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ASSET PURCHASE AGREEMENT
CONCERNING THE PRINTER BUSINESS OF
TEXAS INSTRUMENTS INCORPORATED
BETWEEN
TEXAS INSTRUMENTS INCORPORATED
AND
GENICOM CORPORATION
JULY 22, 1996
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ARTICLE I
THE SALE AND PURCHASE OF ASSETS
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1.1 Sale and Purchase of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
---------------------------
1.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
---------------
1.3 Nonassignable Contracts and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . 4
-----------------------------------
(a) Nonassignability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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(b) Seller to Use Commercially Reasonable Efforts . . . . . . . . . . . . . . . . . 4
---------------------------------------------
(c) If Waivers or Consents Cannot Be Obtained . . . . . . . . . . . . . . . . . . . 5
-----------------------------------------
ARTICLE II
PURCHASE PRICE
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2.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--------------
2.2 Net Book Value Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
-------------------------
(a) Pre-Closing Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
---------------------
(b) Post-Closing Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
----------------------
(c) Adjustment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . 7
----------------------------
2.3 Allocation of Purchase Price for Tax Purposes . . . . . . . . . . . . . . . . . . . . . 7
---------------------------------------------
2.4 Transfer Taxes and Similar Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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ARTICLE III
ASSUMPTION OF LIABILITIES
-------------------------
3.1 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
-------------------
3.2 Retained Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
--------------------
ARTICLE IV
CLOSING
-------
4.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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4.2 Deliveries at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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4.3 Delivery of Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
----------------------------
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
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5.1 Existence and Authority of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
---------------------------------
5.2 Consents and Approvals; Absence of Violations . . . . . . . . . . . . . . . . . . . . . 11
---------------------------------------------
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5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
---------
5.4 Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
----------------------------
(a) Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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(b) No Infringement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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(c) Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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5.5 Capital Equipment and Expensed Assets . . . . . . . . . . . . . . . . . . . . . . . . . 13
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5.6 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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5.7 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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5.8 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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5.9 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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5.10 Historical Financial Information; Projections . . . . . . . . . . . . . . . . . . . . . 14
---------------------------------------------
5.11 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
--------------------------
5.12 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.13 Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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5.15 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
6.1 Existence and Authority of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--------------------------------
6.2 Consents and Approvals; Absence of Violations . . . . . . . . . . . . . . . . . . . . . 16
---------------------------------------------
6.3 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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6.4 Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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6.5 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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ARTICLE VII
COVENANTS OF SELLER
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7.1 Conduct of Business and Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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7.2 Pre-Closing Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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7.3 Update to Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
--------------------
7.4 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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7.5 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE VIII
COVENANTS OF BUYER
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8.1 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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ARTICLE IX
ADDITIONAL COVENANTS
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9.1 Names, Trademarks, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
----------------------
9.2 Preparation of Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 20
-----------------------------------
9.3 Government Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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9.4 Solicitation of Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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9.5 Assignment of Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------------
9.6 Satisfaction of Conditions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--------------------------
9.7 Employee Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----------------
9.8 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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9.9 Agreement Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
------------------------
9.10 Epidemic Failure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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9.11 Confidential Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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ARTICLE X
CONDITIONS TO OBLIGATIONS OF BUYER
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10.1 Truth of Representations and Warranties; Compliance with Covenants . . . . . . . . . . . 25
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10.2 No Adverse Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
----------------------
10.3 Governmental Consents or Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
----------------------------------
10.4 Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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10.5 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLER
-----------------------------------
11.1 Truth of Representations and Warranties; Compliance with Covenants . . . . . . . . . . . 26
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11.2 No Adverse Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
----------------------
11.3 Governmental Consents or Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
----------------------------------
ARTICLE XII
TERMINATION PRIOR TO CLOSING
----------------------------
12.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
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12.2 Procedure and Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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ARTICLE XIII
INDEMNIFICATION
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13.1 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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13.2 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------------------
13.3 Limitations on Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
------------------------------
13.4 Notice and Defense Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-----------------------------
13.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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13.6 Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
----------------------------
13.7 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
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ARTICLE XIV
MISCELLANEOUS
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14.1 Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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14.2 Entire Agreement, Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . 36
----------------------------------------
14.3 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
----------------------
14.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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14.5 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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14.6 Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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14.7 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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14.8 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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14.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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14.10 Bulk Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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14.11 Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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14.12 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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14.13 Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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14.14 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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14.15 Waiver and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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Exhibit A - License Agreement
SCHEDULES
Schedule 1.1(a) - Capital Equipment
Schedule 1.1(f) - Material Contracts
Schedule 1.1(g) - Intellectual Property
Schedule 2.2(a) - Pre-Closing Statement
Schedule 5.2 - Seller's Governmental Consents
Schedule 5.10 - Historical Financial Information; Projections
Schedule 5.13 - Seller's Knowledge
Schedule 6.2 - Buyer's Governmental Consents
Schedule 9.1 - Use of Seller's Name
Schedule 9.7(a) - Employees to be Offered Employment by Buyer
Schedule 9.7(b) - Employees of Seller Buyer May Recruit
Schedule 10.4 - Required Consents
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XXXXX XXXXXXXX AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement"), is made and entered
into on the 22nd day of July, 1996 by and between TEXAS INSTRUMENTS
INCORPORATED, a Delaware corporation with its principal offices in Dallas,
Texas ("Seller"), and GENICOM CORPORATION, a Delaware corporation with its
principal offices in Chantilly, Virginia ("Buyer").
WHEREAS, Seller operates a business engaged in the design,
development, marketing and sale of travel ticket document printers and readers,
monochromatic electrophotographic page printers using laser and LED
technologies and printers using serial impact technologies in each case
operating at peak speeds of less than or equal to 12 pages per minute and
related accessory options, supplies and replaceable parts and components and
sub-assemblies for such printers and options (the "Business");
WHEREAS, on the terms and subject to the conditions contained in this
Agreement, Seller desires to sell, transfer, and assign to Buyer, and Buyer
desires to purchase and acquire from Seller, all of the Purchased Assets (as
hereinafter defined); and
WHEREAS, on the terms and subject to the conditions contained in this
Agreement, Seller wishes to assign to Buyer, and Buyer is willing to assume,
the Assumed Liabilities (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, promises and covenants herein contained, and
intending to be legally bound hereby, it is hereby agreed by Seller and Buyer
as follows:
ARTICLE I
THE SALE AND PURCHASE OF ASSETS
1.1 Sale and Purchase of Assets. On the terms and subject to
conditions hereof, at the Closing (as hereinafter defined) Seller shall sell,
transfer, and assign to Buyer, and Buyer shall purchase and acquire, all of
Seller's right, title and interest in the following assets of Seller, wherever
located (collectively, the "Purchased Assets"):
(a) Capital Equipment. The capital equipment listed on
Schedule 1.1(a);
(b) Expensed Assets. The laptop computers, software,
non-capitalized printers, cellular telephones, pagers, calculators and books
containing only information not proprietary to Seller (not relating to the
Business) used by the employees of Seller who are offered employment with Buyer
as contemplated by Sections 9.7(a) and 9.7(b)
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and the hand tools, miscellaneous manufacturing supplies, and miscellaneous
assets of Seller located in Sweden used exclusively in the Business (the
"Expensed Assets");
(c) Accounts Receivable. All accounts receivable of the
Business other than accounts receivable on the books of Seller's European
operations as of the Closing Date (as hereinafter defined);
(d) Prepaid Items. All prepaid items, costs and fees listed on
the Pre-Closing Statement (as hereinafter defined);
(e) Inventory. The raw materials, work-in-process, finished
goods, stores, spare parts and supplies of the Business as of the Closing Date
but excluding the Excluded Inventory (as hereinafter defined) (collectively,
the "Inventory");
(f) Contracts. Subject to Section 1.3, all rights and
incidents of interest of Seller or any Subsidiary (as hereinafter defined) of
Seller as of the Closing, in and to all contracts, leases, licenses, purchase
orders (as vendor and purchaser) and other agreements of Seller or any
Subsidiary of Seller relating to the Business as of the date of this Agreement,
including those listed on Schedule 1.1(f), and all contracts, leases, licenses,
purchase orders (as vendor and purchaser) and other agreements relating to the
Business entered into by Seller or any Subsidiary of Seller prior to the
Closing in the ordinary course of its operation of the Business, consistent
with past practice and with Section 7.1, but excluding contracts, leases,
licenses, purchase orders and other agreements fully performed or having
expired prior to the Closing (collectively, the "Contracts"), with Schedule
1.1(f) to be updated as of the Closing to reflect the foregoing changes;
(g) Intellectual Property. All of the trademarks, service
marks and trade names listed on Schedule 1.1(g) and the associated goodwill and
pending applications therefor and the related common law rights and all of the
copyrights, inventions, trade secrets, processes, formulae, software, designs
and know-how used exclusively in the Business, including without limitation,
the source code used in the printers manufactured and sold in the Business (the
"Intellectual Property"); and
(h) Books and Records. All information and records of Seller
related to the Purchased Assets and reasonably required by Seller for the
operation of the Business and which do not pertain to areas of Seller's
business other than the Business, including without limitation, copies of the
workpapers used by Seller to prepare the Pre-Closing Statement (as defined in
Section 2.2(b) herein).
1.2 Excluded Assets. Notwithstanding anything to the contrary
provided for in this Agreement, the Purchased Assets shall in no event include
the following:
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(a) All of the Inventory which has been transferred or consumed
by Seller prior to the Closing in the ordinary course of the conduct of the
Business consistent with past practice;
(b) The words and name "Texas Instruments Incorporated" and
"TI", and Seller's related monograms, logos, trademarks, trade names, or any
variations or combinations thereof;
(c) United States and foreign patents, trademarks, service
marks, trade names, copyrights, technology, know-how, processes, trade secret
rights, and claims or interests to or in any of the foregoing, except to the
extent included in the Purchased Assets;
(d) Cash and cash equivalents (other than the deposits and
prepayments specifically described in Section 1.1(d)), including marketable
securities (on hand or in bank accounts);
(e) All contracts of insurance;
(f) All owned real property, options to acquire real property,
real estate leases and leasehold improvements;
(g) Seller's interest in and to all telephone, telex and
telephone facsimile numbers and other directory listings;
(h) Seller's corporate seal, minute books, charter documents,
corporate stock record books and such other books and records as pertain to the
organization, existence or share capitalization of Seller, duplicate copies of
such records included in or relating to the Purchased Assets or to the
operation or operations of the Business as are necessary to enable Seller to
file its tax returns and reports, and any other records or materials relating
to Seller generally and not involving or relating to the Purchased Assets or
the operation or operations of the Business; and
(i) The inventory required to complete the manufacture and/or
assembly of laser units and the finished goods inventory, prepaid assets and
open purchase orders of the Business in each case relating to the microWriter
products, the microLaser 600 products, the microLaser Pro products and the
microLaser Win/4 products as of the Closing Date (collectively, the "Excluded
Inventory").
1.3 Nonassignable Contracts and Permits.
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(a) Nonassignability. To the extent that any Contract to be
assigned pursuant to the terms of Section 1.1(f) is not capable of being
assigned without the consent, approval or waiver of a third person or entity
(including without limitation a governmental or regulatory authority), or if
such assignment or attempted assignment would constitute a breach thereof (each
a "Nonassignable Contract"), or to the extent that the assignment of any
Contract is not practicable because it also relates to an area of Seller's or
one of its Subsidiary's business other than the Business (each a "Nonexclusive
Contract"), nothing in this Agreement will constitute an assignment or require
the assignment thereof except to the extent provided in this Section 1.3.
(b) Seller to Use Commercially Reasonable Efforts.
Notwithstanding anything contained in this Agreement to the contrary, neither
Seller nor any Subsidiary of Seller will be obligated to assign to Buyer any of
its rights and obligations in and to any of the Nonassignable Contracts without
first having obtained all consents, approvals and waivers necessary for such
assignment; provided, however, that Seller shall use commercially reasonable
efforts and will cause its Subsidiaries to use commercially reasonable efforts
to obtain all such consents, approvals and waivers prior to the Closing and, if
the Closing occurs, will use commercially reasonable efforts and will cause its
Subsidiaries to use commercially reasonable efforts after the Closing Date (as
hereinafter defined) to obtain all such consents, approvals and waivers. Buyer
will cooperate with Seller and its Subsidiaries in their efforts to obtain all
required consents, approvals and waivers, provided, however, none of Buyer,
Seller or any Subsidiary of Seller will be required to incur any liability or
pay any consideration in connection therewith. As to the Nonexclusive
Contracts, Seller shall use commercially reasonable efforts and will cause its
Subsidiaries to use commercially reasonable efforts to effect an assignment of
rights with respect to the parts of such Nonexclusive Contract that relate
exclusively to the Business (if practicable) or, alternatively, to enter into
new agreements with respect to the parts of each Nonexclusive Contract that
relate exclusively to the Business.
(c) If Waivers or Consents Cannot Be Obtained. To the extent
that all consents, approvals and waivers required pursuant to the
Nonassignable Contracts are not obtained by Seller or its Subsidiaries or to the
extent that any partial assignment of rights or new agreement with respect to
the Nonexclusive Contracts cannot be effected as described in Section 1.3(b),
after the Closing Seller and its Subsidiaries shall use commercially reasonable
efforts to (i) provide to Buyer the financial and business benefits of each
Nonassignable Contract and each Nonexclusive Contract (as it relates to the
Business) and (ii) enforce, at the request of Buyer, for the account of Buyer,
any rights of Seller or any Subsidiary of Seller arising from any such Contract
(including without limitation the right to elect to terminate in accordance with
the terms thereof upon the advice of Buyer, it being understood that such right
to elect termination shall not be applicable to any Nonexclusive Contract unless
and to the extent such termination may be effected solely as to the portion
thereof relating to the Business). Buyer covenants and agrees with Seller that
Buyer shall use commercially
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reasonable efforts to perform any portion of a Nonassignable Contract the
financial and business benefits of which are being provided to Buyer in
accordance with clause (i) of the preceding sentence to the same extent
required of Seller or any Subsidiary of Seller in such contract (i.e., in the
same (or as near as practicable) manner and time, and with the same quality,
required of Seller or any Subsidiary of Seller).
ARTICLE II
PURCHASE PRICE
2.1 Purchase Price. In consideration of the conveyance to Buyer of
the Purchased Assets, Buyer shall deliver to Seller the Purchase Price (as
hereinafter defined) and assume the Assumed Liabilities (as hereinafter
defined). At the Closing, Buyer will pay to Seller an aggregate cash amount
equal to Thirty Million Dollars ($30,000,000) (the "Unadjusted Purchase
Price"), subject to adjustment pursuant to Section 2.2 (as adjusted, the
"Purchase Price").
2.2 Net Book Value Adjustment.
(a) Pre-Closing Statement. (i) At least two business days
prior to the Closing Date, Seller shall furnish to Buyer a statement of Seller
(the "Pre-Closing Statement"), prepared as of a date no earlier than June 30,
1996, reflecting Seller's good faith estimate of the Net Book Value of the
Business (as hereinafter defined) immediately prior to the Closing (the "Net
Book Value Estimate") and such supporting schedules as reasonably requested by
Buyer. For purposes of illustration only, attached hereto as Schedule 2.2(a)
is a statement of Seller reflecting the Net Book Value of the Business as of
March 31, 1996. Buyer and Seller agree that the Pre-Closing Statement shall be
in form consistent with Schedule 2.2(a).
(ii) Based on the Pre-Closing Statement, if the
amount equal to the Net Book Value Estimate minus $20 million (the "Net Book
Value Adjustment") is a positive number, then the Unadjusted Purchase Price
shall be increased by such amount. If the Net Book Value Adjustment is a
negative number, the Unadjusted Purchase Price shall be reduced by such amount
(expressed as a positive number).
(b) Post-Closing Statement. (i) As soon as practicable, but in
no event more than 90 days after the Closing Date, Buyer shall furnish Seller a
statement (the "Post-Closing Statement") reflecting the Net Book Value of the
Business immediately prior to the Closing (the "Closing Net Book Value")
prepared in accordance with Seller's Accounting Policies (as hereinafter
defined). In connection with the preparation of the Post-Closing Statement, a
physical inventory of the Business shall be taken as of midnight of the day
before
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the Closing Date. Representatives of Buyer and Seller shall participate
jointly in conducting the physical inventory. No transactions (receipt or
shipment) shall be executed by Seller after such physical inventory.
(ii) Within 30 days after the delivery of the
Post-Closing Statement to Seller, Seller shall either accept the amount of the
Proposed Closing Differential (as hereinafter defined) as reflected on the
Post-Closing Statement as correct or object to the Proposed Closing
Differential, specifying in reasonable detail in writing the nature of its
objection(s). In the event Seller does not object to the Proposed Closing
Differential within said 30-day period, Seller shall be deemed to have accepted
the Proposed Closing Differential as the Closing Differential. In the event
Seller objects to the Proposed Closing Differential, then, during a 15-day
period subsequent to the receipt by Buyer of notice of Seller's objection(s),
Buyer and Seller shall attempt in good faith to resolve the differences
respecting such Proposed Closing Differential. In the event Buyer and Seller
are unable to resolve their differences within said 15-day period, the parties
agree that the matter shall be submitted to Price Waterhouse L.L.P., whose
determination shall be final and binding upon the parties. The costs and
expenses of such firm of certified public accountants shall be borne equally by
Buyer and Seller. During the period from the date of delivery of the
Post-Closing Statement to Seller through the date of resolution of any dispute
regarding the Proposed Closing Differential as contemplated by this Section
2.2(b)(ii), Buyer shall provide Seller and its agents and representatives
reasonable access during normal business hours to the books, records (including
those supplemental schedules prepared by Buyer in connection with preparation
of the Post-Closing Statement), facilities and employees of Buyer for purposes
relevant to the review of such Post-Closing Statement and the resolution of any
related dispute.
(c) Adjustment of Purchase Price. Based on the Post-Closing
Statement, within three (3) days after the final determination of the Closing
Differential, the Purchase Price shall be adjusted as follows: if the amount
of the Closing Differential is a positive amount, then the Purchase Price shall
be adjusted upward by an amount equal to the Closing Differential. In such
case, Buyer shall pay to Seller the increase of the Purchase Price resulting
from such adjusted Purchase Price by wire transfer of immediately available
funds. Conversely, if the amount of the Closing Differential is a negative
amount, then the Purchase Price shall be adjusted downward by an amount equal
to the Closing Differential (expressed as a positive amount), which amount
shall be paid by Seller to Buyer by wire transfer of immediately available
funds.
2.3 Allocation of Purchase Price for Tax Purposes. Buyer and Seller
agree to consult with each other with respect to the allocation of the Purchase
Price and the amount of the Assumed Liabilities to the Purchased Assets;
provided, however, that nothing in this Section 2.3 shall be deemed to obligate
either Buyer or Seller to agree on such allocation.
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2.4 Transfer Taxes and Similar Charges. All recordation, transfer
and documentary taxes and fees and all excise, sales and use taxes
(collectively, "Transfer Taxes") imposed or levied by reason of, in connection
with or attributable to this Agreement and the transactions contemplated
hereby, shall be borne by the party that customarily pays such taxes in similar
transactions. Any Transfer Taxes imposed or levied by reason of, in connection
with or attributable to the transfer of any Purchased Asset from an Affiliate
of Seller to Seller prior to the Closing, shall be borne by Seller.
ARTICLE III
ASSUMPTION OF LIABILITIES
3.1 Assumed Liabilities. At the Closing, Buyer will assume and
thereafter pay, perform, or otherwise discharge, as and when the same shall
become due and payable, and hold Seller harmless from the following obligations
and liabilities (the "Assumed Liabilities"):
(a) all liabilities and obligations of Seller in respect of the
Business accrued or reserved for on the Pre-Closing Statement and remaining
unpaid and undischarged on the Closing Date;
(b) all liabilities and obligations of Seller arising in the
ordinary course of the Business between the date of the Pre-Closing Statement
and the Closing Date other than accounts payable on the books of Seller's
European operations, to the extent that the same remain unpaid and undischarged
on the Closing Date and are accrued or reserved for on the Post-Closing
Statement;
(c) all liabilities and obligations arising from product
warranty claims in respect of sales of products by the Business prior to the
Closing; provided, however, Buyer shall not assume, and shall not have any
liability for, product liability claims or product warranty claims arising from
an Epidemic Failure (as hereinafter defined) in each case arising from the
operation of the Business prior to the Closing; and
(d) subject to Section 1.3, all liabilities and obligations of
Seller under the Contracts other than payment and performance of obligations
payable or dischargeable prior to the Closing.
Other than as set forth in this Section 3.1, Buyer shall assume no liabilities
from Seller whether known or unknown, absolute or contingent, accrued or
unaccrued or due or to come due.
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3.2 Retained Liabilities. Other than as set forth in Section 3.1
above, all debts, liabilities and obligations of Seller or arising from the
operation of the Business prior to the Closing (including without limitation,
product liability claims, product warranty claims relating to Epidemic Failure
and environmental claims) shall continue after the Closing to be the debts,
liabilities and obligations of Seller (collectively, the "Retained
Liabilities").
ARTICLE IV
CLOSING
4.1 Closing. The consummation of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Seller, 00000 Xxxxx
Xxxxxxx Xxxxxxxxxx, Xxxxxx, Xxxxx (or at such other place as the parties may
designate), at 9:00 a.m. (Dallas, Texas time) on or before August 31, 1996 or
such later date as the conditions specified in Articles X and XI are fulfilled
(or waived by the party entitled to waive that condition). The date on which
the Closing is effected is referred to in this Agreement as the "Closing Date."
4.2 Deliveries at Closing. At the Closing:
(a) Seller shall deliver to Buyer the items described in
clauses (i) through (ix) below:
(i) a Xxxx of Sale, in form and substance
reasonably satisfactory to Buyer and Seller (the "Xxxx of Sale"), executed by
Seller;
(ii) an Assignment and Assumption Agreement, in
form and substance reasonably satisfactory to Buyer and Seller (the "Assignment
Agreement"), executed by Seller;
(iii) a Trademark Assignment, in form and
substance reasonably satisfactory to Buyer and Seller (the "Trademark
Assignment");
(iv) a Sales Agency Agreement, substantially in
the form previously agreed to by the parties (the "Sales Agency Agreement"),
executed by Seller;
(v) a Transition Master Services Agreement,
substantially in the form previously agreed to by the parties (the "Transition
Services Agreement"), executed by Seller;
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(vi) a License Agreement, substantially in the
form of Exhibit A hereto (the "License Agreement"), executed by Seller;
(vii) a Certificate, dated the Closing Date, in
the form described in Section 10.1, executed by Seller;
(viii) evidence that the party signing this
Agreement on behalf of Seller is authorized to do so; and
(ix) all other documents, certificates,
instruments or writings reasonably requested by Buyer in connection herewith.
(b) Buyer shall deliver to Seller the items described in
clauses (i) through (ix) below:
(i) the Purchase Price described in Section 2.1
above by wire transfer of immediately available funds;
(ii) the Assignment Agreement, executed by Buyer;
(iii) the Trademark Assignment, executed by Buyer;
(iv) the Sales Agency Agreement, executed by
Buyer;
(v) the Transition Services Agreement, executed
by Buyer;
(vi) the License Agreement, executed by Buyer;
(vii) a Certificate, dated the Closing Date, in
the form described in Section 11.1, executed by Buyer;
(viii) evidence that the party signing this
Agreement on behalf of Buyer is authorized to do so; and
(ix) all other documents, certificates,
instruments or writings reasonably requested by Seller in connection herewith.
(c) The Xxxx of Sale, Assignment Agreement, Trademark
Assignment, Sales Agency Agreement, Transition Services Agreement and License
Agreement shall constitute, collectively, the "Collateral Agreements."
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4.3 Delivery of Purchased Assets. Title to the Purchased Assets
shall pass to Buyer as of Closing at the applicable places of business of
Seller. Following the Closing, Seller will deliver to Buyer full possession
and control of the Purchased Assets (it being understood that title to the
Purchased Assets will pass to Buyer, but unless Buyer directs otherwise after
the Closing, any Purchased Assets held by suppliers or contractors shall not be
required to be delivered to Buyer at the Closing). All tangible assets
constituting a part of the Purchased Assets located at Seller's places of
business will, unless Seller and Buyer otherwise agree, be delivered to Buyer's
place of business by means of delivery jointly determined by Seller and Buyer,
and Buyer will bear the cost of such delivery.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as of the date hereof
and as of the Closing Date as follows:
5.1 Existence and Authority of Seller. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Seller has the full corporate power and authority to carry on the
Business as now conducted, to enter into this Agreement and the Collateral
Agreements, and to perform its obligations hereunder and thereunder. The
execution, delivery and performance of this Agreement and the Collateral
Agreements by Seller have been duly and validly authorized by all necessary
corporate proceedings on the part of Seller. This Agreement constitutes and,
when executed and delivered, the Collateral Agreements will constitute, the
legal, valid and binding obligations of Seller or, as applicable, a Subsidiary
of Seller, enforceable against it in accordance with their respective terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization and similar laws affecting creditors' rights and remedies
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).
5.2 Consents and Approvals; Absence of Violations.
(a) Except as set forth in Schedule 5.2, no notification,
authorization, consent or approval of, or notice to, or filing or registration
with, any Governmental Authority (as hereinafter defined) is required to be
obtained or given or waiting period required to expire as a condition to
Seller's execution of this Agreement or the Collateral Agreements and the
performance of its obligations hereunder and thereunder other than (i) filings
with the FTC (as hereinafter defined) and the DOJ (as hereinafter defined)
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pursuant to the HSR Act (as hereinafter defined) and (ii) notifications,
authorization, consents, approvals, notices, filings or registrations which the
failure to obtain or make, in the aggregate, would not be reasonably likely to
have a Material Adverse Effect (as hereinafter defined).
(b) Neither Seller's execution and delivery of this Agreement
or of the Collateral Agreements, nor Seller's performance of its obligations
hereunder or thereunder, will (i) violate any provision of, or result in the
acceleration of, or entitle any party to accelerate (whether after the filing
of notice or lapse of time or both), any obligation, or permit any person to
terminate, modify or cancel the rights of Seller or result in the creation or
imposition of any lien, charge, pledge, security interest or other encumbrance
upon any Purchased Assets under any provision of any mortgage, lien, agreement,
license or other obligation to which Seller is a party, or by which Seller is
bound, or to which Seller's assets are subject, (ii) violate any provision of
the certificate of incorporation or by-laws of Seller, or (iii) violate any
Laws or any judgment, order, or decree of any Governmental Authority to which
Seller is subject, except for such defaults, violations, accelerations, and
liens which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect.
5.3 Contracts. All material contracts (as hereinafter defined) of
Seller relating to the Business, and all open purchase orders relating to the
Business (in the case of Schedule 1.1(f) attached to this Agreement as of its
preparation date, such list having been prepared as of July 16, 1996 and in the
case of Schedule 1.1(f) delivered at the Closing, such list having been
prepared as of a date not more than 5 business days prior to the Closing Date)
are set forth on Schedule 1.1(f) hereto. The Contracts are valid, legal and
binding obligations of Seller, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Neither Seller nor (to the knowledge of
Seller) any other party to any Contract is in breach of any Contract except for
breaches which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect. Except as set forth on Schedule 1.1(f), no consent is
required under any contract, lease, license, purchase order or other agreement
listed on Schedule 1.1(f) in connection with the consummation of the
transactions contemplated by this Agreement except for consents which the
failure to obtain, in the aggregate, is not reasonably likely to have a
Material Adverse Effect. At the Closing, the updated list of Contracts on
Schedule 1.1(f) will include all Material Contracts to which Seller is a party
relating exclusively to the Business. For purposes of this Section 5.3 only,
the term "Seller" shall mean Seller or a Subsidiary of Seller, as applicable.
The open purchase orders of the Business listed on Schedule 1.1(f) are
consistent with (i) the forecasts of the Business as of the date such orders
were placed (except in the case of lifetime buys), (ii) normal lead times, and
(iii) normal transportation times.
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5.4 Intellectual Property Rights.
(a) Ownership. To the knowledge of Seller, Seller owns the
Intellectual Property and has the rights to sell, assign, transfer and deliver
such Intellectual Property as contemplated herein.
(b) No Infringement. To the knowledge of Seller, the
Intellectual Property does not conflict with or infringe, and no one has
asserted to Seller in writing that such rights conflict with or infringe, any
proprietary rights, owned, possessed or used by any third party except for such
instances of infringement that are not reasonably expected to have a Material
Adverse Effect. There are no claims, disputes, actions, proceedings, suits or
appeals pending against Seller with respect to any Intellectual Property or any
Licensed Patent (as hereinafter defined) (other than those, if any, with
respect to which service of process or similar notice may not yet have been
made on Seller), and to the knowledge of Seller, none has been threatened
against Seller except for such claims, disputes, actions, proceedings, suits or
appeals which are not reasonably expected to have a Material Adverse Effect.
Seller makes no representation as to the commercial value of any of the
Intellectual Property or any Licensed Patent.
(c) Disclaimer. Except as specifically provided above, no
warranty or representation by Seller is made that making, having made, selling,
or using the Intellectual Property or any Licensed Patent will be free from
infringement of patents or other intellectual property rights of others nor
shall any representation or warranty be construed as an agreement by Seller to
bring or prosecute actions or suit against third parties for infringement or
conferring any right to bring or prosecute actions or suit against third
parties for infringement.
5.5 Capital Equipment and Expensed Assets. All Capital Equipment
listed on Schedule 1.1(a) and all the Expensed Assets are in reasonably good
condition and repair (subject to normal wear and tear) and are adequate for the
uses to which they are being put or designed to be put. At the Closing, Buyer
will acquire good title to all of the Capital Equipment and Expensed Assets
free and clear of all liens, claims and encumbrances. The Capital Equipment
and Expensed Assets included in the Purchased Assets include all of the
material manufacturing equipment and expensed assets necessary to produce the
products of the Business as such products have been produced by Seller prior to
the Closing.
5.6 Inventory. The Inventory reflected on the Pre-Closing Statement
or acquired since the date thereof was acquired or produced and has been
maintained in the ordinary course of the conduct of the Business. At the
Closing, Buyer will acquire good and marketable title to the Inventory, free
and clear of all liens, claims and encumbrances.
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5.7 Accounts Receivable. The accounts receivable of Seller arising
from the Business as set forth on the Pre-Closing Statement or arising since
the date thereof are valid and genuine and have arisen solely out of bona fide
sales and deliveries of goods, performance of services and other business
transactions in the ordinary course of the operation of the Business. The
allowance for collection losses on the Pre-Closing Statement will have been
determined in accordance with Seller's Accounting Policies. At the Closing,
Buyer will acquire good title to the accounts receivable included in the
Purchased Assets, free and clear of all liens, claims and encumbrances.
5.8 Litigation. There are no legal, administrative, arbitration,
investigatory, or other proceedings, or any other claims asserted in writing,
pending or, to Seller's knowledge, threatened against the Business or directly
affecting any of the Purchased Assets except for proceedings and claims which,
in the aggregate, are not reasonably likely to have a Material Adverse Effect.
There are no product liability lawsuits, claims or other proceedings pending
or, to Seller's knowledge, threatened relating to the Business except for
claims, lawsuits or other proceedings which, in the aggregate, are not
reasonably likely to have a Material Adverse Effect.
5.9 Compliance with Law. To Seller's knowledge, the Purchased
Assets and their use by Seller and the sale of products of the Business by
Seller comply with all applicable Laws except for instances of noncompliance
which in the aggregate, are not reasonably likely to have a Material Adverse
Effect.
5.10 Historical Financial Information; Projections. Schedule 5.10
contains certain information regarding the historical revenues, expenses,
assets and liabilities of the Business (the "Historical Information"). The
Historical Information has been derived from the books and records of Seller
and prepared on a basis consistent with Seller's Accounting Policies. Seller's
Accounting Policies are consistent with GAAP. To Seller's knowledge, such
Historical Information does not contain any material omissions, inaccuracies or
misstatements and are not expected to differ materially from the financial
statements to be prepared pursuant to Section 9.2. There are no material
reserves related to the Business reflected in the consolidated financial
statements of Seller for corresponding periods that are not reflected in the
Historical Financial Information. The financial projections included in
Schedule 5.10 were prepared as of May 9, 1996 based on assumptions considered
as of that date to be reasonable by the management of the Business with respect
to the future operations of the Business and based on the good faith judgment
of the management of the Business. Seller makes no representation or warranty
as to the accuracy of any of such financial projections.
5.11 No Material Adverse Change. Since December 31, 1995, Seller
has not suffered any material change in the results of operations, assets or
financial condition of the
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portion of the Business not related to the design, development, marketing and
sale of laser printer hardware.
5.12 Brokers. No broker, finder, agent or similar intermediary has
acted for or on behalf of Seller in connection with this Agreement or the
transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's, or similar fee or other
commission in connection herewith, based on any agreement or understanding with
Seller or any action taken by Seller.
5.13 Knowledge. As used in this Article V, the terms "to Seller's
knowledge" and "to the knowledge of Seller" shall mean the actual knowledge of
the persons listed on Schedule 5.13 after due inquiry.
5.14 Employee Plans. Each employee plan of Seller in which the
employees listed on Schedule 9.7(a) or Schedule 9.7(b) participate and which is
intended to be qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (the "Code") has heretofore been determined by the Internal
Revenue Service to so qualify. To the knowledge of Seller, nothing has
occurred since the date of the most recent determination that would be
reasonably likely to cause any such employee plan to fail to qualify under
Section 401(a) of the Code.
5.15 Reliance. The representations and warranties of Buyer contained
in this Agreement constitute the sole and exclusive representations and
warranties of Buyer to Seller in connection with this Agreement and the
transactions contemplated hereby, and Seller acknowledges that all other
representations and warranties are specifically disclaimed and may not be
relied upon or serve as a basis for a claim against Buyer.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as of the date hereof
and as of the Closing Date as follows:
6.1 Existence and Authority of Buyer. Buyer is a corporation
validly existing and in good standing under the laws of Delaware and has
full corporate power and authority to enter into this Agreement and the
Collateral Agreements and to perform its obligations hereunder and thereunder.
The execution, delivery and performance of this Agreement and the Collateral
Agreements by Buyer have been duly authorized by all necessary corporate
proceedings on the part of Buyer. The Agreement constitutes, and when executed
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and delivered, the Collateral Agreements will constitute, the legal, valid and
binding obligations of Buyer, enforceable against it in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity).
6.2 Consents and Approvals; Absence of Violations.
(a) Except as set forth in Schedule 6.2, no notification,
authorization, consent or approval of, or notice to, any Governmental Authority
is required to be obtained or given or waiting period required to expire as a
condition to Buyer's execution of this Agreement or of the Collateral
Agreements and the performance of its obligations hereunder and thereunder
other than filings with the FTC and the DOJ pursuant to the HSR Act.
(b) Neither Buyer's execution and delivery of this Agreement or
of the Collateral Agreements, nor Buyer's performance of its obligations
hereunder and thereunder, will (i) except as set forth in Schedule 6.2, violate
any provision of, or result in the acceleration of, or entitle any party to
accelerate (whether after the filing of notice or lapse of time or both), any
obligation under, or permit any person to terminate, modify or cancel the
rights of Buyer under, any provision of any mortgage, lien, agreement, license
or other obligation to which Buyer is a party, or by which Buyer is bound, or
to which Buyer's assets are subject, (ii) violate any provision of the charter
or by-laws of Buyer, or (iii) violate any provisions of Laws or any judgment,
order, or decree of any court or governmental agency to which Buyer is subject.
6.3 Brokers. No broker, finder, agent or similar intermediary has
acted for or on behalf of Buyer in connection with this Agreement or the
transactions contemplated hereby, and no broker, finder, agent or similar
intermediary is entitled to any broker's, finder's or similar fee or other
commission in connection herewith based on any agreement or understanding with
Buyer or any action taken by Buyer.
6.4 Financing. Buyer has delivered to Seller a true and complete
copy of an executed commitment letter dated July 22, 1996 from NationsBank
which commitment letter is in form and substance satisfactory to Seller.
6.5 Reliance. The representations and warranties of Seller
contained in this Agreement constitute the sole and exclusive representations
and warranties of Seller to Buyer in connection with this Agreement and the
transactions contemplated hereby, and Buyer acknowledges that all other
representations and warranties are specifically disclaimed and may
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not be relied upon or serve as a basis for a claim against Seller. BUYER
ACKNOWLEDGES THAT SELLER DISCLAIMS ALL WARRANTIES OTHER THAN THOSE EXPRESSLY
CONTAINED IN THIS AGREEMENT AS TO THE PURCHASED ASSETS, OR ANY OF THEM, EITHER
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VII
COVENANTS OF SELLER
7.1 Conduct of Business and Compliance. Except as otherwise agreed
to by Buyer, which agreement shall not be unreasonably withheld or delayed, or
as otherwise contemplated hereby, Seller covenants and agrees that, between the
date hereof and the Closing, Seller shall:
(a) conduct the Business generally in its customary and usual
manner, including without limitation engaging in marketing efforts at a level
substantially consistent with the financial projections included in Schedule
5.10;
(b) use, operate, repair and maintain all property included in
the Purchased Assets in a commercially reasonable manner consistent with
Seller's past practice;
(c) use commercially reasonable efforts to maintain in full
force and effect all Contracts, permits and other obligations, in all material
respects, which are related to the Business;
(d) use commercially reasonable efforts to retain and preserve
the relationships with and the goodwill of, the present and potential
customers, suppliers and employees of the Business and others having business
relations with the Business;
(e) promptly advise Buyer in writing of the commencement of,
and of any known threat to commence, any suit, claim, action, arbitration,
legal or administrative proceeding, governmental investigation, or tax audit
against the Business or which involve the Purchased Assets;
(f) comply in all material respects with all applicable Laws;
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(g) not enter into any agreement or commitment involving an
aggregate capital expenditure or commitment exceeding $100,000 not in the
ordinary course of Seller's conduct of the Business; and
(h) not enter into any agreement with any Affiliate of Seller
not in the ordinary course of Seller's conduct of the Business.
7.2 Pre-Closing Access. Prior to Closing, Seller shall give the
employees, attorneys and accountants of Buyer and the employees of Atlantic
Design Company, Inc. ("ADC"), at Buyer's reasonable request, reasonable access
during normal business hours to the personnel, properties, books, contracts,
reports and records (including financial information) relating to the Business
in order that Buyer may have the opportunity to make such investigation as it
desires of the affairs of the Business and to furnish Buyer and ADC with
information, and copies of all documents and agreements including but not
limited to financial and operating data and other information concerning the
financial condition, results of operations and business of the Business, that
Buyer may reasonably request, but subject to such reasonable limitations as may
be imposed by Seller. The rights of Buyer and ADC under this Section 7.2 shall
not be exercised in such a manner as to interfere with Seller's operation of
the Business. Seller shall have no duty hereunder to provide access to Buyer
or ADC to any information as to which Seller owes any third party a duty of
confidentiality without such third party's prior written consent; provided,
however, that Seller agrees to use commercially reasonable efforts to obtain
such consents with respect to Material Contracts as soon as practicable after
the date hereof. Prior to the Closing, Seller shall use commercially
reasonable efforts to assist Buyer in verifying the assembly instruction
documentation used in the Business.
7.3 Update to Disclosure. From time to time prior to the Closing,
Seller will supplement or amend the disclosure schedules delivered in
connection herewith with respect to any matter which, if existing or occurring
at or prior to the date of this Agreement, would have been required to be set
forth or described in such disclosure schedules or which is necessary to
correct any information in such disclosure schedules which has been rendered
inaccurate thereby. If the Closing occurs, Buyer waives any right or claim it
may otherwise have or have had on account of any matter so disclosed in such
supplement or amendment.
7.4 Compliance. Seller covenants and agrees that between the date
hereof and the Closing, Seller shall not take any action that would cause the
representations and warranties made by Seller herein not to be true and
correct, in all material respects, as of the Closing without the prior written
consent of Buyer.
7.5 Acquisition Proposals. From and after the date of this
Agreement, Seller shall not, nor shall it authorize or permit any officer,
director or employee of, or any
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investment banker, attorney, accountant or other representative retained by,
Seller to, solicit, initiate or encourage submission of any proposal or offer
(including by way of furnishing information) from any person which constitutes,
or may reasonably be expected to lead to, any Acquisition Proposal. As used in
this Agreement, "Acquisition Proposal" shall mean any proposal for or offer to
acquire in any manner a substantial portion of the Purchased Assets.
ARTICLE VIII
COVENANTS OF BUYER
8.1 Compliance. Buyer covenants and agrees that between the date
hereof and the Closing, Buyer shall not take any action that would cause the
representations and warranties made by Buyer herein not to be true and correct,
in all material respects, as of the Closing without the prior written consent
of Seller.
ARTICLE IX
ADDITIONAL COVENANTS
9.1 Names, Trademarks, Etc. Buyer and its affiliates will revise
trademarks and product literature, change signage and stationery and otherwise
discontinue use of the names "TEXAS INSTRUMENTS INCORPORATED," "TI" and
variations thereof (collectively, the "TI Trade Names") as promptly as
practicable after the Closing; provided, however, that Buyer may consume the
Inventory, stationery and similar supplies on hand or on order as of the
Closing which contain TI Trade Names thereon; provided that to the extent
practicable, such items are overstamped or otherwise appropriately indicate
that the Business is then being conducted by Buyer. Buyer shall be permitted
to utilize the TI Trade Names solely as set forth on Schedule 9.1 in connection
with products of the Business for the life of such products to the extent
Buyer's utilization thereof is accurate. Except as expressly provided in this
Section 9.1, Buyer shall not be permitted to use the TI Trade Names in any
manner.
9.2 Preparation of Financial Statements. Seller shall, as soon as
practicable following the date of this Agreement, provide to Ernst & Young,
LLP, on a confidential basis, such financial information as required to
determine the periods for which historical financial statements of the Business
will be required to be filed by Buyer with the SEC pursuant to the provisions
of Rule 3-05(b) of Regulation S-X promulgated by the SEC. The parties
acknowledge that financial statements have never been prepared and are not
currently available for the Business. Buyer shall, as soon as practicable
following the date of this
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Agreement, advise Seller of the form and content of the audited and unaudited
historical financial statements and other financial data of the Business
required by Buyer to comply with its filing obligations with the SEC under the
rules and regulations of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including Regulation S-X) in connection with the consummation
of the transactions contemplated hereby (the "Financial Statements"). Seller
shall cause the Financial Statements to be prepared and delivered to Buyer as
soon as practicable and in any event within 60 days following such notice so as
to enable Buyer to timely file the Financial Statements with the SEC. The
Financial Statements will conform to the requirements of the Exchange Act as
set forth in the notice of Buyer. Buyer shall pay all fees and expenses of
Ernst & Young, LLP in connection with the preparation and audit of the
Financial Statements.
9.3 Government Approvals. Each of Buyer and Seller will use
commercially reasonable efforts to obtain and to cooperate with the other party
in obtaining, all authorizations, consents, orders and approvals of any
Governmental Authority that may be or become necessary in connection with the
consummation of the transactions contemplated by this Agreement. Promptly
following the execution of this Agreement, Seller and Buyer shall each file (i)
a Premerger Notification and Report Form and all documentary attachments
thereto to be filed with the FTC and the DOJ pursuant to the HSR Act and (ii)
any notices required (if any) under the laws of Belgium. Buyer shall pay all
filing fees required by the HSR Act in connection with the transactions
contemplated by this Agreement. Seller and Buyer shall file any additional
information requested by the FTC, the DOJ or any Belgian governmental agency in
connection with this Agreement or the transactions contemplated hereby as soon
as practicable after receipt of any request for such information. Neither
Seller nor Buyer shall unreasonably take or fail to take any action which
reasonably could be expected to have the effect of delaying, impairing or
impeding the receipt of any authorizations, consents, orders and approvals of
any Governmental Authority (including without limitation approval under the HSR
Act) as contemplated by this Section 9.3. Buyer and Seller agree that any
filing fee required to be paid in connection with any filing with any Belgian
governmental agency shall be paid one-half by Seller and one-half by Buyer.
9.4 Solicitation of Employees. For a period of twenty-five months
following the Closing Date, Buyer and Seller will not solicit for employment or
hire, employ or otherwise retain any employee of the other party or any of the
individuals listed on Schedule 9.7(a), including such listed individuals who
refuse an offer of employment by Buyer; provided, however, that, (i) Buyer
shall have the right to solicit for employment and employ any individual listed
on Schedule 9.7(a) or Schedule 9.7(b), (ii) neither party shall be prohibited
from general employment advertising, and (iii) Buyer's restrictions under this
Section 9.4 shall relate solely to employees of Seller employed in the Business
prior to the Closing who do not accept employment with Buyer.
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9.5 Assignment of Contracts. Seller shall cause its Subsidiaries,
as appropriate, to transfer to Buyer ownership of the Purchased Assets,
including without limitation to assign (subject to Section 1.3) their
respective rights and obligations under the Contracts as necessary to
consummate the transactions contemplated by this Agreement in accordance with
its terms.
9.6 Satisfaction of Conditions. Each of Buyer and Seller will use
commercially reasonable efforts in good faith to satisfy promptly all
conditions required hereby to be satisfied by such party and take such other
actions as may be necessary in order to consummate the transactions
contemplated by this Agreement.
9.7 Employee Matters.
(a) At or prior to the Closing, Buyer will offer employment to
the individuals listed on Schedule 9.7(a) (such employment to become effective
immediately after 12:01 a.m. Dallas, Texas time on the Closing Date (the "New
Employment Start Date") and to be contingent upon the consummation of the
transactions contemplated by this Agreement). Employment will be offered (i)
beginning on the New Employment Start Date at base salary rates not less than
the current base salary rates as of July 1, 1996 for such individuals and (ii)
at a location designated by Buyer not more than 50 miles from such individual's
place of employment prior to the Closing (although the offer need not guarantee
continued employment within such geographic area).
(b) Seller shall terminate the employment of the domestic
employees listed on Schedule 9.7(a) on and as of the Closing Date, such
termination to be deemed effective as of 12:00 midnight Dallas, Texas time
immediately preceding the Closing Date. Buyer will hire, on an "at will" basis
and subject to Buyer's terms, conditions and policies of employment, if any,
each of the individuals listed on Schedule 9.7(a) who are terminated by Seller
on the Closing Date pursuant to the immediately preceding sentence and accept
employment with Buyer. Seller shall permit Buyer to recruit the employees
listed on Schedule 9.7(b).
(c) Buyer will provide to all domestic employees listed on
Schedule 9.7(a) or (b) who accept Buyer's offer of employment extended pursuant
to Section 9.7(a) or (b) above, employee benefits equivalent to such benefits
provided generally to all employees of Buyer, subject to the special terms set
forth in Sections 9.7(d), (e) or (f). Buyer will provide to all international
employees listed on Schedule 9.7(a) who accept Buyer's offer of employment
extended pursuant to Section 9.7(a) above, employee benefits and other terms
and conditions of employment at least identical to those provided to such
employees by Seller as of July 1, 1996, to the extent that Buyer is in a
position to provide an identical benefit and, where Buyer's provision of an
identical benefit is impracticable or impossible in the case of programs
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such as stock option plans and profit sharing programs, Buyer will provide a
program of comparable value (comparability to be determined to the reasonable
satisfaction of Seller and with a view to providing Seller with a successful
defense to any allegation or claim that such employees might make for severance
or termination indemnity); provided, however, that Buyer does not warrant that
any such defense will be successful.
(d) Domestic employees listed on Schedule 9.7(a) or Schedule
9.7(b) who accept Buyer's offer of employment at the Closing will generally be
treated as new hires for purposes of Buyer's employee benefits except as
follows:
(i) Medical and life insurance: Pre-existing
conditions clause will be waived. HMO will be provided for Temple
employees. The cost to employees will be the same as with Seller until
December 31, 1996. Thereafter, the cost to employees shall be the same as
for other employees of Buyer.
(ii) Retiree medical insurance: None.
(iii) 401(k) Plan: Buyer will accept transfer
of employee accounts and loans from Seller's tax-qualified 401(k) plan. That
transfer shall be made in accordance with applicable law. Employees will be
immediately eligible to participate in Buyer's 401(k) plan effective as of the
New Employment Start Date and will be fully vested in employer contributions
when made as if they were fully vested existing employees of Buyer.
(iv) Drug screening: Pre-employment drug
screening shall be waived by Buyer.
(v) Vacation: Employees accepting employment
with Buyer shall be treated as new hires by Buyer and will receive
additional benefits as described in subparagraph (f) below.
(vi) Severance: Employees accepting employment
with Buyer shall be treated as new hires by Buyer and will receive
alternative benefits as described in subparagraph (e) below.
(vii) Tuition plan: Waiting period for
participation will be waived by Buyer.
(viii) Bonus: Employees shall participate in
Buyer's bonus plan for the third and fourth quarter of 1996. Seller shall
pay accrued bonus through
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Closing Date. Buyer shall pay the retention bonuses payable pursuant to
subparagraph (e) below.
(e) Seller will accrue a liability on the Pre-Closing Statement of
$500,000 (the "Severance/Retention Pool"). In the event any domestic employee
of Seller who accepts employment with Buyer is terminated by Buyer (for reasons
other than just cause) during the two year period immediately following the
Closing, such employee will be eligible for a severance payment equal to the
amount that would have been paid to such individual at the time of his/her
employment termination by Seller had such individual been entitled to a
severance payment at that time. Buyer will not provide such employee with any
other post-termination benefits except as required by law. Any transferred
employee who remains employed by Buyer on the second anniversary of the Closing
will be paid a retention bonus equal to 20% of their then current annual base
salary. After the second anniversary of Closing, Buyer will calculate the
total amount of all severance payments and retention bonuses paid by Buyer
under this subparagraph and paid by Seller to direct manufacturing employees of
Seller pursuant to the terms of the Transition Services Agreement. If such
total is less than the Severance/Retention Pool amount, Buyer will pay the
difference to Seller.
(f) Seller will accrue a liability on the Pre-Closing Statement
equal to the aggregate actual vacation days accrued by all employees accepting
employment with Buyer (not to exceed 20 days of vacation for any one employee).
All such employees shall receive cash compensation from Seller upon the
termination of their employment in respect of any vacation days in excess of 20
days. Buyer will recognize the vacation days for which such liability is
accrued. Any of the carryover vacation which has not been taken by December
31, 1997 will be paid to employees in cash by Buyer. Any vacation days carried
over from an employee's employment with Seller shall be used prior to an
employee's use of any vacation days attributable to such employee's employment
with Buyer.
9.8 Confidentiality. Each of Buyer and Seller agrees that, unless
and until the transactions contemplated hereby shall have been consummated,
the Nondisclosure Agreement dated January 29, 1996, as amended to
date, between Buyer and Seller shall remain in full force and effect.
9.9 Agreement Not to Compete.
(a) Subject to the provisions of the Sales Agency Agreement, Seller
agrees that it will not, and it will not permit any of its subsidiaries to,
engage, directly or indirectly, in the Protected Business (as hereinafter
defined) for a period of five years after the Closing Date; provided, however,
that nothing herein shall preclude Seller or any subsidiary thereof from (i)
owning an equity interest of 5% or less in any publicly traded company, (ii)
acquiring after the date hereof an equity interest in any entity which,
together with its subsidiaries, derives 25%
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or less of its consolidated revenues from the Protested Business (a
"Competitive Acquisition"), (iii) manufacturing and/or selling subassemblies or
components for or to others who may compete with the Business, or (iv)
manufacturing and/or selling printers, subassemblies and components based on
Seller's Digital Micromirror Device (as hereinafter defined). In the event of
a Competitive Acquisition, Seller agrees to use its commercially reasonable
efforts to divest, or to cause its subsidiaries to divest, that portion of the
acquired business engaged in the Protected Business (the "Competing Business")
within twenty-four (24) months after the consummation of the Competitive
Acquisition. If, after such efforts, the acquiring party is unable to dispose,
or to cause the disposition, of the Competing Business, then the parties hereto
will cooperate in good faith to develop a plan mutually satisfactory to Buyer
and Seller to eliminate or minimize, to the extent permitted by law, the
potential that the acquiring party and Buyer (or any successor thereto) shall
be engaged in competitive activities. Except as set forth in this Section
9.9(a), Seller does not intend to limit its or its subsidiaries current or
future business activities, whether or not such activities are competitive with
those of Buyer. For purposes of this Section 9.9(a), the term "Protected
Business" means the design, development, marketing and sale of travel ticket
document printers and readers, monochromatic electrophotographic page printers
using laser and LED technologies and printers using serial impact technologies
in each case operating at peak speeds of less than or equal to 18 pages per
minute and related accessory options, supplies and replaceable parts for such
printers and options.
(b) The parties recognize the broad scope of Section 9.9(a), but
agree that Buyer would not have entered into this Agreement in the absence of
the foregoing covenant not to compete. Moreover, the parties agree that the
terms of such covenant are reasonable in light of Buyer's plans for the
Protected Business, which Buyer has discussed with Seller. If, as a result of
a dispute between the parties as to this covenant, a court refuses to enforce
this noncompetition agreement for any reason, the parties shall request such
court to reform this covenant (for purposes of application in the jurisdiction
in which such dispute arises) to the extent necessary to permit its
enforcement.
9.10 Epidemic Failure. In the event that any product of the Business
sold by Seller prior to the Closing is the subject of any Epidemic Failure
(which consequently constitutes a Retained Liability), Buyer agrees that it
shall accept the return of all such products from the purchasers thereof and
shall deal with such purchasers at Seller's sole expense (including the
wholesale cost of replacing the defective products or the internal cost of
Buyer in repairing such defective products, plus the shipping and handling
costs associated with the delivery of the defective products to Buyer from the
customer and the delivery of the replacement or repaired product to the
customer by Buyer). Buyer shall invoice Seller in accordance with its
customary billing practices for the costs contemplated by this Section 9.10 and
Seller shall remit the appropriate payment to Buyer in accordance with Buyer's
customary payment practices.
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9.11 Confidential Treatment. Buyer agrees to seek confidential
treatment under Rule 24b-2 promulgated under the Exchange Act for this
Agreement and any Collateral Agreement Buyer proposes to file with the SEC.
Prior to the proposed filing of any such agreements, Buyer shall (i) give
Seller reasonable prior written notice of such proposed filing, (ii) seek
confidential treatment for those portions of such agreements reasonably
requested by Seller, (iii) use reasonable efforts to secure such confidential
treatment, and (iv) to the extent and for such period as confidential treatment
is secured, hold all such information in strict confidence.
ARTICLE X
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement are subject to the
satisfaction at or prior to the Closing of the following conditions, but
compliance with any such conditions may be waived by Buyer.
10.1 Truth of Representations and Warranties; Compliance with
Covenants. The representations and warranties of Seller contained in this
Agreement shall be true and correct, in all material respects, at and as of the
Closing, and Seller shall have performed and complied with, in all material
respects, all the covenants and agreements required by this Agreement to be
performed or complied with by Seller at or prior to the Closing and Buyer shall
have received a certificate signed by a duly authorized employee of Seller
certifying to the matters set forth in this Section 10.1.
10.2 No Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending against, and no order, decree or judgment of
any court, agency or other Governmental Authority shall have been rendered
against, Buyer or Seller and no Law shall have been enacted which renders
unlawful, restrains or prohibits as of the Closing Date, the consummation of the
transactions contemplated by this Agreement in accordance with its terms or
which could reasonably be expected to limit Buyer's ownership or control of the
Purchased Assets.
10.3 Governmental Consents or Approvals. All applicable waiting
periods under the HSR Act and applicable Belgian antitrust laws (if any) shall
have expired or been terminated.
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10.4 Third Party Consents. Seller shall have obtained and shall
have delivered to Purchaser all third-party consents to the assignment of the
Contracts listed on Schedule 10.4.
10.5 Employees. Buyer shall have received acceptances
of employment offers from all of the employees designated as Code 1 employees
on Schedule 9.7(a), at least 75% of the employees designated as Code 2
employees on Schedule 9.7(a), at least 80% of the employees designated as Code
3 employees on Schedule 9.7(a), at least 60% of the employees designated as
Code 4 employees on Schedule 9.7(a) and at least 50% of the employees
designated as Code 5 employees on Schedule 9.7(b).
ARTICLE XI
CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement are subject to the
satisfaction at or prior to the Closing of each of the following conditions,
but compliance with such conditions may be waived by Seller:
11.1 Truth of Representations and Warranties; Compliance with
Covenants. The representations and warranties of Buyer contained in this
Agreement shall be true and correct, in all material respects, at and as of the
Closing, with the same effect as though such representations and warranties
were made at and as of the Closing, and Buyer shall have performed and complied
with, in all material respects, all the covenants and agreements required by
this Agreement to be performed or complied with by Buyer at or prior to the
Closing and Seller shall have received a certificate of the President or any
Vice President of Buyer certifying to the matters set forth in this Section
11.1.
11.2 No Adverse Proceedings. No suit, action, claim or governmental
proceeding shall be pending against, and no order, decree or judgment of
any court, agency or other Governmental Authority shall have been rendered
against, Buyer or Seller and no Law shall have been enacted which renders
unlawful, restrains or prohibits, as of the Closing Date, the consummation of
the transactions contemplated by this Agreement in accordance with its terms.
11.3 Governmental Consents or Approvals. All applicable waiting
periods under the HSR Act and applicable Belgian antitrust laws (if any) shall
have expired or been terminated.
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ARTICLE XII
TERMINATION PRIOR TO CLOSING
12.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Buyer and Seller;
(b) by either Buyer or Seller:
(i) if a court of competent jurisdiction or
Governmental Authority shall have issued an order, decree or ruling or
taken any other action (which order, decree or ruling the parties hereto
shall use their best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or other
action shall have become final and nonappealable; or
(ii) if the Closing shall not have occurred on or
before September 30, 1996; provided, however, that (A) each of Seller and
Buyer shall have the right, in its sole discretion, to extend the time
period in this Section 12.1(b)(ii) an additional thirty (30) days and (B)
the right to terminate this Agreement shall not be available to any party
whose breach of this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date; or
(iii) if a material default or breach shall be
made by the other with respect to the due and timely performance of any of
its covenants or agreements contained herein, or in any of its
representations or warranties contained in the Agreement, if such default
or breach has not been cured or waived within thirty (30) days (or, if
such material breach or default shall first be discovered by the party
entitled to assert such breach or default on or after September 1, 1996,
then by September 30, 1996) after written notice to the other specifying,
in reasonable detail, such claimed material default or breach and
demanding its cure or satisfaction.
12.2 Procedure and Effect of Termination. In the event of
termination and abandonment of the transactions contemplated hereby pursuant to
Section 12.1, written notice thereof shall forthwith be given to the other
party to this Agreement and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by any of the
parties hereto. If this Agreement is terminated as provided herein:
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(a) upon request therefor, each party will redeliver all documents,
work papers and other material of any other party relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof, to
the party furnishing the same; and
(b) no party hereto shall have any liability or further obligation
to any other party to this Agreement resulting from such termination except (i)
that the provisions of the Nonsolicitation Agreement dated June 13, 1996,
between Buyer and Seller (the "Nonsolicitation Agreement"), Section 9.8, this
Section 12.2 and the proviso of Section 12.1(b)(ii) shall remain in full force
and effect and (ii) no party waives any claim or right against a breaching
party to the extent that such termination results from the breach by a party
hereto of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
ARTICLE XIII
INDEMNIFICATION
13.1 Indemnification by Seller. Seller will indemnify and hold
harmless Buyer, its subsidiaries and affiliates, and each of their respective
officers, directors, shareholders, employees and agents from and against:
(a) Any and all Retained Liabilities;
(b) Any and all losses, liabilities, damages, costs and
obligations (or actions or claims in respect thereof) which Buyer may suffer or
incur, insofar as such losses, liabilities, damages, costs, or obligations (or
actions or claims in respect thereof) arise out of or are based upon the breach
of any representation or warranty of Seller set forth herein;
(c) Any and all losses, liabilities, damages, costs and
obligations (or actions or claims in respect thereof) which Buyer may suffer or
incur, insofar as such losses, liabilities, damages, costs, or obligations (or
actions or claims in respect thereof) arise out of or are based upon the breach
of any covenant or agreement of Seller set forth herein;
(d) Any and all brokers' or similar fees or commissions in
connection herewith, based on any understanding with Seller or any action taken
by Seller;
(e) Any and all losses and costs which Buyer may suffer or
incur, insofar as such losses and costs arise out the inability of Buyer to
collect (in the ordinary course and within 180 days of the Closing Date) the
accounts receivable reflected on the Post-Closing Statement and owed by Trans
Capital Sdn. Bhd. and IEC Electronics Corporation;
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(f) Up to $500,000 in costs which Buyer may incur insofar as
such costs arise out of severance payments actually made by Buyer to Xxxxxx
XxXxxx; and
(g) Any and all legal and other expenses reasonably incurred by
Buyer or any of its officers, directors, or controlling persons in connection
with investigating, defending, or prosecuting any of the matters referred to in
paragraph (a), (b), (c), (d), (e), or (f) above (or actions or claims in
respect thereof) whether or not resulting in any loss, liability, damage, cost,
or obligation.
13.2 Indemnification by Buyer. Buyer will indemnify and hold
harmless Seller, its subsidiaries and affiliates, and each of their respective
officers, directors, shareholders, employees and agents from and against:
(a) Any and all Assumed Liabilities;
(b) Any and all losses, liabilities, damages, costs and
obligations (or actions or claims in respect thereof) which Seller may suffer
or incur, insofar as such losses, liabilities, damages, costs or obligations
(or actions or claims in respect thereof) arise out of or are based upon the
breach of any representation or warranty of Buyer set forth herein;
(c) Any and all losses, liabilities, damages, costs and
obligations (or actions or claims in respect thereof) which Seller may suffer
or incur, insofar as such losses, liabilities, damages, costs, or obligations
(or actions or claims in respect thereof) arise out of or are based upon the
breach of any covenant or agreement of Buyer set forth herein;
(d) Any and all brokers' or similar fees or commissions in
connection herewith, based on any understanding with Buyer or any action taken
by Buyer;
(e) Any and all losses, liabilities, damages, costs and
obligations (or actions or claims in respect thereof) which Seller may suffer
or incur, insofar as such losses, liabilities, damages, costs, or obligations
(or actions or claims in respect thereof) arise out of or are based upon
Buyer's conduct of the Business from and after the Closing; and
(f) Any and all legal and other expenses reasonably incurred by
Seller or any of its officers, directors, or controlling persons in connection
with investigating, defending, or prosecuting any of the matters referred to in
paragraph (a), (b), (c), (d), or (e) above (or actions or claims in respect
thereof) whether or not resulting in any loss, liability, damage, cost, or
obligation.
13.3 Limitations on Indemnification.
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(a) Notwithstanding any other provision hereof or any
applicable Law, no Indemnified Party (as hereinafter defined) will be entitled
to make a claim against an Indemnifying Party (as hereinafter defined) under
Section 13.1(b) or Section 13.2(b), as applicable, unless and until the
aggregate amount of indemnifiable losses incurred under Section 13.1(b) or
Section 13.2(b), as applicable, exceeds $200,000 (the "Deductible"), in which
event the Indemnified Party will be entitled to make a claim against the
Indemnifying Party only to the extent the amount of such indemnifiable losses
exceeds such Deductible.
(b) Neither Indemnifying Party shall be liable for
indemnification payments under Section 13.1(b) or Section 13.2(b) to the extent
such aggregate indemnification payments by such Indemnifying Party exceed $10
million.
(c) The representations and warranties of Seller and of Buyer
contained in this Agreement shall survive the Closing until the expiration of
one year from the Closing Date. Any claim for indemnification with respect to
any of such matters which is not asserted by notice given as herein provided
relating thereto within such specified period of survival may not be pursued
and is hereby irrevocably waived after such time.
(d) The right to indemnification in respect of breaches of
representations and warranties hereunder shall be unaffected by any
investigation conducted by or knowledge obtained by Buyer prior to the Closing;
provided, however, if the Closing occurs, no claim for indemnification may be
asserted under Section 13.1(b) with respect to any matter discovered by or
known to Buyer on or before the date hereof or as provided in Section 7.3
unless such matter was disclosed to Seller immediately upon its discovery by
Buyer.
(e) Notwithstanding anything to the contrary herein contained,
except in the case of the termination of this Agreement in violation of Article
XII, neither Buyer nor Seller shall be liable under Section 13.1(b) or Section
13.2(b) for any special, consequential, incidental or indirect damages
(including without limitation loss of profit) whether or not such party has
been advised of the possibility of such loss, however caused and on any theory
of liability arising out of the transactions contemplated by this Agreement or
any document, instrument or agreement contemplated hereby, it being understood
that this exclusion includes liability that may arise out of third-party
claims.
(f) Anything to the contrary contained herein notwithstanding,
Buyer and Seller agree that if a claim may reasonably be asserted under Section
13.1(b) or 13.2(b), as the case may be, or under a subsection which is not
subject to the limitations contained in this Section 13.3, then the party
seeking indemnification may assert such claim under such subsection not subject
to any limitations; provided, however, that the assertion of any such
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claim under a subsection not subject to any limitations will not be deemed to
be determinative as to whether such claim is or is not subject to the
limitations contained in this Section 13.3.
13.4 Notice and Defense Procedures.
(a) Whenever any claim shall arise or any proceeding shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to this Article XII, such person (the "Indemnified Party") shall
promptly notify (in no event later than ten business days after receipt of such
notice) the person against whom such indemnity may be sought (the "Indemnifying
Party") thereof in writing, including, when known, the facts constituting the
basis for such claim or proceeding and the amount or an estimate of the amount
of the indemnified liability arising therefrom (such notification being the
"Claims Notice"). In addition, each party hereto hereby agrees to provide to
the other party written notification and copies of communication from third
parties received or made by such parties relating to any matter subject to any
indemnification hereunder. The failure by an Indemnified Party to timely
furnish to the Indemnifying Party any notice or copy required to be furnished
under this Section 13.4(a) shall not relieve the Indemnifying Party from any
responsibility for the matters relating to such notice or copy, unless such
failure adversely prejudices the ability of the Indemnifying Party to defend
such matter.
(b) In connection with any claim giving rise to indemnity
hereunder arising out of any claim or legal proceeding by any person who is not
an Indemnified Party, the Indemnifying Party at its sole cost and expense may,
upon written notice to the Indemnified Party, elect to assume the defense of
any such claim or legal proceeding. If the Indemnifying Party has so elected
to assume the defense of any such claim or legal proceeding, such defense shall
be conducted by counsel chosen by the Indemnifying Party, provided that such
counsel is reasonably satisfactory to the Indemnified Party. The Indemnified
Party shall be entitled to participate in (but not control) the defense of any
such action, with its counsel and at its own expense. If the Indemnifying
Party has elected to assume the defense of any claim or legal proceeding as
provided herein, the Indemnified Party shall not be entitled to indemnification
as to fees and expenses of any counsel retained by the Indemnified Party after
the time at which the Indemnifying Party has so elected. The Indemnified Party
shall not settle or compromise any indemnified liability without the prior
written consent of the Indemnifying Party, which shall not be unreasonably
withheld. In the event that the Indemnifying Party shall so assume such
defense, it shall not compromise or settle any such claim, action, or suit
unless (i) the Indemnified Party gives its prior written consent, which shall
not be unreasonably withheld, or (ii) the terms of the compromise or settlement
of such claim, action, or suit provide that the Indemnified Party shall have no
responsibility for the discharge of any settlement amount and impose no other
obligations or duties on the Indemnified Party, and the compromise or
settlement discharges all rights against the Indemnified Party with respect to
such claim, action, or suit. If a firm offer is made to
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settle a pending or threatened claim, action or proceeding for which the
Indemnified Party may be entitled to indemnification hereunder and which
involves only the payment of money damages and the Indemnifying Party desires
to accept and agree to such offer, Indemnifying Party will give written notice
to the Indemnified Party to that effect. If the Indemnified Party fails to
consent to such firm offer within ten calendar days after its receipt of such
notice, the Indemnifying Party may continue to contest or defend such claim
and, in such event, the maximum liability of the Indemnifying Party as to such
claim will not exceed the amount of such settlement offer. The Indemnified
Party will cooperate with the defense of any such claim, action, or suit and
will provide such personnel, technical support, and access to information as
may be reasonably requested by the Indemnifying Party in connection with such
defense.
13.5 Insurance. The amount of any liability for which an Indemnified
Party shall be entitled to indemnification shall take into consideration the
amount of insurance or other third party proceeds, if any, actually received by
the Indemnified Party in respect of such liability, and such amount of
insurance proceeds shall not be included in any calculation of the maximum
aggregate amount of indemnification as set forth in Section 13.3(a). Upon
making any indemnity payment, the Indemnifying Party will, to the extent of
such indemnity payment, be subrogated to all rights of the Indemnified Party
against any third party in respect of the loss to which the indemnity payment
relates. Without limiting the generality or effect of any other provision
hereof, the Indemnified Party and the Indemnifying Party will duly execute upon
request all instruments reasonably necessary to evidence and perfect the
above-described subrogation and subordination rights.
13.6 Adjustment to Purchase Price. Buyer and Seller agree that any
indemnity payment hereunder shall be treated as an adjustment to the Purchase
Price.
13.7 Exclusive Remedy. Buyer and Seller agree that, to the fullest
extent permitted by law, the sole and exclusive remedy of Buyer and Seller
after the Closing with respect to any claim or cause of action asserted by
Buyer or Seller relating to or arising from breaches of the representations,
warranties or covenants of the other party contained in this Agreement or any
document, list, schedule, exhibit, certificate or other instrument furnished or
to be furnished by or on behalf of such other party or any of its
representatives in connection with the transactions contemplated by this
Agreement shall be limited to the rights of Buyer and Seller under, and shall
be subject to the terms and conditions of, this Article XIII.
ARTICLE XIV
MISCELLANEOUS
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14.1 Certain Definitions. For purposes of this Agreement, the term:
"Affiliate" as used herein shall have the meaning given it in Rule
12b-2 of Regulation 12B under the Exchange Act.
"Closing Differential" as used herein shall mean the Proposed Closing
Differential with such revisions, adjustments and changes thereto, if any, as
shall be effected pursuant to Section 2.2(b)(ii).
"Digital Micromirror Device" as used herein shall mean a
Semiconductive Apparatus wherein addressable and movable radiation reflecting
members comprise a substantial portion of the device, including, by way of
illustration, electrostatically controllable, deformable or deflectable
mirrors.
"DOJ" as used herein shall mean the Antitrust Division of the United
States Department of Justice.
"Epidemic Failure" as used herein shall mean (i) common or similar
defects in more than three percent (3%) of products of the same type,
discovered in any shipment or series of shipments of such products, or in the
installed base of such products; or (ii) a consistent pattern of replacement
rates that does NOT meet Mean Time Between Failure (MTBF) and/or specified life
expectancy of printers, options, supplies, or spare parts.
"FTC" as used herein shall mean the Federal Trade Commission.
"GAAP" as used herein shall mean United States generally accepted
accounting principles.
"Governmental Authority" as used herein shall mean any domestic or
foreign court, government, governmental agency, authority, entity or
instrumentality.
"HSR Act" as used herein shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976, as amended.
"Laws" as used herein shall mean the provisions of any law, rule,
ordinance or regulation.
"Licensed Patents" as used herein shall mean the patents licensed on
a non-exclusive basis to Buyer pursuant to the License Agreement.
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"Material Adverse Effect" as used herein shall mean a material
adverse effect on the results of operation, assets or financial condition of
the Business.
"Material Contracts" means all contracts (other than purchase orders)
which have a remaining term in excess of one year or under which Seller paid or
received more than $25,000 in fiscal 1995 or under which Seller reasonably
expects to pay or receive more than $25,000 in fiscal 1996.
"Net Book Value of the Business" shall mean Purchased Assets minus
Assumed Liabilities determined in accordance with Seller's Accounting Policies.
"Proposed Closing Differential" as used herein shall mean, as
reflected in the Post-Closing Statement, the amount (whether a positive or
negative number) equal to (i) the Closing Net Book Value minus the Net Book
Value Estimate.
"Seller's Accounting Policies" as used herein shall mean Seller's
standard accounting policies and procedures, which policies and procedures are
consistent with GAAP and applied on a basis consistent with past practice.
"Semiconductive Apparatus" as used herein shall mean:
(i) a semiconductive element; or
(ii) a semiconductive element and one or more films of
conductive, semiconductive or insulating material formed on a surface or
surfaces of said element, said film or films comprising one or more conductors,
active or passive electrical circuit elements, or any combination thereof; or
(iii) a unitary assembly consisting of one or more of
(i), one or more of (ii), or any multiple of (i) and (ii), having a fixed
permanent physical relationship established therebetween; or
(iv) a unitary assembly consisting of (i), (ii) or
(iii), and one or more thin film devices having a fixed permanent physical
relationship established therebetween.
Such apparatus includes, if provided therewith as a part thereof,
supporting means, terminal members, conductors or equivalent interconnecting
members, housing means or unitary therewith, and such apparatus further
includes, if provided therewith as part thereof, the electrical circuits
constituted thereby and integrally included therein.
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"Subsidiary" as used herein shall have the meaning given it in Rule
12b-2 of Regulation 12B under the Securities Exchange Act of 1934, as amended.
14.2 Entire Agreement, Schedules and Exhibits.
(a) This Agreement, together with the Collateral Agreements and
other Schedules and Exhibits attached hereto, contains the entire understanding
of the parties relating to the subject matter contained herein, and this
Agreement cannot be changed or terminated orally and supersedes all prior
agreements and understandings relating to the subject matter hereof, other than
that certain nondisclosure agreement dated January 29, 1996, as amended to
date, between Seller and Buyer which shall remain in full force and effect and
the Nonsolicitation Agreement which shall remain in effect until the Closing.
After the Closing, the Nonsolicitation Agreement shall be superseded by Section
9.4 of this Agreement.
(b) The Schedules and Exhibits to this Agreement shall be
construed with and as integral parts of this Agreement to the same extent as if
they were set forth verbatim herein.
14.3 Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and permitted assigns.
14.4 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto, all of which together
shall constitute one and the same instrument.
14.5 Headings. The headings of the articles and sections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
14.6 Notice. Any notice, request, instruction, other communications
or other document to be given hereunder by any party hereto to any other party
shall be in writing and delivered personally, telecopied or sent by recognized
overnight delivery service, and shall be deemed given when so delivered
personally, telecopied (with appropriate confirmation of receipt) or received,
as follows:
If to Buyer, to: Genicom Corporation
00000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxx 000, Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
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with copies to: McGuire, Woods, Battle & Xxxxxx, L.L.P.
000 X. Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx Sellers
Telecopier: (000) 000-0000
and if to Seller, to: Texas Instruments Incorporated
0000 Xxxxxxxxx Xxx
P.O. Box 650311, M/S 3995
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telecopier: (000) 000-0000
with copies to: Texas Instruments Incorporated
X.X. Xxx 000000, X/X 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq. and
Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
or at such other address for a party as shall be specified by like notice.
14.7 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to principles of conflicts of laws.
14.8 Invalid Provisions. If any provision of this Agreement or any
Collateral Agreement is held to be illegal, invalid, or unenforceable under any
present or future Law, and if the rights or obligations of any party hereto
under this Agreement or any Collateral Agreement will not be materially and
adversely affected thereby, (a) such provision will be fully severable, (b)
this Agreement or such Collateral Agreement will be construed and enforced as
if such illegal, invalid, or unenforceable provision had never comprised a part
hereof, (c) the remaining provisions of this Agreement or such Collateral
Agreement will remain in full force and effect and will not be affected by the
illegal, invalid, or unenforceable provision or by its severance herefrom, and
(d) in lieu of such illegal, invalid, or unenforceable provision, there will be
added automatically as a part of this Agreement or such Collateral Agreement a
legal, valid, and enforceable provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible.
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14.9 Expenses. Each of the parties hereto shall bear its expenses
separately incurred in connection with this Agreement and with the performance
of its obligations hereunder.
14.10 Bulk Sales. Buyer waives compliance by Seller with the
provisions of the so-called bulk sales Law of any jurisdiction; provided,
however, that Seller will indemnify, defend and hold harmless Buyer in respect
of any indemnifiable loss (without regard to Section 13.3 hereof) relating to,
resulting from or arising out of Seller's failure to so comply with such Laws
in connection with the transitions contemplated by this Agreement.
14.11 Third Parties. Except as specifically set forth or
referred to herein, nothing herein expressed or implied is intended or shall be
construed to confer upon or give to any person other than the parties hereto
and their successors or assigns, any rights or remedies under or by reason of
this Agreement.
14.12 Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto shall use reasonable efforts to
take, or cause to be taken, such action, to execute and deliver, or cause to be
executed and delivered, such additional documents and instruments and to do, or
cause to be done, all things necessary, proper or advisable under the
provisions of this Agreement and under applicable law to consummate and make
effective the transactions contemplated by this Agreement. For a period of 180
days after the Closing, Seller shall use commercially reasonable efforts to
assist Buyer in the transition of the Business from Seller to Buyer. Seller
shall use commercially reasonable efforts to implement the provisions of this
Agreement relating to the transfer of Intellectual Property to Buyer. To that
end, Seller agrees that immediately following the Closing, or such other date
as the parties may mutually agree, to deliver to Buyer or its permitted assign
the Intellectual Property on such media as the parties shall mutually agree.
Thereafter, should Buyer discover that the delivery of Intellectual Property
was incomplete, or that any item or items of the Intellectual Property
delivered is incomplete or unusable as a result of the media, it shall notify
Seller, which shall promptly replace or furnish the requested Intellectual
Property.
14.13 Publicity. Any general notices, releases, statements or
communications to the general public or the press relating to this Agreement
and the transactions contemplated hereby shall be made only at such times and
in such manner as may be mutually agreed upon by Buyer and Seller; provided,
however, that the parties hereto shall be entitled to issue such press releases
and to make such public statements as are, in the opinion of its legal counsel,
required by applicable law in which case the other party shall be advised and
the parties will use their reasonable efforts to cause a mutually agreeable
release or announcement to be issued. Once information has been made available
to the general public in accordance with this Agreement, this section shall no
longer apply to such information.
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14.14 Assignment. Neither this Agreement nor any of the parties'
rights hereunder shall be assignable to any other person without the prior
written consent of the other party hereto. Any assignment in violation of this
Section 14.14 shall be null and void and of no force and effect.
Notwithstanding the foregoing, (i) Buyer may assign all or part of its rights
and obligations under this Agreement to a Subsidiary of Buyer and (ii) Seller
may assign all or part of its rights and obligations under this Agreement to a
Subsidiary of Seller; provided, however, in no event shall any assignment
relieve the assigning party of any of its obligations under any provision of
this Agreement.
14.15 Waiver and Remedies. Any term or condition of this
Agreement may be waived at any time by the party that is entitled to the
benefit thereof. Any such waiver will be in writing and will be executed by
such party. A waiver on one occasion will not be deemed to be a waiver of the
same or any other breach on a future occasion.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
SELLER:
TEXAS INSTRUMENTS INCORPORATED
By: Xxxxxx X. Xxxxxxxxxx
---------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
-------------------------------------------
Title: President, Personal Productivity Products
------------------------------------------
BUYER:
GENICOM CORPORATION
By: Xxxx X. Xxxx
---------------------------------------------
Name: Xxxx X. Xxxx
-------------------------------------------
Title: President and Chief Executive Officer
------------------------------------------
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