1
EXHIBIT 2.1
EXECUTION COPY
ASSET PURCHASE AGREEMENT
AMONG
LCC INTERNATIONAL, INC.,
LCC EUROPE AS
AND
ERICSSON RADIO SYSTEMS AB
AUGUST 25, 1999
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TABLE OF CONTENTS
PAGE
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Recitals 1
Agreements 1
ARTICLE 1 1
PURCHASE OF ASSETS 1
1.1 AGREEMENT TO CONVEY PURCHASED ASSETS 1
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1.2 PURCHASED ASSETS 2
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1.3 EXCLUDED ASSETS 5
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1.5 PURCHASE PRICE 7
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1.6 CLOSING PURCHASE PRICE ADJUSTMENT 7
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1.7 PAYMENT OF ACCOUNTS RECEIVABLE TO LCC 9
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1.8 ALLOCATION OF ASSET VALUE 9
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ARTICLE 2 9
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CLOSING 10
ARTICLE 3 10
ASSUMPTION OF LIABILITIES 10
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3.1 Assumption of Assumed Liabilities by Purchaser 10
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3.2 Excluded Liabilities 11
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ARTICLE 4 12
REPRESENTATIONS AND WARRANTIES OF PURCHASER 12
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4.1 ORGANIZATION AND QUALIFICATION 12
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4.2 AUTHORITY; AUTHORIZATION; ENFORCEABILITY 12
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4.3 NO CONFLICT 13
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4.4 NO CONSENTS 13
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4.5 LITIGATION 14
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4.6 BROKERS 14
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ARTICLE 5 14
REPRESENTATIONS AND WARRANTIES OF LCC and LCC AS 14
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5.1 ORGANIZATION AND QUALIFICATION 14
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5.2 AUTHORITY; AUTHORIZATION; ENFORCEABILITY 14
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5.3 NO CONFLICT 15
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5.4 NO CONSENTS 15
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5.5 FINANCIAL STATEMENTS 15
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5.6 ABSENCE OF UNDISCLOSED LIABILITIES 16
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5.7 ABSENCE OF CHANGES 16
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5.8 LITIGATION 19
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5.9 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS AND
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CONSENTS; GOVERNMENTAL CONTRACTS 19
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5.10 RIGHTS, TITLE AND ASSETS 19
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5.11 ASSIGNED CONTRACTS 20
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5.12 INVENTORIES 21
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5.13 PRODUCT AND SERVICE WARRANTIES 22
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5.14 INTELLECTUAL PROPERTY 22
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5.15 LABOR RELATIONS 24
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5.16 PENSION AND BENEFIT PLANS 25
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5.17 EMPLOYEES 25
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5.18 RECEIVABLES 26
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5.19 CUSTOMERS 26
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5.20 SUPPLIERS 26
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5.21 PRODUCTS AND SERVICES 26
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5.22 YEAR 2000 READINESS 27
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5.23 ENVIRONMENTAL MATTERS 27
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5.24 TANGIBLE PERSONAL PROPERTY 27
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5.25 INSURANCE 27
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5.26 TAXES 28
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5.27 DEFINITION OF LCC'S KNOWLEDGE 28
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5.29 BROKERS 28
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ARTICLE 6 29
COVENANTS PENDING CLOSING 29
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6.1 CONDUCT OF LCC BUSINESSES 29
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6.2 FORBEARANCES BY LCC 29
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6.3 ACCESS TO INFORMATION 31
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ARTICLE 7 32
ADDITIONAL COVENANTS AND AGREEMENTS 32
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7.1 FILINGS WITH GOVERNMENTAL AUTHORITIES 32
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7.2 COOPERATION 32
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7.3 TRANSFERRED EMPLOYEES 32
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7.4 WELFARE BENEFIT PLANS 34
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7.5 HEALTH CARE ADMINISTRATION 34
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7.6 LITIGATION ASSISTANCE 34
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7.7 LIABILITY FOR TRANSFER TAXES AND RELATED MATTERS 34
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7.8 TRANSITIONAL MATTERS 35
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7.9 CONFIDENTIALITY 35
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7.10 NOTICES AND CONSENTS 37
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7.11 NOTICE OF DEVELOPMENTS 38
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7.12 NON-COMPETITION 38
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7.13 EXCLUDED LIABILITIES 40
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7.14 LICENSE OF LCC TRADEMARK 40
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7.15 LCC AS OBLIGATIONS 40
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7.16 LICENSE OF DATABASES; FILE FORMATS 40
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7.17 FURTHER ACTION 41
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ARTICLE 8 41
MUTUAL CONDITIONS PRECEDENT TO OBLIGATIONS OF LCC AND PURCHASER
TO CLOSE 41
8.1 HSR ACT AND NORWAY ACQUISITION ACT 41
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8.2 ABSENCE OF LITIGATION OR INJUNCTION 41
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ARTICLE 9 42
CONDITIONS TO LCC'S AND LCC AS'S OBLIGATION TO CLOSE 42
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9.1 REPRESENTATIONS AND WARRANTIES 42
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9.2 PERFORMANCE 42
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9.3 PURCHASER'S CLOSING DOCUMENTS 42
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ARTICLE 10 42
CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE 42
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10.1 REPRESENTATIONS AND WARRANTIES 42
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10.2 PERFORMANCE 43
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10.3 LCC'S CLOSING DOCUMENTS 43
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10.4 CONSENTS 43
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10.5 NO MATERIAL ADVERSE EFFECT 43
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10.6 RESOLUTIONS OF LCC 43
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10.7 INCUMBENCY CERTIFICATE 43
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10.08 RELEASE OF LIENS 43
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10.09 [ ] 43
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ARTICLE 11 43
ACTION TO BE TAKEN AT CLOSING 43
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11.1 ACTION TO BE TAKEN BY PURCHASER 43
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11.2 ACTION TO BE TAKEN BY LCC AND LCC AS 45
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11.3 FURTHER ASSURANCES 46
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11.4 EFFECTIVE TIME 46
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ARTICLE 12 46
INDEMNIFICATION AND SURVIVAL 46
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12.1 INDEMNIFICATION OF LCC AND LCC AS 46
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12.2 INDEMNIFICATION OF PURCHASER 46
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12.3 JOINT COOPERATION 47
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12.4 LIMITATION OF LIABILITY 48
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12.5 EXCLUSIVE REMEDY 49
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12.6 SURVIVAL 49
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ARTICLE 13 49
TERMINATION 49
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13.1 TERMINATION 49
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13.2 EFFECT OF TERMINATION 50
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ARTICLE 14 50
MISCELLANEOUS 50
14.1 WRITTEN AGREEMENT TO GOVERN 50
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14.2 SEVERABILITY 50
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14.3 NOTICES AND OTHER COMMUNICATIONS 51
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14.4 COUNTERPARTS 52
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14.5 LAW TO GOVERN 52
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14.6 ARBITRATION 52
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14.7 SUCCESSORS AND ASSIGNS 52
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14.8 INTERPRETATION 52
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14.9 SCHEDULES AND EXHIBITS 52
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14.10 PUBLICITY 53
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14.11 MODIFICATION 53
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14.12 WAIVER OF PROVISIONS 53
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14.13 NO THIRD PARTY BENEFICIARIES 53
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14.14 EXPENSES 53
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EXHIBITS
Exhibit A Assumption Agreement
Exhibit B Product Supply Agreement
Exhibit C Software License Agreement
Exhibit X-0, X-0, X-0 Assignments of Patents, Copyrights and Trademarks
Exhibit E Xxxx of Sale and Assignment
Exhibit F McLean Facility Sublease
Exhibit G Oslo Facility Sublease
Exhibit H Employee Transition Services Agreement
Exhibit I Support Agreement
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SCHEDULES
Schedule 1.2(a) Equipment to Be Purchased
Schedule 1.2(b) Inventory of Raw Materials, Work in Process and Finished Goods
Schedule 1.2(g)(i) Patents
Schedule 1.2(g)(ii) Trademarks
Schedule 1.2(g)(iii) Copyrights
Schedule 1.2(g)(iv) Software
Schedule 1.2(g)(vi) Licensed Intellectual Property
Schedule 1.2(h) Assigned Contracts
Schedule 1.3(k) Equipment to Be Excluded
Schedule 1.3(n) Certain Excluded Assets
Schedule 4.4 Purchaser Consents
Schedule 5.4 LCC and LCC AS Consents and Conflicts
Schedule 5.5(a) March 31 Statement of Net Assets and March 31 Financial Statements
Schedule 5.6 Undisclosed Liabilities
Schedule 5.7 Absence of Changes
Schedule 5.9 Compliance with Laws
Schedule 5.10 Title to Assets
Schedule 5.11(a) Certain Assigned Contracts
Schedule 5.11(b) Disputes and Defaults under Certain Assigned Contracts
Schedule 5.11(c) Consents to Assignment
Schedule 5.12 Location of Inventories
Schedule 5.13 Product and Service Warranties
Schedule 5.14(b) Exclusive Interest in Intellectual Property
Schedule 5.14(c) Licenses of Purchased Intellectual Property
Schedule 5.16(a) Employee Pension Benefit Plans
Schedule 5.17(a) Employment Contracts; Transferred Employees, Directors, Consultants, Agents
Schedule 5.17(b) Transferred Employees Not Under Confidentiality Obligations
Schedule 5.18 Receivables
Schedule 5.19 Customers
Schedule 5.20 Suppliers
Schedule 5.21 Products and Services
Schedule 5.22 Year 2000
Schedule 10.4 Necessary Consents
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INDEX OF DEFINED TERMS
DEFINED TERM SECTION
Accepting Employees 7.3(b)
Accounting Firm 1.6(c)
Affiliate 7.3(d)
Agreement Opening Paragraph
Allocation 1.8
Ancillary Agreements 4.2
Applicable Law 5.9
Assigned Contracts 1.2(h)
Assignment of Patents, Copyrights and Trademarks 11.1(h)
Assumed Liabilities 3.1
Assumption Agreement 11.1(c)
Benefit Plans 5.16(a)
Xxxx of Sale and Assignment 11.1(i)
Business Day 14.8
Business Systems 5.22
Chase Credit Facility 3.2(a)
Claims 7.6
Closing Article 2
Closing Date Article 2
Closing Net Book Value 1.6(a)
Closing Statement of Net Assets 1.6(a)
Code 1.3(f)
Competitive Activities 7.12(a)
Competitive Entity 7.12(a)
Consents 4.4
Contracts 1.2(h)
Control 7.3(d)
controlled by 7.3(d)
Controlling Person 7.12(a)
Copyrights 1.2(g)(iii)
DOJ 4.4
Employee Transition Services Agreement 7.3(b)
ERISA 5.16(a)
Estimated Receivables Amount 1.5(b)
Excluded Assets 1.3
Excluded Liabilities 3.2
FTC 4.4
Governmental Authority 4.4
Hardware Business Recitals
Holdback Amount 1.5(b)
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HSR Act 4.4
INS 7.3(b)
Know-How 1.2(g)(v)
knowledge of LCC 5.27
LCC Opening Paragraph
LCC AS Opening Paragraph
LCC Businesses Opening Paragraph
LCC Closing Documents 10.3
LCC Damages 12.1
LCC Indemnitees 12.1
LCC Material Adverse Effect 5.1
LCC Packaging 7.14
LCC Trademark 7.14
Licensed Intellectual Property 1.2(g)(vi)
Licenses 1.2(g)(vi)
Lien 4.3
March 31 Financial Statements 5.5(a)
March 31 Net Book Value 1.6(d)(i)
March 31 Statement of Net Assets 5.5(a)
McLean Facility Recitals
McLean Facility Sublease 7.8
Net Receivables Amount 1.7
Norway Acquisition Act 4.3
Oslo Facility Sublease 7.8
Patents 1.2(g)(i)
Permitted Percentage 7.12(a)
Person 6.2(k)
Principal Line of Business 7.12(a)
Product Supply Agreement 11.1(d)
Purchase Price 1.5
Purchased Assets 1.2
Purchased Intellectual Property 1.2(g)
Purchaser Opening Paragraph
Purchaser Assignee 14.7
Purchaser Closing Documents 9.3
Purchaser Damages 12.2
Purchaser Indemnitees 12.2
Restricted Period 7.12(a)
Retirement Plans 7.3(d)
Software 1.2(g)(iv)
Software Business Recitals
Software License Agreement 11.1(e)
Supplier Systems 5.22
Support Agreement 11.1(m)
Survival Period 12.6
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Tangible Personal Property 5.24
Tax Returns 1.3(h)
Taxes 1.3(f)
Trademarks 1.2(g)(ii)
Transfer Taxes 7.7
Transferred Employees 7.3(a)
Transition Period 7.8
U.S. GAAP 5.5
WARN Act 7.3(c)
Year 2000 Plan 5.22
Year 2000 Ready 5.22
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement"),
dated as of August 25, 1999, is by and among LCC INTERNATIONAL, INC., a
Delaware corporation ("LCC"), LCC EUROPE AS, a Norwegian limited liability
corporation and a wholly owned subsidiary of LCC ("LCC AS"), and ERICSSON RADIO
SYSTEMS AB, a Swedish corporation ("Purchaser").
RECITALS
A. LCC and LCC AS are engaged in the business of
designing, developing, manufacturing, marketing, selling and servicing field
testing and measurement products and related software for the wireless
communications industry (under, among others, the names EXP-2001(R),
RSAT-2000(R), MSAT-2000(TM), DeskCat(TM), Benchmarker(TM), OptimEyes, CellAD
and Champ) (such business is referred to herein as the "Hardware Business").
LCC and LCC AS are also engaged in the business of manufacturing and selling
(i) network propagation modeling tools (under, among others, the names
"ANET(R)," "CellCAD(R)", "Golf"); (ii) a network monitoring tool (under the
name "CellSIGHT(R)") for the wireless communications industry; and (iii) a
point to multi-point planning tool (under the name "Metronet") (such business
is referred to herein as the "Software Business" and, collectively with the
Hardware Business, the "LCC Businesses"). The principal location of the LCC
Businesses is 0000 Xxxxx Xxxxxx Xxxxx, XxXxxx, Xxxxxxxx (the "McLean
Facility").
B. The parties desire to effect a transaction
whereby LCC and LCC AS will sell, and Purchaser and/or its designees will
purchase, substantially all the assets of the LCC Businesses in exchange for
the Purchase Price (as defined in Section 1.5), all on the terms and subject to
the conditions set forth in this Agreement.
AGREEMENTS
In consideration of the mutual covenants and
agreements of the parties and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
ARTICLE 1
PURCHASE OF ASSETS
1.1 AGREEMENT TO CONVEY PURCHASED ASSETS.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations, warranties, covenants and agreements contained herein, at the
Closing (as defined in Article 2), LCC and LCC AS shall sell, assign, transfer,
convey and deliver to Purchaser or to one or more Affiliates (as defined in
Section 7.3(d)) of Purchaser designated by Purchaser prior to the Closing, the
Purchased Assets
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(as defined in Section 1.2), and Purchaser and/or such Affiliates shall
purchase and accept from LCC and LCC AS the Purchased Assets, free and clear of
all Liens (as defined in Section 4.3).
1.2 PURCHASED ASSETS. For purposes of this
Agreement, "Purchased Assets" shall mean all right, title, benefit and interest
of LCC and LCC AS in and to all of the properties, business, assets, rights,
benefits, privileges and goodwill of LCC and LCC AS of every kind and
description and wherever located, whether tangible or intangible, real,
personal or mixed, directly or indirectly owned by LCC and LCC AS, leased,
used, held for use or otherwise held principally for or principally in
connection with the LCC Businesses, except for the Excluded Assets (as defined
in Section 1.3), wherever situated and as the same exist on the Closing Date
(as defined in Article 2), including, without limitation:
(a) all furniture, fixtures, equipment, machinery
and other tangible personal property used or held for use by
LCC and LCC AS at the locations at which the LCC Businesses
are conducted, or otherwise owned or held by LCC and LCC AS in
connection with the LCC Businesses on the Closing Date for use
in the conduct of the LCC Businesses, including, without
limitation, the assets listed on Schedule 1.2(a);
(b) the inventory of raw materials, work in
process and finished goods relating to the LCC Businesses
existing on the Closing Date, including without limitation
those listed on Schedule 1.2(b) to the extent not sold in the
ordinary course of business prior to the Closing Date;
(c) all accounts receivable relating to the LCC
Businesses existing on the Closing Date;
(d) all purchase orders placed by customers of
LCC and LCC AS for products or services of the LCC Businesses
to the extent the same remain unfulfilled on the Closing Date;
(e) all orders for materials and supplies for use
in the LCC Businesses which were placed by LCC and LCC AS with
suppliers in the ordinary course of the LCC Businesses and
which remain unfulfilled on the Closing Date;
(f) all of LCC's and LCC AS's rights under any
leases of equipment used, held for use or otherwise held
principally for or principally in connection with the LCC
Businesses;
(g) any and all of the following used, held for
use or otherwise held principally for or principally in
connection with the LCC Businesses (collectively, "Purchased
Intellectual Property"):
(i) all United States, international and
foreign patents and patent applications, including,
without limitation, reissues, divisions,
continuations, continuations-in-part, extensions and
reexaminations thereof, and
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all rights therein provided by international treaties and
conventions and all improvements thereto (collectively,
"Patents"), including, without limitation, those set forth on
Schedule 1.2.(g)(i);
(ii) all trademarks, service marks,
collective marks, trade dress, logos, domain names, product
configurations, trade names and other source identifiers (and
the goodwill of the LCC Businesses symbolized by the
foregoing), whether or not registered, whether currently in
use or not, including all common law rights therein, and
registrations and applications for registration thereof,
including, but not limited to, all marks registered in the
United States Patent and Trademark Office or in any office or
agency of any state or territory thereof or any foreign
country, all rights therein provided by international treaties
and conventions, and all reissues, extensions and renewals of
any of the foregoing (collectively, "Trademarks"), including,
without limitation, those set forth on Schedule 1.2(g)(ii);
(iii) all copyrightable works and
copyrights, whether or not registered, and registrations and
applications for registration thereof throughout the world,
and all rights therein provided by international treaties and
conventions (collectively, "Copyrights"), including, without
limitation, those set forth on Schedule 1.2(g)(iii);
(iv) all computer software and subsequent
versions thereof developed or currently being developed or
manufactured by LCC or LCC AS, including, without limitation,
those set forth on Schedule 1.2(g)(iv), and including, but not
limited to, all databases, source codes, object codes,
objects, comments, screens, user interfaces, report formats,
templates, menus, buttons and icons, and all files, data,
materials, manuals, design notes and other items and
documentation related thereto or associated therewith
(collectively, "Software");
(v) all trade secrets, inventions, ideas
and conceptions of inventions, whether or not patentable,
whether or not reduced to practice, and whether or not yet
made the subject of a patent application or applications,
technical and business information, including know-how,
manufacturing and production processes and techniques,
research and development information, technical data,
financial, marketing and business data, pricing and cost
information, business and marketing plans and customer and
supplier lists and information, whether or not confidential
(collectively, "Know-How");
(vi) all licenses and sublicenses by LCC
or LCC AS, as licensor to a third party (the "Licenses"), or
by third parties to LCC or LCC AS, as licensee, including,
without limitation, licenses and sublicenses of Software
(collectively, "Licensed Intellectual Property"), including,
without limitation, those set forth on Schedule 1.2(g)(vi);
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(vii) copies and tangible embodiments of
all of the foregoing, in whatever form or medium; and
(viii) all rights to xxx or recover and
retain damages and costs and attorneys' fees for past, present
and future infringement or breach of any of the foregoing;
(h) all agreements, contracts, commitments and other
instruments or arrangements (whether written or oral) ("Contracts")
relating principally to the LCC Businesses, including, to the extent
assignable, all of LCC's and LCC AS's rights under agreements with any
present or past directors, officers, employees, independent
contractors, agents or representatives of the LCC Businesses with
respect to (A) the non-disclosure and/or confidentiality obligations
relating to any of the Know-How, (B) the assignment to LCC or LCC AS
of any such directors', officers', employees', independent
contractors', agents' or representatives' rights and interests to the
Intellectual Property or (C) non-competition or non-solicitation by
such directors, officers, employees, independent contractors, agents
or representatives of the LCC Businesses with respect to the LCC
Businesses (collectively, the "Assigned Contracts"), including,
without limitation, those Assigned Contracts set forth on Schedule
1.2(h) (it being understood that all the carnets listed on Exhibit 1
to subsection (viii) of Schedule 5.11(a) which have not expired prior
to the Closing Date (the "Unexpired Carnets") shall remain in the name
of LCC for the benefit of Purchaser);
(i) all cash and cash equivalents of LCC and LCC AS
relating to the LCC Businesses except as provided in Section 1.3(a);
(j) all sales and promotional literature, customer and
supplier lists and other sales-related materials owned, used,
associated with or employed by LCC and LCC AS in connection with the
LCC Businesses on the Closing Date;
(k) all of (i) LCC's and LCC AS's books of account,
general and personnel records, files, invoices, customer data,
shipping records, supplier lists, correspondence and other similar
books, records and information relating primarily to the LCC
Businesses; (ii) all of LCC's and LCC AS's tax and financial records
and information relating exclusively to the LCC Business (provided
that LCC or LCC AS, as the case may be, shall be entitled to retain
one copy of such records and information, which shall be subject to
the confidentiality restrictions set forth in Section 7.9); and (iii)
LCC's and LCC AS's engineering and other technical books, papers,
logs, files and records pertaining to the LCC Businesses;
(l) all rights and claims of LCC and LCC AS, whether
known or unknown, absolute or contingent, matured or unmatured, or
otherwise, against third parties which relate principally to the LCC
Businesses or the Purchased Assets, whether in tort, contract or
otherwise, including causes of action, choses in action, rights of
recovery and rights of set-off of any kind (including rights to
insurance proceeds), unliquidated rights and
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claims under or pursuant to all warranties, representations and
guarantees made by manufacturers, suppliers or vendors of products,
materials or equipment or components thereof;
(m) to the extent assignable, all permits, approvals,
orders, authorizations, consents, licenses and franchises which have
been issued or granted to or are owned by LCC and LCC AS principally
for or principally in connection with, or required for, the LCC
Businesses and all pending applications therefor;
(n) the goodwill and going-concern value associated with
the LCC Businesses;
(o) prepayments and deposits made by LCC and LCC AS
principally with respect to the LCC Businesses;
(p) any assets of employee benefit plans relating to
liabilities of Accepting Employees to the extent specifically
transferred pursuant to Section 7.03; and
(q) except for the Excluded Assets, all of LCC's and LCC
AS's right, title and interest on the Closing Date in, to and under
all other assets, rights and claims of every kind and nature used or
intended to be used by LCC or LCC AS in the operation of, or residing
with, the LCC Businesses.
1.3 EXCLUDED ASSETS. Notwithstanding anything to the
contrary contained in this Agreement, (i) all assets not used, held for use or
otherwise held principally for or principally in connection with the LCC
Businesses and (ii) the following assets of LCC and LCC AS (collectively, the
"Excluded Assets") shall be excluded from the Purchased Assets and shall be
retained by LCC or LCC AS, as the case may be, to the extent in existence on
the Closing Date:
(a) all restricted cash accounts held by LCC AS for the
benefit of its employees to fund pension plans and other social
insurance obligations pursuant to Applicable Law;
(b) all bank accounts (it being understood that all
amounts in such bank accounts, other than amounts relating to the
matters described in Section 1.3(a), will be Purchased Assets and will
be transferred to Purchaser at the Closing);
(c) all of LCC's rights under that certain Agreement
dated May 17, 1996 between LCC, L.L.C., as tenant, and West*Park
Associates Limited Partnership, as landlord, relating to the XxXxxx
Facility and all leasehold improvements located therein;
(d) the capital stock, notes and all other securities
of, and all other interests of, LCC in any Person, including, without
limitation, all subsidiaries of LCC (including LCC AS);
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(e) all insurance policies and any unearned premiums
thereunder or other rights to refunds thereunder;
(f) all claims for refunds of any and all federal, state,
provincial, local, foreign, or any other income, net worth, capital,
profits, windfall profits, gross receipts, value added, sales, use,
goods and services, excise, customs duties, transfer, conveyance,
mortgage, registration, stamp, documentary, recording, premium,
severance, environmental (including taxes under Section 59A of the
Internal Revenue Code of 1986, as amended (the "Code")), real
property, personal property, ad valorem, intangibles, rent, occupancy,
license, occupational, employment, unemployment insurance, social
security, disability, workers' compensation, payroll, health care,
withholding, estimated or other similar tax, duty or other
governmental charge or assessment or deficiencies thereof (including
all interest and penalties thereon and additions thereto whether
disputed or not) ("Taxes"), including, without limitation, any Taxes
paid on behalf of any Accepting Employee (as defined in Section
7.3(b)), for all periods ending on or prior to the Closing Date;
(g) all intercompany receivables and all receivables not
related to the LCC Businesses;
(h) all books of account, records, files and other data
maintained by LCC or LCC AS for the preparation of its consolidated
financial statements or any returns, declarations, forms, information
returns and statements with respect to Taxes ("Tax Returns"),
excluding originals of tax and financial records and information
relating primarily to the LCC Businesses included as a Purchased Asset
pursuant to Section 1.2(k);
(i) all Contracts related to indebtedness for borrowed
money, including guarantees of indebtedness for borrowed money;
(j) all right, title and interest of LCC in and to the
name "LCC" and any trademark, trade name or corporate, trade or
fictitious name containing the acronym "LCC";
(k) the equipment set forth on Schedule 1.3(k);
(l) except as provided in Section 7.10(b), all Licenses
or other Contracts as to which any consent, waiver or approval
required in order to transfer or assign such License or Contract to
Purchaser is not obtained by the Closing (provided that, with respect
to such Licenses or Contracts, LCC shall use all commercially
reasonable efforts after the Closing to obtain such consents, waivers
or approvals);
(m) the permits, approvals, orders, authorizations,
consents, licenses and franchises which have been issued or granted to
or are owned by LCC or LCC AS for or in connection with the LCC
Businesses or as to which any consent, waiver or approval
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required in order to transfer or assign such permits, approvals,
orders, authorizations, consents, licenses and franchises to Purchaser
is not obtained by the Closing (provided that, with respect to such
permits, approvals, orders, authorizations, covenants, licenses and
franchises, LCC or LCC AS, as the case may be, shall use all
commercially reasonable efforts after the Closing to obtain such
consents, waivers or approvals);
(n) the assets listed on Schedule 1.3(n);
(o) LCC AS's lease to its facility located in Oslo,
Norway;
(p) LCC's lease to its facility located in Singapore, as
well as the furniture, fixtures, equipment, machinery and other
tangible personal property located on such premises; and
(q) all of LCC's rights under outstanding agreements or
other arrangements with Accepting Employees under LCC's 1996 Employee
Stock Option Plan and LCC's Employee Stock Purchase Plan.
1.4 PURCHASING ENTITIES. Subject to Purchaser's right
to assign its rights under this Agreement in accordance with Section 14.7, the
Purchased Assets shall be purchased by Purchaser and/or one or more Affiliates
of Purchaser designated by Purchaser prior to the Closing.
1.5 PURCHASE PRICE. (a) Subject to the adjustments set
forth in Sections 1.6 and 1.7, the aggregate purchase price (the "Purchase
Price") payable by Purchaser in consideration for the sale of the LCC
Businesses shall be $22,542,000. Such amount less the Holdback Amount (as
defined below) shall be payable on the Closing Date (as defined in Article 2)
in immediately available United States funds.
(b) The "Holdback Amount" shall equal one-half of the
amount of accounts receivable, net of reserves therefor, set forth on the March
31 Statement of Net Assets (which amount the parties agree to be $7,099,130),
subject to adjustment pursuant to the proviso to Section 1.6(d) and to Section
1.6(e).
1.6 CLOSING PURCHASE PRICE ADJUSTMENT. The Purchase
Price shall be subject to adjustment after the Closing as specified in this
Section 1.6:
(a) As promptly as practicable, but in any event within
30 calendar days following the Closing Date, LCC shall at its expense prepare
and deliver to the Purchaser a statement of net assets of the LCC Businesses as
of the close of business on the Closing Date (the "Closing Statement of Net
Assets"). The Closing Statement of Net Assets shall include only the book
value of the Purchased Assets and the Assumed Liabilities and shall exclude the
book value of the Excluded Assets and the Excluded Liabilities and shall
otherwise be prepared in accordance with U.S. GAAP applied on a basis
consistent with the preparation of the March 31 Statement of Net Assets (as
defined in Section 5.5) including, without limitation, the treatment of
18
software development costs as a capitalized asset (except that the Closing
Statement of Net Assets shall not include accruals for liabilities, if any,
resulting from or arising out of the use of corporate credit cards issued to
employees of the LCC Businesses). The net assets of the LCC Businesses as of
the Closing (the "Closing Net Book Value") shall be calculated as the excess of
the book value of the Purchased Assets reflected on the Closing Statement of
Net Assets over the book value of the Assumed Liabilities reflected on the
Closing Statement of Net Assets.
(b) LCC shall consult with Purchaser prior to delivering
the Closing Statement of Net Assets and shall deliver drafts thereof and
reasonable supporting documentation as and when they become available. LCC and
Purchaser shall attempt to resolve any differences relating to amounts set
forth on the Closing Statement of Net Assets prior to delivery thereof pursuant
to paragraph (a) or to be set forth above and, if not so resolved by such time,
shall attempt to resolve such differences as promptly as practicable
thereafter.
(c) In the event LCC and Purchaser are unable to resolve
their differences within 10 Business Days after LCC's delivery of the Closing
Statement of Net Assets, LCC shall submit the disputed items to a nationally
recognized independent accounting firm (which may be LCC's regularly engaged
independent accounting firm) selected by LCC with the consent of Purchaser
(which consent shall not be unreasonably withheld). The independent accounting
firm so selected (the "Accounting Firm") shall resolve the disputed items as
promptly as practicable. The resolution of disputed items by the Accounting
Firm shall be deemed to be and shall be final, binding and conclusive on the
parties hereto.
(d) Within three Business Days of all disputed items on
the Closing Statement of Net Assets being resolved pursuant to paragraphs (b)
and (c) above, a Purchase Price adjustment shall be made as follows:
(i) in the event that the Closing Net Book Value
is less than $17,734,112 (the "March 31 Net Book Value", which
the parties agree to be the excess of the book value of the
Purchased Assets over the book value of the Assumed
Liabilities reflected on the March 31 Statement of Net
Assets), then the Purchase Price shall be adjusted downward in
an amount equal to such shortfall and LCC shall, within five
Business Days of such determination, pay such amount to the
Purchaser by wire transfer in immediately available funds; and
(ii) in the event that the Closing Net Book Value
exceeds the March 31 Net Book Value, then the Purchase Price
shall be adjusted upward in an amount equal to such excess and
the Purchaser shall, within five Business Days of such
determination, pay the amount of such excess to LCC by wire
transfer in immediately available funds;
provided, however, that the difference between the amount of accounts
receivable, net of reserves therefor, set forth on the Closing Statement of Net
Assets and the amount of accounts receivable, net of reserves therefor, set
forth on the March 31 Statement of Net Assets (which amount the
19
parties agree to be $7,099,130) shall be allocated fifty percent (50%) to a
cash adjustment to the Purchase Price and fifty percent (50%) to an adjustment
to the Holdback Amount.
(e) In the event LCC delivers to Purchaser a good faith
estimate of the amount of accounts receivable to be included in the Purchased
Assets as of the Closing Date, net of reserves therefor, then the calculation
of the Purchase Price and the Holdback Amount shall be adjusted appropriately
to reflect such estimate.
1.7 PAYMENT OF ACCOUNTS RECEIVABLE TO LCC. Following the
Closing, Purchaser shall proceed to collect the accounts receivable included in
the Purchased Assets in the ordinary course of business. After collection by
Purchaser of an amount equal to the excess of the amount of the accounts
receivable set forth on the Closing Statement of Net Assets, net of reserves
therefor (the "Net Receivables Amount"), over the Holdback Amount, Purchaser
shall pay to LCC all amounts collected in respect of accounts receivable
included in the Purchased Assets, up to a maximum amount equal to the Holdback
Amount. Payment to LCC shall be made within 30 days of the end of each month
in which amounts payable to LCC are collected by Purchaser. If after six
months from the Closing Date Purchaser has not collected an amount equal to or
in excess of the Holdback Amount, LCC shall have the right to pursue, at LCC's
cost and expense, collection of any and/or all remaining uncollected accounts
receivables using reasonable and prudent business methods. Such collection
efforts shall not unduly interfere with the relationship between Purchaser and
a customer and shall in any event be subject to such restrictions as Purchaser
shall impose in its reasonable discretion. Purchaser will cooperate with LCC's
reasonable requests for assistance in the process. Any collections by LCC
(including any amounts collected by Purchaser for the benefit of LCC) shall be
limited to an amount equal to the Holdback Amount, and any excess collected by
LCC shall be paid to Purchaser within 30 days following the end of the month in
which it is collected. In no event shall LCC receive more than the Holdback
Amount in respect of accounts receivables included in the Purchased Assets.
For purposes of this Section 1.7 the Holdback Amount shall mean the Holdback
Amount calculated pursuant to Section 1.5(b) as adjusted (upward or downward,
as applicable), to reflect the exclusion of one-half of the change in the
amount of net accounts receivable pursuant to the provisions of Section 1.6.
1.8 ALLOCATION OF ASSET VALUE. Within sixty days after
the Closing, Purchaser shall provide LCC with a proposed allocation of the
Purchase Price and the Assumed Liabilities among the Purchased Assets based on
fair market value as of the Closing Date. Such allocation shall become final
unless LCC objects to such allocation in writing within 30 days after delivery
by Purchaser. If LCC does not agree with such allocation and the parties are
not otherwise able to reach an agreement as to such allocation, the allocation
shall be determined by an independent appraiser, which shall be a nationally
recognized accounting firm that shall determine the allocation, and such
allocation shall be binding on the parties. The cost of any such independent
appraisal shall be borne equally by the parties. The final allocation as
determined under this Section 1.8 shall be referred to as the "Allocation".
Purchaser and LCC agree to (i) be bound by the Allocation, (ii) act in
accordance with the Allocation in the preparation of financial statements and
filing of all Tax Returns (including filing Form 8594), and in the course of
any Tax audit, Tax review or Tax litigation relating thereto, and (iii) take no
position and cause their
20
Affiliates to take no position inconsistent with the Allocation for all Tax and
accounting purposes.
ARTICLE 2
CLOSING
The consummation of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Xxxxx & Xxxxxxx L.L.P., 000
Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 10:00 a.m. on the fifth
Business Day following the date on which all of the conditions set forth in
Sections 8.1 and 9.4 shall have been satisfied (the "Closing Date") or at such
other place, time and date as the parties may hereafter agree in writing.
ARTICLE 3
ASSUMPTION OF LIABILITIES
3.1 ASSUMPTION OF ASSUMED LIABILITIES BY PURCHASER.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations, warranties, covenants and agreements contained herein, at the
Closing, Purchaser or one or more Affiliates of Purchaser designated by
Purchaser prior to the Closing shall assume and agree to pay, perform and
discharge when due or when required to be performed all of the liabilities
relating principally to the LCC Businesses which exist at or arise on or after
the Closing Date, including, without limitation, the following (collectively,
the "Assumed Liabilities"), except in any case for the Excluded Liabilities (as
defined in Section 3.2):
(a) all liabilities, obligations and commitments of LCC
and LCC AS to the extent arising out of or relating to the LCC
Businesses and reflected or reserved for on the March 31 Statement of
Net Assets and such liabilities which were incurred by LCC or LCC AS
in connection with the LCC Businesses after March 31, 1999, in the
ordinary course of business, consistent with past practice and in
accordance with this Agreement;
(b) all liabilities, obligations and commitments arising
out of the Licenses and Contracts included as part of the Purchased
Assets;
(c) all liabilities for Accepting Employees to the extent
specifically assumed by Purchaser pursuant to Section 7.3;
(d) all warranty, service, maintenance and support
obligations to customers of LCC with respect to the products and
services of the LCC Businesses sold or furnished on or prior to the
Closing Date; and
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(e) all liabilities, obligations and commitments of LCC
and LCC AS for prepayments and deposits from customers of LCC and LCC
AS with respect to the products and services of the LCC Businesses.
3.2 EXCLUDED LIABILITIES. The following liabilities (the
"Excluded Liabilities") shall be excluded from the Assumed Liabilities:
(a) any indebtedness of LCC or any of its Affiliates
(including LCC AS) for borrowed money (including any and all amounts
payable by LCC or LCC AS pursuant to the Asset Purchase Agreement,
dated as of December 30, 1996, between European Technology Partner AS
and LCC International AS, any outstanding balance under the Swingline
Loans (as such term is defined in the Third Amended and Restated
Credit Agreement, dated as of December 31, 1998, among The Chase
Manhattan Bank as Administrative Agent, the lenders signatory thereto,
LCC, LCC Design Services L.L.C., LCC Development Company, L.L.C.,
Microcell Management, Inc., Xxxx Telecommunications, L.L.C. and LCC AS
(the "Chase Credit Facility")) and any and all intercompany payables)
except for such indebtedness as is reflected on the March 31
Statements of Net Assets;
(b) any liabilities for Taxes (including Japanese sales
taxes owed in respect of pre-Closing sales) relating to or arising out
of the conduct of the LCC Businesses accruing, or with respect to any
time period, on or prior to the Closing Date;
(c) any product liability and strict liability claim with
respect to the products or services sold or provided by the LCC
Businesses on or prior to the Closing Date;
(d) workers' compensation claims by Accepting Employees
to the extent arising from occurrences or occupational diseases
contracted on or before the Closing Date;
(e) employee discrimination, harassment, retaliation,
wrongful discharge, breach of employment agreement or covenants,
disputes relating to commission payments or any other type of
compensation including claims for regular or overtime wages, any
personal injury, intentional tort or negligence claims and unfair
labor practice claims to the extent arising out of the conduct of the
LCC Businesses on or prior to the Closing Date;
(f) liabilities with respect to employees or employee
benefit plans, including, without limitation, liabilities under the
LCC Businesses Employee Retention Program, except to the extent
specifically assumed by Purchaser pursuant to Section 7.3;
(g) to the extent not accrued or reserved for on the
Closing Statement of Net Assets, any interest and penalty payments in
respect of late payments owed to vendors, contractors and other
suppliers of LCC and LCC AS in respect of pre-Closing periods;
22
(h) to the extent not accrued or reserved for on the
Closing Statement of Net Assets, amounts to be refunded, if any, to
Essen Telecom of Korea in respect of software purchased by Essen
Telecom prior to the Closing Date;
(i) any and all liabilities resulting from or arising out
of the use of corporate credit cards by employees of the LCC
Businesses;
(j) all actions, claims, demands, suits, proceedings,
arbitrations, grievances, citations, summons, subpoenas, inquiries or
investigations of any nature arising out of the LCC Businesses on or
prior to the Closing Date which do not involve a Purchased Asset;
(k) to the extent not accrued or reserved for on the
Closing Statement of Net Assets, amounts to be refunded, if any, to
Bahrain Telecommunications Company B.S.C. under its Software License
Agreement dated July 28, 1998 with LCC; and
(l) all liabilities relating to or arising out of
the Excluded Assets.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth on the Schedules delivered by Purchaser to
LCC prior to the execution and delivery of this Agreement, Purchaser hereby
represents and warrants to LCC and LCC AS as follows:
4.1 ORGANIZATION AND QUALIFICATION. Purchaser is a
corporation duly organized, validly existing and in good standing under the
laws of Sweden. Each Purchaser Assignee (as defined in Section 14.7) who
acquires any rights hereunder on or prior to the Closing Date shall, on the
Closing Date, be an entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization or formation.
4.2 AUTHORITY; AUTHORIZATION; ENFORCEABILITY. Purchaser
has, and each Purchase Assignee shall have on the Closing Date, all requisite
corporate power and authority to execute and deliver this Agreement and each of
the Product Supply Agreement, the Software License Agreement, the Support
Agreement, the XxXxxx Facility Sublease, the Oslo Facility Sublease and the
Employee Services Agreement (the Product Supply Agreement, the Software License
Agreement, the Support Agreement, the XxXxxx Facility Sublease, the Oslo
Facility Sublease and the Employee Service Agreement, each, an "Ancillary
Agreement" and, collectively, the "Ancillary Agreements") and the other
Purchaser Closing Documents (as defined in Section 9.3) to which it is a party,
and to perform its other obligations hereunder and thereunder, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by Purchaser and each Purchaser Assignee of this Agreement and the
Ancillary Agreements and the other Purchaser Closing Documents to which it is a
party, and the performance by Purchaser and each Purchaser Assignee of its
obligations hereunder and thereunder, have, or in the case of each Purchaser
Assignee, shall have, on or prior to the Closing
23
Date, been duly authorized by all necessary corporate action on the part of
Purchaser or such Purchaser Assignee. This Agreement has been duly executed
and delivered by Purchaser and (assuming due authorization, execution and
delivery by LCC and LCC AS) constitutes, and the Ancillary Agreements and each
of the other Purchaser Closing Documents, when duly executed and delivered by
Purchaser and each Purchaser Assignee party thereto, will constitute, legal,
valid and binding obligations of Purchaser and each Purchaser Assignee party
thereto, enforceable against Purchaser and each Purchaser Assignee party
thereto in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
4.3 NO CONFLICT. Assuming compliance with the
notification requirements of the HSR Act (as defined in Section 4.4) and the
directives of the Ministry of Trade and Industry of Norway pursuant to Section
4 of the Act on the Acquisition of Business Undertakings (the "Norway
Acquisition Act"), except as may result from any facts or circumstances
relating solely to LCC or LCC AS, and except as set forth in section 4.4, the
execution and delivery by Purchaser and each Purchaser Assignee of this
Agreement, the Ancillary Agreements and each of the other Purchaser Closing
Documents to which it is a party do not, and the performance by Purchaser and
each Purchaser Assignee of its obligations hereunder and thereunder will not,
conflict with, or result in any violation of, or default (with or without
notice or lapse of time or both) under, require consent under, or give rise to
a right of termination, amendment, suspension, cancellation or acceleration of
any obligation or loss of any benefit under, or result in the creation or
imposition of any mortgage, pledge, hypothecation, claim, security interest,
lien, encumbrance, voting trust agreement, option, right of first refusal or
any other encumbrance (a "Lien") on any of the assets or properties of
Purchaser or any Purchaser Assignee under, (a) any Contract to which Purchaser
or any Purchaser Assignee is a party or by which any of their properties are
bound, (b) any provision of the organizational documents of Purchaser or any
Purchaser Assignee, or (c) any judgment, order, decree, statute, law,
ordinance, order by a Governmental Authority (as defined in Section 4.4), rule
or regulation applicable to Purchaser or any Purchaser Assignee.
4.4 NO CONSENTS. No consents, approvals, orders,
licenses, permits or authorizations of, or registrations, declarations or
filings with, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, of competent
jurisdiction ("Governmental Authority") or any other Person (as defined in
Section 6.2(k)) ("Consents") are required to be obtained or made by or with
respect to Purchaser or any Purchaser Assignee in connection with the execution
and delivery of this Agreement, the Ancillary Agreements or any of the other
Purchaser Closing Documents or the performance by Purchaser or any Purchaser
Assignee of its obligations hereunder or thereunder, except for (a) filings
with the United States Federal Trade Commission (the "FTC") and the United
States Department of Justice (the "DOJ") pursuant to the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (b)
applicable filings under the Norway Acquisition Act, (c) where the failure to
obtain such Consents would not prevent or materially delay
24
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, and (d) as set forth on Schedule 4.4.
4.5 LITIGATION. There is no action, claim, demand, suit,
proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or
investigation of any nature, civil, criminal, regulatory or otherwise, in law
or in equity, pending or, to the knowledge of Purchaser, threatened against or
relating to Purchaser or any Purchaser Assignee in connection with the
transactions contemplated by this Agreement, or which would be reasonably
likely to materially affect Purchaser's or any Purchaser Assignee's ability to
consummate the transactions contemplated by this Agreement and the Ancillary
Agreements, and Purchaser does not know or have reason to be aware of any basis
for the same.
4.6 BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser or any Purchaser Assignee.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF LCC AND LCC AS
LCC and LCC AS hereby represent and warrant to Purchaser as
follows:
5.1 ORGANIZATION AND QUALIFICATION. LCC is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. LCC AS is a corporation duly organized, validly existing
and in good standing under the laws of Norway. LCC and LCC AS are each
qualified to do business as a foreign corporation in, and are in good standing
under the laws of, each other jurisdiction in which the conduct of the LCC
Businesses or the ownership of the assets of the LCC Businesses requires such
qualification, except where the failure to qualify does not or would not be
expected to have a material adverse effect on (a) the results of operations,
assets, liabilities, employee relationships, customer or supplier
relationships, condition (financial or otherwise) or prospects of the LCC
Businesses or (b) the ability of Purchaser to operate or conduct the LCC
Businesses in the manner in which they are currently operated by LCC or LCC AS
(an "LCC Material Adverse Effect"). For purposes of the definition of LCC
Material Adverse Effect, an event, occurrence, fact, condition or effect shall
not be deemed to be materially adverse unless it involves $100,000 or more.
5.2 AUTHORITY; AUTHORIZATION; ENFORCEABILITY. Each of
LCC and LCC AS has all requisite power and authority to own, lease and operate
its properties and the LCC Businesses as presently conducted by it and has all
requisite power and authority to enter into this Agreement and each of the
Ancillary Agreements and the LCC Closing Documents (as defined in Section 10.3)
to which it is a party, and to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by LCC and LCC AS of this Agreement and each of the
Ancillary Agreements and
25
the other LCC Closing Documents to which it is a party, and the performance by
LCC and LCC AS of their respective obligations hereunder and thereunder, have
been duly authorized by all necessary corporate action on the part of LCC and
LCC AS. This Agreement has been duly executed and delivered by LCC and LCC AS
and (assuming due authorization, execution and delivery by Purchaser)
constitutes, and the Ancillary Agreements and each of the other LCC Closing
Documents, when duly executed and delivered by LCC and LCC AS will constitute,
legal, valid and binding obligations of LCC and LCC AS, enforceable against
LCC and LCC AS in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights and remedies
generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5.3 NO CONFLICT. Assuming compliance with the
notification requirements of the HSR Act and the Norway Acquisition Act, except
as may result from any facts or circumstances relating solely to Purchaser or
any Purchaser Assignee and except as set forth on Schedule 5.4, the execution
and delivery by LCC and LCC AS of this Agreement, the Ancillary Agreements and
each of the other LCC Closing Documents do not, and the performance by LCC and
LCC AS of its obligations hereunder and thereunder will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time
or both) under, require consent under, or give rise to a right of termination,
amendment, suspension, cancellation or acceleration of any obligation or loss
of any benefit under, or result in the creation or imposition of any Lien on
any of the assets or properties of LCC or LCC AS under, (a) any Contract to
which LCC or LCC AS is a party or by which any of their properties are bound,
(b) any provision of the organizational documents of LCC or LCC AS, or (c) any
judgment, order, decree, statute, law, ordinance, order by a Governmental
Authority, rule or regulation applicable to LCC or LCC AS.
5.4 NO CONSENTS. No Consents of a Governmental Authority
or any other Person are required to be obtained or made by or with respect to
LCC or LCC AS in connection with the execution and delivery of this Agreement,
the Ancillary Agreements or any other LCC Closing Documents, or the performance
by LCC or LCC AS of its obligations hereunder or thereunder, except for (a)
filings with the FTC and the DOJ pursuant to the HSR Act, (b) applicable
filings under the Norway Antitrust Acquisition Act and (c) as set forth on
Schedule 5.4.
5.5 FINANCIAL STATEMENTS. (a) The unaudited interim
statement of net assets of the LCC Businesses as of March 31, 1999 (the "March
31 Statement of Net Assets"), a copy of which is attached hereto as Schedule
5.5(a), has been prepared from the books and records of the LCC Businesses and
includes only the book value, as of March 31, 1999, of the Purchased Assets and
the Assumed Liabilities and excludes the book value, as of March 31, 1999, of
the Excluded Assets and the Excluded Liabilities and has otherwise been
prepared in accordance with United States generally accepted accounting
principles ("U.S. GAAP") and presents fairly the Purchased Assets and the
Assumed Liabilities as of March 31, 1999. The unaudited statement of income of
the LCC Businesses for the quarter ended March 31, 1999 (together with the
March 31 Statement of Net Assets, the "March 31 Financial Statements"), a copy
of which is attached hereto as Schedule 5.5(a), has been prepared from the
books and
26
records of the LCC Businesses in accordance with U.S. GAAP applied consistently
throughout the period involved, presents fairly the results of operations of
the LCC Businesses for the period indicated and includes all adjustments
(consisting only of normal recurring accruals) that are necessary for a fair
presentation of the results of operations of the LCC Businesses for the period
covered thereby.
(b) The audited financial statements of LCC included in
LCC's Annual Report on Form 10-K for the fiscal year ended December 31, 1998,
have been prepared from the books and records of LCC in accordance with U.S.
GAAP applied consistently throughout the periods involved, present fairly the
assets, liabilities and results of operations of LCC as of the dates and for
the periods indicated and include all adjustments that are necessary for a fair
presentation of the financial condition of LCC and the results of operations of
LCC as of the dates thereof or for the periods covered thereby.
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Neither LCC
nor LCC AS has any liabilities or obligations of any nature, whether known or
unknown, absolute or contingent, matured or unmatured, or otherwise, and
whether due or to become due, arising out of or relating to the LCC Businesses,
other than Excluded Liabilities, except (i) liabilities arising under the
Assigned Contracts, (ii) as set forth on Schedule 5.6, (iii) as and to the
extent reflected in or reserved against in the March 31 Financial Statements,
or (iv) for liabilities and obligations that (A) were incurred after March 31,
1999 in the ordinary course of business consistent with past practice and (B)
individually and in the aggregate are not material to the LCC Businesses and
have not had or resulted in, and will not have or result in, an LCC Material
Adverse Effect.
5.7 ABSENCE OF CHANGES. Except as set forth on Schedule
5.7, since March 31, 1999, LCC and LCC AS have conducted the LCC Businesses
only in the ordinary course consistent with past practice and have not, on
behalf of, in connection with or relating to the LCC Businesses or the
Purchased Assets:
(a) suffered any LCC Material Adverse Effect;
(b) incurred any obligation, commitment or liability,
known or unknown, absolute or contingent, matured or unmatured, or
otherwise, whether due or to become due, except current liabilities
for trade or business obligations incurred in connection with the
purchase or sale of goods or services in the ordinary course of
business consistent with past practice, none of which liabilities, in
any case or in the aggregate, could have an LCC Material Adverse
Effect;
(c) discharged or satisfied any Lien other than those
then required to be discharged or satisfied, or paid any obligation,
commitment or liability, known or unknown, absolute or contingent,
matured or unmatured, or otherwise, whether due or to become due,
other than current liabilities shown on the March 31 Financial
Statements, current liabilities incurred since the date thereof in
the ordinary course of business consistent with past practice or
Excluded Liabilities;
27
(d) mortgaged, pledged or subjected to Lien any property,
business or assets, tangible or intangible, held in connection with
the LCC Businesses other than Excluded Assets;
(e) sold, transferred, leased to others or otherwise
disposed of any of the Purchased Assets, except for inventory sold in
the ordinary course of business or transferred at book value to other
divisions or Affiliates of LCC and licenses of Software or CellAD
software licenses of LCC AS granted in the ordinary course of
business, or canceled or compromised any debt or claim, or waived or
released any right of substantial value;
(f) received any notice of termination of any Contract
relating to the LCC Businesses or suffered any damage, destruction or
loss (whether or not covered by insurance) which, in any case or in
the aggregate, has had an LCC Material Adverse Effect;
(g) transferred or granted any rights under, or entered
into any settlement regarding the breach or infringement of, any
Patents, Copyrights and Trademarks or Know-How, or any Patents,
Copyrights and Trademarks or Know-How of LCC or LCC AS, other than
licenses of Software or software licenses of LCC or LCC AS granted in
the ordinary course of business, or modified any existing rights with
respect thereto;
(h) made any change in the rate of compensation,
commission, bonus or other direct or indirect remuneration payable, or
paid or agreed or orally promised to pay, conditionally or otherwise,
any bonus, incentive, retention or other compensation, retirement,
welfare, fringe or severance benefit or vacation pay to or in respect
of, or otherwise entered into any contractual relationship, whether
oral or written, that changes the terms and conditions or scope and
nature of the employment relationship with any Transferred Employees
(other than the LCC Businesses Employee Retention Program, all of the
liabilities relating to which shall be retained by LCC), except in the
ordinary course of business consistent with past practice;
(i) encountered any labor union organizing activity, had
any actual or, to the knowledge of LCC or LCC AS, threatened, employee
strikes, work stoppages, slowdowns or lockouts, or had any material
change in its relations with its employees, agents, customers or
suppliers;
(j) failed to replenish inventories and supplies in a
normal and customary manner consistent with past practice and prudent
business practices prevailing in the industry, or made any purchase
commitment in excess of the normal, ordinary and usual requirements of
the LCC Businesses or at any price in excess of the then current
market price or upon terms and conditions more onerous than those
usual and customary in the industry, or made any change in the
selling, pricing, advertising or personnel practices inconsistent with
past practice and prudent business practices prevailing in the
industry;
28
(k) instituted, settled or agreed to settle any
litigation, action or proceeding before any Governmental Authority
other than in the ordinary course of business consistent with past
practice, but not in any case involving amounts in excess of $25,000
or entered into any conciliation, commitment, auditing or reporting
agreement with any Governmental Authority;
(l) made any material change in any accounting procedures
or practices applied in keeping the books and records of the LCC
Businesses;
(m) entered into any transaction or Contract other than
in the ordinary course of business consistent with past practice, or
incurred any severance pay or amended or modified any employee plan or
contract to provide for enhanced benefits or accelerated payments,
earnouts or vesting obligations by reason of this Agreement or the
transactions contemplated hereby;
(n) made any material changes in the customary methods of
operation of the LCC Businesses, including, without limitation,
practices and policies relating to manufacturing, purchasing,
inventories, marketing, selling and pricing;
(o) acquired any material assets related to the LCC
Businesses other than in the ordinary course of business consistent
with past practice;
(p) permitted or allowed any of the assets of the LCC
Businesses to be subjected to any Liens, other than Liens that will be
released at or prior to the Closing;
(q) written down or written up (or failed to write down
or write up in accordance with U.S. GAAP consistent with past
practice) the value of any inventories or receivables related to the
LCC Businesses or revalued any assets of the LCC Businesses other than
in the ordinary course of business consistent with past practice and
in accordance with U.S. GAAP;
(r) made any change in any method of accounting or
accounting practice or policy used by the LCC Businesses;
(s) made any capital expenditure or commitment for any
capital expenditure related to the LCC Businesses, other than
expenditures for software development incurred in the ordinary course
of business, in excess of $100,000 individually or $500,000 in the
aggregate;
(t) terminated, discontinued, closed or disposed of any
plant, facility or other operation of the LCC Businesses, or laid off
any employees of the LCC Businesses or implemented any early
retirement, separation or program providing early retirement window
benefits to employees of the LCC Businesses within the meaning of
Section 1.401(a)-4 of the Regulations under the Code or announced or
planned any such action or program for the future;
29
(u) amended, modified or consented to the termination of
any Contract or LCC's or LCC AS's rights thereunder; or
(v) agreed, whether in writing or otherwise, to take any
of the actions specified in this Section 5.7, except as expressly
contemplated by this Agreement and the Ancillary Agreements.
5.8 LITIGATION. There is no action, claim, demand, suit,
proceeding, arbitration, grievance, complaint, citation, summons, subpoena,
inquiry or investigation of any nature, civil, criminal, administrative,
regulatory or otherwise, in law or in equity, pending or, to the knowledge of
LCC and LCC AS, threatened against or relating to LCC (in connection with the
Purchased Assets or the LCC Businesses) or LCC AS, or against or relating to
the transactions contemplated by this Agreement, and neither LCC nor LCC AS
knows or has reason to be aware of any basis for the same. Neither LCC nor
LCC AS is subject to any Governmental Order directed specifically to the LCC
Businesses, or affecting or that could reasonably be expected to affect any of
the Purchased Assets or the LCC Businesses (nor, to the best knowledge of LCC
and LCC AS, are there any such Governmental Orders threatened in writing to be
imposed by any Governmental Authority).
5.9 COMPLIANCE WITH LAWS; GOVERNMENTAL APPROVALS AND
CONSENTS; GOVERNMENTAL CONTRACTS. Except as otherwise disclosed on Schedule
5.9, since January 1, 1996, with respect to LCC and since January 1, 1997, with
respect to LCC AS, the LCC Businesses have complied in all respects with all
Applicable Laws (as defined below) applicable to the LCC Businesses or the
Purchased Assets, except where the failure so to comply would not, individually
or in the aggregate, have an LCC Material Adverse Effect, and neither LCC nor
LCC AS nor any of their respective predecessors has received any notice
alleging any conflict with, violation of, breach of or default with respect to
the LCC Businesses or the Purchased Assets under any such Applicable Law which
has not been previously cured. "Applicable Law" means all applicable
provisions of all (A) constitutions, treaties, statutes, laws (including the
common law), rules, regulations, ordinances, codes or orders of any
Governmental Authority, (B) any consent of, with or to any Governmental
Authority and (C) orders, decisions, injunctions, judgments, awards and decrees
of or agreements with any Governmental Authority.
5.10 RIGHTS, TITLE AND ASSETS. (a) Except as disclosed
on Schedule 5.10, LCC and LCC AS own, lease or have the legal right to use all
the Purchased Assets, free and clear of any and all Liens and, with respect to
rights under contracts included in the Purchased Assets, are a party to and
enjoy the rights to the benefits of all such contracts.
(b) The Purchased Assets and the other assets and
properties licensed to Purchaser under the licenses, or otherwise made
available to Purchaser, constitute all of the properties, assets and rights
principally used or intended by LCC or LCC AS to be used in, and all such
properties, assets and rights as are necessary in the conduct of, the LCC
Businesses as presently conducted.
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(c) Except as set forth on Schedule 5.10, LCC and LCC AS
have the complete and unrestricted power and unqualified right to sell, assign,
transfer, convey and deliver the Purchased Assets to Purchaser without penalty
or other adverse consequences. Following the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements and the execution
of the instruments of transfer contemplated by this Agreement and the Ancillary
Agreements, Purchaser will own, with good, valid and marketable title, or
lease, under valid and subsisting leases, or otherwise acquire, the interests
of LCC and LCC AS in the Purchased Assets, free and clear of any Liens, and
without incurring any penalty or other adverse consequence, including, without
limitation, any increase in rentals, royalties, or license or other fees
imposed as a result of, or arising from, the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements. The Purchased
Assets are in good repair and operating condition (subject to normal wear and
tear) and are suitable for the purposes for which they are currently used and
currently intended by LCC or LCC AS to be used.
5.11 ASSIGNED CONTRACTS. (a) Schedule 5.11(a) contains a
complete and correct list of all the following Assigned Contracts that are in
effect as of the date hereof to which LCC or LCC AS is a party or by which
either entity is bound in connection with the LCC Businesses or the Purchased
Assets (other than Contracts which are Excluded Assets):
(i) each contract, agreement, invoice, purchase order,
sales order and other arrangement for the purchase or sale of
inventory or other products or equipment with any supplier or for the
furnishing of services by or to the LCC Businesses under the terms of
which LCC or LCC AS is obligated to pay or entitled to receive
consideration of more than $60,000, in the aggregate, over the
remaining term of such contract;
(ii) all material broker, distributor, dealer,
manufacturer's representative, franchise, agency, sales promotion,
market research, market consulting and advertising contracts and
agreements to which LCC or LCC AS is a party and which are primarily
related to the LCC Businesses;
(iii) all material contracts with independent contractors
or consultants (or similar arrangements) to which LCC or LCC AS is a
party and which are primarily related to the LCC Businesses;
(iv) all contracts and agreements that involve
indebtedness of LCC or LCC AS in excess of $100,000 and that are
primarily related to the LCC Businesses;
(v) all contracts and agreements with any Governmental
Authority to which LCC or LCC AS is a party and which are primarily
related to the LCC Businesses;
(vi) all contracts and agreements that limit or purport to
limit the ability of LCC or LCC AS to engage in any activity in any
geographic area or during any period of time;
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(vii) all contracts and agreements between or among LCC or
LCC AS or any Affiliate of LCC which are primarily related to the LCC
Businesses; and
(viii) all other contracts and agreements, whether or not
made in the ordinary course of business, which are material to the
conduct of the LCC Businesses.
(b) LCC has made available to Purchaser true and complete
copies of all Assigned Contracts. All Assigned Contracts are in full force and
effect and constitute a valid and binding obligation of each party thereto,
enforceable in accordance with their terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally and subject to
general principles of equity. Except as set forth on Schedule 5.11(b) and
except for the [ ] (as such terms are defined
in Section 6.1(b)), or except as would not result in an LCC Material Adverse
Effect, there does not exist under any Assigned Contract any violation, breach
or event of default or event or condition that, after notice or lapse of time
or both, would constitute a violation, breach or event of default thereunder on
the part of LCC or LCC AS or, to the knowledge of LCC, any other party thereto.
(c) Each Assigned Contract (i) represents the entire
agreement between the parties thereto with respect to the subject matter
thereof, (ii) except as set forth on Schedule 5.4, is freely and fully
assignable to Purchaser without penalty or other adverse consequences and (iii)
upon consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except in any case to the extent that any consents set
forth on Schedule 5.4 are not obtained, shall continue in full force and effect
without penalty or other adverse consequence. Neither LCC nor LCC AS has
received any notice of uncured breach or default under, or termination of, any
Assigned Contract.
5.12 INVENTORIES. As of March 31, 1999, all inventories
of the LCC Businesses were and, as of the Closing Date, all inventories of the
LCC Businesses will be, of good and merchantable quality except to the extent
of the reserves therefor included in the March 31 Statement of Net Assets or
the Closing Statement of Net Assets, respectively, and were or will be usable
and suitable for the purposes for which they are currently used and were or
will be in a condition such that they can be used in the ordinary course of the
LCC Businesses consistent with past practice. All such inventories are
recorded on the books of the LCC Businesses at the lower of cost or market
value determined in accordance with U.S. GAAP. Schedule 5.12 lists the
locations of all such inventories. As of March 31, 1999, the inventories do
not consist of items that are obsolete, damaged or slow-moving except to the
extent of the reserves therefor included in the March 31 Statement of Net
Assets and, as of the Closing Date, the inventories will not consist of items
that are obsolete, damaged or slow moving except to the extent of the reserves
therefor which will be included in the Closing Statement of Net Assets. The
inventories do not consist of any items held on consignment. Neither LCC nor
LCC AS is under any obligation or liability with respect to accepting returns
of items of inventory or merchandise in the possession of its customers, except
to the extent consistent with past return policies of the LCC Businesses. No
clearance or extraordinary sale of the inventories has been conducted since
January 1, 1996 other than liquidations of excess or obsolete inventories made
in the ordinary course. As of
32
March 31, 1999, neither LCC nor LCC AS has acquired or committed to acquire or
manufactured inventory for sale which is not of a quality and quantity usable
in the ordinary course of business within a reasonable period of time and
consistent with past practice, except to the extent of the reserves therefor
included in the March 31 Statement of Net Assets and as of the Closing Date,
neither LCC nor LCC AS will have acquired or committed to acquire or
manufacture inventory for sale which will not be of a quality and quantity
usable in the ordinary course of business within a reasonably period of time
and consistent with past practice, except to the extent of the reserves
therefor which will be included in the Closing Statement of Net Assets.
Neither LCC nor LCC AS has or will have changed the price of any inventory
except for (i) reductions to reflect any reduction in the cost thereof to LCC
or LCC AS, (ii) reductions and increases responsive to normal competitive
conditions and consistent with the past sales practices of the LCC Businesses,
and (iii) increases to reflect any increase in the cost thereof to LCC.
5.13 PRODUCT AND SERVICE WARRANTIES. Except as set forth
on Schedule 5.13 and for warranties imposed by Applicable Law, (a) there are no
warranties, express or implied, written or oral, with respect to the products
or services of the LCC Businesses, and (b) there are no pending or, to the
knowledge of LCC and LCC AS, threatened claims with respect to any such
warranty as of the date hereof, and neither LCC nor LCC AS has any liability
with respect to any such warranty, whether known or unknown, absolute or
contingent, matured or unmatured, or otherwise, whether due or to become due,
except to the extent of the reserve therefor included in the March 31 Statement
of Net Assets and the Closing Statement of Net Assets.
5.14 INTELLECTUAL PROPERTY. (a) Schedules 1.2(g)(i),
1.2(g)(ii), 1.2(g)(iii), 1.2(g)(iv) and 1.2(g)(vi) set forth a true and
complete list of the Patents, Trademarks, Copyrights, Software and Licensed
Intellectual Property, respectively. The Purchased Intellectual Property
includes all of the intellectual property and software used by LCC or LCC AS in
the ordinary day-to-day conduct of the LCC Businesses (other than accounting
and financial reporting systems and office automation software, all of which
are readily available from software providers on commercially reasonable
terms), and there are no other items of intellectual property that are material
to such ordinary day-to-day conduct of the LCC Businesses. The Purchased
Intellectual Property is subsisting, valid and enforceable, and has not been
adjudged invalid or unenforceable in whole or part.
(b) Except as set forth on Schedule 5.14(b), LCC or LCC
AS is the exclusive owner of the entire and unencumbered right, title and
interest in and to the Purchased Intellectual Property free from any Liens,
conditions or restrictions whatsoever, and is entitled to use the Purchased
Intellectual Property in the ordinary course of the LCC Businesses as presently
conducted, subject only to the terms of the licenses of the Licensed
Intellectual Property.
(c) The operation of the LCC Businesses and the use of
the Purchased Intellectual Property by LCC or LCC AS in the conduct of the LCC
Businesses does not conflict with or infringe upon the intellectual property
rights of any third party, and no claim has been asserted that the operation of
the LCC Businesses or use of such Purchased Intellectual Property in the
conduct of the LCC Businesses does or may conflict with or infringe upon the
intellectual
33
property rights of any third party. To the best of LCC's and LCC AS's
knowledge after due inquiry, no person is engaging in any activity that
infringes upon the Purchased Intellectual Property. Except as set forth on
Schedule 5.14(c), neither LCC nor LCC AS has granted any license or other right
to any third party with respect to the Purchased Intellectual Property. The
consummation of the transactions contemplated by this Agreement will not result
in the termination or impairment of any of the Purchased Intellectual Property.
(d) No legal proceedings have been asserted, or, to the
best of LCC's and LCC AS's knowledge after due inquiry, are pending or
threatened against LCC or LCC AS (i) based upon, or challenging, or seeking to
deny or restricting the use by LCC or LCC AS of, any of the Purchased
Intellectual Property, (ii) alleging that any services provided by, processes
used by, or products manufactured or sold by, LCC or LCC AS infringe upon or
misappropriate any intellectual property right of any third party, or (iii)
alleging that any intellectual property licensed under the Licensed
Intellectual Property infringes upon any intellectual property right of any
third party, or is being licensed or sublicensed in conflict with the terms of
any license or other agreement.
(e) With respect to the Patents, Copyrights and
Trademarks, LCC and LCC AS have taken all commercially reasonable actions to
register such Patents, Copyrights and Trademarks with, file in, or have issued
by, as the case may be, the United States Patent and Trademark Office or the
United States Copyright Office, and LCC and LCC AS have taken other
commercially reasonable actions to ensure full protection thereof under any
Applicable Laws of the United States, and such registrations, filings and
issuances remain in full force and effect.
(f) LCC and LCC AS have delivered or made available to
Purchaser correct and complete copies of all the licenses of the Licensed
Intellectual Property. With respect to each such license:
(i) such license is valid and binding and in full force
and effect and represents the entire agreement between the respective
licensor and licensee with respect to the subject matter of such
license;
(ii) except as may result from the failure to obtain any
required consent described on Schedule 5.4, such license will not
cease to be valid and binding and in full force and effect on terms
identical to those currently in effect as a result of the consummation
of the transactions contemplated by this Agreement, nor will the
consummation of the transactions contemplated by this Agreement
constitute a breach or default under such license, or otherwise give
the licensor a right to terminate such license;
(iii) except as set forth on Schedule 5.11(b) (A) neither
LCC nor LCC AS has received any notice of termination or cancellation
under such license, (B) neither LCC nor LCC AS has received any
notice of a breach or default under such license, which breach has not
been cured, and (C) neither LCC or LCC AS has granted to any other
third party any rights, adverse or otherwise, under such license that
would constitute a breach of such license; and
34
(iv) except as set forth on Schedule 5.11(b) and except
for the Xxxx Ageement and the NCC Agreement, neither LCC, LCC AS nor
any other party to such license is in breach or default in any
material respect, and no event has occurred that, with notice or lapse
of time, would constitute such a breach or default, or permit
termination, modification or acceleration under such license.
(g) (i) The Software is free of all viruses, worms,
trojan horses and other material known contaminants, and, except for such
products that are currently in development and have not yet been released for
commercial use, does not contain any bugs, errors, or problems of a material
nature that disrupt its operation or have an adverse impact on the operation of
other software programs or operating systems. LCC and LCC AS have obtained all
approvals necessary for exporting the Software outside the United States and
importing the Software into any country in which the Software is now sold or
licensed for use, and all such export and import approvals in the United States
and throughout the world are valid, current, outstanding and in full force and
effect.
(ii) LCC and LCC AS have the right to use all software
development tools, library functions, compilers and other third party software
that is material to the LCC Businesses, or that is required to operate or
modify the Software.
(h) LCC and LCC AS have taken reasonable steps in
accordance with normal industry practice to maintain the confidentiality of
their Know-How and other confidential intellectual property. To the knowledge
of LCC or LCC AS, (i) there has been no misappropriation of any Know-How or
other material confidential intellectual property of LCC or LCC AS that relate
to the LCC Business by any Person, and (ii) no employee, independent contractor
or agent of LCC or LCC AS has misappropriated any trade secrets of any other
person in the course of such performance as an employee, independent contractor
or agent; and (iii) no employee, independent contractor or agent of LCC or LCC
AS is in default or breach of any term of any employment agreement,
non-disclosure agreement, assignment of invention agreement or similar
agreement, including the Assigned Contracts or any contract relating in any way
to the protection, ownership, development, use or transfer of Purchased
Intellectual Property.
5.15 LABOR RELATIONS. Neither LCC nor LCC AS is a party
to any collective bargaining or similar agreement with respect to any of the
Transferred Employees. There is no strike, labor, dispute, slowdown, stoppage
or other material interference with, or impairment by, labor of the LCC
Businesses actually pending or, to the knowledge of LCC and LCC AS, threatened,
against LCC or LCC AS with respect to the LCC Businesses.
35
5.16 PENSION AND BENEFIT PLANS. (a) Schedule 5.16(a)
sets forth a list and brief description of any "employee pension benefit plans"
(as defined in Section 3(2) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), "employee welfare benefit plans" (as defined in
Section 3(1) of ERISA) (all the foregoing being hereinafter collectively
referred to as "Benefit Plans") maintained, or contributed to, by LCC or LCC AS
for the benefit of Transferred Employees, whether of a legally binding nature
or in the nature of informal understandings.
(b) Except as set forth on Schedule 5.16(a), all Benefit
Plans which are intended to be qualified under Sections 401(a) and 501(a) of
the Code, have been determined by the Internal Revenue Service to be qualified
(or application for such determination has been made). Except as set forth on
Schedule 5.9, each of LCC and LCC AS is in compliance in all material respects
with the provisions of all Applicable Laws, including the Code and ERISA, and
the regulations and published interpretations thereunder, with respect to the
Benefit Plans. To the knowledge of LCC and LCC AS, no fiduciary or other
service provider to a Benefit Plan has or could reasonably be expected to incur
a liability under Applicable Law, the Code or ERISA. Neither LCC nor LCC AS,
nor any of their Affiliates, maintains any Benefit Plan which is subject to the
provisions of Title IV of ERISA, nor has any of LCC, LCC AS or any of their
respective Affiliates incurred any liability under Title IV of ERISA or could
reasonably be expected to incur such liability.
5.17 EMPLOYEES. (a) Neither LCC nor LCC AS (in respect of
the LCC Businesses) has any written employment Contract with any Transferred
Employee, salaried director, consultant or agent except such employment
Contracts as are set forth on Schedule 5.17(a). Schedule 5.17(a) lists the
name and place of employment of each Transferred Employee, as well as that of
each current salaried director, consultant or agent of the LCC Businesses whose
current annual compensation as of June 30, 1999, exceeded $60,000, and, with
respect to each Transferred Employee, such Transferred Employee's position with
LCC or LCC AS, initial employment date, a brief description of such Transferred
Employee's responsibilities and job title and such Transferred Employee's 1998
and current annual salary or hourly wage, bonus or incentive compensation,
total taxable compensation for 1998, accrued vacation as of June 30, 1999, and
the current pension, deferred or contingent compensation, "golden parachute"
and other like benefits paid or payable (in cash or otherwise) to such Person.
No changes in the basis for remuneration of the Transferred Employees, salaried
directors, consultants or agents have been made, promised or authorized by LCC
or LCC AS from and including January 1, 1999, except in the ordinary course of
business consistent with past practice or as disclosed on Schedule 5.17(a).
Except as disclosed on Schedule 5.17(a), other than general understandings
which may exist for employment at will, no real understandings currently exist
between any executive officer or other representative of LCC, LCC AS or any LCC
Subsidiary authorized to enter into such understandings on behalf of LCC, LCC
AS or any LCC Subsidiary and any Transferred Employee, salaried director,
consultant or agent regarding changes in compensation, promotion or any other
change in status.
(b) Except as set forth on Schedule 5.17(b), all
employees employed in the LCC Businesses who are officers, management employees
or technical or professional
36
employees are under written obligation to LCC or LCC AS to maintain in
confidence all confidential or proprietary information acquired by them in the
course of their employment and to assign to LCC or LCC AS all inventions made
by them within the scope of their employment during such employment and for a
reasonable period thereafter. All such agreements are assignable by LCC or LCC
AS to Purchaser without the consent of any such employee.
5.18 RECEIVABLES. Schedule 5.18 contains an aged list of
the receivables which are included in the Purchased Assets as of July 31, 1999.
All receivables reflected on Schedule 5.18 arose from, and the receivables
existing on the Closing Date will have arisen from, the sale of inventory or
services to Persons not affiliated with LCC or LCC AS and in the ordinary
course of the LCC Businesses consistent with past practice, and, except to the
extent reserved for on the March 31 Statement of Net Assets or in the Closing
Statement of Net Assets, constitute or will constitute, as the case may be,
only valid, undisputed claims of the LCC Businesses not subject to valid claims
of set-off or other defenses or counterclaims other than normal cash discounts
accrued in the ordinary course of the LCC Businesses consistent with past
practice.
5.19 CUSTOMERS. Schedule 5.19 lists the 10 most
significant customers (by revenue) of each of the LCC Businesses for the
12-month period ended June 30, 1999 and the amount of such revenues from each
such customer during such period. Except as disclosed in Schedule 5.19, as of
the date hereof, neither LCC nor LCC AS has received any notice or has reason
to believe that any significant customer of the LCC Businesses has ceased, or
will cease, to use the products, equipment, goods or services of the LCC
Businesses or has substantially reduced, or will substantially reduce, the use
of such products, equipment, goods or services at any time except for such
reductions which arise out of normal fluctuations in purchasing patterns.
5.20 SUPPLIERS. Schedule 5.20 lists the 10 most
significant suppliers of raw materials, supplies, merchandise and other goods
for each of the LCC Businesses for the 12-month period ended June 30, 1999 and
the amount of such raw materials, supplies, merchandise and other goods
received from each such supplier related to the LCC Businesses during such
period. Except as disclosed on Schedule 5.20, as of the date hereof, neither
LCC nor LCC AS has received any notice that any such supplier will not sell raw
materials, supplies, merchandise and other goods to the LCC Businesses at any
time after the Closing Date on terms and conditions similar to those imposed on
current sales to the LCC Businesses, subject only to general and customary
price increases.
5.21 PRODUCTS AND SERVICES. Except as described on
Schedule 5.21, there is no material defect in design, materials, manufacture or
otherwise in any products designed, manufactured, distributed or sold by the
LCC Businesses, or any material defect in repair to, or replacement of, any
such products. Schedule 5.21 sets forth a true and complete list of all
products designed, manufactured, marketed or sold by the LCC Businesses that
have been recalled or withdrawn (whether voluntarily or otherwise) as of the
date hereof. The aggregate expense of all product recalls and withdrawals
performed by the LCC Businesses has not exceeded $100,000 in any of the four
fiscal quarters prior to the date hereof.
37
5.22 YEAR 2000 READINESS. Except as described on Schedule
5.22, LCC and LCC AS have (i) undertaken an assessment of all significant
computer hardware, software, networks, systems and equipment embedded within
products of the LCC Businesses and/or used in the conduct of the LCC Businesses
as currently conducted ("Business Systems") that could be adversely affected by
a failure to accurately adapt, accommodate, process or respond to the Year 2000
and thereafter ("Year 2000 Ready"), (ii) developed a plan and time line for
rendering all significant Business Systems Year 2000 ready (the "Year 2000
Plan"), and (iii) to date, implemented such plan in accordance with such
timetable in all material respects. Assuming Purchaser continues to implement
the Year 2000 Plan following the Closing in accordance with such timetable
there are no Business Systems which will not be Year 2000 Ready in all material
respects, except as described on Schedule 5.22. LCC and LCC AS have also (i)
requested all significant suppliers to the LCC Businesses to provide to LCC and
LCC AS assessments of the Year 2000 Readiness of all material computer
hardware, software, networks, systems and equipment of such suppliers used in
providing products or services to the LCC Businesses ("Supplier Systems"), (ii)
are receiving assessments from all such suppliers and (iii) based on such
assessments to date, have no reason to believe that any material Supplier
Systems will not be Year 2000 Ready in all material respects.
5.23 ENVIRONMENTAL MATTERS. (a) (i) Hazardous Materials
have not been generated, used, treated, handled or stored on, or transported to
or from, or released or discharged in connection with the LCC Businesses; (ii)
LCC and LCC AS have disposed of any waste generated by the LCC Businesses in
compliance with all applicable environmental laws and permits required under
environmental laws; and (iii) there are no past, pending or threatened
environmental claims against LCC or LCC AS with respect to the LCC Businesses.
(b) There are no circumstances with respect to any
Purchased Asset or the operation of the LCC Businesses which could reasonably
be anticipated (i) to form the basis of an environmental claim against LCC, LCC
AS or any Purchased Asset or (ii) to cause such Purchased Asset to be subject
to any restrictions on ownership, occupancy, use or transferability under any
applicable environmental law.
5.24 TANGIBLE PERSONAL PROPERTY. Schedule 1.2(a) lists
each item or distinct group of machinery, equipment, tools, supplies,
furniture, fixtures, personalty, vehicles and other tangible personal property
(the "Tangible Personal Property") primarily used in the LCC Businesses. Prior
to the Closing Date, LCC will deliver to Purchaser a revised list of Tangible
Personal Property, specifying the jurisdiction in which each group of Tangible
Personal Property is located.
5.25 INSURANCE. All material assets, properties and risks
of the LCC Businesses, LCC and LCC AS are, and for the past five years have
been (except for director's and officer's insurance, errors and omissions
insurance and fiduciary liability insurance, with respect to which coverage was
first obtained effective September 1, 1996) covered by valid and currently
effective insurance policies or binders of insurance (including, without
limitation, general liability, property, workers' compensation, automobile
liability, excess liability, fiduciary liability, professional errors and
omissions, directors and officers liability insurance) issued in
38
favor of LCC or LCC AS, in each case with responsible insurance companies, in
such types and amounts and covering such risks as are consistent with customary
practices and standards of companies engaged in businesses and operations
similar to those of the LCC Businesses.
5.26 TAXES. All returns and reports in respect of Taxes
require to be filed with respect to LCC and LCC AS have been timely filed,
except as would not have an LCC Material Adverse Effect. All Taxes required to
be shown on such returns and reports of LCC and LCC AS or otherwise due have
been timely paid. All such returns and reports of LCC and LCC AS are true,
correct and complete, except as would not have an LCC Material Adverse Effect.
No adjustment relating to such returns of LCC or LCC AS has been proposed
formally or informally by any Tax authority and, to the best knowledge of LCC
and LCC AS (after reasonable investigation), no basis exists for any such
adjustment. There are no pending or, to the best knowledge of LCC and LCC AS
(after reasonable investigation), threatened actions or proceedings for the
assessment or collection of Taxes against LCC or LCC AS. There are no Tax
liens on any of the Purchased Assets.
5.27 DEFINITION OF LCC'S KNOWLEDGE. As used in this
Agreement, the phrase "to the knowledge of LCC" or words of similar import
means the circumstance, event or condition referred to is within the current
actual knowledge of Xxxxx X. Xxxxxx, J. Xxxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxx
Xxxxxxxx, C. Xxxxxx Xxxxxxxx III, Xxxx Xxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxxx or
Xxxxxx X. Xxxx, or should have been within the current actual knowledge of one
or more of such persons if they had exercised due inquiry.
5.28 LIMITED WARRANTIES. Purchaser understands, agrees
and acknowledges that except for the representations and warranties expressly
set forth in this Agreement, the Ancillary Agreements and the LCC Closing
Documents, the Purchased Assets are being purchased and sold on an "AS IS,
WHERE IS" basis. ALL IMPLIED WARRANTIES EXISTING UNDER ANY APPLICABLE LAW WITH
RESPECT TO THE PURCHASED ASSETS OR TO THE SALE THEREOF ARE HEREBY EXPRESSLY
DISCLAIMED AND NEGATED. PARTICULARLY, BUT WITHOUT LIMITING THE FOREGOING, LCC
HEREBY NEGATES AND DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR ANY
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. PURCHASER AGREES THAT,
TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE EFFECTIVE, THE DISCLAIMERS OF
IMPLIED WARRANTIES CONTAINED IN THIS SECTION ARE "CONSPICUOUS" DISCLAIMERS FOR
THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.
5.29 BROKERS. Except for CIBC Xxxxxxxxxxx, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of LCC. LCC is solely
responsible for payment of the fees and expenses of CIBC Xxxxxxxxxxx.
39
ARTICLE 6
COVENANTS PENDING CLOSING
6.1 CONDUCT OF LCC BUSINESSES. Except as otherwise
contemplated by this Agreement, during the period from the date hereof through
the Closing Date, LCC and LCC AS will use their reasonable best efforts to
conduct the operations of the LCC Businesses in the ordinary and usual course,
consistent with current practices, to preserve the LCC Businesses and maintain
their existing franchises and licenses, and to preserve the goodwill of the
employees, representatives, suppliers and customers of the LCC Businesses or
other persons with which they have significant business relationships. LCC and
LCC AS shall maintain in full force and effect all of their existing casualty,
liability and other insurance covering the LCC Businesses and the Purchased
Assets through the day following the Closing Date in amounts not less than
those in effect on the date hereof, except for changes in such insurance that
are made in the ordinary course of business consistent with past practice.
(b) With respect to [
] LCC shall, promptly
after execution hereof, pay all past due amounts outstanding
thereunder, obtain delivery of all items remaining to be delivered
thereunder and take all reasonable measures to preserve for the
benefit of Purchaser the work product developed under such agreements.
6.2 FORBEARANCES BY LCC AND LCC AS. Except as
contemplated by this Agreement, or consented to by Purchaser in writing, during
the period from the date hereof through the Closing Date, neither LCC nor LCC
AS shall:
(a) mortgage, pledge or otherwise place or allow to be
placed a Lien on any of the Purchased Assets other than Liens on after
acquired property under the Chase Credit Facility or any refinancing
thereof (it being understood that LCC shall cause all such Liens to be
released at or prior to the Closing);
(b) sell, lease, transfer or otherwise dispose of any of
the Purchased Assets except (i) in the ordinary course of business
consistent with past practice and (ii) the transfer to LCC or LCC AS
of equipment being leased by the LCC Businesses to LCC or LCC AS or
any of their Affiliates and the termination of corresponding leases
therefor;
(c) waive or release any rights of the LCC Businesses of
material value, or cancel, compromise, release or assign any
indebtedness owed to the LCC Businesses or any claims held by the LCC
Businesses, except in the ordinary and usual course of business;
40
(d) purchase any property or assets on behalf of the LCC
Businesses, except in the ordinary course of business;
(e) fail to pay accounts payable or other obligations of
the LCC Businesses consistent with past practice, except those being
contested in good faith;
(f) fail to replenish inventory of the LCC Businesses in
the ordinary course of business, consistent with past practices;
(g) fail to perform in all respects its obligations under
all material Contracts relating to the LCC Businesses or affecting the
Purchased Assets, or fail to comply in all respects with all material
Applicable Laws pertaining to the Purchased Assets or the LCC
Businesses, except where the failure so to perform or so to comply
would not, individually or in the aggregate, have an LCC Material
Adverse Effect;
(h) enter into or terminate any material Contract with
respect to the LCC Businesses, or make any change in any of its
material Contracts with respect to the LCC Businesses, other than
accepting purchase orders from customers and issuing supply orders to
suppliers in the ordinary course of business and except where any such
action would not, individually or in the aggregate, have an LCC
Material Adverse Effect;
(i) increase the compensation or fringe benefits of any
Transferred Employee (other than compensation increases in accordance
with the customary compensation practices of the LCC Businesses and
related changes in fringe benefits) or pay or agree to pay any pension
or retirement benefit to any such officer or employee not required by
any existing employment agreement or employee benefit plan;
(j) enter into any contract that may reasonably be
expected to have an LCC Material Adverse Effect;
(k) borrow or agree to borrow any funds on behalf of the
LCC Businesses, other than trade payables in the ordinary course, or
directly or indirectly guarantee or agree to guarantee the obligations
of any other natural person, firm, partnership, association,
corporation, company, trust, business trust, Governmental Authority or
other entity ("Person") on behalf of the LCC Businesses other than
under the Chase Credit Facility or any refinancing thereof (it being
understood that LCC shall cause all such Liens to be released at or
prior to the Closing);
(l) make any loan or advance to any Person on behalf of
the LCC Businesses except for advances to any employee in respect of
travel expenses in the ordinary course of business;
(m) take any action that may reasonably be expected to
violate any Applicable Law;
41
(n) commit any act or omit to do any act, or engage in
any activity or transaction or incur any obligation (by conduct or
otherwise), that (individually or in the aggregate) reasonably could
be expected to have an LCC Material Adverse Effect;
(o) fail to continue its advertising and promotional
activities, and pricing and purchasing policies related to the LCC
Businesses in accordance with past practices;
(p) shorten or lengthen the customary payment cycles for
any of the payables or receivables of the LCC Businesses without due
prior consultation with Purchaser;
(q) not use its reasonable best efforts to preserve
intact the Purchased Assets and the organization of the LCC
Businesses;
(r) fail to use commercially reasonable efforts to keep
available to Purchaser the services of the Transferred Employees;
(s) take any or fail to take any action that reasonably
could be expected to cause any of the representations, warranties or
covenants contained therein to be untrue or incorrect or incapable of
being performed or satisfied on the Closing Date, or
(t) take any of the actions described in Section 5.7.
6.3 ACCESS TO INFORMATION. (a) From the date hereof
until the Closing, upon reasonable notice, LCC and LCC AS shall and shall cause
each of LCC's and LCC AS's officers, employees, agents, accountants and counsel
to: (i) afford the officers, employees and authorized agents, accountants,
counsel and representatives of Purchaser reasonable access, during normal
business hours, to the offices, properties, plants, other facilities, books and
records of the LCC Businesses and to those officers, employees, agents,
accountants and counsel of LCC and LCC AS who have any knowledge relating to
the LCC Businesses and (ii) furnish to the officers, employees and authorized
agents, accountants, counsel and representatives of Purchaser such additional
financial and operating data and other information regarding the LCC Businesses
as Purchaser may from time to time reasonably request.
(b) In order to facilitate the resolution of any claims
made against or incurred by LCC or LCC AS prior to or following the Closing,
for a period of seven years after the Closing, Purchaser shall (i) retain the
books and records of LCC and LCC AS which are transferred to Purchaser pursuant
to this Agreement relating to periods prior to or following the Closing in a
manner reasonably consistent with the prior practices of LCC and LCC AS and
(ii) upon reasonable notice, afford the officers, employees, authorized agents,
accountants, counsel and representatives of LCC and LCC AS reasonable access
(including the right to make photocopies at LCC's and LCC AS's expense), during
normal business hours, to such books and records.
(c) In order to facilitate the resolution of any claims
made by or against or incurred by Purchaser after the Closing, for a period of
seven years following the Closing, LCC
42
and LCC AS shall (i) retain all books and records of LCC and LCC AS which are
not transferred to Purchaser pursuant to this Agreement and which relate to the
LCC Businesses for periods prior to the Closing and which shall not otherwise
have been delivered to Purchaser and (ii) upon reasonable notice, afford the
officers, employees, authorized agents, accountants, counsel and
representatives of Purchaser, reasonable access (including the right to make
photocopies at Purchaser's expense), during normal business hours, to such
books and records.
ARTICLE 7
ADDITIONAL COVENANTS AND AGREEMENTS
7.1 FILINGS WITH GOVERNMENTAL AUTHORITIES. As promptly
as possible after the execution and delivery of this Agreement, Purchaser and
LCC shall file Notification and Report Forms under the HSR Act with the FTC and
the Antitrust Division of the DOJ and LCC and Purchaser shall pay an equal
portion of the HSR filing fee. As promptly as possible after the execution and
delivery of this Agreement, Purchaser shall file the necessary forms and a copy
of this Agreement with the Ministry of Trade and Industry of Norway. All
filing fees for filing such Notification and Report Forms and Norwegian filing
shall be paid equally by Purchaser and Seller. As promptly as possible after
the execution and delivery of this Agreement, Purchaser and LCC shall determine
whether a filing needs to be made in respect of Brazil and, should such a
filing prove to be necessary, Purchaser and LCC shall cooperate in promptly
making such filing. Any expense incurred in connection with such filing shall
be borne equally by LCC and Purchaser. Each party shall cooperate with the
other party with respect to such filings and the filing of any additional
information required or requested in connection with any such filings.
7.2 COOPERATION. Each party shall (a) cooperate with the
other parties and take all actions reasonably required to obtain on a timely
basis any consents, waivers and approvals required to consummate the
transactions contemplated by this Agreement, and (b) use all reasonable efforts
to satisfy promptly the conditions to the Closing specified in this Agreement.
Each party shall furnish to the other parties and to the other parties' counsel
all such information as may be reasonably required in order to effectuate the
foregoing actions. Notwithstanding the foregoing, Purchaser acknowledges that
the approval of the transactions contemplated by this Agreement by the lenders
under the Chase Credit Facility is within the discretion of such lenders and
not within the control of LCC; provided that LCC shall use reasonable best
efforts to obtain such consent.
7.3 TRANSFERRED EMPLOYEES. (a) As used in this
Agreement, "Transferred Employees" means the employees of the LCC Businesses
set forth on Schedule 5.17(a), if employed by LCC or LCC AS on the Closing
Date.
(b) Purchaser shall offer employment to all the
Transferred Employees effective as of the day following the Closing Date at the
same salary or hourly wage set forth in Schedule 5.17(a), subject to
Purchaser's right to terminate any such Transferred Employee, in
43
accordance with Applicable Laws, at any time with or without cause, for any
reason or no reason at all. Except as otherwise required by Applicable Law or
provided in this Article 7, Purchaser shall employ the Transferred Employees
who accept such employment offer (the "Accepting Employees") in accordance
with, and subject to, Purchaser's usual terms, conditions and policies of
employment, including all of Purchaser's policies regarding modification of the
terms and conditions of employment. Purchaser shall also assume all
liabilities for unpaid accrued vacation pay under LCC's and LCC AS's vacation
policies, accrued salaries and commissions and accrued retirement obligations
with respect to each Accepting Employee, all to the extent reserved on the
Closing Statement of Net Assets. Notwithstanding anything in this Section
7.3(b) to the contrary, if, in the sole discretion of Purchaser, any filings
with and approvals of the U.S. Immigration and Naturalization Service (the
"INS") are required or recommended by Purchaser's counsel as being required to
maintain the employee's non-immigrant status or to avoid compromising a
petition or application for permanent residence with respect to the transfer of
employment of any Transferred Employee to Purchaser, (i) LCC shall retain on
its payroll following the Closing any such Transferred Employees pursuant to
the terms of the Employee Transition Services Agreement attached hereto as
Exhibit K (the "Employee Transition Services Agreement") until any such
required or recommended approvals from the INS have been received to the
satisfaction of Purchaser and (ii) LCC and Purchaser shall cooperate in the
completion of all such INS filings and approvals. On or prior to the date
hereof, LCC has furnished to Purchaser copies of all original I-9 files and
immigration files for all Transferred Employees. Promptly following the
Closing, LCC and LCC AS shall transfer to Purchaser all personnel files (which
shall include, but not be limited to, resumes, applications, offer letters,
hiring data, compensation records, including salary and rate of pay history,
performance evaluations, disciplinary records, attendance and leave of absence
records, documents evidencing superior accomplishments or recognition, medical
records, including OSHA, workers' compensation and FMLA documents, work history
records, including transfer, reassignments, promotions, and all separately
maintained supervisor's files) pertaining to the Accepting Employees.
(c) Each of LCC and Purchaser shall provide any
notifications to its respective employees (including, in the case of Purchaser,
the Accepting Employees) required under the Workers Adjustment and Retraining
Notification Act (the "WARN Act") and shall bear any liabilities arising under
the WARN Act with respect to such employees.
(d) As soon as practicable following the Closing Date,
the Accepting Employees shall be eligible to participate in Purchaser's
retirement plans ("Retirement Plans") on the same terms and conditions as
similarly situated employees of Purchaser are eligible to participate therein,
subject to the terms and conditions of such plans. Purchaser shall cause the
Retirement Plans to recognize prior service of the Accepting Employees under
corresponding LCC retirement plans on and prior to the Closing Date as service
with Purchaser and its Affiliates (as defined below) for purposes of
eligibility (including eligibility for early retirement benefits) and vesting
(but not benefit accrual) thereunder. The benefit coverage which will be
provided under the Retirement Plans shall commence on the day immediately
following the Closing Date. For purposes of this Agreement, an "Affiliate" of
a Person shall mean a Person that, directly or indirectly through one or more
intermediaries, is controlled by, controls or is
44
under common control with the first Person. "Control" (including the term
"controlled by") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management policies of a Person, whether
through the ownership of voting securities, by Contract, as trustee or
executor, or otherwise.
(e) With respect to each Accepting Employee, Purchaser
hereby agrees to give LCC notice of the termination of such Accepting
Employee's employment with Purchaser or any of its Affiliates within 30 days of
the date thereof, and provide LCC with such information with respect thereto as
LCC shall reasonably request to enable it to determine if such event would give
rise to a right of distribution to such Accepting Employee under LCC's 401 (k)
plan.
7.4 WELFARE BENEFIT PLANS. As of the Closing Date or as
soon thereafter as practicable, each Accepting Employee shall cease to
participate in LCC's and LCC AS's employee welfare benefit plans. LCC's and
LCC AS's employee welfare benefit plans shall be liable for the payment of the
benefit claims incurred by any such Accepting Employee and/or any such
employee's eligible dependents on or prior to the Closing Date in accordance
with the terms of the applicable plan. Purchaser's employee welfare benefit
plans shall cover the Accepting Employees who participated in LCC's and LCC
AS's employee welfare benefit plans. The group health plan made available by
Purchaser to provide medical coverage for Accepting Employees and their
dependents pursuant to this Section 7.4 shall waive any applicable waiting
periods for coverage of Accepting Employees and their dependents and shall not
contain any exclusion or limitation with respect to any pre-existing condition
of an Accepting Employee or any dependents of an Accepting Employee. Purchaser
will provide under its comprehensive medical and dental plans for integration
of current year co-payments, co-insurance and payments made under a deductible
in LCC's and LCC AS's corresponding plans.
7.5 HEALTH CARE ADMINISTRATION. LCC and LCC AS shall
retain its liability to those former employees of the LCC Businesses whose
employment was terminated on or prior to the Closing Date and who are eligible
to receive COBRA benefits under Section 4980B of the Code.
7.6 LITIGATION ASSISTANCE. In order to assist the other
party in its resolution of all actions, claims, demands, suits, proceedings,
arbitrations, grievances, citations, summons, subpoenas, inquiries, or
investigations of any nature, whether made or initiated before or after the
Closing Date, with respect to any fact, circumstance, situation, condition,
occurrence or event in connection with the LCC Businesses (the "Claims"), each
party shall cooperate and provide such reasonable assistance as is necessary to
resolve the Claims related to the LCC Businesses on an efficient and economic
basis. Such cooperation shall include, but not be limited to, making their
respective employees reasonably available in order to investigate, defend and
resolve the Claims, dealing with the Persons making such Claims and working
with the applicable insurance carrier.
7.7 LIABILITY FOR TRANSFER TAXES AND RELATED MATTERS.
LCC or LCC AS, as the case may be, and Purchaser shall each be liable for fifty
percent (50%) of any sales (including, without limitation, bulk sales), use,
value added, documentary, stamp, gross receipts, registration, transfer,
conveyance, excise, recording, firearm, ammunition, license and other
45
similar Taxes and fees ("Transfer Taxes"), arising out of or in connection with
or attributable to the transfer of any of the Purchased Assets. LCC or LCC AS,
as the case may be, after the review and consent by Purchaser, shall prepare
and timely file all Returns required to be filed in respect of such Transfer
Taxes, provided that Purchaser shall be permitted to prepare any such Returns
that are the primary responsibility of Purchaser or any of its affiliates under
Applicable Law. Each party's preparation of any such Returns shall be subject
to the other party's approval, which approval shall not be withheld
unreasonably.
7.8 TRANSITIONAL MATTERS. The parties acknowledge that a
transition period from the Closing Date until the date 12 months immediately
following the Closing Date (the "Transition Period") is required in order to
relocate the Accepting Employees to Purchaser's facilities and to transition
the management, accounting and information systems of the LCC Businesses to
Purchaser. LCC hereby grants to Purchaser the right to sublease space at the
XxXxxx Facility, as provided in the sublease attached as Exhibit F (the "XxXxxx
Facility Sublease"), subject to and in accordance with all the terms, covenants
and conditions of the lease applicable to the XxXxxx Facility. In connection
with the XxXxxx Facility Sublease, Purchaser will have the right to (A) occupy
and use the space, telephones, facsimile machines and computers at the XxXxxx
Facility currently occupied or used by the Accepting Employees for their
intended and usual purpose in connection with the operation of the LCC
Businesses and (B) store the tangible personal property included in the
Purchased Assets at the current location of such Purchased Assets in the XxXxxx
Facility. LCC hereby also grants to Purchaser access to, and use of, LCC's
computer network and programs for accounting applications from the Closing Date
until the earlier of (i) Purchaser's installation of an autonomous computer
network for accounting purposes and (ii) the last day of the Transition Period.
On the Closing Date the parties shall enter in to a transition services
agreement which shall provide for the equitable sharing of expenses associated
with the operation of the XxXxxx Facility during the Transition Period and
shall provide for the parties to provide such other transition services to each
other as they shall in good faith agree. LCC AS and Purchaser shall enter into
a sublease in the form attached hereto as Exhibit G (the "Oslo Facility
Sublease"). LCC shall cause LCC's Affiliate located in Singapore to provide to
Xxxx Xxxx sufficient office space and support services in such Affiliate's
existing offices (but only as long as LCC's Affiliate is entitled to occupy
such space under its existing lease term, it being understood that Xx. Xxxx is
entitled to vacate the premises of LCC's Affiliate at any time without prior
notice) for Xx. Xxxx to continue marketing and technical support to the LCC
Businesses in the Asia region at the level such marketing and technical support
is currently being provided. Purchaser shall reimburse LCC or such Affiliate
within thirty (30) days of invoicing for the cost of such space and support
services on a prorata basis based upon the proportion of the total space which
Ball's office comprises and 100% of all out-of-pocket charges such as long
distance telephone charges.
7.9 CONFIDENTIALITY. (a) Each of LCC and LCC AS agrees
to, and shall cause their agents, representatives, Affiliates, employees,
officers and directors to: (i) treat and hold as confidential (and not
disclose or provide access to any Person to) all information relating to trade
secrets, processes, copyrights, patent or trademark applications, product
development, price, customer and supplier lists, pricing and marketing plans,
policies and strategies, operations methods, product development techniques,
business acquisition plans, new personnel acquisition plans and any other
confidential information with respect to the LCC Businesses, (ii) in the event
46
that LCC, LCC AS or any such agent, representative, Affiliate, employee,
officer or director becomes legally compelled to disclose any such information,
provide Purchaser with prompt written notice of such requirement so that
Purchaser may seek a protective order or other remedy or waive compliance with
this Section, (iii) in the event that such protective order or other remedy is
not obtained, or Purchaser waives compliance with this Section, furnish only
that portion of such confidential information which is legally required to be
provided and exercise its reasonable best efforts to obtain assurances that
confidential treatment will be accorded such information, and (iv) promptly
furnish (prior to, at, or as soon as practicable following, the Closing) to
Purchaser any and all copies (in whatever form or medium) of all such
confidential information then in the possession of LCC, LCC AS or any of their
agents, representatives, Affiliates, employees, officers and directors and
destroy any and all additional copies then in the possession of LCC, LCC AS or
any of their agents, representatives, Affiliates, employees, officers and
directors of such information and of any analysis, compilations, studies or
other documents prepared, in whole or in part, on the basis thereof; provided,
however, that this sentence shall not apply to any information that, at the
time of disclosure, is available publicly and was not disclosed in breach of
this Agreement by LCC, LCC AS, their agents, representatives, Affiliates,
employees, officers or directors; provided further that specific information
shall not be deemed to be within the foregoing exception merely because it is
embraced in general disclosures in the public domain. In addition, any
combination of features shall not be deemed to be within the foregoing
exception merely because the individual features are in the public domain
unless the combination itself and its principle of operation are in the public
domain.
(b) Each of LCC and LCC AS agrees and acknowledges that
remedies under Applicable Law for any breach of its obligations under this
Section are inadequate and that in addition thereto Purchaser shall be entitled
to seek equitable relief, including injunction and specific performance, in the
event of any such breach, without the necessity of demonstrating the inadequacy
of money damages.
(c) Purchaser agrees to, and shall cause its agents,
representatives, Affiliates, employees, officers and directors to: (i) treat
and hold as confidential (and not disclose or provide access to any Person) all
information relating to trade secrets, processes, patent or trademark
applications, product development, price, customer and supplier lists, pricing
and marketing plans, policies and strategies, operations methods, product
development techniques, business acquisition plans, new personnel acquisition
plans and any other confidential information with respect to the businesses of
LCC other than the LCC Businesses, (ii) in the event that Purchaser or any such
agent, representative, Affiliate, employee, officer or director becomes legally
compelled to disclose any such information, provide LCC with prompt written
notice of such requirement so that LCC may seek a protective order or other
remedy or waive compliance with this Section, (iii) in the event that such
protective order or other remedy is not obtained, or LCC waives compliance with
this Section, furnish only that portion of such confidential information which
is legally required to be provided and exercise its reasonable best efforts to
obtain assurances that confidential treatment will be accorded such
information, and (iv) promptly furnish (prior to, at, or as soon as practicable
following, the Closing) to LCC any and all copies (in whatever form or medium)
of all such confidential information then in the
47
possession of Purchaser or any of its agents, representatives, Affiliates,
employees, officers and directors and destroy any and all additional copies
then in the possession of Purchaser or any of its agents, representatives,
Affiliates, employees, officers and directors of such information and of any
analysis, compilations, studies or other documents prepared, in whole or in
part, on the basis thereof; provided, however, that this sentence shall not
apply to any information that, at the time of disclosure, is available publicly
and was not disclosed in breach of this Agreement by Purchaser, its agents,
representatives, Affiliates, employees, officers or directors; provided further
that specific information shall not be deemed to be within the foregoing
exception merely because it is embraced in general disclosures in the public
domain. In addition, any combination of features shall not be deemed to be
within the foregoing exception merely because the individual features are in
the public domain unless the combination itself and its principle of operation
are in the public domain.
(d) Purchaser agrees and acknowledges that remedies under
Applicable Law for any breach of its obligations under this Section are
inadequate and that in addition thereto LCC shall be entitled to seek equitable
relief, including injunction and specific performance, in the event of any such
breach, without the necessity of demonstrating the inadequacy of money damages.
(e) Upon consummation of the Closing, the Confidentiality
Agreement dated March 4, 1999, as amended March 29, 1999, shall terminate
without any further action on the part of Purchaser or LCC.
7.10 NOTICES AND CONSENTS. (a) Each of LCC and LCC AS
shall give promptly such notices to third parties and use its reasonable best
efforts to obtain all such third party consents that are necessary or desirable
in connection with the transfer of the Contracts. Purchaser shall cooperate
and use its reasonable best efforts to assist LCC and LCC AS in giving such
notices and obtaining such consents; provided, however, that Purchaser shall
have no obligation to give any guarantee (other than assumption of the
obligations thereunder) or other consideration of any nature in connection with
any such notice or consent or to consent to any change in the terms of any
Contract which Purchaser, in its reasonable discretion, may deem adverse to the
interests of Purchaser or the LCC Businesses.
(b) LCC, LCC AS and Purchaser agree that, in the event
any consent, approval or authorization necessary or desirable to preserve for
the LCC Businesses or Purchaser any right or benefit under any lease, license,
contract, commitment or other agreement or arrangement to which LCC or LCC AS
is a party is not obtained prior to the Closing, LCC or LCC AS, as the case may
be, will, subsequent to the Closing, cooperate with Purchaser in attempting to
obtain such consent, approval or authorization as promptly thereafter as
practicable. If such consent, approval or authorization cannot be obtained,
LCC or LCC AS, as the case may be, will use its reasonable best efforts to
provide Purchaser with the rights and benefits of the affected lease, license,
contract, commitment or other agreement or arrangement for the term of such
lease, license, contract or other agreement or arrangement, and, if LCC and LCC
AS provide such rights and benefits, Purchaser shall assume the obligations and
burdens thereunder.
48
(c) LCC, LCC AS and Purchaser agree to cooperate with
each other (i) in providing to Purchaser, on commercially reasonable terms and
for purposes of conducting the LCC Businesses, the benefit of any asset or
right that is currently used in the LCC Businesses and that is not effectively
transferred to Purchaser under this Agreement or the Ancillary Agreements and
(ii) in providing to LCC or LCC AS, as the case may be, on commercially
reasonable terms and for purposes of conducting the businesses of LCC or LCC
AS, as the case may be, as of the date hereof other than the LCC Businesses,
the benefit of any asset or right that is currently used in such businesses and
that is transferred to Purchaser under this Agreement or the Ancillary
Agreements.
(d) LCC, LCC AS and Purchaser shall cooperate in
preparing a comprehensive list prior to the Closing of all Permits that are
non-transferable or which will require the consent of any Governmental
Authority in order to be transferred to Purchaser in the event of the
consummation of the transactions contemplated by this Agreement.
(e) LCC and Purchaser shall cooperate in obtaining an
amendment to and/or waiver of the non-competition provisions set forth in the
[ ]
or other solution acceptable to Ericsson. If such amendment and/or waiver is
not obtained, such Agreement shall not be assigned to Purchaser but shall be
retained by LCC.
7.11 NOTICE OF DEVELOPMENTS. (a) Prior to the Closing,
each of LCC and LCC AS shall promptly notify Purchaser in writing of (i) all
events, circumstances, facts and occurrences arising subsequent to the date of
this Agreement which could reasonably be expected to result in any material
breach of a representation or warranty or covenant of LCC or LCC AS in this
Agreement or which could reasonably be expected to have the effect of making
any representation or warranty of LCC or LCC AS in this Agreement untrue or
incorrect in any material respect and (ii) all other material adverse
developments affecting the Purchased Assets, Assumed Liabilities, business,
financial condition, operations, results of operations, customer or supplier
relations, employee relations, projections or prospects of LCC or LCC AS or
the LCC Businesses.
(b) Prior to the Closing, Purchaser shall promptly notify
LCC and LCC AS in writing of all events, circumstances, facts and occurrences
arising subsequent to the date of this Agreement which could reasonably be
expected to result in any material breach of a representation or warranty or
covenant of Purchaser in this Agreement or which could reasonably be expected
to have the effect of making any representation or warranty of Purchaser in
this Agreement untrue or incorrect in any material respect.
7.12 NON-COMPETITION. (a) In partial consideration of
the payment of the Purchase Price, as set forth in Section 1.5, LCC, LCC AS and
Purchaser agree that for a period of five (5) years after the Closing with
respect to the matters set forth in clause (i) of this Section 7.12(a), and for
a period of three (3) years with respect to the matters set forth in clause
(ii) of this Section 7.12(a) (the "Restricted Period"), (i) LCC, LCC AS and
their subsidiaries shall not
49
engage, directly or indirectly (including by any independent contractor engaged
by or on behalf of LCC, LCC AS or any of their subsidiaries), in any
Competitive Activities anywhere in the world or, without the prior written
consent of Purchaser, directly or indirectly, own more than the Permitted
Percentage of the outstanding equity securities in, or manage, operate or
control any Competitive Entity, and (ii) any Person who, as of the date hereof,
directly or indirectly owns 50% or more of the voting power of LCC or LCC AS (a
"Controlling Person"), shall not engage, directly or indirectly (including by
any independent contractor engaged by or on behalf of such Person), in any
Competitive Activities anywhere in the world or, without the prior written
consent of Purchaser, directly or indirectly, own more than the Permitted
Percentage of the outstanding equity securities in, or manage, operate or
control any Competitive Entity that has a Competitive Activity constituting a
Principal Line of Business on the date such Person makes the initial investment
in such Competitive Entity or commences activities with respect thereto (the
"Commencement Date"). If, subsequent to the Commencement Date, such
Competitive Entity engages in a Competitive Activity that constitutes a
Principal Line of Business, a Controlling Person may only retain a passive
investment interest therein and may not manage, operate or control such
Competitive Entity.
"Competitive Activities" means designing, developing,
manufacturing, marketing and selling network propagation modeling tools,
network monitoring tools, field testing and measurement products and related
software, all for the wireless communications industry and all as conducted or
provided by LCC and its Affiliates as of the Closing Date, each to the extent
such tools, products and software may be deemed competitive with the products
and services of the Hardware Business or the Software Business as of the
Closing Date (except where the design or development of such tools is for LCC's
internal needs and solely for the purpose of supporting LCC's engineering,
benchmarking, drive testing, systems deployment or program management
services); provided, however, that following the first anniversary of the
Closing Date, "Competitive Activities" shall not include the sale of network
propagation modeling tools, network monitoring tools, field testing and
measurement products and related software designed, developed and manufactured
by third parties, in quantities and in a manner incidental to the provision of
network engineering services by LCC and its subsidiaries, if LCC has previously
requested that Purchaser provide such products to LCC's engineering services
customers at or above Purchaser's list price therefor and on other commercially
reasonable terms and Purchaser has refused or is unable to provide such
products within a commercially reasonable time period.
"Competitive Entity" means any Person that is engaged in
Competitive Activities.
"Permitted Percentage" means 5% during the Restricted Period.
"Principal Line of Business" means with respect to a Person a
line of business representing more than 20% of such Person's revenues or
earnings for the prior fiscal year.
(b) As a separate and independent covenant, each of LCC
and LCC AS agrees with Purchaser that for a period of five (5) years after the
Closing, neither LCC nor LCC AS shall in any way, directly or indirectly,
interfere with any Transferred Employees, or induce or attempt to induce any of
them to leave the employ of Purchaser or any of its subsidiaries or
50
violate the terms of their contracts, or any employment arrangements, with
Purchaser or any of its subsidiaries, and shall not in any event hire or agree
to hire any of them prior to the one year anniversary of the last day such
person leaves the employ of Purchaser or any of its subsidiaries.
(c) The Restricted Period shall be extended by the length
of any period during which LCC or LCC AS (whether through its own activities or
the activities of a subsidiary or Controlling Person) is in breach of the terms
of Section 7.12(a).
(d) Each of LCC and LCC AS acknowledges that the
covenants of LCC and LCC AS set forth in this Section 7.12 are an essential
element of this Agreement and that, but for the agreement of LCC and LCC AS to
comply with these covenants, Purchaser would not have entered into this
Agreement. Each of LCC and LCC AS acknowledges that this Section 7.12
constitutes an independent covenant and shall not be affected by performance or
nonperformance of any other provision of this Agreement by Purchaser. Each of
LCC and LCC AS has independently consulted with its counsel and after such
consultation agrees that the covenants set forth in this Section 7.12 are
reasonable and proper.
7.13 EXCLUDED LIABILITIES. LCC and LCC AS shall pay and
discharge the Excluded Liabilities consistent with past practice, except those
being contested in good faith.
7.14 LICENSE OF LCC TRADEMARK. LCC hereby grants to
Purchaser a non-exclusive, non-assignable, royalty-free license to use, for a
period of six months after the Closing Date, the LCC(R) trademark (the "LCC
Trademark") on purchase orders, product labels, packaging and other materials
on which the LCC Trademark appears as of the Closing Date ("LCC Packaging") in
connection with the continued conduct of the LCC Businesses, and Purchaser
shall thereafter cease to use the same except as permitted by this Section
7.14. Notwithstanding the provisions of the immediately preceding sentence,
Purchaser may for a period of one year from the Closing Date use the LCC
Trademark in the form and style in which the same are used on the LCC Packaging
as of the Closing Date (whether alone or in combination with other trademarks)
on stock of labels and packaging produced by the LCC Businesses at any time
prior to the expiration of the aforesaid six-month period, provided that any
such products are manufactured, in all material respects, at the quality
standards used in the LCC Businesses prior to the Closing. Any such LCC
Businesses materials bearing the LCC Trademark not used within the aforesaid
six-month or one-year periods, as applicable, after the Closing Date may not
thereafter be used by Purchaser and will be destroyed at Purchaser's sole
expense unless otherwise agreed to by LCC in writing.
7.15 LCC AS OBLIGATIONS. LCC agrees to cause LCC AS to
perform its obligations under this Agreement, the Ancillary Agreements and the
LCC Closing Documents and hereby guarantees the due and punctual performance
thereof.
7.16 LICENSE OF DATABASES; FILE FORMATS. (a) Purchaser
hereby grants to LCC, effective as of the Closing, [
] license or sublicense to use the [
51
] as the same shall exist as of the
Closing for internal uses only, and only to the extent Purchaser has the right
to grant such license or sublicense without any cost or expense to Purchaser.
LCC understands and agrees that Purchaser makes no representation or warranty
to LCC with respect to such databases or the information contained therein and
has no obligation to LCC with respect to such databases (including, without
limitation, any obligation to provide support or other services) except to
grant the license or sublicense required by this Section 7.16.
(b) Purchaser acknowledges LCC's actual knowledge of the
current file formats used or produced by Collect and OptimEyes and which are
generated by Benchmarker. Purchaser agrees to grant LCC continued use of such
file formats in connection with Benchmarker solely for LCC's internal use. If
Purchaser changes the means of access to the data generated by the data files,
Purchaser shall continue to provide to LCC access to such data through means
selected by Purchaser for LCC's internal use only.
7.17 FURTHER ACTION. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action,
do or cause to be done all things necessary, proper or advisable under
applicable Laws, and execute and deliver such documents and other papers, as
may be required to carry out the provisions of this Agreement and consummate
and make effective the transactions contemplated by this Agreement, including,
without limitation, delivering, or causing to be delivered, the certificates,
opinions and other documents to be delivered to the other party as a condition
to such other party's obligations under Articles 9 and 10 of this Agreement.
ARTICLE 8
MUTUAL CONDITIONS PRECEDENT TO OBLIGATIONS OF LCC AND PURCHASER TO CLOSE
Unless waived by both Purchaser and LCC, the obligations of
the parties hereto to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction, on or before the Closing Date,
of each of the following conditions:
8.1 HSR ACT AND NORWAY ACQUISITION ACT. All filings
required under the HSR Act, if any, and the Norway Acquisition Act shall have
been made, and all waiting periods, including any extensions thereof,
applicable to the transactions contemplated by this Agreement under the HSR Act
and the Norway Acquisition Act shall have expired or otherwise terminated.
8.2 ABSENCE OF LITIGATION OR INJUNCTION. No action,
claim, suit, arbitration, inquiry, proceeding or investigation shall have been
commenced by or before any Governmental Authority against either LCC, LCC AS or
the Purchaser, seeking to restrain, enjoin, prohibit or
52
materially and adversely alter the transactions contemplated by this Agreement
which action, claim, suit, arbitration, inquiry, proceeding or investigation,
in the reasonable good faith determination of the parties, would be likely to
render it impossible or unlawful to consummate such transactions; provided,
however, that the provisions of this Section 8.2 may not be asserted by a party
to prevent such Closing from occurring, if such party has directly or
indirectly solicited or encouraged such action, claim, suit, arbitration,
inquiry, proceeding or investigation.
ARTICLE 9
CONDITIONS TO LCC'S AND LCC AS'S OBLIGATION TO CLOSE
The obligation of LCC and LCC AS to consummate the
transactions contemplated by this Agreement are subject to the satisfaction, on
or before the Closing Date, of each of the following additional conditions,
unless otherwise waived by LCC and LCC AS:
9.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Purchaser contained herein or in any document delivered
pursuant hereto shall be true and correct in all material respects (in the case
of any representations and warranties not containing any materiality or similar
qualifications) or in all respects (in the case of any representations or
warranties containing any materiality or similar qualification) as of the date
made and on and as of the Closing Date.
9.2 PERFORMANCE. Purchaser shall have performed or
complied with all of the covenants, acts and obligations to be performed or
complied with by Purchaser hereunder at or prior to the Closing.
9.3 PURCHASER'S CLOSING DOCUMENTS. Purchaser shall have
delivered all Assigned Contracts and other documents described in Section 11.1
(the "Purchaser Closing Documents").
9.4 CONSENTS. LCC shall have obtained the waiver of the
lenders under the Chase Credit Facility with respect to any defaults resulting
from the consummation of the transactions contemplated by this Agreement;
provided, however, that LCC shall be entitled to rely on the absence of
fulfillment of the condition set forth in this Section 9.4 to not consummate
the transactions contemplated by this Agreement only if it shall have complied
fully with its obligations as set forth in Section 7.2.
ARTICLE 10
CONDITIONS TO PURCHASER'S OBLIGATION TO CLOSE
The obligation of Purchaser to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, on or before
the Closing Date, of each of the following additional conditions, unless
otherwise waived by Purchaser:
53
10.1 REPRESENTATIONS AND WARRANTIES. The representations
and warranties of LCC and LCC AS contained herein or in any document delivered
pursuant hereto shall be true and correct in all material respects (in the case
of any representations and warranties not containing any materiality, material
adverse effect or similar qualifications) or in all respects (in the case of
representations and warranties containing any materiality, material adverse
effect or similar qualification) as of the date made and on and as of the
Closing Date.
10.2 PERFORMANCE. Each of LCC and LCC AS shall have
performed or complied with covenants, acts and obligations to be performed or
complied with by it hereunder at or prior to the Closing.
10.3 LCC'S CLOSING DOCUMENTS. LCC and LCC AS shall have
completed assignment or otherwise transferred title to all Licensed
Intellectual Property and Assigned Contracts and other documents described in
Section 11.2 (the "LCC Closing Documents").
10.4 CONSENTS. LCC and LCC AS shall have obtained all
consents and assignments required under all vendor, customer and other
Contracts, as well as all governmental approvals and permits that are
commercially or technically necessary to operate the LCC Businesses and that
are set forth on Schedule 10.4.
10.5 NO MATERIAL ADVERSE EFFECT. There shall have been no
LCC Material Adverse Effect with respect to either the Hardware Business or the
Software Business.
10.6 RESOLUTIONS OF LCC. Purchaser shall have received
true and complete copies certified by the Secretary or an Assistant Secretary
of each of LCC and LCC AS, of the resolutions duly and validly adopted by the
Board of Directors of LCC and LCC AS evidencing authorization of the execution
and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby.
10.7 INCUMBENCY CERTIFICATE. Purchaser shall have
received certificates of the Secretary or an Assistant Secretary of each of LCC
and LCC AS certifying the names and signatures of the officers of LCC and LCC
AS authorized to sign this Agreement and the Ancillary Agreements and the other
documents to be delivered hereunder and thereunder.
10.8 RELEASE OF LIENS. Purchaser shall have received
evidence from LCC that all Liens placed on any of the Purchased Assets
(including such Liens that shall have incurred in connection with the Chase
Credit Facility and such subsisting Liens previously granted to Nomura Holding
America, Inc.) have been released.
10.9 [ .] Purchaser
shall have received evidence from LCC that the obligations and delivery of all
items remaining to be delivered set forth in Section 6.1(b) have been
satisfied.
ARTICLE 11
54
ACTION TO BE TAKEN AT CLOSING
11.1 ACTION TO BE TAKEN BY PURCHASER. At the Closing,
Purchaser shall deliver or cause to be delivered to LCC the following:
(a) the Purchase Price, by wire transfer to LCC's bank
account, which bank account shall have been specified in writing by
LCC to Purchaser not later than four days prior to the Closing;
(b) a receipt acknowledging receipt of the Assumed
Assets;
(c) an executed document of assumption, assuming the
Assumed Liabilities in the form attached hereto as Exhibit A (the
"Assumption Agreement"), executed by Purchaser or one or more
Purchaser Assignees;
(d) a Product Supply Agreement in the form attached
hereto as Exhibit B (the "Product Supply Agreement"), executed by
Purchaser or a Purchaser Assignee;
(e) the Software License Agreement in the form attached
hereto as Exhibit C (the "Software License Agreement"), executed by
Purchaser or a Purchaser Assignee;
(f) a certificate executed by an authorized executive
officer of Purchaser, dated the Closing Date, certifying that (i) the
representations and warranties of Purchaser, contained herein or in
any document delivered pursuant hereto are true and correct in all
material respects (in the case of any representations and warranties
not containing any materiality qualifications) or in all respects (in
the case of any representations or warranties containing any
materiality qualifications) as of the date made and on and as of the
Closing Date and (ii) Purchaser has duly performed or complied with
all of the covenants, acts and obligations to be performed or complied
with by Purchaser hereunder at or prior to the Closing;
(g) opinions of United States and Swedish counsel to
Purchaser, dated the Closing Date and addressed to LCC, in form and
substance reasonably satisfactory to LCC;
(h) executed assignments, dated the Closing Date, in
appropriate form for filing with applicable Governmental Authorities,
of the LCC Patents, Copyrights and Trademarks (the "Assignments of
Patents, Copyrights and Trademarks"), in the forms attached hereto as
Exhibits X-0, X-0 and D-3;
(i) an executed Xxxx of Sale and Assignment (the "Xxxx of
Sale and Assignment"), dated the Closing Date, transferring all the
Purchased Assets to Purchaser and assigning to Purchaser all right,
title and interest of LCC and LCC AS, therein and thereto and
conveying all Purchased Assets not otherwise transferred or conveyed
by the
55
document delivered pursuant to clauses (h) hereof, in the form
attached hereto as Exhibit E;
(j) the McLean Facility Sublease, executed by Purchaser
or a Purchaser Assignee;
(k) the Oslo Facility Sublease, executed by Purchaser or
a Purchaser Assignee;
(l) an Employee Transition Service Agreement, if required
pursuant to Section 7.3 (b), executed by Purchaser or a Purchaser Assignee in
the form attached as Exhibit H (the "Employee Transition Service Agreement");
and
(m) a Support Agreement in the form attached hereto as
Exhibit I (the "Support Agreement"), executed by Purchaser or a Purchaser
Assignee.
11.2 ACTION TO BE TAKEN BY LCC AND LCC AS. At the
Closing, LCC or LCC AS shall deliver to Purchaser the following:
(a) a receipt acknowledging receipt of the Purchase
Price;
(b) the Assignments of Patents,
Copyrights and Trademarks, executed by LCC;
(c) the Xxxx of Sale and Assignment,
executed by LCC and LCC AS;
(d) the Product Supply Agreement, executed by LCC;
(e) the Software License Agreement, executed by LCC;
(f) certificates executed by an authorized executive
officer of each of LCC and LCC AS, dated the Closing Date, certifying
that (i) the representations and warranties of LCC and LCC AS, as the
case may be, contained herein or in any document delivered pursuant
hereto are true and correct in all material respects (in the case of
any representations and warranties not containing any materiality
qualifications) or in all respects (in the case of any representations
or warranties containing any materiality qualification) as of the date
made and on and as of the Closing Date and (ii) LCC or LCC AS, as the
case may be, has performed or complied with all the covenants, acts
and obligations to be performed and complied with by it hereunder at
or prior to the Closing;
(g) opinions of Xxxxx & Xxxxxxx L.L.P., U.S. counsel to
LCC, and Wikborg, Rein & Co., Norwegian counsel to LCC AS, dated the
Closing Date and addressed to Purchaser, in form and substance
reasonably satisfactory to Purchaser;
56
(h) the McLean Facility Sublease, executed by LCC;
(i) the Oslo Facility Sublease, executed by LCC AS;
(j) the Employee Transition Services Agreement, if
required pursuant to Section 7.3(b), executed by LCC; and
(k) the Support Agreement, executed by LCC.
11.3 FURTHER ASSURANCES. At any time on or after the
Closing, the parties hereto shall each perform such acts, execute and deliver
such instruments, assignments, endorsements and other documents and do all such
other things consistent with the terms of this Agreement as may be reasonably
necessary to accomplish the transactions contemplated in this Agreement or
otherwise to carry out the purpose of this Agreement.
11.4 EFFECTIVE TIME. The effective time of the Closing
shall be the close of business on the Closing Date.
ARTICLE 12
INDEMNIFICATION AND SURVIVAL
12.1 INDEMNIFICATION OF LCC AND LCC AS. From and after
the Closing, Purchaser shall indemnify, defend and hold LCC, LCC AS, their
Affiliates and their respective officers, directors, employees, agents,
advisors and representatives (collectively, the "LCC Indemnitees") harmless
from and against any and all costs, expenses, losses, damages, fines or
liabilities (including reasonable attorneys' fees) ("LCC Damages") incurred by
any LCC Indemnitee with respect to or in connection with:
(a) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the
representations or warranties of Purchaser contained in this Agreement
or in any document delivered pursuant hereto (provided that if any
portion of any representation or warranty is qualified by materiality
or similar qualification, then such qualification shall be entirely
disregarded for purposes of determining the existence of a breach or
violation for purposes of this Section 12.1(a));
(b) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the covenants
or agreements of Purchaser contained in this Agreement or in any
document delivered pursuant hereto;
57
(c) the Assumed Liabilities which, for purposes hereof,
shall include all liabilities arising after the Closing Date with
respect to Assigned Contracts to which the benefits described in
Section 7.3 apply to Purchaser;
(d) any and all Taxes of Purchaser; and
(e) the Unexpired Carnets, to the extent LCC incurs
expenses thereunder due to Purchaser's action or inaction in respect
thereof, as the case may be.
12.2 INDEMNIFICATION OF PURCHASER. From and after the
Closing, LCC and LCC AS shall indemnify, defend and hold Purchaser and its
Affiliates and their respective officers, directors, employees, agents,
advisors and representatives (collectively, the "Purchaser Indemnitees")
harmless from and against any and all costs, expenses, losses, damages or
liabilities (including reasonable attorneys' fees) ("Purchaser Damages")
incurred by any Purchaser Indemnitee with respect to or in connection with:
(a) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the
representations or warranties of LCC or LCC AS contained in this
Agreement or in any document delivered pursuant hereto (provided that
if any portion of any representation or warranty is qualified by
materiality, material adverse effect or similar qualification, then
such qualification shall be entirely disregarded for purposed of
determining the existence of a breach of violation for purposes of
this Section 12.2(a));
(b) the existence of any fact, circumstance, situation or
condition constituting a breach or violation of any of the covenants
or agreements of LCC or LCC AS contained in this Agreement or in any
document delivered pursuant hereto;
(c) any Excluded Liabilities or Excluded Assets;
(d) any liability relating to any employees or former
employees other than Accepting Employees, whether such liability
occurs prior to, on or following the Closing Date;
(e) any liabilities relating to any Accepting Employees
of LCC or LCC AS prior to the Closing Date other than those expressly
assumed by Purchaser herein;
(f) any and all Taxes of LCC or LCC AS or any subsidiary
of LCC not relating to or arising out of the LCC Businesses; and
(g) the failure by LCC or LCC AS to have all permits,
licenses, franchises, approvals, consents, or other authorizations from all
applicable Governmental Authorities required for the conduct of the LCC
Businesses, including without limitation any such permits, licenses,
franchises, approvals, consents, or other authorization, from the Federal
Communications Commission or the European Commission; provided that LCC and LCC
AS shall have no indemnification obligation hereunder arising from the failure
of Purchaser or any
58
Purchaser Assignee from having any of the authorizations set forth on Schedule
5.9 at any time on or after the Closing Date.
12.3 JOINT COOPERATION. Upon obtaining knowledge of the
institution of any action, proceeding, or other event which could give rise to
a claim of indemnity hereunder, the party seeking indemnification shall
promptly notify the indemnifying party thereof. If such claim or demand
relates to a claim or demand asserted by a third party, the indemnifying party
shall have the right, at its expense, to employ counsel of its choice to defend
such claim or demand. Failure by the indemnifying party to notify the
indemnified party of its election to defend any such claim or demand of a third
party within ten (10) days after notice thereof shall have been given to the
indemnifying party shall be deemed a waiver by the indemnifying party of its
right to defend such claim or demand. If the indemnifying party fails to
assume the defense of such claim, the indemnified party against which the claim
has been asserted will have the right to undertake, at the indemnifying party's
cost and expense, the defense, compromise or settlement of such claim, provided
that the indemnified party shall not enter into any such compromise or
settlement without the consent of the indemnifying party, which consent shall
not be unreasonably withheld. If the indemnifying party elects to defend such
claim or demand, it shall not be responsible for any attorneys' fees incurred
by the indemnified party; provided that the indemnified party may participate
in such defense at its own cost and expense. So long as the indemnifying party
is defending such claim or demand in good faith, the indemnified party will not
settle or compromise such claim or demand without the indemnifying party's
consent, which consent shall not be unreasonably withheld. The indemnified
party shall make available to the indemnifying party all records and other
materials and employees reasonably required by it in contesting a claim or
demand asserted by a third party against the indemnified party and shall
cooperate in the defense thereof.
12.4 LIMITATION OF LIABILITY. (a) No liability for
indemnification shall arise on the part of LCC or LCC AS under this Article 12
with respect to any claim for indemnification based upon clause (a) of Section
12.2 until the aggregate amount of Purchaser Damages exceeds $350,000,
whereupon Purchaser Indemnitees shall be entitled to seek indemnification to
the extent that the amount of such Purchaser Damages exceeds $350,000 (provided
that if any portion of any representation or warranty is qualified by
materiality, material adverse effect or similar qualification, then for
purposes of determining indemnification under this Section 12.4(a) such
qualification shall be entirely disregarded); provided, however, that such
limitation shall not apply to any liability for indemnification with respect to
any claim for indemnification based upon (i) fraud, (ii) any misrepresentation
or breach of a warranty which was actually known to be untrue by LCC or LCC AS
when made or (iii) any Excluded Liability. The aggregate indemnification
payable by LCC and LCC AS under this Article 12 with respect to any and all
claims for indemnification based upon Section 12.2(a) shall be limited to the
Purchase Price; provided, however, that, with respect to claims that do not
arise out of claims of infringement, the aggregate indemnification shall be
limited to $10,000,000; provided further, however, that the aggregate
indemnification payable by LCC and LCC AS under this Article 12 with respect to
claims for indemnification based upon Section 12.2(a) and arising out of or
relating to claims of infringement shall be limited to the Purchase Price less
any amounts paid or payable with respect to any and all other claims for
indemnification based upon Section
59
12.2(a); provided further, that such limitation shall not apply to any claim
for indemnification based upon (i) fraud, (ii) any misrepresentation or breach
of a warranty which was actually known to be untrue by LCC or LCC AS when made,
or (iii) any Excluded Liability, and any indemnification paid hereunder based
upon any of the foregoing shall not be counted towards such maximum
indemnification amount.
(b) No liability for indemnification shall arise on the
part of Purchaser under this Article 12 with respect to any claim for
indemnification based upon clause (a) of Section 12.1 until the aggregate
amount of LCC Damages exceeds $350,000, whereupon the LCC Indemnities shall be
entitled to seek indemnification to the extent that the amount of such LCC
Damages exceeds $350,000 (provided that if any portion of any representation or
warranty is qualified by materiality, material adverse effect or similar
qualification, then for purposes of determining indemnification under this
Section 12.4(b) such qualification shall be entirely disregarded); provided,
however, that such limitation shall not apply to any liability for
indemnification with respect to any claim for indemnification based upon (i)
fraud, (ii) any misrepresentation or breach of a warranty which was actually
known to be untrue by Purchaser when made or (iii) any Assumed Liability; and
provided further that any liabilities with respect to taxes shall not be
subject to the limitations set forth in this Section 12.4. The aggregate
indemnification payable by Purchaser under this Article 12 with respect to any
and all claims for indemnification based upon Section 12.1(a) shall be limited
to $10,000,000; provided, however, that such limitation shall not apply to any
claim for indemnification based upon (i) fraud, (ii) any misrepresentation or
breach of a warranty which was actually known to be untrue by Purchaser when
made or (iii) any Assumed Liability, and any indemnification paid hereunder
based upon any of the foregoing shall not be counted towards such maximum
indemnification amount.
12.5 EXCLUSIVE REMEDY. The parties acknowledge that,
except in the case of fraud, their sole remedy after the Closing for any breach
of any representation or warranty contained in this Agreement shall be the
indemnification provisions set forth in this Article 12. Notwithstanding the
foregoing, nothing herein shall be construed or interpreted as limiting or
impairing the rights or remedies that any party hereto may have at equity,
including, but not limited to, specific performance and injunctive relief,
where available.
12.6 SURVIVAL. The representations and warranties
contained in this Agreement and in any other document delivered pursuant hereto
shall survive until March 31, 2001 and shall not survive thereafter; provided,
however, that the representations and warranties dealing with Tax matters and
ERISA matters shall terminate at the close of business on the 120th day
following the expiration of the applicable statute of limitations with respect
to the Tax liabilities and ERISA liabilities in question; provided further that
the representations and warranties contained in Sections 5.1 through 5.4 and
5.10 shall survive indefinitely. The applicable period of survival of each
representation and warranty contained in this Agreement is referred to herein
as the "Survival Period". Any claim or cause of action based upon or arising
out of a breach of a representation or warranty made hereunder or in any other
document delivered pursuant hereto must be made within the Survival Period
applicable thereto or the party against which such claim is made shall have no
liability with respect thereto.
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ARTICLE 13
TERMINATION
13.1 TERMINATION. This Agreement may be terminated at any
time prior to the Closing Date:
(a) by mutual consent of Purchaser and LCC;
(b) by LCC, upon written notice to Purchaser, if there
has been a material breach by Purchaser of any of its representations,
warranties, covenants or agreements contained herein, or any such
representation or warranty shall have become untrue, in any such case
such that any of the conditions set forth in Article 9 will not be
satisfied and such breach or condition has not been cured within
thirty (30) days following receipt by Purchaser of written notice of
such breach;
(c) by Purchaser, upon written notice to LCC, if there
has been a material breach by LCC or LCC AS of any of its
representations, warranties, covenants or agreements contained herein,
or any such representation or warranty shall have become untrue, in
any such case such that any of the conditions set forth in Article 10
will not be satisfied and such breach or condition has not been cured
within thirty (30) days following receipt by LCC or LCC AS of written
notice of such breach; or
(d) by either Purchaser or LCC, at any time after
November 30, 1999, if the Closing has not occurred on or before such
date through no fault of the terminating party or any of the
terminating party's Affiliates.
13.2 EFFECT OF TERMINATION. In the event of termination
of this Agreement, as provided above, this Agreement shall forthwith become
void and there shall be no liability hereunder on the part of any party, except
for any party's liability resulting from such party's breach of any
representation, warranty, covenant or agreement in this Agreement and except
that the agreements with respect to expenses contained in Sections 7.1 and
14.14 shall survive the termination hereof.
ARTICLE 14
MISCELLANEOUS
14.1 WRITTEN AGREEMENT TO GOVERN. This Agreement
(together with the Schedules and Exhibits hereto and the other Contracts and
documents delivered pursuant hereto) sets forth the entire understanding and
supersedes all prior oral and written agreements among the parties relating to
the subject matter contained herein, and merges all prior discussions among
them.
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14.2 SEVERABILITY. The parties expressly agree that it is
not the intention of any party to violate any public policy, statutory or
common laws, rules, regulations, treaties or decisions of any Governmental
Authority. If any provision of this Agreement is judicially or
administratively interpreted or construed as being so in violation, such
provision shall be inoperative and the remainder of this Agreement shall remain
binding upon the parties hereto.
14.3 NOTICES AND OTHER COMMUNICATIONS. Any notice or
other communication required, contemplated or permitted by this Agreement by
any party, shall be in writing and shall be deemed served (a) when personally
delivered, (b) when transmitted via facsimile machine to the party for whom it
is intended at the number shown below, (c) on the second Business Day after
delivery to a reputable overnight courier for next business day delivery, or
(d) five Business Days after deposit in the United States mail, registered or
certified mail, return receipt requested, postage prepaid, addressed, in the
case of deliveries made pursuant to clause (c) or (d), as follows:
If to LCC or LCC AS: LCC International, Inc.
0000 Xxxxx Xxxxxx Xxxxx
XxXxxx, XX 00000
Attn.: Xxxxx X. Xxxxxx, Vice President,
General Counsel and Secretary
Fax No.: (000) 000-0000
With a copy to: Xxxxx & Xxxxxxx L.L.P.
000 Xxxxxxxxxx Xxxxxx X.X.
Xxxxxxxxxx, XX 00000
Attn.: Xxxxxxxx Xxxxxxxxx, Esq.
Fax No.: (000) 000-0000
If to Purchaser: Ericsson Radio Systems AB
X-000 00 Xxxxxxxxx
Xxxxxx
Attn.: Xxxxxxxx Xxxxxx
Fax No.:(000 00) 000 000-000
With a copy to: Telefonaktiebolaget LM Ericsson
X-000 00 Xxxxxxxxx
Attn: General Counsel
Fax No.:(000 00) 0 000-0000
and to: Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxxx Xxxxx, Esq.
Fax No.: (000) 000-0000
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or to such other address or addresses as any addressee may designate for itself
by written notice served in accordance herewith.
14.4 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, and each counterpart shall constitute an original
instrument, but all such separate counterparts shall constitute one and the
same agreement.
14.5 LAW TO GOVERN. The validity, construction and
enforceability of this Agreement shall be governed in all respects by the laws
of the State of New York without regard to its conflict of laws rules.
14.6 ARBITRATION. All disputes between the parties with
respect to any matter arising out of or relating to this Agreement shall be
finally and conclusively settled under the rules of arbitration of the
International Chamber of Commerce, by a panel of three arbitrators appointed in
accordance with said rules. The place of arbitration shall be New York, NY,
United States of America and the English language shall be used in the
proceedings.
14.7 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no party may assign
its rights and obligations hereunder without the prior written consent of the
other party, which consent may not be unreasonably withheld, except that LCC
may assign all or any portion of its respective rights hereunder without the
prior written consent of Purchaser (a) in connection with a merger,
consolidation or sale of all or substantially all of its assets, (b) to an
Affiliate or (c) to any lender as security for a loan. Purchaser may assign
this Agreement in whole or in part or any of its rights hereunder to an
Affiliate of Purchaser (a "Purchaser Assignee") without the consent of LCC or
LCC AS (provided that Purchaser shall in such case remain obligated to perform
its obligations hereunder following such assignment).
14.8 INTERPRETATION. The masculine, feminine or neuter
pronouns used herein shall be interpreted without regard to gender, and the use
of the singular or plural shall be deemed to include the other whenever the
context so requires. The headings in this Agreement are inserted for
convenience of reference only and shall not be a part of or control or affect
the meaning of this Agreement. Unless otherwise expressly stated herein, all
references herein to Articles, Sections and paragraphs are to Articles,
Sections and paragraphs in this Agreement and all references herein to
Schedules and Exhibits are to Schedules and Exhibits to this Agreement. The
phrase "including" shall mean "including, without limitation". The parties
have all been represented by counsel in connection with the negotiation of this
Agreement. The fact that any provision hereof may have been drafted by counsel
for a given party shall not be taken into consideration in interpreting such
provision. "Business Day" means any day other than a Saturday or Sunday or
other day on which national banks in Washington, D.C. or New York City are
required or permitted to be closed.
14.9 SCHEDULES AND EXHIBITS. The Schedules and Exhibits
referred to herein and attached or to be attached to this Agreement are
incorporated herein by such reference as if fully set forth in the text hereof.
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14.10 PUBLICITY. No party shall announce or disclose
publicly the terms or provisions hereof or the transactions contemplated hereby
without the prior written approval of the parties, except as such disclosure
may be required by Applicable Law (subject to giving the parties notice as
promptly as possible of the intention to make such disclosure and providing the
parties an opportunity to review the wording of such disclosure) and except
that this provision shall not prohibit any party from disclosing such terms or
provisions to its attorneys, accountants, lenders, bankers, financial advisors
or any other advisor or consultant provided any such person to whom such terms
or provisions are disclosed agrees to be bound by the terms and conditions of a
confidentiality agreement.
14.11 MODIFICATION. The parties to this Agreement may, by
mutual written consent, executed by the authorized officers of each party,
modify or supplement this Agreement in such manner as may be mutually agreed
upon by them in writing.
14.12 WAIVER OF PROVISIONS. The terms, covenants,
representations, warranties and conditions of this Agreement may be waived only
by a written instrument executed by the party waiving compliance. The failure
of any party at any time to require performance of any provisions hereof shall
in no manner affect the right at a later date to enforce the same. No waiver
by any party of any condition, or breach of any provision, term, covenant,
representation or warranty contained in this Agreement, whether by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as
a further or continuing waiver of any such condition or of the breach of any
other provision, term, covenant, representation or warranty of this Agreement.
14.13 NO THIRD PARTY BENEFICIARIES. This Agreement shall
be binding upon and inure solely to the benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, other than Article
12, is intended to or shall confer upon any other Person, including, without
limitation, any union or any employee or former employee of LCC or LCC AS, any
legal or equitable right, benefit or remedy of any nature whatsoever,
including, without limitation, any rights of employment for any specified
period, under or by reason of this Agreement.
14.14 EXPENSES. Except as otherwise provided in this
Agreement, each party shall bear its own expenses incident to this Agreement
and the transactions contemplated hereby, including without limitation, all
fees of counsel, accountants and consultants.
[Remainder of the page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its officer thereunto duly
authorized, all on or as of the day and year first above written.
LCC INTERNATIONAL, INC.
By: /s/ C. XXXXXX XXXXXXXX III
--------------------------------------
Name: C. Xxxxxx Xxxxxxxx III
Its: Chairman and CEO
LCC EUROPE AS
By: /s/ XXXXX X. XXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxx
Its: Chairman
ERICSSON RADIO SYSTEMS AB
By: /s/ XXXX XXXXXXXX
--------------------------------------
Name: Xxxx Xxxxxxxx
Its: Authorized Signatory
