1
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT made as of June 13, 1997 by and between CSP
EUROPE, INC. ("CSPI"), a Delaware corporation ("BUYER"), and SIGNAL ANALYTICS
CORPORATION ("SA"), a Virginia corporation ("SELLER").
WITNESSETH:
WHEREAS, SELLER is in the business ("Business") of manufacturing,
producing, marketing, distributing, and selling software ("Software") and
providing services related thereto; and
WHEREAS, SELLER desires to sell, and BUYER desires to buy certain assets of
SELLER associated with the Software and the Business;
NOW, THEREFORE, in consideration of the mutual covenants, representations
and warranties hereinafter set forth, the parties hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
1.1 PURCHASED ASSETS. Subject to the terms and conditions of this
Agreement, SELLER shall sell, convey, transfer, assign and deliver to BUYER at
the Closing (as defined in Section 6.1), and BUYER shall purchase from SELLER,
substantially all of the assets, properties, rights and interests of SELLER
relating to the Business described on EXHIBIT A hereto ("Purchased Assets"), in
each case free and clear of all liens, charges, security interests and other
encumbrances. SA's cash shall not be included in Purchased Assets.
1.2 ACCOUNTS RECEIVABLE. For purposes hereof, "Accounts Receivable" shall
be the accounts receivable of SELLER related to the Business as of the close of
business on the Closing date and set forth in EXHIBIT B. At the Closing, SELLER,
shall provide BUYER with a certificate of its President, substantially in the
form of EXHIBIT B, showing the value of the Accounts Receivable.
1.3 PURCHASE PRICE. The purchase price for the Purchased Assets (the
"Purchase Price") shall be $2,140,000, plus the value of SA's accounts
receivable shown on EXHIBIT B.
1.4 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid in cash, by
wire transfer of immediately available funds in each case as follows:
2
(a) An amount equal of $2,140,000 plus the value of Accounts
Receivable as shown on EXHIBIT B, less $25,000, shall be paid by BUYER to SELLER
at the Closing.
(b) An amount, if any, by which $25,000 exceeds the value of Accounts
Receivable as shown on EXHIBIT B that are not collected by BUYER within 90 days
after the Closing shall be paid by BUYER to SELLER within 95 days after the
Closing. In the event that less than $25,000 is paid to SELLER pursuant to this
subparagraph 1.4 (b), BUYER shall transfer to SELLER the Accounts Receivable
that BUYER did not collect within 90 days after the Closing.
1.5 NO ASSUMPTION OF LIABILITIES. BUYER is assuming no liabilities or
obligations of SELLER in connection with this transaction. Without limiting the
generality of the foregoing, except as specifically provided in this Agreement,
SELLER shall be solely responsible for payment of all amounts at any time owing
by SELLER with respect to the business of SELLER, both before and after the
Closing Date, whether accrued or contingent, known or unknown, other than
liabilities or obligations arising as a result of BUYER's ownership of the
Purchased Assets and conduct of the Business after the Closing.
1.6 ALLOCATION OF PURCHASE PRICE. The total amount of the Purchase Price,
including the Assumed Liabilities, shall be allocated among the Purchased Assets
in the manner set forth in EXHIBIT C. It is acknowledged by the parties that
such allocation was arrived at by arm's-length negotiation, appropriately
reflects the fair market value of the Purchased Assets, will be binding on the
parties for federal and state income tax purposes in connection with the
purchase and sale of the Purchased Assets, and will be consistently reflected by
the parties in their respective tax returns. BUYER and SELLER shall each file a
Form 8594 (Asset Acquisition Statement) with the Internal Revenue Service
consistent with such allocation.
1.7 INSTRUMENTS OF TRANSFER. The transfer of the Purchased Assets to be
transferred to BUYER at the Closing shall be effected by bills of sale,
assignments, licenses and such other instruments of transfer as shall transfer
to BUYER full title to the Purchased Assets free and clear of all liens,
charges, security interests and other encumbrances. All of such documents shall
contain appropriate and customary warranties and covenants of title and shall be
in form and substance acceptable to BUYER and its counsel.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER
SELLER represents, warrants and covenants to BUYER that as of the Closing:
2
3
2.1 ORGANIZATION, STANDING AND POWER. SELLER is a corporation duly
organized, validly existing and in good standing under the laws of Virginia and
has full corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. SELLER has duly obtained
all permits, licenses and other qualifications under all applicable laws,
regulations, and ordinances or orders of public authorities, or otherwise, that
are necessary to the current conduct of the Business, except for such permits,
licenses and qualifications which if not obtained would not have a material
adverse effect on the Business or the Purchased Assets. SELLER has no
subsidiaries.
2.2 AUTHORITY AND BINDING OBLIGATION. This Agreement has been duly
authorized, executed and delivered by SELLER, and SELLER has the corporate power
and authority to enter into and perform the obligations to be performed by it
hereunder. This Agreement and the Xxxx of Sale and other instruments of transfer
referred to in Section 6.3 (b) constitute the valid and binding obligations of
SELLER, enforceable against it in accordance with their respective terms, except
that such enforceability may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to enforcement of creditor's rights
generally and is subject to general principles of equity.
2.3 STOCKHOLDER APPROVAL. The transaction has been approved by the
stockholder of SA who represents that he owns all of the common shares and/or
common share equivalents amounting to not less than 100% of the outstanding
shares of SA. The parties will cooperate to provide such information as may be
required in connection with any required filings with the Securities and
Exchange Commission or any applicable state securities commission.
2.4 NO BREACH. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (a) violate any
provision of the charter or by-laws of SELLER or any material law, regulation,
ordinance, judgment or decree applicable to SELLER or its properties or assets;
(b) violate, conflict with or result in the breach or termination of, or
otherwise give any other contracting party the right to terminate, or constitute
(or with notice or lapse of time, or both, would constitute) a default under the
terms of any material written contract, licenses, mortgage, lease, bond,
indenture, agreement, franchise or other instrument or obligation relating to
the Business; or (c) result in the creation of any lien, claim or encumbrance
(collectively, "Liens") upon the Purchased Assets.
2.5 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE CHANGE.
(a) The unaudited interim financial statements of the Business for the
period ended May 31, 1997, including a statement of income for and a balance
sheet as of such period. copies of which are attached as EXHIBIT D, fairly
present, subject to the notes included therein, the financial position of the
Business as of such dates and the results of operations for such periods.
3
4
(b) Since January 1, 1997, the Business has been operated only in the
ordinary course and in a manner consistent with past practices and there has
been no material adverse change in the condition (financial or otherwise),
assets, liabilities, obligations (whether absolute, accrued, contingent or
otherwise and whether due or to become due), earnings, financial position or
results of operations of the Business or in the relationship of SELLER with
providers to or customers of the Business.
2.6 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) SELLER has or will have at the Closing the full right to sell,
transfer, and assign all of the purchased Assets to BUYER, and has good and
marketable title hereto. Following the Closing, BUYER will be the lawful owner
of, and have good and marketable title to, the Purchased Assets, free and clear
of the liens, charges, security interests and other encumbrances whatsoever. The
Purchased Assets include all for the assets and properties (except for
inventory) utilized by the SELLER for the development, manufacture and sale of
the software substantially as SELLER has conducted its business in the past.
Each of the Purchased Assets is in the possession of the SELLER at 000 Xxxxx
Xxxxxx Xxxx, Xxxxx 000 Xxxxxx, Xxxxxxxx or in the possession of sales personnel
or customers as expressly specified in EXHIBIT A.
(b) SELLER has good and marketable title to each item of equipment,
machinery, structure, fixture or other tangible personal property included in
the Purchased Assets, a complete list of which is attached as EXHIBIT A, free
and clear of all Liens. All leases, conditional sale contracts, franchises or
licenses the rights to which are included in the Purchased Assets are valid and
effective, and there is not under any of such instruments any existing default
or event of default or event which, with notice or lapse of time or both, would
constitute a default which would materially adversely affect the Business or the
Purchased Assets. The tangible personal properties included in the Purchased
Assets are in good operating condition and repair, ordinary wear and tear
excepted.
2.7 LITIGATION: COMPLIANCE. There are no actions, suits, proceedings or
investigations pending or, to the knowledge of SELLER, threatened against SELLER
or any of its properties, at law or in equity, before any court or governmental
agency. Neither SELLER nor any of its properties is subject to any order, writ,
injunction, decree or judgment or any court or governmental agency.
2.8 SCHEDULE OF WARRANTY AND PRODUCT LIABILITY CLAIMS. BUYER has been
provided access to true and complete copies of SELLER's customer service records
that record (a) all products related to the Business returned to SELLER because
of warranty or other problems and all credits and allowances made with respect
hereto and (b) all repairs performed by SELLER or any other person or entity
with respect to goods related to the business and sold by SELLER because of
warranty or other claims concerning defects in such goods. There have been no
product liability claims made
4
5
against SELLER with respect to products related to the Business. SELLER has
never been a defendant in any product liability litigation relating to any
product manufactured, fabricated, produced or sold by SELLER as part of the
Business, and no such litigation has ever been threatened.
2.9 TAXES. SELLER
(a) has duly and timely filed all federal, state and other tax returns
and reports required to be filed by the laws of any jurisdiction to which it or
any of its assets is or has been subject,
(b) has paid in full to the proper governmental agencies all federal,
state and other taxes (including, without limitation, all sales, use,
withholding and payroll taxes), interest, assessments, fees, and other
governmental charges dues or claimed to be due on account of its assets,
properties, income or operations, and
(c) has withheld, collected and paid to the proper governmental
agencies all amounts that it has been required by law to withhold or collect and
pay.
2.10 EMPLOYMENT MATTERS. SELLER has paid or otherwise made provisions for
payment of all amounts due to all of its present or former employees and has
paid over to the appropriate governmental agencies or other appropriate persons
or entities all withheld taxes, social security and other payments due and
payable through the Closing Date.
2.11 LEGAL COMPLIANCE. (a) SELLER has obtained all governmental or other
consents, licenses, permits or approvals (federal, state, foreign or local)
required for the lawful sale of the Software and all such consents, license,
permits and approvals are in full force and effect. No violations have been
asserted in respect to any such consent, license, permit or approval, and no
proceeding relating to the revocation or limitation of any such consent,
license, permit or approval is pending or threatened. All such consents,
licenses, permits and approvals are transferable to BUYER and are being
transferred to BUYER and will remain in full force and effect for the benefit of
the BUYER after the Closing Date. (b) SELLER has duly complied in all material
respects with all applicable laws and regulations of federal, state and local
governments relating to the manufacture, distribution or sale of the Software.
2.12 DISTRIBUTORS AND CUSTOMERS. EXHIBIT E hereto sets forth a list of all
customers who have purchase software.
2.13 SUPPLIERS. EXHIBIT F hereto sets forth a list of all vendors or other
suppliers from or through whom SELLER has purchased goods or services related to
the Business during the period from January 1993 to present, other than
utilities and vendors of standard business suppliers.
5
6
2.14 PATENTS, TRADEMARKS AND OTHER INTANGIBLE PERSONAL PROPERTY.
(a) SELLER has no patents or pending patent applications. The trade
names, trademarks (and goodwill associated therewith) and applications therefor,
trade dress, specifications, processes, know-how, blueprints, drawings, service
marks, designs, patterns, works protected by copyright, copyrights, Software,
algorithms, inventions, technology, trade secrets, proprietary information other
information and documents listed or described in EXHIBIT G or compromising or
embodied in the items of tangible or intangible property listed or described in
such Exhibit (collectively, "Intellectual Property") constitute all of the
intellectual property rights owned by or licensed to SELLER and related to the
Business.
(b) SELLER is not a party to, nor is SELLER aware of any written or
oral agreement relating to the ownership of or any rights in the Intellectual
Property. In particular, and without limitation, SELLER is neither a party to or
aware of any agreement placing any restriction upon the exercise or exploitation
of the Intellectual Property, or any written or oral agreement which obligates
or may obligate BUYER to pay royalties, licensee fees, maintenance fees, or
transfer fees under any circumstances.
(c) SELLER, pursuant to this Agreement, will assign and transfer to
Buyer all Intellectual Property including all Intellectual Property relating to
the Software, including, without limitation, all rights relating to the design,
development, manufacture, licensing, distribution and use of the Software and
any derivative works based upon the Software. At BUYER'S reasonable request, and
BUYER'S expense, SELLER will provide BUYER all cooperation necessary to allow
BUYER to establish, perfect, and defend the Intellectual Property, including,
without limitation, the execution of separate releases, assignments, recordings,
affidavits, or documents that are or may become necessary to or useful to
BUYER'S efforts to establish perfect, and defend the Intellectual Property.
(d) There is no violation or infringement by any third party of
SELLER's Intellectual Property rights, and no claim (and no basis for a claim)
by any third party to the effect that SELLER is violating or infringing any
third party's intellectual property rights.
(e) All of the following will be delivered by SELLER to BUYER on the
Closing Date as part of the Purchased Assets: (I) all code relating to the
Software including, without limitation, source code, object code, design or
architectural specifications, and code commentary prepared by prior programmers;
(ii) all documentation relating to the Software, including, without limitation,
all manuals, instruction sets, end-user and other licenses, and performance
specifications; (iii) all technical data maintained by SELLER relating to the
Software, including, without limitation the results of all testing and
information regarding any required interoperability, such as information
regarding each platform or environment within which the Software is intended to
operate; and (iv) all other information necessary or
6
7
useful to any effort by BUYER to develop, create derivative works based upon,
manufacture, license, distribute or otherwise exploit the Software.
2.15 PRODUCT LIABILITY INSURANCE. SELLER has previously made available to
BUYER true and complete copies of all its product liability insurance policies.
2.16 BOOKS, RECORDS, ETC. SELLER's books of account fairly, accurately and
completely set forth all its items of income and expense and its assets,
liabilities, capital and accruals. There has been no financial transaction with
respect to the Business that is customary to record in the financial records
that is not fully described in such books of account.
2.17 SOLVENCY. Immediately following the Closing, the SELLER's financial
condition will permit it to pay its obligations to creditors as of the Closing
Date as they become due.
2.18 NO SOLICITATION OF EMPLOYEES. SELLER and Xxxxxxx Xxxx, PhD agree that
until the expiration of two (2) years from the date of the Agreement, neither
Xxxxxxx Xxxx, PhD nor SELLER shall, whether acting alone or with its affiliates
or any nonaffiliated persons or corporations without the prior approval of the
BUYER, hire or attempt to hire any employee of CSPI or its affiliates, nor shall
SELLER encourage any such employee to terminate his or her relationship with
CSPI or its affiliates.
2.19 EXPORT COMPLIANCE. SELLER has compiled with all export regulations in
all their foreign shipments.
2.20 CHANGE AND USE OF NAME. Within one business day after the Closing,
SELLER shall file a charter amendment with the Virginia State Corporation
Commission changing its corporate name so that BUYER may use the name "SIGNAL
ANALYTICS CORPORATION" or any derivative thereof that BUYER may elect, and
SELLER shall make no further use of any of such name.
2.21 LIQUIDATION. SELLER shall liquidate within 6 months of the Closing, or
if later, prior to January 1, 1998.
2.22 PAYMENT OF TAXES. SELLER shall pay, promptly and when due, whether at
the original time fixed therefor or pursuant to any extension of time to pay or
any agreement with tax authorities, all taxes, fees, charges, penalties or
interest accrued on account of the operation and conduct of SELLER's business on
or before the Closing Date or on account of any of the transactions contemplated
by this Agreement, unless otherwise agreed to by the parties, provided, however,
that SELLER shall not be required to pay any such tax, fee, charge, penalty or
interest if it is contesting the validity or amount thereof through proper
proceedings, in good faith and with reasonable diligence if such contest does
not, and will not, have any averse impact on BUYER.
7
8
2.23 PAYMENT OF CREDITORS. After the Closing, the SELLER shall promptly
apply the proceeds from the sale of the Purchased Assets and Accounts Receivable
to the unsecured trade creditors of the SELLER on the Closing Date.
2.24 NON-DISCLOSURE. SELLER and Xxxxxxx Xxxx, PhD shall keep confidential,
and shall not disclose to any third party or use, any confidential or
proprietary information or trade secret relating to the Software, including, by
way of example and without limitation, vendor lists that relate to the Software,
customer lists, know-how and trade secrets, except to the extent such
information is published by, or with the written consent of, BUYER or by a third
party having no obligation of confidentiality to BUYER.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
BUYER represents and warrants to SELLER that as of the Closing:
3.1 DUE ORGANIZATION. BUYER is a corporation duly organized, validity
existing and in good standing under the laws of the state of Delaware.
3.2 AUTHORITY AND BINDING OBLIGATION. This Agreement has been duly
authorized, executed and delivered by BUYER, and BUYER has the corporate power
and authority to enter into and perform the obligations to be performed by it
hereunder. This Agreement constitutes the valid and binding obligations of
BUYER, enforceable against it in accordance with their respective terms.
3.3 CONSENTS AND APPROVALS. All consents and approvals of and notifications
to any governmental authority or other person not a party hereto required in
connection with the execution and delivery of this Agreement by BUYER or the
performance by BUYER of its obligations hereunder have been obtained or made.
3.4 NO BREACH. Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will (a) violate any
provision of the charter or by-laws of BUYER or any material law, regulation,
ordinance, judgment or decree applicable to BUYER or its properties or assets;
or (b) violate or conflict with any agreement to which BUYER is a party.
ARTICLE IV
COVENANTS OF SELLER AND BUYER
8
9
4.1 USE OF REASONABLE EFFORTS. Without limitation of any other covenants
set forth in this agreement, each of the parties agrees to use commercially
reasonable efforts to effectuate the transactions contemplated hereby.
4.2 DEFENSE OF CLAIMS AND LITIGATION. At all times from and after the
Closing Date, and without charge except for reimbursement of out-of-pocket
expenses, each party shall consult, confer and cooperate in good faith on a
reasonable basis with the other party (including, without limitation, the making
available of witnesses and cooperation in discovery proceedings) in the conduct
or defense of any claim, litigation or proceeding against said other party by
any third party that relates to any of the Purchased Assets or any matter that,
directly or indirectly, arises therefrom, whether known at the Closing Date or
arising thereafter. The foregoing notwithstanding, to the extent the
indemnification provisions of this Agreement or of any other document delivered
in connection with the transactions contemplated hereby apply to any such
conduct or defense, they shall control as to the payment of costs and expenses.
ARTICLE V
CONDITIONS TO CLOSING
5.1 CONDITIONS TO EACH PARTY'S OBLIGATION. The respective obligations of
each party to be performed at the Closing shall be subject to the satisfaction
prior to the Closing of the following conditions:
(a) LEGAL ACTION. No temporary restraining order, injunction or other
order preventing the consummation of the transactions contemplated hereby shall
have been issued by any governmental entity or instrumentality ("Governmental
Entity") and remain in effect, and no litigation seeking the issuance of such an
order, or seeking the imposition against SELLER or BUYER of material damages if
the transactions contemplated hereby are consummated, shall be pending which, in
the good faith judgment of SELLER's or BUYER's Board of Directors (acting with
advice of outside counsel) has a reasonable probability of resulting in such an
order.
(b) STATUTES. No action shall have been taken, and no statute, rule,
regulation or order shall have been enacted, promulgated or issued or deemed
applicable to the transactions contemplated hereby by any Governmental Entity
which would (i) make the consummation of such transactions illegal, (ii)
prohibit BUYER's ownership or operation of all or a material portion of the
Business or the Purchased Assets, or compel BUYER to dispose of or hold separate
all or a material portion of the Business or the Purchased Assets, or (iii)
render SELLER and BUYER unable to consummate such transactions.
5.2 CONDITIONS OF OBLIGATIONS OF BUYER. The obligations of BUYER to be
performed at the Closing are subject to the satisfaction of the following
conditions:
9
10
(a) REPRESENTATIONS AND WARRANTIES OF SELLER. The representations and
warranties of SELLER set forth in this Agreement shall be correct and complete
in all material respects (except for such representations and warranties which
are qualified by a reference to materiality, which representations and
warranties as so qualified shall be correct and complete in all respects) as of
the date of this Agreement and as of the Closing Date, as though made on and as
of each such date, except as otherwise contemplated by this Agreement.
(b) NO MATERIAL ADVERSE CHANGE. There shall have been no material
adverse change in the Business or the Purchased Assets on or before the Closing
Date.
(c) PERFORMANCE OF OBLIGATION OF SELLER. SELLER shall have performed in
all material respects all obligations and covenants required to be performed by
it under this Agreement prior to the Closing.
5.3 CONDITIONS OF OBLIGATIONS OF SELLER. The obligations of SELLER to be
performed at the Closing are subject to the satisfaction of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES OF BUYER. The representations and
warranties of BUYER set forth in this Agreement shall be correct and complete in
all material respects as of the date of this Agreement and as of the Closing
Date, as though made on and as of each such date, except as otherwise
contemplated by this Agreement.
(b) PERFORMANCE OF OBLIGATIONS OF BUYER. BUYER shall have performed in
all material respects all obligations and covenants required to be performed by
it under this Agreement prior to the Closing.
ARTICLE VI
THE CLOSING
6.1 THE CLOSING DATE AND PLACE. The consummation of the transactions
contemplated hereby (the "Closing") shall take place at 10:00 a.m. EDT on
Friday, June 13, 1997, at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, or
as soon thereafter as all the conditions set forth in Article V have been
satisfied or waived, and shall be effective immediately after the close of
business on such date, or at such other time and place as to which the parties
may agree in writing (the "Closing Date").
6.2 DELIVERIES AT CLOSING BY BUYER. At the Closing, provided SELLER has
fully performed all of its obligations hereunder and the conditions set forth in
Sections 5.1 and 5.2 have been satisfied, BUYER shall deliver or cause to be
delivered to SELLER the following:
(a) The consideration specified in Section 1.4(a);
10
11
(b) a Guarantee substantially in the form of EXHIBIT H duly executed by
CSPI;
(c) a certificate of the Vice President of BUYER to the effect of
Section 5.3(a) and (b).
6.3 DELIVERIES AT CLOSING BY SELLER. At the Closing, provided BUYER has
fully performed all of its obligations hereunder and the conditions set forth in
Sections 5.1 and 5.3 have been satisfied, SELLER shall deliver or cause to be
delivered to BUYER the following:
(a) the certificate of the President of SELLER required by Section 1.2;
(b) a Xxxx of Sale substantially in the form of EXHIBIT I, and such
other instruments of transfer for the Purchased Assets, including assignments of
all of SELLER's intellectual property rights, in form and substance reasonably
satisfactory to BUYER and its counsel and sufficient to convey to BUYER all of
SELLER's right, title and interest in and to the Purchased Assets;
(c) a Guarantee substantially in the form of EXHIBIT J, duly executed
by Xxxxxxx Xxxx, PhD;
(d) a certificate of the President of SELLER to the effect of Sections
5.2(a), (b) and (c).
(e) an employment letter substantially in the form of EXHIBIT K duly
executed by Xxxxxxx Xxxx, PhD.
ARTICLE VII
INDEMNIFICATION
7.1 INDEMNIFICATION OF BUYER.
(a) Subject to the limitations set forth in subparagraph (b), SELLER
and Xxxxxxx Xxxx, PhD jointly and severally agree to defend, indemnify and hold
BUYER harmless from and against any loss, liability, damage or expense suffered,
incurred or paid by BUYER, including, without limitation, reasonable attorneys
fees:
(i) that would not have been suffered, incurred or paid if all the
representations, warranties, covenants and agreements of SELLER in this
Agreement or in any other instrument or document furnished to BUYER in
connection with the transactions contemplated hereby had been (with respect to
representations and
11
12
warranties) true, complete and correct and had been (with respect to covenants
and agreements) fully performed and fulfilled;
(ii) as a result of any claim, action or proceeding asserted or
brought against BUYER or any of its assets (including, without limitation, the
Purchased Assets) that arises, in whole or in part, out of or in connection with
SELLER's conduct of its business before or after the Closing Date, including,
without limitation, any breach of warranty or any other product liability in
connection with the sale of any Software prior to the Closing Date;
(iii) as a result of any claim, action or proceeding asserted
against BUYER or any of its assets with respect to any liability or alleged
liability of SELLER not specifically assumed by BUYER under this Agreement;
(iv) as a result of any claim, action or proceeding asserted or
brought against BUYER or any of its assets that arises out of, or in connection
with, SELLER's failure to pay, promptly and when due, any amount owing, in whole
or in part, whether before or after the Closing, with respect to SELLER's
conduct of business, whether due or to become due, accrued or contingent, known
or unknown; and
(v) as a result of any claim, action or proceeding asserted or
brought against BUYER or any of its assets that arises out of or in connection
with SELLER's failure to pay, promptly and when due, any tax, fee or other
charge that shall become due or shall have accrued (a) on account of SELLER's
use, acquisition, ownership or sale of any of the Purchased Assets or (b) on
account of the transactions contemplated hereby.
(b) Notwithstanding anything in this Agreement to the contrary, with
the exception of items listed in Section (c), the indemnification obligation set
forth in Section (a) shall not apply with respect to:
(i) the first $5,000 of loss, liability, damage or expense suffered,
incurred or paid by BUYER;
(ii) any loss, liability, damage or expense suffered, incurred or
paid by BUYER in excess of $140,000; or
(iii) any claim for loss, liability, damage or expense raised 12
months or more after Closing.
(c) The items that shall not be limited by Section (b) are the
obligations set forth in Sections 2.6, 2.10, and 7.1 (a) (v) of this Agreement.
12
13
7.2 INDEMNIFICATION OF SELLER. BUYER agrees to defend, indemnify and hold
SELLER harmless from and against any loss, liability, damage or expense
suffered, incurred or paid by SELLER, including, without limitation, reasonable
attorneys fees:
(i) That would not have been suffered incurred or paid if all the
representations, warranties, covenants and agreements of BUYER in this Agreement
or in any other instrument or document furnished to SELLER in connection with
the transactions contemplated hereby had been (with respect to representations
and warranties) true, complete and correct and had been (with respect to
covenants and agreements) fully performed and fulfilled;
(ii) as a result of any claim, action or proceeding asserted or
brought against SELLER or any of its assets that arises in whole or in part, out
of or in connection with, BUYER's conduct of its Business, after the Closing
Date;
(iii) as a result of any claim, action or proceeding asserted or
brought against SELLER or any of its assets that arises out of or in connection
with BUYER's failure to pay, promptly and when due, any tax, fee or other charge
that shall become due or shall have accrued (a) on account of BUYER's use,
acquisition, ownership of any of the Purchased Assets of (b) on account of the
transactions contemplated hereby.
(b) Notwithstanding anything in this Agreement to the contrary, the
indemnification obligation set forth in Section (a) shall not apply with respect
to:
(i) the first $5,000 of loss, liability, damage or expense suffered,
incurred or paid by SELLER;
(ii) any loss, liability, damage or expense suffered, incurred or
paid by SELLER in excess of $140,000; or
(iii) any claim for loss, liability, damage or expense raised 12
months or more after Closing.
7.3 PROCEDURE AND RIGHT TO CONTEST. In connection with any claim to
indemnification under Section 7.1 or 7.2 involving third parties, the party
seeking indemnification (the "Indemnified Party") shall promptly notify in
writing the party from whom indemnification is sought (the "Indemnifying Party")
of such claim to indemnification. No indemnification under this Agreement shall
be available to any party who shall fail to give notice as provided herein if
the party to whom notice was not given was unaware of the proceeding to which
such notice would have related and was prejudiced by the failure to give such
notice. Before being required to make any payment pursuant to Section 7.1 or
7.2, the Indemnifying Party may, at its own expense, elect to contest or to
assume the defense of any claim, liability, or action in respect thereof
involving third parties or to prosecute such contest or action to conclusion or
settlement, in each case with counsel reasonably satisfactory to the Indemnified
Party. In any such
13
14
proceeding which the Indemnifying Party shall have elected to contest, the
Indemnified Party shall have the right to retain its own counsel at its own
expense. The Indemnified Party shall cooperate fully with the Indemnifying Party
in the conduct of any such contest or action which the Indemnifying Party shall
have elected to contest. The Indemnifying Party shall not be liable for any
settlement of any such claim or proceeding without its prior written consent,
which consent shall not be unreasonably withheld; but if settled with such
consent or if there shall be a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify the Indemnified Party from and against
any loss or liability by reason of such settlement or judgment.
7.4 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. Notwithstanding
any investigation conducted before or after the Closing, and notwithstanding any
knowledge or notice of any fact or circumstance that either BUYER or SELLER may
have as the result of such investigation or otherwise (except as set forth
below), BUYER and SELLER shall each be entitled to rely upon the
representations, warranties and covenants of the other in this Agreement unless
BUYER or SELLER shall have actual knowledge prior to the Closing of any such
misrepresentation or breach of any warranty or covenant. Each of the
Representations, warranties and covenants contained in this Agreement, made in
any document delivered hereunder or otherwise made in connection with the
Closing hereunder shall survive the Closing and shall remain in full force and
effect until the first anniversary of the date of this Agreement, whereupon such
representations, warranties and covenants shall expire, except that those set
forth in Sections 2.6, 2.10, 2.18, 2.24, 7.1(a) (v) and 7.2 (iii) hereof shall
not expire and shall survive for as long as the applicable statute of
limitations provides.
7.5 RIGHT TO PERFORM. If SELLER shall fail to pay or perform any of its
obligations hereunder within 15 business days after receipt of written notice
that payment or performance is due but has not been paid or satisfied, BUYER
shall be entitled to pay or perform such obligation for SELLER, provided,
however, that SELLER shall have the right to contest the validity or amount of
any such obligation through proper proceedings, in good faith and with
reasonable diligence if such contest does not, and will not, have any material
adverse impact on the Business taken as a whole as conducted by the BUYER. In
such event, SELLER shall pay to BUYER on demand the amount of such payment or
the cost of such performance, as the case may be, together with interest thereon
at the rate of eight (8) percent annum.
ARTICLE VIII
MISCELLANEOUS
8.1 BROKERAGE. SELLER represents to BUYER, and BUYER represents to SELLER,
that there has been no intermediary or broker in negotiations or discussions
incident to the execution of this Agreement of any of the transactions
contemplated hereby and that no intermediary or broker is or shall be entitled
to any commission or other compensation with respect to any of such
transactions.
14
15
8.2 WAIVERS AND AMENDMENTS.
(a) This Agreement may be amended, modified or supplemented only by a
written instrument executed by the parties hereto.
(b) No waiver of any provision of this Agreement, or consent to any
departure from the terms hereof, shall be effective unless the same shall be in
writing and signed by the party waiving or consenting thereto. No failure on the
part of any party to exercise, and no delay in exercising, any right or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right or remedy. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate as
a waiver of any subsequent breach. All rights and remedies hereunder are
cumulative and are in addition to and not exclusive of any other rights and
remedies provided by law.
8.3 ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Purchased Assets as set forth in Section 1.6 of this Agreement. All
parties hereto agree to abide by such allocation in preparation of federal and
state income tax returns on which the transactions contemplated by this
Agreement are reported or on which the basis of any of the Assets is disclosed,
reported, or claimed.
8.4 NOTICES. All notices, requests, demands and other communications which
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by registered
or certified mail, return receipt requested, postage prepaid.
(a) if to SELLER, Signal Analytics Corporation, 000 Xxxxx Xxxxxx, Xxxx,
Xxxxx 000, Xxxxxx, XX 00000, Attn: Xxxxxxx Xxxx, PhD.
(b) if to BUYER, to CSPI, 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attn:
Xxxx Xxxxxxxxx or to such other address as SELLER or BUYER shall have specified
by such notice in writing to the other.
8.5 EXPENSES. Each party hereto shall pay its own expenses in connection
with the transactions contemplated hereby, whether or not they are completed. In
the event of any conflict between this provision and the indemnification
provisions of this Agreement, the indemnification provisions shall control.
8.6 MISCELLANEOUS.
(a) This Agreement and any agreements contemplated hereby constitute
the entire agreement among the parties hereto with respect to the subject matter
hereof
15
16
and supersede all prior agreements and understandings, whether written or oral,
among the parties, or any of them, in connection with such subject matter.
(b) This Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and their respective heirs, legal representatives, successors
and permitted assigns. Without the consent of BUYER, SELLER shall not assign any
or all of its rights hereunder, whether as security or otherwise, to any entity.
(c) This Agreement shall be governed by, and construed and enforced in
accordance with, the substantive laws of The Commonwealth of Massachusetts.
(d) Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. In the event that any provision of this Agreement
shall be determined to be unenforceable by reason of its extension for too great
a period of time or over too large a geographic area or over too great a range
of activities, it shall be interpreted to extend only over the maximum period of
time, geographic area or range of activities as to which it may be enforceable.
(e) All Exhibits mentioned in this Agreement shall be attached to this
Agreement, and shall form an integral part hereof. All capitalized terms defined
in this Agreement which are used in any Exhibit shall, unless the context
otherwise requires, have the same meaning therein as given herein.
(f) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
16
17
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement on the Date first above written.
ATTEST: SIGNAL ANALYTICS CORPORATION
By________________________________ By__________________________________
Xxxxxxx Xxxx, PhD
President
ATTEST: CSP Europe, Inc.
By________________________________ By__________________________________
Xxxx X. Xxxxxx
Vice President
WITNESS:
__________________________________ By__________________________________
As to Xxxxxxx Xxxx, PhD Xxxxxxx Xxxx, PhD
17
