ASSET PURCHASE AGREEMENT
BETWEEN
INTERLINK COMPUTER SCIENCES, INC.
AND
XXXXXX AIRCRAFT COMPANY
Dated as of September 17, 1997
TABLE OF CONTENTS
Page
ARTICLE I - THE ACQUISITION...........................................................................................1
1.1 Purchase of Assets..................................................................................1
1.2 Consideration.......................................................................................3
1.3 Transfer of Customers...............................................................................6
1.4 Closing.............................................................................................7
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLER.................................................................7
2.1 Organization of Seller..............................................................................7
2.2 Authority; Consents.................................................................................8
2.3 Restrictions on Business Activities.................................................................8
2.4 Absence of Liens and Encumbrances...................................................................8
2.5 Intellectual Property...............................................................................8
2.6 Employee Benefit Plans..............................................................................9
2.7 Employee Relations..................................................................................9
2.8 Agreements, Contracts and Commitments...............................................................9
2.9 Governmental Authorization.........................................................................10
2.10 Litigation.........................................................................................10
2.11 Brokers' and Finders' Fees; Third-Party Expenses...................................................10
2.12 Employee Arrangements..............................................................................10
2.13 Environmental Laws.................................................................................10
2.14 Compliance with Laws...............................................................................10
2.15 Complete Copies of Materials.......................................................................10
2.16 No Undisclosed Liabilities.........................................................................10
2.17 Sales Information..................................................................................10
2.18 Representations Complete...........................................................................11
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF BUYER................................................................11
3.1 Organization, Standing and Power...................................................................11
3.2 Authority..........................................................................................11
3.3 Litigation.........................................................................................11
3.4 Cash Consideration.................................................................................11
ARTICLE IV - RESTRICTIONS ON COMPETITION.............................................................................12
4.1 Restriction on Competition.........................................................................12
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TABLE OF CONTENTS
(continued)
Page
ARTICLE V - CONDUCT PRIOR TO THE CLOSING DATE........................................................................13
5.1 Conduct of Business of Seller......................................................................13
5.2 No Solicitation....................................................................................14
ARTICLE VI - ADDITIONAL AGREEMENTS...................................................................................15
6.1 Access to Information..............................................................................15
6.2 Confidentiality....................................................................................16
6.3 Expenses...........................................................................................16
6.4 Public Disclosure..................................................................................16
6.5 Best Efforts.......................................................................................16
6.6 Notification of Certain Matters....................................................................16
6.7 Tax Returns........................................................................................17
6.8 Post-Closing Employment of Transitioned Employees..................................................17
6.9 Employee Benefits..................................................................................18
6.10 Additional Documents and Further Assurances........................................................18
6.11 Post-Closing Operation of Product Line on Seller's Premises and
with the Use of Certain of Seller's Equipment....................................................18
6.12 Financial Information..............................................................................19
6.13 Seller's Cooperation on Obtaining Additional Consents..............................................19
ARTICLE VII - SURVIVAL; INDEMNIFICATION..............................................................................19
7.1 Indemnification. ..................................................................................19
7.2 Arbitration........................................................................................23
ARTICLE VIII - CONDITIONS TO THE ACQUISITION.........................................................................23
8.1 Conditions to Obligations of Each Party to Effect the Acquisition..................................23
8.2 Additional Conditions to Obligations of Seller.....................................................24
8.3 Additional Conditions to the Obligations of Buyer..................................................24
ARTICLE IX - TERMINATION, AMENDMENT AND WAIVER.......................................................................26
9.1 Termination........................................................................................26
9.2 Effect of Termination..............................................................................26
9.3 Amendment..........................................................................................26
9.4 Extension; Waiver..................................................................................27
ARTICLE X - GENERAL PROVISIONS.......................................................................................27
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10.1 Survival of Representations and Warranties.........................................................27
10.2 Exclusion of other Representations.................................................................27
10.3 Knowledge..........................................................................................27
10.4 Notices............................................................................................27
10.5 Interpretation.....................................................................................28
10.6 Counterparts.......................................................................................29
10.7 Entire Agreement...................................................................................29
10.8 Assignment.........................................................................................29
10.9 Severability.......................................................................................29
10.10 Governing Law......................................................................................29
10.11 Rules of Construction..............................................................................29
Exhibits and Schedules Description
Exhibit A Equipment and Assumed Obligations
Exhibit B Form of Purchased Price Allocation Schedule
Exhibit C Sales Information
Exhibit D Transitioned Employees
Exhibit E Form of Secondment Agreement
Exhibit F Form of Transitional Services Agreement
Exhibit G Form of Employment, Invention Assignment and
Confidentiality Agreement
Schedule A Intellectual Property
Schedule B Contracts
Schedule 10.3 Seller's Management Personnel
Article II Disclosure Schedule
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of September 17, 1997 by and among Interlink Computer Sciences, Inc., a
Delaware corporation ("Buyer") and Xxxxxx Aircraft Company, a Delaware
corporation ("Seller").
RECITALS
A. Buyer is seeking to acquire substantially all of the assets of
NetLOCK, a product line of Seller ("NetLOCK").
B. NetLOCK is a line of products providing enterprise network security
products used to protect computer communications within commercial and
governmental organizations (the "Product Line").
C. The Boards of Directors of each of Seller and Buyer believe it is in
the best interests of each company and each company's respective stockholders
that Buyer acquire from Seller certain assets and assume certain specified
obligations of Seller which are used to operate the Product Line (the
"Acquisition").
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties and
covenants set forth herein, the parties agree as follows:
ARTICLE I
THE ACQUISITION
1.1 Purchase of Assets.
(a) Purchase and Sale of Assets. On the terms and subject to
the conditions set forth in this Agreement, and on the Closing Date (as defined
in Section 1.4(a)), Seller will sell, convey, transfer, assign and deliver to
Buyer, and Buyer will purchase and acquire from Seller, all of Seller's right,
title and interest in and to the assets described below (the "Assets") free and
clear of all liens, pledges, charges, claims, security interests or other
encumbrances of any sort (collectively, "Liens") other than Permitted Liens (as
defined in Section 2.4 below). The Assets include certain software including the
NetLOCK family of interoperable network security products including the NetLOCK
Manager and NetLOCK Agent, which provide end-to-end network security between
desktop computers, laptops and servers using encryption, device-level
authentication, access control and data integrity (the "Software"). The Assets
consist of the following:
(i) all patents, patent applications, copyrights,
trademarks, service marks and trade names identified on the attached Schedule A
and all related intangible trade secrets, proprietary information, technology
rights and licenses, all electronic rights, multimedia rights, interactive
rights, moral rights, new media rights, reacquisition rights and publication
rights, proprietary rights and processes, know-how, research and development in
progress, and any and all other intangible intellectual property including,
without limitation, all things authored, discovered, conceived or first reduced
to practice by Seller or any of its employees in the course of their employment
with Seller that pertain to the Assets and are used exclusively or primarily in
the operation of the Product Line in any stage of development and all of
Seller's rights of any kind in or to any of the foregoing (collectively, the
"Intellectual Property");
(ii) all of Seller's rights and ownership of the
Software, including but not limited to all versions of the Software, and all
copies of the Software (including revisions and updates in process), and all
technical, design, development, installation, operation and maintenance
information concerning the Software, including source code, source
documentation, source listings and annotations, engineering notebooks, test data
and test results, as well as all reference manuals and support materials
normally distributed to end-users and potential end-users in connection with the
distribution of the Software;
(iii) all of Seller's claims against any parties
relating exclusively or primarily to any Asset, the Product Line or any Contract
(as defined below) necessary to operate the Product Line or otherwise material
to the Product Line, including without limitation, unliquidated rights under
manufacturers' and vendors' warranties or guaranties. "Contracts" shall mean
those agreements, licenses and commitments, written or oral, relating
exclusively or primarily to the Product Line or any of the Assets to which
Seller is a party, beneficiary or by which it is bound as described in Schedule
B;
(iv) all of Seller's rights pertaining to the Software
under all software development, consulting and maintenance Contracts;
(v) any rights the Seller has to the NetLOCK website on
the World Wide Web; provided that the Assets do not include the Internet address
space used by Seller to support such website nor any other Internet address
space to which the NetLOCK website has links; and provided further, that at
Buyer's request, Seller will deliver an electronic copy of the NetLOCK website
to Buyer so that Buyer can establish the NetLOCK website servers other than
Seller's.
(vi) all machinery, equipment, furniture, tools and
supplies used exclusively or primarily in the operation of the Product Line and
described on the attached Exhibit A (the "Equipment"); and
(vii) customer lists, potential customer lists,
proposals, operating manuals, business strategy plans, projects under
development, lead referral methods, co-selling arrangements, distribution and
reseller methods and contacts, management plans, related business opportunities
and tangible intellectual property in Seller's possession used exclusively or
primarily in the operation of the Product Line.
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To the extent delivery of the Assets involves physical delivery, Seller
shall be required to so deliver the Assets at the Closing (as defined in Section
1.4(a)).
Notwithstanding the foregoing, the Assets shall not include any of the
following (collectively, the "Excluded Assets"):
(A) all of Seller's cash, bank deposits and cash
equivalents, wherever located, and all billed receivables and receivables
previously written off which arose out of sales or services provided by Seller
in operating the Product Line;
(B) books and records that Seller or any of its
affiliates is required to retain pursuant to any statute, rule, regulation or
ordinance (provided that, if such books and records relate primarily to the
Product Line, Seller shall provide copies thereof to Buyer to the extent
permitted under applicable law);
(C) general books of account and books of original
entry that comprise Seller's permanent accounting or Tax records (which shall be
preserved for a period of five years to permit the audits that Buyer may conduct
pursuant to Section 6.12); and
(D) all of Seller's and any of its affiliates'
right, title and interest in and to any real estate, including any such real
estate used in connection with the Product Line, and the related fixtures or
leasehold improvements, and the permits relating to the ownership or occupancy
of such real estate, fixtures or improvements, subject to Buyer's right to use
the facilities as set forth in Section 6.11 below.
(b) Assumption of Obligations. Buyer shall assume only such
liabilities and obligations of Seller described on Exhibit A as "Assumed
Obligations" (collectively, the "Assumed Obligations"). Without limiting the
foregoing, it is expressly agreed that, other than the Assumed Obligations set
forth on Exhibit A, Buyer shall not assume any other liabilities or obligations,
including those for employment, income, sales, property or other Taxes (as
defined in Section 1.2(c)) incurred or accrued by Seller or that would have been
accrued under generally accepted accounting principles assuming Seller reports
taxes on the accrual method of accounting. Contracts that are listed on Exhibit
A as "Assumed Obligations" are being assumed only if the rights under such
Contracts are being assigned to Buyer at the Closing (as defined below).
1.2 Consideration.
(a) Consideration for Assets. On the terms and subject to the
conditions set forth in this Agreement, as full payment for the selling,
conveyance, transfer, assignment and delivery of the Assets by Seller to Buyer,
at the Closing Buyer shall pay to Seller the "Purchase Price" of $1,000,000 plus
$1,143,822 for the Equipment, subject to adjustment as herein provided, by wire
transfer of immediately available funds (the "Cash Payment").
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(b) Royalty.
(i) Amount. As further consideration for the Software
and provided that Seller shall perform all the terms and conditions required of
Seller under this Agreement, Buyer agrees to pay, with no minimum royalty
commitment by Buyer [*] of Net Revenues (as defined below) derived from sale,
distribution or sublicensing of the Software, including any modification
thereof, and including related service, consulting, support and warranty-related
revenues, and any related maintenance fees (both original and, to the extent
calculated pursuant to clause (ii) below, renewal maintenance fees
(collectively, the "Sales") for the five-year period following the Closing Date.
However, the maximum royalty payable by Buyer under this Agreement shall be [*]
(the "Maximum Royalty Obligation"). In addition, no royalty commitments shall
become due for any Net Revenues received after the fifth anniversary of the
Closing Date of this Agreement.
(ii) Definition. "Net Revenues" means any and all
royalties, fees, or other amounts invoiced by Buyer and its affiliates in
connection with Sales, net of any arm's-length amounts paid by Buyer or such
affiliates on account of sales and other applicable taxes, duties, freight or
shipping charges, insurance, commissions, tariffs, and the like, and net of any
revenues (a) obtained in connection with consulting or other services rendered
in installing and implementing software at client sites and (b) any net refunds
for actual returns as provided in the last paragraph of this clause (ii).
Notwithstanding the foregoing, (i) no royalty amount will be due or payable with
respect to inter-company Sales by Buyer to its affiliates or within Buyer's
internal organization to the extent the products, services or intellectual
property so transferred or other uses are for the research and development
purposes of Buyer or its affiliates and not intended for the use by or benefit
for any third party, (ii) the royalty amount due and payable with respect to
inter-company Sales (other than those described in clause (i) above) shall be
based on assumed net revenues equal to the net revenues that would be derived
from similar Sales involving arm's-length transactions with unrelated third
parties, and (iii) to the extent any royalty amount has been or will be
concurrently paid with respect to inter-company Sales, where the product,
service or intellectual property so transferred or other uses are intended to be
re-Sold to unrelated parties, a royalty amount shall be due and payable in
connection with such intended re-Sales to unrelated third parties, after giving
credit to any royalty amount paid or to be paid with respect to such
inter-company Sales.
In a bundled transaction involving both the Software and one
or more other products, "Net Revenues" shall include only the amount invoiced by
Buyer in the transaction allocated between the Software and such other products
in accordance with Buyer's published standard prices in good faith by Buyer.
Royalties on renewal maintenance fees will be calculated annually in good faith
by Buyer using an allocation methodology based on the ratio of the value
attributable to NetLOCK-based renewal maintenance fees as compared to the total
value of all renewal maintenance fees covered by the applicable invoices.
If (i) a royalty is paid pursuant to this Section 1.2(c), and
(ii) the product on which the royalty was paid is returned to Buyer and (iii)
the party returning the product is refunded the amount paid (rather than
accepting a replacement product on which a royalty would be due), Buyer shall be
entitled to set off the royalty already paid to Seller for the product returned
against future royalty obligations. If there are no future royalty obligations
because of the expiration of the royalty period or because the maximum royalty
has already been paid, Buyer will notify Seller of the return and Seller will
reimburse Buyer for the royalty paid to Seller.
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---------------------------------
*Confidential Treatment Requested
(iii) Notices and Payment. Within sixty (60) days after
the end of each calendar quarter (or portion thereof) during the five-year
period following the Closing Date in which Net Revenues exceed a minimum of one
hundred dollars, Buyer shall furnish to Seller written reports, certified by
Seller's Chief Financial Officer as being true and correct (and shall be in a
form reasonably satisfactory to Seller) setting out for the previous quarter,
the Net Revenues derived from the Sales (other than renewal maintenance fees)
and the royalties due to Seller. Within that sixty (60) day period, Buyer shall
also pay to Seller the royalties due. Royalties for renewal maintenance fees
will be paid annually, not later than ninety (90) days after closing the fiscal
year. All payment shall be made by Buyer to Seller, by wire transfer of
immediately available funds, to such account as shall be designated by Seller
from time to time in writing. In the event any royalty amount due hereunder is
not paid by Buyer by the applicable due date, and after written notice by Seller
to Buyer of any such failure to pay royalties, such late payment shall be paid
to Seller with interest thereon, from the applicable due date to the date of
payment, calculated at the per annum rate equal to the rate announced by Bank of
America as its "prime rate" or "base rate" as of the close of business on the
applicable due date. Subject to the notice requirements and other limitations
set forth in Section 7.2 below, Buyer shall have the right to set off against
any sums due to Seller under this Agreement any sums due from the Seller to
Buyer, including any overpayments of royalties or advances, until such sums have
been recouped or paid. With regard only to the allocation made by Buyer of the
revenues from renewal maintenance fees, Seller has twenty (20) business days
from the date of Seller's receipt of the report furnished under this subsection
to object to or dispute such allocation, by setting forth in writing the amount
of royalties in disagreement and the nature of such objection or dispute. Within
15 days of receipt by Buyer of Seller's notice, Buyer and Seller shall attempt,
in good faith, to resolve the differences. If Buyer and Seller, notwithstanding
such good faith effort, shall have failed to resolve the differences within 30
days after the expiration of such 15-day period, then any remaining disputed
matters shall be finally and conclusively determined pursuant to Section 7.2
herein.
(iv) Withholding for Taxes. Buyer is hereby authorized
by Seller to withhold and make payment of, on behalf of Seller, or otherwise,
all taxes, duties or levies the withholding of which may from time to time be
required by the government of the U.S. or any other country, or any agencies
thereof, on the royalties or other payments due to Seller under this Agreement.
Such taxes, duties or levies shall be deducted from payments made to Seller, and
Buyer shall provide Seller with appropriate receipts for all such payments made
by them on behalf of and for the benefit of Seller.
(v) Records/Inspection. Buyer shall retain at its
principal place of business for a period of not less than three (3) years after
the calendar quarter to which such records relate, files, records, and books of
account prepared in the normal course of business which contain data reasonably
required for the computation and verification of the amounts to be paid and the
information to be provided in any royalty report required under this Agreement.
For the purposes of verifying the royalties paid by Buyer, Seller may, not more
than once in each twelve (12) month period and once within six (6) months
following any breach or termination of this Agreement, retain a certified public
accountant approved by Buyer, which approval shall not unreasonably be withheld,
to audit those business records of Buyer which relate to royalties due under
this Agreement, provided (i) that such accountant execute Buyer's then-current
standard non-disclosure agreement, and (ii) that Seller gives sixty (60) days
written notice prior to the audit, and (iii) that all audits are conducted
during regular business hours and on Buyer's premises. Buyer shall not be
required to provide any information to the auditor with respect to any royalty
report submitted to Seller more than thirty-six (36) months prior to the date on
which Buyer receives Seller's request for an audit. The auditor's report and all
work papers or other materials relating
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to the auditor's examination of Buyer's books and records will be treated as
confidential information owned by Buyer.
(c) Transaction Taxes. Seller shall pay and promptly discharge
when due all Taxes (as defined below) and recording imposed or levied by reason
of the sale of the Assets to Buyer. For the purposes of this Agreement, a
reference to "Tax" or, collectively, "Taxes," means any and all federal, state,
local and foreign taxes, assessments and other governmental charges, duties,
impositions and liabilities, including taxes based upon or measured by gross
receipts, income, profits, sales, use and occupation, and value added, ad
valorem, transfer, franchise, withholding, payroll, recapture, employment,
excise and property taxes, together with all interest, penalties and additions
imposed with respect to such amounts and any obligations under any agreements or
arrangements with any other person with respect to such amounts and including
any liability for taxes of a predecessor entity.
(d) Purchase Price Allocation. Buyer shall deliver a schedule
to Seller, in the form of Exhibit B, allocating the Cash Payment and the Assumed
Obligations among the Assets not later than 60 days after the Closing Date.
Within 30 days after receipt of such schedule, Seller shall provide Buyer with
its comments, if any, by setting forth in writing any portion of such allocation
with which Seller does not agree. Within 15 days of receipt by Buyer of Seller's
comments, Buyer and Seller shall attempt, in good faith, to resolve the
differences. If Buyer and Seller, notwithstanding such good faith effort, shall
have failed to resolve the differences within 30 days after the expiration of
such 15-day period, then any remaining disputed matters shall be finally and
conclusively determined by a "Big 6" independent auditing firm of recognized
national standing, which shall not be the general auditor for either Buyer or
Seller, to be mutually selected by Buyer and Seller. The fees and disbursements
of any such arbitrator shall be shared equally by the parties. For purposes of
all Taxes, Buyer and Seller agree (i) to report the transactions contemplated in
this Agreement in a manner consistent with the allocation under this Section
1.2(e), and (ii) that neither of them shall take any position inconsistent
therewith in any Tax return, in any refund claim, in any litigation, or
otherwise.
1.3 Transfer of Customers.
(a) Intent. It is the intent of parties hereto that all of the
Assets and all of Seller's backlog, if any, arising out of the operation of the
Product Line be transferred to Buyer. Accordingly, the parties agree to use
their reasonable best efforts to facilitate such transfer of customers as soon
as possible. For purposes of this Agreement, the "reasonable best efforts"
standard shall not require a party hereto to pay money to any third party solely
as an inducement for performance by such third party.
(b) Purchase Order Data. Included on Exhibit C is the
following information (hereinafter collectively referred to as the "Sales
Information"): (i) a list of all outstanding written customer orders, purchase
orders and other customer commitments from Seller's current customers of the
Business and (ii) the names of all customers of the Business (the "Current
Customers").
(c) Assignments. Prior to the Closing, Seller shall assign
Seller's rights and benefits under the Contracts to Buyer as of the Closing.
1.4 Closing.
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(a) Closing. Unless this Agreement is earlier terminated
pursuant to Section 9.1, the closing of the transactions contemplated by this
Agreement (the "Closing") shall be held at the offices of Xxxxxx Xxxxxxx
Xxxxxxxx & Xxxxxx, P.C., 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, at 1:30 p.m.
(Pacific time) on September 18, 1997, provided the conditions to closing have
been satisfied, or at such other time or on such other date as the Buyer and
Seller agree (the actual date on which the Closing occurs is referred to herein
as the "Closing Date"); provided that no party shall be obligated to close after
September 19, 1997.
(b) Delivery. At the Closing:
(i) Buyer shall deliver to Seller an instrument of
assumption of obligations by which Buyer shall assume the Assumed Obligations as
of the Closing Date;
(ii) Seller shall deliver to Buyer all bills of sale,
endorsements, assignments, consents to assignments and other instruments and
documents as Buyer may reasonably request for Seller to sell, convey, assign,
transfer and deliver to Buyer all right, title and interest to all the Assets
free and clear of any and all Liens (other than Permitted Liens); and
(iii) Seller, on the one hand, and Buyer, on the other
hand, shall deliver or cause to be delivered to one another the instruments and
documents required under Article VIII and such other instruments and documents
necessary or appropriate to evidence the due execution, delivery and performance
of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth on the disclosure schedule delivered by Seller to
Buyer prior to the execution of this Agreement (the "Disclosure Schedule"), the
Seller represents and warrants to Buyer as follows:
2.1 Organization of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Seller has the corporate power to own its properties and to carry on its
business as now being conducted. Seller is duly qualified to do business and is
in good standing in each jurisdiction in which failure to be so qualified would
have a material adverse effect on the Assets or the Product Line (hereinafter
referred to as a "Material Adverse Effect").
2.2 Authority; Consents. Seller has all requisite corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby and to own, license or lease the Assets and to operate and
use the Assets and to carry on its business as presently conducted. The
execution and delivery of this Agreement and Exhibits and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Seller. This Agreement and the
Exhibits hereto have been duly executed and delivered by Seller and are valid,
binding and enforceable obligations of Seller. The execution and delivery of
this Agreement and the Exhibits hereto by the Sellers do not, and, as of the
Closing, the consummation of the transactions contemplated hereby and thereby
will not, conflict with, or result in any violation of, or default under or
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give rise to a right of termination or acceleration of any obligation or loss of
any benefit under (any such event, a "Conflict") (i) any provision of the
Certificate of Incorporation or Bylaws of Seller or (ii) any agreement or
instrument, permit, judgment, statute, law, rule or regulation applicable to
Seller or the Assets. No consent, waiver, approval, or registration, declaration
or filing with, any court, administrative agency or other federal, state,
county, local or foreign governmental authority, or agency having jurisdiction
over the Seller ("Governmental Entity") or any third party (so as to enable
Seller to assign Buyer the Assets and all of the Seller's rights and benefits
under the Contracts), is required by or with respect to Seller in connection
with the execution and delivery of this Agreement or the Exhibits or the
consummation of the transactions contemplated hereby or thereby.
2.3 Restrictions on Business Activities. There is no agreement,
commitment, judgment, injunction, order or decree binding upon Seller or the
Assets which has or could reasonably be expected to have the effect of impairing
any use by Buyer of the Assets or operations by Buyer of the Product Line
following the Closing.
2.4 Absence of Liens and Encumbrances. Seller has all right title and
interest to all of the Assets, free and clear of any Liens, except such
imperfections of title as do not materially detract from or interfere with the
present use of the assets subject to or affected thereby, or otherwise
materially impair the use of such assets, which are set forth on the Disclosure
Schedule, and inchoate statutory liens for real and personal property taxes not
yet due or payable (the "Permitted Lien"). Seller has full right and power to
(and at the Closing will) transfer and deliver to Buyer all right, title and
interest to all the Assets free and clear of all Liens, except for Permitted
Liens.
2.5 Intellectual Property.
(a) Section 2.5 of the Disclosure Schedule sets forth a
complete and accurate schedule of all of the following Intellectual Property
used primarily or exclusively in the development or operation of the Product
Line: (i) all patents and patent applications owned by Seller, including the
country of filing, filing number, date of issue, expiration date and title; (ii)
all registered trademarks and service marks and all trademark and service xxxx
applications, including country of filing, filing number, date of issue and
expiration date; (iii) all common law trademarks, service marks and trade names;
(iv) all registered and unregistered copyrights; (v) all computer software and
documentation; (vi) all license, option and other agreements pursuant to which
Seller acquired rights to any Intellectual Property and all license, option and
other agreements, oral or written, pursuant to which Seller is obligated to pay
royalties or other consideration to third parties with respect to any
Intellectual Property; and (vii) all license, option and other agreements, oral
or written, pursuant to which Seller has granted any third party any right to
any Intellectual Property. Complete and accurate copies of all written
agreements referred to in the foregoing clauses (vi) and (vii) have been
provided to Buyer.
(b) (i) Seller has all right, title and interest in and to the
Intellectual Property used primarily or exclusively in the development or
operation of the Product Line; (ii) to the Seller's knowledge, Seller has
neither incorporated into nor relied on any software, technology or proprietary
information of any third party in the creation of the Software, unless given
permission to so under a written agreement, (iii) to the Seller's knowledge,
Seller is not making use of any invention, software, technology or proprietary
information in connection with the Software in which any present or past
employee of Seller or any other person has or has claimed an interest; (iv)
Seller is in compliance in all
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material respects with all agreements pursuant to which it acquired any
Intellectual Property; (v) to the Seller's knowledge, the Intellectual Property
does not infringe upon any patent, trademark, trade name, copyright or other
intellectual property right of any third party; (vi) to the Seller's knowledge,
no third party has asserted or threatened to assert against Seller or any of its
officers or directors any conflicting rights to any Intellectual Property; (vii)
Seller has no knowledge that any third party is infringing upon any of the
Intellectual Property; (viii) the Intellectual Property will not be rendered
invalid or adversely affected in any way by virtue of the execution, delivery or
performance of this Agreement or the Exhibits or the occurrence of the
transactions contemplated hereby or thereby.
2.6 Employee Benefit Plans.
Buyer will not succeed to any liability under any of Seller's
employee benefit plans or any other employee benefit of Sellers by virtue of the
transactions contemplated by this Agreement.
2.7 Employee Relations. Seller has, with regard to employees primarily
employed in connection with the Product Line, complied with all applicable laws,
rules and regulations which relate to employment and collective bargaining
(including pay and discrimination) and to the operation of the Product Line and
is not liable for any arrears of wages or any taxes or penalties for failure to
comply with any of the foregoing, except where such noncompliance would not
reasonably be expected to have a Material Adverse Effect. Seller is not a party
to, and is not threatened with, any dispute or controversy with a union or with
respect to unionization or collective bargaining involving the employees of
Seller who work with NetLOCK.
2.8 Agreements, Contracts and Commitments. Seller has not received
written notice that it has breached, violated or defaulted under, any of the
terms or conditions of any Contract. Each Contract is in full force and effect
and, to the knowledge of Seller, the other party to such Contract has not
breached, violated or defaulted under any of the terms or conditions of any
Contract. Seller has obtained, or will use its reasonable best efforts
consistent with good business practice to obtain prior to the Closing Date, all
necessary consents, waivers and approvals of parties to any Contract as are
required to assign all rights and benefits thereunder to Buyer as of the
Closing.
2.9 Governmental Authorization. No consent, permit, or other
authorization by a Governmental Entity is required for the use or operation of
the Assets prior to the Closing Date and to the Seller's knowledge none is
required for the use or operation of the Assets thereafter, the holding of an
interest in the Assets by Seller or the transfer, in part or in whole, of the
Assets to Buyer.
2.10 Litigation. There is no action, suit or proceeding of any nature
pending or, to Seller's knowledge, threatened against Seller that relates,
directly or indirectly, to the Product Line, the Assets. No Governmental Entity
has at any time notified Seller of any challenge or question regarding the legal
right of Seller to manufacture, offer or sell any products relating to the
Product Line in the present manner or style thereof.
2.11 Brokers' and Finders' Fees; Third-Party Expenses. Seller has not
incurred, nor will it incur, directly or indirectly, any liability for brokerage
or finders' fees or agents' commissions or any similar charges in connection
with this Agreement of the Exhibits or any transaction contemplated hereby or
thereby.
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2.12 Employee Arrangements. No current employee of Seller engaged in
the operation of the Product Line is subject to any agreement or other
arrangement that would in any manner hinder or obstruct the employment by Buyer
of such individual, or result in any payments by Buyer in connection with such
employment.
2.13 Environmental Laws. Insofar as it relates to the Product Line or
could reasonably be anticipated to affect the Assets, Seller is in compliance,
in all material respects, with all applicable laws or regulations relating to
the protection of the environment or concerning the handling, storage, disposal
or discharge of toxic materials (collectively, "Environmental Laws"), and there
is no pending or, to Seller's knowledge, threatened, action or proceeding
against Seller alleging violations of the Environmental Laws relating to the
Product Line.
2.14 Compliance with Laws. Seller has complied, in all material
respects, with and has not received any notices of violation with respect to,
any federal, state or local statute, law or regulation, domestic or foreign
applicable to Seller relating to the Product Line.
2.15 Complete Copies of Materials. A true and complete copy of each
document listed on Schedule B has been delivered to Buyer by Seller.
2.16 No Undisclosed Liabilities. NetLOCK does not have any material
liability, indebtedness, obligation, expense, claim, deficiency, guaranty or
endorsement of any type, whether accrued, absolute, contingent, matured,
unmatured or other, which, individually or in the aggregate, will by operation
of law or otherwise become a liability or obligation of Buyer by virtue of the
transactions contemplated by this Agreement, except for the Assumed Obligations.
2.17 Sales Information. The Sales Information set forth on Exhibit C
hereto is accurate and complete in all material respects and the Current
Customers included on such schedule represent bona fide customers of Seller.
2.18 Representations Complete. Seller has not intentionally concealed
any fact, circumstance or condition of any kind or nature whatsoever known to
Seller which is material to the Product Line.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to the Seller as follows:
3.1 Organization, Standing and Power. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the corporate power to own its properties and to carry on
its business as now being conducted. Buyer is duly qualified to do business and
is in good standing in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
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3.2 Authority; Consents. Buyer has all requisite corporate power and
authority to enter into this Agreement and the Exhibits and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and the Exhibits and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by all necessary corporate action
on the part of Buyer. This Agreement and the Exhibits have been duly executed
and delivered by Buyer and constitutes the valid and binding obligations of
Buyer, enforceable in accordance with their terms except as such enforceability
may be limited by bankruptcy or similar laws and general principles of equity.
The execution and delivery of this Agreement and the Exhibits by Buyer does not,
and, as of the Closing, the consummation of the transactions contemplated hereby
and thereby will not, conflict with (i) any provision of the Certificate of
Incorporation or Bylaws of Buyer or (ii) any agreement or instrument, permit,
judgment, statute, law, rule or regulation applicable to Buyer. No consent,
waiver, approval, or registration, declaration or filing with, any Governmental
Entity or any third party is required by or with respect to Buyer in connection
with the execution and delivery of this Agreement or the Exhibits or the
consummation of the transactions contemplated hereby or thereby.
3.3 Litigation. There is no action, suit or proceeding of any nature
pending or, to Buyer's knowledge, threatened against Buyer that could reasonably
be expected to have a material adverse effect on the ability of Buyer to
consummate the transactions contemplated hereby.
3.4 Cash Consideration. Buyer currently has available, and at the
Closing Date of the Acquisition will continue to have available, sufficient cash
to enable it to perform its obligations under this Agreement.
ARTICLE IV
RESTRICTIONS ON COMPETITION
4.1 Restriction on Competition.
(a) Restricted Activities for Seller. At no time after the
Closing will Seller represent to any third party that Seller still owns or
operates the Product Line or is the successor in interest of the Product Line.
In addition, for a period of three (3) years beginning on the Closing Date,
Seller shall not:
(i) engage in or own any interest (except as a passive
investor of less than five percent (5%) of total debt and equity of a publicly
traded company) in, any business or other activity that would compete with the
Product Line as currently conducted; or
(ii) divert or attempt to divert any existing or
prospective business or customers of Buyer (including any affiliates of Buyer)
as it relates to the operation of the Product Line as currently conducted to any
other person or entity, by direct or indirect inducement or otherwise, in any
business or other activity competitive with the Product Line as currently
conducted; or provided, however, nothing herein shall preclude Seller or any of
its affiliates from (1) acquiring from third parties products, even if included
in the Product Line, for internal consumption or for use as components in its
own products or (2) acquiring, and thereafter operating, any business or entity
(an "Acquired Business"), provided that the Acquired Business is not, at the
time of acquisition by Seller or its affiliates, primarily
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engaged in activities which if conducted by Seller would be precluded under this
Section 4.1(a); provided further that nothing herein shall preclude Raytheon
Company, any affiliate of Raytheon Company, any company resulting from the
merger of Raytheon Company and HE Holdings, Inc., or any affiliate of an any
such resulting company from engaging in any business activity engaged in by
Raytheon Company or its affiliates prior to the consummation of the proposed
merger between HE Holdings, Inc. and Raytheon Company and any such engagement
shall not be deemed a violation by Seller or its affiliates of this Section
4.1(a).
(b) Restriction on Employee Solicitation. For a period of two
(2) years beginning on the Closing Date, the Seller shall not solicit any person
for employment who was an employee of Seller with respect to the Product Line as
of the Closing Date and who is at that time already employed by Buyer or any of
its affiliates, or otherwise directly or indirectly induce or seek to induce
such person to leave his or her employment with Buyer; provided, however,
nothing herein shall preclude Seller or any of its affiliates from soliciting
the employment of any employee of Buyer (i) who ceases to be employed by Buyer
without inducement by Seller or (ii) as part of a general solicitation to the
public or to people having skills similar to such employee of Buyer which is not
specifically directed to the employees of Buyer.
(c) Scope of Restriction.
(i) This Section constitutes a series of separate
covenants for each county, state (including the District of Columbia) and
country in which Buyer or an affiliate of Buyer transacts business.
(ii) In the event that any other provision of this
Section or the application of any such provision shall be held to be prohibited
or unenforceable in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability. The remaining provisions of this covenant to refrain from
competition shall remain in full force and effect, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. The parties shall use
their best efforts to replace the provision that is contrary to law with a legal
one approximating to the extent possible the original intent of the parties.
(d) Ancillary Agreement. The parties acknowledge that their
agreements in this Section 4.1 are ancillary to an otherwise enforceable
agreement.
ARTICLE V
CONDUCT PRIOR TO THE CLOSING DATE
5.1 Conduct of Business of Seller. During the period from the date of
this Agreement and continuing until the earlier of the termination of this
Agreement or the Closing Date, Seller agrees, with respect to the operation of
the Product Line (except to the extent that Buyer shall otherwise consent in
writing, which consent shall not be unreasonably withheld), to carry on the
Business in substantially the same manner as conducted immediately prior to the
date of this Agreement, and continue to pay its debts and taxes when due, to pay
or perform other obligations when due, and use reasonable efforts to preserve
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intact the NetLOCK's Assets and Equipment that are being acquired pursuant to
this Agreement, all material relationships with third parties that have existing
written or oral agreements with Seller with respect to the NetLOCK Product Line,
and services of NetLOCK's present officers and employees, subject to the
distribution of layoff notices to all such employees by Seller on September 2,
1997. Seller shall promptly notify Buyer of any event or occurrence or emergency
not in the ordinary course of business of Seller, and any event which could have
a Material Adverse Effect. Except as expressly contemplated by this Agreement,
Seller shall not, without the prior written consent of Buyer (which shall be
given, or reasonably withheld within two (2) business days after receipt of
written request therefor and in the event that Buyer fails to respond at the end
of the second business day, such lack of response shall be deemed to be a
consent) and notwithstanding the foregoing:
(a) Enter into any commitment or transaction primarily
related, directly or indirectly, to the operation of the Product Line not in the
ordinary course of business;
(b) Transfer to any person or entity any rights to Seller's
Intellectual Property primarily related, directly or indirectly, to the
operation of the Product Line other than in the ordinary course of business in
conjunction with license agreements of the Seller's commercially available
products;
(c) Enter into or amend any agreements pursuant to which any
other party is granted marketing, distribution or similar rights of any type or
scope with respect to any products of Seller primarily related, directly or
indirectly, to the operation of the Product Line other than in the ordinary
course of business in conjunction with license agreements of the Seller's
commercially available products;
(d) Amend or otherwise modify (or agree to do so), except in
the ordinary course of business, or violate the terms of the Contracts;
(e) Commence any litigation primarily related, directly or
indirectly, to the operation of the Product Line;
(f) Acquire or agree to acquire by merging or consolidating
with, or by purchasing a substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof, or otherwise acquire or agree to
acquire any assets which are material, individually or in the aggregate, to the
Product Line;
(g) Sell, lease, license or otherwise dispose of any of the
Assets;
(h) As it relates to the Seller's employees engaged in the
operation of the Product Line, adopt or amend any employee benefit plan, or
enter into any employment contract, pay or agree to pay any special bonus or
special remuneration to any director or employee, or increase the salaries or
wage rates;
(i) Revalue any of the Equipment other than in the ordinary
course of business;
(j) Grant any security interest in any of the Assets;
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(k) Pay, discharge or satisfy, in any amount, any claim,
liability or obligation (absolute, accrued, asserted or unasserted, contingent
or otherwise), other than the payment, discharge or satisfaction of the
foregoing in the ordinary course of business; provided, further that this
subsection (k) shall not apply to actions taken with respect to any unassumed
Liabilities so long as such actions do not adversely affect the Assets or the
Business;
(l) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 5.1(a) through 5.1(k) above, or any other action
that would prevent Seller from performing or cause Seller not to perform its
covenants hereunder.
5.2 No Solicitation. Until (i) the Closing Date or (ii) the date of
termination of this Agreement pursuant to the provisions of Article IX hereof,
as the case may be, Seller will not (and Seller will use its reasonable best
efforts not to permit any of Seller's officers, directors, agents,
representatives or Affiliates to) directly or indirectly, take any of the
following actions with any party other than Buyer and its designees:
(a) solicit, encourage, initiate any negotiations or
discussions with respect to, any offer or proposal to acquire all or any portion
of Seller's business and properties or capital stock whether by merger, purchase
of assets, tender offer or otherwise;
(b) except as required by law (in the written opinion of
outside counsel), including fiduciary duties required by law, disclose any
information relating to any potential acquisition of all or any portion of
Seller's business and properties or capital stock whether by merger, purchase of
assets, tender offer or otherwise to any person other than its attorneys or
financial advisors concerning Seller's business and properties or afford to any
person or entity access to its properties, books or records;
(c) any negotiations or discussions with respect to, any offer
or proposal to acquire all or any portion of Seller's business and properties or
capital stock whether by merger, purchase of assets, tender offer or otherwise,
except as required by applicable fiduciary duties (in the written opinion of
outside counsel) and following written notice to the Buyer (with a duty to
promptly update Buyer as such discussions proceed or terminate) of the nature of
such discussions including the name of the third party and the terms of the
proposal (including price); or
(d) assist or cooperate with any person to make any proposal
to purchase all or any part of Seller's capital stock or assets, other than
selling products of Seller in the ordinary course of business.
In the event Seller shall receive any offer or proposal,
directly or indirectly, of the type referred to in clause (a) or (c) above, or
any request for disclosure or access pursuant to clause (b) above, Seller shall
immediately inform Buyer in writing as to any such offer or proposal.
ARTICLE VI
ADDITIONAL AGREEMENTS
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6.1 Access to Information. Seller shall afford Buyer and its
accountants, counsel and other representatives reasonable access at NetLOCK's
principal place of business during normal business hours during the period prior
to the Closing Date to (a) all of Seller's properties, books, contracts,
commitments and records primarily relating to the Assets and the Product Line
and (b) all other information concerning the Assets and the Product Line, and
related personnel (subject to restrictions imposed by applicable law) of Seller
as Buyer may reasonably request. Seller agrees to maintain and retain any and
all information regarding the Product Line and Assets on or prior to the Closing
Date which are reasonably necessary for Buyer to calculate the availability to
it of tax credits under the Internal Revenue Code of 1986, as amended. No
information or knowledge obtained in any investigation pursuant to this Section
6.1 shall affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the
Acquisition.
6.2 Confidentiality. Each of the parties hereto hereby agrees to keep
such information or knowledge obtained pursuant to the negotiation and execution
of this Agreement and the Exhibits, or the effectuation of the transactions
contemplated hereby and thereby, confidential; provided, however, that the
foregoing shall not apply to information or knowledge which (a) a party can
demonstrate was already lawfully in its possession prior to the disclosure
thereof by the other party, (b) is or becomes generally known to the public and
did not become so known through any violation of law or this Agreement by the
non-disclosing party, (c) is later lawfully acquired by such party from other
sources, (d) is required to be disclosed by order of court or government agency
after seeking any reasonably available protection against general disclosure or
(e) which is disclosed in the course of any litigation between any of the
parties hereto; it being understood that the parties may disclose relevant
information and knowledge to their respective employees and agents on a need to
know basis, provided that the parties cause such employees and agents to treat
such information and knowledge confidentially.
6.3 Expenses. Whether or not the Acquisition is consummated, all fees
and expenses incurred in connection with the Acquisition including, without
limitation, all legal, accounting, financial advisory, consulting and all other
fees and expenses of third parties incurred by a party in connection with the
negotiation and effectuation of the terms and conditions of this Agreement and
the Exhibits and the transactions contemplated hereby and thereby, shall be the
obligation of the respective party incurring such fees and expenses.
6.4 Public Disclosure. Unless otherwise required by law or any
applicable rule of a stock exchange or quotation system upon which a party's
securities are listed, prior to the Closing Date, no disclosure (whether or not
in response to an inquiry) of the subject matter of this Agreement shall be made
by any party hereto unless approved by Buyer and Seller prior to release;
provided that such approval shall not be unreasonably withheld, subject to
Buyer's and Seller's obligation to comply with applicable securities laws.
6.5 Best Efforts. Subject to the terms and conditions provided in this
Agreement and to the fiduciary duties of the board of directors of Seller under
applicable law as advised by counsel, each of the parties hereto shall use its
commercially reasonable best efforts to take promptly, or cause to be taken, all
actions, and to do promptly, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate
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and make effective the transactions contemplated by this Agreement and the
Exhibits for the purpose of securing to the parties hereto the benefits
contemplated by this Agreement and the Exhibits.
6.6 Notification of Certain Matters. Seller shall give prompt notice to
Buyer, and Buyer shall give prompt notice to Seller, of (i) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is likely
to cause any representation or warranty of Seller or Buyer, respectively,
contained in this Agreement or the Exhibits to be untrue or inaccurate at or
prior to the Closing Date and (ii) any failure of Seller or Buyer, as the case
may be, to comply with or satisfy any covenant, condition or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 6.6 shall not limit or otherwise affect
any remedies available to the party receiving such notice.
6.7 Tax Returns. Seller shall be responsible for and pay when due all
of Seller's Taxes attributable to or levied or imposed upon the Assets relating
or pertaining to the period (or that portion of any period) ending on or prior
to the Closing Date. Seller shall continue to timely file within the time period
for filing, or any extension granted with respect thereto, all of Seller's Tax
returns required to be filed in connection with the Assets for all periods
ending on or prior to the Closing Date and any portion of any such Tax returns
connected therewith shall be true and correct and completed in accordance with
applicable laws.
Buyer shall be responsible for and pay when due (i) all of Buyer's's
taxes attributable to or levied or imposed upon the Assets relating or
pertaining to the period (or that portion of any period) beginning the day
immediately following the Closing Date and (ii) all taxes attributable to,
levied or imposed upon, or incurred in connection with Buyer's business
operations immediately following the Closing Date. Buyer shall timely file
within the time period for filing, or any extension granted with respect
thereto, all of Buyer's Tax returns required to be filed in connection with the
Assets for all periods ending after the Closing Date and any portion of any such
Tax Returns connected therewith shall be true and correct and completed in
accordance with applicable laws.
Federal and state income and franchise Taxes imposed on or in respect
of the Assets for any taxable period that includes the Closing Date shall be
allocated to and paid by (i) Seller for the period up to and including the
Closing Date, and (ii) Buyer for the period subsequent to the Closing Date. For
purposes of this Agreement, Taxes for the period up to and including the Closing
Date and for the period subsequent to the Closing Date shall be apportioned on a
per diem basis in the case of any such Taxes not measured or measurable in whole
or in part with reference to net or gross income, sales or receipts, capital
expenses or compensation expenses, and all other such Taxes shall be determined
on the basis of any interim closing of the books of the Product Line as of the
Closing Date.
Seller and Buyer shall provide reasonable cooperation to each other in
connection with (i) the preparation or filing of any Tax return, Tax election,
Tax consent or certification, or any claim for a Tax refund, (ii) any
determination of liability of Taxes, and (iii) any audit, examination or other
proceeding in respect of Taxes related to the Assets or the operation or
activities of the Assets.
6.8 Post-Closing Employment of Transitioned Employees. Except as
otherwise provided in the Secondment Agreement (as defined below), Seller shall
terminate each employee listed on Exhibit D on and as of the date (the
"Departure Date") Buyer moves such employees out of the premises of Seller
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that Buyer will be given access to Seller pursuant to the Transition Services
Agreement (defined in Section 6.11 below). At the Closing Date, Buyer and Seller
shall execute a Secondment Agreement in the form substantially attached hereto
as Exhibit E (the "Secondment Agreement") providing that Buyer will reimburse
Seller for the compensation paid to such employees, and other costs associated
with Seller's employment of such employees, from the Closing Date to the date
the Secondment Agreement will terminate with respect to each such employee. Such
Secondment Agreement will provide for payroll payments and other associated
costs by the Seller, on behalf of the Buyer, to each employee being seconded
pursuant to the Secondment Agreement, for which the Buyer will reimburse the
Seller in full within thirty (30) days of receipt from the Seller of a statement
detailing all such payments and costs. Upon the Closing Date the Buyer shall
make employment offers (the "Employment Offers") to each employee listed on
Exhibit D in the Buyer's standard form. Each such Employment Offer will become
effective upon the termination of the Secondment Agreement. Each employment
offer by the Buyer to each such employee, shall be on an "at will" basis and
subject to Buyer's terms, conditions and policies of employment, if any. Nothing
contained in this Section is intended or shall be deemed to (a) require Buyer to
employ such persons for any fixed or pre-determined time after the Closing, or
(b) confer upon any employee of Seller, past, present, or future, any rights of
employment of any nature, it being understood and agreed that the provisions of
this Section are intended to set forth an agreement among Buyer and Seller, and
are not intended to benefit any persons not party to this Agreement, including
such employees. Such Employees who become employees of Buyer (the "Transitioned
Employees") shall be given a year-of-service level ("Service Credit") for
purposes of Buyer's benefits that gives such Employees credit for all service on
the NetLOCK Product Line for purposes of vesting and eligibility in any
compensation or benefit plan, program, or arrangement of Buyer, except as
prohibited by applicable federal and state laws and regulations; provided that
no Employee will be given such Service Credit for any period prior to January 1,
1995, and Employees hired after January 1, 1995 will be given Service Credit
from their date of hire.
6.9 Employee Benefits.
(a) With respect to the rights of Transitioned Employees to
accrued vacation and other approved leave prior to the Departure Date, the
Seller shall pay such Transitioned Employees the value of all such accrued
rights in cash within three (3) business days of the Departure Date, or such
shorter period as required by law. Effective upon (i) execution of their
respective Employment Offers and (ii) the Departure Date, the Transitioned
Employees shall be permitted to participate in all current Buyer benefit, bonus,
profit sharing, welfare and similar plans available to all other employees of
Buyer on the terms and conditions provided in such plans. Transitioned Employees
and their dependents shall be immediately eligible for any welfare benefits
provided by the Buyer, and all otherwise applicable pre-existing conditions,
exceptions, exclusionary provisions, and waiting periods shall be waived;
provided, however, (i) that stock options granted to the Employees shall be
subject to the standard vesting provisions applicable to options granted under
Buyer's Stock Option Plan, and (ii) that the Employees will not be able to
enroll in the Buyer's Employee Stock Purchase Plan or 401(k) Plan until the open
enrollment period following their being hired as an Employee of Buyer. In the
period between the date the parties enter into this Agreement and the Departure
Date, the Seller's benefit plans shall remain in effect for the Transitioned
Employees, to the extent possible under the terms of such plans.
6.10 Additional Documents and Further Assurances. Each party hereto, at
the reasonable request of another party hereto, shall execute and deliver such
other instruments and do and perform such
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other acts and things as may be reasonably necessary or desirable for effecting
completely the consummation of this Agreement and the transactions contemplated
hereby.
6.11 Post-Closing Operation of Product Line on Seller's Premises and
with the Use of Certain of Seller's Equipment. Seller hereby consents to the use
by Buyer of Seller's premises and any of Seller's equipment that is not part of
the Equipment that is (and for the past six months has been) used in connection
with the Product Line to operate the Product Line post-Closing for a period (the
"Transition Period") not to exceed thirty (30) days. In addition, Seller shall
provide those services and equipment required to operate the NetLOCK product
line during the Transition Period under an agreement to be executed between the
Buyer and the Seller (the "Transitional Services Agreement"), prior to or on the
Closing Date, substantially in the form attached hereto as Exhibit F. The Seller
will provide the services and equipment under the Transitional Services
Agreement at a specified rate and will invoice the Buyer monthly for such
Seller's expenses under the Transitional Services Agreement, which the Buyer
will reimburse the Seller for within thirty (30) of receipt of such invoice.
6.12 Financial Information. The Seller, recognizing the possible need
by the Buyer to prepare audited financial statements for the NetLOCK product
line for up to the three fiscal years prior to the Closing Date, will use its
best efforts to provide the Buyer, at Buyer's request, with such financial
information, including internal financial reports, payroll reports, and other
relevant financial documents, in Seller's possession relating to the Product
Line as well as access to the Seller's accountants or other accounting or
financial personnel who prepared such reports or statements; provided that after
three months after the Closing Date, Seller shall have no obligations to make
such personnel available if such personnel are no longer employed by Seller (or
any subsidiary or successor of Seller). Seller shall preserve such financial
records in accordance with its standard record retention policies and practices
provided that such information shall be preserved for a period of 4 years after
the Closing Date.
6.13 Seller's Cooperation on Obtaining Additional Consents. Seller
covenants to use its best efforts to obtain the consents necessary to assign to
Buyer the agreements between the Seller and Helix Software Company, Inc. and
between the Seller and Volt Delta Resources Inc.
ARTICLE VII
SURVIVAL; INDEMNIFICATION
7.1 Indemnification.
(a) Indemnification by Seller. Subject to the qualifications
and limitations in this Section 7.1, if the Closing is consummated, Seller shall
indemnify and defend and hold Buyer, its subsidiaries, directors, officers,
agents, and other affiliates harmless against and with respect to, any and all
Damages (as defined in subsection 7.1(c) below) incurred by Buyer, its
subsidiaries, directors, officers, agents or other affiliates as a result of any
of the following:
(i) any inaccuracy or misrepresentation in, or breach of
any representation or warranty of Seller in, this Agreement or the related
documents executed and delivered by Seller in connection with this Agreement
(the "Operative Documents");
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(ii) any breach or failure by Seller to perform any of
its covenants or agreements under this Agreement or any of the other Operative
Documents;
(iii) any liability not expressly being assumed by Buyer
hereunder, any Excluded Asset or the non-compliance by the parties with the
provisions of Article 6 of the Uniform Commercial Code of the State of
California, if applicable, or with any similar applicable article or section
under the Uniform Commercial Code or other similar applicable law enacted in any
other jurisdiction in which any of the Assets is located; and
(iv) any liability or obligation with respect to the
operation of the Product Line arising (A) under applicable environmental laws,
rules or regulations with respect to acts occurring or taken or conditions
existing on or prior to the Closing Date, (B) under applicable tax laws, rules
or regulations with respect to acts occurring or taken or conditions existing on
or prior to the Closing Date (including any tax assessed by virtue of successor
liability by any governmental agency), or (C) from the infringement of
intellectual property rights of others with respect to products shipped or
services provided to third parties prior to the Closing Date by the Product
Line.
(b) Indemnification by Buyer. Subject to the qualifications
and limitations in this Section 7.1, if the Closing is consummated, Buyer shall
indemnify and defend and hold Seller and its directors, officers, agents, and
other affiliates harmless against and with respect to, any and all Damages (as
defined in subsection 7.1(c) below) incurred by Seller or any of its directors,
officers, agents or other affiliates as a result of any of the following:
(i) any inaccuracy or misrepresentation in, or breach of
any representation or warranty of Buyer in this Agreement or the other Operative
Documents;
(ii) any breach or failure by Buyer to perform any of
its covenants or agreements under this Agreement or any of the other Operative
Documents;
(iii) the operation or ownership of the Product Line or
the Assets from and after the Closing Date, including (A) the use of any of the
Assets at, or the removal of any of the Assets from, any real property owned by
Seller or its affiliates, and (B) any liability or obligation under applicable
environmental laws, rules or regulations caused directly by the acts or
omissions of persons acting on behalf of Buyer, whether with respect to Sellers'
premises or otherwise; and
(iv) any Assumed Obligation.
(c) Damages. For purposes of this Section 7.1, "Damages" means
all demands, claims, claims for reimbursement, actions or causes of action,
assessments, losses, damages, costs, expenses, liabilities, deficiencies,
judgments, awards, fines, sanctions, penalties, charges and amounts paid in
settlement, whether civil, criminal or administrative in nature, including the
reasonable costs, fees and expenses of attorneys, experts, accountants,
appraisers, consultants, witnesses, investigators and agents and all such costs,
fees and expenses incurred in defending against any of the foregoing or in
enforcing this Agreement. Notwithstanding the foregoing definition, when used
with reference to amounts recoverable as the result of any breach of a
representation, warranty or covenant contained in this Agreement or any other
Operative Document, Damages shall not include amounts recoverable solely as
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lost profits, incidental damages, indirect damages, special damages, punitive
damages or consequential damages.
(d) Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(i) The party claiming indemnification ("Claimant")
shall, within thirty (30) days after its discovery of any claim for which
indemnification will be sought as provided in this Agreement (the "Claim"), give
notice to the party from whom indemnification is sought ("Indemnitor") of its
Claim, specifying in reasonable detail the factual basis for the Claim and, to
the extent known, the amount of the Claim. Notwithstanding the foregoing, the
failure by Claimant to provide notice of any Claim within the period specified,
or any delay in providing such notice, shall not affect or impair the
obligations of Indemnitor hereunder, except and only to the extent that
Indemnitor has been adversely affected by such failure or delay.
(ii) With respect to Claims between the parties,
following receipt of notice from Claimant of a Claim, Indemnitor shall have
sixty (60) days to make any investigation of the Claim that Indemnitor deems
necessary or desirable. For purposes of this investigation, Claimant agrees to
make available to Indemnitor and its authorized representatives the information
relied upon by Claimant to substantiate the Claim. If Claimant and Indemnitor
cannot agree as to the validity and amount of the Claim within the sixty (60)
day period (or any mutually agreed upon extension thereof), Claimant may seek
appropriate legal remedy, subject to the provisions of Section 7.3.
(iii) With respect to any Claim by a third party as to
which Claimant is entitled to indemnification hereunder, Indemnitor shall have
the right, exercisable by written notice to Claimant within 30 days after
receipt of written notice from Claimant of the commencement or assertion of any
such Claim, at its own expense to participate in or assume control of the
defense of the Claim, and Claimant shall cooperate fully with Indemnitor,
subject to reimbursement for actual out-of-pocket expenses incurred by Claimant
the result of a request by the Indemnitor. If Indemnitor does not elect to
assume control or otherwise participate in the defense of any third party Claim
within thirty (30) days of its receipt of notice of the Claim (or any extended
period mutually agreed upon by the parties), Claimant shall (upon further
written notice to Indemnitor) have the right to undertake the defense,
compromise or settlement of the Claim for the account of Indemnitor subject to
the right of Indemnitor, at its expense, to assume the defense of the Claim at
any time prior to final settlement, compromise or determination thereof. In no
event shall Indemnitor be liable or otherwise have any obligation with respect
to any settlement, compromise or determination of any Claim agreed to by
Claimant without the prior written consent of Indemnitor (which shall not be
withheld unreasonably).
(iv) The parties shall cooperate in defending any third
party Claim, and the defending party shall have reasonable access to the books,
records and personnel which are pertinent to the defense and which are in
control of the other party. The parties agree to furnish such records,
information and testimony, and attend such conferences, discovery proceedings,
hearings, trials and appeals, as may be reasonably requested by the other party
in connection with defending any third party Claim.
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(e) Limitations and Conditions Applicable to Buyer. The right
of Buyer to obtain indemnification from Seller pursuant to Section 7.1(a) of
this Agreement is subject to the following limitations:
(i) Buyer shall not be entitled to indemnification from
Seller pursuant to Section 7.1(a) until the aggregate Damages for which Seller
is liable under Section 7.1(a) exceed $50,000, whereupon Buyer shall be entitled
to indemnification by Seller for all such Damages.
(ii) Buyer shall not be entitled to indemnification from
Seller pursuant to Section 7.1(a) for that amount of its aggregate Damages for
which Seller is liable under Section 7.1(a) which is in excess of $1,000,000.
(iii) No Claim shall be brought by Buyer against Seller
under Section 7.1(a) unless notice in writing of such Claim shall have been
given to Seller on or prior to 5:00 p.m. Pacific Standard Time on the first
anniversary of the Closing Date, but Claims may be brought against Seller as to
any Damages (or a potential claim by an appropriate party) asserted in good
faith prior to such date.
(iv) Seller shall not be liable for Damages to the
extent that the Damages arise from a change in the accounting or Tax policies or
practices of Buyer after the Closing Date.
(v) Buyer shall not be entitled to recover Damages in
respect of any Claim or otherwise obtain reimbursement or restitution more than
once with respect to any claim hereunder.
(f) Limitations and Conditions Applicable to Seller. The right
of Seller to obtain indemnification from Buyer pursuant to Section 7.1(b) of
this Agreement is subject to the following limitations:
(i) Seller shall not be entitled to indemnification from
Buyer pursuant to Section 7.1(b) until the aggregate Damages for which Buyer is
liable under Section 7.1(b) exceed $50,000, whereupon Seller shall be entitled
to indemnification by Buyer for all such Damages; provided, however, that the
above limitation shall not apply as to Damages arising from failure by the Buyer
to pay Royalties under ss.1.2(b) hereunder.
(ii) Seller shall not be entitled to indemnification
from Buyer pursuant to Section 7.1(b) for that amount of its aggregate Damages
for which Buyer is liable under Section 7.1(b) which is in excess of $1,000,000;
provided, however, that the above limitation shall not apply as to Damages
arising from failure by the Buyer to pay Royalties under ss.1.2(b) hereunder.
(iii) No Claim shall be brought by Seller against Buyer
under Section 7.1(b) unless notice in writing of such Claim shall have been
given to Buyer on or prior to 5:00 p.m. Pacific Standard Time on the first
anniversary of the Closing Date, but Claims may be brought against Buyer as to
any Damages (or a potential claim by an appropriate party) asserted in good
faith prior to such date; provided, however, that the above limitation shall not
apply as to Damages arising from failure by the Buyer to pay Royalties under
ss.1.2(b) hereunder.
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(iv) Seller shall not be entitled to recover Damages in
respect of any Claim or otherwise obtain reimbursement or restitution more than
once with respect to any claim hereunder.
(g) Remedies Exclusive. The remedies provided in this Section
7.1 shall be exclusive as to any Claims by a party under this Agreement or any
other Operative Document or arising out of the transactions provided for herein
and therein and shall preclude assertion by any party of any other rights or the
seeking of any other remedies against another party; provided, however, that
nothing in this Section 7.1(g) shall limit rights or remedies expressly provided
for in this Agreement or any other Operative Document, rights or remedies for
fraud, deceit, or intentional non-disclosure, or rights or remedies which, as a
matter of applicable law or public policy, cannot be limited or waived.
(h) Interpretation. Solely for purposes of this Section 7.1,
the existence and extent of any breach of any representation or warranty under
Article II and Article III referred to in Section 7(a)(i) or Section 7(b)(i)
shall be determined by reading such representation or warranty as if all
materiality standards contained in such representation or warranty (i.e.,
without reference to the qualifier "material," "materially," "material to the
Business as a whole," "in all material aspects," "in any material respect,"
"Material Adverse Effect" or similar qualifiers), has been deleted from such
representation or warranty in its entirety.
7.2 Arbitration. Any controversy involving a claim by an indemnified
party pursuant to this Article VII shall be finally settled by arbitration in
Santa Clara, California in accordance with the then current Commercial
Arbitration Rules of the American Arbitration Association; and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Such arbitration shall be conducted by an arbitrator chosen by mutual
agreement of Buyer and Seller. Failing such agreement, the arbitration shall be
conducted by three independent arbitrators, none of whom shall have any
competitive interests with Buyer or Seller. Buyer shall choose one such
arbitrator, Seller shall choose one such arbitrator, and such two arbitrators
shall mutually select a third arbitrator. Any decision of two such arbitrators
shall be binding on Buyer and Seller. Each party shall pay its own costs and
expenses (including counsel fees) of any such arbitration except that the
arbitrator can compel one party to pay all or a portion of the other party's
costs and expenses.
ARTICLE VIII
CONDITIONS TO THE ACQUISITION
8.1 Conditions to Obligations of Each Party to Effect the Acquisition.
The respective obligations of each party to this Agreement to effect the
Acquisition shall be subject to the satisfaction at or prior to the Closing Date
of the following conditions:
(a) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Acquisition shall be in effect, nor shall any
proceeding brought by an administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, seeking any of
the foregoing be pending; nor shall there be any
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action taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to the Acquisition, which makes the consummation
of the Acquisition illegal.
(b) Raytheon Approval. The oral or written approval by the
Raytheon Company of all of the material terms of this Agreement and any of the
transactions contemplated thereby including the execution of the other Operative
Agreements.
8.2 Additional Conditions to Obligations of Seller. The obligations of
Seller to consummate and effect this Agreement and the Exhibits and the
transactions contemplated hereby and thereby shall be subject to the
satisfaction at or prior to the Closing Date of each of the following
conditions, any of which may be waived, in writing, exclusively by Seller:
(a) Representations, Warranties and Covenants. The
representations and warranties of Buyer in this Agreement shall be true and
correct in all material respects (without giving duplicative effect to any
materiality standard contained in the terms of such representation or warranty)
on and as of the Closing Date as though such representations and warranties were
made on and as of such time and Buyer shall have performed and complied with all
covenants, obligations and conditions of this Agreement and the Exhibits
required to be performed and complied with by it as of the Closing Date.
(b) Certificate of Buyer. Seller shall have been provided with
a certificate in a form mutually acceptable to both parties duly executed on
behalf of Buyer to the effect that, as of the Closing Date:
(i) all representations and warranties made by Buyer in
this Agreement are true and correct in all material respects (without giving
duplicative effect to any materiality standard contained in the terms of such
representation or warranty); and
(ii) all covenants, obligations and conditions of this
Agreement to be performed by Buyer on or before such date have been so
performed.
(c) Claims. There shall not have occurred any written claims
or threatened litigation against Buyer (whether or not asserted in litigation)
which would reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated hereby.
(d) No Material Adverse Changes. There shall not have occurred
any material adverse change in the financial condition of Buyer and its
subsidiaries taken as a whole.
(e) Mentat Settlement. Seller and Mentat shall have entered
into a settlement agreement settling their dispute regarding the license
agreement executed by them.
8.3 Additional Conditions to the Obligations of Buyer. The obligations
of Buyer to consummate and effect this Agreement and the transactions
contemplated hereby shall be subject to the satisfaction at or prior to the
Closing Date of each of the following conditions, any of which may be waived, in
writing, exclusively by Buyer:
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(a) Representations, Warranties and Covenants. The
representations and warranties of the Seller in this Agreement shall be true and
correct in all material respects (without giving duplicative effect to any
materiality standard contained in the terms of such representation or warranty)
on and as of the Closing Date as though such representations and warranties were
made on and as of such time and the Seller shall have performed and complied
with all covenants, obligations and conditions of this Agreement required to be
performed and complied with by them as of the Closing Date.
(b) Certificate of Seller. Buyer shall have been provided with
a certificate in a form mutually acceptable to both parties executed by and on
behalf of Seller to the effect that, as of the Closing Date:
(i) all representations and warranties made by Seller in
this Agreement are true and correct in all material respects (without giving
duplicative effect to any materiality standard contained in the terms of such
representation or warranty); and
(ii) all covenants, obligations and conditions of this
Agreement to be performed by Seller on or before such date have been so
performed.
(c) Claims. There shall not have occurred any claims or
threatened litigation against Seller (whether or not asserted in litigation)
which would reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated hereby, the Assets or the
Business.
(d) No Injunctions or Restraints on Conduct of Business. No
temporary restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal or regulatory
restraint or provision challenging Buyer's proposed acquisition of the Assets,
or limiting or restricting Buyer's conduct or operation of any business related
to the Assets (or its own business) following the Acquisition shall be in
effect, nor shall any proceeding brought by an administrative agency or
commission or other governmental authority or instrumentality, domestic or
foreign, seeking any of the foregoing be pending.
(e) No Material Adverse Changes. There shall not have occurred
any Material Adverse Effect in the Assets or the Product Line.
(f) Third Party Rights. No third party shall have any right of
any nature whatsoever (including, without limitation, any right to receive
royalty payments) in respect of any of the Assets, other than as specifically
set forth in the Disclosure Schedule.
(g) Employment, Invention Assignment and Confidentiality
Agreements. Buyer and each of the New Employees listed on Exhibit D shall each
have agreed to enter into an Employment, Invention Assignment and
Confidentiality Agreement on substantially the terms set forth in Exhibit G to
become effective when the individuals listed on Exhibit D shall become employees
of the Company.
(h) Third-Party Consents. All third-party consents for the
Contracts listed under Assumed Obligations in Exhibit A shall have been
obtained, except for Seller's distribution license and bundling agreement with
Helix Software Company, Inc. and Seller's services agreement with Volt Delta
Resources Inc.
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(i) Mentat Agreement. Buyer shall have entered into a written
agreement with Mentat regarding software development.
(j) Employees. The employees of Seller listed on Exhibit D
shall accept offers of at-will employment with Buyer, which will include an
agreement to sign the Employment, Invention Assignment and Confidentiality
Agreement.
(k) Transitional Services Agreement and Secondment Agreement.
Buyer and Seller shall enter into the Transitional Services Agreement and the
Secondment Agreement substantially in the forms set forth in Exhibits E and F,
respectively.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1 Termination. Except as provided below, this Agreement may be
terminated and the Acquisition abandoned at any time prior to the Closing Date:
(a) by mutual consent of Seller and Buyer;
(b) by Buyer or Seller if: (i) the Closing has not occurred by
September 19, 1997; (ii) there shall be a final nonappealable order of a federal
or state court in effect preventing consummation of the Acquisition; or (iii)
there shall be any statute, rule, regulation or order enacted, promulgated or
issued or deemed applicable to the Acquisition by any Governmental Entity that
would make consummation of the Acquisition illegal; and
(c) by Buyer if there shall be any action taken, or any
statute, rule, regulation or order enacted, promulgated or issued or deemed
applicable to the Acquisition by any Governmental Entity, which would: (i)
prohibit Buyer's ownership of the Assets or operation of all or a portion of the
Product Line or (ii) compel Buyer to dispose of or hold separate all or a
portion of the Assets, the Product Line or other businesses or assets of Buyer
as a result of the Acquisition.
9.2 Effect of Termination. In the event of termination of this
Agreement as provided above, this Agreement shall forthwith become void and
there shall be no liability or obligation on the part of Buyer or Seller, or
their respective officers, directors, stockholders or equity owners, provided
that each party shall remain liable for any breaches of this Agreement prior to
its termination; and provided further that, the provisions of Sections 6.2, 6.3
and 6.4 of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.
9.3 Amendment. This Agreement may be amended by the parties hereto at
any time only by execution of an instrument in writing signed on behalf of the
Buyer and the Seller.
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9.4 Extension; Waiver. At any time prior to the Closing Date, Buyer on
the one hand, and Seller, on the other, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations of the other party
hereto, (ii) waive any inaccuracies in the representations and warranties made
to such party contained herein or in any document delivered pursuant hereto, and
(iii) waive compliance with any of the agreements or conditions for the benefit
of such party contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party.
ARTICLE X
GENERAL PROVISIONS
10.1 Survival of Representations and Warranties. All representations
and warranties made by any party in the Agreement or in any document executed
and delivered hereunder (an "Operative Document") shall survive the Closing, but
all claims made after the Closing with respect to any such representations and
warranties shall be made under, and subject to the limitations set forth in,
Section 7.1, except as otherwise set forth in Section 7.1(g) which shall be the
exclusive remedy after Closing for any such claim.
10.2 Exclusion of other Representations. Each party has made its
decision to enter into this Agreement and to consummate the transactions
provided for herein without relying upon any express or implied representations,
warranties, commitments or undertakings of any other party, or such other
party's directors, officers, employees, agents, representatives or affiliates,
except as expressly set forth in this Agreement and in the Operative Documents.
10.3 Knowledge. "Knowledge" means such knowledge that the executives
and managers of the Product Line, as identified on the attached Schedule 10.3,
have or should have or Seller has or should have, in the ordinary course of
business.
10.4 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally or by commercial
delivery service, or on the third business day after mailing if mailed by
registered or certified mail (return receipt requested) or on the day of
transmission if sent via telecopy (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Buyer, to:
Interlink Computer Sciences, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
(b) if to Sellers, to:
Xxxxxx Aircraft Company
0000 Xxxxxx Xxxx., Xxx. 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx
0000 Xxxxx Xxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
Xxxxxx Electronics Corporation
0000 Xxxxxx Xxxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attn: Office of the General Counsel
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
10.5 Interpretation. When a reference is made in this Agreement to
Exhibits or Schedules, such reference shall be to an Exhibit or Schedule to this
Agreement unless otherwise indicated. References to "this Agreement" or "the
Agreement" shall mean the Agreement including all Exhibits and Schedules unless
otherwise provided herein. The words "include," "includes" and "including" when
used herein shall be deemed in each case to be followed by the words "without
limitation." The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
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10.6 Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
10.7 Entire Agreement. This Agreement and the Exhibits hereto, each of
which is hereby incorporated into this Agreement and made a part hereof: (a)
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersede all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof;
(b) are not intended to confer upon any other person any rights or remedies
hereunder, unless expressly provided otherwise.
10.8 Assignment. This Agreement shall not be assigned by operation of
law (except in connection with a change in the jurisdiction of incorporation of
the Buyer or the proposed merger of Seller or its affiliate with Raytheon
Company) or otherwise except as otherwise specifically provided; provided that
after the Closing, any rights or obligations of the Buyer can be assigned,
without the consent of Seller, to any entity acquiring at least fifty percent of
the voting control of Buyer in any one or series of transactions, or any entity
acquiring all or substantially all of Buyer's assets.
10.9 Severability. In the event that any provision of this Agreement or
the application thereof becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision (including, if applicable, one that limits the scope or
duration of the covenants contained herein) that will achieve, to the extent
possible, the economic, business and other purposes of such void or
unenforceable provision.
10.10 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the State of California, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws. Except as expressly provided elsewhere in this Agreement, the parties
hereto agree that the federal or state courts in the State of California shall
be the exclusive jurisdiction for all disputes.
10.11 Rules of Construction. The parties hereto agree that they have
been represented by counsel during the negotiation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
[Remainder of Page Left Intentionally Blank]
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IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be
signed by or their duly authorized respective officers, all as of the date first
written above.
"BUYER"
INTERLINK COMPUTER SCIENCES, INC.
By: /s/ Xxxxxxx Xxxxx
-----------------------------
Name: Xxxxxxx Xxxxx
---------------------------
Title: Vice President
--------------------------
"SELLER"
XXXXXX AIRCRAFT COMPANY
By: /s/ Xxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxx X. Xxxx
---------------------------
Title: Sr. Vice President and CFO
--------------------------
[Signature Page to Interlink Computer Sciences, Inc. Asset Purchase Agreement]
