Financial Statements. Palm shall provide to
3Com on a timely basis all Information that 3Com reasonably requires to meet its
schedule for the preparation, printing, filing, and public dissemination of
3Com's annual and quarterly financial statements. Without limiting the
generality of the foregoing, Palm will provide all required financial
Information with respect to Palm and its Subsidiaries to Palm's Auditors in a
sufficient and reasonable time and in sufficient detail to permit Palm's
Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to 3Com's Auditors with respect to financial Information
to be included or contained in 3Com's annual and quarterly financial statements.
Similarly, 3Com shall provide to Palm on a timely basis all financial
Information that Palm reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of Palm's annual and
quarterly financial statements. Without limiting the generality of the
foregoing, 3Com will provide all required financial Information with respect to
3Com and its Subsidiaries to 3Com's Auditors in a sufficient and reasonable time
and in sufficient detail to permit 3Com's Auditors to take all steps and perform
all reviews necessary to provide sufficient assistance to Palm's Auditors with
respect to Information to be included or contained in Palm's annual and
quarterly financial statements.
(d) Identity of Personnel Performing the Annual Audit and Quarterly
Reviews. Palm shall authorize Palm's Auditors to make available to 3Com's
Auditors both the personnel who performed or will perform the annual audits and
quarterly reviews of Palm and work papers related to the annual audits and
quarterly reviews of Palm, in all cases within a reasonable time prior to Palm's
Auditors' opinion date, so that 3Com's Auditors are able to perform the
procedures they consider necessary to take responsibility for the work of Palm's
Auditors as it relates to 3Com's Auditors' report on 3Com's financial
statements, all within sufficient time to enable 3Com to meet its timetable for
the printing, filing and public dissemination of 3Com's annual and quarterly
statements. Similarly, 3Com shall authorize 3Com's Auditors to make available to
Palm's Auditors both the personnel who performed or will perform the annual
audits and quarterly reviews of 3Com and work papers related to the annual
audits and quarterly reviews of 3Com, in all cases within a reasonable time
prior to 3Com's Auditors' opinion date, so that Palm's Auditors are able to
perform the procedures they consider necessary to take responsibility for the
work of 3Com's Auditors as it relates to Palm's Auditors' report on Palm's
statements, all within sufficient time to enable Palm to meet its timetable for
the printing, filing and public dissemination of Palm's annual and quarterly
financial statements.
(e) Access to Books and Records. Palm shall provide 3Com's internal
auditors and their designees access to Palm's and its Subsidiaries' books and
records so that 3Com may conduct reasonable audits relating to the financial
statements provided by Palm pursuant hereto as well as to the internal
accounting controls and operations of Palm and its Subsidiaries. Similarly, 3Com
shall provide Palm's internal auditors and their designees access to 3Com's and
its Subsidiaries' books and records so that Palm may conduct reasonable audits
relating to the financial statements provided by 3Com pursuant hereto as well as
to the internal accounting controls and operations of 3Com and its Subsidiaries
(f) Notice of Change in Accounting Principles. Palm shall give 3Com
as much prior notice as reasonably practical of any proposed determination of,
or any significant changes in, its accounting estimates or accounting principles
from those in effect on the Separation Date. Palm will consult with 3Com and, if
requested by 3Com, Palm will consult with 3Com's independent public
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accountants with respect thereto. 3Com shall give Palm as much prior notice as
reasonably practical of any proposed determination of, or any significant
changes in, its accounting estimates or accounting principles from those in
effect on the Separation Date.
(g) Conflict with Third-Party Agreements. Nothing in Sections 5.4
and 5.5 shall require Palm to violate any agreement with any third party
regarding the confidentiality of confidential and proprietary information
relating to that third party or its business; provided, however, that in the
event that Palm is required under Sections 5.4 and 5.5 to disclose any such
Information, Palm shall use all commercially reasonable efforts to seek to
obtain such third party's consent to the disclosure of such information.
Section 5.6 Consistency with Past Practices. At all times, 3Com and Palm
will conduct the Palm Business before the Separation Date in the ordinary
course, consistent with past practices.
Section 5.7 Payment of Expenses. Except as otherwise provided in this
Agreement, the Ancillary Agreements or any other agreement between the parties
relating to the Separation, the IPO or the Distribution, all costs and expenses
of the parties hereto in connection with the Separation, the IPO (including
underwriting discounts and commissions) and the Distribution and costs and
expenses of the parties hereto in connection with the Separation shall be
allocated between Palm and 3Com. Palm and 3Com shall each be responsible for
their own internal fees, costs and expenses incurred in connection with the
Separation, the IPO and the Distribution.
Section 5.8 Foreign Subsidiaries. 3Com and Palm shall cause each of
their foreign subsidiaries to execute such local transfer agreements,
assignments, assumptions, novations and other documents as shall be necessary to
carry out the plan described in Exhibit K (the "Non-US Plan") hereto to effect
the purposes of this Agreement with respect to their respective operations
outside the United States.
Section 5.9 Dispute Resolution.
(a) If a dispute, controversy or claim ("Dispute") arises between the
parties relating to the interpretation or performance of this Agreement or the
Ancillary Agreements, or the grounds for the termination hereof, appropriate
senior executives (e.g. director or V.P. level) of each party who shall have the
authority to resolve the matter shall meet to attempt in good faith to negotiate
a resolution of the Dispute prior to pursuing other available remedies. The
initial meeting between the appropriate senior executives shall be referred to
herein as the "Dispute Resolution Commencement Date." Discussions and
correspondence relating to trying to resolve such Dispute shall be treated as
confidential information developed for the purpose of settlement and shall be
exempt from discovery or production and shall not be admissible. If the senior
executives are unable to resolve the Dispute within thirty (30) days from the
Dispute Resolution Commencement Date, and either party wishes to pursue its
rights relating to such Dispute, then the Dispute will be mediated by a mutually
acceptable mediator appointed pursuant to the mediation rules of JAMS/Endispute
within thirty (30) days after written notice by one party to the other demanding
non-binding mediation. Neither party may unreasonably withhold consent to the
selection of a mediator or the location of the mediation. Both parties will
share the costs of the mediation equally, except that each party shall bear its
own costs
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and expenses, including attorney's fees, witness fees, travel expenses, and
preparation costs. The parties may also agree to replace mediation with some
other form of non-binding or binding ADR.
(b) Any Dispute which the parties cannot resolve through mediation
within ninety (90) days of the Dispute Resolution Commencement Date, unless
otherwise mutually agreed, shall be submitted to final and binding arbitration
under the then current Commercial Arbitration Rules of the American Arbitration
Association ("AAA"), by three (3) arbitrators in Santa Xxxxx County, California.
Such arbitrators shall be selected by the mutual agreement of the parties or,
failing such agreement, shall be selected according to the aforesaid AAA rules.
The arbitrators will be instructed to prepare and deliver a written, reasoned
opinion stating their decision within thirty (30) days of the completion of the
arbitration. The prevailing party in such arbitration shall be entitled to
expenses, including costs and reasonable attorneys' and other professional fees,
incurred in connection with the arbitration (but excluding any costs and fees
associated with prior negotiation or mediation). The decision of the arbitrator
shall be final and non-appealable and may be enforced in any court of competent
jurisdiction. The use of any ADR procedures will not be construed under the
doctrine of laches, waiver or estoppel to adversely affect the rights of either
party.
(c) Any Dispute regarding the following is not required to be
negotiated, mediated or arbitrated prior to seeking relief from a court of
competent jurisdiction: breach of any obligation of confidentiality;
infringement, misappropriation, or misuse of any intellectual property right;
any other claim where interim relief from the court is sought to prevent serious
and irreparable injury to one of the parties or to others. However, the parties
to the Dispute shall make a good faith effort to negotiate and mediate such
Dispute, according to the above procedures, while such court action is pending.
(d) 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 Section 5.9 with
respect to all matters not subject to such dispute, controversy or claim.
Section 5.10 Governmental Approvals. To the extent that the Separation
requires any Governmental Approvals, the parties will use their reasonable
commercial efforts to obtain any such Governmental Approvals.
Section 5.11 No Representation or Warranty. 3Com does not, in this
Agreement or any other agreement, instrument or document contemplated by this
Agreement, make any representation as to, warranty of or covenant with respect
to:
(a) the value of any asset or thing of value to be transferred to
Palm;
(b) the freedom from encumbrance of any asset or thing of value to be
transferred to Palm;
(c) the absence of defenses or freedom from counterclaims with
respect to any claim to be transferred to Palm; or
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(d) the legal sufficiency of any assignment, document or instrument
delivered hereunder to convey title to any asset or thing of value upon its
execution, deliver and filing.
Except as may expressly be set forth herein or in any Ancillary Agreement,
all assets to be transferred to Palm shall be transferred "AS IS, WHERE IS" and
Palm shall bear the economic and legal risk that any conveyance shall prove to
be insufficient to vest in Palm good and marketable title, free and clear of any
lien, claim, equity or other encumbrance.
Section 5.12 Non-Solicitation of Employees. 3Com and Palm each agree not
to solicit or recruit, without the other party's express written consent, the
other party's employees for a period of two (2) years following the Distribution
Date. To the extent this prohibition is waived, any recruitment efforts by
either 3Com or Palm during the period of one (1) year after the Distribution
Date shall be coordinated with each party's Senior Vice President of Human
Resources or his or her designate and appropriate management. Notwithstanding
the foregoing, this prohibition on solicitation does not apply to actions taken
by a party either: (a) solely as a result of an employee's affirmative response
to a general recruitment effort carried out through a public solicitation or
general solicitation, or (b) as a result of an employee's initiative.
Section 5.13 Employee Agreements. Definition. As used in this Section
5.13, "Employee Agreement" means the Conflicts, Confidential Information and
Assignment of Inventions Agreement and corresponding agreements in foreign
countries executed by each 3Com employee.
(a) Survival of 3Com Employee Agreement Obligations and 3Com's Common
Law Rights. The 3Com Employee Agreements of all former 3Com employees
transferred to Palm as of the Distribution Date shall remain in full force and
effect according to their terms; provided, however, that none of the following
acts committed by former 3Com employees within the scope of their Palm
employment shall constitute a breach of such 3Com Employee Agreements: (i) the
use or disclosure of Confidential Information (as that term is defined in the
former 3Com employee's 3Com Employee Agreement) for or on behalf of Palm, if
such disclosure is consistent with the rights granted to Palm and restrictions
imposed on Palm under this Agreement, any Ancillary Agreement or any other
agreement between the parties; (ii) the disclosure and assignment to Palm of
rights in proprietary developments authored or conceived by the former 3Com
employee after the Separation Date and resulting from the use of, or based upon
intellectual property (whether patented or not) which is retained by 3Com;
provided, however, that in no event shall such disclosure and assignment be
regarded as assigning the underlying intellectual property to Palm; (iii) the
rendering of any services, directly or indirectly, to Palm to the extent such
services are consistent with the assignment or license of rights granted to Palm
and the restrictions imposed on Palm under this Agreement, any Ancillary
Agreement or any other agreement between the parties; and (iv) solicitation of
the employees of one party by the other party prior to the Distribution Date (so
long as such solicitation does not violate Section 5.12 hereof). Further, 3Com
retains any rights it has under statute or common law with respect to actions by
its former employees to the extent such actions are inconsistent with the rights
granted to Palm and restrictions imposed on Palm under this Agreement, any
Ancillary Agreement or any other agreement between the parties.
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(b) Assignment, Cooperation for Compliance and Enforcement.
(i) 3Com retains all rights under the 3Com Employee Agreements
of all former 3Com employees necessary to permit 3Com to protect the rights and
interests of 3Com, but hereby transfers and assigns to Palm its rights under the
3Com Employee Agreements of all former 3Com employees to the extent required to
permit Palm to enjoin, restrain, recover damages from or obtain specific
performance of the 3Com Employee Agreements or obtain other remedies against any
employee who breaches his/her 3Com Employee Agreement.
(ii) 3Com and Palm agree, at their own respective cost and
expense, to use their reasonable efforts to cooperate as follows: (A) Palm shall
advise 3Com of: (1) any violation(s) of the 3Com Employee Agreement by former
3Com employees, and (2) any violation(s) of the Palm Employee Agreement which
affect 3Com's rights; and (B) 3Com shall advise Palm of any violations of the
3Com Employee Agreement by current or former 3Com employees which affect Palm's
rights; provided, however, that the foregoing obligations shall only apply to
violations which become known to an attorney within the legal department of the
party obligated to provide notice thereof.
(iii) 3Com and Palm each may separately enforce the 3Com
Employee Agreements of former 3Com employees to the extent necessary to
reasonably protect their respective interests, provided, however, that (i) Palm
shall not commence any legal action relating thereto without first consulting
with 3Com's General Counsel or his/her designee and (ii) 3Com shall not commence
any legal action relating thereto against any former 3Com employee who is at the
time an Palm employee without first consulting with Palm's General Counsel or
his/her designee. If either party, in seeking to enforce any 3Com Employee
Agreement, notifies the other party that it requires, or desires, such party to
join in such action, then the other party shall do so. In addition, if either
party commences or becomes a party to any action to enforce a 3Com Employee
Agreement of a former 3Com employee, the other party shall, whether or not it
becomes a party to the action, cooperate with the other party by making
available its files and employees who have information or knowledge relevant to
the dispute, subject to appropriate measures to protect the confidentiality of
any proprietary or confidential information that may be disclosed in the course
of such cooperation or action and subject to any relevant privacy laws and
regulations. Any such action shall be conducted at the expense of the party
bringing the action and the parties shall agree on a case by case basis on
compensation, if any, of the other party for the value of the time of such other
party's employees as reasonably required in connection with the action.
(iv) 3Com and Palm understand and acknowledge that matters
relating to the making, performance, enforcement, assignment and termination of
employee agreements are typically governed by the laws and regulations of the
national, federal, state or local governmental unit where an employee resides,
or where an employee's services are rendered, and that such laws and regulations
may supersede or limit the applicability or enforceability of this Section 5.13.
In such circumstances, 3Com and Palm agree to take action with respect to the
employee agreements that best accomplishes the parties' objectives as set forth
in this Section 5.13 and that is consistent with applicable law.
Section 5.14 Cooperation in Obtaining New Agreements. 3Com understands
that, prior to the Separation Date, Palm has derived benefits under certain
agreements and relationships between
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3Com and third parties, which agreements and relationships are not being
assigned or transferred to Palm in connection with the Separation. Upon the
request of Palm, 3Com agrees to make introductions of appropriate Palm personnel
to 3Com's contacts at such third parties, and agrees to provide reasonable
assistance to Palm, at 3Com's own expense, so that Palm may enter into
agreements or relationships with such third parties under substantially
equivalent terms and conditions, including financial terms and conditions, that
apply to 3Com. Such assistance may include, but is not limited to, (i)
requesting and encouraging such third parties to enter into such agreements or
relationships with Palm, (ii) attending meetings and negotiating sessions with
Palm and such third parties, and (iii) participating in buying consortiums with
Palm. 3Com also understands that certain agreements between 3Com and third
parties which are being assigned to Palm in connection with the Separation may
require the consent of the applicable third party. 3Com shall assist Palm in
seeking and obtaining the consent of such third parties to such assignment. The
parties expect that the activities contemplated by this Section 5.14 will be
substantially completed by the Distribution Date, but in no event will 3Com have
any obligations hereunder after the first anniversary of the Distribution Date.
Section 5.15 Property Damage to Palm Assets Prior to the Separation Date.
In the event of any property damage, other than ordinary wear and tear,
to any Palm Assets held by 3Com which occurs prior to the Separation Date, 3Com
shall repair or otherwise address such damage in the ordinary course of business
consistent with past practices; provided, however, that nothing in this clause
shall restrict 3Com from disposing of any Assets in the ordinary course of
business consistent with past practices.
ARTICLE VI
MISCELLANEOUS
Section 6.1 Limitation of Liability. IN NO EVENT SHALL ANY MEMBER OF THE
3COM GROUP OR PALM GROUP BE LIABLE TO ANY OTHER MEMBER OF THE 3COM GROUP OR PALM
GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES
OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT THE
FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S INDEMNIFICATION OBLIGATIONS
FOR LIABILITIES AS SET FORTH IN THE INDEMNIFICATION AND INSURANCE MATTERS
AGREEMENT.
Section 6.2 Entire Agreement. This Agreement, the Ancillary Agreements
and the Exhibits and Schedules referenced or attached hereto and thereto,
constitute the entire agreement between the parties with respect to the subject
matter hereof and thereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof and thereof.
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Section 6.3 Governing Law. This Agreement shall be construed in
accordance with and all Disputes hereunder shall be governed by the laws of the
State of California, excluding its conflict of law rules and the United Nations
Convention on Contracts for the International Sale of Goods. The Superior Court
of Santa Xxxxx County and/or the United States District Court for the Northern
District of California shall have jurisdiction and venue over all Disputes
between the parties that are permitted to be brought in a court of law pursuant
to Section 5.9 above.
Section 6.4 Termination. This Agreement and all Ancillary Agreements may
be terminated and the Distribution abandoned at any time prior to the IPO
Closing Date by and in the sole discretion of 3Com without the approval of Palm.
This Agreement may be terminated at any time after the IPO Closing Date and
before the Distribution Date by mutual consent of 3Com and Palm. In the event of
termination pursuant to this Section 6.4, no party shall have any liability of
any kind to the other party.
Section 6.5 Notices. Notices, offers, requests or other communications
required or permitted to be given by either party pursuant to the terms of this
Agreement shall be given in writing to the respective parties to the following
addresses:
if to 3Com :
3Com Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
if to Palm:
Palm Computing, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing as provided herein. Any notice
involving non-performance, termination, or renewal shall be sent by hand
delivery, recognized overnight courier or, within the United States, may also be
sent via certified mail, return receipt requested. All other notices may also
be sent by fax, confirmed by first class mail. All notices shall be deemed to
have been given and received on the earlier of actual delivery or three (3) days
from the date of postmark.
Section 6.6 Counterparts. This Agreement, including the Ancillary
Agreement and the Exhibits and Schedules hereto and thereto and the other
documents referred to herein or therein, may be executed in counterparts, each
of which shall be deemed to be an original but all of which shall constitute one
and the same agreement.
Section 6.7 Binding Effect; Assignment. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, and
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nothing in this Agreement, express or implied, is intended to confer upon any
other Person any rights or remedies of any nature whatsoever under or by reason
of this Agreement. This Agreement may be enforced separately by each member of
the 3Com Group and each member of the Palm Group. Neither party may assign this
Agreement or any rights or obligations hereunder, without the prior written
consent of the other party, and any such assignment shall be void; provided,
however, either party may assign this Agreement to a successor entity in
conjunction with such party's reincorporation.
Section 6.8 Severability. If any term or other provision of this
Agreement or the Exhibits or Schedules attached hereto is determined by a court,
administrative agency or arbitrator to be invalid, illegal or incapable of being
enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to either party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that transactions
contemplated hereby are fulfilled to the fullest extent possible.
Section 6.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement or the Exhibits or Schedules attached hereto are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
Section 6.10 Amendment. No change or amendment will be made to this
Agreement or the Exhibits or Schedules attached hereto except by an instrument
in writing signed on behalf of each of the parties to such agreement.
Section 6.11 Authority. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other actions, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and general equity principles.
Section 6.12 Interpretation. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Exhibit or
Schedule but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.
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Section 6.13 Conflicting Agreements. In the event of conflict between
this Agreement and any Ancillary Agreement or other agreement executed in
connection herewith, the provisions of such other agreement shall prevail.
ARTICLE VII
DEFINITIONS
Section 7.1 Affiliated Company. "Affiliated Company" of any Person means
any entity that controls, is controlled by, or is under common control with such
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 entity, whether through ownership of voting securities or other interests,
by contract or otherwise.
Section 7.2 Governmental Approvals. "Governmental Approvals" means any
notices, reports or other filings to be made, or any consents, registrations,
approvals, permits or authorizations to be obtained from, any Governmental
Authority.
Section 7.3 Governmental Authority. "Governmental Authority" shall mean
any federal, state, local, foreign or international court, government,
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority.
Section 7.4 Information. "Information" means 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.
Section 7.5 IPO Closing Date. "IPO Closing Date" has the meaning set
forth in the Section 3.3 hereof.
Section 7.6 Palm Assets. "Palm Assets" has the meaning set forth in
Section 1.2 of the Assignment Agreement.
Section 7.7 Palm Group. "Palm Group" means Palm, each Subsidiary and
Affiliated Company of Palm immediately after the Separation Date or that is
contemplated to be a Subsidiary or Affiliated Company of Palm pursuant to the
Non-US Plan and each Person that becomes a Subsidiary or Affiliate Company of
Palm after the Separation Date.
Section 7.8 Palm's Auditors. "Palm's Auditors" means Palm's independent
certified public accountants.
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Section 7.9 Person. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
Section 7.10 Record Date. "Record Date" means the close of business on
the date to be determined by the Board of Directors of 3Com as the record date
for determining the stockholders of 3Com entitled to receive shares of common
stock of Palm in the Distribution.
Section 7.11 Subsidiary. "Subsidiary" of any Person means a 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.
Section 7.12 3Com Group. "3Com Group" means 3Com, each Subsidiary and
Affiliated Company of 3Com (other than any member of the Palm Group) immediately
after the Separation Date, after giving effect to the Non-US Plan and each
Person that becomes a Subsidiary or Affiliate Company of 3Com after the
Separation Date.
Section 7.13 3Com's Auditors. "3Com's Auditors" means 3Com's independent
certified public accountants.
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WHEREFORE, the parties have signed this Master Separation and Distribution
Agreement effective as of the date first set forth above.
3COM CORPORATION PALM COMPUTING, INC.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxx Xxxxxx
-------------------------- -----------------------------------
Name: Xxxx X. Xxxxxxxx Name: Xxxx Xxxxxx
------------------------ ---------------------------------
Title: Chairman and CEO Title: Senior Vice President and CFO
----------------------- --------------------------------
EXHIBITS
Exhibit A Certificate of Secretary of 3Com
Exhibit B Certificate of Secretary of Palm
Exhibit C General Assignment and Assumption Agreement
Exhibit D-1 Master Technology Ownership and License Agreement
Exhibit D-2 Master Patent Ownership and License Agreement
Exhibit D-3 Master Trademark Ownership and License Agreement
Exhibit E Employee Matters Agreement
Exhibit F Tax Sharing Agreement
Exhibit G Master Transitional Services Agreement
Exhibit H Real Estate Matters Agreement
Exhibit I Master Confidential Disclosure Agreement
Exhibit J Indemnification and Insurance Matters Agreement
Exhibit K Reorganization of Operations Outside the US (the Non-US Plan)
EXHIBIT A
CERTIFICATE OF SECRETARY OF 3COM
SECRETARY'S CERTIFICATE
I, ____________________, Secretary of 3Com Corporation, a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
DO HEREBY CERTIFY that attached hereto are true and correct copies of certain
resolutions adopted in a telephone meeting of the 3Com Corporation Board of
Directors on _________, 1999, which resolutions have not been amended, modified,
rescinded and remain in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of
3Com Corporation this __________________ day of ___________, 1999.
___________________________________
________________________, Secretary
EXHIBIT B
CERTIFICATE OF SECRETARY OF PALM
SECRETARY'S CERTIFICATE
I, ____________________, Secretary of Palm Computing, Inc., a corporation
organized and existing under the laws of the State of California (the
"Company"), DO HEREBY CERTIFY that attached hereto are true and correct copies
of certain resolutions adopted in a meeting of the Palm Computing, Inc. Board of
Directors on __________, 1999, which resolutions have not been amended,
modified, rescinded and remain in full force and effect on the date hereof.
IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of
Palm Computing, Inc. this __________________ day of ___________, 1999.
___________________________________
________________________, Secretary
EXHIBIT C
GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT D-1
MASTER TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT
EXHIBIT D-2
MASTER PATENT OWNERSHIP AND LICENSE AGREEMENT
EXHIBIT D-3
MASTER TRADEMARK OWNERSHIP AND LICENSE AGREEMENT
EXHIBIT E
EMPLOYEE MATTERS AGREEMENT
EXHIBIT F
TAX SHARING AGREEMENT
EXHIBIT G
MASTER TRANSITIONAL SERVICES AGREEMENT
EXHIBIT H
REAL ESTATE MATTERS AGREEMENT
EXHIBIT I
MASTER CONFIDENTIAL DISCLOSURE AGREEMENT
EXHIBIT J
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT
EXHIBIT K
REORGANIZATION OF OPERATIONS
OUTSIDE THE US (THE NON-US PLAN)
