EXHIBIT 10.36
ASSET PURCHASE AND SALE AGREEMENT
BY AND AMONG
MARCONI COMMUNICATIONS, INC.,
MARCONI INTELLECTUAL PROPERTY (RINGFENCE) INC.,
MARCONI CORPORATION PLC,
ADVANCED FIBRE COMMUNICATIONS, INC.
AND
ADVANCED FIBRE COMMUNICATIONS NORTH
AMERICA, INC.
DATED AS OF JANUARY 5, 2004
SALE OF NORTH AMERICAN ACCESS SYSTEMS BUSINESS
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................................ 1
1.1 Definitions........................................................................ 1
1.2 Interpretation..................................................................... 19
ARTICLE II SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS.................... 20
2.1 Purchase and Sale of Assets........................................................ 20
2.2 Assignment of Permits and Contracts................................................ 22
2.3 Certain Provisions Regarding Assignments........................................... 24
2.4 Excluded Assets.................................................................... 25
2.5 Assumed Obligations................................................................ 27
2.6 Retained Obligations............................................................... 28
2.7 Prorations......................................................................... 30
ARTICLE III PURCHASE PRICE; ADJUSTMENT; ALLOCATION........................................... 31
3.1 Payment of Purchase Price.......................................................... 31
3.2 Purchase Price Adjustment.......................................................... 31
3.3 Allocation of Consideration for Assets............................................. 33
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PARENT, THE SELLER AND MARCONI IP........... 34
4.1 Due Incorporation.................................................................. 34
4.2 Due Authorization.................................................................. 35
4.3 Consents and Approvals; Authority Relative to this Agreement....................... 35
4.4 Management Accounts................................................................ 36
4.5 No Other Assumed Liabilities....................................................... 36
4.6 No Adverse Effects or Changes...................................................... 37
4.7 Title to Assets; Affiliate Ownership of Assets..................................... 37
4.8 Access Business Assets............................................................. 37
4.9 Real Property...................................................................... 37
4.10 Personal Property; Leased Personal Property........................................ 38
4.11 Customers and Distributors; Suppliers.............................................. 39
4.12 Proceedings........................................................................ 39
4.13 Intellectual Property.............................................................. 40
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TABLE OF CONTENTS
(continued)
4.14 Contracts.......................................................................... 42
4.15 Permits............................................................................ 45
4.16 Insurance.......................................................................... 45
4.17 Employee Benefit Plans and Employment Agreements................................... 45
4.18 Employment and Labor Matters....................................................... 46
4.19 Taxes.............................................................................. 48
4.20 Compliance with Laws............................................................... 48
4.21 Environmental Matters.............................................................. 48
4.22 Accounts Receivable................................................................ 49
4.23 Inventory.......................................................................... 49
4.24 Product Warranties and Liabilities................................................. 49
4.25 Effect of Transactions............................................................. 50
4.26 Solvency........................................................................... 50
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND AFCNA.......................... 50
5.1 Due Incorporation.................................................................. 50
5.2 Due Authorization.................................................................. 51
5.3 Consents and Approvals; Authority Relative to this Agreement....................... 51
5.4 Proceedings........................................................................ 52
5.5 Financing.......................................................................... 52
5.6 Independent Investigation.......................................................... 52
ARTICLE VI COVENANTS......................................................................... 52
6.1 Access to Information.............................................................. 52
6.2 Preservation of Business........................................................... 53
6.3 Consents and Approvals............................................................. 57
6.4 Marconi Name....................................................................... 59
6.5 Brokers............................................................................ 60
6.6 Assignments........................................................................ 60
6.7 Orderly Transition; Preservation of Books and Records; Access and Assistance....... 60
6.8 Insurance.......................................................................... 62
6.9 Confidentiality.................................................................... 62
6.10 Taxes.............................................................................. 67
6.11 Agreement Not to Compete........................................................... 68
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TABLE OF CONTENTS
(continued)
6.12 Collection of Receivables.......................................................... 70
6.13 Release of Liens................................................................... 70
6.14 Nonsolicitation.................................................................... 70
6.15 Bedford Facility................................................................... 71
6.16 Grande............................................................................. 72
6.17 Audit.............................................................................. 72
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER AND AFCNA................... 75
7.1 Warranties True.................................................................... 75
7.2 Compliance with Agreements and Covenants........................................... 75
7.3 Certificate of Compliance.......................................................... 76
7.4 Xxxx-Xxxxx-Xxxxxx.................................................................. 76
7.5 No Injunctions or Other Legal Restraints........................................... 76
7.6 Absence of Proceedings............................................................. 76
7.7 Certificates....................................................................... 76
7.8 FIRPTA Certificate................................................................. 76
7.9 Consents........................................................................... 77
7.10 Material Adverse Effect............................................................ 77
7.11 Other Documents.................................................................... 77
7.12 Release of Liens................................................................... 77
7.13 Opinion of Counsel................................................................. 77
7.14 Solvency Opinion................................................................... 77
ARTICLE VIII CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER, MARCONI IP AND THE PARENT.... 77
8.1 Warranties True.................................................................... 77
8.2 Compliance with Agreements and Covenants........................................... 78
8.3 Certificate of Compliance.......................................................... 78
8.4 Xxxx-Xxxxx-Xxxxxx.................................................................. 78
8.5 No Injunctions or Other Legal Restraints........................................... 78
8.6 Absence of Proceedings............................................................. 78
8.7 Other Documents.................................................................... 78
8.8 Purchase Price..................................................................... 78
8.9 Certificates....................................................................... 78
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TABLE OF CONTENTS
(continued)
8.10 Opinion of Counsel................................................................. 78
ARTICLE IX CLOSING............................................................................ 79
9.1 Closing............................................................................ 79
9.2 Deliveries by the Seller........................................................... 79
9.3 Deliveries by the Purchaser........................................................ 79
ARTICLE X TERMINATION......................................................................... 80
10.1 Termination........................................................................ 80
10.2 Effect of Termination.............................................................. 81
ARTICLE XI EMPLOYEES AND EMPLOYEE BENEFITS.................................................... 81
11.1 Offers of Employment............................................................... 81
11.2 Employee Benefits - Generally...................................................... 82
11.3 Service Credit..................................................................... 82
11.4 Welfare Benefits................................................................... 83
11.5 Paid Time Off...................................................................... 83
11.6 Disability......................................................................... 83
11.7 Bonus.............................................................................. 84
11.8 Retirement Plans................................................................... 84
11.9 Workers and Unemployment Compensation.............................................. 84
11.10 Wages.............................................................................. 84
11.11 Severance.......................................................................... 85
11.12 Cooperation........................................................................ 85
11.13 Employment Claims.................................................................. 85
ARTICLE XII INDEMNIFICATION................................................................... 85
12.1 Survival........................................................................... 85
12.2 Indemnification by the Parent, the Seller and Marconi IP........................... 86
12.3 Indemnification by the Purchaser and AFCNA......................................... 87
12.4 Limitations on Liability........................................................... 88
12.5 Mitigation......................................................................... 89
12.6 Claims............................................................................. 90
12.7 Notice of Third Party Claims; Assumption of Defense................................ 90
12.8 Time Limits........................................................................ 92
12.9 Net Losses and Subrogation......................................................... 92
12.10 Purchase Price Adjustments......................................................... 93
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TABLE OF CONTENTS
(continued)
12.11 Reimbursement of Expenses.......................................................... 93
ARTICLE XIII MISCELLANEOUS.................................................................... 93
13.1 Expenses........................................................................... 93
13.2 Amendment.......................................................................... 93
13.3 Notices............................................................................ 93
13.4 Payments in Dollars................................................................ 95
13.5 Waivers............................................................................ 95
13.6 Assignment......................................................................... 95
13.7 No Third Party Beneficiaries....................................................... 95
13.8 Publicity.......................................................................... 96
13.9 Further Assurances................................................................. 96
13.10 Severability....................................................................... 96
13.11 Entire Understanding............................................................... 96
13.12 Language........................................................................... 96
13.13 Applicable Law..................................................................... 96
13.14 Remittances........................................................................ 96
13.15 Bulk Sales......................................................................... 97
13.16 Jurisdiction of Disputes; Waiver of Jury Trial..................................... 97
13.17 Schedules.......................................................................... 97
13.18 Disclaimer of Warranties........................................................... 98
13.19 Counterparts....................................................................... 99
13.20 Specific Performance............................................................... 99
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EXHIBITS
Exhibit A Assignment and Assumption Agreement
Exhibit B Xxxx of Sale
Exhibit C Copyright Assignment
Exhibit D Cross License Agreement
Exhibit E Grande Reseller Agreement
Exhibit F Patent Assignment
Exhibit G Release Agreement
Exhibit H-1 Sublicense
Exhibit H-2 Sublicense
Exhibit I OPPS Supply Agreement
Exhibit J Trademark Assignment
Exhibit K Transition Services Agreement
Exhibit L Bedford Lease
Exhibit M FIRPTA Certificate
Exhibit N Opinion of Mayer, Brown, Xxxx & Maw LLP (US Law Matters)
Exhibit O Opinion of Mayer, Brown, Xxxx & Maw LLP (UK Law Matters)
Exhibit P Opinion of Xxxxx & Overy (Indenture Matters)
Exhibit Q Opinion of Valuation Research Corporation
Exhibit R Opinion of Pillsbury Winthrop LLP
SCHEDULES
Schedule 1.1A Core Technology
Schedule 1.1B Current Access Employees
Schedule 1.1C Former Access Employees
Schedule 1.1D Global Patent Licenses
Schedule 1.1E Group A and Group B Patents
Schedule 1.1F OPPS Patents
Schedule 1.1G Purchaser's Knowledge
Schedule 1.1H Seller's Knowledge
Schedule 1.1I Shared Contracts
Schedule 2.1(a) Personal Property
Schedule 2.1(e) Registered Trade Names
Schedule 2.2(c) Certain Customer Contracts
Schedule 2.2(f) Other Contracts
Schedule 2.4(x) Excluded Laboratory and Other Equipment
Schedule 2.5(g) Assumed Proceedings
Schedule 3.2(g) Calculation Principles
Schedule 4.3(a) Seller Governmental Consents
Schedule 4.3(b) Seller Other Consents
Schedule 4.4(a) Management Accounts
Schedule 4.4(b) Deviations from UK GAAP
Schedule 4.4(c) Assets and Liabilities
Schedule 4.5 No Other Assumed Liabilities
Schedule 4.6 No Adverse Effects or Changes
Schedule 4.7(a) Title to Assets
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Schedule 4.7(b) Affiliate Ownership of Assets
Schedule 4.8 Access Business Assets
Schedule 4.9(a) Real Property
Schedule 4.10(a) Material Owned Personal Property
Schedule 4.10(b) Material Personal Property Leases
Schedule 4.11(a) Material Customers
Schedule 4.11(b) Material Suppliers
Schedule 4.11(c) Material Distributors/Sales Representatives
Schedule 4.12 Proceedings
Schedule 4.13(a) Transferred Patents, Transferred Trademarks and Transferred Technology
Schedule 4.13(b)(i) Transferred Intellectual Property - Administrative Actions
Schedule 4.13(b)(ii) Transferred Intellectual Property - Effectiveness
Schedule 4.13(c) Ownership of Transferred Patents, Transferred Trademarks and Transferred Technology
Schedule 4.13(d) Inbound Licenses
Schedule 4.13(e)(i) Transferred Intellectual Property - Infringement and Claims
Schedule 4.13(e)(ii) Transferred Intellectual Property - Pending Challenges or Adversarial Proceedings
Schedule 4.13(e)(iii) Transferred Intellectual Property - Infringement
Schedule 4.14(a) Contracts
Schedule 4.14(b) Material Contracts - Defaults
Schedule 4.14(c) Material Contracts - Consents
Schedule 4.15 Permits
Schedule 4.16 Insurance
Schedule 4.17 Employee Benefit Plans and Employment Agreements
Schedule 4.18(a) Work Stoppages; Collective Bargaining Agreements
Schedule 4.18(b) Compliance with Labor Laws
Schedule 4.18(c) Employment Losses Under WARN
Schedule 4.18(d) Agreements Restricting Employees
Schedule 4.18(e) Reporting of Wages
Schedule 4.20 Compliance with Laws
Schedule 4.21 Environmental Matters
Schedule 4.23 Inventory
Schedule 4.24(a) Product Warranties and Liabilities
Schedule 4.24(c) Recalls
Schedule 4.25 Effect of Transactions
Schedule 6.2 Preservation of Business
Schedule 6.3(c) Obtaining Consents
Schedule 6.16 Grande
Schedule 7.9 Closing Condition Consents
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT is made as of the 5th day of
January, 2004, by and among Advanced Fibre Communications, Inc., a Delaware
corporation (the "Purchaser"), Advanced Fibre Communications North America,
Inc., a Delaware corporation and a wholly-owned subsidiary of the Purchaser
("AFCNA"), Marconi Communications, Inc., a Delaware corporation and an indirect
wholly-owned subsidiary of the Parent (the "Seller"), Marconi Intellectual
Property (Ringfence) Inc., a Delaware corporation and a wholly-owned subsidiary
of the Seller ("Marconi IP"), and Marconi Corporation plc, a public limited
liability company incorporated in England and Wales (registered no. 0067307)
(the "Parent"). Certain capitalized terms used herein are defined in Article I.
W I T N E S S E T H:
WHEREAS, the Purchaser and AFCNA (with respect to the Inventory (as
defined below) only) wish to purchase from the Seller and Marconi IP, and the
Seller and Marconi IP wish to sell to the Purchaser and AFCNA (with respect to
the Inventory only), the Assets (as defined below), and the Purchaser desires to
assume from the Seller, and the Seller desires to assign to the Purchaser,
certain obligations and liabilities relating to the Access Business (as defined
below), all upon the terms and subject to the conditions contained herein; and
WHEREAS, the Parent, as a parent entity of the Seller and Marconi IP,
has approved the sale of the Assets to the Purchaser and AFCNA as provided
herein, and the Board of Directors of the Parent has resolved that the
consideration for the Assets is sufficient to effect such sale under the
Indentures (as defined below).
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
Purchaser, AFCNA, the Seller, Marconi IP and the Parent agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The following terms shall have the following
meanings for the purposes of this Agreement:
"Access Business" shall mean the business, as conducted by the Seller
prior to the date hereof, of designing, developing, manufacturing, marketing and
selling to telecommunications service providers voice, data and video transport
systems for copper and fiber access networks, including digital loop carriers,
digital subscriber lines and systems delivering fiber to the curb, fiber to the
premises and fiber to the home, and the provision of related technical services,
field support services, repair and replacement services and ongoing maintenance
services for such systems. "Access Business" does not include (a) the Accesshub
Business or (b) the Other Businesses.
"Access Employees" shall mean, collectively, Current Access Employees
and Former Access Employees.
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"Accesshub Business" shall mean the business, as conducted by the
Parent and its Affiliates (other than the Seller and its Subsidiaries) prior to
the date hereof, of designing, developing, manufacturing, marketing and selling
to telecommunications service providers voice, data and video transport systems
for copper and fiber access networks, including digital loop carriers, digital
subscriber lines and systems delivering fiber to the curb, fiber to the premises
and fiber to the home, and the provision of related technical services, field
support services, repair and replacement services and ongoing maintenance
services for such systems. "Accesshub Business" does not include (a) the Access
Business or (b) the Other Businesses.
"Access Plans" shall mean the plans, programs, arrangements and
agreements which cover only Current Access Employees or Former Access Employees
and are identified on Schedule 4.17 as an Access Plan.
"Access Portion" shall have the meaning set forth in Section 2.3(c).
"Accounting Firm" shall have the meaning set forth in Section 3.2(c).
"Accounts Payable" shall have the meaning set forth in Section 2.5(e).
"Accounts Receivable" shall have the meaning set forth in Section
2.1(c).
"Accrued Compensation and Benefits" shall mean (i) payroll and bonuses
earned (it being understood that payroll and bonuses will be deemed "earned" in
accordance with the applicable plan or policy), (ii) vacation pay accrued and
(iii) the Included AIP Amount, in each case with respect to the Transferred
Employees.
"Acquired Entity" shall have the meaning set forth in Section 6.11(b).
"Acquisition" shall mean the purchase and sale of the Assets and the
assumption of the Assumed Obligations pursuant to the terms and conditions of
this Agreement.
"Adjusted Purchase Price" shall have the meaning set forth in Section
3.2(f).
"AFAC" shall mean Advanced Fibre Access Corporation, a Delaware
corporation.
"AFCNA" shall have the meaning set forth in the Preamble.
"Affiliate" shall mean, with respect to any specified Person, any other
Person which directly or indirectly, controls, is under common control with, or
is controlled by, such specified Person. The term "control" as used in the
preceding sentence means, with respect to a corporation, the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the shares of such corporation, or with respect to any Person
other than a corporation, the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such Person.
"Affiliate Contracts" shall have the meaning set forth in Section
4.14(a)(vi).
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"Affiliated Group" shall have the meaning set forth in this section
under the definition of Tax or Taxes.
"Agreement" shall mean this Asset Purchase and Sale Agreement,
including all Exhibits and Schedules hereto, as it may be amended, modified or
supplemented from time to time in accordance with its terms.
"Antitrust Division" shall mean the Antitrust Division of the United
States Department of Justice.
"Applicable Accounting Principles" shall have the meaning set forth in
Section 4.4.
"Assets" shall have the meaning set forth in Section 2.2.
"Assignment and Assumption Agreement" shall mean the assignment and
assumption agreement in the form set forth in Exhibit A.
"Assumed Obligations" shall have the meaning set forth in Section 2.5.
"Assumed Proceedings" shall have the meaning set forth in Section
2.5(g).
"Audit" shall have the meaning set forth in Section 6.17(a).
"Balance Sheet" shall have the meaning set forth in Section 4.4.
"BBRS Business" shall mean the business of designing, developing,
manufacturing, marketing and selling broadband routing and switching equipment
and systems and associated administrative and management software, and the
provision of related technical services, field support services, repair and
replacement services and ongoing maintenance services for such equipment,
systems and software, provided, that, for purposes of the foregoing, "broadband
routing and switching equipment and systems": (a) includes ATM switching, IP
switching, IP routing, frame relay switching, Ethernet switching, MPLS switching
and similar products and technologies; and (b) excludes the Access Business, and
specifically excludes Digital Subscriber Line Access Multiplexers (DSLAMS), the
MX shelf deployed in a mode to aggregate FITLA and DISC*s DSL traffic and the
aggregation of remote DSL ports of the FITLA and MX products of the Access
Business that are internal to those products.
"Bedford Facility" shall mean the facility located at 0000 Xxxxxxxx
Xxxxxxx, Xxxxxxx, Xxxxx 00000.
"Bedford Lease" shall have the meaning set forth in Section 4.9(a).
"Bedford Sale Agreement" shall mean the Agreement for the Sale and
Purchase of Real Estate entered into on November 24, 2003, by and between Jabil
Circuit of Texas, L.P. and CAMI Industrial, LLC.
"BellSouth Entity" shall mean (i) BellSouth Corporation, (ii) any
Subsidiary of BellSouth Corporation, (iii) any Person that acquires directly or
indirectly (whether by purchase,
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assignment, conveyance, spin-off, contribution or otherwise, alone or together
with one or more Affiliates in a single transaction or series of related
transactions) at least 100,000 telephone lines or other access lines within the
Nine-State Region from BellSouth Corporation or any of its Subsidiaries (the
"Subject Lines") (it being understood that, subsequent to any such transaction,
only the portion of such Person's business consisting of the Subject Lines shall
be deemed to be included in the definition of "BellSouth Entity") and (iv) any
successors (by way of merger, consolidation or otherwise) to any Persons
referred to in the foregoing clauses (i), (ii) or (iii) (it being understood
that in the case of a successor of the type contemplated by this clause (iv),
only that portion of such successor's business that constituted the business of
a "BellSouth Entity" in the Nine-State Region prior to the applicable
transaction shall be deemed included in the definition of "BellSouth Entity"
subsequent to such transaction); provided, however that if any Person referred
to in the foregoing clauses (i), (ii), (iii) or (iv) acquires any equity
interest in, or all or a portion of the business or assets of, any Person (other
than a Person referred to in the foregoing clauses (i), (ii), (iii) or (iv))
(regardless of the form of such transaction), then the definition of "BellSouth
Entity" shall not include (A) such acquired Person or any of its Subsidiaries
(in the case of an acquisition of equity interests) or (B) the business or
assets so acquired (in the case of any acquisition of assets).
"Benchmark Amount" shall mean $5,604,000.
"Benefit Plans" shall mean, collectively, the Access Plans and the
Seller Benefit Plans.
"Xxxx of Sale" shall mean the xxxx of sale in the form set forth in
Exhibit B.
"Business Day" shall mean any day of the year other than (i) any
Saturday or Sunday or (ii) any other day on which banks located in London,
England or New York, New York generally are closed for business.
"Business Material Adverse Effect" shall mean any event, change or
occurrence which, individually or together with any other event, change or
occurrence, (A) has had or would reasonably be expected to have a material
adverse effect on the operations, assets, results of operations or financial
condition of the Access Business as a whole or (B) has otherwise had or would
reasonably be expected to have a material adverse effect on the Purchaser's
ability following the Closing to conduct the Access Business as currently
conducted (for purposes of this clause (B), disregarding impairments to the
extent caused by the identity of the Purchaser, by any unique characteristic of
the Purchaser or by any facts relating specifically to the Purchaser that would
distinguish it from another similarly situated purchaser of the Assets), other
than any event, change or occurrence resulting from (i) matters generally
affecting the economy of the United States of America or Canada, (ii) conditions
affecting the industry in general in which the Access Business operates and not
having a materially disproportionate effect (relative to most industry
participants) on the Access Business, (iii) military action or any act of
terrorism, (iv) the loss of any vendors, customers or employees of the Access
Business due to the fact that the Purchaser (as opposed to any other Person) is
acquiring the Access Business, (v) changes in Law (for this purpose, "Law" shall
not include Judgments to which any of the Seller, the Parent or Marconi IP is a
party or by which the Access Business or the Assets are bound) or (vi) with
respect to clause (A) above only, matters to the extent relating to an Excluded
Asset and/or a Retained Obligation so long as such matters do not have and would
not reasonably be expected
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to have an adverse impact on the value of the Access Business to the Purchaser,
the value of the Assets or the reputation of the Access Business.
"Calculation Principles" shall have the meaning set forth in Section
3.2(g).
"CAMI Transaction" shall have the meaning set forth in Section 4.9(a).
"Claims" shall have the meaning set forth in Section 2.2(h).
"Claims Proceeds" shall have the meaning set forth in Section
6.2(c)(iv).
"Closing" shall mean the consummation of the Acquisition and the other
transactions contemplated herein in accordance with Article IX.
"Closing Date" shall mean the date on which the Closing occurs or is to
occur.
"Closing Working Capital" shall have the meaning set forth in Section
3.2(a).
"COBRA" shall mean all continuation group health coverage in accordance
with the provisions of Section 4980B or Part 6 of Subtitle B of Title 1 of
ERISA.
"Code" shall mean the United States Internal Revenue Code of 1986, as
amended.
"Commercial Agreements" shall mean the Transition Services Agreement,
the OPPS Supply Agreement, the Grande Reseller Agreement, if any, and the Seller
Bedford Lease, if any.
"Commercial Laws" shall have the meaning set forth in Section 2.5(c).
"Consent" shall mean a consent, authorization or approval of a Person,
or a filing or registration with a Person.
"Contract" shall mean any contract, license, lease, sales order,
purchase order, indenture, mortgage, note, bond, warrant, legally binding
commitment, agreement and all other legally binding arrangements, whether oral
or written.
"Conveyance Agreement" shall mean any Related Agreement other than the
Commercial Agreements.
"Copyright Assignment" shall mean the Copyright Assignment in the form
attached hereto as Exhibit C.
"Core Technology" shall mean the Transferred Technology described on
Schedule 1.1A.
"Cross License Agreement" shall mean the cross license agreement in the
form attached hereto as Exhibit D.
"CSC" shall mean Computer Sciences Corp., a Nevada corporation.
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"CSC International" shall mean CSC International Systems Management
Inc., a Nevada corporation.
"CSC Outsourcing Arrangement" shall mean the series of agreements
pursuant to which the Seller and its Affiliates have agreed to (i) outsource the
provision of certain information technology services to CSC International,
including information technology services for the Access Business, and (ii)
transfer certain of their equipment, contracts and other assets to CSC
International and British Telecommunications PLC for the purpose of facilitating
such outsourcing arrangement, including certain information technology assets
formerly used in support of the Access Business.
"Current Access Employee" shall mean any person who is employed by the
Seller or any of its Affiliates immediately prior to the Closing Date primarily
in connection with the Access Business, including any such person on leave of
absence, maternity or paternity leave, vacation, sick leave, short term or long
term disability, military leave, jury duty or bereavement leave. All such
persons are listed in Schedule 1.1B.
"Current Access Products" shall mean products, materials and services
that are presently offered by the Access Business, or are presently,
demonstrably in development to be offered by the Access Business, in each case
as such products, materials and services exist before incorporation of products,
materials and services provided or performed by the OPPS Business.
"December CA" shall have the meaning set forth in Section 6.9(a).
"Deloitte" shall have the meaning set forth in Section 6.17(a).
"Dollars" or numbers preceded by the symbol "$" shall mean amounts in
United States Dollars.
"Employee IP Agreement" shall mean: (i) for copyrights that qualify as
works made for hire or for trade secrets, an agreement with the Seller or
Marconi IP or any predecessor in interest, that vests in the Seller or Marconi
IP or the predecessor in interest original ownership in such copyrights or trade
secrets included in the Transferred Technology conceived or developed by
Personnel and (ii) for copyrights that cannot qualify as works made for hire or
for Patents, appropriate assignments, or agreements to assign, such copyrights
or Patents included in Transferred Patents or Transferred Technology to the
Seller or Marconi IP or any predecessor in interest.
"Enforceability Limitations" shall mean limitations on enforcement and
other remedies imposed by or arising under or in connection with applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar Laws affecting creditors' rights generally from time to time in
effect or general principles of equity.
"Environmental Law" shall mean any Law, each as in effect on the date
hereof or the Closing Date, that imposes liability or standards of conduct
concerning discharges, emissions, Releases or threatened Releases of any
pollutant or contaminant into ambient air, water (including ground water) or
land, or otherwise relating to the generation, treatment, storage, disposal,
cleanup, transport or handling of any pollutant or contaminant.
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"Environmental Permit" shall mean any Permit required by or pursuant to
any applicable Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Evolutions" shall have the meaning set forth in the Cross License
Agreement.
"Exchange Act" shall have the meaning set forth in Section 6.17(f).
"Excluded Assets" shall have the meaning set forth in Section 2.4.
"Excluded Leases" shall have the meaning set forth in Section 2.4(g).
"50% Losses" shall mean any Losses arising out of or resulting from (a)
a breach of a representation or warranty contained in (i) Section 4.7(b),
Section 4.8 or Section 4.13 of this Agreement, (ii) Section 5 of the Cross
License Agreement or (iii) Section 3 of either Sublicense or (b) Section 12.2(f)
or Section 12.2(g) of this Agreement.
"FIRPTA Certificate" shall have the meaning set forth in Section 7.8.
"Former Access Employee" shall mean any person who is not employed by
the Seller or any of its Affiliates immediately prior to the Closing Date and
who, immediately prior to such individual's termination of employment with the
Seller or its Affiliate, was coded on the data systems of the Seller or its
Affiliates as employed in Department 160, the department number which designated
the person as employed primarily in connection with the Access Business. All
such persons are listed in Schedule 1.1C.
"Freeport Sublease" shall mean the lease, dated March 27, 1998, by and
between the Seller and Freeport #1 L.P. with respect to the Seller's former
facility located at 0000 Xxxxxxxx Xxxxxxx, Xxxxxx, Xxxxx 00000 and the related
sublease, dated September 27, 2002, by and between the Seller and CSC.
"FTC" shall mean the Federal Trade Commission.
"Global Patent Licenses" shall mean the patent licenses set forth on
Schedule 1.1D.
"Governmental Authority" shall mean any Federal, state, local or
foreign government or subdivision thereof, or any entity, body or authority
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any Federal, state, local or foreign government.
"Governmental Required Consent" shall mean, with respect to a Person,
compliance by such Person with, and filings by such Person under, the HSR Act.
"Grande" shall mean Grande Communications, Inc., a Delaware
corporation.
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"Grande Agreements" shall mean the Grande Credit Facility and any notes
receivable thereunder, the Grande Warrant Agreement and the System Purchase
Agreement.
"Grande Credit Facility" shall mean the Loan and Security Agreement,
dated as of October 29, 2001, and as subsequently amended, among Grande, Grande
Communications Networks, Inc., Grande Communications Holdings, Inc. (and certain
Affiliates thereof), the Lenders thereto, General Electric Capital Corporation
(as Administrative Agent) and GECC Capital Markets Group, Inc. (as Lead
Arranger).
"Grande Reseller Agreement" shall mean the Grande Reseller Agreement
attached hereto as Exhibit E.
"Grande Warrant Agreement" shall mean the Warrant Agreement, dated as
of October 29, 2001, by and among Grande Communications Holdings, Inc., NTFC
Capital Corporation and Marconi Finance, Inc.
"Group Contract" shall mean any Contract under which the Access
Business and at least one other business unit of the Seller or an Affiliate of
the Seller purchase or sell goods or services on a joint basis or otherwise have
rights or obligations.
"Group A Patents" shall mean the Patents so designated on Schedule
1.1E, including any and all related foreign counterpart patents and patent
applications.
"Group B Patents" shall mean the Patents so designated on Schedule
1.1E, including any and all related foreign counterpart patents and patent
applications.
"Guarantees" shall have the meaning set forth in Section 4.14(a)(iii).
"Hazardous Substance" shall mean any pollutant, contaminant, waste,
material or substance that is defined as hazardous, regulated, or controlled
under any applicable Environmental Law.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
"Inbound Licenses" shall have the meaning set forth in Section 4.13(d).
"Included AIP Amount" shall mean the total bonuses earned as of March
31, 2004 under the Marconi AIP, multiplied by a fraction, the numerator of which
is the number of days in the applicable bonus payment period which occur prior
to the Closing Date and the denominator of which is the total number of days in
the applicable bonus payment period ending on March 31, 2004, less amounts paid
by Marconi under the Marconi AIP prior to the Closing Date. However, and
notwithstanding the foregoing, if the bonus is based on the satisfaction of more
than one target and each of the targets has a different period of time
associated with the target, the proration above described shall be computed with
respect to each target separately.
"Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article XII.
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"Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article XII.
"Indentures" shall mean, collectively, (i) the Indenture, dated as of
May 19, 2003, between Marconi Corporation plc, the Initial Guarantors named
therein and Law Debenture Trust Company of New York with respect to certain
Guaranteed Senior Secured Notes due 2008; (ii) the Indenture, dated as of May
19, 2003, between Marconi Corporation plc, the Initial Guarantors named therein
and Law Debenture Trust Company of New York with respect to certain Guaranteed
Junior Secured Notes due 2008; and (iii) the Security Trust and Intercreditor
Deed, dated as of May 19, 2003, between Marconi Corporation plc, The Law
Debenture Trust Company of New York, JPMorgan Chase Bank, HSBC Bank plc, the New
Bonding Facility Banks named therein, The Bank of New York, the Intra-Group
Creditors named therein and the Intra Group Borrowers named therein.
"Information and Records" shall have the meaning set forth in Section
2.1(d).
"Intellectual Property" shall mean intellectual property rights,
whether protected, created or arising under the laws of the United States or any
other jurisdiction anywhere in the world, including:
(a) patent registrations and applications;
(b) copyright registrations and applications;
(c) registrations of and applications for trade names,
trademarks, service names and service marks;
(d) trade secrets (including trade secrets consisting of
know-how, inventions, discoveries, concepts, ideas, methods, processes,
designs, formulae, technical data, drawings, specifications, data
bases, customer lists, pricing information and other proprietary and
confidential information);
(e) domain names; and
(f) all other proprietary rights.
"Interim Audit" shall have the meaning set forth in Section 6.17(f)
"Interim Financial Statements" shall have the meaning set forth in
Section 6.17(f)
"Inventory" shall have the meaning set forth in Section 2.1(b).
"Jabil" shall mean Jabil Circuit, Inc., a Delaware corporation.
"Jabil Agreements" shall mean, collectively, the Jabil Manufacturing
Agreement, the Jabil Repair Agreement, the Jabil Rationalization Agreement and
the Jabil Transition Agreement.
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"Jabil Manufacturing Agreement" shall mean the Manufacturing Agreement,
dated June 13, 2001, among the Seller, certain Affiliates of the Seller and
Jabil, as amended.
"Jabil Rationalization Agreement" shall mean the U.S. Rationalization
Agreement, dated August 28, 2002, as amended pursuant to (i) the First Amendment
to the U.S. Bedford Rationalization Agreement, dated October 7, 2003, among the
Seller, certain Affiliates of the Seller and Jabil and (ii) the Second Amendment
to the U.S. Bedford Rationalization Agreement, dated December 19, 2003, among
the Seller, certain Affiliates of the Seller and Jabil.
"Jabil Repair Agreement" shall mean the Repair Services Agreement,
dated June 13, 2001, among the Seller, certain Affiliates of the Seller and
Jabil.
"Jabil Transition Agreement" shall mean the Access Transition
Agreement, dated May 2, 2003, by and between the Seller and Jabil.
"Judgment" shall have the meaning set forth in Section 4.3(b).
"Law" shall mean any law, statute, regulation, ordinance, rule, order,
decree or governmental requirement enacted, promulgated or imposed by any
Governmental Authority.
"Liability" shall mean with respect to any Person, any liability or
obligation of such Person of any kind, character or description, whether known
or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, executory, determined, determinable or
otherwise and whether or not the same is required to be accrued on the financial
statements of such Person.
"LIBOR Rate" shall have the meaning set forth in Section 3.2(f).
"Lien" shall mean any claim, encumbrance, lien, mortgage, pledge or
security interest.
"Loss" or "Losses" shall mean any and all losses, liabilities, claims,
diminution in value, damages and expenses (including reasonable legal and other
discretionary third-party fees and expenses in connection with defending or
settling any claim, demand, action, Proceeding or threat thereof or
investigating any facts related thereto).
"Management Accounts" shall have the meaning set forth in Section 4.4.
"Marconi AIP" shall mean the Marconi Access Systems Annual Incentive
Plan 2003/2004 Financial Year, as amended, as in effect on the date hereof.
"Marconi Entity" shall have the meaning set forth in the Cross License
Agreement.
"Marconi Finance" shall mean Marconi Finance, Inc., a Delaware
corporation.
"Marconi 401(k) Plan" shall have the meaning set forth in Section 11.8.
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"Marconi Guarantee" shall mean any guarantee, indemnity, performance
bond, letter of credit, deposit or other security or contingent obligation in
the nature of a financial obligation, including letters of comfort or support
entered into or granted by any of the Seller's Affiliates in relation to or
arising out of any obligations or liabilities of the Seller in connection with
the Access Business (i) that are set forth on the Schedules or (ii) that were
incurred in the ordinary course of business.
"Marconi IP" shall have the meaning set forth in the Preamble.
"Marconi Name" shall mean the business name, brand name, trade name,
trademark, service xxxx, and domain name "Marconi," any business name, brand
name, trade name, trademark, service xxxx and domain name that includes the word
"Marconi", any portion thereof, any and all other derivatives thereof and the
Marconi logo (i.e., the script "M").
"Marconi plc" shall mean Marconi plc, a public limited liability
company incorporated in England and Wales (registered no. 3846429) whose
registered office is at New Century Park, XX Xxx 00, Xxxxxxxx, XX0 0XX, Xxxxxx
Xxxxxxx.
"Marconi Retirement Plan" shall have the meaning set forth in Section
11.3.
"Material Contracts" shall have the meaning set forth in Section
4.14(b).
"Material Personal Property Leases" shall have the meaning set forth in
Section 4.10.
"Maximum Rent" shall have the meaning set forth in Section 6.15(b).
"Net Accounts Payable" shall mean the aggregate amount of the Accounts
Payable, less the amount of any Accounts Payable erroneously billed, overbilled
or otherwise subject to a good faith reduction or dispute by the Access
Business.
"Net Accounts Receivable" shall mean the aggregate amount of the
Accounts Receivable, less reserves established in accordance with the
Calculation Principles.
"Net Inventory" shall mean the aggregate amount of the Inventory (other
than supplies), less reserves established in accordance with the Calculation
Principles.
"Nine-State Region" shall mean the States of Alabama, Florida, Georgia,
Kentucky, Louisiana, Mississippi, North Carolina, South Carolina and Tennessee.
"Non-Access Portion" shall have the meaning set forth in Section
2.3(c).
"Notice of Acceptance" shall have the meaning set forth in Section
3.2(b)(i).
"Notice of Disagreement" shall have the meaning set forth in Section
3.2(b)(ii).
"October CA" shall have the meaning set forth in Section 6.9(c).
"100% Losses" shall mean Losses arising out of or resulting from (i) a
breach of a Title and Authorization Warranty (other than the representation and
warranty set forth in Section
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4.7(b)), (ii) a breach of a covenant contained herein (other than breaches of
covenants contained in (A) the first sentence of Section 6.2, (B) Section
6.2(a)(ii), (iii), (vi), (xvi) or (xx) or (C) Section 6.2(b), (c), or (d)) or in
a Conveyance Agreement, (iii) Section 12.2(c), (d), or (e) hereof, (iv) Section
12.3(c) or (d) hereof or (v) fraud.
"OPPS Business" shall mean the business of (a) providing configuration,
design, implementation and support services for network systems, and the
provision of technical services, field support services, repair and replacement
services and ongoing maintenance services, in each case relating to such
configuration, design, implementation and support services, (b) designing,
developing, manufacturing, marketing and selling enclosures for housing both
active and passive electronic systems and active and passive communications
systems, and the provision of related technical services, field support
services, repair and replacement services and ongoing maintenance services for
such enclosures, and (c) designing, developing, manufacturing, marketing and
selling connection, protection and power systems, solutions and products for or
to network systems, and the provision of technical services, field support
services, repair and replacement services and ongoing maintenance services, in
each case relating to connection, protection and power systems, solutions and
products for or to network systems.
"OPPS Patents" shall mean the Patents listed on Schedule 1.1F.
"OPPS Supply Agreement" shall have the meaning set forth in the
definition of "Supply Agreements."
"Other Businesses" shall mean the OPPS Business, the BBRS Business and
the Test Systems Business.
"Other Business Product" shall mean any product of the Other Businesses
(as conducted in accordance with the definitions of "OPPS Business," "BBRS
Business" and "Test Systems Business" herein) that (i) does not incorporate or
use, and was not developed using, any of the Core Technology, (ii) is not
covered by any of the Group A Patents (excluding, only for purposes of this
clause (ii), products of existing licensees under the Global Patent Licenses),
and (iii) does not include any Current Access Products.
"Other Business Service" shall mean any service of the Other Businesses
(as conducted in accordance with the definitions of "OPPS Business," "BBRS
Business" and "Test Systems Business" herein) that (i) is performed without the
use of any of the Core Technology, (ii) is not performed on products covered by
any of the Group A Patents (excluding, only for purposes of this clause (ii),
products of existing licensees under the Global Patent Licenses) and (iii) is
not performed on any Current Access Products.
"Other Confidentiality Agreements" shall have the meaning set forth in
Section 6.9(a).
"Other Current Liabilities" shall mean the aggregate of (i) the accrual
for the discount owing to Communications Test Design, Inc., a distributor to
BellSouth Telecommunications, Inc., which accrual the Seller and the Purchaser
agree shall equal 2.25% of outstanding accounts receivables owing to the Access
Business from Communications Test Design, Inc. and (ii) the accruals for
personal property taxes, sales and use taxes and franchise taxes.
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"Parent" shall have the meaning set forth in the Preamble.
"Patent" shall mean any United States patents, pending United States
patent applications, and all extensions, continuations, continuations in part,
divisions, reissues and reexaminations of such patents and patent applications.
"Patent Assignment" shall mean the patent assignment by Marconi IP in
favor of the Purchaser in the form of Exhibit F.
"Permit" shall mean any permit, license, approval or other
authorization required or granted by any Governmental Authority.
"Permitted Liens" shall mean: (i) Liens for Taxes that are not yet
delinquent or that are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with the past
practices of the Access Business; (ii) workers', mechanics', materialmen's,
repairmen's, suppliers', carriers' or similar Liens arising in the ordinary
course of business with respect to the accounts payable being assumed by the
Purchaser pursuant to Section 2.5(e) that are not yet delinquent or that are
being contested in good faith by appropriate proceedings; (iii) covenants,
zoning restrictions, easements, licenses, or other restrictions on the use of
real property or other irregularities in title (including leasehold title)
thereto that do not materially impair the use of such real property, leases or
leasehold estates; and (iv) those Liens set forth in Schedule 4.7(a) (other than
Item 1 on Schedule 4.7(a)).
"Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association
or other entity.
"Personal Property" shall have the meaning set forth in Section 2.1(a).
"Personnel" shall mean all former and current employees, agents,
consultants and independent contractors that have contributed to or participated
in the conception or development of Transferred Technology or Transferred
Patents.
"Post-Closing Specific Performance Covenants" shall mean the covenants
set forth in Section 2.3, the last two sentences of Section 2.7, Section 3.2,
Section 3.3, Section 6.4, Section 6.6, Section 6.7, Section 6.9, the last two
sentences of Section 6.10(b), Section 6.10(c), Section 6.11, Section 6.12,
Section 6.13, Section 6.15(b), Section 6.15(c), Section 6.17, Section 13.6 and
Section 13.9 of this Agreement.
"Pre-Closing Environmental Liability" shall mean any Loss, Proceeding,
responsibility or other Liability arising out of Environmental Laws and (1) any
condition of the Assets or Excluded Assets to the extent existing on or prior to
the Closing Date, (2) the ownership or operation of the Access Business
(including by any former owner or operator thereof) or the Assets or any
Excluded Asset (or any assets previously owned or operated in connection with
the Access Business by any former owner or operator thereof) on or prior to the
Closing Date, (3) (A) personal injury, property damage or exposure to Hazardous
Substances or (B) investigation, remediation, natural resources damages or other
response actions, including claims related to any Releases, in each case arising
out of the ownership or operation of the Access Business or the Assets or any
Excluded Asset (or any assets previously owned or
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operated in connection with the Access Business or by any former owner or
operator of the Access Business) on or prior to the Closing Date or (4) the
Release of Hazardous Substances or the arrangement for such activities, from, at
or to any off-site location arising out of the ownership or operation of the
Access Business, the Other Businesses, the Assets or any Excluded Asset (or any
assets previously owned or operated in connection with the Access Business or
the Other Businesses or by any former owner or operator of the Access Business
or the Other Businesses) on or prior to the Closing Date (it being understood
that, for purposes of this clause (4), the Seller and its Affiliates shall not
be liable for any actions or inactions by the Purchaser or any of its Affiliates
with respect to any such arrangement subsequent to the Closing).
"Pre-Closing Insurance Claims" shall have the meaning set forth in
Section 6.2(c)(ii).
"Pre-Closing Specific Performance Covenants" shall mean the covenants
set forth in Section 2.1, Section 2.2, Section 2.3, Section 2.5, Section 3.1,
Section 6.1, Section 6.2, Section 6.3, Section 6.4, Section 6.6, Section 6.7,
Section 6.9, the last two sentences of Section 6.10(b), Section 6.13, Section
6.14, Section 6.15, Section 6.16, Section 6.17, Section 13.6 and Section 13.8 of
this Agreement.
"Prepaids" shall mean all prepaid expenses of the Access Business as
determined and accounted for in accordance with accounting policies of the
Access Business, including prepaid travel expenses, license fees, maintenance
fees and support fees, deferred charges, advanced payments, security deposits
and other prepaid items.
"Proceeding" shall have the meaning set forth in Section 2.6(e).
"Proposed Adjustments" shall have the meaning set forth in Section
3.2(b)(ii).
"PTO" shall have the meaning set forth in Section 11.5.
"PTO Policy" shall have the meaning set forth in Section 11.5.
"Purchase Price" shall have the meaning set forth in Section 3.1(a).
"Purchased Contracts" shall mean the Contracts and other rights
described in Section 2.2 (including the Access Portion of the Shared Contacts).
"Purchaser" shall have the meaning set forth in the Preamble.
"Purchaser 401(k) Plan" shall have the meaning set forth in Section
11.8.
"Purchaser Benefit Plans" shall have the meaning set forth in Section
11.2.
"Purchaser Indemnified Party" shall have the meaning set forth in
Section 12.2.
"Purchaser Material Adverse Effect" shall mean any event, change or
occurrence that has had or would reasonably be expected to have a material
adverse effect (i) on the ability of the Purchaser or AFCNA to perform their
obligations under this Agreement and their Related
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Agreements or (ii) on the ability of the Purchaser or AFCNA to consummate the
transactions required to be effected by them as contemplated hereby and thereby.
"Purchaser's knowledge," or any similar expression with regard to the
knowledge or awareness of or receipt of notice by the Purchaser, shall mean the
actual, direct and personal knowledge of any of the Persons listed in Schedule
1.1G.
"Purchaser's Welfare Plans" shall have the meaning set forth in Section
11.4.
"Related Agreement" shall mean any Contract that is to be entered into
by a party hereto at the Closing or otherwise pursuant to this Agreement on or
prior to the Closing Date, including the Assignment and Assumption Agreement,
the Xxxx of Sale, the Patent Assignment, the Cross License Agreement, the
Sublicenses, the Grande Reseller Agreement, if any, the OPPS Supply Agreement,
the Transition Services Agreement, the Copyright Assignment and the Trademark
Assignment. The Related Agreements executed by a specified Person shall be
referred to as "such Person's Related Agreements," "its Related Agreements" or
other similar expression.
"Release" shall mean any releasing, disposing, discharging, injecting,
spilling, leaking, leaching, pumping, dumping, emitting, escaping, emptying,
seeping, dispersal, migration, transporting, placing and the like, including the
moving of any materials through, into or upon, any land, soil, surface water,
groundwater or air, or otherwise entering into the environment.
"Release Agreement" shall mean the Release Agreement between The Law
Debenture Trust Corporation p.l.c., Marconi Corporation plc, Marconi
Communications, Inc. and Marconi Intellectual Property (Ringfence) Inc.,
substantially in the form attached hereto as Exhibit G.
"Request" shall have the meaning set forth in Section 6.17(b).
"Representatives" of a Person shall mean any officer, director,
employee, accountant, counsel, investment banker, financial advisor or other
representative of such Person or any of its Affiliates.
"Restricted Asset" shall have the meaning set forth in Section 2.3(a).
"Restricted Product" shall mean any voice, data or video transport
system for copper or fiber access networks (or any component thereof), including
digital loop carriers, digital subscriber lines and systems delivering fiber to
the curb, fiber to the premises or fiber to the home.
"Restrictive Covenants" shall have the meaning set forth in Section
6.11(c).
"Retained Obligations" shall have the meaning set forth in Section 2.6.
"Retained Patents" shall mean Patents (other than the Transferred
Patents), including any and all related foreign counterpart patents and patent
applications, that are owned by, or licensed to, any of the Marconi Entities and
are licensable to the Purchaser and its Affiliates by a Marconi Entity (but
excluding the OPPS Patents and the rights licensed to the Parent, the Seller or
any of their Affiliates under the Global Patent Licenses), and
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(a) are listed in Schedule 1.24 of the Cross License
Agreement; or
(b) cover any Current Access Product; or
(c) cover a patented machine, manufacture, combination or
composition, or a material or apparatus for which a Current Access
Product is a material part of the invention, where such Current Access
Product is not a staple article or commodity of commerce suitable for
substantial noninfringing use.
"Retained Technology" shall mean Technology that: (a) is owned by, or
licensed to, any Marconi Entity and is licensable to the Purchaser and its
Affiliates by any Marconi Entity; (b) is used in the Access Business as
presently conducted by the Seller; and (c) is not Transferred Technology;
provided, however, that Retained Technology does not include the Technology in
Schedule 1.25 of the Cross License Agreement.
"SEC's Staff" shall have the meaning set forth in Section 6.17(b).
"Seller" shall have the meaning set forth in the Preamble.
"Seller Bedford Lease" shall have the meaning set forth in Section
6.15(c).
"Seller Benefit Plans" shall mean the plans, programs, arrangements and
agreements set forth on Schedule 4.17 that are identified on such Schedule as a
Seller Benefit Plan.
"Seller Indemnified Party" shall have the meaning set forth in Section
12.3.
"Seller Material Adverse Effect" shall mean any event, change or
occurrence that has had or would reasonably be expected to have a material
adverse effect (i) on the ability of the Parent, the Seller and Marconi IP to
perform their obligations under this Agreement and their Related Agreements or
(ii) on the ability of the Parent, the Seller and Marconi IP to consummate the
transactions required to be effected by them as contemplated hereby and thereby.
"Seller's knowledge," or any similar expression with regard to the
knowledge or awareness of or receipt of notice by the Seller, shall mean the
actual, direct and personal knowledge of (i) any of the Persons listed in
Schedule 1.1H or (ii) if, between the date hereof and the Closing, any Person
set forth on Schedule 1.1H ceases to hold the position with the Seller or an
Affiliate of the Seller that such Person holds as of the date hereof, any Person
who assumes such position or a comparable position prior to the Closing.
"Seller's Pension Plans" shall have the meaning set forth in Section
11.8.
"Seller's Welfare Plans" shall have the meaning set forth in Section
11.4.
"Shared Contracts" shall mean those Group Contracts set forth in
Schedule 1.1I.
"Special Warranty Matters" shall mean the obligation of the Seller to
provide replacement products or repair services as a result of the matters set
forth in items 1, 2, 3 and 4 in the "Customer Disputes" Section of Schedule
4.11(a).
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"Special Warranty Reserve" shall mean $4,638,000 (which amount
represents the amount of the reserve agreed between the Seller and the Purchaser
with respect to the Special Warranty Matters as of September 30, 2003) less the
aggregate cost of replacement products and repair services incurred in
connection with the Special Warranty Matters between September 30, 2003 and the
Closing.
"Statement of Working Capital" shall have the meaning set forth in
Section 3.2(a).
"Sublicenses" shall mean the sublicense agreements in the forms of
Exhibits H-1 and H-2 hereto.
"Subsidiaries" of a Person shall mean any Person subject to control by
such Person. The term "control" as used in the preceding sentence means, with
respect to a corporation, the right to exercise, directly or indirectly, more
than fifty percent (50%) of the voting rights attributable to the shares of such
corporation, or with respect to any Person other than a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person.
"Supply Agreements" shall mean, collectively, (i) the Supply Agreement
between the Seller (acting through OPPS) and the Purchaser in the form set forth
in Exhibit I (the "OPPS Supply Agreement") and (ii) the Grande Reseller
Agreement, if any.
"System Purchase Agreement" shall have the meaning set forth in Section
6.16.
"Tax" or "Taxes" means all: (i) Federal, state, local, foreign and
other taxes, assessments, duties or similar charges of any kind whatsoever,
including all corporate franchise, income, sales, use, ad valorem, receipts,
value added, profits, license, withholding, payroll, employment, excise,
property, net worth, capital gains, transfer, stamp, documentary, social
security, payroll, environmental, alternative minimum, occupation, recapture and
other taxes, and including any interest, penalties and additions imposed with
respect to such amounts; (ii) liability for the payment of any amounts of the
type described in clause (i) as a result of being a member of an affiliated,
consolidated, combined, unitary or aggregate group (an "Affiliated Group"); and
(iii) liability for the payment of any amounts as a result of an express or
implied obligation to indemnify any other Person with respect to the payment of
any amounts of the type described in clause (i) or (ii).
"Tax Return" shall mean any report, return or other information
required to be supplied to a Governmental Authority in connection with any
Taxes.
"Tax Statute of Limitations Date" shall mean the close of business on
the 60th day after the expiration of the applicable statute of limitations with
respect to any Tax, including any extensions thereof (or if such date is not a
Business Day, the next Business Day).
"Tax Warranty" shall mean a representation or warranty in Section 4.19.
"Technology" shall mean trade secrets, confidential information,
inventions, discoveries, know-how, formulae, practices, processes, procedures,
ideas, specifications, engineering data, software, firmware, programs and source
disks, source codes, databases and data collections,
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designs, registered and unregistered copyrights, composition services, research
records, records of inventions, test information, market surveys and marketing
know-how.
"Termination Date" shall have the meaning set forth in Section 10.1(b).
"Territory" shall mean the United States of America and Canada.
"Test Systems Business" shall mean the development, manufacture, supply
and installation of hardware and software systems used by telephone service
providers for maintaining service to subscribers and qualifying lines for
application of broadband technology including hardware and software systems (a)
interfacing the system's remote measurement units with access and switching
network elements deployed within a service provider's network to perform fault
analysis of the transport facility used for its subscriber loops, (b) providing
analysis of the loop to determine the suitability for transport of broadband
services such as DSL and (c) consisting of auxiliary hardware used in
applications to facilitate connection to the network element's test access port.
The Test Systems Business also provides installation, turn-up and engineering
services to the service provider to adapt its system to the specific network
elements and operational support systems used by the customer.
"Third Party Claim" shall have the meaning set forth in Section
12.7(a).
"Title and Authorization Warranty" shall mean a representation or
warranty in Section 4.1, 4.2, 4.3 (other than Sections 4.3(b)(ii) and (v)), 4.7,
4.26, 5.1, 5.2 or 5.3 (other than Section 5.3(b)(ii) and (iv)) of this
Agreement.
"Trademark Assignment" shall mean the Trademark Assignment in the form
of Exhibit J.
"Transfer Taxes" shall mean any Liability for transfer, documentary,
sales, use, registration, value added and other similar Taxes (including all
applicable real estate transfer Taxes and real property transfer gains Taxes)
and related amounts (including any penalties, interest and additions to Tax)
incurred in connection with this Agreement, the Related Agreements, the
Acquisition and the other transactions contemplated hereby and thereby.
"Transferable Permits" shall have the meaning provided in Section 2.2.
"Transferred Employee" shall have the meaning set forth in Section
11.1.
"Transferred Intellectual Property" shall mean, collectively, the
Transferred Trademarks, the Transferred Technology and the Transferred Patents.
"Transferred Patents" shall mean the Group A Patents and the Group B
Patents, including any and all related foreign counterpart patents and patent
applications.
"Transferred Technology" shall mean Technology owned by the Seller that
(a) was substantially developed by the Access Business or was developed
exclusively for the Access Business for use in the Access Business, but
excluding Technology used by the OPPS Business for the OPPS Business; or (b) was
used exclusively in the Access Business as presently
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conducted, including the Core Technology, but excluding the Technology listed in
Schedule 1.25 of the Cross License Agreement.
"Transferred Trademarks" shall have the meaning set forth in Section
2.1(e).
"Transition Services Agreement" shall mean the transition services
agreement between the Seller and the Purchaser in the form set forth in Exhibit
K.
"25% Losses" shall mean any Losses under or otherwise in connection
with this Agreement, or any Conveyance Agreement or any other document delivered
at the Closing that is not a Commercial Agreement or the transactions
contemplated hereby or thereby other than (i) 50% Losses and (ii) 100% Losses.
"2003 Financial Statements" shall have the meaning set forth in Section
6.17(a).
"UKLA" shall mean the Financial Services Authority acting in its
capacity as the competent authority for the purposes of Part VI of the Financial
Services and Markets Xxx 0000 of England.
"Unresolved Adjustments" shall have the meaning set forth in Section
3.2(c).
"U.S. Affiliate" means, with respect to any specified Person, any
Affiliate of such Person that is incorporated or organized under the laws of any
of the states of the United States of America.
"U.S. GAAP" shall have the meaning set forth in Section 6.17(a).
"Vidar Claims" shall mean (i) all amounts awarded or received, or that
may subsequently be awarded or received, to or by the Seller pursuant to or in
settlement of the Vidar Proceedings and (ii) all other indemnities, rights or
claims of the Seller against Vidar-SMS Co., Ltd. or any of its Affiliates
arising from the matters subject to the Vidar Proceedings.
"Vidar Proceedings" shall mean (i) Marconi Communications, Inc. vs.
Vidar-SMS Co., Ltd., ICC International Court of Arbitration Case No.
11035/ESR/TE and (ii) Marconi Communications, Inc. v. Vidar-SMS Co., Ltd., Civil
Action No. 3:00-CV-1293-L in the United States District Court for the Northern
District of Texas, Dallas Division.
"WARN Act" shall mean the Worker Adjustment and Retraining Notification
Act of 1988, as amended, and any similar Law.
"Welfare Plan" shall mean the Marconi Total Rewards Plan.
1.2 Interpretation. The headings preceding the text of Articles
and Sections included in this Agreement and the headings to Schedules attached
to this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or
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"include, without limitation," respectively. The phrase "ordinary course of
business consistent with past practices" and similar phrases as used herein with
respect to the operation of the Access Business prior to the Closing shall refer
to the operation of the Access Business between April 1, 2002 and the date
hereof. Reference to any Person includes such Person's successors and assigns to
the extent such successors and assigns are permitted by the terms of any
applicable agreement. Reference to a Person in a particular capacity excludes
such Person in any other capacity or individually. Reference to any agreement
(including this Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms hereof.
Underscored references to Articles, Sections, paragraphs, clauses, Exhibits or
Schedules shall refer to those portions of this Agreement. The use of the terms
"hereunder," "hereof," "hereto" and words of similar import shall refer to this
Agreement as a whole and not to any particular Article, Section, paragraph or
clause of, or Exhibit or Schedule to, this Agreement.
ARTICLE II
SALE AND PURCHASE OF ASSETS; ASSUMPTION OF ASSUMED OBLIGATIONS
2.1 Purchase and Sale of Assets. Except as provided in Sections
2.3 and 2.4 and subject to the other terms and conditions of this Agreement, at
the Closing, the Seller and Marconi IP, as the case may be, shall sell, assign,
convey, transfer and deliver to the Purchaser, and, with respect to the
Inventory only, AFCNA, free and clear of any Liens other than Permitted Liens,
and the Purchaser and, with respect to the Inventory only, AFCNA, shall purchase
and acquire from the Seller and Marconi IP, as the case may be, and take
assignment and delivery from the Seller and Marconi IP, as the case may be, of
all of the Seller's or Marconi IP's, as the case may be, right, title and
interest in and to the following (wherever located, unless otherwise
specifically stated, and other than the Excluded Assets):
(a) Equipment; Personal Property. All (i) equipment,
machinery, computers, computer hardware, servers, network equipment and
connections, in each case either (A) located at the Bedford Facility or
(B) if primarily used or held for use in the Seller's conduct and
operation of the Access Business, located elsewhere, (ii) furniture,
furnishings, tools, spare parts, and all other items of tangible
personal property, in each case either (A) located at the Bedford
Facility or (B) if primarily used or held for use in the Seller's
conduct and operation of the Access Business, located elsewhere and
(iii) all vehicles primarily used in the Access Business, including
with respect to subclauses (i), (ii) and (iii), those items of personal
property set forth on Schedule 2.1(a), but in each case excluding the
laboratory and other equipment listed on Schedule 2.4(x) (the assets
described in this Section 2.1(a) being collectively referred to as the
"Personal Property");
(b) Inventory. All supplies, materials and other
inventories of raw materials, works-in-progress and finished goods
(wherever located) to the extent used in or held in connection with the
Access Business, including any inventories on consignment with contract
manufacturers or customers in connection with the Access Business
(collectively, the "Inventory");
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(c) Accounts Receivable. All accounts receivable, trade
receivables, notes receivable and other receivables (excluding any
receivables relating to any Benefit Plan) to the extent arising out of
or from the operation of the Access Business, including receivables
from suppliers but excluding receivables to the extent relating to the
Excluded Assets and any claim, remedy or right to the foregoing
(collectively, the "Accounts Receivable");
(d) Information and Records. All sales and business
records, service records, warranty records, books of account, ledgers,
general, financial and accounting records, files, program
documentation, tapes, manuals, forms, product guides and similar
materials, proprietary information and invention agreements and similar
agreements, invoices, inventory records, engineering, maintenance,
operating and production records, cost and pricing information,
business plans, catalogs, quality control records, files related to
Assumed Proceedings, credit records of customers, customers' and
suppliers' lists, other distribution lists, billing records, sales and
promotional literature, customer and supplier correspondence (in all
cases, in any form or medium), in each case, to the extent used or held
for use in, or to the extent that arose or arise out of the operation
or conduct of, the Access Business or to the extent related to any
Asset or any Assumed Obligation (collectively, the "Information and
Records"); provided, that, notwithstanding anything to the contrary in
this Section 2.1(d), (i) "Information and Records" shall not include
(A) any information or records which constitute "Technology", (B) any
Proceeding files other than files related to the Assumed Proceedings
and (C) the portion of any information or records related to an
Excluded Asset or Retained Obligation and (ii) if any particular record
of the Seller contains both information to be transferred to the
Purchaser pursuant to this Section 2.1(d) and other information, then
the Seller can, at its option, either (A) provide a copy of such record
to the Purchaser subject to the Purchaser's obligations contained
herein to keep such other information confidential or (B) create a new
record that separates out the information to be transferred to the
Purchaser pursuant to this Section 2.1(d) and provide a copy of such
new record to the Purchaser;
(e) Trade Names. All (i) registered trade names,
trademarks, service names and service marks (and applications for
registration of the same) set forth on Schedule 2.1(e) and (ii) all
unregistered trade names, trademarks, service names and service marks
which are owned by the Seller and used exclusively in the Seller's
conduct of the Access Business (collectively, the "Transferred
Trademarks");
(f) Technology. The Transferred Technology;
(g) Patents. The Transferred Patents;
(h) Goodwill. All of the Seller's and Marconi IP's
customer relationships and related goodwill to the extent generated by
or associated with the Access Business, including the exclusive right
to represent oneself as the successor of the Access Business
(notwithstanding the foregoing, it is understood and agreed that the
Seller is not transferring to the Purchaser (i) the customer
relationships (or related goodwill) to the
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extent generated by or associated with the Other Businesses or (ii) any
goodwill associated with the Marconi Name in and of itself);
(i) Products. All products of the Access Business sold
prior to the Closing (including products returned after the Closing and
rights of rescission, replevin and reclamation) (as such products exist
without the inclusion of any services or products supplied by the Other
Businesses);
(j) Credits. All credits and Prepaids to the extent used
or held for use in, or that arose or arise out of, the operation or
conduct of the Access Business or in connection with any Asset or any
Assumed Obligation (excluding those credits relating to any Benefit
Plan);
(k) Claims Proceeds. All Claims Proceeds except as
provided in Sections 6.2(c)(iv)(A) and (B); and
(l) Other. All other properties and assets of every kind,
character and description, tangible or intangible, primarily used or
held for use in, or that primarily arose or arise out of, the operation
or conduct of the Access Business to the extent not set forth above,
whether or not similar to the items set forth above.
2.2 Assignment of Permits and Contracts. Except as provided in
Sections 2.3 and 2.4 and subject to the other terms and conditions of this
Agreement, at the Closing, the Seller and Marconi IP, as the case may be, shall
assign and transfer to the Purchaser, and the Purchaser shall take assignment
of, all of the Seller's and Marconi IP's, as the case may be, right, title and
interest in and to all Permits and all pending applications or renewals thereof
that relate exclusively to the operation or conduct of the Access Business or
are exclusively used or held for use in connection with any Asset including the
Permits, applications and renewals set forth on Schedule 4.15, to the extent
such Permits, applications and renewals are transferable (collectively, the
"Transferable Permits"), and in and to the following Contracts or contractual
rights of the Seller:
(a) Occupancy of Bedford Facility. Subject to Section
6.15, the Bedford Lease;
(b) Personal Property Leases. All leases of personal
property related exclusively to the conduct or operation of the Access
Business, including the leases set forth on Schedule 4.10(b) (except as
otherwise noted on such schedule);
(c) Customer Contracts. (i) All sale orders and other
Contracts for the provision of goods or services to customers arising
exclusively from the operation or conduct of the Access Business,
including those Contracts set forth on Schedule 4.14(a)(xi) and
Schedule 2.2(c), (ii) the Shared Contracts listed as items 1, 2, 3, 12
and 13 on Schedule 7.9 and (iii) subject to the foregoing clause (ii)
and except as otherwise provided on Schedule 7.9, the portion of each
Shared Contract set forth on Schedule 1.1I under the heading "Shared
Customer Contracts" to the extent pertaining to the operation or
conduct of the Access Business after the Closing;
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(d) Vendor Contracts. (i) All purchase orders and other
Contracts for the purchase of goods or services related exclusively to
the operation or conduct of Access Business, including those Contracts
set forth on Schedule 4.14(a)(iv) (except as otherwise noted on such
schedule) and (ii) the portion of each Shared Contract set forth on
Schedule 1.1I under the heading "Shared Vendor Contracts" to the extent
pertaining to the operation or conduct of the Access Business after the
Closing;
(e) Intellectual Property Licenses. (i) All agreements
for the license to the Seller or Marconi IP of Intellectual Property
that are used or held for use exclusively in the operation or conduct
of the Access Business including all agreements set forth on Schedule
4.13(d) (except as otherwise noted on such schedule) and (ii) those
certain rights under each Shared Contract set forth on Schedule 1.1I
under the heading "Shared Intellectual Property Licenses" to the extent
used or held for use in the operation or conduct of the Access
Business;
(f) Other Contracts. (i) All other Contracts set forth on
Schedule 2.2(f), (ii) those certain rights under each Shared Contract
set forth on Schedule 1.1I under the heading "Other Shared Contracts"
to the extent used or held for use in the operation or conduct of the
Access Business and (iii) such other Contracts entered into between the
date hereof and the Closing Date entered into in compliance with
Section 6.2 to the extent used or held for use in the operation or
conduct of the Access Business;
(g) Non-Disclosure Obligations. All non-disclosure,
confidentiality and similar obligations owed to the Seller or any of
its Affiliates to the extent related to the Access Business other than
those non-disclosure or confidentiality agreements entered into in
connection with the proposed sale of the Access Business;
(h) Claims. All warranties, indemnities, rights and
claims against third parties to the extent arising out of or relating
to the Access Business or any Asset or Assumed Obligation
(collectively, "Claims", it being agreed that "Claims" shall not
include claims to the extent arising out of or relating to any Excluded
Asset or Retained Obligation), including Claims in bankruptcy but
excluding Claims arising under insurance policies (except as set forth
in Section 6.8); and
(i) Employee Non-Compete Obligations. All rights with
respect to any obligation of any Access Employee to refrain from
competing with the Access Business.
All of the property and assets to be transferred or assigned to the
Purchaser and AFCNA hereunder pursuant to Sections 2.1 and 2.2 are herein
referred to collectively as the "Assets"; provided, however, "Assets" shall not
include the equity of, or any other ownership interest in, any Person.
Notwithstanding the foregoing, the transfer of the Assets pursuant to
this Agreement shall not include the assumption of any Liability related to the
Assets unless the Purchaser expressly assumes that Liability pursuant to Section
2.5.
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2.3 Certain Provisions Regarding Assignments.
(a) Anything in this Agreement to the contrary
notwithstanding, this Agreement shall not constitute an agreement to
assign or transfer any Contract or other Asset or any claim, right,
benefit or obligation thereunder or resulting therefrom if (i) an
assignment or transfer thereof, without the Consent of a third party
thereto, would constitute a breach or violation thereof or would in any
way adversely affect the rights (upon transfer) of the Purchaser under
such Contract or other Asset or result in the loss or cancellation
thereof and (ii) such Consent is not obtained at or prior to the
Closing ("Restricted Asset") (it being understood that this Section
2.3(a) shall in no way limit any parties' obligations under Section
6.3(c)).
(b) If the parties are not successful in obtaining a
Consent at or prior to the Closing, then (i) the Seller shall continue
to keep the applicable Restricted Asset in effect in accordance with
its terms and shall provide the Purchaser with the benefits of the
Restricted Asset in question accruing after the Closing Date to the
extent that the Seller may provide such benefits (A) in a manner not in
violation of the terms of such Restricted Asset (and subject to Section
2.3(d) below) and (B) without incurring any material expense or
otherwise taking any material actions or measures (such as hiring
additional employees) and (ii) if the Seller provides such benefits to
the Purchaser, the Purchaser shall perform at its sole expense the
obligations of the Seller to be performed after the Closing under the
Restricted Asset in question. Once a Consent for the sale, assignment,
assumption, transfer, conveyance and delivery of a Restricted Asset is
obtained, the Seller shall promptly assign, transfer and deliver such
Restricted Asset to the Purchaser, and the Purchaser shall assume the
obligations under such Restricted Asset that relate to the period from
and after the date of assignment, transfer and delivery of such
Restricted Asset to the Purchaser. The terms of this Section 2.3(b)
shall not apply with respect to Shared Contracts, it being understood
that the treatment of Shared Contracts is addressed in Section 2.3(c).
(c) Prior to the Closing and subject to the provisions
set forth in Schedule 7.9 with respect to certain Shared Contracts, the
Seller and the Purchaser shall use their reasonable best efforts to
work together (and, if necessary and desirable, to work with the third
parties to the Shared Contracts) in an effort to (i) divide, modify
and/or replicate (in whole or in part) the respective rights and
obligations under and in respect of the Shared Contracts and (ii) if
possible, novate the respective rights and obligations under and in
respect of the Shared Contracts, such that, effective as of the
Closing, (A) the Purchaser is the beneficiary of the post-Closing
rights and is responsible for the post-Closing obligations related to
that portion of the Shared Contract included in the Purchased Contracts
(the "Access Portion") (so that, subsequent to the Closing, the Seller
shall have no post-Closing rights or post-Closing obligations with
respect to the Access Portion of the Shared Contract) and (B) the
Seller is the beneficiary of the rights and is responsible for the
obligations related to the Shared Contract other than the Access
Portion (the "Non-Access Portion") (so that, subsequent to the Closing,
the Purchaser shall have no rights or obligations with respect to the
Non-Access Portion of the Shared Contract). If the parties are not able
to enter into an arrangement to formally divide, modify and/or
replicate one or more Shared Contracts prior to the Closing as
contemplated by the
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previous sentence, then (i) the Purchaser shall be entitled to the
benefits of the Access Portion of any such Shared Contract accruing
after the Closing Date to the extent that the Seller may provide such
benefits (A) in a manner not in violation of the terms of such Shared
Contract (and subject to Section 2.3(d) below) and (B) without
incurring any material expense or otherwise taking any material actions
or measures (such as hiring additional employees) and (ii) if the
Seller provides such benefits to the Purchaser, the Purchaser shall
perform at its sole expense the obligations of the Seller to be
performed after the Closing under the Access Portion of such Shared
Contract.
(d) If any Consent with respect to a Restricted Asset is
not obtained or any division, modification or replication with respect
to a Shared Contract is not procured prior to the Closing, the Seller
and the Purchaser shall cooperate (at their own expense) in any lawful
and reasonable arrangement reasonably proposed by the Purchaser under
which the Purchaser shall obtain the economic claims, rights and
benefits under the Restricted Asset or Shared Contract with respect to
which the Consent has not been obtained in accordance with this
Agreement. Such reasonable arrangement may include subcontracting,
sublicensing or subleasing to the Purchaser of any and all rights of
the Seller, the Parent or Marconi IP under such Restricted Asset or
Access Portion of a Shared Contract. To the extent the Purchaser
receives the economic claims, rights and benefits under a Restricted
Asset or Shared Contract as set forth above, the Purchaser shall be
responsible for the Assumed Obligations, if any, arising under such
Restricted Asset or Access Portion of a Shared Contract.
2.4 Excluded Assets. Notwithstanding the provisions of Sections
2.1 and 2.2, neither the Seller nor Marconi IP shall sell, assign, convey,
transfer or deliver to the Purchaser or AFCNA, and neither the Purchaser nor
AFCNA shall purchase, acquire or take assignment or delivery of, any of the
following assets or Contracts, or any right, title or interest therein
(collectively, the "Excluded Assets"):
(a) Cash. Other than the Claims Proceeds, all cash,
certificates of deposit, bank deposits, negotiable instruments,
marketable securities and other cash equivalents, together with all
accrued but unpaid interest thereon;
(b) Marconi Name. The Marconi Name and all goodwill
associated therewith;
(c) Tax Refunds; Tax Returns. All claims for and rights
to receive refunds, rebates, or similar payments of Taxes to the extent
such Taxes were paid by or on behalf of the Seller or any of its
Affiliates, all Tax Returns, and all notes, worksheets, files or
documents relating thereto;
(d) Corporate Records. All minute books and corporate
records of the Seller and its Affiliates;
(e) Employee Records. All personnel, employee
compensation, medical and benefits and labor relations records relating
to employees or past employees of the Seller and its Affiliates;
provided, however, copies of all such materials relating to the Current
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Access Employees and any Former Access Employees who were employed in
connection with the Access Business on or after April 1, 2002 shall be
delivered to the Purchaser to the extent permitted by applicable Law;
and provided, further, that, copies of benefit records relating to any
benefit liability not being assumed by the Purchaser shall not be
provided to the Purchaser;
(f) Sale Documents. All books and records prepared or
received in connection with the proposed sale of the Access Business,
including offers received from prospective purchasers, and the Seller's
and its Affiliates' right, title and interest under this Agreement and
the Related Agreements;
(g) Excluded Leases. Other than as provided in the
Transition Services Agreement and in respect of the transfer of the
Bedford Lease, all right, title and interest to (i) the Seller's leased
space located at 0000 Xxxxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000, (ii)
the Freeport Sublease, (iii) the Jabil Rationalization Agreement and
(iv) all other leaseholds or interests in real property of the Seller
(collectively the "Excluded Leases");
(h) Group Contracts. Subject to clauses (ii) and (iii) of
Section 2.2(c), all Group Contracts other than the respective Access
Portions of the Shared Contracts;
(i) Disposed Assets. All assets sold or otherwise
disposed of in the ordinary course of business and in compliance with
Section 6.2 during the period from the date of this Agreement until the
Closing Date;
(j) Insurance. Subject to Section 6.8, all insurance
policies or insurance coverage relating to the Assets or the Access
Business;
(k) Affiliate Contracts. All Affiliate Contracts and
obligations thereunder;
(l) Intercompany Obligations. All obligations of any kind
payable to or owing from any Affiliate of the Seller, including all
intercompany accounts receivable and accounts payable relating to
indebtedness for borrowed money;
(m) Global Patent Licenses. The Global Patent Licenses;
(n) Intellectual Property. All right, title and interest
in or to any Intellectual Property or rights owned by, or leased or
licensed to, the Seller or any of its Affiliates, other than as set
forth in Sections 2.1 and 2.2, including the Retained Patents and
Retained Technology and the Technology listed on Schedule 1.25 of the
Cross License Agreement;
(o) Non-Disclosure Obligations. All non-disclosure,
confidentiality, non-solicitation and similar rights or obligations to
the extent related to the businesses (other than the Access Business)
of the Seller or its Affiliates, including the Other Businesses
(including the rights under the confidentiality agreements entered into
in connection with the proposed sale of the Access Business);
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(p) Employee Non-Compete Obligations. All rights with
respect to any obligation of any Access Employee to refrain from
competing with any businesses (other than the Access Business) of the
Seller or its Affiliates, including the Other Businesses;
(q) Vidar Claims. The Vidar Claims;
(r) Grande. Subject to Section 6.16, all of the Seller's
right, title and interest in and to the Grande Agreements;
(s) Indebtedness. All Contracts evidencing indebtedness
for borrowed money and Guarantees, including the Indentures and Marconi
Guarantees;
(t) Jabil. Except as provided in the Transition Services
Agreement or Section 6.15, the Jabil Agreements;
(u) IT Assets. Except as provided in the Transition
Services Agreement, all equipment, contracts and other assets of the
Seller that have been transferred, or that are required to be
transferred, to CSC International or British Telecommunications PLC (or
their respective nominees) pursuant to the CSC Outsourcing Arrangement;
(v) Benefits. All Benefit Plans and the assets thereof;
(w) Administrative Assets. Other than as set forth in the
Transition Services Agreement, all information technology assets,
systems and networks exclusively used to administer payroll, employee
benefits, financial accounting and tax matters for the Access Business
and the Other Businesses; and
(x) Other Assets. All other assets (real or personal,
tangible or intangible) and Contracts of the Seller not included in the
Assets, including the laboratory and other equipment listed on Schedule
2.4(x).
None of the Excluded Assets shall be included in the term "Assets,"
"Purchased Contracts," "Transferable Permits" or any other term defined in
Sections 2.1 or 2.2.
2.5 Assumed Obligations. At the Closing, subject to the provisions
of Sections 2.3 and 2.6, the Purchaser shall assume, and shall agree to pay,
perform and discharge when due, only the following Liabilities of the Seller
(the "Assumed Obligations"):
(a) Purchased Contracts. Subject to Sections 2.5(c) and
(d), all Liabilities of the Seller under the Purchased Contracts (other
than under any material oral Contracts not set forth in Schedule
4.14(a)), including the Access Portion of the Shared Contracts, to the
extent to which (i) the Seller provides the benefits of such Purchased
Contracts, including the Access Portion of the Shared Contracts, to the
Purchaser and (ii) such Liabilities arise and relate to the period from
and after the Closing;
(b) Bedford Lease. Subject to Section 6.15, all
Liabilities arising from and after the Closing under the Bedford Lease
or the Jabil Rationalization Agreement;
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(c) Product Claims. All Liabilities (including any
product returns or recalls) to the extent related to the performance,
quality or condition of products or the quality of product support
services sold by the Seller in the conduct of the Access Business under
express or implied warranty (other than any warranty of
non-infringement), contract, tort (including product liability) or
provisions of the Uniform Commercial Code or comparable statutes
governing the obligations of commercial sellers of goods and services
(excluding provisions relating to non-infringement of Intellectual
Property rights) ("Commercial Laws"), including all Liabilities arising
with respect to the Special Warranty Matters, but excluding any
Liability relating to or arising as a result of (i) fraud, (ii) any
failure to obtain or hold any applicable Intellectual Property rights
or (iii) any warranty or Contract for new product development, product
evolution or introduction of new product features or functionality
other than as set forth in a written Purchased Contract (it being
understood that (A) in no event is the Purchaser assuming any Liability
to pay for, or reimburse or indemnify another for the payment of, any
fine or penalty to any Governmental Authority relating to the sale by
the Seller or its Affiliates prior to Closing of products or services
in violation of applicable Law and (B) Section 2.3 shall not limit the
Liabilities assumed pursuant to this Section 2.5(c));
(d) Employee and Benefit Obligations. The Liabilities to
or with respect to Access Employees specifically set forth, and only to
the extent set forth, in Article XI;
(e) Accounts Payable. All Liabilities of the Seller with
respect to accounts payable of the Access Business as of the Closing
(including unbilled accounts payable), other than accounts payable
related to Excluded Assets, but only to the extent and up to the
amounts reflected in the final Statement of Working Capital
(collectively, the "Accounts Payable");
(f) Permits. All Liabilities arising from and after the
Closing with respect to the Transferable Permits to the extent to which
the Seller or Marconi IP provides the Purchaser the benefits of such
Transferable Permits and only to the extent such Liabilities arise and
relate to the period from and after the Closing; and
(g) Assumed Proceedings. The Liabilities arising from or
associated with the matters set forth on Schedule 2.5(g) (the "Assumed
Proceedings").
2.6 Retained Obligations. Notwithstanding anything to the contrary
contained in this Agreement, neither the Purchaser nor AFCNA shall assume or
otherwise be liable in respect of any Liability of the Parent, the Seller or
Marconi IP or any of their Affiliates to the extent relating to, or arising out
of the operation or conduct of, the Access Business other than to the extent set
forth in Section 2.5. All Liabilities of the Parent, the Seller or Marconi IP or
any of their Affiliates to the extent relating to, or arising out of the
operation or conduct of, the Access Business that are not assumed by the
Purchaser pursuant to Section 2.5 (the "Retained Obligations") shall be retained
by the Parent, the Seller, Marconi IP or their Affiliates. The Retained
Obligations shall include the following:
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(a) General. Any Liability of the Parent, the Seller or
Marconi IP or their Affiliates, except as specifically set forth in
Section 2.5, to the extent relating to, or arising out of, the
operation or conduct of the Access Business prior to the Closing;
(b) Taxes. Any Liability for Taxes whether or not
accrued, assessed or currently due and payable (i) of the Parent, the
Seller or Marconi IP or any of their Affiliates or (ii) relating to the
operation or ownership of the Access Business or the Assets for any Tax
period (or portion thereof) ending on or prior to the Closing Date;
(c) Other Businesses. Any Liability to the extent arising
out of the operation or conduct by the Parent, the Seller, Marconi IP
or any of their Affiliates of any business other than the Access
Business;
(d) Purchased Contracts. Subject to Section 2.5(c), any
Liability (i) arising out of any actual or alleged breach of, or
nonperformance under, any Contract (including any Purchased Contract or
Shared Contract) prior to the Closing or (ii) accruing under any
Purchased Contract with respect to any period prior to the Closing;
(e) Proceedings. Subject to Section 2.5(g), any Liability
of the Parent, the Seller or Marconi IP or any of their Affiliates to
the extent arising out of any suit, action (including regulatory
action), proceeding (including under any alternative dispute resolution
procedure) or other litigation ("Proceeding") (i) pending as of the
Closing Date, (ii) based on any act or omission of the Parent, the
Seller or Marconi IP occurring on or prior to the Closing or (iii)
based on any actual or alleged violation by the Parent, the Seller or
Marconi IP of any Law prior to or on account of the Closing;
(f) Accounts Payable. Subject to Section 2.5(e), any
accounts payable of the Seller or any of its Affiliates to the extent
of the amount not included in the final Statement of Working Capital;
(g) Excluded Assets. Any Liability to the extent (i)
relating to or arising out of any Excluded Asset, (ii) arising out of
the distribution to, or ownership or operation by, the Seller or any of
its Affiliates of any Excluded Asset or (iii) associated with the
realization by the Seller or any of its Affiliates of the benefits of
any Excluded Asset;
(h) Indebtedness. Any Liability or indebtedness for
borrowed money or any Liabilities relating to Guarantees;
(i) Products. Except as specifically set forth in Section
2.5(c), any Liability to the extent relating to or arising out of
products manufactured, shipped or sold by or on behalf of the Access
Business on or prior to the Closing Date;
(j) Infringement. Any Liability of the Parent, the Seller
or Marconi IP or any of their Affiliates for infringement or
misappropriation of Intellectual Property or Technology arising out of
the operation of the Access Business or products manufactured, shipped
or sold by or on behalf of the Parent, the Seller, Marconi IP or any of
their Affiliates on or prior to the Closing Date;
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(k) Injury/Disability. Subject to the terms of Article
XI, any Liability of the Parent, the Seller or Marconi IP or any of
their Affiliates to the extent arising out of or related to any injury,
disease or disability arising or occurring on or prior to the Closing
Date, or exposure or alleged exposure on or prior to the Closing Date
to any materials or chemicals in the work place by any Person
(including any Transferred Employee or any other employee heretofore
employed in the Access Business);
(l) Affiliates. Any Liability of the Parent, the Seller,
Marconi IP or any of their Affiliates to each other or to their
respective Affiliates existing as of the Closing;
(m) Environmental. Any Pre-Closing Environmental
Liability;
(n) Excluded Leases. Any Liabilities of the Seller or any
of its Affiliates with respect to the Excluded Leases;
(o) Settlement Agreements. Any Liabilities of the Seller
under any settlement agreement other than any settlement agreement set
forth on Schedule 2.2(f);
(p) Excluded Contracts. Any Liabilities of the Parent,
the Seller or Marconi IP or any of their Affiliates under or with
respect to any Contract that is not a Purchased Contract; and
(q) Employee Liabilities. Except as specifically set
forth in Section 2.5(d), any Liabilities of the Seller, the Parent or
Marconi IP or any of their Affiliates to or with respect to Access
Employees and Liabilities under or with respect to employee benefit
plans, programs, policies and arrangements.
2.7 Prorations. The parties hereto agree that all of the items
listed below relating to the Access Business and the Assets will be prorated as
of the Closing Date, with the Seller liable to the extent such items relate to
any time period up to and including the Closing Date and the Purchaser liable to
the extent such items relate to periods subsequent to the Closing Date:
(a) the amount of any fees, royalties, rents or other
charges which in any case are payable periodically by the Seller with
respect to any of the Purchased Contracts (including the Access Portion
of the Shared Contracts); and
(b) the amount of any fees or charges which in any case
are payable periodically by the Seller with respect to any of the
Transferable Permits.
The Seller agrees to furnish the Purchaser with such documents and
other records as the Purchaser reasonably requests in order to confirm all
adjustment and proration calculations made pursuant to this Section 2.7. Final
payments with respect to prorations contemplated by this Section 2.7 that are
not ascertainable on or before the Closing Date shall be settled between the
parties as soon as practicable after such prorations are ascertainable.
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ARTICLE III
PURCHASE PRICE; ADJUSTMENT; ALLOCATION
3.1 Payment of Purchase Price.
(a) The total consideration for the Assets shall consist
of (i) the assumption by the Purchaser of the Assumed Obligations and
(ii) the payment of $240,000,000 to the Seller (for itself and as agent
for Marconi IP) (the amount referred to in this clause (ii), the
"Purchase Price"). At the Closing, the Purchaser shall pay to the
Seller the Purchase Price.
(b) All payments made hereunder shall be made in
accordance with Section 13.4 and to such account or accounts as the
receiving party shall designate in writing to the paying party.
3.2 Purchase Price Adjustment.
(a) The Purchaser shall, as soon as practicable, and in
any event no later than ninety (90) days after the Closing Date, (i)
prepare the initial draft of a statement (the "Statement of Working
Capital") setting forth, as of 12:01 a.m. (central standard time) on
the Closing Date, the amount equal to (y) the aggregate of the Net
Inventory, the Net Accounts Receivable and the Prepaids less (z) the
aggregate of the Net Accounts Payable, the Accrued Compensation and
Benefits, the Other Current Liabilities and the Special Warranty
Reserve (such net amount being the "Closing Working Capital") and (ii)
deliver the same to the Seller, together with a certificate from the
Purchaser's independent auditors to the effect that the initial draft
Statement of Working Capital has been prepared in accordance with
Section 3.2(g).
(b) The Seller and the Seller's independent auditors
shall review the initial draft Statement of Working Capital during the
sixty (60)-day period commencing on the date that the Seller receives
the initial draft Statement of Working Capital. At or prior to the end
of such sixty (60)-day period, the Seller shall either:
(i) deliver a notice to the Purchaser confirming
that no adjustments are proposed by the Seller to the initial draft
Statement of Working Capital or the Purchaser's calculation of Closing
Working Capital (a "Notice of Acceptance"); or
(ii) (deliver a notice to the Purchaser to the
effect that the Seller disagrees with the initial draft Statement of
Working Capital and/or the Purchaser's calculation of Closing Working
Capital (a "Notice of Disagreement"), specifying the nature of such
disagreement and the adjustments that the Seller seeks to the initial
draft Statement of Working Capital and/or the calculation of Closing
Working Capital (collectively, the "Proposed Adjustments").
(c) To the extent that there are any Proposed
Adjustments, the Purchaser will, no later than thirty (30) days after
receipt of the Proposed Adjustments, notify the Seller which, if any,
of the Proposed Adjustments it accepts or rejects. The Seller and the
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Purchaser shall seek in good faith to resolve any differences that
remain in relation to the Proposed Adjustments and to reach agreement
in writing on any Proposed Adjustments not accepted by the Purchaser.
If any of the Proposed Adjustments are not so resolved (the "Unresolved
Adjustments") within forty-five (45) days after the Purchaser's receipt
of the Seller's notice of the Proposed Adjustments, the Unresolved
Adjustments may be submitted at the request of either the Seller or the
Purchaser to the Cleveland office of PricewaterhouseCoopers (the
"Accounting Firm") for arbitration. The scope of the review by the
Accounting Firm shall be limited to a determination of (i) whether the
portions of the initial draft Statement of Working Capital and the
calculation of Closing Working Capital related to the Unresolved
Adjustments were prepared in accordance with Section 3.2(g) and (ii)
based on its determinations of the matters described in clause (i), a
final calculation of the Closing Working Capital. The Accounting Firm
is not to make or be asked to make any determination other than as set
forth in the previous sentence. The Seller and the Purchaser shall use
reasonable best efforts to cause the Accounting Firm to render its
written decision resolving the matters submitted to it as promptly as
practicable and, if at all possible, within thirty (30) days after such
submission of the Unresolved Adjustments. Judgment may be entered upon
the determination of the Accounting Firm in any court having
jurisdiction over the party against which such determination is to be
enforced. The fees and expenses of the Accounting Firm incurred
pursuant to this Section 3.2(c) shall be borne equally by the Seller,
on the one hand, and the Purchaser, on the other hand. The fees and
disbursements of the Purchaser's independent auditors incurred in
connection with the preparation and certification of the draft
Statement of Working Capital and their review of any Proposed
Adjustments or Unresolved Adjustments shall be borne by the Purchaser,
and the fees and disbursements of the Seller's independent auditors
incurred in connection with their review of the draft Statement of
Working Capital, the working papers of the Purchaser's independent
auditors and any Proposed Adjustments or Unresolved Adjustments shall
be borne by the Seller.
(d) The Statement of Working Capital shall become final
and binding on all parties upon the earliest of (i) the date that a
Notice of Acceptance is delivered to the Purchaser pursuant to Section
3.2(b)(i) (in which case the final Closing Working Capital shall be as
set forth in the Statement of Working Capital delivered pursuant to
Section 3.2(a)), (ii) the date that is one (1) day after the sixty
(60)-day review period specified in Section 3.2(b) has ended if no
Notice of Disagreement has been delivered by the Seller to the
Purchaser pursuant to Section 3.2(b)(ii) during such sixty (60)-day
period (in which case the final Closing Working Capital shall be as set
forth in the Statement of Working Capital delivered pursuant to Section
3.2(a)), (iii) the date of an agreement in writing by the Seller and
the Purchaser that the Statement of Working Capital, together with any
modifications thereto agreed by the Seller and the Purchaser, are final
and binding (in which case the final Closing Working Capital shall be
as so agreed upon by the parties) and (iv) the date on which the
Accounting Firm finally resolves in writing any disputed matters (in
which case the final Closing Working Capital shall be as determined by
the Accounting Firm pursuant to Section 3.2(c)).
(e) The Purchaser shall provide the Seller and its
independent auditors with reasonable access to the books, records,
working papers and senior management and
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employees of the Access Business and shall cause its independent
auditors to provide reasonable access to their working papers prepared
for the purpose of the certificate rendered under Section 3.2(a) as the
Seller and its independent auditors may request in connection with the
finalization of the Statement of Working Capital or calculation of
Closing Working Capital.
(f) In the event the final Closing Working Capital (as
provided in Section 3.2(d)) is greater than or less than the Benchmark
Amount by more than $100,000, the Purchase Price shall be increased by
the amount by which the final Closing Working Capital (as provided in
Section 3.2(d)) exceeds the Benchmark Amount, or decreased by the
amount by which the final Closing Working Capital (as provided in
Section 3.2(d)) is less than the Benchmark Amount. The Purchase Price
as so increased or decreased shall hereafter be referred to as the
"Adjusted Purchase Price." If the Purchase Price is less than the
Adjusted Purchase Price, the Purchaser shall, within two (2) Business
Days after the Statement of Working Capital becomes final and binding
on the parties, make payment by wire transfer in immediately available
funds to one or more accounts designated by the Seller of the amount of
such difference together with a sum equivalent to interest thereon at a
rate equal to the LIBOR Rate, accrued from the Closing Date to and
including the date of payment and calculated on the basis of the actual
number of days elapsed divided by 360. If the Purchase Price is more
than the Adjusted Purchase Price, the Seller shall, within two (2)
Business Days after the Statement of Working Capital becomes final and
binding on the parties, make payment by wire transfer in immediately
available funds to an account designated by the Purchaser of the amount
of such difference together with a sum equivalent to interest thereon
at a rate equal to the LIBOR Rate, accrued from the Closing Date to and
including the date of payment and calculated on the basis of the actual
number of days elapsed divided by 360. "LIBOR Rate" shall mean the rate
of interest announced publicly by the British Bankers Association as
its three (3)-month LIBOR rate for U.S. dollars on the Business Day
immediately following the day on which the Statement of Working Capital
becomes final. The parties agree that any amounts paid pursuant to this
Section 3.2(f) shall be allocated in a manner that is consistent with
the allocation of the Purchase Price as set forth in Section 3.3.
(g) The Statement of Working Capital shall be prepared in
the same way and using the same accounting policies, principles, bases
and methods and using the same level of prudence as used in the
preparation of the Management Accounts specified in Schedule 4.4(a),
subject to the Calculation Principles referred to below.
Notwithstanding the generality of the foregoing sentence, the Statement
of Working Capital shall be prepared in accordance with the rules of
calculation specified in Schedule 3.2(g) (the "Calculation
Principles"). For purposes of the preparation of the Statement of
Working Capital, in the event of any conflict or inconsistency between
the accounting policies, principles, bases and methods referred to in
the first sentence of this Section 3.2(g) and the Calculation
Principles, the Calculation Principles shall control.
3.3 Allocation of Consideration for Assets. Within 90 days
following the Closing, the Purchaser and the Seller and their respective
Affiliates shall consult with each other and agree upon the allocation of the
Purchase Price among the Assets and file all necessary Tax Returns
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and other forms (including Internal Revenue Service Form 8594) to report the
transactions contemplated herein for U.S. federal, state, local and non-United
States income Tax purposes in accordance with such allocation, and shall not
take any position inconsistent with such allocation. The parties agree and
acknowledge that such allocation will be in accordance with U.S. GAAP and the
appraisals of the Assets conducted on behalf of the Purchaser following the
Closing. Any adjustment to the Purchase Price for the Assets shall be allocated
as provided in Treasury Regulation Section 1.1060-1, and, in the event of such
adjustment, the Purchaser and the Seller agree to revise and amend Form 8594
within 30 days of such adjustment.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PARENT, THE SELLER AND MARCONI IP
The Seller, the Parent and Marconi IP, jointly and severally, represent
and warrant to the Purchaser and AFCNA as follows:
4.1 Due Incorporation. Each of the Seller and Marconi IP (a) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the state of Delaware, (b) has all requisite corporate power and
authority to own, operate and lease its assets and to conduct its businesses as
presently conducted and (c) is duly qualified to do business and in good
standing (with respect to those jurisdictions that recognize the concept of good
standing) to do business as a foreign corporation in each state in which its
ownership of the Assets or, in the case of the Seller, its conduct of the Access
Business, makes such qualification necessary, other than such jurisdictions in
which the failure to be so qualified or in good standing does not constitute a
Seller Material Adverse Effect or a Business Material Adverse Effect. The Parent
(a) is a public limited liability company duly incorporated, validly existing
and in good standing under the laws of England and Wales, (b) has the requisite
limited liability company power and authority to own, operate and lease its
properties and to conduct its businesses as presently conducted and (c) is duly
qualified to do business and in good standing (with respect to those
jurisdictions that recognize the concept of good standing) to do business as a
foreign company in each jurisdiction in which its ownership of assets or its
conduct of its businesses makes such qualification necessary, other than such
jurisdictions in which the failure to be so qualified or in good standing does
not constitute a Seller Material Adverse Effect or a Business Material Adverse
Effect. Each Marconi Entity other than the Seller, the Parent and Marconi IP (a)
is a entity duly incorporated, validly existing and in good standing under the
laws of its respective jurisdiction of formation, (b) has the requisite power
and authority to own, operate and lease its properties and to conduct its
businesses as presently conducted and (c) is duly qualified to do business and
in good standing (with respect to those jurisdictions that recognize the concept
of good standing) to do business as a foreign company in each jurisdiction in
which its ownership of assets or its conduct of its businesses makes such
qualification necessary, other than such jurisdictions in which the failure to
be so qualified or in good standing does not constitute a Seller Material
Adverse Effect or a Business Material Adverse Effect.
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4.2 Due Authorization.
(a) Each of the Parent, the Seller, Marconi IP and,
solely with respect to the Cross License Agreement, the other Marconi
Entities has full corporate power and authority to execute, deliver and
perform this Agreement and its Related Agreements and to consummate the
transactions contemplated hereby and thereby. The execution, delivery
and performance by each of the Parent, the Seller, Marconi IP and,
solely with respect to the Cross License Agreement, the other Marconi
Entities of this Agreement and its Related Agreements and the
consummation by each of the Parent, the Seller, Marconi IP and, solely
with respect to the Cross License Agreement, the other Marconi Entities
of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action, including the approval of
the boards of directors of each of the Parent, the Seller, Marconi IP
and, solely with respect to the Cross License Agreement, the other
Marconi Entities. Each of the Parent, the Seller and Marconi IP has
duly and validly executed and delivered this Agreement and, at or prior
to the Closing, the Parent, the Seller, Marconi IP and, solely with
respect to the Cross License Agreement, the other Marconi Entities will
have duly and validly executed and delivered each of its Related
Agreements. Assuming the due authorization, execution and delivery of
this Agreement and its Related Agreements by the other parties thereto,
this Agreement constitutes, and each of the Seller's, Marconi IP's and,
solely with respect to the Cross License Agreement, the other Marconi
Entities' Related Agreements will after the Closing constitute, legal,
valid and binding obligations of the Parent, the Seller, Marconi IP or
the applicable other Marconi Entity, as the case may be, and to the
extent a party thereto, enforceable against each of them (to the extent
a party thereto) in accordance with their respective terms, subject to
the Enforceability Limitations.
(b) No vote of the holders of any class or series of
capital stock or other securities of the Parent or any of its
Affiliates (other than approval of FS Holdings Corp. as the sole
shareholder of the Seller and the approval of the Seller as the sole
shareholder of Marconi IP each of which has been obtained prior to the
date hereof) is necessary in connection with the execution and delivery
of this Agreement and the Related Agreements and the consummation of
the transactions contemplated hereby and thereby.
4.3 Consents and Approvals; Authority Relative to this Agreement.
(a) Except for the Governmental Required Consents or as
set forth in Schedule 4.3(a), no Consent of or with any Governmental
Authority is necessary in connection with the execution, delivery or
performance by the Parent, the Seller, Marconi IP and, solely with
respect to the Cross License Agreement, the other Marconi Entities, of
this Agreement or any of their respective Related Agreements or the
consummation by the Parent, the Seller, Marconi IP and, solely with
respect to the Cross License Agreement, the other Marconi Entities of
the transactions contemplated hereby or thereby.
(b) Except for the Governmental Required Consents or as
set forth in Schedule 4.3(b), the execution, delivery and performance
by the Parent, the Seller, Marconi IP and, solely with respect to the
Cross License Agreement, the other Marconi
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Entities of this Agreement and their respective Related Agreements, and
the consummation by the Parent, the Seller, Marconi IP and, solely with
respect to the Cross License Agreement, the other Marconi Entities of
the transactions contemplated hereby and thereby, do not and will not
conflict with, or result in any violation of or default (with or
without notice or lapse of time, or both) under, or give rise to a
right of termination, cancellation or acceleration of any obligation or
to a loss of a material benefit under, or to increased, additional,
accelerated or guaranteed rights or entitlements of any Person under,
or result in the creation of any Lien upon any of the properties or
assets of the Parent, the Seller, Marconi IP or, solely with respect to
the Cross License Agreement, the other Marconi Entities under, any
provision of (i) the certificate of incorporation or by-laws or other
organizational documents of the Parent, the Seller, Marconi IP or,
solely with respect to the Cross License Agreement, the other Marconi
Entities, (ii) any Contract to which the Parent, the Seller, Marconi IP
or, solely with respect to the Cross License Agreement, the other
Marconi Entities is a party or by which any of their respective
properties or assets is bound, (iii) any Transferable Permit, (iv) any
judgment, order or decree ("Judgment") or Law applicable to the Parent,
the Seller, Marconi IP or, solely with respect to the Cross License
Agreement, the other Marconi Entities or their respective properties or
assets or (v) any Contract with respect to any indebtedness of the
Parent, the Seller, Marconi IP or, solely with respect to the Cross
License Agreement, the other Marconi Entities, other than (A) in the
case of clause (ii) above, any conflict, violation or other such item
that does not constitute a Business Material Adverse Effect or a Seller
Material Adverse Effect and (B) in the case of clauses (iii), (iv) and
(v) above, any conflict, violation or other such item that does not
constitute a Seller Material Adverse Effect.
4.4 Management Accounts. Schedule 4.4(a) sets forth the statement
of assets and liabilities to be transferred pursuant to this Agreement as of
September 30, 2003 ("Balance Sheet") and the statement of operating profit of
the Access Business for the year ended March 31, 2003 and the six-month interim
period ended September 30, 2003 (together with the Balance Sheet, the
"Management Accounts"). Except as set forth on Schedule 4.4(b), the Management
Accounts have been (a) prepared on the basis of accounting principles generally
accepted in the United Kingdom at the time prepared, consistently applied (as
modified by the exceptions set forth on Schedule 4.4(b), the "Applicable
Accounting Principles") and (b) properly extracted from the Seller's books and
records. Except as set forth on Schedule 4.4(c), on the basis of the Applicable
Accounting Principles, the Balance Sheet fairly presents in all material
respects as of September 30, 2003 the assets and liabilities of the Access
Business to be transferred pursuant to this Agreement. The Benchmark Amount was
properly extracted and calculated from the Management Accounts using the same
level of prudence as used in the preparation of the Management Accounts, giving
effect to the Calculation Principles.
4.5 No Other Assumed Liabilities. Except for the Assumed
Obligations or as set forth on Schedule 4.5, there is no Liability of the Seller
or any of its Affiliates which will become a Liability of the Purchaser
following the Closing, except:
(a) those set forth or reflected in the Balance Sheet
which have not been paid or discharged since the date thereof;
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(b) those arising under agreements or other commitments
to be expressly assumed by the Purchaser at the Closing; and
(c) those arising in the ordinary course of business
consistent with past practices since September 30, 2003.
4.6 No Adverse Effects or Changes. Since September 30, 2003, there
has not been a Business Material Adverse Effect. Except (a) with respect to the
Excluded Assets and the Retained Obligations, (b) as set forth in Schedule 4.6
or (c) as otherwise expressly permitted by this Agreement, since September 30,
2003, the Access Business has (i) been conducted in the ordinary course and in
substantially the same manner as previously conducted and (ii) made reasonable
efforts consistent with past practices to preserve the relationships of the
Access Business with material customers, suppliers and distributors.
4.7 Title to Assets; Affiliate Ownership of Assets.
(a) Except as set forth in Schedule 4.7(a), the Seller
(i) has title to, and is the lawful owner of, all of the owned Assets
(other than the Transferred Intellectual Property, the title to which
is addressed exclusively in Section 4.13), free and clear of any Lien
other than Permitted Liens and (ii) has a valid leasehold or license
interest in or to all the assets that are the subject of personal
property leases or licenses included in the Purchased Contracts (other
than licenses related to Intellectual Property, the validity of the
leasehold or license interest of which is addressed exclusively in
Section 4.13). Except as set forth in Schedule 4.7(a) and subject to
obtaining and making all applicable Consents, (A) the Seller has the
full right to sell, convey, transfer, assign and deliver the Assets
(other than the Transferred Intellectual Property) to the Purchaser or
AFCNA, as the case may be, and (B) at the Closing the Seller shall
convey to the Purchaser or AFCNA, as the case may be, good title to all
of the Assets (other than the Transferred Intellectual Property, the
transfer of which is addressed exclusively in Section 4.13), free and
clear of any Lien (other than Permitted Liens). This Section 4.7(a)
does not apply to title to Intellectual Property, it being agreed that
the sole and exclusive representations and warranties regarding title
to Intellectual Property are set forth in Section 4.13.
(b) Except as set forth on Schedule 4.7(b), no Affiliate
of the Seller (other than Marconi IP) owns, licenses or leases any
assets or properties used or held for use in the conduct or operation
of the Access Business.
4.8 Access Business Assets. Except as set forth on Schedule 4.8,
the Assets are sufficient for the conduct of the Access Business by the
Purchaser and AFCNA, operating together, following the Closing in substantially
the same manner as currently conducted by the Seller and as was conducted by the
Seller on September 30, 2003.
4.9 Real Property.
(a) Other than the Bedford Facility and the real property
that is the subject of the Excluded Leases, the Seller does not own or
lease any real property that is primarily used in connection with the
Access Business. The Seller and CAMI Industrial LLC have entered into a
lease with respect to the Bedford Facility pursuant to which the Seller
will
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lease the Bedford Facility effective upon the closing of the
transaction contemplated by the Bedford Sale Agreement (the "CAMI
Transaction"). A true and correct copy of such lease is attached hereto
as Exhibit L (the "Bedford Lease"). Other than the Jabil
Rationalization Agreement, the Bedford Sale Agreement and the Bedford
Lease (it being understood that the effectiveness of the Bedford Lease
is conditional on the closing of the CAMI Transaction), there are no
other agreements or arrangements whatsoever relating to the Seller's
right to occupy the Bedford Facility. Except as set forth in Schedule
4.9(a), (i) the Seller is not in default under the Jabil
Rationalization Agreement (nor does there exist any condition which,
upon the passage of time or the giving of notice or both, would cause
such a default) and (ii) to the Seller's knowledge, no other party is
in default under the Jabil Rationalization Agreement (nor does there
exist any condition which, upon the passage of time or the giving of
notice or both, would cause such a default). Upon the closing of the
CAMI Transaction, the Bedford Lease shall be valid, binding and in full
force and effect against the Seller, and, to the Seller's knowledge,
against the other party thereto in accordance with its terms. Further,
assuming the closing of the CAMI Transaction, the Seller warrants that
it will not have breached the provisions of the Bedford Lease or be in
default under the Bedford Lease (nor will there exist any condition
which, upon the passage of time or the giving of notice or both, would
cause such a breach or default). To the Seller's knowledge, there is no
pending or threatened proceeding or action by any Governmental
Authority to condemn or take by the power of eminent domain (or to
purchase in lieu thereof) all or any part of the Bedford Facility.
Except as set forth in Schedule 4.9(a), (i) the Bedford Facility is
supplied with utilities and other services sufficient to operate the
Access Business as presently conducted and (ii) the operation of the
Access Business by the Seller at the Bedford Facility has not since
January 1, 2003 violated and does not violate in any material manner
any applicable building code, zoning requirement, or zoning, building
use or occupancy classification or statute relating to the Bedford
Facility. If, at the time of the Closing, the Bedford Lease is in
effect, the Seller warrants that it will not have transferred,
mortgaged or assigned any interest in such Bedford Lease. The Bedford
Facility is suitable for the conduct of the Access Business as
conducted as of September 30, 2003 and as currently conducted.
(b) The Seller has the right to transfer its right to
occupy the Bedford Facility under the Jabil Rationalization Agreement
to the Purchaser without the consent of Jabil. In the event the CAMI
Transaction does not close, the Seller has the right to cause Jabil to
sell the Bedford Facility to the Seller under the Jabil Rationalization
Agreement.
4.10 Personal Property; Leased Personal Property. Schedule 4.10(a)
includes an accurate and complete list as of October 31, 2003 of all of the
Personal Property having an individual book value in excess of $10,000. Schedule
4.10(b) sets forth an accurate and complete list of each lease of personal
property used primarily in the Seller's conduct or operation of the Access
Business having aggregate minimum lease payments in excess of $10,000 (the
"Material Personal Property Leases"). The Seller has made available to the
Purchaser true and complete copies of the Material Personal Property Leases
except as noted on Schedule 4.10(b). All Personal Property, whether owned or
leased, is in all material respects in good working order and has been
maintained in all material respects in accordance with the past practice of the
Access Business.
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4.11 Customers and Distributors; Suppliers.
(a) Except for the customers named in Schedule 4.11(a),
the Access Business does not have any customer to which it made more
than five percent (5%) of its sales during its most recent full fiscal
year or during the six month period ended September 30, 2003. Except as
set forth in Schedule 4.11(a) and except for fluctuations in volume in
the ordinary course of business, since September 30, 2003 there has not
been (i) to the Seller's knowledge, any material adverse change in the
relationship of the Access Business with any customer named in Schedule
4.11(a) or (ii) except for changes in prices in the ordinary course of
business, any change in any material term (including credit terms) of
the sales agreements or related agreements with any such customer.
Since January 1, 2002, neither the Seller nor any of its Affiliates has
received any written complaint concerning the products and services of
the Access Business from a purchaser thereof, nor has the Seller nor
any of its Affiliates had any such products returned by a purchaser
thereof, other than complaints and returns that, individually or in the
aggregate, do not constitute a Business Material Adverse Effect.
(b) Except for the suppliers named in Schedule 4.11(b),
the Access Business has not purchased, from any single supplier, goods
or services for which the aggregate purchase price exceeds five percent
(5%) of the total value of goods and services purchased by the Access
Business during its most recent full fiscal year or during the six
month period ended September 30, 2003. Except as set forth in Schedule
4.11(b) and except for fluctuations in volume in the ordinary course of
business, since September 30, 2003, there has not been (i) to the
Seller's knowledge, any material adverse change in the relationship of
the Access Business with any supplier named in Schedule 4.11(b) or (ii)
except for changes in prices in the ordinary course of business, any
change in any material term (including credit terms) of the supply
agreements or related arrangements with any such supplier.
(c) Schedule 4.11(c) sets forth a list of each material
distributor or sales representative of the products of the Access
Business and (i) indicates whether such distributor or sales
representative has a written contract or oral arrangement with the
Access Business and (ii) only with respect to such oral arrangements,
contains a description of the terms of such oral arrangement with the
Access Business with respect to territory, exclusivity and the term of
the arrangement. To the Seller's knowledge, no Affiliate of the Seller
has entered into any arrangements that would contractually prevent the
Purchaser from distributing or selling any products of the Access
Business in the United States or Canada.
4.12 Proceedings.
(a) Except as set forth in Schedule 4.12, there are no
Proceedings pending, or, to the Seller's knowledge, Proceedings or
claims threatened against the Seller or any of its Affiliates the
subject matter of which relates to the Access Business or against or
affecting any of the Assets before any court or any other Governmental
Authority that (i) involves more than $100,000, (ii) presents in large
degree the same legal and factual issues as other Proceedings or claims
and, together with such other Proceedings and
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claims, involves more than $100,000, (iii) seeks any injunctive relief
or (iv) relates to or otherwise may give rise to any legal restraint on
or prohibition against the transactions contemplated by this Agreement.
Except as set forth in Schedule 4.12, neither the Seller, the Parent
nor Marconi IP nor any of their respective Affiliates is (i) a party or
subject to any Judgment that has had or would reasonably be expected to
have a material adverse effect on (A) the Purchaser's ability to
conduct the Access Business or (B) any Asset or Assumed Obligation or
(ii) in default under any Judgment, which default would reasonably be
expected to have a material adverse effect on (A) the Purchaser's
ability to conduct the Access Business or (B) any Asset or Assumed
Obligation. Except as set forth in Schedule 4.12, there is not any
Proceeding or claim by the Seller, the Parent or Marconi IP pending, or
which any of them intends to initiate, against any other Person arising
out of the conduct of the Access Business which involves an amount
greater than $100,000. Except as set forth in Schedule 4.12, to the
Seller's knowledge, there is no pending or threatened investigation of,
or affecting the conduct of, the Access Business or any Asset or
Assumed Obligation by a Governmental Authority. Except as disclosed in
Schedule 4.12, neither the Seller nor any of its Affiliates (solely in
relation to the operation of the Access Business) has entered into any
agreement to settle or compromise any Proceeding pending or threatened
against it which has involved any obligation other than the payment of
money and for which it has any continuing obligation.
(b) There are no Proceedings pending, or, to the Seller's
knowledge, threatened, by or against the Seller or any of its
Affiliates with respect to this Agreement or the Related Agreements, or
in connection with the transactions contemplated hereby or thereby.
4.13 Intellectual Property.
(a) Schedule 4.13(a) sets forth an accurate and complete
list of all registration and applications for registration for the
Transferred Patents, Transferred Trademarks and Transferred Technology.
The Transferred Patents, Transferred Trademarks, Transferred
Technology, Inbound Licenses, the Intellectual Property licensed under
the Cross License Agreement and the Sublicenses , the Intellectual
Property licensed under the Global Patent Licenses referenced at Items
3 and 4 of Schedule 1.1D and the so-called "shrink-wrap" or
"click-wrap" license agreements referenced at Section 4.13(d) below are
collectively sufficient for the conduct of the Access Business by the
Purchaser and AFCNA, operating together, following the Closing in
substantially the same manner as currently conducted by the Seller and
as was conducted by the Seller on September 30, 2003.
(b) With respect to all Transferred Patents, Transferred
Trademarks and Transferred Technology that are registered or subject to
an application of registration, Schedule 4.13(a) sets forth a list of
all jurisdictions in which such Transferred Patents, Transferred
Trademarks and Transferred Technology are registered or registrations
applied for and all registration and application numbers. Schedule
4.13(b)(i) lists all administrative actions that must be taken by the
Purchaser within one hundred eighty (180) days after the Closing Date,
including the payment of any registration, maintenance, renewal fees,
annuity fees and taxes or the filing of any documents,
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applications or certificates, for the purposes of maintaining,
perfecting or preserving or renewing Transferred Patents, Transferred
Trademarks and Transferred Technology that is Intellectual Property set
forth in Schedule 4.13(a). Except as set forth in Schedule 4.13(b)(ii),
all such Transferred Patents, Transferred Trademarks and Transferred
Technology that is Intellectual Property are in full force and effect,
and each of the Parent, the Seller, Marconi IP and their respective
Affiliates, to the extent applicable, has, in a timely manner
(including extensions), taken those necessary administrative actions
(including the payment of any applicable fees) that would reasonably be
expected to ensure that all applications filed by or on behalf of the
Parent, the Seller, Marconi IP and their respective Affiliates for the
Transferred Patents, Transferred Trademarks and Transferred Technology
remain in full force and effect.
(c) Except as set forth in Schedule 4.13(c) or as the
result of the failure of Personnel to enter into an Employee IP
Agreement under circumstances in which, under applicable Law, ownership
of Intellectual Property rights in Transferred Intellectual Property
developed or conceived by such Personnel would vest on creation in such
Personnel and not in the Seller or Marconi IP, either the Parent, the
Seller or Marconi IP is, and on the Closing Date, the Purchaser or the
Purchaser's designated Affiliate will be, the sole and exclusive owner
of, and the Parent, the Seller or Marconi IP has, and on the Closing
Date the Purchaser or the Purchaser's designated Affiliate will have,
in connection with the Access Business, all rights that accrue to a
sole owner, without payment to any other Person, to all Transferred
Patents, Transferred Trademarks and Transferred Technology. The
consummation of the Acquisition, the ownership of the Access Business
by the Purchaser and AFCNA and the other transactions contemplated
hereby do not and will not conflict with, alter or impair any such sole
ownership rights, other than as is not within the Seller's knowledge or
would not reasonably be expected to result in any material liability or
have any Business Material Adverse Effect on the continued conduct of
the Access Business, as such is currently conducted.
(d) Schedule 4.13(d) sets forth an accurate and complete
list of all licenses, sublicenses and other agreements pursuant to
which the Seller or any of its Affiliates is authorized or licensed to
use any third party Intellectual Property or Technology that is used in
connection with the Access Business as currently conducted, except for
so-called "shrink-wrap" or "click-wrap" license agreements relating to
off-the-shelf computer software licensed in the ordinary course of
business ("Inbound Licenses").
(e) Except as set forth in Schedule 4.13(e)(i), to the
Seller's knowledge, the conduct of the Access Business as currently
conducted and as conducted on the Closing Date does not violate,
conflict with or infringe or misappropriate the Intellectual Property
or Technology that is Intellectual Property of any other Person that
would result in any material liability or have any Business Material
Adverse Effect on the continued conduct of the Access Business as
conducted on the Closing Date. Except as set forth in Schedule
4.13(e)(i), (i) no claims are pending or, to the Seller's knowledge,
threatened, against the Seller or any of its Affiliates by any Person
with respect to the ownership, validity (excluding administrative
actions received in the normal course of business in connection with
pending patent applications), enforceability or use in the Access
Business of any Intellectual Property and (ii) during the past three
(3) years the Seller and its Affiliates
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have not received any written or, to the Seller's knowledge, oral
communication alleging that the Seller or any of its Affiliates has in
the conduct of the Access Business violated any rights relating to the
Intellectual Property of any Person. During the past two (2) years
neither the Parent, the Seller or Marconi IP has received any written
or, to the Seller's knowledge, oral, communication from any Person
asserting any ownership interest in, or requesting that the Seller
obtain a license to, any Transferred Patents, Transferred Trademarks or
Transferred Technology. Schedule 4.13(e)(ii) contains a complete and
accurate list of any pending challenges or adversarial proceedings
before any patent or trademark authority to which the Seller and any of
its Affiliates is a party (including any pending applications for
reexamination of a patent) with respect to the Transferred Patents or
Transferred Trademarks, a description of the subject matter of each
proceeding, and the current status of each proceeding, including
interferences, priority contests, opposition and protests. Except as
set forth in Schedule 4.13(e)(iii), to the Seller's knowledge, no third
party is infringing, misappropriating or violating any of the
Transferred Patents, Transferred Trademarks or Transferred Technology.
(f) The Parent, the Seller or Marconi IP have used all
reasonable efforts to maintain all material Transferred Technology that
constitutes confidential or trade secret information in confidence in
accordance with protection procedures customarily used in the industry
to protect rights of like importance. As to any claim against the
Seller, Marconi IP or any of their Affiliates asserting that Personnel
owns the Transferred Patents or Transferred Technology, no such claim
has been asserted or, to Seller's knowledge, is threatened. To the
Seller's knowledge, none of the current officers and employees of
Marconi IP, the Seller or their Affiliates has any patents issued or
applications pending for any device, process, design or invention of
any kind that was conceived or developed within the scope of such
officers' or employees' employment by Marconi IP, the Seller or the
applicable Affiliate in the furtherance of the Access Business, which
patents or applications have not been assigned to Marconi IP, the
Seller or such Affiliates, with such assignment duly recorded in the
United States Patent and Trademark Office.
(g) Neither (i) the execution and delivery of this
Agreement by the Seller, the Parent and Marconi IP, (ii) the execution
and delivery of the Cross License Agreement by the Marconi Entities nor
(iii) the consummation of the transactions contemplated hereby or
thereby by the Seller, the Parent, Marconi IP or the other Marconi
Entities, as applicable, will result in (A) a loss of, or encumbrance
or lien on, any Transferred Patents, Transferred Trademarks or
Transferred Technology, (B) the grant, assignment, or transfer to any
other person or entity of any license or other right or interest under,
to, or in any of the Transferred Patents, Transferred Trademarks or
Transferred Technology, or (C) the Purchaser being obligated to pay any
royalties or other amounts to any third party in excess of those
payable by the Seller or Marconi IP prior to the Closing, other than
payments calculated based on product sales.
4.14 Contracts.
(a) Schedule 4.14(a) is an accurate and complete list of
all the Contracts (other than any Contract relating to any Benefit
Plan) of the following types to which the
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Seller or Marconi IP is a party, or by which either is bound, that
relate primarily to, or are material to the operation or conduct of,
the Access Business or to which any of the Assets is subject:
(i) each Contract which requires, on an annual
basis, a payment by any party in excess of, or a series of payments
which in the aggregate exceed, $100,000 (as pertaining to the Access
Business) or provides for the delivery of goods or performance of
services, or any combination thereof, having a value in excess of
$100,000 (as pertaining to the Access Business);
(ii) each Contract with a sales representative,
manufacturer's representative, distributor, dealer, broker, sales
agency, advertising agency or other Person engaged in sales,
distribution or promotional activities, or any Contract to act in one
of the foregoing specified capacities on behalf of any Person;
(iii) each Contract pursuant to which the Seller
or Marconi IP has made or will make loans or advances, or has incurred,
or is obligated to incur, indebtedness for borrowed money or has become
a guarantor or surety or pledged its credit for or otherwise become
responsible with respect to any undertaking of another Person
("Guarantees") (except for the negotiation or collection of negotiable
instruments in transactions in the ordinary course of business) or any
Contract granting a Lien upon any Assets other than Permitted Liens;
(iv) each Contract with suppliers (including
purchase orders) which has a commitment of more than $100,000 on an
annual basis;
(v) each covenant not to compete or other
covenant of the Seller or any of its Affiliates restricting the
development, manufacture, marketing or distribution of the products and
services of the Access Business;
(vi) each material Contract with any Affiliate of
the Seller (the "Affiliate Contracts");
(vii) each Contract with any officer, director or
employee of the Seller or any of its Affiliates (other than employment
agreements and "at will" arrangements);
(viii) each lease, sublease or similar Contract
with any Person under which the Seller is a lessor or sublessor of, or
makes available for use to any Person, (A) any Assets or (B) any
portion of the Bedford Facility;
(ix) each license, sublicense, option or other
Contract relating, in whole or in part, to any Transferred Intellectual
Property (including any license or other Contract under which the
Seller or any of its Affiliates granted the right to use any
Transferred Intellectual Property);
(x) each confidentiality agreement (other than
(A) any confidentiality agreement entered into in the ordinary course
of business with a Person who (together with such Person's Affiliates)
does not compete in any manner with the Access Business
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and (B) any confidentiality agreement entered into in connection with
the sale of the Access Business);
(xi) each Contract with a customer (including
sales order) that involves an obligation of the Seller to deliver
products and services for payment of or having a fair market value of
more than $100,000;
(xii) each Contract (A) for the sale of any Asset
(other than inventory sales in the ordinary course of business), (B)
for the grant of any preferential rights to purchase any Asset (other
than inventory in the ordinary course of business) or (C) for the grant
of any exclusive right to use any Asset;
(xiii) each Contract with any Governmental
Authority;
(xiv) each Group Contract;
(xv) each Contract for any joint venture,
partnership or similar arrangement; and
(xvi) each written Contract other than as set
forth above to which the Parent, the Seller or Marconi IP is a party or
by which it or any of its assets or business is bound or subject that
is material to the Access Business.
(b) Except as set forth in Schedule 4.14(b), neither the
Seller nor Marconi IP nor any Affiliate of the Seller or Marconi IP (as
applicable) has since January 1, 2001 (with or without the lapse of
time or the giving of notice, or both) materially breached the
provisions of, or is in material default under, the terms of (i) any
Contract listed on Schedule 4.14(a) that is a Purchased Contract or is
material to the operation of the Access Business or (ii) any Material
Personal Property Lease (collectively, the "Material Contracts"), and,
to the Seller's knowledge, no other party to any Material Contract is
in material breach of the provisions of, or is in material default
under the terms of, any Material Contract. Except as set forth in
Schedule 4.14(b), all Material Contracts are valid, binding and in full
force and effect and are enforceable against the Seller or Marconi IP
(as applicable) and, to Seller's knowledge, the other party thereto, in
accordance with their terms, subject to the Enforceability Limitations.
Neither the Seller nor Marconi IP nor any of their respective
Affiliates has received any written notice of the intention of any
party to terminate any Material Contract. Complete and correct copies
of all Material Contracts have been delivered or made available to the
Purchaser by the Seller, except as set forth in Schedule 4.10(b) or
Schedule 4.14(a) (it being understood and agreed that certain pricing
and product information related to the Other Businesses contained in
the Material Contracts has not been made available or delivered to the
Purchaser).
(c) Schedule 4.14(c) sets forth each Material Contract
with respect to which the Consent of the other party or parties thereto
must be obtained by virtue of the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby
or under the Related Agreements to avoid the invalidity of the
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transfer of such Material Contract, the termination thereof, a breach,
violation or default thereunder or any other change or modification to
the terms thereof.
4.15 Permits. The Seller and Marconi IP possess all material
Permits required by applicable Law for them to own or hold the Assets and
necessary to conduct the Access Business as currently conducted. Schedule 4.15
is an accurate and complete list of all such Permits. All such Permits are
validly held by the Seller and Marconi IP, as applicable, and each of the Seller
and Marconi IP has complied in all material respects with all terms and
conditions thereof. Since January 1, 2002, neither the Seller nor any of its
Affiliates has received any written notice of any Proceedings relating to the
revocation or modification of any such Permits the loss of which, individually
or in the aggregate, constitutes a Business Material Adverse Effect or a Seller
Material Adverse Effect. Except as set forth in Schedule 4.15, none of such
Permits will be subject to suspension, modification, revocation or nonrenewal as
a result of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby or the ownership of the Access Business or
the Assets by the Purchaser and AFCNA.
4.16 Insurance. The Seller maintains policies of fire and casualty,
liability, workers' compensation and other forms of insurance (and/or
participates in insurance arrangements made by one or more of its Affiliates)
with respect to the Access Business in such amounts, with such deductibles and
against such risks and losses as are reasonable for the Access Business (it
being understood that the Seller is self-insured with respect to workers'
compensation claims that may be brought by Former Access Employees whose primary
place of employment at the time such employees worked for the Access Business
was in Ohio). Except as set forth on Schedule 4.16, all such policies are in
full force and effect, all premiums due and payable thereon have been paid
(other than retroactive or retrospective premium adjustments that are not yet,
but may be, required to be paid with respect to any period ending prior to the
Closing Date under comprehensive general liability and worker's compensation
insurance policies), and no notice of cancellation or termination has been
received by the Seller or any of its Affiliates with respect to any such policy
which has not been replaced on substantially similar terms prior to the date of
such cancellation. To the Seller's knowledge, the Access Business has been
conducted in a manner so as to conform in all material respects to all
applicable provisions of such insurance policies.
4.17 Employee Benefit Plans and Employment Agreements.
(a) General. Except as listed in Schedule 4.17, the
Seller is not a party to or a participant in:
(i) any "employee benefit plan" (as defined in
section 3(3) of ERISA);
(ii) any retirement or deferred compensation
plan, incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus or benefit
arrangement, insurance or hospitalization program or any other fringe
benefit arrangements for any Access Employee, which does not constitute
an employee benefit plan; or
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(iii) any employment agreement or any written
severance agreement with any Current Access Employee that provides for
a severance payment in excess of twelve (12) months' base annual
salary.
Nothing in this Section 4.17(a) shall require that Schedule 4.17
include any plans, policies, programs, arrangements or agreements unless the
plan, policy, program, arrangement or agreement covers or has been entered into
with any Access Employee or unless the plan, policy, program, arrangement or
agreement covers other persons with respect to which a liability is being
assumed by the Purchaser.
(b) Compliance With Laws; Liabilities. As to all Benefit
Plans:
(i) all Benefit Plans comply, and have been
administered in compliance, in all material respects, with all
requirements of Law applicable thereto; and
(ii) each Benefit Plan which is an employee
pension benefit plan (as defined in section 3(2) of ERISA) and which is
intended to be qualified under section 401(a) of the Code is the
subject of a favorable determination letter issued by the Internal
Revenue Service.
(c) The Assets are not subject to any Lien imposed under
ERISA or the Code on account of any pension benefit plan maintained or
contributed to by the Seller or any of its Affiliates.
(d) The Seller has provided to the Purchaser a true and
correct copy of each of the Marconi AIP, the Seller's severance
policies applicable to the Transferred Employees as in effect on the
date of this Agreement, and the form of agreement for the thirteen
agreements that are listed under the heading of "Special Severance
Agreements" on Schedule 4.17. With the exception of the name of the
individual covered by the applicable agreement, each of the thirteen
Special Severance Agreements is identical to the form of agreement
provided.
4.18 Employment and Labor Matters.
(a) Schedule 1.1B sets forth an accurate and complete
list of the names, titles or job descriptions, and a description of
their status, i.e., whether active or on leave of absence) as of the
date of this Agreement, of all employees (part- and full-time) of the
Seller involved primarily in the Access Business. A complete and
accurate list of (i) the annual compensation for the preceding and
current fiscal year and (ii) accrued paid time off (and current rate of
accrual) of each such person is set forth in that certain Memorandum
from the Seller to the Purchaser titled "Section 4.18(a) - Compensation
Information Memorandum" dated as of the date hereof and reflecting in
the case of accrued paid time off accruals through December 6, 2003.
Except as described in Schedule 4.18(a), there is, and since January 1,
2001 there has been, no labor strike, material labor dispute, material
labor slow-down, material work stoppage or other material labor
difficulty pending or, to the Seller's knowledge, threatened, against
the Seller and relating to the Access Business. Except as disclosed in
Schedule 4.18(a), none of the employees of the Seller involved
primarily in the Access Business is covered by
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any collective bargaining agreement, and, to the Seller's knowledge, no
attempt is currently being made or since January 1, 2001 has been made
to organize any such employees to form or enter a labor union or
similar organization.
(b) Except as set forth in Schedule 4.18(b), (i) the
Seller is not engaged in any unfair labor practice in connection with
the conduct of the Access Business; (ii) the Access Business is in
compliance in all material respects with all applicable laws and
regulations respecting labor, employment, fair employment practices,
work place safety and health, terms and conditions of employment,
immigration and wages and hours; (iii) to the Seller's knowledge, there
are no formal or informal grievances, complaints, investigations,
audits or charges with respect to employment or labor matters
(including charges of employment discrimination, retaliation, unfair
labor practices, work place safety or health violations, terms and
conditions of employment, violation of immigration laws or violation of
wage and hours laws) pending or, to Seller's knowledge, threatened in
any judicial, regulatory or administrative forum, or under any dispute
resolution procedure; and (iv) the Access Business is not currently
subject to and since January 1, 2001 has not been subject to any
consent decree, court order or settlement that creates an obligation on
the Purchaser or a Current Access Employee in respect of any labor or
employment matters.
(c) Except as set forth on Schedule 4.18(c) (which shall
be delivered immediately prior to the Closing and which shall contain
the name, job title, and date of separation of each affected employee),
during the 90-day period prior to the Closing, none of the employees of
the Access Business or any other employees of the Seller who are
located at the Bedford Facility will suffer an "employment loss" (as
defined in the WARN Act or any similar state or local law or
regulation).
(d) Except as set forth on Schedule 4.18(d), to the
Seller's knowledge, the Acquisition and the other transactions
contemplated by this Agreement and the Related Agreements will not
adversely affect the authority of any employee of the Access Business
to work in the United States. Except as set forth on Schedule 4.18(d),
no employee of the Access Business is, to the Seller's knowledge, a
party to or bound by any Contract or subject to any Judgment that may
materially interfere with the use of such person's best efforts to
promote the interests of the Access Business, or, other than as set
forth on Schedule 4.18(d), that has had or could reasonably be expected
to have a Business Material Adverse Effect.
(e) Except as set forth on Schedule 4.18(e), no
independent contractor, temporary employee, leased employee or any
other servant or agent employed or used with respect to the Access
Business since January 1, 2001 has been or is compensated other than
through wages reportable on a Form W-2 or a Form 1099 paid by the
Seller or by a bona fide temporary or employee leasing agency. To the
extent that any individuals set forth on Schedule 4.18(e) are used with
respect to the Access Business, they are properly classified and
treated in accordance with applicable laws and for purposes of all
benefit plans and perquisites.
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4.19 Taxes.
(a) All Tax Returns with respect to the Access Business
and the Assets or income attributable thereto that are required by
applicable Law to be filed on or before the Closing Date by the Seller
have been filed or will be filed in a timely manner (within any
applicable extension periods). The information provided on such Tax
Returns is or will be complete and accurate in all respects and all
Taxes owing by the Seller have been timely paid in full or will be
timely paid in full. There are no material Liens for Taxes with respect
to any of the Assets (other than Permitted Liens). The Seller is not a
"foreign person" within the meaning of Section 1445 of the Code. The
Seller is not the beneficiary of any extension of time within which to
file any Tax Return relating to sales, real estate, personal property
or ad valorem Taxes payable with respect to the Assets. The Seller has
withheld and paid all Taxes related to the Access Business required to
have been withheld and paid in connection with amounts paid or owing to
any employee, independent contractor, stockholder or other third party
and all Forms W-2 and 1099 required with respect thereto have been
properly completed and timely filed.
(b) To the Seller's knowledge, there is no material
dispute or claim concerning any sales, real estate, personal property
or ad valorem Tax liability with respect to the Assets claimed or
raised by a Governmental Authority in writing.
(c) The Seller has delivered to the Purchaser complete
and accurate copies of all real estate, personal property and ad
valorem Tax Returns filed with respect to the Assets for taxable
periods ending after December 31, 2002, and no such Tax Returns have
been audited or are currently under audit.
(d) Neither the Seller nor any of its Subsidiaries is a
party to a Tax allocation or sharing agreement regarding sales, real
estate, personal property or ad valorem taxes.
4.20 Compliance with Laws. Except as disclosed in Schedule 4.20,
each of the Seller and Marconi IP has, since January 1, 2001, complied and is in
compliance in all material respects with all Laws applicable and material to the
Access Business. Except as set forth on Schedule 4.12, since January 1, 2001,
neither the Seller nor any of its Affiliates has received any written notice
from any Person that alleges that the Seller or Marconi IP is not in material
compliance with any Law applicable and material to the Access Business. This
Section 4.20 does not relate to matters with respect to Taxes (which are the
subject of Section 4.19), to employee benefits (which are the subject of Section
4.17), to environmental matters (which are the subject of Section 4.21), to
labor and employment matters (which are the subject of Section 4.18) or to
Intellectual Property matters (which are the subject of Section 4.13).
4.21 Environmental Matters. Except as disclosed in Schedule 4.21:
(a) the Seller (solely in relation to its conduct of the
Access Business) has at all times been and is in compliance with all
applicable Environmental Laws, except where the failure to so comply
does not constitute a Business Material Adverse Effect or a Seller
Material Adverse Effect;
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(b) the Seller is in possession of all Environmental
Permits, if any, required for its operation of the Access Business as
currently conducted and is in compliance with all of the requirements
and limitations included in such Environmental Permits except where the
failure to possess such Environmental Permits or to so comply does not
constitute a Business Material Adverse Effect;
(c) to the Seller's knowledge, there are no Hazardous
Substances in, on, under or at the Bedford Facility that constitute a
Business Material Adverse Effect;
(d) no written notice has been received by the Seller or
any of its Affiliates from any Governmental Authority or third party
claiming that the operation of the Access Business is in violation of
any Environmental Law or Environmental Permit, or that any of them,
solely in relation to the Access Business, is responsible (or
potentially responsible) for the cleanup of any Hazardous Substances at
any location; and
(e) neither the Seller nor any of its Affiliates (solely
in relation to the operation of the Access Business) is the subject of
any pending, or, to the Seller's knowledge, threatened litigation,
Proceeding or demand in any forum, judicial or administrative,
involving a claim for damages, injunctive relief, penalties or other
potential liability with respect to any Release or threatened Release
of Hazardous Substances or violations of any Environmental Law.
For purposes of this Section 4.21, the "Seller" shall refer only to
Marconi Communications, Inc. and its corporate predecessors as in existence and
operated from and since the acquisition of Reltec Communications, Inc. by
General Electric Corporation in April 1999.
4.22 Accounts Receivable. All the Accounts Receivable constituting
Assets (a) represent actual indebtedness incurred by the applicable account
debtors and (b) have arisen from bona fide transactions in the ordinary course
of business. To the Seller's knowledge, all the Accounts Receivable that
constitute Assets are not factored or subject to any setoff or counterclaim.
Since September 30, 2003, there have not been any write-offs as uncollectible of
any Accounts Receivable, except for write-offs in the ordinary course of
business and consistent with past practice.
4.23 Inventory. Except as set forth in Schedule 4.23, since
September 30, 2003, there have not been any write-downs of the value of, or
establishment of any reserves against, any Inventory of the Access Business,
except as made in the ordinary course of business consistent with past practice.
Inventory is properly stated on the books and records of the Access Business at
the lesser of cost and fair market value, with adequate obsolescence reserves,
all as determined in accordance with the Applicable Accounting Principles.
4.24 Product Warranties and Liabilities.
(a) Except as set forth in Schedule 4.24(a), each product
manufactured, shipped or sold by the Access Business has been in
conformity with all applicable contractual commitments and all express
and implied warranties (except as properly disclaimed in the applicable
Contract), and the Access Business does not have any liability (and, to
the Seller's knowledge, there is no basis for any present or future
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Proceeding, hearing, investigation, charge, complaint, claim or demand
against it giving rise to any liability) for replacement or repair
thereof or other damages in connection therewith, except for
nonconformities and liabilities that would not reasonably be expected
to have a material adverse effect on the Access Business' relationship
with any customer or distributor.
(b) The Seller has delivered to the Purchaser complete
and correct copies of all Contracts to which the Seller is a party
relating to the sale of products or services by the Access Business to
(i) BellSouth Telecommunications, Inc. and its Affiliates, (ii)
Communications Test Design, Inc., (iii) Grande, (iv) US WEST Business
Resources, Inc. and its successors and (v) Sprint/North Supply Company
and any Affiliate thereof (it being understood and agreed that certain
product and pricing information related to the Other Businesses
contained in such Contracts has not been delivered to the Purchaser).
(c) Except as set forth in Schedule 4.24(c), since
January 1, 2001, there has been no material recall of any product
manufactured, shipped or sold by the Access Business, nor, to the
Seller's knowledge, has any such recall been threatened.
4.25 Effect of Transactions. Except as set forth in Schedule 4.25,
to the Seller's knowledge, no executive officer, people manager or engineer of
the Access Business intends to terminate his or her employment with the Access
Business. Except as set forth in Schedule 4.25, to the Seller's knowledge, no
customer identified on Schedule 4.11(a) or supplier identified on Schedule
4.11(b) intends to terminate, or otherwise change in a manner materially adverse
to the Access Business, its relationship with the Access Business on account of
the ownership of the Access Business by the Purchaser or the consummation of any
transactions contemplated hereby.
4.26 Solvency. On the Closing Date and immediately after the
consummation of the Acquisition and the other transactions contemplated hereby
and under the Related Agreements: (a) the Seller shall not intend, whether by
virtue of the Acquisition (and the transactions contemplated hereby and under
the Related Agreements) or otherwise, to hinder, defraud, or delay any of its
present or future creditors, (b) the Seller shall be solvent (as such term is
determined for purposes of Section 548 of Title 11 of the United States Code and
under any applicable state Uniform Fraudulent Transfer Act or Uniform Fraudulent
Conveyance Act), (c) the Seller shall not be engaged in business or a
transaction, and shall not about to be engaged in business or a transaction, for
which any property remaining with the Seller shall be an unreasonably small
capital, and (d) the Seller shall not intend to incur, and shall not believe
that it is about to incur, debts that would be beyond the Seller's ability to
pay as such debts matured.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND AFCNA
The Purchaser and AFCNA, jointly and severally, represent and warrant
to the Seller, Marconi IP and the Parent as follows:
5.1 Due Incorporation. Each of the Purchaser and AFCNA is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and
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has all requisite corporate power and authority to own, operate and lease its
assets and to conduct its business as presently conducted.
5.2 Due Authorization. Each of the Purchaser and AFCNA has full
corporate power and authority to execute, deliver and perform this Agreement and
its Related Agreements and to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance by the Purchaser and AFCNA
of this Agreement and its Related Agreements, and the consummation by the
Purchaser and AFCNA of the transactions contemplated hereby and thereby, have
been duly authorized by all necessary corporate action, including the approval
of the respective board of directors of the Purchaser and AFCNA. Each of the
Purchaser and AFCNA has duly and validly executed and delivered this Agreement
and, at or prior to the Closing, will have duly and validly executed and
delivered each of its Related Agreements. Assuming the due authorization,
execution and delivery of this Agreement and its Related Agreements by the other
parties thereto, this Agreement constitutes, and each of the Purchaser's and
AFCNA's Related Agreements will, after the Closing, constitute, legal, valid and
binding obligations of the Purchaser and AFCNA, enforceable against each of them
(to the extent a party thereto) in accordance with their respective terms,
subject to Enforceability Limitations.
5.3 Consents and Approvals; Authority Relative to this Agreement.
(a) Except for the Governmental Required Consents, no
Consent of or with any Governmental Authority is necessary in
connection with the execution, delivery or performance by the Purchaser
or AFCNA of this Agreement or any of the Related Agreements or the
consummation by the Purchaser or AFCNA of the transactions contemplated
hereby or thereby.
(b) Except for the Governmental Required Consents, the
execution and delivery by the Purchaser and AFCNA of this Agreement and
of each of its Related Agreements do not, and the transactions
contemplated hereby and thereby and compliance by the Purchaser and
AFCNA with the terms hereof and thereof will not, conflict with, or
result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or to loss of a material
benefit under, or to increased, additional, accelerated or guaranteed
rights or entitlements of any Person under, or result in the creation
of any Lien upon any of the properties or assets of the Purchaser or
any of its Subsidiaries under, any provision of (i) the certificate of
incorporation or by-laws or other organizational documents of the
Purchaser or any of its Subsidiaries, (ii) any Contract to which the
Purchaser or any of its Subsidiaries is a party or by which any of
their respective properties or assets is bound, (iii) any Judgment, Law
or Permit applicable to the Purchaser or any of its Subsidiaries or
their respective properties or assets or (iv) any indebtedness of the
Purchaser or any of its Subsidiaries, other than, in the case of clause
(ii) above, any conflict, violation or other such items that (A) has
not resulted in and would not reasonably be expected to result in a
material adverse effect on the Purchaser and its Subsidiaries, taken as
a whole and (B) does not constitute a Purchaser Material Adverse
Effect.
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5.4 Proceedings. There are no Proceedings or claims pending, or,
to the Purchaser's knowledge, Proceedings or claims threatened, by or against
the Purchaser, AFCNA or any of their respective Affiliates with respect to this
Agreement or the Related Agreements, or in connection with the transactions
contemplated hereby or thereby.
5.5 Financing. The Purchaser has internal resources available in
connection with the acquisition of the Assets which are in an aggregate amount
sufficient to consummate the transactions contemplated hereby. The financial
statements of the Purchaser as of the end of the most recent fiscal quarter for
which there are financial statements available and for the period then ended,
which have been previously delivered to the Seller, fairly present the financial
condition and results of operations of the Purchaser as of the date and for the
period then ended.
5.6 Independent Investigation. In making the decision to enter
into this Agreement and the Related Agreements and to consummate the
transactions contemplated hereby and thereby, other than reliance on the
representations, warranties, covenants and obligations of the Parent, the Seller
and Marconi IP set forth in this Agreement and in the Related Agreements to
which they are or will be parties, the Purchaser and AFCNA have relied solely on
their own independent investigation, analysis and evaluation of the Access
Business and the Assets. Each of the Purchaser and AFCNA confirms to the Seller
that it is sophisticated and knowledgeable about the industry in which the
Access Business operates and is capable of evaluating the matters set forth
above.
ARTICLE VI
COVENANTS
6.1 Access to Information. From and after the date of this
Agreement until the Closing Date, the Seller, Marconi IP and the Parent shall
afford, and, to the extent reasonably necessary, cause each of its Affiliates to
afford, to the Purchaser and its Representatives, on a reasonably timely basis,
reasonable access, upon reasonable notice during normal business hours, to all
the personnel (other than external professional advisors), work papers,
information systems, properties, books, contracts, commitments, Tax Returns and
records of, or relating to (and then only to the extent relating to), the Access
Business and during such period shall furnish to the Purchaser and its
Representatives any information relating to (and then only to the extent
relating to) the Access Business, the Assets and the Assumed Obligations, and to
Retained Obligations that arise from, relate to or affect, the Access Business,
as the Purchaser or its Representatives may reasonably request (including all
information reasonably necessary for purposes of transition planning and
preparation for post-Closing integration purposes); provided, that, nothing
herein will obligate the Seller, Marconi IP or the Parent to (i) take any
actions that would unreasonably interrupt the normal course of the Access
Business or (ii) violate any Law or the terms of any Contract to which the
Seller, Marconi IP, or the Parent or any of their Affiliates is a party or to
which any of their respective assets are subject; and provided, further, if any
particular item of the Seller, Marconi IP or the Parent that the Purchaser has
the right of access to pursuant to this Section 6.1 contains both information
related to the Access Business and other information, then the Seller, Marconi
IP and the Parent (as applicable) can, at its option either (A) provide a copy
of such information to the Purchaser subject to the Purchaser's obligations
contained herein to keep such other information confidential or (B) create a new
form of such
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information and provide the Purchaser with access to such new form of
information (which new form of information shall incorporate all information
that the Purchaser has the right to access to pursuant to this Section 6.1) (it
being understood that, notwithstanding the foregoing, the Seller shall make
available to the Purchaser the original complete copy of any particular item of
information if the Purchaser has a reasonable need to review such original copy,
subject to reasonable redaction that is not inconsistent with such reasonable
need of the Purchaser). The Purchaser's right of access to Tax Returns pursuant
to this Section 6.1 shall be limited to Tax Returns relating to real estate,
personal property or ad valorem Taxes payable with respect to the Assets.
6.2 Preservation of Business. From the date of this Agreement
until the Closing Date, except as set forth on Schedule 6.2 or as expressly
permitted by this Agreement, the Seller and Marconi IP shall operate the Access
Business in the ordinary course of business and in substantially the same manner
as has been conducted between April 1, 2002 and the date hereof, and use
reasonable best efforts to, and take such actions as the Purchaser reasonably
requests in order to, keep intact the Access Business, keep available the
services of the Current Access Employees and preserve the relationships of the
Access Business with material customers, suppliers, licensors, licensees,
distributors and others with whom the Access Business deals. Prior to the
Closing, the Seller, the Parent and Marconi IP shall not, and shall not permit
any of their Affiliates to, take any action that would or would reasonably be
expected to (x) result in the failure of any of the conditions to the Closing
contained in Articles VII or VIII or (y) cause any of the representations or
warranties of the Seller, Marconi IP or the Parent made in this Agreement (other
than the representations and warranties set forth in (i) the second sentence of
Section 4.10, (ii) clause (ii) of the second sentence of Section 4.11(a), (iii)
clause (ii) of the second sentence of Section 4.11(b), (iv) the first sentence
of Section 4.11(c), (v) the third sentence of Section 4.12(a), (vi) the last
sentence of Section 4.12(a), (vii) the first sentence of Section 4.13(a), (viii)
the first two sentences of Section 4.13(b), (ix) Section 4.13(d), (x) Section
4.14(a), (xi) the second sentence of Section 4.15, (x) Section 4.17(a), (xi) the
first sentence of Section 4.18(e), (xii) Section 4.19(c), (xiii) the first
sentence of Section 4.19(d), (xiv) Section 4.24(b) and (xv) Section 4.24(c), it
being agreed that nothing in this parenthetical shall be deemed to limit or
modify the covenants of the Parent, the Seller or Marconi IP herein other than
the covenant contained in this clause (y)) not to be true and correct as of the
date of such action or as of the Closing Date.
(a) Negative Covenants. Without limiting the generality
of the foregoing, except as set forth in the corresponding subsections
of Schedule 6.2 or as expressly permitted or required by this
Agreement, prior to the Closing, neither the Seller nor Marconi IP (in
each case, solely in relation to the Access Business) shall without the
prior written consent of the Purchaser:
(i) move from the Bedford Facility (if such
asset is located at the Bedford Facility), sell, lease, license or
otherwise dispose of any of its assets that would be Assets, except
inventory of finished goods sold, obsolete inventory disposed of and
other consumable assets used, in each case, in the ordinary course of
business and consistent with past practice;
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(ii) make any capital expenditures in any
calendar month that are in the aggregate more than 110% of the amount
of capital expenditures forecast for such month in the Capital Spending
Analysis for the Access Business attached to Schedule 6.2;
(iii) make any material changes in the accounting
principles or practices of the Access Business other than those changes
required by accounting principles generally accepted in the United
Kingdom;
(iv) sell, transfer or lease any of the Assets
to, or otherwise enter into any transaction or Contract with respect to
the Access Business with, any Affiliates of the Seller, or amend or
extend in a manner materially adverse to the Access Business any such
transaction or Contract;
(v) increase the compensation or benefits of any
Access Employee or independent contractor of the Access Business, or
enter into any Contract to do so, except as required by existing
Contracts or by Law or in the ordinary course of business consistent
with past practices;
(vi) adopt or amend any Access Plan or enter
into, adopt, extend (beyond the Closing Date), renew or amend any
collective bargaining agreement or other Contract with any labor
organization, union or association, except in each case as required by
Law or in the ordinary course of business consistent with past
practices;
(vii) permit or allow any Asset to become
subjected to any Lien of any nature whatsoever, other than Permitted
Liens and those Liens set forth in Schedule 4.7(a);
(viii) enter into or terminate, or amend or extend
in a manner materially adverse to the Access Business, any material
Contract in connection with the Access Business other than entering
into Contracts with customers in the ordinary course of business;
(ix) enter into any Group Contract that relates
to or binds the Access Business;
(x) 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
any assets (other than Inventory) that are material, individually or in
the aggregate, to the Access Business;
(xi) acquire fee title to, or an ownership
interest in, any real property that would be an Asset or enter into any
lease (or renewal of any lease) of real property that would be an Asset
other than the Bedford Lease;
(xii) enter into, amend, terminate or extend any
license, option or other material agreement pertaining to the
Transferred Intellectual Property with any Person;
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(xiii) enter into any Contract containing a
covenant not to compete or any other covenant restricting the
development, manufacture, marketing or distribution of the products and
services of the Access Business or amend or extend in a manner adverse
to the Access Business any such covenant in any existing Contract of
the Access Business;
(xiv) make any purchase commitment with terms and
conditions not in the ordinary course of business consistent with past
practice or for a period of greater than six months;
(xv) (A) subject to the covenant with respect to
compensation contained in Section 6.2(a)(v), enter into, adopt or amend
any employment, severance, consulting, termination or other agreement
relating to any Current Access Employees or independent contractors
employed to perform services in the Access Business or (B) except in
the ordinary course of business consistent with past practice, hire any
person to work as an employee or independent contractor in the Access
Business other than as a replacement at the same job title, duties and
compensation of a Current Access Employee or current independent
contractor;
(xvi) incur or assume any liabilities, obligations
or indebtedness for borrowed money or guarantee any such liabilities,
obligations or indebtedness or otherwise take any action to incur or
assume, or intentionally fail to take any action required by any
obligation or duty that results in the incurrence of, any other
material liabilities or obligations of any nature, other than in the
ordinary course of business and consistent with past practice;
provided, however, that in no event shall the Access Business incur,
assume or guarantee any long-term indebtedness for borrowed money;
(xvii) cancel any material indebtedness
(individually or in the aggregate) or waive any claims or rights of
substantial value;
(xviii) accelerate (A) the delivery of products or
services under any Contract for the sale or distribution of any
products manufactured by the Access Business other than at the request
of the customer or (B) the collection of any outstanding Accounts
Receivable;
(xix) enter into or amend in any manner materially
adverse to the Access Business any Contract for the manufacture of
products on behalf of the Access Business;
(xx) (A) institute, settle or agree to settle any
Proceeding relating to or affecting the Access Business or Assets
before any court or governmental body (other than settlements of
Proceedings (1) not involving Intellectual Property matters, (2)
involving solely the payment of monetary damages and (3) not involving
an admission of liability) or (B) waive or surrender any rights related
to any pending or threatened Proceeding to the extent relating to or
affecting the Access Business or Assets; or
(xxi) authorize, commit to do or agree to take,
whether in writing or otherwise, any of the foregoing actions.
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(b) Advise of Changes.
(i) From the date hereof until the Closing,
promptly after the Seller acquires knowledge of any such matter, the
Seller shall advise the Purchaser in writing of (A) any material
failure of the Seller, Marconi IP or the Parent to comply with or
satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder and (B) the occurrence or nonoccurrence of
any event, the occurrence or nonoccurrence of which would reasonably be
likely to cause any condition to the obligations of the Purchaser to
effect the Closing hereunder not to be satisfied or that calls into
question the ability of the Seller, the Purchaser or Marconi IP to
enter into or enforce any of the Related Agreements.
(ii) From the date hereof until the Closing,
promptly after the Purchaser acquires knowledge of any such matter, the
Purchaser shall advise the Seller in writing of (A) any material
failure of the Purchaser or AFCNA to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder and (B) the occurrence or nonoccurrence of any event, the
occurrence or nonoccurrence of which would reasonably be likely to
cause any condition to the obligations of the Seller to effect the
Closing hereunder not to be satisfied or that calls into question the
ability of the Purchaser or AFCNA to enter into or enforce any of the
Related Agreements.
(c) Affirmative Covenants. Until the Closing, the Parent,
the Seller and, to the extent applicable, Marconi IP, shall:
(i) use reasonable best efforts to maintain the
Assets in all material respects in good working order, in accordance
with the past practice of the Access Business;
(ii) upon acquiring knowledge of any damage
(other than immaterial damage), destruction or loss to, or condemnation
of, any material Asset, (A) promptly notify the Purchaser, (B) make all
available claims against insurance policies covering such Asset (the
"Pre-Closing Insurance Claims") and (C) consult with the Purchaser as
to the application of any and all insurance proceeds with respect
thereto to repair, replace or restore such Asset;
(iii) use reasonable best efforts to maintain its
level and quality of Accounts Receivable and Inventory and spare parts
in the ordinary course of business so as to be sufficient for the
conduct of the Access Business by the Purchaser following Closing in
substantially the same manner as conducted on September 30, 2003 and as
currently conducted by the Seller; and
(iv) segregate any proceeds received prior to the
Closing from any Claims (the "Claims Proceeds") into a separate account
and retain any such Claims Proceeds in such account until the Closing;
provided, however, that (A) any Claims Proceeds received under an
insurance policy as a result of damage to or destruction of an Asset
(other than Inventory) may, subject to Section 6.2(c)(ii), be used to
replace the damaged or destroyed Asset and (B) any Claims Proceeds
received under an insurance
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policy as a result of damage to or destruction of Inventory need not be
segregated into a separate account and may be used or disbursed in the
Seller's sole discretion.
(d) Consultation. Except to the extent that any such
consultation would be in violation of applicable Laws, in connection
with the continuing operation of the Access Business between the date
of this Agreement and the Closing, to the extent reasonably requested
by Purchaser, the Seller shall consult in good faith on a regular and
frequent basis with representatives of the Purchaser to report material
operational developments and the general status of ongoing operations.
Any such consultation shall not constitute a waiver by the Purchaser of
any rights under this Agreement, and the Purchaser shall not have any
liability or responsibility for any actions of the Parent, the Seller
or Marconi IP or any of their respective officers or directors with
respect to matters that are the subject of such consultations.
6.3 Consents and Approvals.
(a) On the terms and subject to the conditions of this
Agreement, each party shall use its reasonable best efforts to cause
the Closing to occur, including taking all reasonable actions necessary
(i) to comply promptly with all legal requirements that may be imposed
on it or any of its Affiliates with respect to the Closing and (ii) to
obtain each Governmental Required Consent and each other Consent of or
with a Governmental Authority which if not obtained or made would
reasonably be expected to have a material adverse effect on the ability
of the parties to consummate the transactions contemplated hereby. For
purposes of this Section 6.3(a), the "reasonable best efforts" of the
Purchaser shall include (1) opposing any motion or action for a
temporary, preliminary or permanent injunction against or other
prohibition of the Closing and (2) entering into a consent decree,
other order or other agreement, or giving an assurance, commitment or
undertaking, containing the Purchaser's agreement to hold separate and
divest (pursuant to any terms as may be required by any Governmental
Authority) the business, products and assets of any product or service
lines of the Access Business and/or any other business, product line,
service line, division or subsidiary of the Purchaser and/or any
Affiliate of the Purchaser and otherwise to take such other action as
may be required by any Governmental Authority; provided, however, that
neither the foregoing nor anything else in this Agreement shall require
the Purchaser to take any action or agree to take or not to take any
action if the taking of any such action or the agreement to take or not
to take any such action would reasonably be expected to have a material
adverse effect on the benefits (viewed as a whole) reasonably expected
to be derived by the Purchaser from the Acquisition, including any
action that would (x) involve a change in or restriction on the
business, products, assets or operations of the Access Business, the
Purchaser or any Affiliate of the Purchaser or (y) involve the
disposition (whether by way of sale, lease, license or otherwise),
before or after the Closing, of all or any portion of the business,
products or assets (including Intellectual Property) of the Access
Business, the Purchaser or any Affiliate of the Purchaser.
(b) In furtherance and not in limitation of the
provisions of Section 6.3(a), each of the Seller, Marconi IP, the
Parent, the Purchaser and AFCNA shall cooperate with the other with
respect to obtaining and making the Consents of Governmental
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Authorities in connection with this Agreement and the transactions
contemplated hereby. The Seller, Parent, Marconi IP, the Purchaser and
AFCNA, or Persons nominated thereby, will promptly provide drafts to
the others, allow reasonably adequate time for comment by the others
and consult with the others as promptly as practicable with respect to
the contents of all notifications, filings, submissions, further
documentation and evidence to be submitted to all relevant Governmental
Authorities. The Seller, Marconi IP, the Parent, the Purchaser and
AFCNA shall, in each case where permitted by the relevant Governmental
Authority, allow Persons nominated by the other party to attend all
meetings with Governmental Authorities and, where appropriate, to make
oral submissions at such meetings. Each of the Purchaser, Marconi IP,
the Parent, the Seller and AFCNA shall (i) furnish to the other such
necessary information and reasonable assistance as the other may
require in connection with its preparation of any notification, filing,
submission or further documentation or evidence that is necessary in
obtaining and making Consents of Governmental Authorities and (ii)
promptly disclose to the other all correspondence received from or sent
to any relevant Governmental Authority in connection herewith and shall
keep the other fully informed of any other related communication in
whatever form with any of the relevant Governmental Authorities. The
Purchaser, the Parent, Marconi IP, the Seller and AFCNA shall comply
promptly with any inquiry or request for additional information from
any relevant Governmental Authority in connection herewith and shall
promptly provide any supplemental information requested in connection
with the notifications, filings and/or submissions made hereunder for
the purposes of obtaining and making the Consents of Governmental
Authorities.
(c) Each party shall promptly notify the other parties in
writing of any notice or other communication from any third party
received by it alleging that the consent of such third party is or may
be required in connection with the execution, delivery or performance
of this Agreement or any Related Agreement or the consummation of the
transactions contemplated hereby and thereby. The Seller shall, and
shall cause its Affiliates to, use its reasonable best efforts to
obtain, and the Purchaser shall, and shall cause its Affiliates to,
cooperate with the Seller and its Affiliates in obtaining, all Consents
from third parties required in connection with the execution, delivery
or performance of this Agreement or any Related Agreement or the
consummation of the transactions contemplated hereby and thereby;
provided, however, that, subject to the exceptions set forth on
Schedule 6.3(c) (incorporated herein), the parties shall not be
required to pay or commit to pay any amount to (or incur any obligation
in favor of) any Person from whom any such Consent may be required
(other than nominal filing or application fees). The Purchaser and
AFCNA acknowledge that certain Consents with respect to the
transactions contemplated by this Agreement may be required from
parties to Contracts and that such Consents have not been obtained.
Except as expressly provided in this Agreement, and without limiting
the representations, warranties and covenants of the Seller, the Parent
and Marconi IP herein, including in this Section 6.3 and in Sections
4.3, 4.13, 4.14, and 4.15, so long as the Seller and its Affiliates
have complied with their obligations under this Agreement and the
Related Agreements in any way related to obtaining Consents and there
has been no breach of any applicable representation or warranty by the
Seller, the Parent or Marconi IP hereunder or under the applicable
Related Agreement in any way implicated by the failure to obtain a
Consent,
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the Seller, the Parent and Marconi IP shall not have any Liability to
the Purchaser and AFCNA to the extent due to the failure to obtain any
Consents that may be required in connection with the transactions
contemplated by this Agreement or because of the termination of any
Purchased Contract as a result thereof.
(d) Without limiting the terms of this Section 6.3, each
of the Purchaser and the Seller will (i) as soon as reasonably
practicable after the date of this Agreement file with the Antitrust
Division and the FTC the notification and report form, if required by
the HSR Act, for the transactions contemplated hereunder, requesting
early termination of the waiting period thereunder, (ii) respond
promptly to inquiries from the Antitrust Division or the FTC in
connection with such filings, including providing any supplemental
information that may be requested by the Antitrust Division or the FTC,
and (iii) provide to the other party copies of any filings made under
the HSR Act at the time they are filed with the Antitrust Division or
the FTC.
6.4 Marconi Name.
(a) The Purchaser and AFCNA acknowledge that the Marconi
Name is and shall remain the property of the Seller or its Affiliates
and that nothing in this Agreement shall transfer or shall operate as
an agreement to transfer any right, title or interest in the Marconi
Name to the Purchaser or any Affiliate of the Purchaser.
(b) Subject to Sections 6.4(c), (d) and (e), the Seller
is not granting the Purchaser or AFCNA a license to use, and neither
the Purchaser nor any of its Affiliates shall have any title, right or
interest in or to, the Marconi Name after the Closing.
(c) The Purchaser and AFCNA agree:
(i) that, as soon as reasonably practicable
following the Closing, but in any event, within sixty (60) days
following the Closing Date and thereafter, no stationery, purchase
order, invoice, receipt or other similar document containing any
reference to the Marconi Name shall be printed, ordered or produced and
that the Purchaser and AFCNA shall cease to use any stationery,
purchase order, invoice, receipt or other similar document containing
any reference to the Marconi Name or shall only use such stationery,
purchase order, invoice, receipt or other similar document after having
deleted, pasted over or placed a sticker over such references;
(ii) as soon as reasonably practicable after the
Closing, and in any event no later than one hundred twenty (120) days
after the Closing Date, to remove the Marconi Name from all premises,
signs and vehicles which are included in the Assets or made available
to the Purchaser and AFCNA in connection herewith;
(iii) that following the Closing, no brochures,
leaflets or similar documents and no packaging containing any reference
to the Marconi Name shall be printed, ordered or produced and, with
respect to existing brochures, leaflets or similar documents and
packaging that remain in the Purchaser's possession, custody or control
and that contain a reference to the Marconi Name, that the Purchaser
and AFCNA shall use their reasonable best efforts to ensure that, as
soon as reasonably practicable but in no
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event later than sixty (60) days following the Closing Date, such
references are deleted, pasted over or a sticker is put over such
references; and
(iv) that the Purchaser and AFCNA shall use their
respective reasonable best efforts to ensure that, from and following
the Closing, no stocks, goods, products, services or software are
manufactured, produced or provided showing, having marked thereon or
using the Marconi Name.
(d) For the avoidance of doubt, the Purchaser and AFCNA
shall have no obligation to remove the Marconi Name from any products
(or related packaging, documentation or other materials) sold,
licensed, leased, delivered or otherwise provided by the Access
Business to a third party prior to the Closing.
(e) The Purchaser and AFCNA shall have the right to
continue to use "xxxxxxx.xxx" as an e-mail address for Transferred
Employees for a period of three (3) months following the Closing Date.
6.5 Brokers. Regardless of whether the Closing shall occur, (a)
the Seller, Marconi IP and the Parent shall indemnify the Purchaser and its
Affiliates against, and hold the Purchaser and its Affiliates harmless from, any
and all liability for any brokers' or finders' fees or other commissions arising
with respect to brokers or finders retained or engaged by the Parent, the Seller
or any of its Affiliates in respect of the transactions contemplated by this
Agreement, and (b) the Purchaser and AFCNA shall indemnify the Seller and its
Affiliates against, and hold the Seller and its Affiliates harmless from, any
and all liability for any brokers' or finders' fees or other commissions arising
with respect to brokers or finders retained or engaged by the Purchaser or any
of its Affiliates in respect of the transactions contemplated by this Agreement.
6.6 Assignments. The Seller and Marconi IP, as applicable, shall
prepare all assignments of Transferred Intellectual Property required hereunder
and provide such assignments to the Purchaser in recordable form reasonably
acceptable to the Purchaser. The Seller and the Parent shall reimburse the
Purchaser for one-half of all filing or recordation fees incurred in connection
with such assignments.
6.7 Orderly Transition; Preservation of Books and Records; Access
and Assistance.
(a) Upon reasonable request and during normal business
hours, the Purchaser, AFCNA, the Seller, the Parent and Marconi IP
shall reasonably cooperate with each other, and shall cause their
respective Representatives to reasonably cooperate with each other,
after the Closing to ensure the orderly transition of the Access
Business from the Seller and Marconi IP to the Purchaser and AFCNA and
to minimize any disruption to the Access Business and the other
respective businesses of the Seller and the Purchaser that might result
from the transactions contemplated hereby. Notwithstanding the previous
sentence, no party shall be required to incur material out-of-pocket
expenses of any kind in connection with complying with this Section
6.7(a).
(b) After the Closing, upon reasonable notice, the
Purchaser and AFCNA, on one hand, and the Seller, Marconi IP and the
Parent, on the other hand, shall furnish or cause to be furnished to
the other and their respective Representatives access, during
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normal business hours, to such information relating to the Access
Business (to the extent within the control of such party or any of its
Affiliates) as is reasonably necessary for financial reporting and/or
accounting matters (including (i) responding to inquires or other
demands of any Governmental Authority (including the Securities and
Exchange Commission) and (ii) in the case of the Purchaser, confirming
the information contained in the Audit to be delivered by the Seller to
the Purchaser pursuant to Section 6.17). Notwithstanding the previous
sentence, if any particular item of the Seller, Marconi IP or the
Parent that the Purchaser or AFCNA has the right of access to pursuant
to this Section 6.7(b) contains both information related to the Access
Business and other information that is not reasonably necessary for
financial reporting and/or accounting matters, then the Seller, Marconi
IP or the Parent, as applicable, can, at its option, either (i) provide
a copy of such information to the Purchaser or AFCNA subject to the
Purchaser's and AFCNA's obligations contained herein to keep such other
information confidential or (ii) create a new form of such information
and provide the Purchaser and AFCNA with access to such new form of
information.
(c) From and after the Closing, the Purchaser and AFCNA
shall preserve and retain all Information and Records and other
accounting, legal, auditing and other books and records (including any
documents relating to any governmental or non-governmental claims,
actions, suits, proceedings or investigations with respect to the
Seller) relating to the conduct of the Access Business and the
ownership of the Assets on or prior to the Closing Date in a manner
consistent with the Purchaser's document retention policy.
(d) In the event and for so long as any party hereto is
contesting or defending against or prosecuting any third-party charge,
complaint, action, suit, Proceeding, hearing, investigation, claim or
demand in connection with (i) any transaction contemplated under this
Agreement or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure
to act, or transaction on or prior to the Closing Date involving the
Access Business, each other party hereto will (A) fully cooperate with
it and its counsel in, and assist it and its counsel with, the contest,
defense or prosecution, (B) make available its personnel (including for
purposes of fact finding, consultation, interviews, depositions and, if
required, as witnesses), and (C) provide such information, testimony
and access to its books and records, in each case as shall be
reasonably requested in connection with the contest, defense or
prosecution, all at the sole cost and expense (not including employee
compensation and benefits costs) of the contesting, defending or
prosecuting party (unless the contesting, defending or prosecuting
party is entitled to indemnification therefor under Article XII). For
the avoidance of doubt, this Section 6.7(d) shall not apply with
respect to disputes between the parties hereto.
(e) Each party shall reimburse the other parties for
reasonable out-of-pocket administrative costs and expenses incurred at
the request of the other in assisting the other pursuant to this
Section 6.7. No party shall be required by this Section 6.7 to take any
action that would unreasonably interfere with the conduct of its
business or unreasonably disrupt its normal operations (or, in the case
of Purchaser, the Access Business). Any information received by any
party pursuant to this Section 6.7 shall be subject to Section 6.9.
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6.8 Insurance. The Purchaser and AFCNA acknowledge that (a) all of
the insurance policies maintained by the Seller or any of its Affiliates prior
to the Closing Date will be terminated with respect to the Access Business
effective as of the Closing Date and (b) upon such termination, the Access
Business will cease to be covered under such policies and the Purchaser and
AFCNA will have to obtain replacement coverage (including coverage as the
Purchaser deems appropriate for the Assets, the operation of the Access Business
and the satisfaction of the Assumed Obligations). To the extent the Seller or
any of its Affiliates receive any proceeds from any Pre-Closing Insurance Claims
following the Closing, the Seller shall, and shall cause the relevant Affiliate
to, promptly remit such insurance claim proceeds to the Purchaser.
6.9 Confidentiality.
(a) Pre-Closing Confidentiality Terms and Other
Confidentiality Agreements. The parties have previously entered into
several confidentiality agreements covering specific purposes
(collectively, the "Other Confidentiality Agreements"), and a
confidentiality agreement dated December 12, 2002 (as amended, the
"December CA") specifically addressing the purchase transaction
contemplated by this Agreement. The parties intend that all rights,
obligations and causes of action that existed or arose under the Other
Confidentiality Agreements and the December CA, respectively, prior to
the effective date of this Agreement, shall continue to be governed by
and subject to the terms of the Other Confidentiality Agreements and
the December CA, respectively, and nothing in this Agreement shall be
deemed to be a waiver of any rights or a release of any party with
respect to those rights, obligations and causes of action. From and
after the effective date of this Agreement, and except with respect to
the December CA, the parties intend that their obligations, rights and
causes of action arising under the Other Confidentiality Agreements
shall continue to be governed by and subject to the terms of the Other
Confidentiality Agreements, respectively, and nothing in this Agreement
shall be deemed to be a waiver of any rights or a release of any party
with respect to those rights, obligations and causes of action. It is
the intent of the parties that the Other Confidentiality Agreements
shall continue in full force and effect with respect to the subject
matter and purposes for which they were entered into, and this
Agreement shall not modify, affect or otherwise impact the Other
Confidentiality Agreements. With respect to the December CA, (i) prior
to the effective date of this Agreement, the December CA shall govern
the information provided by a disclosing party to the others in
connection with the transactions contemplated hereby or by the Related
Agreements, and (ii) from and after the effective date of this
Agreement, this Section 6.9 shall govern the information provided by a
disclosing party to the others in connection with the transactions
contemplated by this Agreement, and for all rights, obligations and
causes of action arising from and after the effective date of this
Agreement, the December CA is hereby superceded by this Agreement.
(b) Permitted Disclosures. Each of the following reasons
shall be deemed to be a "Permitted Disclosure" and collectively, the
"Permitted Disclosures", subject to the terms and conditions applicable
to any such Permitted Disclosure as set forth below or as otherwise
expressly set forth in this Section 6.9:
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(i) making any filing with a Governmental
Authority that is required in connection with the consummation of the
transactions contemplated hereby;
(ii) subject to obtaining reasonable assurances
of confidentiality, obtaining any Consent from a third party to
transfer any Purchased Contract or Transferable Permit, provided that
the party seeking Consent shall only disclose the identity of the other
parties and the general nature of the transaction to such third party;
(iii) defending or prosecuting any litigation,
Proceeding or dispute;
(iv) as otherwise required by Law or
administrative process;
provided that in the event of (iii) or (iv) above, (A) the scope of the
information to be disclosed shall be solely that which is reasonably
necessary for the respective purpose stated above, (B) the receiving
parties shall provide written notice to the disclosing parties as to
the need for such disclosure and such scope, as soon as the receiving
parties first becomes aware of such, in order to give the disclosing
parties the opportunity to appear and object, if it so chooses and (C)
the court may review such information under seal, upon the disclosing
parties making a motion for such, to which the receiving parties shall
make no objection;
(v) disclosing to any and all Persons, without
limitation of any kind, the U.S. federal and state tax treatment and
tax structure (tax structure shall mean any fact that may be relevant
to understanding the U.S. federal or state tax treatment of the
transaction) contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the
party making the disclosure relating to such tax treatment and tax
structure except to the extent maintaining confidentiality of such
information is necessary to comply with any federal or state securities
laws;
(vi) making any public announcement or disclosure
required by the rules of any stock exchange, the Panel on Takeovers and
Mergers, the UKLA or any other Law or Judgment (in which case the party
required to make the disclosure shall promptly notify the other parties
and give such parties a reasonable opportunity to oppose such
disclosure or request confidential treatment of such disclosure if
available);
(vii) subject to reasonable assurances of
confidentiality, disclosing this Agreement or any of the Related
Agreements or their contents or the transactions contemplated hereby or
thereby to Representatives of the parties and their Affiliates with a
bona fide need to know such information;
(viii) disclosing this Agreement or any of the
Related Agreements or their contents or the transactions contemplated
hereby or thereby (A) subject to the terms of a confidentiality
agreement protecting the confidentiality of such information, to
current or potential lenders to, investors in and purchasers of the
parties or their Affiliates (or any portion thereof) so long as (1) the
due diligence investigation by the lender, investor or purchaser, as
applicable, of such party and its Affiliates is substantially complete,
(2) the definitive agreement with respect to such loan, investment or
purchase, as applicable, is substantially complete and substantially
all of the material terms with
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respect thereto (including, (x) with respect to a loan, the loan amount
and interest rate, (y) with respect to an investment, the amount to be
invested and the price per security to be issued, and (z) with respect
to a purchase, the purchase price) have been agreed in principle and
(3) the board of directors (or the senior management) of such party or
its Affiliates (as applicable) and the potential lender, investor or
purchaser, as the case may be, have (xx) in the case of a loan from a
bank or similar entity that is in the business of lending money,
reviewed and approved the commitment letter or term sheet setting forth
the material terms of such loan and (yy) in the case of all other
transactions contemplated by this clause (3), been apprised of such
transaction and have consented to further negotiations subject to final
board (or senior management) approval, and (B) without limiting any
other Permitted Disclosure, to those Persons whose approval, agreement
or opinion, as the case may be, is required for consummation of such
particular transaction or transactions;
(ix) disclosing information as permitted in
accordance with Section 13.8 of this Agreement; or
(x) enforcing the parties' rights hereunder, or
under any of the Related Agreements.
Additional reasons for disclosure of confidential information of a
party may be permitted as expressly set forth in this Section 6.9.
(c) Purchaser's Obligations. The Purchaser and AFCNA
shall keep confidential and shall not use or disclose except as
expressly permitted or required by this Agreement or the Related
Agreements, and shall cause their Affiliates and each of the
Representatives of the Purchaser, AFCNA and such Affiliates to keep
confidential and not use or disclose except as expressly permitted or
required by this Agreement or the Related Agreements, all information
regarding the Seller, Marconi IP, the Parent or their Affiliates or any
of their businesses, products, processes or financings being provided
by Seller, Marconi IP, the Parent or any of their Affiliates or
Representatives in connection with the transactions contemplated hereby
(excluding, from and after the Closing Date, the Information and
Records, Transferred Technology and information arising from the
Assumed Obligations), except (i) as necessary or required in connection
with a Permitted Disclosure, (ii) for information that is available to
the public on the Closing Date, or thereafter becomes available to the
public, other than as a result of a breach of this Section 6.9 or the
December CA, and (iii) for information that is or was independently
developed by the Purchaser or AFCNA or any of their Affiliates without
reference to any confidential information of the Seller, Marconi IP,
the Parent or any of their Affiliates or (iv) for information that is
known or becomes known to the Purchaser or AFCNA (other than by
disclosure by the Seller, Marconi IP or the Parent) without any breach
of any obligation of confidentiality or not in connection with the
transactions contemplated hereby. The Purchaser and AFCNA agree to use,
and agree to cause their respective Affiliates and Representatives to
use, at least the same degree of care to protect such confidential
information of the Seller, Marconi IP and the Parent and their
Affiliates as the Purchaser and AFCNA use to protect their confidential
information of like importance and in any event using not less than a
reasonable degree of care.
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(d) Seller's Obligations. The Seller, Marconi IP and the
Parent shall keep confidential and shall not use or disclose except as
expressly permitted or required by this Agreement or the Related
Agreements, and shall cause their Affiliates and each of the
Representatives of the Seller, Marconi IP, the Parent and such
Affiliates to keep confidential and not use or disclose except as
expressly permitted or required by this Agreement, (i) all information
regarding the Purchaser, AFCNA or any of their Affiliates or any of
their businesses, products, processes or financings being provided by
Purchaser, AFCNA or any of their Affiliates or Representatives in
connection with the transactions contemplated hereby or by the Related
Agreements and (ii) after the Closing, all Information and Records,
Transferred Technology and information arising from the Assumed
Obligations, except (A) as necessary or required in connection with a
Permitted Disclosure, (B) for information that is available to the
public prior to or on the Closing Date, or thereafter becomes available
to the public, other than as a result of a breach of this Section 6.9
or the December CA, (C) with respect to clause (i) above only, for
information that (1) is or was independently developed by the Seller,
Marconi IP or the Parent or any of their Affiliates without reference
to any information described in clause (i) above or (2) is known or
becomes known to the Seller, Marconi IP or the Parent (other than by
disclosure by the Purchaser or AFCNA) without any breach of any
obligation of confidentiality or not in connection with the
transactions contemplated hereby. The Seller, Marconi IP and the Parent
agree to use, and agree to cause their respective Affiliates and
Representatives to use, at least the same degree of care to protect
such confidential information of the Purchaser and AFCNA as the Seller,
Marconi IP and the Parent use to protect their confidential information
of like importance and in any event using not less than a reasonable
degree of care.
(e) Disclosures under the December CA and this Agreement.
Notwithstanding anything to the contrary herein or in the December CA,
the Purchaser and AFCNA, on the one hand, and the Seller, the Parent
and Marconi IP, on the other hand, shall each be permitted to disclose
information regarding the other parties, or their businesses, products,
processes or financings, being provided to them in connection with the
transactions contemplated by this Agreement only to the extent
necessary or required in connection with any Permitted Disclosure, or
as otherwise expressly set forth in this Section 6.9.
(f) Post-Closing Confidentiality Obligations of Seller.
Effective upon, and only upon, the Closing, (i) the terms of this
Section 6.9 (excluding Section 6.9(c)) shall apply to the Seller,
Marconi IP and the Parent with respect to Information and Records,
Transferred Technology and information arising from the Assumed
Obligations, and (ii) subject to Section 6.9(i) below, any Information
and Records, Transferred Technology or information arising from the
Assumed Obligations shall be deemed the confidential information of the
Purchaser, and the Purchaser's obligations from and after the Closing
under this Section 6.9, the December CA and the Other Confidentiality
Agreements with respect to such information shall cease.
(g) Return or Destruction of Access Business Information.
Promptly following the date hereof, each of the Seller, Marconi IP and
the Parent shall use reasonable best efforts to secure the return or
destruction of all information and materials
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relating to the Access Business, the Assets and the Assumed Obligations
provided to any Person who is or was a potential purchaser of the
Access Business. To the extent any Person returns such information and
materials to the Seller, Marconi IP or the Parent, the Seller shall
destroy all such information and materials. To the extent possible, the
Seller shall provide the Purchaser with all information reasonably
requested by the Purchaser regarding the status of such process.
(h) Return or Destruction of Seller Information. The
Purchaser and AFCNA agree that upon written notice from the Seller,
Marconi IP or the Parent, the Purchaser and AFCNA shall promptly (and
in any case within 14 days of the request) return to the Seller,
Marconi IP or the Parent, as the case may be, all confidential
information of the Seller, Marconi IP and the Parent provided by them
in connection with the transactions contemplated by this Agreement to
the Purchaser, AFCNA, any of their Affiliates or their Representatives,
except Notes (as defined in the December CA), and cause all Notes (and
copies thereof) to be destroyed, and certify in writing to the Seller,
Marconi IP and the Parent that all such material has been returned or
destroyed in compliance with this Agreement; provided, however, that
this obligation shall not apply from and after the Closing Date to any
Information and Records, Transferred Technology or information arising
from the Assumed Obligations.
(i) Retention of Information. Upon and after the Closing
Date, each of the Seller, Marconi IP, the Parent and their respective
Affiliates shall retain only such copies of the Transferred Technology
as are maintained as of the date of this Agreement by each of the
Seller, Marconi IP, the Parent or their respective Affiliates in the
conduct of their respective businesses other than the Access Business
in the ordinary course of business. In addition, upon and after the
Closing Date, each of the Seller, Marconi IP and the Parent and their
respective Affiliates shall retain only such copies of confidential
information of the Purchaser and AFCNA as may be necessary to perform
their respective obligations under the Related Agreements, in each case
in accordance with the terms and conditions provided in such
agreements. Finally, the Seller, Marconi IP and the Parent shall be
entitled to retain one copy of such information as they deem necessary
for archive purposes for a record of the transactions contemplated by
this Agreement and the Related Agreements.
(j) No Representations or Warranties; No Licenses. Except
as expressly set forth in this Agreement or in any of the Related
Agreements, neither the Purchaser nor AFCNA nor any of their
Affiliates, on the one hand, nor the Seller, Marconi IP or the Parent
or any of their Affiliates, on the other hand, makes any
representations or warranties with respect to any of the information
provided by them in connection with the transactions contemplated
hereby or by the Related Agreements. In addition, except as expressly
set forth in this Agreement or any Related Agreements, neither the
Purchaser nor AFCNA or any of their Affiliates, on the one hand, nor
the Seller, Marconi IP or the Parent or any of their Affiliates, on the
other hand, grants any licenses or rights in any information provided
by such party in connection with the transactions contemplated hereby
or by the Related Agreements.
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(k) Privilege Savings Clause. Each party providing any
information in connection with this Agreement is not waiving, and will
not be deemed to have waived or diminished, any of its attorney work
product protections, attorney-client privileges or similar protections
and privileges as a result of disclosing such information (including
information related to pending or threatened litigation) to the other
party, regardless of whether such disclosing party has asserted, or is
or may be entitled to assert, such privileges and protections. The
parties (i) share a common legal and commercial interest in all of such
information that is subject to such privileges and protections; (ii)
may become joint defendants in Proceedings to which such information
covered by such protections and privileges relates; (iii) intend that
such privileges and protections remain intact should any party become
subject to any actual or threatened Proceeding to which such
information covered by such protections and privileges relates; and
(iv) intend that after the Closing the receiving party shall have the
right to assert such protections and privileges. No receiving party
shall admit, claim or contend, in Proceedings involving either party or
otherwise, that any party disclosing such information waived any of its
attorney work-product protections, attorney-client privileges or
similar protections and privileges with respect to any information,
documents or other material disclosed to a party due to a disclosing
party disclosing information (including information related to pending
or threatened litigation) to such receiving party.
(l) Additional Mutual Obligations. On and after the
effective date of this Agreement, except for the Permitted Disclosures,
each of the Seller, Marconi IP and the Parent, and their respective
Affiliates, and the Purchaser and AFCNA and their respective
Affiliates, agree to hold confidential the terms and provisions of this
Agreement and the Related Agreements and the terms of the transactions
contemplated hereby and thereby.
6.10 Taxes.
(a) Property Taxes. All real estate, personal property,
and ad valorem Taxes relating to the Assets which shall have accrued
and become payable prior to the Closing Date shall be paid by the
Seller. All such Taxes which shall be accrued but unpaid shall be
prorated to the Closing Date. In connection with such proration, in the
event the actual Tax figures are not available at the Closing Date,
proration of Taxes shall be based on 105% of the actual Taxes for the
preceding year for which actual Tax figures are available. The amount
due one party as a result of such proration shall be paid to the other
party at the Closing.
(b) Taxes Related to Transaction. The Seller and the
Purchaser shall each pay one-half of the cost of all property transfer,
sales, use or Transfer Taxes, and all recording costs, arising out of
the transfer of the Assets pursuant to this Agreement and all costs and
expenses incurred in connection with the transferring and recording of
title to the Assets. The sales, use and transfer Tax Returns required
by reason of said transfer shall be timely prepared and filed by the
party legally obligated to make such filing. The parties agree to
cooperate with each other in connection with the preparation and filing
of such Tax Returns, in obtaining all available exemptions from such
sales, use and transfer Taxes and in timely providing each other with
resale certificates and any other documents necessary to satisfy any
such exemptions.
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(c) Access to Tax Records. After the Closing, upon
reasonable written notice, the Purchaser, AFCNA, the Seller, the Parent
and Marconi IP shall furnish or cause to be furnished to each other and
their respective Representatives, as promptly as practicable, such
information and assistance (to the extent within the control of such
party) relating to the Assets (including access to books and records)
as is reasonably necessary for the filing of all Tax Returns (including
Form 8594), and making of any election related to Taxes, the
preparation for any audit by any Taxing Authority, and the prosecution
or defense of any claim, suit or Proceeding related to any Tax Return.
The Parent, Marconi IP, the Seller, the Purchaser and AFCNA shall
cooperate with each other in the conduct of any audit or other
Proceeding relating to Taxes involving the Access Business. In the
event that the Seller or any of its Affiliates or the Purchaser or any
of its Affiliates shall after the Closing take any position in any Tax
Return, or reach any settlement or agreement on audit, which is in any
manner inconsistent with any position taken by the Seller or its
Affiliates in any filing, settlement or agreement made by the Seller or
its Affiliates prior to the Closing and such inconsistent position (i)
might require the payment by the Purchaser or the Seller (or one of
their respective Affiliates) of more Tax than would have been required
to be paid had such position not been taken or such settlement or
agreement not been reached, (ii) affects the determination of useful
life, basis or method of depreciation, amortization or accounting of
any of the Assets or any of the properties, assets or rights of the
Purchaser or one of its Affiliates or (iii) might accelerate the time
at which any Tax must be paid by the Purchaser or the Seller, then the
Purchaser or the Seller, as the case may be, shall provide timely and
reasonable notice to the other party hereto of such position.
6.11 Agreement Not to Compete.
(a) The Parent, the Seller and Marconi IP understand that
the Purchaser and AFCNA would not have entered into this Agreement
absent the provisions of this Section 6.11 and, therefore, for a period
of five (5) years from the Closing Date, none of the Parent, the Seller
nor Marconi IP shall, and each shall cause each of its Affiliates to
not, directly or indirectly (including by owning any interest in,
managing, operating or controlling any other business enterprise):
(i) sell, provide, deliver or supply any
Restricted Product to any BellSouth Entity for use, delivery or
deployment within the Nine-State Region, or call on, solicit or attempt
to induce any BellSouth Entity to order or purchase any Restricted
Product for use, delivery or deployment within the Nine-State Region;
or
(ii) solicit, recruit or hire any person who is
employed in the Access Business as operated by the Purchaser and its
Affiliates after the Closing, provided, however, that this clause (ii)
shall not prohibit hiring any person (A) who responds to a public
advertisement which is disseminated generally and is not targeted at
such person or at other employees of the Access Business, and who
otherwise has not been solicited or recruited in violation of this
clause (ii), or (B) who is first approached, solicited or recruited
when no longer an employee of the Purchaser or any of its Affiliates
and whose resignation or other termination of employment with the
Purchaser or any of its Affiliates
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was not solicited or induced, directly or indirectly, by the Parent,
the Seller, Marconi IP or any of their Affiliates.
(b) Notwithstanding the terms of Section 6.11(a), (i)
nothing in Section 6.11(a) shall prohibit or otherwise restrict the
Parent, the Seller, Marconi IP or any of their Affiliates from carrying
on or engaging in the Other Businesses (it being understood and agreed
that the Seller and its Affiliates in conducting the Other Businesses
(A) currently sell, provide, develop, deliver and supply Other Business
Products and Other Business Services to, and may continue to sell,
provide, develop, deliver and supply Other Business Products and Other
Business Services to, Persons unaffiliated with the Parent, the Seller,
Marconi IP and their other Affiliates that, in turn, package or combine
such Other Business Products with, or use such Other Business Services
in support of, Restricted Products that are or will be sold to a
BellSouth Entity, (B) currently sell, provide, develop, deliver and
supply Other Business Products and Other Business Services to, and may
continue to sell, provide, develop, deliver and supply Other Business
Products and Other Business Services to, a BellSouth Entity that are or
will be used in connection with Restricted Products) and (C) may (1)
obtain from any Person other than the Parent or any of its Affiliates
Restricted Products (or components thereof) that do not incorporate or
use any Core Technology and (2) incorporate or combine Other Business
Products or Other Business Services into or with such Restricted
Product, and then sell the resulting product(s) to a BellSouth Entity),
(ii) in the event that any Person directly or indirectly acquires a
majority equity interest in the Parent or any of its Affiliates
(including the Seller) (each an "Acquired Entity"), then Section
6.11(a) shall apply only to each Acquired Entity and not to the
acquiring Person or any of such Person's Affiliates other than any
Acquired Entity (provided that, if the applicable Acquired Entity
elects upon written notice provided to the Purchaser on or before the
closing of such acquisition to terminate the licenses granted to it
under the Cross License Agreement effective as of the closing of such
acquisition pursuant to Section 4.1.4 of the Cross License Agreement,
then Section 6.11(a) shall apply to neither such Acquired Entity, the
acquiring Person nor any of such Person's other Affiliates unless the
acquiring Person or such Affiliate of the acquiring Person is otherwise
licensed under the Cross License Agreement) and (iii) in the event that
any Person acquires all or a portion of the business or assets of the
Parent or any of its Affiliates (including the Seller), regardless of
the form of such transaction (other than a transaction of the type
described in the previous clause (ii)), then Section 6.11(a) shall
apply to the acquiring Person or such Person's Affiliates to the extent
and only to the extent of the products, materials and services of the
acquired business or acquired assets (or Evolutions thereof) that after
the closing of the acquisition continue to be subject to the licenses
under the Cross License Agreement; provided that, in the case of each
of clause (ii) and (iii), Section 6.11(a) shall apply to the acquiring
Person if such Person is the Parent or an Affiliate of the Parent
immediately prior to such acquisition.
(c) Section 6.11(a) shall not be deemed to be breached
solely as a result of the ownership by the Parent, the Seller, Marconi
IP and their Affiliates (taken collectively) of less than an aggregate
of 5% of any class of equity of a publicly traded Person which sells,
provides, delivers or supplies Restricted Products.
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(d) If, at the time of enforcement of the covenants
contained in this Section 6.11 (collectively, the "Restrictive
Covenants"), a court holds that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area
reasonable under such circumstances shall be substituted for the stated
duration, scope or area and that the court shall be allowed and
directed to revise the restrictions contained herein to cover the
maximum period, scope and area permitted by Law. Upon advice of legal
counsel, each of the Parent, the Seller and Marconi IP has determined
and hereby acknowledges that the Restrictive Covenants are reasonable
in terms of duration, scope and area restrictions.
(e) If the Parent, the Seller, Marconi IP or any of their
respective Affiliates breaches, or threatens to commit a breach of, any
of the Restrictive Covenants, then the Purchaser shall have the rights
and remedies with respect to such breach as are set forth in Article
XII (and for such purpose, Losses shall include Competition Damages)
and Section 13.20 hereof. For purposes of this clause (e), "Competition
Damages" shall mean the right and remedy to require the Seller and the
Parent, jointly and severally, to account for and pay over to the
Purchaser any profits or other benefits derived or received by the
Person breaching such Restrictive Covenant as the result of any
transactions constituting such a breach.
6.12 Collection of Receivables. From and after the Closing, the
Purchaser shall have the right and authority to collect for its own account (at
its own cost and risk) all Accounts Receivable that are included in the Assets
and to endorse with the name of the Seller any checks or drafts received with
respect to any Accounts Receivable (noting that such endorsement is explicitly
without recourse). The Seller shall promptly deliver to the Purchaser any cash
or other property received directly or indirectly by it or any of its Affiliates
with respect to the Accounts Receivable, including any amounts received as
interest on such Accounts Receivable.
6.13 Release of Liens. Each of the Seller, Marconi IP and the
Parent shall (a) take all actions required of the Seller, Marconi IP or the
Parent (and shall cause their Affiliates to take all actions required of such
Affiliate) under the Indentures and the applicable security agreements related
thereto to cause the Liens encumbering the Assets under the Indentures and the
applicable security agreements related thereto to be terminated and released at
the Closing and (b) take all actions required of the Seller, Marconi IP or the
Parent (and shall cause their Affiliates to take all actions required of such
Affiliate) to cause any other Liens encumbering the Assets (other than Permitted
Liens) to be terminated and released at the Closing. Each of the Seller, Marconi
IP and the Parent shall use (and shall cause their Affiliates use) its
respective reasonable best efforts to cause all other actions necessary for such
Liens to be terminated and released at the Closing to be taken at or prior to
the Closing. Within one Business Day after the Closing Date, the Seller, Marconi
IP and the Parent, as applicable, shall make all filings (including UCC-3s), or
use their reasonable best efforts to cause the holders of the Liens encumbering
the Assets to make such filings, in all local, state and foreign jurisdictions
necessary to publicly notice the termination and release of such Liens. All such
releases and filings shall be in the form and substance reasonably acceptable to
the Purchaser.
6.14 Nonsolicitation. Neither the Parent, the Seller nor Marconi IP
shall, nor shall any of them authorize or permit any of their respective
Affiliates or Representatives to, directly or
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indirectly, (a) solicit, initiate or encourage (including by way of furnishing
information) any "other bid," (b) take any other action to knowingly facilitate
any inquiries or the making of any proposal that constitutes or may reasonably
be expected to lead to any "other bid," (c) engage in any discussion or
negotiations relating thereto (other than discussions solely related to
informing a third party of the existence of this provision) or (d) accept any
"other bid." The Parent, Marconi IP and the Seller shall instruct each of its
Representatives to observe the terms of this Section 6.14. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the first two sentences of this Section 6.14 by any Representative, whether or
not such Person is purporting to act on behalf of the Parent, Marconi IP or the
Seller or otherwise, shall be deemed to be a breach of this Section 6.14 by the
Parent, Marconi IP and the Seller. Subject to contractual confidentiality
restrictions in place as of the date of this Agreement, the Parent or the Seller
promptly shall advise the Purchaser orally and in writing of any "other bid"
made after the execution of this Agreement or any inquiry made after the
execution of this Agreement which could reasonably be expected to lead to any
"other bid" and the identity of the Person making any such "other bid" or
inquiry. As used in this Section 6.14, "other bid" shall mean any proposal or
offer from any Person to directly or indirectly acquire in any manner any
substantial portion of the assets of the Access Business.
6.15 Bedford Facility.
(a) If the CAMI Transaction closes prior to the Closing,
then at the Closing the Seller shall transfer the Bedford Lease to the
Purchaser, and the Purchaser shall assume the Seller's rights and
obligations thereunder.
(b) If (i) the CAMI Transaction does not close prior to
the Closing and (ii) at the time of the Closing the Bedford Sale
Agreement has not been terminated, then at the Closing the Seller shall
transfer the Seller's right to occupy the Bedford Facility under the
Jabil Rationalization Agreement to the Purchaser and the Purchaser
shall assume the Seller's obligations with respect to such occupancy
right set forth in Section 3.9(b), the fourth sentence of (c), (d) and
(e) of the Jabil Rationalization Agreement; provided, however, that
notwithstanding the foregoing, the Purchaser shall have no obligations
to any Person (including Jabil or the Seller) under such sections in
excess of the aggregate monthly rent for the Bedford Facility under the
CAMI Lease (the "Maximum Rent"). The Purchaser shall thereafter occupy
the Bedford Facility under the Seller's occupancy rights under the
Jabil Rationalization Agreement until the earlier of (A) the closing of
the CAMI Transaction (at which point the Seller shall transfer the
Bedford Lease to the Purchaser and the Purchaser shall assume the
Seller's rights and obligations thereunder) and (B) the termination of
the Bedford Sale Agreement (in which case the terms of Section 6.15(c)
shall apply).
(c) If the Bedford Sale Agreement is terminated either
before or after the Closing, then the Seller shall (or shall cause a
third-party buyer to) purchase the Bedford Facility from Jabil as soon
as reasonably practicable after such termination pursuant to the terms
of the Jabil Rationalization Agreement and lease the Bedford Facility
to the Purchaser (or a wholly-owned subsidiary of the Purchaser)
pursuant to a lease containing substantially the same terms as the
Bedford Lease (the "Seller Bedford Lease"). If such purchase is not
effected prior to the Closing, then at the Closing the Seller shall
transfer
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the Seller's right to occupy the Bedford Facility under the Jabil
Rationalization Agreement to the Purchaser (and the Purchaser shall
assume the Seller's obligations with respect to such occupancy right
set forth in Section 3.9(b), the fourth sentence of (c), (d) and (e) of
the Jabil Rationalization Agreement up to the Maximum Rent) until such
time as the Seller purchases (or causes a third-party to purchase) the
Bedford Facility from Jabil and the Seller or the third-party purchaser
leases the Bedford Facility to the Purchaser or a wholly-owned
subsidiary of the Purchaser pursuant to the Seller Bedford Lease.
(d) Notwithstanding anything to the contrary set forth in
this Section 6.15 and subject to the immediately following sentence,
the Seller shall be solely responsible for any and all repairs or
maintenance of the Bedford Facility during the period, if any, that the
Purchaser occupies the Bedford Facility under the Jabil Rationalization
Agreement pursuant to Section 6.15(b) and (c) above. In the event the
Purchaser occupies the Bedford Facility pursuant to Section 6.15(b) and
(c) above under the Jabil Rationalization Agreement and then either
enters into the CAMI Lease or the Seller Bedford Lease, the Purchaser
shall promptly reimburse the Seller for all such repair and maintenance
costs and expenses incurred by the Seller that the Purchaser would
otherwise have been liable for under the CAMI Lease assuming the
Purchaser had been a party to the CAMI Lease and leased the Bedford
Facility pursuant to such lease during the period that the Purchaser
occupied the Bedford Facility under the Jabil Rationalization
Agreement. Furthermore, during the period, if any, that the Purchaser
occupies the Bedford Facility under the Jabil Rationalization Agreement
pursuant to Section 6.15(b) and (c) above, the Purchaser agrees to use
reasonable best efforts to prevent waste to the Bedford Facility from
occurring; provided, however, the Purchaser shall not have any
affirmative obligation of inspection.
6.16 Grande. Between the date hereof and the Closing, each of the
Seller and the Purchaser shall use their reasonable best efforts to comply with
the provisions of Schedule 6.16 with respect to the System Purchase Agreement,
dated as of October 29, 2001, between Grande and the Seller, as amended by the
Letter Agreement, dated December 16, 2002, between Grande and the Seller
(collectively, the "System Purchase Agreement"), which such System Purchase
Agreement is a Shared Contract.
6.17 Audit.
(a) Without limiting the parties' other obligations under
this Article VI, the Seller agrees to prepare "special purpose
financial statements" of the Access Business, including a statement of
Assets to be acquired by the Purchaser and Assumed Obligations as of
September 30, 2003, and the related statements of operations and of
cash flows for the year then ended (the "2003 Financial Statements"),
including related footnotes, otherwise (except for the omission of
assets not acquired and liabilities not assumed) in conformity with
accounting principles generally accepted in the United States ("U.S.
GAAP"), and agrees to engage the Seller's independent public
accountants, Deloitte & Touche LLP ("Deloitte"), to commence an audit
of the 2003 Financial Statements under auditing standards generally
accepted in the United States (the "Audit"). Promptly after execution
of this Agreement, the Seller shall use its reasonable best efforts to
prepare the
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2003 Financial Statements on the basis provided in this paragraph (a)
(or, if applicable, on such other basis as may be required pursuant to
paragraph (b) below), and cause Deloitte to commence and complete the
Audit of such financial statements as soon as reasonably practicable
after the execution of the engagement letter. The Seller agrees to
cause such engagement letter to be prepared, and the Seller will be
prepared to execute such letter on its own behalf, promptly after the
date hereof. The Seller and the Purchaser will both be signatories to
Deloitte's engagement letter for the Audit. The Seller represents that
subject to the "special purpose" nature of the financial statements,
the 2003 Financial Statements will fairly present the financial
condition, results of operations and cash flows of the Access Business
as of and for the applicable period, and will be consistent with the
books and records of the Seller.
(b) The Seller will, and will use its reasonable best
efforts to cause its independent public accountants to, cooperate with
the Purchaser with respect to the preparation and presentation of a
written request by the Purchaser pursuant to Rule 3-13 of Regulation
S-X (the "Request") for appropriate relief from the staff of the
Division of Corporation Finance of the Securities and Exchange
Commission (the "SEC's Staff") in order to permit the filing and use by
the Purchaser of "special purpose financial statements" of the Access
Business as contemplated in Section 6.17(a) to fulfill its obligations
under Rule 3-05 of Regulation S-X. The Seller (and to the extent
required, the Parent and/or Marconi IP) will promptly prepare a letter
addressed to the Purchaser that contains such information as may be
reasonably required for purposes of the Request, including an
explanation of the appropriateness of the "special purpose financial
statement" basis contemplated by Section 6.17(a). The Seller will
provide the Purchaser with any information reasonably required to
respond to any comments or inquiries of the SEC's Staff received with
respect to the Request. If the SEC's Staff denies the Request or
otherwise indicates to the Purchaser that the 2003 Financial Statements
must be prepared on a different basis than that stated in the Request,
then the Purchaser will promptly notify the Seller of the basis on
which the 2003 Financials must be prepared pursuant to such
communication from the SEC's Staff, and the Seller will cause the 2003
Financial Statements to be prepared under U.S. GAAP on the basis so
notified by the Purchaser.
(c) Prior to the Closing, the Seller and the Parent
shall, and shall cause their Affiliates to, cooperate fully with
Deloitte in connection with the Audit, including providing Deloitte
with reasonable access to personnel, books and records as is requested
by Deloitte to complete the Audit. Subsequent to the Closing, each of
the Seller and the Parent shall, and shall cause their respective
Affiliates to, use reasonable best efforts to cooperate fully with the
Purchaser, Deloitte and any other auditors of the Purchaser in
connection with the Audit and the financial statements that are the
subject of the Audit, including (i) providing reasonable access to
personnel, books and records (including reasonable access to personnel,
books and records of the Other Businesses to the extent necessary) as
may be requested by Deloitte to complete the Audit, (ii) cooperating
with the reasonable requests of the Purchaser and its independent
accountants in order to permit the Purchaser and its Affiliates to
prepare and submit the Request and to respond to inquiries or other
demands of any Governmental Entity (including the Securities Exchange
Commission) related to such financial statements of the Access Business
or to
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confirm the information upon which such financial statements are based
(including for purposes of any "comfort letter" requested by the
Purchaser), and (iii) facilitating discussions between the Purchaser
and Deloitte with respect to the completed Audit to the extent
reasonably requested by the Purchaser. The Seller and the Parent
acknowledge and agree that the foregoing cooperation could involve the
provision of information concerning non-Access Business units (such as
the Other Businesses) to the extent relevant to the preparation and
audit of such financial statements of the Access Business, provided,
that, such information will be provided only to the auditors (and not
to the Purchaser except to the extent reasonably necessary for the
purposes set forth in clause (ii) above), subject to customary
confidentiality restrictions. It is acknowledged and agreed that it is
the intention of the parties to facilitate the completion of the Audit
as soon as reasonably practicable after the date hereof.
(d) As soon as reasonably practicable after issuance of
Deloitte's report on the Audit of the 2003 Financial Statements, the
Seller shall provide a copy of the 2003 Financial Statements and an
Audit report to the Purchaser. After the delivery of the 2003 Financial
Statements and Audit report by the Seller to the Purchaser, the
Purchaser shall reimburse the Seller for all fees and reasonably
documented expenses billed by Deloitte (consistent with their
engagement letter) and paid by the Seller in connection with the Audit,
within five (5) Business Days of the presentation to the Purchaser of
reasonably detailed documentation of such fees and expenses.
Notwithstanding the foregoing, (i) if the Purchaser terminates this
Agreement pursuant to Section 10.1(c)(i), then the Seller shall be
responsible for all fees and expenses of Deloitte in connection with
the Audit and shall promptly reimburse the Purchaser for any and all
fees and expenses paid by the Purchaser to Deloitte directly or to the
Seller pursuant to the reimbursement provisions of the immediately
preceding sentence and (ii) if this Agreement is terminated other than
(A) by the Purchaser pursuant to Section 10.1(c)(i) or (B) by the
Seller pursuant to Section 10.1(d)(i), then the Purchaser and the
Seller shall share equally all fees and expenses of Deloitte in
connection with the Audit and the Seller shall promptly reimburse the
Purchaser for one-half of any and all fees and expenses paid by the
Purchaser to Deloitte directly or to the Seller pursuant to the
reimbursement provisions of the immediately preceding sentence.
(e) Until the Audit report has been delivered to the
Purchaser, the Seller shall use its reasonable best efforts to arrange
a weekly conference call with the Purchaser at a mutually agreeable
time at which representatives of the Seller will inform the Purchaser
of the timing and general status of the Audit. The Seller represents
that such information will accurately summarize the timing and status
of the Audit in all material respects.
(f) To the extent required by the Purchaser under the
Securities Exchange Act of 1934, as amended (together with the rules
and regulations promulgated thereunder, the "Exchange Act"), with
respect to each quarterly financial reporting period ending prior to
the Closing Date, commencing with the calendar quarter ending December
31, 2003, the Seller will prepare financial statements on a basis
consistent with the 2003 Financial Statements per Section 6.17(a) as of
and for the applicable quarterly period ended (the "Interim Financial
Statements"). The Seller agrees to engage Deloitte to perform an audit
of the Interim Financial Statements under auditing standards generally
accepted in the
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United States (the "Interim Audit"). The Seller shall use its
reasonable best efforts to prepare the Interim Financial Statements and
cause Deloitte to commence and complete the Interim Audit as soon as
reasonably practicable upon determination by the Purchaser that such
financial statements are required by the Purchaser and to furnish to
the Purchaser the Interim Financial Statements at least five (5) days
prior to the date that the Purchaser is required to file its report
with the SEC under the Exchange Act. Subject to the "special purpose"
nature of the financial statements, the Seller represents such Interim
Financial Statements will fairly present the financial condition,
results of operations and cash flows of the Access Business as of and
for the applicable period, and will be consistent with the books and
records of the Seller, subject only to the absence of footnotes. The
provisions of paragraphs (c), (d) and (e) of this Section 6.17 will
apply to the parties' obligations replacing "the Audit" with "the
Interim Audit" as applicable and replacing "the 2003 Financial
Statements" with "the Interim Financial Statements" as applicable.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER AND AFCNA
The obligations of the Purchaser and AFCNA to consummate the
Acquisition and the other transactions contemplated hereby are subject to the
satisfaction or written waiver by the Purchaser of the following conditions
precedent on or before the Closing Date:
7.1 Warranties True.
(a) Other than with respect to the representations and
warranties contained in Section 4.26, the representations and
warranties of the Parent, the Seller and Marconi IP contained herein
shall have been accurate, true and correct on and as of the date
hereof, and, except to the extent that any such representation or
warranty is made solely as of the date hereof or as of another date
earlier than the Closing Date, shall also be accurate, true and correct
on and as of the Closing Date as though made on the Closing Date
(without giving effect to any limitation as to "materiality," "material
adverse effect," or similar qualifying language set forth therein),
except to the extent that any breach (in the aggregate with all other
such breaches) does not constitute a Business Material Adverse Effect
or a Seller Material Adverse Effect.
(b) The representations and warranties of the Seller and
Marconi IP contained in Section 4.26 shall have been accurate, true and
correct on and as of the date hereof, and shall also be accurate, true
and correct on and as of the Closing Date as though made on the Closing
Date.
7.2 Compliance with Agreements and Covenants. Each of the Parent,
the Seller and Marconi IP shall have in all material respects performed and
complied with all of its covenants and obligations contained in this Agreement
and in the Transition Services Agreement to be performed and complied with by it
on or prior to the Closing Date.
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7.3 Certificate of Compliance. The Parent, the Seller and Marconi
IP shall have delivered to the Purchaser a certificate of the Parent, the Seller
and Marconi IP dated as of the Closing Date, executed by an authorized officer
of each, certifying as to compliance with Sections 7.1 and 7.2.
7.4 Xxxx-Xxxxx-Xxxxxx. Any applicable waiting period under the HSR
Act shall have expired or been earlier terminated without action by the
Antitrust Division or the FTC to prevent consummation of the transactions
contemplated by this Agreement.
7.5 No Injunctions or Other Legal Restraints. No applicable Law,
injunction or other legal restraint or prohibition enacted, entered,
promulgated, enforced or issued by any Governmental Authority preventing the
consummation of the Acquisition shall be in effect.
7.6 Absence of Proceedings. There shall not be any Proceeding
pending or threatened in writing by any Governmental Authority or any other
Person that has a reasonable possibility of success (i) challenging or seeking
to restrain or prohibit the Acquisition or any of the other transactions
contemplated hereby or by the Related Agreements or the enforceability of any
material covenant (including Section 6.11 hereof) contained herein or in any
Related Agreement, which Proceeding is based on facts or circumstances that, if
true, would not involve a breach of any representation or warranty of the
Purchaser hereunder, (ii) seeking to obtain from the Purchaser or any of its
Affiliates in connection with the Acquisition any material damages, which
Proceeding is based on facts or circumstances that, if true, would not involve a
breach of any representation or warranty of the Purchaser hereunder, or (iii)
imposing or seeking to impose (including by requiring the Purchaser to take any
action or to agree to take or not to take any action) a change in or restriction
on the business, assets or operations of the Access Business, the Purchaser or
any Affiliate of the Purchaser or requiring or seeking to require the Purchaser
or any of its Affiliates to take any action or agree to take or not to take any
action, including the disposition (whether by way of sale, lease, license or
otherwise), before or after the Closing, of all or any portion of the business,
products or assets (including Intellectual Property assets) of the Access
Business, the Purchaser or any Affiliate of the Purchaser, if such change,
restriction, requirement or disposition would reasonably be expected to have a
material adverse effect on the benefits (viewed as a whole) reasonably expected
to be derived by the Purchaser from the Acquisition.
7.7 Certificates. The Parent, the Seller and Marconi IP shall have
delivered to the Purchaser a duly executed certificate from an authorized
officer of each certifying to their respective (a) organizational documents, (b)
resolutions or minutes of the boards of directors and, with respect to the
Seller and Marconi IP, shareholders pertaining to the authorization of this
Agreement and the Related Agreements and the transactions contemplated hereby
and thereby and (c) incumbency of their executing officers.
7.8 FIRPTA Certificate. The Seller shall have delivered to the
Purchaser a duly executed certificate from an authorized officer certifying,
under penalty of perjury, that the Seller and Marconi IP are not foreign persons
within the meaning of section 1445 of the Code in substantially the form
attached hereto as Exhibit M (the "FIRPTA Certificate").
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7.9 Consents. The Seller shall have delivered to the Purchaser
written consents from the third parties to the Contracts listed on Schedule 7.9,
in form and substance reasonably acceptable to the Purchaser, necessary to
transfer such listed Contracts to Purchaser at the Closing in the manner
provided on Schedule 7.9.
7.10 Material Adverse Effect. There shall not have occurred any
Business Material Adverse Effect during the period from the date hereof to the
Closing.
7.11 Other Documents. Each of the Parent, the Seller, Marconi IP
and the Marconi Entities shall have furnished to the Purchaser all agreements
and documents required to be delivered by such parties pursuant to Section 9.2,
and each such agreement shall be in full force and effect.
7.12 Release of Liens. The Liens on the Assets, other than
Permitted Liens, shall have been terminated and released and the Release
Agreement shall have been executed by the parties thereto and delivered to the
Purchaser.
7.13 Opinion of Counsel. The Purchaser shall have received the
legal opinions of (a) Mayer, Brown, Xxxx & Maw LLP with respect to certain U.S.
legal issues in substantially the form attached hereto as Exhibit N, (b) Mayer,
Brown, Xxxx & Maw LLP with respect to certain U.K. legal issues in substantially
the form attached hereto as Exhibit O, (c) Mayer, Brown, Xxxx & Maw LLP, or
other outside legal counsel reasonably acceptable to the Purchaser, acting as
special counsel to the Marconi Entities under the Cross License Agreement
substantially in the same form and content as the legal opinions referred to in
clause (a) or clause (b) above, as applicable, and (d) Xxxxx & Xxxxx with
respect to certain legal issues related to the Indentures in substantially the
form attached hereto as Exhibit P.
7.14 Solvency Opinion. The Purchaser shall have received the
opinion of Valuation Research Corporation, or another nationally recognized,
independent valuation firm reasonably acceptable to the Purchaser and the
Seller, dated as of the Closing Date, in the form attached hereto as Exhibit Q.
ARTICLE VIII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLER, MARCONI IP AND
THE PARENT
The obligations of the Parent, the Seller and Marconi IP to consummate
the Acquisition and the other transactions contemplated hereby are subject to
the satisfaction or written waiver by the Seller of the following conditions
precedent on or before the Closing Date:
8.1 Warranties True. The representations and warranties of the
Purchaser and AFCNA contained herein shall have been accurate, true and correct
on and as of the date hereof, and, except to the extent that any such
representation or warranty is made solely as of the date hereof or as of another
date earlier than the Closing Date, shall also be accurate, true and correct on
and as of the Closing Date as though made on the Closing Date (without giving
effect to any limitation as to "materiality," "material adverse effect," or
similar qualifying language set forth therein), except to the extent that any
breach (in the aggregate with all other such breaches)
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would not reasonably be expected to have a material adverse effect on the
Purchaser and its Subsidiaries taken as a whole or does not constitute a
Purchaser Material Adverse Effect.
8.2 Compliance with Agreements and Covenants. The Purchaser and
AFCNA shall have in all material respects performed and complied with all of its
respective covenants and obligations contained in this Agreement and the
Transition Services Agreement to be performed and complied with by it on or
prior to the Closing Date.
8.3 Certificate of Compliance. The Purchaser and AFCNA shall have
delivered to the Seller a certificate of the Purchaser and AFCNA dated as of the
Closing Date, executed by an authorized officer of each, certifying as to
compliance with Sections 8.1 and 8.2.
8.4 Xxxx-Xxxxx-Xxxxxx. Any applicable waiting period under the HSR
Act shall have expired or been earlier terminated without action by the
Antitrust Division or the FTC to prevent the consummation of the transactions
contemplated by this Agreement.
8.5 No Injunctions or Other Legal Restraints. No applicable Law,
injunction or other legal restraint or prohibition enacted, entered,
promulgated, enforced or issued by any Governmental Authority preventing the
consummation of the Acquisition shall be in effect.
8.6 Absence of Proceedings. There shall not be any Proceeding
pending or threatened in writing by any Governmental Authority or any other
Person that has a reasonable possibility of success challenging or seeking to
restrain or prohibit the Acquisition or any of the other transactions
contemplated hereby or by the Related Agreements, which Proceeding is based on
facts or circumstances that, if true, would not involve a breach of any
representation or warranty of the Parent, the Seller or Marconi IP hereunder.
8.7 Other Documents. Each of the Purchaser and AFCNA shall have
furnished to the Seller all agreements and documents required to be delivered by
the Purchaser and AFCNA pursuant to Section 9.3, and each such agreement shall
be in full force and effect.
8.8 Purchase Price. The Seller, for itself and as agent for
Marconi IP, shall have received from the Purchaser the Purchase Price pursuant
to Section 3.1.
8.9 Certificates. The Purchaser and AFCNA shall have delivered to
the Seller a duly executed certificate from an authorized officer of each
certifying to their respective (a) organizational documents, (b) resolutions or
minutes of their respective boards of directors and, if applicable, shareholders
pertaining to the authorization of this Agreement and its Related Agreements and
the transactions contemplated hereby and thereby and (c) incumbency of their
executing officers.
8.10 Opinion of Counsel. The Seller shall have received the legal
opinion of Pillsbury Winthrop LLP in substantially the form attached hereto as
Exhibit R.
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ARTICLE IX
CLOSING
9.1 Closing. Subject to Articles VII and VIII, the Closing shall
take place at the offices of Pillsbury Winthrop LLP, 00 Xxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, at 10:00 a.m. (pacific standard time) on the third
Business Day after all the conditions set forth in Articles VII and VIII have
been satisfied (or, to the extent permitted, waived by the parties entitled to
the benefits thereof), or at such other place, time and date as shall be agreed
between the Seller and the Purchaser. The Closing, and all transactions to occur
at the Closing, shall be deemed to have taken place at, and shall be effective
as of, 12:01 a.m. (central standard time) on the Closing Date.
9.2 Deliveries by the Seller. At the Closing the Seller or Marconi
IP, as applicable, shall deliver to the Purchaser the following:
(a) the Assignment and Assumption Agreement, duly
executed by the Seller;
(b) the Xxxx of Sale, duly executed by the Seller;
(c) subject to Section 6.16, the Supply Agreements, duly
executed by the Seller;
(d) the Transition Services Agreement, duly executed by
the Seller;
(e) the Cross License Agreement, duly executed by the
Marconi Entities;
(f) the Sublicenses, duly executed by the Seller;
(g) the Patent Assignment, duly executed by Marconi IP;
(h) the Copyright Assignment, duly executed by the
Seller;
(i) the Trademark Assignment, duly executed by the
Seller;
(j) a cross receipt verifying the receipt by the Seller
of the Purchase Price; and
(k) the FIRPTA Certificate.
9.3 Deliveries by the Purchaser. At the Closing the Purchaser or
AFCNA, as applicable, shall deliver to the Seller the following:
(a) the Assignment and Assumption Agreement, duly
executed by the Purchaser;
(b) the Xxxx of Sale, duly executed by the Purchaser and
AFCNA;
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(c) subject to Section 6.16, the Supply Agreements, duly
executed by the Purchaser or, at the option of the Purchaser, an
Affiliate of the Purchaser (it being understood that if an Affiliate of
the Purchaser is the primary party to the Supply Agreements, the
Purchaser nonetheless shall remain responsible for the performance of
all of such Affiliate's obligations thereunder);
(d) the Transition Services Agreement, duly executed by
the Purchaser or, at the option of the Purchaser, an Affiliate of the
Purchaser (it being understood that if an Affiliate of the Purchaser is
the primary party to the Transitions Services Agreement, the Purchaser
nonetheless shall remain responsible for the performance of all of such
Affiliate's obligations thereunder);
(e) the Cross License Agreement, duly executed by the
Purchaser or, at the option of the Purchaser, an Affiliate of the
Purchaser (it being understood that if an Affiliate of the Purchaser is
the primary party to the Cross License Agreement, the Purchaser
nonetheless shall remain responsible for the performance of all of such
Affiliate's obligations thereunder);
(f) the Sublicenses, duly executed by the Purchaser or,
at the option of the Purchaser, an Affiliate of the Purchaser (it being
understood that if an Affiliate of the Purchaser is the primary party
to the Sublicenses, the Purchaser nonetheless shall remain responsible
for the performance of all of such Affiliate's obligations thereunder);
(g) the Purchase Price in accordance with Sections 3.1
and 13.4; and
(h) tax resale certificates with respect to the Inventory
duly executed by the Purchaser or AFCNA, as applicable.
ARTICLE X
TERMINATION
10.1 Termination. This Agreement may be terminated, and the
transactions contemplated herein may be abandoned, at any time on or prior to
the Closing Date:
(a) with the mutual written consent of the Seller and the
Purchaser;
(b) by the Seller or the Purchaser, if the Closing shall
not have taken place on or before July 31, 2004 (the "Termination
Date"); provided, that, the right to terminate this Agreement under
this Section 10.1(b) shall not be available to (i) the Seller if the
failure of the Seller or any of its Affiliates to fulfill any of their
obligations under this Agreement caused the failure of the Closing to
occur on or before such date or (ii) the Purchaser if the failure of
the Purchaser or any of its Affiliates to fulfill any of their
obligations under this Agreement caused the failure of the Closing to
occur on or before such date;
(c) by the Purchaser, (i) if there shall have been a
breach of any representation or warranty of the Seller, Marconi IP or
the Parent hereunder and the breach of such
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representation or warranty constitutes a Business Material Adverse
Effect or a Seller Material Adverse Effect, or if there shall have been
a material breach of any covenant or obligation of the Seller, Marconi
IP or the Parent hereunder and, if such breach is curable, such breach
shall not have been remedied within thirty (30) days after receipt by
the Seller of a notice in writing from the Purchaser specifying the
breach and requesting such breach be remedied or (ii) if any of the
other conditions set forth in Article VII shall have become incapable
of fulfillment on or prior to the Termination Date and shall not have
been waived by the Purchaser (unless the failure of such condition is
the result of a material breach of this Agreement by the Purchaser or
AFCNA); or
(d) by the Seller, (i) if there shall have been a
material breach of any covenant, obligation, representation or warranty
of the Purchaser or AFCNA hereunder, and, if such breach is curable,
such breach shall not have been remedied within thirty (30) days after
receipt by the Purchaser of notice in writing from the Seller
specifying the breach and requesting such breach be remedied or (ii) if
any of the other conditions set forth in Article VIII shall have become
incapable of fulfillment on or prior to the Termination Date and shall
not have been waived by the Seller (unless the failure of such
condition is the result of a material breach of this Agreement by the
Seller, the Parent or Marconi IP).
In the event of termination by the Seller or the Purchaser pursuant to
this Section 10.1 (other than Section 10.1(a)), written notice thereof shall be
given to the other parties hereto.
10.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 10.1, all obligations of the parties hereunder shall
terminate, except for the obligations set forth in Sections 6.5 (Brokers), 6.9
(Confidentiality), 13.1 (Expenses) and 13.8 (Publicity), each of which shall
survive the termination of this Agreement (it being understood and agreed,
however, that (a) no such termination shall relieve any party from liability for
any prior breach of this Agreement and (b) for purposes of determining such
liability, the terms of Article XII (other than Section 12.1 and Section 12.8)
shall survive the termination of this Agreement).
ARTICLE XI
EMPLOYEES AND EMPLOYEE BENEFITS
11.1 Offers of Employment. The Purchaser shall offer each Current
Access Employee employment with the Purchaser effective as of the Closing Date.
The Purchaser's offers of employment shall be for employment on substantially
the same terms and conditions and at the same level of cash compensation as
applied to such employees immediately prior to the Closing Date as employees of
the Seller and its Affiliates (excluding any amounts payable in connection with
the transactions contemplated by this Agreement) except as otherwise
specifically provided by this Article XI with respect to employment terms and
conditions other than cash compensation, during their continued employment with
the Purchaser until such terms and conditions or cash compensation are changed
by the Purchaser in the ordinary course of business. Each such individual who
accepts the Purchaser's offer of employment shall become an employee of the
Purchaser as of the Closing and shall be referred to herein as a "Transferred
Employee".
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11.2 Employee Benefits - Generally. Subject to the provisions of
this Article XI, as of the Closing Date, the Purchaser shall provide or cause to
be provided to Transferred Employees employee benefits which are, in the
aggregate, substantially similar to those provided to similarly situated
employees of the Purchaser and its Affiliates. Each of the Parent and the Seller
agree that neither the Purchaser nor any of its Affiliates shall assume
sponsorship or have any responsibility or Liability under any employee benefit
plan, program, policy or arrangement maintained by the Seller or any of its
Affiliates, and the Purchaser agrees that none of Parent, the Seller or any of
their Affiliates shall have any responsibility or Liability under any employee
benefit plan, program, policy or arrangement maintained by the Purchaser or any
of its Affiliates (collectively, the "Purchaser Benefit Plans"). Notwithstanding
the foregoing, the Purchaser, the Seller and their respective Affiliates shall
have the obligations and responsibilities as otherwise specifically provided in
this Article XI.
11.3 Service Credit. The Purchaser shall cause each Purchaser
Benefit Plan to provide to the Transferred Employees credit for their service
with the Seller and its Affiliates and their predecessors for all purposes under
the Purchaser Benefit Plans provided, that, the crediting of service with the
Seller, its Affiliates and their predecessors under the Purchaser Benefit Plans
will occur as set forth below:
(a) Purchaser 401(k) Plan. For purposes of the Purchaser
401(k) Plan, service shall be credited to each Transferred Employee for
all purposes from the hire date used by the Marconi 401(k) Plan to
determine service for the purposes of vesting and credit for a year of
service will be provided for the calendar year in which such hire date
occurred and each calendar year commencing after such hire date and
before the Closing Date (provided that this provision shall not require
double-counting of service otherwise credited under the Purchaser
401(k) Plan).
(b) Purchaser Sabbatical Plan. For purposes of the
Purchaser's Sabbatical Plan, each Transferred Employee shall be given
credit for two months of service for each year from the hire date used
by the Marconi 401(k) Plan to determine service for purposes of
vesting.
(c) Purchase Stock Option Plans. No credit will be given
for service with the Seller, its Affiliates or their predecessors under
the Purchaser's stock option plans.
(d) All Other Purchaser Plans. For purposes of the
Purchaser Benefit Plans other than as described in Section 11.3(a), (b)
or (c), each Transferred Employee shall be given credit for service in
accordance with the rules of the applicable Purchaser Benefit Plan by
deeming service to have commenced with the Purchaser from the hire date
used by the Marconi 401(k) Plan to determine service for the purposes
of vesting.
Within 30 days of the date hereof the Seller shall provide the
Purchaser with a list setting forth the hire date used by the Marconi 401(k)
Plan to determine service for vesting purposes for all Current Access Employees
determined as of the date this Agreement was executed; provided, however, that
for purposes of determining this hire date, any individual for whom service to
Jabil was required to be credited under paragraph 2 of the Twelfth Amendment of
the Marconi USA
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Employees' Retirement Plan (the "Marconi Retirement Plan") shall be deemed
service with the Seller.
11.4 Welfare Benefits. Each Transferred Employee shall be entitled
to coverage effective as of the Closing Date under all of the medical, dental,
vision, prescription drug, life insurance plans or other welfare benefit plans
(the "Purchaser's Welfare Plans") maintained by the Purchaser for its employees,
which medical, dental, vision and prescription drug coverage, through December
31, 2004, shall be available at the same employee contribution rates as applied
under the corresponding welfare benefit plans of the Seller (the "Seller's
Welfare Plans") as of the date of this Agreement. Any waiting periods or
pre-existing condition limitations in the Purchaser's Welfare benefit Plans
shall be waived unless coverage would have been denied on a similar basis under
the Seller's Welfare Plans and deductibles shall be waived for claims incurred
prior to April 1, 2004. The Seller will retain all liabilities for payment of
claims under the Seller's Welfare Plans and none of the Purchaser nor any of its
Affiliates shall have any Liability under or with respect to the Seller's
Welfare Plans. The Seller and its Affiliates shall be responsible for providing
continuing group health coverage, which satisfies the requirements of COBRA
applicable to the Seller and any applicable state laws which require
continuation of health coverage, to all Access Employees (and their eligible
dependents) who incur a qualifying event on or prior to the Closing Date and to
any person who is an M&A qualified beneficiary within the meaning of Treasury
Regulations issued under Section 4980B of the Code. None of the Seller or any of
its Affiliates shall have any Liability under or with respect to the Purchaser's
Benefit Plans, including the Purchaser's Welfare Plans.
11.5 Paid Time Off. With respect to any accrued but unused paid
time off ("PTO") to which any Transferred Employee is entitled as of the Closing
Date pursuant to the PTO policy applicable to such Transferred Employee
immediately prior to the Closing Date (the "PTO Policy"), the Purchaser shall
assume the liability for accrued PTO of Transferred Employees in the amounts set
forth in the memorandum furnished to the Purchaser pursuant to Section 4.18(a)
(which amounts shall be updated as of the Closing Date based on accruals from
and after December 6, 2003 (the date as of which accruals were provided in the
memorandum furnished to the Purchaser pursuant to Section 4.18(a)) consistent
with the PTO Policy in effect as of the date hereof) and shall permit such
Transferred Employees to use such accrued PTO or pay in cash to each such
Transferred Employee an amount equal to the wages relating to any such PTO which
the Purchaser does not permit the Transferred Employee to use. Transferred
Employees shall be entitled to accrue future paid time off under the Purchaser's
vacation policy based on service credited pursuant to Section 11.3 and service
with the Purchaser and its Affiliates after the Closing. Further, effective as
of the Closing Date, the Purchaser shall credit each Transferred Employee with 5
sick days.
11.6 Disability. If a Transferred Employee is on short-term
disability leave as of the Closing Date, the Purchaser shall provide such
Transferred Employee with short-term disability benefits in accordance with the
short-term disability policy of the Seller and its Affiliates and the Seller and
its Affiliates shall cease to have any liability for such payments and benefits
after the Closing. The Purchaser shall provide all other Transferred Employees
with short-term disability benefits in accordance with the terms and conditions
of the short-term disability plans of the Purchaser. The Seller shall retain all
liabilities under the long-term disability plan of the Seller, including
liabilities for Transferred Employees who are eligible upon the satisfaction of
any
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waiting or elimination period to receive benefits under such plan as of the
Closing; provided, however, that if a Transferred Employee returns to active
employment with the Purchaser under conditions that would require a new waiting
or elimination period under the Seller's long-term disability plan, any future
long-term disability benefits shall be the responsibility of the Purchaser and
none of the Seller, its Affiliates or the Seller's long-term disability plan
shall have any responsibility or liability therefor.
11.7 Bonus. The Purchaser agrees to pay each Transferred Employee
the amount of the bonus that the Purchaser determines would otherwise have been
paid to such Transferred Employee under the terms of the Marconi AIP for service
through March 31, 2004.
11.8 Retirement Plans. The Seller shall retain all liabilities and
obligations of the Seller and its Affiliates under its "employee pension benefit
plans" (as defined in Section 3(2) of ERISA) (the "Seller's Pension Plans") and
all assets thereunder and none of the Seller or any of its Affiliates shall have
any Liability under or with respect to any "employee pension benefit plans" of
the Purchaser or its Affiliates. The Seller shall cause all Transferred
Employees to become 100% vested in their accrued benefits under the Marconi USA
Wealth Accumulation Plan (the "Marconi 401(k) Plan") and the Marconi Retirement
Plan, and the Purchaser and its Affiliates shall not have any responsibility
with respect to the Seller's Pension Plans. The Purchaser shall cooperate with
the Seller to provide such current information regarding Transferred Employees
as permitted by law on an ongoing basis as may be necessary to facilitate
payment of pension benefits from the Seller's Pension Plans. To the extent
necessary, the Seller shall cause the sponsor of the "Marconi 401(k) Plan" to
amend the Marconi 401(k) Plan to permit, after the Closing Date to the extent
permitted under the requirements of the Code applicable to qualified retirement
plans, Transferred Employees to elect to receive a distribution of benefits
under the Marconi 401(k) Plan and to permit Transferred Employees to elect to
roll over such amounts (including any outstanding loans) to a defined
contribution plan of the Purchaser ("Purchaser 401(k) Plan") satisfying the
requirements of Section 401(a) of the Code and including a cash or deferred
arrangement satisfying the requirements of Section 401(k) of the Code. The
Purchaser shall cause the sponsor of the Purchaser 401(k) Plan to amend the
Purchaser 401(k) Plan to the extent necessary and to the maximum extent
permitted by applicable law to accept rollover contributions of all amounts
(including promissory notes evidencing outstanding loans) distributed to or on
behalf of Transferred Employees from the Marconi 401(k) Plan.
11.9 Workers and Unemployment Compensation. The Seller shall retain
liability for all workers compensation and unemployment events for Access
Employees occurring prior to the Closing Date. The Purchaser shall be
responsible for all workers compensation and unemployment events for Transferred
Employees occurring after the Closing Date.
11.10 Wages. The Purchaser shall assume liability for all salary,
wages and bonuses earned by Transferred Employees after the Closing Date. The
Seller shall retain all other liability for salary, wages and bonuses earned by
and payable to Access Employees for periods prior to and including the Closing
Date (other than bonuses under the Marconi AIP which are payable by Purchaser in
accordance with Section 11.7).
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11.11 Severance. The Purchaser agrees to provide to any Transferred
Employee whose employment with the Purchaser and its Affiliates is terminated on
or before the later of December 31, 2004 or nine (9) months after the Closing
Date, severance benefits that are at least equal to the benefits that would have
been provided to such Transferred Employee under the Seller's severance policies
as in effect on the date of this Agreement. Further, the Purchaser shall assume
and satisfy all obligations under the thirteen agreements set forth on Schedule
4.17 that are listed under the heading of "Special Severance Agreements." The
Seller agrees that the Purchaser shall not be responsible for any other
severance obligations of the Seller or its Affiliates to any Access Employees,
whether or not they are Transferred Employees.
11.12 Cooperation. The Seller shall cooperate with the Purchaser in
its efforts to screen and hire Transferred Employees but only to the extent of
providing non confidential information on Access Employees and in publishing and
disseminating communications of the Purchaser regarding the employment of
Transferred Employees.
11.13 Employment Claims. Except as otherwise stated in this Article
XI, the Seller shall retain all Liability for all employment related claims of
Access Employees, including claims of violation of state and federal Laws
regarding discrimination, payment of wages, and WARN, and claims of breach of
employment contract and wrongful discharge, arising or relating to the period
prior to the Closing. The Purchaser shall be liable for all employment related
claims made by Transferred Employees, including claims of violation of state and
federal Laws regarding discrimination, payment of wages, and WARN, and claims of
breach of employment contract and wrongful discharge, arising and relating to
the period after the Closing. For the avoidance of doubt, it is agreed that (a)
the Seller is liable for any WARN notices or payments in lieu of notice for
"mass layoffs" and "plant closings" (as those terms are defined in the WARN Act)
occurring prior to the Closing Date and (b) the Purchaser is liable for any WARN
notices or payments in lieu of notice for "mass layoffs" and "plant closings"
occurring after the Closing Date, including but not limited to any liability for
those persons suffering an employment loss prior to the Closing Date but to whom
notice was not required to be given until the occurrence of events after the
Closing Date.
ARTICLE XII
INDEMNIFICATION
12.1 Survival. The representations and warranties of the parties
hereto contained herein and in the Conveyance Agreements shall survive the
Closing for a period of eighteen (18) months after the Closing, except that (a)
the representations and warranties set forth in (i) Sections 4.8, 4.13, 4.17,
4.18, 4.20 and 4.21 of this Agreement, (ii) Section 5 of the Cross License
Agreement and (iii) Section 3 of either Sublicense Agreement shall survive the
Closing for a period of four (4) years after the Closing, (b) the Tax Warranties
shall survive until the Tax Statute of Limitations Date, (c) the Title and
Authorization Warranties shall survive forever, (d) without prejudice to the
obligation of the Seller, Marconi IP and the Parent to indemnify the Purchaser
Indemnified Parties with respect to Retained Obligations, the representations
and warranties in Section 4.5 shall not survive the Closing and (e) the
representations and warranties in Section 4.24(a) and (c) shall not survive the
Closing. All representations and warranties of the Seller, Marconi IP and the
Parent set forth in this Agreement and in any document delivered
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pursuant to this Agreement that is not a Commercial Agreement shall be deemed to
have been made again by such parties on and as of the Closing Date except to the
extent such representations and warranties are expressly made as of an earlier
date. If the Closing occurs, neither the Purchaser, AFCNA, the Seller, Marconi
IP nor the Parent shall have any liability with respect to claims first asserted
in connection with any representation or warranty after the expiration of the
survival period specified therefor in this Section 12.1.
12.2 Indemnification by the Parent, the Seller and Marconi IP.
Subject to Section 12.4, the Parent, the Seller and Marconi IP, jointly and
severally, agree to indemnify the Purchaser and its Affiliates and each of their
respective officers, directors, employees, stockholders, agents and
representatives (each, a "Purchaser Indemnified Party") against, and agree to
hold the Purchaser Indemnified Parties harmless from, any and all Losses
incurred or suffered by the Purchaser Indemnified Parties to the extent arising
out of or resulting from any of the following:
(a) any breach of or any inaccuracy in any representation
or warranty made by the Parent, Marconi IP or the Seller in this
Agreement, any Conveyance Agreement or any other document delivered by
the Seller, Marconi IP or the Parent hereunder at the Closing that is
not a Commercial Agreement, provided, that, if the Closing occurs, none
of the Parent, the Seller or Marconi IP shall have any liability under
this Section 12.2(a) for any breach of or inaccuracy in any
representation or warranty unless a claim for indemnification therefor
is asserted in accordance with Section 12.6 or Section 12.7 (as
applicable), in each case before the expiration of the survival period
applicable to such representation or warranty under Section 12.1; and
provided, further, that for purposes of Purchaser Indemnified Parties'
rights to indemnification pursuant to this Section 12.2(a), the
representations and warranties of the Parent, Marconi IP and the Seller
(other than the representations and warranties contained in (i) the
third sentence of Section 4.4, (ii) the first sentence of Section 4.6,
(iii) Section 4.11, or (iv) Section 4.14(a)), shall not be qualified by
any references therein to materiality (including references to
"Business Material Adverse Effect" or "Seller Material Adverse Effect,"
and whether or not any breach results or may result in a Business
Material Adverse Effect or Seller Material Adverse Effect) as if such
qualifications were deleted from such representation or warranty;
(b) any breach of or failure by the Parent, the Seller or
Marconi IP to perform any covenant or obligation of the Parent, the
Seller or Marconi IP set out in this Agreement, any Conveyance
Agreement or any other document delivered by the Parent, the Seller or
Marconi IP hereunder at the Closing that is not a Commercial Agreement;
(c) the Excluded Assets or the Retained Obligations,
other than Retained Obligations to the extent arising from the effect
of a change in Law occurring after the Closing based on a fact,
condition or circumstance existing prior to the Closing (for this
purpose, "Law" shall not include Judgments to which any of the Seller,
the Parent or Marconi IP is a party or by which the Access Business or
the Assets are bound);
(d) the failure by the Seller, Marconi IP or the Parent
to comply with statutory provisions relating to bulk sales and
transfers in connection with the transactions contemplated hereby;
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(e) one-half of the aggregate amount of product costs
incurred by the Purchaser or its Affiliates with respect to Liabilities
assumed pursuant to Section 2.5(c) (including product costs incurred
with respect to Special Warranty Matters) in excess of $10,000,000 (it
being understood and agreed that for purposes of this clause (e) the
term "product costs" (i) shall, subject to clause (iii), mean all
out-of-pocket costs and expenses of any kind (including costs and
expenses for materials and replacement parts or products) incurred by
the Purchaser or its Affiliates as a result of Section 2.5(c), (ii) for
purposes of clarification, shall not include any overhead costs or
overhead expenses of the Purchaser or any of its Affiliates, including
costs and expenses associated with salary or other compensation or
benefits of any employee of the Purchaser or its Affiliates, or any
other cost or expense not referred to in clause (i) above and (iii)
shall not include any amounts to the extent arising from the
Purchaser's or any of its Affiliates' treatment of the customer making
a claim with respect to a Liability assumed by the Purchaser pursuant
to Section 2.5(c) in a manner more favorable to the customer than the
Purchaser's customary treatment of its customers for similar claims
related to the Purchaser's other comparable products or services);
(f) any Personnel that is not a party to an Employee IP
Agreement (or any assigns or successors-in-interest of such Personnel)
having or claiming to have any Intellectual Property rights in any
Transferred Technology or any Transferred Patents developed or
conceived by such Personnel under circumstances in which, under
applicable Law, ownership of the Intellectual Property rights in such
Transferred Technology or Transferred Patents would vest on creation in
such Personnel in the absence of an Employee IP Agreement; provided
that the Purchaser or its Affiliates must notify the Seller of any
claims arising or resulting from the above in accordance with Section
12.6 or Section 12.7 of this Agreement, as applicable, on or prior to
the fourth anniversary of the Closing Date; or
(g) claims (whether as a part of a Proceeding or
otherwise) by the Persons identified at Items 4 or 5 of Schedule
4.13(e)(i) (or any Affiliates thereof or assigns or successors in
interest thereto) to the extent arising out of infringement of any
Patents identified in any correspondence described in such Items by a
Current Access Product; provided that the Purchaser or its Affiliates
must notify the Seller of any claims arising or resulting from the
above in accordance with Section 12.6 or Section 12.7 of this
Agreement, as applicable, on or prior to the fourth anniversary of the
Closing Date.
The Purchaser Indemnified Parties' right to indemnification under this
Article XII shall not be affected by any investigation (including any
environmental or intellectual property investigation or assessment) conducted
with respect to, or any knowledge acquired (or capable of being acquired) by,
the Purchaser or AFCNA at any time, whether before or after the execution and
delivery of this Agreement or the Closing Date, with respect to the accuracy or
inaccuracy of or compliance with any representation, warranty, covenant or
obligation.
12.3 Indemnification by the Purchaser and AFCNA. Subject to Section
12.4, the Purchaser and AFCNA, jointly and severally, agree to indemnify the
Seller and its Affiliates and each of their respective officers, directors,
employees, stockholders, agents and representatives (each, a "Seller Indemnified
Party") against, and agree to hold the Seller Indemnified Parties
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harmless from, any and all Losses incurred or suffered by the Seller Indemnified
Parties to the extent arising out of or resulting from any of the following:
(a) any breach of or any inaccuracy in any representation
or warranty made by the Purchaser, AFCNA or AFAC in this Agreement, any
Conveyance Agreement or any other document delivered by the Purchaser,
AFCNA or AFAC hereunder at the Closing that is not a Commercial
Agreement, provided, that, if the Closing occurs neither the Purchaser,
AFCNA nor AFAC shall have any liability under this Section 12.3(a) for
any breach of or inaccuracy in any representation or warranty unless a
claim for indemnification therefor is asserted in accordance with
Section 12.6 or Section 12.7 (as applicable), in each case before the
expiration of the survival period applicable to such representation or
warranty under Section 12.1; and provided,further, that for purposes of
Seller Indemnified Parties' rights to indemnification pursuant to this
Section 12.3(a), the representations or warranties of the Purchaser,
AFCNA and AFAC shall not be qualified by any references therein to
materiality as if such qualifications were deleted from such
representation and warranty;
(b) any breach of or failure by the Purchaser, AFCNA or
AFAC to perform any covenant or obligation of the Purchaser, AFCNA or
AFAC set out in this Agreement, any Conveyance Agreement or any other
document delivered by the Purchaser, AFCNA or AFAC hereunder at the
Closing that is not a Commercial Agreement;
(c) the Assumed Obligations; or
(d) the operation of the Access Business subsequent to
the Closing (excluding, for the avoidance of doubt, the Retained
Obligations and the matters for which the Purchaser Indemnified Parties
are entitled to indemnification under Section 12.2).
12.4 Limitations on Liability.
(a) The Purchaser Indemnified Parties shall have the
right to receive payment by the Parent, the Seller or Marconi IP,
jointly and severally, under Section 12.2(a) and Section 12.2(f) only
if, and only to the extent that, the Purchaser Indemnified Parties
shall have incurred indemnifiable Losses in excess of $2,000,000. The
Seller Indemnified Parties shall have the right to receive payment by
the Purchaser and AFCNA, jointly and severally, under Section 12.3(a)
only if, and only to the extent that, the Seller Indemnified Parties
shall have incurred indemnifiable Losses in excess of $2,000,000.
(b) Neither the Seller nor any of its Affiliates, on the
one hand, and neither the Purchaser nor any of its Affiliates, on the
other hand, shall have any Liability under this Agreement, any
Conveyance Agreement or any document delivered by any such Person at
the Closing that is not a Commercial Agreement for (i) 25% Losses in
excess of $60,000,000 in the aggregate, (ii) 25% Losses and 50% Losses
in excess of $120,000,000 in the aggregate and (iii) 25% Losses, 50%
Losses and 100% Losses in excess of the Purchase Price in the
aggregate; for the avoidance of doubt, in no event shall the Seller's
and its Affiliates', on the one hand, or the Purchaser's and its
Affiliates', on the other
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hand, aggregate liability under this Agreement, the Conveyance
Agreements and the documents delivered by them at the Closing that are
not Commercial Agreements exceed the Purchase Price in the aggregate.
(c) EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED IN THIS
AGREEMENT, THE SOLE AND EXCLUSIVE LIABILITY OF THE SELLER AND ITS
AFFILIATES TO THE PURCHASER AND ITS AFFILIATES, AND THE SOLE AND
EXCLUSIVE LIABILITY OF THE PURCHASER AND ITS AFFILIATES TO THE SELLER
AND ITS AFFILIATES, UNDER THIS AGREEMENT, THE CONVEYANCE AGREEMENTS AND
THE OTHER DOCUMENTS DELIVERED HEREUNDER THAT ARE NOT COMMERCIAL
AGREEMENTS OR IN RESPECT OF THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (INCLUDING FOR ANY BREACH OF OR INACCURACY IN ANY
REPRESENTATION OR WARRANTY OR FOR ANY BREACH OF ANY COVENANT OR
OBLIGATION OR FOR ANY OTHER REASON), AND THE SOLE AND EXCLUSIVE REMEDY
OF THE PURCHASER AND ITS AFFILIATES AND OF THE SELLER AND ITS
AFFILIATES (RESPECTIVELY) WITH RESPECT TO ANY OF THE FOREGOING, SHALL
BE AS SET FORTH IN THIS ARTICLE XII, SECTION 6.5, SECTION 6.11(E) AND
SECTION 13.20 OF THIS AGREEMENT, and section 6.14 of the Cross License
Agreement, Section 6.14 of the Sublicense Attached hereto as Exhibit
H-1 and Section 7.14 of the Sublicense attached hereto as Exhibit H-2.
Except with respect to Losses arising out of or relating to a breach of
the Commercial Agreements, to the extent that the Purchaser or any of
its Affiliates (on the one hand) or the Seller or its Affiliates (on
the other hand) has any Losses for which it may assert any right to
indemnification, contribution or other monetary recovery from the
Seller or any of its Affiliates or from the Purchaser or any of its
Affiliates (as the case may be) (whether under this Agreement, any
Conveyance Agreement, any other document delivered hereunder that is
not a Commercial Agreement or under any common law theory or any
statute or other Law, including any Environmental Law, or otherwise),
other than pursuant to the provisions of this Article XII, the
Purchaser and the Seller (respectively) each hereby waives, releases
and agrees not to assert such right, and the Purchaser and the Seller
(respectively) each agrees to cause each of its Affiliates to waive,
release and agree not to assert such right.
(d) Neither the Seller nor any of its Affiliates shall
have any liability under or otherwise in connection with this
Agreement, any Conveyance Agreement or any other document delivered
hereunder that is not a Commercial Agreement or the transactions
contemplated hereby or thereby for any Loss to the extent accrued,
provided or reserved for in the Statement of Working Capital.
12.5 Mitigation. With respect to claims subject to the indemnity at
Section 12.2(g), the Purchaser and its Affiliates shall reasonably cooperate to
mitigate Losses, including, if reasonable, modifying, redesigning or replacing
the product in question so as to make the product non-infringing (it being
understood and agreed that the costs and expenses relating to such modification,
redesign or replacement shall be indemnified Losses to the extent provided in
this Article XII).
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12.6 Claims. As promptly as is reasonably practicable after
becoming aware of a claim for indemnification under this Agreement not involving
a claim, or the commencement of any suit, action or Proceeding, of the type
described in Section 12.7, the Indemnified Person shall give written notice to
the Indemnifying Person of such claim, which notice shall specify the material
facts alleged to constitute the basis for such claim, including, if applicable,
the representations, warranties, covenants and obligations alleged to have been
breached, if known, and the amount (if known) that the Indemnified Person seeks
hereunder from the Indemnifying Person, together with such information (to the
extent known by the Indemnified Person) as may be necessary for the Indemnifying
Person to determine that the limitations in Section 12.4 have been satisfied or
do not apply; provided, that, the failure of the Indemnified Person to give such
notice shall not relieve the Indemnifying Person of its obligations under this
Article XII except to the extent (if any) that the Indemnifying Person
demonstrates that it has been prejudiced thereby. Unless it would reasonably be
expected that the Indemnified Person will be prejudiced by such two-week delay,
for a period of at least two weeks from the date the Indemnifying Person
receives the written notice of a claim pursuant to this Section 12.6, the
Indemnified Person and the Indemnifying Person shall consult with each other
regarding resolution of such claim and attempt to resolve such claim; provided
that neither party shall be obligated to take or refrain from taking any action
to enforce its rights.
12.7 Notice of Third Party Claims; Assumption of Defense.
(a) The Indemnified Person shall give notice to the
Indemnifying Person within fifteen (15) days of the assertion of any
claim, or the commencement of any suit, action or Proceeding, by any
Person not a party hereto (such claim, suit, action or Proceeding, as
it pertains to the Indemnified Person, a "Third Party Claim") in
respect of which indemnity may be sought under this Agreement (which
notice shall specify in reasonable detail the nature and amount (to the
extent known by the Indemnified Person) of such claim together with
such information (to the extent known by the Indemnified Person) as may
be necessary for the Indemnifying Person to determine that the
limitations in Section 12.4 have been satisfied or do not apply);
provided, that, the failure of the Indemnified Person to give such
notice shall not relieve the Indemnifying Person of its obligations
under this Article XII except to the extent (if any) that the
Indemnifying Person demonstrates that it has been prejudiced thereby.
(b) The Indemnifying Person may, at its own expense,
defend the Indemnified Person against the Third Party Claim with
counsel of its own choice reasonably satisfactory to the Indemnified
Person so long as (i) the Indemnifying Person notifies the Indemnified
Person in writing, within fifteen (15) days after the Indemnified
Person has given notice of the Third Party Claim, that the Indemnifying
Person will indemnify the Indemnified Person from and against any
Losses the Indemnified Person may suffer resulting from, or arising out
of such Third Party Claim (whether or not otherwise required
hereunder), (ii) the Indemnifying Person possesses financial resources
that would reasonably be expected to be sufficient to defend against
the Third Party Claim and to fulfill its indemnification obligations
hereunder, (iii) the Third Party Claim does not seek an injunction or
other equitable relief that would adversely impact the Access Business,
if granted, (iv) the Third Party Claim does not relate to or arise in
connection with any criminal action, indictment, allegation,
investigation or Proceeding, (v) the
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Third Party Claim does not relate to or arise in connection with any
action, allegation, investigation or Proceeding involving (A)
Transferred Intellectual Property or (B) other Intellectual Property
licensed to the Purchaser or any of its Affiliates under the Cross
License Agreement or either Sublicense if the Purchaser's (or its
Affiliate's) operation of the Access Business is the primary focus of
such Third Party Claim, (vi) settlement of, or an adverse judgment with
respect to, the Third Party Claim would not reasonably be likely to
establish a precedential custom or practice that would reasonably be
expected to be materially adverse to the continuing business interests
of the Indemnified Person or its Affiliates, (vii) the Indemnified
Person has not been advised in writing by counsel reasonably acceptable
to the Indemnifying Person that, based on the defenses and positions
expected to be asserted as of the time of such advice, a conflict of
interest between the Indemnified Person and the Indemnifying Person
exists or would reasonably be expected to exist or arise in connection
with such Third Party Claim and (viii) the Indemnifying Person conducts
the defense of the Third Party Claim with substantially the same amount
of diligence as the Indemnifying Person would, acting with a reasonable
degree of prudence, exert in defending a comparable claim against
itself; provided, that, notwithstanding the foregoing, the Seller shall
in all cases be entitled to retain the defense of (1) any Third Party
Claim pending on the date hereof that is a Retained Obligation and (2)
so long as the foregoing clauses (ii), (iv), (vii) and (viii) are
satisfied, (x) any Third Party Claim relating to or arising in
connection with any action, allegation, investigation or Proceeding
involving Intellectual Property licensed to the Purchaser or any of its
Affiliates under the Cross License Agreement or either Sublicense
(other than Third Party Claims of the type described in the foregoing
clause (v)(B)) and (y) any claims described in Section 12.2(g). If the
Indemnified Person assumes the defense of the Third Party Claim
pursuant to the previous sentence, the Indemnifying Person shall have
the right to consult with the Indemnified Person regarding the counsel
used by the Indemnified Person in connection with such defense.
(c) So long as the Indemnifying Person is conducting the
defense of the Third Party Claim in accordance with Section 12.7(b)
above, (i) the Indemnified Person may, at its election, retain separate
co-counsel at its sole cost and expense and participate in the defense
of the Third Party Claim, (ii) the Indemnified Person will not consent
to the entry of any judgment or enter into any settlement or compromise
with respect to the Third Party Claim without the prior written consent
of the Indemnifying Person (which consent shall not be unreasonably
withheld or delayed), (iii) the Indemnifying Person will not consent to
the entry of any judgment or enter into any settlement or compromise
with respect to the Third Party Claim unless either (A) the
Indemnifying Person obtains a written agreement releasing the
Indemnified Person from all Loss and Liability thereunder, (B) the
settlement agreement entered into in connection therewith includes a
written agreement releasing the Indemnified Person from all Loss and
Liability thereunder or (C) the Indemnifying Person obtains the written
consent of the Indemnified Person (which consent shall not be
unreasonably withheld or delayed) and (iv) if the Third Party Claim
relates to or arises in connection with any action, allegation,
investigation or Proceeding involving Intellectual Property licensed to
the Purchaser or any of its Affiliates under the Cross License
Agreement or either Sublicense, the Indemnifying Person shall defend
any such Third Party Claim with a view only to the interest of the
Purchaser and its Affiliates (it being understood and agreed that use
of the
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same counsel for the Purchaser Indemnified Parties and the Indemnifying
Parties will not, in and of itself, be deemed to result in a conclusion
that the Indemnifying Party is not acting with a view only to the
interest of the Purchaser and its Affiliates) and shall consult with
the Purchaser at all reasonable times as may be reasonably requested by
the Purchaser concerning matters specified by the Purchaser related to
the defense of any such Third Party Claim.
(d) In the event any of the conditions in Section 12.7(b)
above is or becomes unsatisfied, however, (i) the Indemnified Person
may assume and control the defense of the Third Party Claim and may
consent to the entry of any judgment or enter into any settlement or
compromise with respect thereto (subject to the prior consent of the
Indemnifying Person, which consent shall not be unreasonably withheld
or delayed), (ii) the Indemnifying Person may participate in such
defense at its sole cost and expense and will, subject to the terms and
conditions of Article XII, reimburse the Indemnified Person for the
fees, costs and expenses of defending against the Third Party Claim
(including reasonable attorneys' fees and expenses) and (iii) the
Indemnifying Person will remain responsible for any Losses the
Indemnified Person may suffer resulting from or arising out of the
Third Party Claim, subject to the applicable limitations provided in
this Article XII.
(e) Whether or not the Indemnifying Person assumes the
defense of the Third Party Claim, all of the parties hereto shall
cooperate in the defense thereof.
12.8 Time Limits. Any right to indemnification or other recovery
under Section 12.2(a) or under Section 12.3(a) shall only apply to Losses
arising from claims with respect to which the Indemnified Person shall have
notified the applicable Indemnifying Person in writing within the applicable
survival period set forth in Section 12.1; provided, however, that such rights
(and the Indemnifying Parties' obligations to indemnify and hold harmless
hereunder) shall not terminate with respect to any Losses arising from claims as
to which the Indemnified Person shall have, before the expiration of the
applicable survival period, previously delivered a notice pursuant to Section
12.6 or Section 12.7 to the Indemnifying Person.
12.9 Net Losses and Subrogation.
(a) Notwithstanding anything contained herein to the
contrary, the amount of any Losses incurred or suffered by any
Indemnified Person shall be calculated after giving effect to (i) any
insurance proceeds received by the Indemnified Person (or any of its
Affiliates) with respect to such Losses and (ii) any recoveries
obtained by the Indemnified Person (or any of its Affiliates) from any
other third party, in each case less the out-of-pocket costs reasonably
incurred by the Indemnified Person in connection with obtaining such
proceeds or recoveries (including the amount of the first retrospective
or experience-based insurance premium adjustment to the extent
resulting therefrom). Each Indemnified Person (or any of its
Affiliates) shall exercise reasonable best efforts to obtain such
proceeds and recoveries. If any such proceeds or recoveries are
received by an Indemnified Person (or any of its Affiliates) with
respect to any Losses after an Indemnifying Person has made a payment
to the Indemnified Person with respect thereto, the Indemnified Person
(or such Affiliate) shall promptly pay to the Indemnifying Person
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the amount of such proceeds or recoveries (up to the amount of the
Indemnifying Person's payment).
(b) Upon making any payment to an Indemnified Person in
respect of any Losses, the Indemnifying Person will, to the extent of
such payment, be subrogated to all rights of the Indemnified Person
(and its Affiliates) against any third party in respect of the Losses
to which such payment relates except for third parties, other than
insurers, if providing the Indemnifying Party such a right of
subrogation would reasonably be expected to have a material adverse
impact on a then-current or then-proposed bona fide commercial
relationship between the Indemnified Person and such third party. Such
Indemnified Person (and its Affiliates) and Indemnifying Person will
execute upon request all instruments reasonably necessary to evidence
or further perfect such subrogation rights.
12.10 Purchase Price Adjustments. To the extent permitted by Law,
any amounts payable under Section 12.2 or Section 12.3 shall be treated by the
parties hereto as an adjustment to the Purchase Price.
12.11 Reimbursement of Expenses. The Indemnifying Person shall
reimburse the Indemnified Person on an as-incurred basis for any expenses for
which the Indemnified Person is entitled to indemnification hereunder unless
there is a dispute about whether the Indemnified Person is in fact entitled to
indemnification (it being understood that this provision is not intended to
negate a party's right to dispute a claim for indemnification in accordance with
the terms of this Agreement).
ARTICLE XIII
MISCELLANEOUS
13.1 Expenses. Except as otherwise specifically contemplated by
this Agreement, each party hereto shall bear its own fees and expenses with
respect to the transactions contemplated hereby; provided, however, that (a) the
filing fees under the HSR Act and (b) the fees and expenses of any economist or
other expert retained with the mutual agreement of each of the Seller and the
Purchaser in connection with the filing under the HSR Act shall each be borne
equally by the Seller and the Purchaser.
13.2 Amendment. Except as provided in Section 13.17, this Agreement
may be amended, modified or supplemented only in writing signed by the
Purchaser, AFCNA, the Parent, the Seller and Marconi IP.
13.3 Notices. Any notice, request, instruction or other document to
be given hereunder by a party hereto shall be in writing and shall be deemed to
have been given, (a) when received if given in person or by courier or a courier
service, or (b) on the date of transmission if sent by facsimile transmission
(receipt confirmed) on a Business Day during the normal business hours of the
intended recipient, and if not so sent on such a day and at such a time, on the
following Business Day:
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(i) If to the Purchaser or AFCNA, addressed as follows:
Advanced Fibre Communications, Inc.
0000 Xxxxx XxXxxxxx Xxxx.
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Pillsbury Winthrop LLP
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile (000) 000-0000
(ii) If to the Parent, the Seller or Marconi IP, addressed
as follows:
Marconi Communications, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel - Americas
Facsimile: (000) 000-0000
Marconi Intellectual Property (Ringfence) Inc.
000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxx
Facsimile: (000) 000-0000
with copies to:
Mayer, Brown, Xxxx & Maw LLP
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
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Marconi Corporation plc
Marrable House
The Vineyards
Great Baddow
Chelmsford
Essex CM2 7QS
England
Attention: Xxxxx Xxxxx
Facsimile: (00) 0000 000000
or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.
13.4 Payments in Dollars. Except as otherwise provided herein or in
a Related Agreement, all payments pursuant hereto shall be made by wire transfer
in Dollars in same day or immediately available funds without any set-off,
deduction or counterclaim whatsoever.
13.5 Waivers. Except as otherwise provided in Article XII, the
failure of a party hereto at any time or times to require performance of any
provision hereof or claim damages with respect thereto shall in no manner affect
its right at a later time to enforce the same. No waiver by a party of any
condition or of any breach of any term, covenant, representation or warranty
contained in this Agreement shall be effective unless in writing, and no waiver
in any one or more instances shall be deemed to be a further or continuing
waiver of any such condition or breach in other instances or a waiver of any
other condition or breach of any other term, covenant, representation or
warranty.
13.6 Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns; provided, that, except with the written consent of the other parties,
no assignment of this Agreement or any rights or obligations hereunder, by
operation of law or otherwise, may be made by any party, other than to an
Affiliate of such party (but no such assignment shall relieve the assigning
party of its obligations hereunder). Notwithstanding the foregoing, so long as
any such Affiliate agrees in writing to be bound by the applicable terms of this
Agreement, the Purchaser may (i) assign any or all of its rights and interests
hereunder to one or more of its Affiliates, and (ii) designate one or more of
its Affiliates to perform its obligations hereunder (and in such case the
Purchaser nonetheless shall remain responsible for the performance of all of its
obligations hereunder). For a period of four (4) years from the date hereof, the
Parent agrees that it will not, directly or indirectly, sell, convey, assign,
transfer, lease, license or otherwise dispose of, more than 90% of its
properties or assets (as measured on a net book value basis) to any Person in
one or more related transactions unless, prior to or concurrently with such
disposition, (a) such Person agrees, in writing reasonably satisfactory to and
for the express benefit of Purchaser and AFCNA, to be bound by the Parent's
obligations pursuant to this Agreement and (b) the Purchaser is provided with an
original executed copy of such agreement. Any purported sale, conveyance,
assignment, transfer, lease, license or other disposition in violation of this
Section 13.6 shall be null and void.
13.7 No Third Party Beneficiaries. This Agreement is solely for the
benefit of the parties hereto and, to the extent expressly provided herein,
their respective Affiliates (and, solely
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with respect to Article XII, the Indemnified Persons as defined therein), and no
provision of this Agreement shall be deemed to confer upon other third parties
any remedy, claim, liability, reimbursement, cause of action or other right.
13.8 Publicity. Prior to the Closing Date, no public announcement
or other publicity regarding the existence of this Agreement or any of the
Related Agreements or their contents or the transactions contemplated hereby or
thereby shall be made by the Purchaser, the Seller or any of their respective
Affiliates or Representatives, without the prior written agreement of the
Purchaser and the Seller, in any case, as to form, content, timing and manner of
distribution or publication. Nothing in this Section 13.8 is intended to limit
or otherwise affect a party's rights to disclose confidential information or
make a public announcement, in each case as provided in Section 6.9 of this
Agreement.
13.9 Further Assurances. Upon the reasonable request of the
Purchaser, the Seller and Marconi IP shall on and after the Closing Date,
without further consideration, execute and deliver, and cause to be executed and
delivered, to the Purchaser such deeds, assignments and other instruments, and
take such other reasonable actions, as may be reasonably requested by the
Purchaser and are required or desirable to effectuate completely the transfer
and assignment to the Purchaser and AFCNA of the Seller's and Marconi IP's
right, title and interest in and to the Assets, and to otherwise carry out the
purposes of this Agreement.
13.10 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
13.11 Entire Understanding. This Agreement, the Related Agreements
and the December CA set forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby and thereby
and supersede any and all prior agreements, arrangements and understandings
among the parties relating to the subject matter hereof.
13.12 Language. The Parent, the Seller, Marconi IP, the Purchaser
and AFCNA agree that the language used in this Agreement is the language chosen
by the parties to express their mutual intent, and that no rule of strict
construction is to be applied against the Parent, the Seller, Marconi IP, the
Purchaser or AFCNA. Each of the Parent, the Seller, Marconi IP, the Purchaser
and AFCNA and their respective counsel have reviewed and negotiated the terms of
this Agreement.
13.13 Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York without giving effect to the principles of conflicts of law thereof.
13.14 Remittances. All remittances, payments, mail and other
communications relating to the Assets or the Assumed Obligations received by the
Seller, Marconi IP or the Parent at any time after the Closing Date shall be
promptly turned over to the Purchaser by the Seller, Marconi IP or the Parent.
All remittances, payments, mail and other communications relating to the
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Excluded Assets or the Retained Obligations received by the Purchaser or AFCNA
at any time after the Closing Date shall be promptly turned over to the Seller
by the Purchaser or AFCNA.
13.15 Bulk Sales. The Purchaser and AFCNA hereby waive compliance by
the Seller and Marconi IP with the provisions of the Laws of any jurisdiction
relating to a bulk sale or transfer of assets that may be applicable to the
transfer of the Assets.
13.16 Jurisdiction of Disputes; Waiver of Jury Trial. Each party to
this Agreement hereby: (a) agrees that any litigation, Proceeding or other legal
action in connection with or relating to this Agreement, any Related Agreement
or any matters contemplated hereby or thereby, shall be brought by any party in
a court of competent jurisdiction located within the County of New York, in the
State of New York, whether a state or federal court; (b) agrees that in
connection with any such litigation, Proceeding or action, such party will
consent and submit to personal jurisdiction in any such court described in
clause (a) of this Section 13.16 and to service of process upon it in accordance
with the rules and statutes governing service of process; (c) agrees to waive to
the full extent permitted by Law any objection that it may now or hereafter have
to the venue of any such litigation, Proceeding or action in any such court or
that any such litigation, Proceeding or action was brought in an inconvenient
forum; (d) designates, appoints and directs CT Corporation System as its
authorized agent to receive on its behalf service of any and all process and
documents in any such litigation, Proceeding or action in the County of New
York, in the State of New York; (e) agrees to notify the other parties to this
Agreement immediately if such agent shall refuse to act, or be prevented from
acting, as agent and, in such event, promptly to designate another agent in the
County of New York, in the State of New York to serve in place of such agent and
deliver to the other parties written evidence of such substitute agent's
acceptance of such designation; (f) agrees as an alternative method of service
to service of process in any such litigation, Proceeding or action by mailing of
copies thereof to such party at its address set forth in Section 13.3; (g)
agrees that any service made as provided herein shall be effective and binding
service in every respect; and (h) agrees that nothing herein shall affect the
rights of any party to effect service of process in any other manner permitted
by Law. EACH PARTY HERETO IRREVOCABLY AND ABSOLUTELY WAIVES THE RIGHT TO A TRIAL
BY JURY IN ANY DISPUTE IN CONNECTION WITH, ARISING UNDER OR RELATING TO THIS
AGREEMENT, ANY RELATED AGREEMENT OR ANY MATTERS CONTEMPLATED HEREBY OR THEREBY,
AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH
WAIVER.
13.17 Schedules. Neither the specification of any Dollar amount or
any item or matter in any provision of this Agreement or any Related Agreement
nor the inclusion of any specific item or matter in any Schedule hereto or
thereto is intended to imply that such amount, or higher or lower amounts, or
the item or matter so specified or included, or other items or matters, are or
are not material, and no party shall use the fact of the specification of any
such amount or the specification or inclusion of any such item or matter in any
dispute or controversy between the parties as to whether any item or matter is
or is not material for purposes of this Agreement or any Related Agreement.
Neither the specification of any item or matter in any provision of this
Agreement or any Related Agreement nor the inclusion of any specific item or
matter in any Schedule hereto or thereto is intended to imply that such item or
matter, or other items or matters, are or are not in the ordinary course of
business, and no party shall use the fact of the specification or the inclusion
of any such item or matter in any dispute or controversy between
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the parties as to whether any item or matter is or is not in the ordinary course
of business for purposes of this Agreement or any Related Agreement. The Seller,
Marconi IP and the Parent shall, from time to time until the Closing, by notice
in accordance with the terms of this Agreement, promptly after acquiring
knowledge of any such matter, supplement or amend the Schedules hereto with
respect to any matter hereafter arising or discovered that, if existing or known
at the date of this Agreement, would have been required to be set forth or
described in the Schedules hereto; provided, however, that no supplement or
amendment to any Schedule (other than Schedule 4.18(c)), shall have any effect
for (a) the purpose of determining the satisfaction of the conditions set forth
in Section 7.1 or (b) except as provided in the following sentence, for the
purpose of determining the accuracy of any representation or warranty herein or
whether any Person is otherwise in breach of this Agreement or whether any
Person is entitled to indemnification pursuant to Article XII or to any other
remedy permitted under the terms of this Agreement. Notwithstanding clause (b)
of the previous sentence, if the Closing occurs, any such supplement or
amendment of the Schedules, to the extent relating to (i) a matter arising after
the date hereof which is expressly assumed by the Purchaser pursuant to Section
2.5(c) or (ii) the matters described in Section 4.25, will be effective to cure
and correct for purposes of the Seller's and its Affiliates' indemnification
obligations under Article XII, any inaccuracy in or breach of any
representation, warranty, covenant or obligation which would have existed if the
Seller had not made such supplement or amendment, and all references to any
Schedule hereto which is supplemented or amended as provided in this sentence
shall, for purposes of the Seller's and its Affiliates' indemnification
obligations under Article XII after the Closing, be deemed to be a reference to
such Schedule as so supplemented or amended.
13.18 Disclaimer of Warranties. The Seller, Marconi IP and the
Parent make no representations or warranties with respect to any projections,
forecasts or forward-looking statements made available to the Purchaser. There
is no assurance that any projected or forecasted results will be achieved. For
the avoidance of doubt, the foregoing does not apply to any forward-looking
representation or warranty herein or in any Related Agreement or any
forward-looking statement made in the Schedules. EXCEPT TO THE EXTENT OF THE
EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT AND THE
RELATED AGREEMENTS, (a) THE SELLER, MARCONI IP AND THE PARENT ARE SELLING THE
ASSETS ON AN "AS IS, WHERE IS" BASIS AND DISCLAIM ALL OTHER WARRANTIES,
REPRESENTATIONS AND GUARANTEES, WHETHER EXPRESS OR IMPLIED AND (b) THE SELLER,
MARCONI IP AND THE PARENT MAKE NO REPRESENTATION OR WARRANTY AS TO
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE AND NO IMPLIED WARRANTIES
WHATSOEVER. WITHOUT LIMITING THE FOREGOING, AND EXCEPT AS EXPRESSLY SET FORTH IN
THIS AGREEMENT AND THE RELATED AGREEMENTS, THE SELLER AND MARCONI IP DISCLAIM
ANY WARRANTY OF TITLE OR NON-INFRINGEMENT AND ANY WARRANTY ARISING BY INDUSTRY
CUSTOM OR COURSE OF DEALING. THE PURCHASER AND AFCNA ACKNOWLEDGE AND AGREE THAT
THEY ARE NOT RELYING ON ANY REPRESENTATIONS OR WARRANTIES, EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT AND THE RELATED
AGREEMENTS. The Purchaser and AFCNA acknowledge and agree that neither the
Seller, Marconi IP, the Parent, their respective Affiliates, any of their
respective Representatives nor any other Person has made any representation or
warranty, express or implied, as to the accuracy or completeness of any
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memoranda, charts, summaries, schedules or other information heretofore made
available by the Seller, Marconi IP, the Parent, their respective Affiliates or
their respective Representatives to the Purchaser, any of its Affiliates or
their Representatives (including the Confidential Descriptive Memorandum dated
December 2002) or any information that is not included in or covered by this
Agreement, the Related Agreements or the Schedules and Exhibits hereto and
thereto, and neither the Seller, Marconi IP, the Parent, their respective
Affiliates, any of their respective Representatives nor any other Person will
have or be subject to any liability to the Purchaser, any of its Affiliates or
their Representatives resulting from the distribution of any such information
to, or the use of any such information by, the Purchaser, any of its Affiliates
or any of their agents, consultants, accountants, counsel or other
representatives.
13.19 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
13.20 Specific Performance. The parties agree that irreparable
damage would occur and that the parties would not have any adequate remedy at
law in the event that (a) any Pre-Closing Specific Performance Covenants are not
performed in accordance with their specific terms prior to the Closing or (b)
any Post-Closing Specific Performance Covenants are not performed in accordance
with their specific terms subsequent to the Closing. It is accordingly agreed
that (i) prior to the Closing, the parties shall be entitled to an injunction or
injunctions to prevent breaches of the Pre-Closing Specific Performance
Covenants and to enforce specifically the terms and provisions thereof and (ii)
subsequent to the Closing, the parties shall be entitled to an injunction or
injunctions to prevent breaches of the Post-Closing Specific Performance
Covenants and to enforce specifically the terms and provisions thereof, in each
case, in addition to any other remedy to which they are entitled at law or in
equity; provided, however, that all monetary liability shall be subject to
Article XII.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
ADVANCED FIBRE COMMUNICATIONS, INC.
By:_________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Chairman, President and Chief
Executive Officer
ADVANCED FIBRE COMMUNICATIONS NORTH AMERICA,
INC.
By:_________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
MARCONI COMMUNICATIONS, INC.
By:_________________________________________
Name: Xxxxxxx x. XxXxxxx
Title: Vice President
MARCONI INTELLECTUAL PROPERTY (RINGFENCE)
INC.
By:_________________________________________
Name: Xxxxxxx x. XxXxxxx
Title: Vice President
MARCONI CORPORATION PLC
By:_________________________________________
Name: Xxxxxxx x. XxXxxxx
Title: Executive Vice President
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AMENDMENT NUMBER ONE TO ASSET PURCHASE AND SALE AGREEMENT
The undersigned, being all of the parties to that certain Asset
Purchase and Sale Agreement dated January 5, 2004 (the "Agreement"), hereby
agree as follows:
1. The definitions of "Exchange Act," "Request" and "SEC's Staff"
set forth in Section 1.1 of the Agreement are hereby deleted.
2. The following definitions set forth in Section 1.1 of the
Agreement are hereby amended to read in their entirety as follows:
"Interim Audit" shall have the meaning set forth in Section 6.17(e).
"Interim Financial Statements" shall have the meaning set forth in
Section 6.17(e).
3. Section 3.2(a) of the Agreement is hereby amended to read in
its entirety as follows: "(a) The Purchaser shall, as soon as practicable, and
in any event no later than ninety (90) days after the Closing Date, (i) prepare
the initial draft of a statement (the "Statement of Working Capital") setting
forth, as of 5:00 p.m. (central standard time) on the Closing Date, the amount
equal to (y) the aggregate of the Net Inventory, the Net Accounts Receivable and
the Prepaids less (z) the aggregate of the Net Accounts Payable, the Accrued
Compensation and Benefits, the Other Current Liabilities and the Special
Warranty Reserve (such net amount being the "Closing Working Capital") and (ii)
deliver the same to the Seller, together with a certificate from the Purchaser's
independent auditors to the effect that the initial draft Statement of Working
Capital has been prepared in accordance with Section 3.2(g).
4 The first sentence of Section 6.9(a) of the Agreement is
hereby amended to read in its entirety as follows: "The parties have previously
entered into several confidentiality agreements covering specific purposes
(collectively, the "Other Confidentiality Agreements"), and a confidentiality
agreement dated December 6, 2002 (as amended, the "December CA") specifically
addressing the purchase transaction contemplated by this Agreement."
5. Section 6.17 of the Agreement is hereby amended to read in its
entirety as follows:
(a) Without limiting the parties' other obligations under this Article VI,
the Seller agrees to prepare a statement of Assets to be acquired by
the Purchaser and Assumed Obligations as of December 31, 2003, and the
related statements of operations and of cash flows for the year then
ended (the "2003 Financial Statements"), including related footnotes,
otherwise (except for the omission of assets not acquired and
liabilities not assumed) in conformity with accounting principles
generally accepted in the United States ("U.S. GAAP"), and agrees to
engage the Seller's independent public accountants, Deloitte & Touche
LLP ("Deloitte"), to commence an audit of the 2003 Financial Statements
under auditing standards generally accepted in the United States (the
"Audit"). Promptly after execution of this Agreement, the Seller shall
use its reasonable best efforts to prepare the 2003 Financial
Statements on the basis provided in this paragraph (a), and cause
Deloitte to commence and complete the Audit of such financial
statements as soon as reasonably practicable after the execution of the
engagement letter. The Seller agrees to cause such
engagement letter to be prepared, and the Seller will be prepared to
execute such letter on its own behalf, promptly after the date hereof.
The Seller and the Purchaser will both be signatories to Deloitte's
engagement letter for the Audit. The Seller represents that the 2003
Financial Statements will fairly present the financial condition,
results of operations and cash flows of the Access Business as of and
for the applicable period, and will be consistent with the books and
records of the Seller.
(b) Prior to the Closing, the Seller and the Parent shall, and shall cause
their Affiliates to, cooperate fully with Deloitte in connection with
the Audit, including providing Deloitte with reasonable access to
personnel, books and records as is requested by Deloitte to complete
the Audit. Subsequent to the Closing, each of the Seller and the Parent
shall, and shall cause their respective Affiliates to, use reasonable
best efforts to cooperate fully with the Purchaser, Deloitte and any
other auditors of the Purchaser in connection with the Audit and the
financial statements that are the subject of the Audit, including (i)
providing reasonable access to personnel, books and records (including
reasonable access to personnel, books and records of the Other
Businesses to the extent necessary) as may be requested by Deloitte to
complete the Audit, (ii) cooperating with the reasonable requests of
the Purchaser and its independent accountants in order to permit the
Purchaser and its Affiliates to prepare and submit the Request and to
respond to inquiries or other demands of any Governmental Entity
(including the Securities Exchange Commission) related to such
financial statements of the Access Business or to confirm the
information upon which such financial statements are based (including
for purposes of any "comfort letter" requested by the Purchaser), and
(iii) facilitating discussions between the Purchaser and Deloitte with
respect to the completed Audit to the extent reasonably requested by
the Purchaser. The Seller and the Parent acknowledge and agree that the
foregoing cooperation could involve the provision of information
concerning non-Access Business units (such as the Other Businesses) to
the extent relevant to the preparation and audit of such financial
statements of the Access Business, provided, that, such information
will be provided only to the auditors (and not to the Purchaser except
to the extent reasonably necessary for the purposes set forth in clause
(ii) above), subject to customary confidentiality restrictions. It is
acknowledged and agreed that it is the intention of the parties to
facilitate the completion of the Audit as soon as reasonably
practicable after the date hereof.
(c) As soon as reasonably practicable after issuance of Deloitte's report
on the Audit of the 2003 Financial Statements, the Seller shall provide
a copy of the 2003 Financial Statements and an Audit report to the
Purchaser. After the delivery of the 2003 Financial Statements and
Audit report by the Seller to the Purchaser, the Purchaser shall
reimburse the Seller for all fees and reasonably documented expenses
billed by Deloitte (consistent with their engagement letter) and paid
by the Seller in connection with the Audit, within five (5) Business
Days of the presentation to the Purchaser of reasonably detailed
documentation of such fees and expenses. Notwithstanding the foregoing,
(i) if the Purchaser terminates this Agreement pursuant to Section
10.1(c)(i), then the Seller shall be responsible for all fees and
expenses of Deloitte in connection with the Audit and shall promptly
reimburse the Purchaser for any and all fees and expenses paid by the
Purchaser to Deloitte directly or to the Seller pursuant to the
reimbursement provisions of the immediately preceding sentence and (ii)
if this Agreement is terminated other than (A) by
2
the Purchaser pursuant to Section 10.1(c)(i) or (B) by the Seller
pursuant to Section 10.1(d)(i), then the Purchaser and the Seller shall
share equally all fees and expenses of Deloitte in connection with the
Audit and the Seller shall promptly reimburse the Purchaser for
one-half of any and all fees and expenses paid by the Purchaser to
Deloitte directly or to the Seller pursuant to the reimbursement
provisions of the immediately preceding sentence.
(d) Until the Audit report has been delivered to the Purchaser, the Seller
shall use its reasonable best efforts to arrange a weekly conference
call with the Purchaser at a mutually agreeable time at which
representatives of the Seller will inform the Purchaser of the timing
and general status of the Audit. The Seller represents that such
information will accurately summarize the timing and status of the
Audit in all material respects.
(e) With respect to each quarterly financial reporting period ending prior
to the Closing Date, commencing with the calendar quarter ending March
31, 2004, the Seller will prepare financial statements on a basis
consistent with the 2003 Financial Statements per Section 6.17(a) as of
and for the applicable quarterly period ended (the "Interim Financial
Statements"). The Seller agrees to engage Deloitte to perform an audit
of the Interim Financial Statements under auditing standards generally
accepted in the United States (the "Interim Audit"). The Seller shall
use its reasonable best efforts to prepare the Interim Financial
Statements and cause Deloitte to commence and complete the Interim
Audit as soon as reasonably practicable after the end of the applicable
quarter. The Seller represents such Interim Financial Statements will
fairly present the financial condition, results of operations and cash
flows of the Access Business as of and for the applicable period, and
will be consistent with the books and records of the Seller, subject
only to the absence of footnotes. The provisions of paragraphs (b), (c)
and (d) of this Section 6.17 will apply to the parties' obligations
replacing "the Audit" with "the Interim Audit" as applicable and
replacing "the 2003 Financial Statements" with "the Interim Financial
Statements" as applicable.
6. The second sentence of Section 9.1 of the Agreement is hereby
amended to read in its entirety as follows: "The Closing, and all transactions
to occur at the Closing, shall be deemed to have taken place at, and shall be
effective as of, 3:00 p.m. (central standard time) on the Closing Date."
The provisions of the Agreement that have not been amended hereby shall
remain in full force and effect. The provisions of the Agreement, as amended
hereby, shall remain in full force and effect.
* * *
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Number One to Asset Purchase and Sale Agreement to be executed and delivered as
of the 18th day of February, 2004
ADVANCED FIBRE COMMUNICATIONS, INC.
By:_________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Chairman, President and Chief
Executive Officer
ADVANCED FIBRE COMMUNICATIONS NORTH AMERICA,
INC.
By:_________________________________________
Name: Xxxx X. Xxxxxxxxx
Title: President and Chief Executive
Officer
MARCONI COMMUNICATIONS, INC.
By:_________________________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: Director and Secretary
MARCONI INTELLECTUAL PROPERTY (RINGFENCE)
INC.
By:_________________________________________
Name: Xxxxxxxx X. Xxxxxxx
Title: Director, President and Secretary
MARCONI CORPORATION PLC
By:_________________________________________
Name: Xxxxxxx X. Xxxxxxxxx
Title: Authorized Signatory
