TSMD ACQUISITION CORP.
PURCHASE OF ALL OF THE OUTSTANDING
CAPITAL STOCK OF X-X TSMD INC.
August 29, 1997
INDEX
1. Stock Purchase Agreement dated as of August 29, 1997 ("Stock Purchase
Agreement") by and among TSMD Acquisition Corp., Xxxxxxx-Xxxxxxx
Company and X-X TSMD Inc.
A. GaAs/Thin Film Supply Agreement Term Sheet.
B. Form of Cross License Agreement.
C. Marketing Agreement Term Sheet.
D. MIM/Glass Seal/Hybrid Assembly Supply Agreement Term Sheet.
E. Sublease Term Sheets.
F. Form of Trademark License Agreement.
G. Matters to be Covered in Opinion of Counsel to Seller and
Company.
H. Matters to be Covered in Opinion of Counsel to Buyer.
2. Schedule 3.3 (Buyer Approvals and Permits) to Stock Purchase Agreement.
-----------------
* Indicates that certain material has been omitted pursuant to a request for
confidential treatment. Such material is contained in a copy of this document
provided to the Securities and Exchange Commission.
STOCK PURCHASE AGREEMENT
dated as of
August 29, 1997,
by and among
TSMD ACQUISITION CORP.,
XXXXXXX-XXXXXXX COMPANY
and
X-X TSMD INC.
TABLE OF CONTENTS
Page No.
ARTICLE I
DEFINITIONS/PURCHASE & XXXX/CLOSING.................................................. 2
1.1 Definitions.......................................................................... 2
1.2 Sale of the Stock by Seller.......................................................... 12
1.3 Purchase of the Stock by Buyer;
Total Purchase Price................................................................. 13
1.4 The Closing.......................................................................... 13
1.6 Purchase Price Adjustment............................................................ 14
1.7 Retention Plan Escrow................................................................ 17
1.8 Deposit; Deposit Escrow.............................................................. 17
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER............................................. 19
2.1 Organization and Related Matters..................................................... 19
2.2 Equity Securities.................................................................... 19
2.3 Financial Statements; Changes;
Contingencies........................................................................ 20
2.4 Tax and Other Returns and Reports.................................................... 21
2.5 Material Contracts................................................................... 22
2.6 Real and Personal Property;
Government-Furnished and
Government-Owned Property or
Equipment............................................................................ 23
2.7 Intangible Property.................................................................. 25
2.8 Authorization; No Conflicts.......................................................... 26
2.9 Legal Proceedings and Certain
Labor Matters........................................................................ 27
2.10 Minute Books......................................................................... 28
2.11 Accounting Records; Internal
Controls............................................................................. 28
2.12 Insurance............................................................................ 28
2.13 Permits.............................................................................. 29
2.14 Compliance with Law.................................................................. 29
2.15 Dividends and Other Distributions.................................................... 29
2.16 Employee Benefits.................................................................... 30
2.17 Certain Interests.................................................................... 32
2.18 Intercompany Transactions............................................................ 33
2.19 No Brokers or Finders................................................................ 33
2.20 Inventory............................................................................ 33
2.21 Customers and Suppliers.............................................................. 34
2.22 Environmental Compliance............................................................. 34
2.23 Government Contracts................................................................. 35
2.24 Backlog.............................................................................. 37
2.25 Clearances........................................................................... 37
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER.............................................. 37
3.1 Organization and Related Matters..................................................... 37
3.2 Authorization........................................................................ 38
3.3 No Conflicts......................................................................... 38
3.4 No Brokers or Finders................................................................ 38
3.5 Legal Proceedings.................................................................... 38
3.6 Investment Representation............................................................ 39
ARTICLE IV
COVENANTS WITH RESPECT TO CONDUCT OF COMPANY
PRIOR TO CLOSING....................................................... 39
4.1 Access............................................................................... 39
4.2 Material Adverse Changes; Reports;
Financial Statements................................................................. 40
4.3 Conduct of Business.................................................................. 40
4.4 Notification of Certain Matters...................................................... 42
4.5 Permits and Approvals................................................................ 43
4.6 Preservation of Business Prior to
Closing Date......................................................................... 43
4.7 Government Filings................................................................... 43
4.8 Elimination of Intercompany and
Affiliate Liabilities................................................................ 44
4.9 Inconsistent Agreements.............................................................. 44
4.10 Contribution......................................................................... 45
4.11 Provisions Respecting Government
Contracts............................................................................ 45
4.12 Certain Material Contracts........................................................... 46
4.13 Customers and Suppliers.............................................................. 47
4.14 Backlog.............................................................................. 47
ARTICLE V
ADDITIONAL CONTINUING COVENANTS.............................................. 47
5.1 Noncompetition....................................................................... 47
5.2 Nondisclosure of Proprietary Data.................................................... 49
5.3 Certain Tax Matters.................................................................. 50
5.4 Corporate Name Change; Trademark
License Agreement.................................................................... 51
5.5 Post-Closing Cooperation Generally................................................... 51
5.6 Refund Claims and Warranty Claims.................................................... 51
5.7 Warranty Work........................................................................ 52
5.8 Change Orders........................................................................ 52
5.9 Cooperation re: Refund Claims and
Warranty Claims...................................................................... 53
5.10 Prorations; Cooperation re:
Collection of Receivables............................................................ 53
5.11 Post-Closing Status of Company....................................................... 54
5.12 Employment of Employees of the
Business............................................................................. 54
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ARTICLE VI
CONDITIONS OF PURCHASE................................................... 56
6.1 General Conditions................................................................... 56
6.2 Conditions to Obligations of Buyer................................................... 56
6.3 Conditions to Obligations of
Seller............................................................................... 58
ARTICLE VII
TERMINATION OF OBLIGATIONS; SURVIVAL........................................... 59
7.1 Termination of Agreement............................................................. 59
7.2 Effect of Termination................................................................ 61
7.3 Survival of Representations and
Warranties........................................................................... 61
7.4 Limitation on Obligations of
Company.............................................................................. 62
ARTICLE VIII
INDEMNIFICATION........................................................ 62
8.1 Obligations of Seller................................................................ 62
8.2 Obligations of Buyer................................................................. 63
8.3 Certain Tax Matters.................................................................. 63
8.4 Procedure............................................................................ 65
8.5 Limitations on Indemnification....................................................... 66
8.6 Tax Adjustments...................................................................... 66
ARTICLE IX
GENERAL........................................................... 67
9.1 Amendments; Waivers.................................................................. 67
9.2 Schedules; Exhibits; Integration..................................................... 67
9.3 Best Efforts; Further Assurances..................................................... 67
9.4 Governing Law........................................................................ 68
9.5 Assignment........................................................................... 68
9.6 Headings............................................................................. 68
9.7 Counterparts......................................................................... 69
9.8 Publicity and Reports................................................................ 69
9.9 Parties in Interest.................................................................. 69
9.10 Performance by Subsidiaries.......................................................... 69
9.11 Notices.............................................................................. 70
9.12 Expenses............................................................................. 71
9.13 Remedies; Waiver..................................................................... 71
9.14 Attorney's Fees...................................................................... 71
9.15 Knowledge Convention................................................................. 71
9.16 Representation By Counsel;
Interpretation....................................................................... 72
9.17 Specific Performance................................................................. 72
9.18 Severability......................................................................... 72
9.19 Confidentiality...................................................................... 72
9.20 Schedules............................................................................ 75
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EXHIBITS
A GaAs/Thin Film Term Sheet
B Form of License Agreement
C Marketing Term Sheet
D MIM Supply Term Sheet
E Sublease Term Sheets
F Form of Trademark License Agreement
G Matters to be Covered in Opinion of Counsel to Seller and Company
H Matters to be Covered in Opinion of Counsel to Buyer
SCHEDULES
Disclosure Schedule
1.1 Excluded Assets
2.1 Officers and Directors
2.4 Tax Matters
2.5 Material Contracts
2.6(a) Real and Personal Property
2.6(d) Government-Furnished Items
2.7 Intangible Property
2.8 Seller Approvals and Permits
2.9 Litigation
2.12 Insurance
2.16 Employee Benefit Plan Matters
2.20 Inventory Valuation Methodology
2.21 Customers and Suppliers
2.23(c) Government Contract Audits
2.25 Clearances
3.3 Buyer Approvals and Permits
5.7 Warranty Work Principles
5.10 Proration Principles
6.2(d) Certain Third Party Consents
8.3(a) Certain Leases of Tangible Property
9.15 Knowledge
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STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement") dated as of
August 29, 1997 by and among TSMD ACQUISITION CORP., a Delaware corporation
("Buyer"), XXXXXXX-XXXXXXX COMPANY, a California corporation ("Seller"), and X-X
TSMD INC., a California corporation and a wholly-owned subsidiary of Seller
("Company").
B A C K G R O U N D
A. Seller is, and, upon completion of the Contribution,
Company will be, engaged in the design, development, manufacture and sale of
modular subsystems, microwave devices and electronic equipment that are used in
defense and space applications and serve, among others, the following markets:
(i) guided munitions, including subsystems used by the USAF Advanced
Medium-Range Air-to-Air Missile and the USN SM-2/Block IV shipboard missile;
(ii) certain intelligence applications, including modular subsystems used in the
USAF Joint Airborne Surveillance Architecture (other than intelligence systems
that are manufactured by Seller's Telecommunications Group in Gaithersburg,
Maryland and are designed to monitor or intercept communication signals); (iii)
electronic warfare and radar, including the USAF ALQ-131 electronic
countermeasures system and the USN Aegis SPY missile protection radar system;
(iv) space applications, including for military and commercial satellites such
as Motorola's Iridium satellite system and (v) commercial equipment, including
test instruments built by Marconi in the United Kingdom. Seller operates the
Business from a site located in Palo Alto, California.
X. Xxxxx, Seller and Company desire that Buyer purchase the
Business on the terms and conditions set forth in this Agreement. They intend to
accomplish that by having Seller and Company consummate the Contribution and
Buyer purchase all the outstanding stock of Company from Seller pursuant to this
Agreement.
C. After such stock sale, Seller will continue to design,
develop, manufacture and sell semiconductor and telecommunications products,
including microwave products (collectively the "Retained Businesses") at the
Palo Alto site and elsewhere. Several special steps will be necessary to
accommodate the separation of the Business and the Retained Businesses after the
stock sale. For example, under the Sublease Agreements, Seller will sublease
facilities to Company at the Palo Alto Site to enable Company to continue to
conduct the Business at that site. In addition, Seller operates a gallium
arsenide
semiconductor wafer processing facility, a thin-film production substrate
facility and a metal injection molding facility (the "MIM Facility") at the Palo
Alto site. Those facilities provide (or in the future are expected to provide)
essential items to the Business and certain of the Retained Businesses. Seller
will retain the gallium arsenide semiconductor wafer processing facility and the
thin-film production substrate facility (except, in the case of the latter, for
the Intangible Property relating thereto). Seller will enter into supply
agreements with Company under which, after the stock sale, Seller will furnish
Company with the items needed by the Business that are produced at those
facilities. As regards the metal injection molding facility, Seller will
contribute that facility to Company prior to the Closing as part of the
Contribution. Company will enter into a supply agreement with Seller under
which, after the stock sale, Company will furnish Seller with the items needed
by the Retained Businesses that are produced at that facility. In addition,
because Seller will continue to use technology and other know-how in certain of
the Retained Businesses that are also used in the Business, Seller and Company
will share the use of that "common" technology pursuant to the License
Agreement.
D. The purpose of this Agreement is to memorialize the terms
and conditions under which Buyer will purchase the Stock and Buyer, Seller and
Company will effect the other arrangements described above.
NOW THEREFORE, in consideration of the promises and covenants
contained herein and intending to be legally bound, Buyer, Seller and Company do
hereby agree as follows:
ARTICLE I
DEFINITIONS/PURCHASE & SALE/CLOSING
1.1 Definitions.
For all purposes of this Agreement, except as otherwise
expressly provided:
(a) the terms defined in this Article I have the
meanings assigned to them in this Article I and include the plural as
well as the singular;
(b) all accounting terms not otherwise defined herein
have the meanings assigned under generally accepted accounting
principles;
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(c) all references in this Agreement to designated
"Articles," "Sections" and other subdivisions are to the designated
Articles, Sections and other subdivisions of the body of this
Agreement;
(d) pronouns of either gender or neuter shall include,
as appropriate, the other pronoun forms; and
(e) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
As used in this Agreement and the Exhibits and Schedules
delivered pursuant to this Agreement, the following definitions shall apply:
"Accounting Report" is defined in Section 1.6(a).
"Action" means any action, complaint, petition, investigation,
suit or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"Additional Accounting Firm" is defined in Section 1.6(c).
"Additional Accounting Report" is defined in Section 1.6(c).
"Adjustment Amount" means the excess of March 31 Net Asset
Value over Closing Date Net Asset Value. In the event that March 31 Net Asset
Value is less than Closing Date Net Asset Value, the Adjustment Amount shall be
zero.
"Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified Person.
"Agreed Adjustments" is defined in Section 1.6(b).
"Agreed Rate" means, as of the date of any payment of interest
to be made by reference thereto, the interest rate established on such date by
Citibank, N.A. as its "prime" rate, or, if that rate is no longer established or
published, a comparable interest rate.
"Agreement" means this Agreement by and among Buyer, Seller
and Company as amended or supplemented together with all Exhibits and Schedules
attached or incorporated by reference.
3
"Ancillary Agreements" means the Calibration Group Supply
Agreement, the GaAs/Thin Film Agreement, the License Agreement, the Marketing
Agreement, the MIM Supply Agreement, the Sublease Agreements and the Trademark
License Agreement.
"Approval" means any approval, authorization, consent,
qualification or registration, or any waiver of any of the foregoing, required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to, any Governmental Entity or any other Person.
"Associate" of a Person means
(i) a corporation or organization (other than Company or a
party to this Agreement) of which such person is an officer or partner or is,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities;
(ii) any trust or other estate in which such person has a
substantial beneficial interest or as to which such person serves as trustee or
in a similar capacity; and
(iii) any relative or spouse of such person or any relative
of such spouse.
"Assumed Obligations" means only those liabilities and
obligations of Seller or Company that are (i) liabilities and obligations of the
Business on the Closing Date for Accrued PTO and Holidays, Advance Billing,
Provision for Losses on Contracts, Accrual for "Sick Leave Bank" and Deferred
Compensation (to the extent relating to Messrs. Xxxxxx and Xxxxxxx), (ii)
executory obligations to perform under Contracts that are Purchased Assets and
(iii) liabilities or obligations under the Retention Plan.
"Audited Adjustment Amount" is defined in Section 1.6(a).
"Auditors" means Deloitte & Touche, independent public
accountants to Seller and Company.
"Base Purchase Price" is defined in Section 1.3.
"Business" means the Tactical Subsystems Sector and the
Microwave Devices Sector businesses conducted by Seller and by Company,
including, but not limited to, the design, development, manufacture and sale of
modular subsystems, microwave devices and electronic equipment that are used in
defense and space applications and serve, among others, the following markets:
(i) guided munitions,
4
including subsystems used by the USAF Advanced Medium-Range Air-to-Air Missile
and the USN SM-2/Block IV shipboard missile, (ii) certain intelligence
applications, including modular subsystems used in the USAF Joint Airborne
Surveillance Architecture, (iii) electronic warfare and radar, including the
USAF ALQ-131 electronic countermeasures system and the USN Aegis SPY missile
protection radar system, (iv) space applications, including for military and
commercial satellites such as Motorola's Iridium satellite system and (v)
commercial equipment, including test instruments built by Marconi in the United
Kingdom, and shall be deemed to include any of the following incidents of such
businesses: income, cash flow, operations, condition (financial or other),
assets, liabilities, Products, properties and, to the extent contemplated by
Seller's or Company's business plans or projections as of the date hereof,
prospects; provided, however, that "Business" shall not include intelligence
systems that are manufactured by Seller's Telecommunications Group in
Gaithersburg, Maryland and are designed to monitor or intercept communication
signals.
"Buyer's Accountants" is defined in Section 1.6(a).
"Calibration Group Supply Agreement" means a Calibration Group
Supply Agreement by and among Buyer, Seller and Company on terms reasonably
satisfactory to the parties thereto.
"Closing" means the consummation of the purchase and sale of
the Stock under this Agreement.
"Closing Date" means the date of the Closing.
"Closing Date Net Asset Value" means the book value of the
Purchased Assets (excluding any value attributed to intangibles that were not on
the balance sheet for the Business as of March 31, 1997 referred to in Section
2.3) minus the book value of the Assumed Obligations (not including any
liabilities or obligations under the Retention Plan), in each case as carried on
Seller's books of account in accordance with GAAP consistently applied (provided
that in the event of any conflict between those principles required under GAAP
and those principles required for consistency, the principles required under
GAAP shall control) as of the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" is defined in the preamble hereto.
5
"Contract" means any binding agreement, arrangement, bond,
commitment, franchise, indemnity, indenture, instrument, lease, license or
understanding.
"Contribution" means the transfer by Seller to Company of
those Purchased Assets and Assumed Obligations not owned or held by Company as
of the date hereof, such transfer to be evidenced by all necessary and
appropriate documentation and filings with Governmental Entities including, but
not limited to, all necessary filings with Governmental Entities with respect to
the transfer of the Intangible Property listed on Schedule 2.7 from Seller to
Company.
"Customer Contracts" means all Contracts providing for
obligations to deliver Products, the rights to be paid for those Products and
the obligations and rights that are ancillary to those obligations and rights.
"Deposit" is defined in Section 1.8(a).
"Disclosure Schedule" means the Disclosure Schedule of even
date herewith delivered by Seller to Buyer. The Sections of the Disclosure
Schedule shall be numbered to correspond to the applicable Sections of this
Agreement and the matters disclosed in particular Sections of the Disclosure
Schedule shall be deemed to qualify only the corresponding particular Section of
this Agreement except where the nature of the disclosure is such that its
applicability to other Sections of the Agreement is apparent.
"Encumbrance" means any claim, charge, easement, encumbrance,
lease, covenant, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, except
for any restrictions on transfer generally arising under any applicable federal
or state securities law.
"Escrow Agent" is defined in Section 1.8(a).
"Escrow Agreement" means the Escrow Agreement by and among
Buyer, Seller and Escrow Agent on terms reasonably satisfactory to the parties
thereto regarding the holding and release of the Deposit.
"ESOP" is defined in Section 2.16(b).
"Equity Securities" means any capital stock or other equity
interest or any securities convertible into or
6
exchangeable for capital stock or any other rights, warrants or options to
acquire any of the foregoing securities.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the related regulations and published interpretations.
"ERISA Affiliate" has the meaning set forth in
Section 2.16(c).
"Estimated Adjustment Amount" is defined in Section 1.5.
"Estimated Purchase Price" is defined in Section 1.5.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" means those assets specifically identified
on Schedule 1.1 which shall include, but not be limited to, assets of the
Business on the Closing Date comprising Accounts Receivable, Deferred Tax Assets
and Other Current Assets - Prepaids.
"Excluded Liabilities" means any and all liabilities of
Seller, Company or the Business of any kind or nature, whether known or unknown,
accrued, absolute, contingent or otherwise (other than the Assumed Obligations)
including, but not limited to, Accounts Payable, Accrued Salaries and Profit
Sharing, Government Accruals and Accrued Expenses - Other, and any and all
liabilities with respect to any of the plans, agreements or arrangements listed
(or required by Section 2.16(a) to be listed) in Schedule 2.16.
"Final Audited Adjustment Amount" is defined in
Section 1.6(c).
"GAAP" means generally accepted accounting principles in the
United States, as in effect from time to time.
"GaAs/Thin Film Agreement" means the GaAs/Thin Film Agreement
by and among Buyer, Seller and Company on the principal terms set forth in
Exhibit A hereto and such other terms as are reasonably satisfactory to the
parties thereto.
"Government Bid" is defined in Section 2.23(a).
"Government Contract" means any prime contract, subcontract,
teaming agreement or arrangement, joint venture, basic ordering agreement,
letter contract, purchase order, delivery order, Government Bid, change order,
or
7
other contractual commitment of any kind relating to the Business including, but
not limited to, any Customer Contract or Supplier Contract, in each instance
between Seller or Company and (i) any Governmental Entity, (ii) any prime
contractor of any Governmental Entity, or (iii) any subcontractor with respect
to any contract described in clauses (i) or (ii) above.
"Government Contract Novation" means, with respect to any
Government Contract, an instrument reasonably satisfactory in form and substance
to Buyer and Seller pursuant to which all of Seller's rights, claims, benefits
and liabilities thereunder shall have been validly conveyed, transferred,
assigned and novated to Buyer by all parties thereto.
"Governmental Entity" means any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"Government-Furnished Items" is defined in Section 2.6(d).
"Xxxx-Xxxxx-Xxxxxx Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the related regulations and published
interpretations.
"Hazardous Substance" means (but shall not be limited to)
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable Laws as "hazardous substances," "hazardous materials," "hazardous
wastes" or "toxic substances," or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as ignitibility,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the exploration, development, or production of crude oil,
natural gas or geothermal energy.
"Indemnifiable Claim" means any Loss for or against which any
party is entitled to indemnification under this Agreement; "Indemnified Party"
means the party entitled to indemnity hereunder; and "Indemnifying Party" means
the party obligated to provide indemnification hereunder.
"Intangible Property" means any Intellectual Property Rights,
marketing rights, contractual rights, licenses and all related agreements and
documentation.
8
"Intellectual Property Rights" means all industrial and
intellectual property rights, including, without limitation, patents, patent
applications (pending or otherwise), patent rights, copyrights, computer
firmware and software (existing in any form), Know-How, Trade Secrets, Marks,
proprietary processes, inventions and formulae.
"Inventory" means all finished products, work in progress,
parts, components and raw materials.
"Investment Plan" is defined in Section 2.16(b).
"IRS" means the Internal Revenue Service or any successor
entity.
"Know-How" means any information, including, but not limited
to, invention records, research and development findings, records and reports,
experimental and engineering reports, pilot designs, production designs,
production specifications, raw material specifications, quality control reports
and specifications, drawings, photographs, models, tools, parts, algorithms,
processes, methods, market and competitive analysis, or other information,
whether or not considered proprietary or a Trade Secret.
"Law" means any constitutional provision, statute or other
law, rule, regulation, or interpretation of any Governmental Entity and any
Order.
"License Agreement" means the Cross License Agreement by and
among Buyer, Seller and Company substantially in the form of Exhibit B hereto.
"Loss" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, obligation, penalty or settlement of any kind or
nature, whether foreseeable or unforeseeable, including but not limited to,
interest or other carrying costs, penalties, legal, accounting and other
professional fees and expenses incurred in the investigation, collection,
prosecution and defense of claims and amounts paid in settlement, that may be
imposed on or otherwise incurred or suffered by the specified person.
"March 31 Net Asset Value" means $34.6 million.
"Mark" means any brand name, copyright, patent, service mark,
trademark, tradename, and all registrations or application for registration of
any of the foregoing.
"Marketing Agreement" means the Marketing Agreement by and
among Buyer, Seller and Company on the
9
principal terms set forth in Exhibit C hereto and such other terms as are
reasonably satisfactory to the parties thereto.
"Material Contract" is defined in Section 2.5.
"MIM Facility" is defined in the Background hereto.
"MIM Supply Agreement" means an MIM Supply Agreement by and
among Buyer, Seller and Company on the principal terms set forth in Exhibit D
hereto and such other terms as are reasonably satisfactory to the parties
thereto.
"Net Tax Benefit" is defined in Section 8.6.
"Order" means any decree, injunction, judgment, order,
ruling, assessment or writ.
"Palo Alto Site" means the real property currently leased by
Seller in Palo Alto, California that is commonly referred to as 0000 Xxxxxxxx
Xxxxxx.
"Permit" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
"Person" means an association, a corporation, an individual, a
partnership, a trust or any other entity or organization, including a
Governmental Entity.
"Post-Closing Partial Period" means any period beginning
before the Closing Date and ending after the Closing Date, but only with respect
to the portion of such period beginning the day after the Closing Date.
"Pre-Closing Partial Period" means any period beginning before
the Closing Date and ending after the Closing Date, but only with respect to the
portion of such period up to and including the Closing Date.
"Prime Government Contract" means any Government Contract
between Seller or Company, on the one hand, and the government of the United
States of America on the other hand.
"Products" means products, technology and services
manufactured, sold, licensed, under development or otherwise exploited by Seller
or Company in connection with the Business, or proposed in Seller's or Company's
business plans or projections to be exploited in connection with the Business,
including replacement parts or components sold by Seller or Company for other
products.
10
"Projected Retention Payments" is defined in Section 1.7(a).
"Purchased Assets" means each and every asset or property used
in the conduct of, connected with or comprising the Business including, but not
limited to, all assets and properties listed on Schedules 2.6(a) (which Schedule
shall include, among other things, assets of the Business on the Closing Date
comprising Unbilled Receivables, Inventory, PPE, Intangibles and $85,000 in
loans to employees of the Business) and 2.7, except for the Excluded Assets.
"Refund Claim" is defined in Section 5.6.
"Retained Businesses" is defined in the Background hereto.
"Retention Plan" means Seller's Retention Bonus Plan.
"Retention Plan Adjustment" is defined in Section 1.7.
"SEC" means the Securities and Exchange Commission or any
successor entity.
"Section 338(h)(10) Election" is defined in Section 5.11.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller's Post-Closing Balance Sheet" is defined in
Section 1.6(a).
"Seller's Incomplete Schedules" is defined in Section 9.20.
"Sublease Agreements" means the Sublease Agreements by and
among Buyer, Seller and Company on the principal terms set forth in Exhibit E
hereto and such other terms as are reasonably satisfactory to the parties
thereto.
"Stock" means all of the outstanding capital stock of Company.
"Subsidiary" means any Person in which Company has a direct or
indirect equity or ownership interest in excess of 10%.
"Supplier Contracts" means all Contracts providing for the
purchase goods and services consumed by the Business
11
or directly used to support the Business, the obligations to pay for those goods
and services, and the obligations and rights that are ancillary to those
obligations and rights.
"Tax" means any foreign, federal, state, county or local
income, sales and use, excise, franchise, real and personal property, transfer,
gross receipt, capital stock, production, business and occupation, disability,
employment, payroll, severance or withholding tax or charge imposed by any
Governmental Entity, any interest and penalties (civil or criminal) related
thereto or to the nonpayment thereof, and, except as specifically provided
herein, any Loss in connection with the determination, settlement or litigation
of any Tax liability.
"Tax Reimbursement Amount" is defined in Section 8.6.
"Tax Return" means a report, return or other in formation
required to be supplied to a Governmental Entity with respect to Taxes
including, where permitted or required, combined or consolidated returns for any
group of entities that includes Seller or Company.
"Title IV Plan" is defined in Section 2.16(c).
"Total Purchase Price" is defined in Section 1.3.
"Trademark License Agreement" means the Trademark License
Agreement by and among Buyer, Seller and Company substantially in the form of
Exhibit F hereto.
"Trade Secrets" means any formula, pattern, device or
compilation of information which gives an opportunity to obtain an advantage
over competitors who do not know or use it, including, but not limited to,
formulas for chemical compounds, a process of manufacturing, treating or
preserving materials, a pattern for a machine or any forms, plans, drawings,
specifications, customer lists, marketing and competition analysis and project
management, inventory and cost control systems and techniques.
"Warranty Claim" is defined in Section 5.6.
"Warranty Work" is defined in Section 5.7.
1.2 Sale of the Stock by Seller.
Subject to the terms and conditions of this Agreement, Xxxxxx
agrees to sell the Stock and deliver the certificate evidencing the Stock to
Buyer at the Closing. The certificate will be properly endorsed for transfer to
or accompanied by a duly executed stock power in favor of Xxxxx
12
or its nominee as Buyer may have directed prior to the Closing Date and
otherwise in a form acceptable for transfer on the books of Company.
1.3 Purchase of the Stock by Buyer; Total Purchase Price.
Subject to the terms and conditions of this Agreement, Xxxxx
agrees to purchase the Stock from Seller and to pay to Seller the Total Purchase
Price. The "Total Purchase Price" shall consist of $103,000,000 (the "Base
Purchase Price"), minus the Adjustment Amount, if any, minus the Retention Plan
Adjustment.
1.4 The Closing.
The Closing will take place at the offices of O'Melveny &
Xxxxx, Embarcadero Center West, 000 Xxxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
00000-0000 on the last Friday of the first month during which all of the
conditions specified in Article VI have been satisfied (provided, however, that
if such conditions are not satisfied before the close of business on the fifth
business day prior to such day, the Closing will take place on the last Friday
of the next succeeding month), or at such other place or on such other day as
Seller and Buyer may agree in writing.
1.5 Payment of Purchase Price.
Not later than 5 days prior to the Closing Date, Seller shall
prepare and deliver to Buyer an estimated balance sheet for the Business as of
the Closing Date, which balance sheet shall have been prepared in conformity
with GAAP applied on a basis consistent with the balance sheet for the Business
as of March 31, 1997 referred to in Section 2.3 (provided that in the event of
any conflict between those principles required under GAAP and those principles
required for consistency, the principles required under GAAP shall control)
which shall not reflect the results of or otherwise give effect to Buyer's
purchase of the Stock and the accounting treatment thereof and a notice setting
forth Seller's good faith estimate of the Adjustment Amount (the "Estimated
Adjustment Amount") together with a schedule setting forth in detail the
calculations supporting Seller's computation thereof. Buyer shall pay the
Estimated Purchase Price to Seller at the Closing by wire transfer of funds
immediately available in the City of New York to an account specified by Seller
not later than 5 days prior to the Closing Date. The "Estimated Purchase Price"
shall be the sum of (a) the Base Purchase Price net of the Retention Plan
Adjustment, and (b) the Estimated Adjustment Amount. Promptly, but in any event
not later than 5 days, after the final determination of the Adjustment Amount
pursuant to
13
Section 1.6, (i) in the event that the Total Purchase Price exceeds the
Estimated Purchase Price, Buyer shall pay to Seller by wire transfer of funds
immediately available in the City of New York an amount equal to such excess
plus interest thereon from the Closing Date to the date of payment thereof at
the Agreed Rate, or (ii) in the event the Estimated Purchase Price exceeds the
Total Purchase Price, Seller shall pay to Buyer by wire transfer of funds
immediately available in the City of New York an amount equal to such excess
plus interest thereon from the Closing Date to the date of payment thereof at
the Agreed Rate.
1.6 Purchase Price Adjustment.
(a) Physical Inventory; Closing of Books; Audit of
Seller's Post-Closing Balance Sheet.
On the day after the Closing Date, Buyer shall direct its
independent certified public accountants ("Buyer's Accountants") to conduct a
physical inventory (consistent with year-end closing practices) of all of the
Inventory of the Business (including, but not limited to, all "offshore"
inventory), such physical inventory to be completed as promptly as practicable
but in any event not later than 10 days after the Closing Date. Seller shall
cooperate with Buyer and Xxxxx's Accountants to afford all access and provide
all information necessary to facilitate such physical inventory. On the day
after the Closing Date, Seller shall initiate and shall take all actions
necessary to effect a closing (effective as of the Closing Date) of Seller's
(with respect to the Business) and Company's books of account (including, but
not limited to, the closing of all variance accounts (i.e., all unfavorable
variances on open projects shall be written off)). As promptly as practicable
but in any event not later than 30 days after the Closing Date, Seller shall
prepare and deliver to Buyer a balance sheet for the Business as of the Closing
Date, which balance sheet shall have been prepared in conformity with GAAP
applied on a basis consistent with the balance sheet for the Business as of
March 31, 1997 referred to in Section 2.3 (provided that in the event of any
conflict between those principles required under GAAP and those principles
required for consistency, the principles required under GAAP shall control)
which shall not reflect the results of or otherwise give effect to Buyer's
purchase of the Stock and the accounting treatment thereof, which shall reflect
the closing of all variance accounts as required above (such balance sheet, as
so prepared, being "Seller's Post-Closing Balance Sheet") and a notice setting
forth Seller's good faith calculation of the Adjustment Amount (the "Revised
Adjustment Amount") together with a schedule setting forth in detail the
calculations supporting Seller's computation thereof. At Buyer's election,
promptly
14
following Xxxxx's receipt thereof, Xxxxx may direct Buyer's Accountants to
conduct an audit in accordance with the standards of the American Institute of
Certified Public Accountants, such audit to be completed as promptly as
practicable but in any event not later than 30 days after the receipt by Buyer
of Seller's Post-Closing Date Balance Sheet and the Revised Adjustment Amount,
of Seller's Post-Closing Balance Sheet and the Revised Adjustment Amount.
Xxxxx's Accountants shall, if so requested by Seller, permit the Auditors to
observe the processes applied by Xxxxx's Accountants in conducting the audit of
Seller's Post-Closing Balance Sheet referred to above. In the event Buyer elects
not to direct Buyer's Accountants to conduct such an audit, Buyer shall so
advise Seller not later than 30 days after the receipt by Buyer of Seller's
Post-Closing Date Balance Sheet and the Revised Adjustment Amount, upon which
advice the Revised Adjustment Amount shall be final and binding as the
Adjustment Amount under this Agreement. In the event Buyer elects to direct
Buyer's Accountants to conduct such an audit, upon completion thereof Buyer's
Accountants shall deliver to Buyer a written notice (the "Accounting Report")
setting forth a schedule of all adjustments, if any, to Seller's Post-Closing
Balance Sheet and the Revised Adjustment Amount determined by Buyer's
Accountants to be required to generate a balance sheet for the Business as of
the Closing Date and calculate the Adjustment Amount hereunder (the Adjustment
Amount, after giving effect to such adjustments, being the "Audited Adjustment
Amount"). At Buyer's election, promptly following Xxxxx's receipt thereof, Xxxxx
may deliver the Accounting Report to Seller. In the event Buyer elects not to
deliver the Accounting Report to Seller, Buyer shall so advise Seller not later
than 5 days after the receipt by Buyer of the Accounting Report, upon which
advice the Revised Adjustment Amount shall be final and binding as the
Adjustment Amount under this Agreement.
(b) Review by Seller. In the event that Xxxxx shall deliver
the Accounting Report to Seller, promptly following receipt of the Accounting
Report Seller shall review the same and, as promptly as practicable, but in any
event not later than 30 days thereafter, shall deliver to Buyer either (i) a
written notice stating that the Accounting Report and the Audited Adjustment
Amount are accepted by Seller, or (ii) a certificate signed by Seller's chief
financial officer setting forth Seller's objections to the Accounting Report
together with a summary of the reasons therefor and calculations supporting such
adjustments that, in its view, are necessary to eliminate such objections. In
the event Seller delivers to Buyer such a written notice stating that the
Accounting Report and the Audited Adjustment Amount are accepted by Seller or
does not deliver such a certificate of objection within such 30-day period,
15
the Audited Adjustment Amount set forth in the Accounting Report shall, upon the
earlier of such delivery or the end of such 30-day period be final and binding
as the Adjustment Amount under this Agreement. In the event Seller so objects
within such 30-day period, Buyer and Seller shall endeavor to resolve by written
agreement (the "Agreed Adjustments") any differences as to the Adjustment Amount
and, in the event Buyer and Seller so resolve any such differences, the Audited
Adjustment Amount set forth in the Accounting Report, as adjusted by the Agreed
Adjustments, shall be final and binding as the Adjustment Amount under this
Agreement.
(c) Audit by Additional Accounting Firm. In the event any
objections lodged by Seller in accordance with Section 1.6(b) above are not
resolved by Agreed Adjustments within the 30-day period next following the
30-day period referred to in Section 1.6(b) above, then Buyer and Seller shall
jointly select a national accounting firm acceptable to both Buyer and Seller
(or, if they cannot agree on such selection, they shall select a national
(big-six) accounting firm by lot after eliminating Buyer's Accountants and the
Auditors) and shall direct the firm so selected (the "Additional Accounting
Firm") to conduct, as promptly as practicable, but in any event not later than
30 days after such direction, such audit of the Audited Adjustment Amount (as
determined by Xxxxx's Accountants as set forth in the Accounting Report) as they
believe to be necessary to resolve the objections (it being understood that
under no circumstances shall they be charged with reconsidering or conducting an
audit of any elements of the Audited Adjustment Amount as to which no objection
has been lodged by Seller and which do not bear directly on the matters or
conclusions objected to by Seller), and to deliver a written notice (the
"Additional Accounting Report") to each of Buyer and Seller setting forth what
adjustments, if any, to the Audited Adjustment Amount the Additional Accounting
Firm believes to be required under GAAP and this Agreement to resolve such
objections, and the amount of the Adjustment Amount after giving effect to such
adjustments (such Audited Adjustment Amount if and as so adjusted being the
"Final Audited Adjustment Amount"). In such event, the Final Audited Adjustment
Amount shall be final and binding as the Adjustment Amount under this Agreement.
(d) Access to Information; Fees and Expenses. The parties
hereto shall make available to Buyer, Seller, the Auditors, Xxxxx's Accountants
and, if applicable, the Additional Accounting Firm, such books, records and
other information (including all work papers, summary memoranda and summary
conclusions of the Auditors and Xxxxx's Accountants) as any of them may
reasonably request to audit Seller's Post-Closing Balance Sheet and prepare and
review
16
the Accounting Report or the Additional Accounting Report in accordance with the
terms of this Section 1.6. The fees and expenses of the Additional Accounting
Firm, if any, shall be paid 50% by Buyer and 50% by Seller.
1.7 Retention Plan Escrow.
(a) Not later than 5 days prior to the Closing Date, Seller
shall deliver to Buyer an estimate (the "Retention Payment Adjustment") prepared
in good faith by Seller in consultation with Xxxxx's Accountants of all amounts
projected to become due and payable to employees of the Business (the "Projected
Retention Payments") (and all Taxes payable in connection therewith) under the
terms of the Retention Plan together with a schedule setting forth in detail the
calculations supporting their computation thereof.
(b) Upon the Closing, Buyer shall deposit into an escrow an
amount equal to the Projected Retention Payments. All interest or other amounts
earned on all amounts held in such escrow shall be for the benefit of Buyer.
(c) Company shall be responsible for the payment of all
amounts payable under the Retention Plan. Such payments shall be made from
amounts held pursuant to the escrow referred to in Section 1.7(b). Seller shall
indemnify and hold harmless Buyer and Company from and against any and all
Losses (including, but not limited to, any Taxes) resulting from any excess of
amounts payable under the Retention Plan in excess of the Retention Plan
Adjustment. Upon the final determination of all amounts that may be or become
due and payable under the Retention Plan, Buyer shall pay over to Seller any
excess of the Retention Plan Adjustment over the aggregate of all amounts due
and payable under the Retention Plan.
1.8 Deposit; Deposit Escrow.
(a) Not later than 3 business days after the date hereof
(September 4, 1997), Buyer shall deposit into an escrow with an escrow agent
("Escrow Agent") an xxxxxxx money deposit consisting of an irrevocable standby
letter of credit for the benefit of Escrow Agent in the amount of $2 million
(together with any additional amounts deposited pursuant to Section 1.8(b), if
any, the "Deposit") and Buyer, Seller and Escrow Agent shall execute and deliver
the Escrow Agreement.
(b) Upon the later to occur of (i) September 26, 1997 and (ii)
the satisfaction of the conditions set forth in Sections 6.1(b), 6.2(d) and
6.2(i) and the completion of negotiations between Xxxxx and Seller of the final
forms of
17
each of the Ancillary Agreements and the final form of all documentation
evidencing or effecting the Contribution (each of which shall be in form
reasonably satisfactory to Buyer and its counsel), Buyer shall either (x)
deposit into escrow a supplemental xxxxxxx money deposit in cash or an
irrevocable standby letter of credit for the benefit of Escrow Agent, in either
case in the amount of $1 million or (y) deliver to Seller a copy of a commitment
letter from a third-party lender evidencing such lender's commitment to provide
financing sufficient for Buyer to pay the Total Purchase Price; provided,
however, that such supplemental deposit or commitment letter shall be required
only if the conditions set forth in Sections 6.1(a), 6.2(a) and (b) are
satisfied as of the date of such requirement. If under such circumstances Buyer
does not make a supplemental deposit or deliver such commitment letter, then
either Seller or Buyer may terminate this Agreement for a period of five (5)
business days thereafter, in which case the Deposit plus all interest accrued
thereon shall be paid to Seller.
(c) In the event the purchase and sale of the Stock is not
consummated or this Agreement is terminated because of the failure of any
condition to the obligations of Buyer under Sections 6.1 or 6.2 to effect the
Closing hereunder or any other reason except for a default hereunder solely on
the part of Buyer or because of the failure of the condition to the obligations
of Seller under Section 6.3(b) to effect the Closing hereunder, the Deposit plus
all interest accrued thereon shall be immediately refunded to Buyer. In the
event the purchase and sale of the Stock is not consummated because of a default
hereunder solely on the part of Buyer or because of the failure of the condition
to the obligations of Seller under Section 6.3(b) to effect the Closing
hereunder, the Deposit and all interest accrued thereon shall be paid to and
retained by Seller. On the Closing Date and only upon, or concurrently with, the
consummation of the Closing, Escrow Agent shall cause to be refunded to Buyer
the Deposit plus all interest accrued thereon.
(d) In the event that the Deposit is paid to Seller pursuant
to the provisions of Section 1.8(c) and the Escrow Agreement, Seller's receipt
of such payment shall constitute liquidated damages ("Seller's Liquidated
Damages Amount") and Seller shall have no other remedy, whether at law or in
equity, for any breach hereof by Buyer, including, but not limited to, any
failure by Buyer to effect the Closing. Xxxxx, Seller and Company expressly
agree and acknowledge that actual damages in the event of a breach of this
Agreement by Xxxxx would be extremely difficult or impracticable to ascertain
and that Seller's Liquidated Damages Amount represents the parties'
approximation of such damages and that such amount is not a penalty.
18
(e) The provisions of this Section 1.8 shall survive any
termination of this Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as otherwise specified on the Disclosure Schedule,
Seller and Company, jointly and severally, represent, warrant and agree for the
benefit of Buyer as follows:
2.1 Organization and Related Matters.
(a) Seller and Company are corporations duly organized,
validly existing and in good standing under the respective laws of the
jurisdiction of their incorporation or organization. Seller and Company have all
necessary corporate power and authority to execute, deliver and perform this
Agreement and any related agreements to which they are a party. Company has no
Subsidiaries, and Company owns no Equity Securities of any entity that is not a
Subsidiary. Schedule 2.1 correctly lists the current directors and executive
officers of Company. True, correct and complete copies of the charter documents
of Company as in effect on the date hereof have been delivered to Buyer. Company
is not a registered or reporting company under the Exchange Act.
(b) Each of Seller and Company have, and Company after the
consummation of the Contribution will have, all necessary corporate power and
authority to own its properties and assets and to carry on the Business and each
of them is and Company will be duly qualified or licensed to do business as a
foreign corporation in good standing in all jurisdictions in which the character
or the location of the assets owned or leased by it or the nature of the
Business require licensing or qualification, except where the failure to be so
qualified or licensed is not material to the Business.
2.2 Equity Securities.
Seller owns all of the outstanding Equity Securities of
Company beneficially and of record. All of such Equity Securities are owned free
and clear of any Encumbrances. At the Closing, Buyer will acquire good and
marketable title to and complete ownership of the Stock, free and clear of any
Encumbrances. The authorized capital stock of Company consists of 1,000 shares
of common stock, no par value, of which no shares are issued and no shares are
outstanding as of the date hereof, and of which 1,000 shares will be issued and
1,000 shares will be outstanding
19
as of the Closing. There are no outstanding Contracts or other rights to
subscribe for or purchase, or Contracts or other obligations to issue or grant
any rights to acquire, any Equity Securities of Company or to restructure or
recapitalize Company. There are no outstanding Contracts of Seller or Company to
repurchase, redeem or otherwise acquire any Equity Securities of Company. All
Equity Securities of Company are duly authorized, validly issued and outstanding
and are fully paid and nonassessable and were issued in conformity with
applicable Laws. There are no preemptive rights in respect of any Equity
Securities of Company.
2.3 Financial Statements; Changes; Contingencies.
(a) Audited Financial Statements. Seller has delivered to
Buyer balance sheets for the Business at December 31, 1996 and 1995 and the
related statements of operations and changes in cash flow for the periods then
ended. All such financial statements have been examined by the Auditors whose
reports thereon are included with such financial statements. All such financial
statements have been prepared in conformity with GAAP applied on a consistent
basis. Such statements of operations and cash flow present fairly the results of
operations and cash flows of the Business for the respective periods covered,
and such balance sheets present fairly the financial condition of the Business
as of their respective dates. Seller has made available to Buyer copies of each
management letter delivered to or by Seller or Company to or by the Auditors in
connection with such financial statements or relating to any review by Auditors
of the internal controls of Seller or Company during the two-year period ended
December 31, 1996 or thereafter, and has made available for inspection all
reports and working papers produced or developed by Auditors or management in
connection with the Auditors' examination of such financial statements, as well
as all such reports and working papers for prior periods for which any tax
liability of the Business has not been finally determined or barred by
applicable statutes of limitation.
(b) Unaudited Interim Financial Statements. Seller has
delivered to Buyer an unaudited balance sheet for the Business at March 31, 1997
and the related statement of operations for the three-month period then ended,
an unaudited balance sheet for the Business at June 27, 1997 and the related
statement of operations for the six-month period then ended, an unaudited
statement of operations for the three-month period ended March 31, 1997 and an
unaudited statement of operations for the six-month period ended June 27, 1997.
All such financial statements have been prepared in conformity with GAAP applied
on a consistent basis. Such statements of operations present fairly the results
of operations of the Business for the respective periods
20
covered, and such balance sheets present fairly the financial condition of the
Business as of their respective dates. Seller has made available to Buyer copies
of all material reports and working papers produced or developed by management
in connection with their preparation of such financial statements. Since June
27, 1997, there has been no change in any of the accounting policies, practices
or procedures of Seller or Company.
(c) No Material Adverse Changes. Since December 31,
1996, whether or not in the ordinary course of business, there
has not been, occurred or arisen:
(i) any change in or event affecting the Business or
the Stock that has had or may reasonably be expected to have a
material adverse effect on the Business or the Stock;
(ii) any agreement, condition, action or omission which
would be proscribed by (or require consent under) Section 4.3 had it
existed, occurred or arisen after the date of this Agreement;
(iii) any strike or other labor dispute; or
(iv) any casualty, loss, damage or destruction
(whether or not covered by insurance) of any material property
of Company.
(d) No Other Liabilities or Contingencies.
There are no material liabilities of Company, the Business or
Seller (with respect to the Business) of any kind or nature, whether known or
unknown, accrued, absolute, contingent or otherwise, and whether due or to
become due, probable of assertion or not, except liabilities that (A) are
reflected or disclosed in the most recent of the financial statements referred
to in subsection (a) above, (B) were incurred after June 27, 1997 in the
ordinary course of business and do not exceed $50,000 individually or $300,000
in the aggregate or (C) are executory obligations to perform under Contracts.
2.4 Tax and Other Returns and Reports.
(a) Seller and Company have timely filed (or, where permitted
or required, its respective direct or indirect parents have timely filed) all
required Tax Returns with respect to which Company may have any liability for
Taxes and have, except as set forth on Schedule 2.4, paid all Taxes due for all
periods ending on or before the date hereof with respect to which Company may
have any liability. Adequate provision has been made in the books and records of
21
Seller and Company and in the financial statements referred to in Section 2.3
for all Taxes whether or not due and payable and whether or not disputed.
Neither Seller nor Company has elected to be treated as a consenting corporation
under Section 341(f) of the Code. Schedule 2.4 lists the date or dates through
which the IRS has examined the United States federal income tax returns of
Seller. All required Tax Returns, including amendments to date, have been
prepared in good faith and are complete and accurate in all material respects.
Except as set forth in Schedule 2.4, no Governmental Entity has, during the past
three years, examined or is in the process of examining any Tax Returns of
Seller or Company. Except as set forth on Schedule 2.4, no Governmental Entity
has proposed (tentatively or definitively), asserted or assessed or, to the best
knowledge of Seller, threatened to propose or assert, any deficiency, assessment
or claim for Taxes against (1) Seller with respect to which Company may have any
liability, or (2) Company.
(b) Neither Seller nor Company has made any payments, is
obligated to make any payments, or is a party to any agreement that under
certain circumstances could obligate it to make any payments that will not be
deductible under Code Section 280G.
(c) Neither Seller nor Company has been a member of an
Affiliated Group filing a consolidated federal income Tax Return (other than a
group the common parent of which was Seller and the only other member of which
was Company) under Sections 1502 and 1504 of the Code and the Treasury
Regulations thereunder (or any similar provision of state, local, or foreign
law). Company does not have any liability for the Taxes of any Person other than
Company as a transferee or successor or by contract.
2.5 Material Contracts.
Schedule 2.5 lists each Contract to which Seller (with respect
to the Business) or Company is a party or to which Seller or Company or any of
their properties is subject or by which Seller or Company is bound that (a) is a
Customer Contract that provides for payments to or performance by Seller or
Company in excess of $250,000 in the aggregate, (b) is a Supplier Contract that
provides for payments by Seller or Company in excess of $250,000 in the
aggregate, (c) is a Government Contract, (d) after June 27, 1997 obligates
Seller or Company to pay an amount of $250,000 or more in the aggregate, (e) has
an unexpired term as of the date hereof in excess of three years, (f) represents
a Contract upon which the Business is substantially dependent or the absence of
which would have a material adverse effect on the Business, (g) provides for an
22
extension of credit other than consistent with normal credit terms, (h) limits
or restricts the ability of Seller (with respect to the Business) or Company to
compete or otherwise to conduct its business in any manner or place, (i)
provides for a guaranty or indemnity by Seller (with respect to the Business) or
Company, (j) grants a power of attorney, agency or similar authority to another
person or entity, (k) contains a right of first refusal, (l) contains a right or
obligation of any Affiliate, officer or director or any Associate, of Seller or
Company to Seller or Company, (m) requires Seller or Company to buy or sell
goods or services with respect to which there will be material losses or will be
costs and expenses materially in excess of expected receipts (other than as
provided for or otherwise reserved against on the most recent of the balance
sheets referred to in Section 2.3), (n) is an offshore production contract or
(o) was not made in the ordinary course of business (each of which, together
with each Contracts relating to any of the Intangible Property listed on
Schedule 2.7, being a "Material Contract"). True copies of each Material
Contract, including all amendments and supplements thereto, have been made
available to Buyer. Each Material Contract is valid and subsisting; Seller or
Company, as applicable, has duly performed in all material respects all of its
obligations thereunder to the extent that such obligations to perform have
accrued; and no material breach or default, alleged material breach or default,
or event which would (with the passage of time, notice or both) constitute a
material breach or default thereunder by Seller or Company or, to the best
knowledge of Seller and Company, any other party or obligor with respect
thereto, has occurred or as a result of this Agreement or performance thereof
will occur. The consummation of the transactions contemplated by this Agreement
will not (and will not give any person a right to) terminate or modify any
rights of, or accelerate or augment any obligation of, Seller or Company under
any Material Contract.
2.6 Real and Personal Property; Government-Furnished
and Government-Owned Property or Equipment.
(a) Schedule 2.6(a) lists all tangible property, whether real
or personal of Seller or Company that is material to the Business, properly
identifies each of such properties as an interest in real property or personal
property and designates any leasehold interests therein. Neither Seller (with
respect to the Business) nor Company owns fee title to any real property. Seller
(with respect to the Business) or Company has good and marketable title to, free
and clear of any Encumbrances, all items of real property and such other assets
and properties including, but not limited to, all assets that it purports to own
or have
23
the right to use at June 27, 1997 or that were thereafter acquired, except for
(i) Encumbrances consisting of liens for Taxes not yet due, and (ii) assets and
properties not material to the Business that were disposed of since such date in
the ordinary course of business consistent with past practice. All material
leasehold properties held by Seller (with respect to the Business) and Company
as lessee are held under valid, binding and enforceable leases, subject only to
such exceptions as are not, individually or in the aggregate, material to the
Business. There is no pending or, to the best knowledge of Seller, threatened
Action that would materially interfere with the quiet enjoyment of any such
leasehold by Seller (with respect to the Business) or Company.
(b) All material tangible properties of Seller (with respect
to the Business) and Company are in a good state of maintenance and repair
(except for ordinary wear and tear) and are adequate for the operation of the
Business.
(c) Company was incorporated on June 27, 1997. Company has had
no operations since its inception. Upon consummation of the Contribution,
Company will own and have good and marketable title to, free and clear of any
Encumbrances, each and every Purchased Asset including, but not limited to, all
assets and properties listed on Schedules 2.6(a) and 2.7, and will acquire
rights to use each and every asset or property used in the conduct of, connected
with or comprising the Business that is not a Purchased Asset pursuant to and on
the terms set forth in the Ancillary Agreements. Company does not have and upon
the Closing will not have any liabilities other than the Assumed Obligations.
(d) Schedule 2.6(d) sets forth a listing by description or
inventory number of all personal property, equipment and fixtures loaned, bailed
or otherwise furnished to Seller or Company by or on behalf of any Governmental
Entity that (i) relate to the Business, (ii) are or were used in the conduct of
the Business and (iii) are or should be in the possession of Seller or Company
("Government-Furnished Items") and identifies each Government Contract to which
each such Government-Furnished Item relates. All Government-Furnished Items
currently used in the Business and, to the best knowledge of Seller and Company,
all other Government-Furnished Items are in a good state of maintenance and
repair (except for ordinary wear and tear), have been regularly and
appropriately maintained and repaired in accordance with all contractual, legal
and regulatory requirements and shall be in the possession of Company on the
Closing Date. Seller and Company have complied with all of their obligations
relating to the
24
Government-Furnished Items, and upon the return thereof to the applicable
Governmental Entity in the condition thereof on the date hereof, Seller and
Company would have no liability to such Governmental Entity with respect
thereto.
2.7 Intangible Property.
(a) Schedule 2.7 lists all of the Intangible Property
in which Seller (with respect to the Business) or Company has an interest. Such
assets include all Permits or other rights with respect to any of the
foregoing. Except as shown on Schedule 2.7, Seller (with respect to the
Business) and Company do not use any Intangible Property by consent of any
other Person, and are not required to and do not make any payments to others
with respect thereto, and such Intangible Property is owned by Seller or
Company and is assignable free and clear of any Encumbrances. Seller and
Company have in all material respects performed all obligations required to be
performed by them, and are not in default in any material respect under any
Contract relating to any of the foregoing. Neither Seller (with respect to the
Business) nor Company has received any notice to the effect (and is not
otherwise aware) that any such Intangible Property or its use by Seller or
Company conflicts with any rights of any Person.
(b) Except as otherwise set forth on Schedule 2.7:
(i) Seller or Company owns, has the exclusive right
to use, sell, license or dispose of, has exclusive right to bring
actions for the infringement of Intellectual Property Rights related
to, and has taken all appropriate actions and made all applicable
applications and filings pursuant to applicable Laws to perfect or
protect its interest in the Products as in existence on the date
hereof;
(ii) Seller or Company owns, has the exclusive right
to use, sell, license or dispose of, has the exclusive right to bring
actions for the infringement of, and has taken all appropriate actions
and made all applicable applications and filings pursuant to applicable
Laws to perfect or protect its interest in, all Intangible Property,
necessary or required for the conduct of the Business;
(iii) the execution, delivery and performance of this
Agreement and the consummation of the other transactions contemplated
hereby will not breach, violate or conflict with any Intangible
Property, will not cause the forfeiture or termination or give rise to
a right of forfeiture or termination of, or in any way
25
impair the right of Seller or Company to use, sell, license or
dispose of or to bring any action for the infringement of, any
Intangible Property;
(iv) there are no royalties, honoraria, fees or other
payments payable by Seller or Company to any Person by reason of the
ownership, use, license, sale or disposition of the Products or any
Intangible Property necessary or required for the conduct of the
Business;
(v) the manufacture, marketing, license, sale or use
of any Product by Seller or Company will not violate any license or
agreement with any third party; there is no pending or, to the best
knowledge of Seller and Company, threatened Action, nor is Seller or
Company aware of a basis for any such Action, contesting the validity,
ownership or right to use, sell, license or dispose of any of the
Products, nor has Seller or Company received any notice asserting that
any of the Products or the proposed use, sale, license or disposition
thereof conflicts or will conflict with the rights of any other party;
(vi) Seller and Company have taken all steps
necessary (including, without limitation, entering into appropriate
confidentiality, non-disclosure and non-competition agreements with all
officers, directors and employees of Seller and Company with access to
or knowledge of the Intangible Property and the Products) to safeguard
and maintain the secrecy and confidentiality of, and its proprietary
rights in, all such property and rights;
(vii) employees of Seller and Company have taken all
actions necessary to irrevocably assign or otherwise transfer to Seller
or Company all of their respective right, title and interest in and to
any Intangible Property which are necessary or required for the conduct
of the Business; and
(viii) the Products perform the functions and
operations, have the technical capabilities and meet or exceed the
specifications appearing in Seller's and Company's published and
internal technical documentation and marketing literature.
2.8 Authorization; No Conflicts.
The execution, delivery and performance of this Agreement and
any related agreements by Seller and Company has been duly and validly
authorized by the Board of Directors of Seller and Company and by all other
necessary
26
corporate action on the part of Seller and Company. This Agreement and any
related agreements constitute the legally valid and binding obligation of Seller
and Company, enforceable against each of them in accordance with its terms
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors rights generally. The execution, delivery and
performance of this Agreement by Seller and Company and the execution, delivery
and performance of any related agreements or contemplated transactions by Seller
and Company will not violate or constitute a breach or default (whether upon
lapse of time and/or the occurrence of any act or event or otherwise) under the
charter documents or by-laws of any of such entities or violate or constitute a
material breach or default (whether upon lapse of time and/or the occurrence of
any act or event or otherwise) under any Material Contract, result in the
imposition of any material Encumbrance against any material asset or properties
of Seller (with respect to the Purchased Assets or any asset or property that
Company or Buyer will acquire rights to use pursuant to the Ancillary
Agreements) or Company, or violate any Law. Schedule 2.8 lists all Approvals and
Permits required to be obtained by Seller or Company to consummate the
transactions contemplated by this Agreement. Except for matters identified in
Schedule 2.8 as requiring that certain actions be taken by or with respect to a
third party or Governmental Entity, the execution and delivery of this Agreement
by Seller and the performance of this Agreement and any related or contemplated
transactions by Seller or Company will not require filing or registration with,
or the issuance of any Permit by, any other third party or Governmental Entity.
2.9 Legal Proceedings and Certain Labor Matters.
There is no Order or Action pending, or, to the best knowledge
of Seller and Company, threatened, against or affecting Seller, Company or any
of their Affiliates, properties or assets that individually or when aggregated
with one or more other Orders or Actions has or might reasonably be expected to
have a material adverse effect on Seller, Company, the Business, on Seller's
ability to perform this Agreement, or on any aspect of the transactions
contemplated by this Agreement. There is no organized labor strike, dispute,
slowdown or stoppage, collective bargaining or unfair labor practice claim or
union representation question (collectively, "Labor Matters"), pending or to the
best knowledge of Seller threatened, against or affecting Seller (with respect
to the Business), Company or the Business. Schedule 2.9 lists each Order, Action
and Labor Matter that involves a claim or potential claim of aggregate liability
in excess of $50,000 against, or that enjoins or
27
compels or seeks to enjoin or to compel any activity by Company or Seller (with
respect to the Business). There is no matter as to which Seller (with respect to
the Business) or Company has received any notice, claim or assertion, or, to the
best knowledge of Seller and Company, which otherwise has been threatened or is
reasonably expected to be threatened or initiated, against or affecting any
director, officer, employee, agent or representative of Seller or Company or any
other Person, nor to the best knowledge of Seller and Company is there any
reasonable basis therefor, in connection with which any such Person has or may
reasonably be expected to have any right to be indemnified by Seller or Company.
2.10 Minute Books.
The minute books of Company accurately reflect all actions and
proceedings taken to date by the respective shareholders, boards of directors
and committees of Company, and such minute books contain true and complete
copies of the charter documents of Company and all related amendments. The stock
record books of Company reflect accurately all transactions in its capital stock
of all classes.
2.11 Accounting Records; Internal Controls.
Each of Seller (with respect to the Business) and Company has
records that accurately and validly reflect its respective transactions, and
accounting controls sufficient to insure that such transactions are (i) executed
in accordance with management's general or specific authorization and (ii)
recorded in conformity with GAAP so as to maintain accountability for assets.
Such accounting records, to the extent they contain important information that
is not easily and readily available elsewhere, have been duplicated, and such
duplicates are stored safely and securely pursuant to procedures and techniques
utilized by companies of comparable size in similar lines of business. The data
processing equipment, data transmission equipment, related peripheral equipment
and software used by Seller and Company in the operation of the Business
(including any disaster recovery facility) to generate and retrieve such records
are comparable in performance, condition and capacity with those utilized by
companies of comparable size in similar lines of business.
2.12 Insurance.
Seller (with respect to the Business) and Company are, and at
all times during the past two years have been, insured with reputable insurers
against all risks normally insured against by companies in similar lines of
business, and all of the insurance policies and bonds maintained by
28
them are in full force and effect. Schedule 2.12 lists all insurance policies
and bonds that are material to the Business. Neither Seller nor Company is in
default under any such policy or bond. Seller and Company have timely filed
claims with insurers with respect to all material matters and occurrences for
which they have coverage. All insurance policies maintained by Seller (with
respect to the Business) and Company will remain in full force and effect and to
the best knowledge of Seller and Company may reasonably be expected to be
renewed on comparable terms following consummation of the transactions
contemplated by this Agreement (subject to such entities' continuing compliance
with the applicable terms thereof and any right of insurers to terminate without
cause), and neither Seller nor Company has received any notice or other
indication from any insurer or agent of any intent to cancel or not so renew any
of such insurance policies. Seller and Company have complied with and
implemented in all material respects all outstanding (i) requirements of and
recommendations of any insurance company that has issued a policy with respect
to any of the material properties and assets of Seller (with respect to the
Business) and Company and (ii) requirements and recommendations of the Board of
Fire Underwriters or other body exercising similar functions or any Governmental
Entity with respect to any such insurance policy.
2.13 Permits.
Seller and Company hold all material Permits that are required
by any Governmental Entity to permit them to conduct the Business, all such
material Permits are valid and in full force and effect and Company will hold
all such material Permits upon consummation of the transactions contemplated by
this Agreement. To the best knowledge of Seller and Company, no suspension,
cancellation or termination of any of such material Permits is threatened or
imminent.
2.14 Compliance with Law.
Seller (with respect to the Business) and Company are
organized and have conducted the Business in all material respects in accordance
with applicable Laws, and the forms, procedures and practices of Seller (with
respect to the Business) and Company are in compliance in all material respects
with all such Laws, to the extent applicable.
2.15 Dividends and Other Distributions.
There has been no dividend or other distribution of assets or
securities whether consisting of money, property or any other thing of value,
declared, issued or
29
paid by Company subsequent to the date of the most recent financial statements
referred to in Section 2.3.
2.16 Employee Benefits.
(a) Employee Benefit Plans, Collective Bargaining and
Employee Agreements, and Similar Arrangements.
(1) Schedule 2.16 lists all employee benefit plans
and collective bargaining agreements or other similar arrangements to which each
of Seller and Company is or ever has been a party or by which it is or ever has
been bound, and all employment and severance agreements to which each of Seller
and Company is currently bound (provided that the obligation to list employment
and severance agreements may be satisfied with respect to any form of employment
or severance agreement by including in Schedule 2.16 a copy of such form and a
description of the classes or groups of employees to which such form is
applicable), legally or otherwise, including, without limitation, (a) any
profit-sharing, deferred compensation, bonus, stock option, stock purchase,
pension, retainer, consulting, retirement, severance, welfare or incentive plan,
agreement or arrangement, (b) any plan, agreement or arrangement providing for
"fringe benefits" or perquisites to employees, officers, directors or agents,
including but not limited to benefits relating to company automobiles, clubs,
vacation, child care, parenting, sabbatical, sick leave, medical, dental,
hospitalization, life insurance and other types of insurance, (c) any employment
agreement, or (d) any other "employee benefit plan" (within the meaning of
Section 3(3) of ERISA).
(2) Seller has made available to Buyer true and
complete copies of all documents and summary plan descriptions with respect to
such plans, agreements and arrangements, or summary descriptions of any such
plans, agreements or arrangements not otherwise in writing.
(3) There are no negotiations, demands or proposals
made or endorsed by Seller or Company that are pending or have been made which
concern matters now covered, or that would be covered, by plans, agreements or
arrangements of the type described in Section 2.16(a)(1)(a) other than routine
offers of employment made in the ordinary course.
(4) Each of Seller and Company is in full
compliance with the applicable provisions of ERISA (as amended through the date
of this Agreement), the regulations and published authorities thereunder, and is
in material compliance with all other Laws applicable with respect to all such
employee benefit plans, agreements and
30
arrangements. Each of Seller and Company is in material compliance with all of
its obligations under all such plans, agreements and arrangements. To the best
knowledge of Seller and Company, there are no Actions (other than routine claims
for benefits) pending or threatened against such plans or their assets, or
arising out of such plans, agreements or arrangements, and all such plans,
agreements and arrangements have been operated in compliance with their terms.
To the best knowledge of Seller and Company, no facts exist which could give
rise to any such Actions.
(5) Except for those listed on Schedule 2.16, each
of the plans, agreements or arrangements listed on Schedule 2.16 can be
terminated by Company within a period of 30 days following the Closing Date
without payment of any additional compensation or amount or the additional
vesting or acceleration of any such benefits.
(6) All obligations of Company under each such plan,
agreement and arrangement (x) that are due prior to the Closing Date have been
paid or will be paid prior to that date, and (y) that have accrued prior to the
Closing Date have been or will be paid or properly accrued on the financial
statements of Company as of the Closing Date.
(b) Qualified Plans
(1) None of the "employee pension benefit plans"
(within the meaning of Section 3(2) of ERISA) in Schedule 2.16 is a stock bonus,
pension or profit-sharing plans within the meaning of Section 401(a) of the
Code, except for the Xxxxxxx-Xxxxxxx Employees' Investment Plan (the "Investment
Plan") and the Xxxxxxx-Xxxxxxx Employee Stock Ownership Plan (the "ESOP").
(2) The IRS has issued, with respect to each such
plan a determination letter stating that such plan is qualified in form under
Section 401(a) of the Code and each trust under each such plan is exempt from
tax under Section 501(a) of the Code. No non-exempt prohibited transaction
(within the meaning of Section 4975 of the Code) or non-exempt party-in-interest
transaction (within the meaning of Section 406 of ERISA) has occurred with
respect to any of such plans.
(3) Seller has delivered to Buyer for each such plan
copies of the following documents: (i) the Form 5500 filed in each of the most
recent three plan years including but not limited to all schedules thereto and
financial statements with attached opinions of independent accountants, (ii) the
most recent determination letter from the IRS, (iii) the consolidated statement
of assets and liabilities of such plan as of its most recent valuation
31
date, and (iv) the statement of changes in fund balance and in financial
position or the statement of changes in net assets available for benefits under
such plan for the most recently ended plan year. The financial statements so
delivered fairly present the financial condition and the results of operations
of each of such plans as of such dates, in accordance with GAAP.
(c) Title IV Plans.
Seller does not maintain or contribute to any plan subject to
Title IV of ERISA (a "Title IV Plan"), and neither Seller nor any business
organization with respect to which Seller is an ERISA Affiliate has
contractually agreed to assume any liabilities in connection with any employee
benefit plan at any time maintained or contributed to any Title IV Plan. Seller
has not entered into any contractual obligation, indemnity agreement or similar
arrangement with any ERISA Affiliate in connection with any Title IV Plan
maintained at any time by such ERISA Affiliate. An "ERISA Affiliate" is any
trade or business (whether or not incorporated) that is a member of a group
which Company or Seller is a member and which is under common control within the
meaning of Section 414(b) and (c) of the Code.
(d) Multiemployer Plans.
No plan listed in Schedule 2.16 is a "multiemployer plan"
(within the meaning of Section 3(37) of ERISA). Company, Seller and any ERISA
Affiliate of Company and Seller have never contributed to or had an obligation
to contribute to any multiemployer plan.
(e) Health Plans. All group health plans of Company and any
ERISA Affiliate have been operated in compliance with the group health plan
continuation coverage requirements of Section 4980B of the Code to the extent
such requirements are applicable.
(f) Fines and Penalties. There has been no act or omission by
Company or any ERISA Affiliate that has given rise to or may give rise to fines,
penalties, taxes, or related charges under Section 502(c) or (k) or Section 4071
of ERISA or Chapter 43 of the Code.
2.17 Certain Interests.
No Affiliate of Seller or Company nor any officer or director
of any thereof, nor Associate of any such individual, has any material interest
in any property used in or pertaining to the Business; no such Person is
indebted or otherwise obligated to Seller or Company; and neither Seller nor
Company is not indebted or otherwise obligated to
32
any such Person, except for amounts due under normal arrangements applicable to
all employees generally as to salary or reimbursement of ordinary business
expenses not unusual in amount or significance. The consummation of the
transactions contemplated by this Agreement will not (either alone, or upon the
occurrence of any act or event, or with the lapse of time, or both) result in
any benefit or payment (severance or other) arising or becoming due from Seller
or Company or the successors or assigns of any thereof to any Person.
2.18 Intercompany Transactions.
Company has not engaged in any transaction with Seller or any
other Affiliate of Seller. Company has and, upon consummation of the
Contribution will have, no liabilities or obligations to Seller or any other
Affiliate of Seller and none of Seller or such Affiliates has or, upon
consummation of the Contribution will have, any obligations to Company. The
consummation of the transactions contemplated by this Agreement will not (either
alone, or upon the occurrence of any act or event, or with the lapse of time, or
both) result in any payment arising or becoming due from Company or its
successors or assigns to Seller or any Affiliate of Seller.
2.19 No Brokers or Finders.
No agent, broker, finder, or investment or commercial banker,
or other Person or firm engaged by or acting on behalf of Seller or Company or
any of their respective Affiliates in connection with the negotiation, execution
or performance of this Agreement or the transactions contemplated by this
Agreement, is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement or such transactions except for
Alliant Partners and Bentley Hall Xxx Xxxx International, as to which Seller
shall have full responsibility and neither Buyer nor Company shall have any
liability.
2.20 Inventory.
All Inventory of Seller (with respect to the Business) and
Company is of good merchantable quality, reasonably in balance, and salable (in
the case of Inventory held for sale) or usable (in the case of other Inventory)
in the ordinary course of business. The value of obsolete, damaged or excess
Inventory and of Inventory below standard quality has been written down on the
most recent balance sheet referred to in Section 2.3 or, with respect to
Inventory purchased since such balance sheet date, on the books and records of
Seller or Company, to ascertainable
33
market value, or adequate reserves described on such balance sheet have been
provided therefor, and the value at which Inventory is carried reflects the
customary Inventory valuation policy of Seller (with respect to the Business)
and Company (which fairly reflects the value of obsolete, spoiled or excess
Inventory) for stating Inventory, in accordance with GAAP consistently applied
in accordance with the valuation methodology described on Schedule 2.20.
2.21 Customers and Suppliers.
Schedule 2.21 lists the names of and describes all Contracts
with and the appropriate percentage of Business attributable to, the twenty most
significant customers and suppliers (in terms of dollar volume) of the Business
at the date of this Agreement, and any suppliers of significant goods or
services (other than electricity, gas, telephone or water) to the Business with
respect to which alternative sources of supply are not readily available on
comparable terms and conditions (including all suppliers which are the only
reasonably available source).
2.22 Environmental Compliance.
(a) Seller (with respect to the Business) and Company have
not generated, used, transported, treated, stored, released or disposed of, or
have suffered or permitted anyone else to generate, use, transport, treat,
store, release or dispose of any Hazardous Substance in violation of any Laws or
at any location which could require investigation or remediation; (b) there has
not been any generation, use, transportation, treatment, storage, release or
disposal of any Hazardous Substance in connection with the conduct of the
Business or the use of any property or facility of Seller or Company (whether
owned, generated or used by Company) or to the knowledge of Seller any nearby or
adjacent properties or facilities, which has created or might reasonably be
expected to create any liability under any Laws or which would require reporting
to or notification of any Governmental Entity or which could have an adverse
impact on the operation of any property or facility owned, operated or used by
Seller (with respect to the Business) or Company; (c) no asbestos or
polychlorinated biphenyl or underground storage tank is contained in or located
at any facility of Seller or of Company and no Hazardous Substance is present
on, under or about any property or facility owned, operated or used by Seller
(with respect to the Business) or Company which could require investigation or
remediation by any Governmental Entity; (d) any Hazardous Substance handled or
dealt with in any way in connection with the Business, whether before or during
Seller's or Company's ownership, has been and is being handled or dealt with in
all respects in compliance with applicable Laws; and
34
(e) no condition exists at any property owned, operated or used by Seller (with
respect to the Business) or Company which is in violation of any Law or for
which any Law could require that corrective action be taken.
2.23 Government Contracts.
(a) In addition to the representations and warranties in
Section 2.5, with respect to each and every Government Contract or bid which, if
accepted, would result in a Government Contract (a "Government Bid"): (i) Seller
and Company have complied with all material terms and conditions of such
Government Contract or Government Bid, including all clauses, provisions and
requirements incorporated expressly, by reference or by operation of Law
therein; (ii) Seller and Company have complied with all requirements of all
material Laws or agreements pertaining to such Government Contract or Government
Bid; (iii) all representations and certifications executed, acknowledged or set
forth in or pertaining to such Government Contract or Government Bid were
complete and correct in all material respects as of their effective date, and
Seller and Company have complied in all material respects with all such
representations and certifications; (iv) neither the U.S. Government nor any
prime contractor, subcontractor or other Person has notified Seller or Company,
either in writing or, to their knowledge, orally, that Seller or Company has
breached or violated any Law, certification, representation, clause, provision
or requirement pertaining to such Government Contract or Government Bid; (v) no
termination for convenience, termination for default, cure notice or show cause
notice is currently in effect pertaining to such Government Contract or
Government Bid; (vi) no material cost incurred by Seller or Company pertaining
to such Government Contract or Government Bid has been formally questioned or
challenged, is the subject of any investigation or has been disallowed by the
U.S. Government; and (vii) no money due to Seller or Company pertaining to such
Government Contract or Government Bid has been withheld or set off nor has any
claim been made to withhold or set off money and Seller or Company is entitled
to all progress payments received with respect thereto.
(b) With respect to the Business: (i) neither Seller nor
Company or, to their knowledge, any of their respective directors, officers,
employees, consultants or agents is (or during the last three years has been)
under administrative, civil or criminal investigation known to Seller or
Company, indictment or information by any Governmental Entity, or any audit or
investigation of Seller or Company with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government Contract or
Government Bid; and (ii) during the
35
last three years, neither Seller nor Company has conducted or initiated any
internal investigation or made a voluntary disclosure to the U.S. Government,
with respect to any alleged irregularity, misstatement or omission arising under
or relating to a Government Contract or Government Bid. There exists no
irregularity, misstatement or omission arising under or relating to any
Government Contract or Government Bid that has led to any of the consequences
set forth in Clause (i) or (ii) of the immediately preceding sentence or any
other damage, penalty assessment, recoupment of payment or disallowance of cost.
(c) With respect to the Business, there exist (i) no
outstanding material claims against Seller or Company, either by the U.S.
Government or by any prime contractor, subcontractor, vendor or other third
party, arising under or relating to any Government Contract or Government Bid;
and (ii) no material disputes between Seller or Company and the U.S. Government
under the Contract Disputes Act or any other Federal statute or between Seller
or Company and any prime contractor, subcontractor or vendor arising under or
relating to any Government Contract or Government Bid. Neither Seller nor
Company has any interest in any pending or potential claim against the U.S.
Government or any prime contractor, subcontractor or vendor arising under or
relating to any Government Contract or Government Bid. Schedule 2.23(c)
identifies each Government Contract which is currently under audit by the U.S.
Government or any other Person that is a party to such Government Contract.
(d) The Business has not been debarred or suspended from
participation in the award of contracts with the United States Department of
Defense or any other Governmental Entity (excluding for this purpose
ineligibility to bid on certain contracts due to generally applicable bidding
requirements). To the knowledge of Seller and Company, there exist no facts or
circumstances that would warrant the institution of suspension or debarment
proceedings or the finding of nonresponsibility or ineligibility on the part of
Seller (with respect to the Business), Company or any director or officer of
Seller or Company in respect of the Business. With respect to the evaluation of
any Government Bid made by Seller or Company, or by a prime contractor of Seller
or Company, during the past three years, there has been no adverse finding made
by any Governmental Entity concerning Seller's or Company's past performance on
a Government Contract. No payment has been made by Seller or Company (or, to the
extent that the same might result in any liability on the part of Seller or
Company, by any person on behalf of Seller or Company) in connection with any
Government Contract in violation of applicable procurement laws or regulations
or in violation of, or requiring disclosure pursuant to, the Foreign Corrupt
36
Practices Act. Seller's and Company's cost accounting and procurement systems
and the associated entries reflected in Seller's and Company's financial
statements with respect to the Government Contracts are in compliance in all
material respects with all Laws.
(e) All material test and inspection results provided by
Seller or Company to the U.S. Government pursuant to any Government Contract or
to any other Person pursuant to a Government Contract or as a part of the
delivery to the U.S. Government or to any other Person pursuant to a Government
Contract of any article designed, engineered or manufactured in the Business
were complete and correct in all material respects as of the date so provided.
Seller or Company has provided all material test and inspection results to the
U.S. Government or to any other Person pursuant to a Government Contract as
required by Law and the terms of the Government Contracts.
2.24 Backlog.
Schedule 2.24 sets forth a list and brief summaries of
Contracts constituting the customer backlog of the Business as of June 27, 1997.
Buyer understands and acknowledges that such Contracts may be cancelled at the
option of the applicable customer.
2.25 Clearances.
Except to the extent disclosure is prohibited by the
Industrial Security Manual, Schedule 2.25 sets forth listings (including an
indication of the type of clearance) of all facility security clearances held by
Seller (with respect to the Business) and Company and all personnel security
clearances held by any officer, director, employee, consultant or agent of
Seller (with respect to the Business) or Company.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Xxxxx represents, warrants and agrees as follows:
3.1 Organization and Related Matters.
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. Buyer has all necessary
corporate power and authority to execute, deliver and perform this Agreement and
any related agreements to which it is a party.
37
3.2 Authorization.
The execution, delivery and performance of this Agreement and
any related agreements by Xxxxx has been duly and validly authorized by the
Board of Directors of Buyer and by all other necessary corporate action on the
part of Buyer. This Agreement and any related agreements constitute the legally
valid and binding obligation of Buyer, enforceable against Buyer in accordance
with its terms except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors' rights generally.
3.3 No Conflicts.
The execution, delivery and performance of this Agreement and
any related agreements by Buyer will not violate or constitute a breach or
default (whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under the charter documents or bylaws of Buyer, violate or constitute
a material breach or default (whether upon lapse of time and/or the occurrence
of any act or event or otherwise) under any Contract to which Buyer is a party
that is material to the financial condition, results of operations or conduct of
the business of Buyer or violate any Law. Except for matters identified in
Schedule 3.3 as requiring that certain actions be taken by or with respect to a
third party or Governmental Entity, the execution and delivery of this Agreement
by Buyer and the performance of this Agreement and any related or contemplated
transactions by Buyer will not require filing or registration with, or the
issuance of any Permit by, any other third party or Governmental Entity.
3.4 No Brokers or Finders.
No agent, broker, finder, or investment or commercial banker,
or other Person or firm engaged by or acting on behalf of Buyer or any of its
Affiliates in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or will be
entitled to any brokerage or finder's or similar fee or other commission as a
result of this Agreement or such transactions.
3.5 Legal Proceedings.
There is no Order or Action pending or, to the best knowledge
of Buyer, threatened against or affecting Buyer, its Affiliates or any of their
properties or assets that individually or when aggregated with one or more other
Actions has or might reasonably be expected to have a
38
material adverse effect on Xxxxx's ability to perform this Agreement, or on any
aspect of the transactions contemplated by this Agreement.
3.6 Investment Representation.
Buyer is acquiring the Stock from Seller for Xxxxx's own
account, for investment purposes only and not with a view to or for sale in
connection with any distribution thereof.
ARTICLE IV
COVENANTS WITH RESPECT TO CONDUCT OF COMPANY
PRIOR TO CLOSING
4.1 Access.
Subject to specific restrictions imposed upon Seller and
Company by Law or Contract to which either of them is a party and to the
execution and delivery by each of the representatives of Buyer referred to below
of a confidentiality agreement on substantially the same terms as set forth in
that certain Confidentiality Agreement dated April 30, 1997 by and between Buyer
and Seller, Seller and Company shall authorize and permit Buyer and its
representatives (which term shall be deemed to include its independent
accountants and counsel and representatives of prospective financing
institutions of Buyer) to have reasonable access during normal business hours,
upon reasonable notice and in such manner as will not unreasonably interfere
with the conduct of their respective businesses, to all of their respective
properties, books, records, operating instructions and procedures, Tax Returns,
and all other information with respect to the Business as Buyer may from time to
time request, and to make such reasonable numbers of copies of such books,
records and other documents and to discuss their respective businesses with such
other Persons, including, without limitation, the directors, officers,
employees, accountants, counsel, suppliers, customers, and creditors of Seller
(with respect to the Business) and Company, as are reasonably necessary or
appropriate for the purposes of familiarizing them with the Business and
obtaining any necessary Approvals of or Permits for the transactions
contemplated by this Agreement. Without limiting the generality of the
foregoing, Buyer shall be entitled to (a) conduct or cause to be conducted
without the consent of Seller or Company, an environmental compliance audit of
the Business and, respect to any interest in real property held by Seller (with
respect to the Business) or Company, a non-invasive environmental audit
consisting of a "phase 1" environmental study, (b) conduct or cause to be
conducted subject to the prior written
39
consent of Seller or Company (which consent shall not be unreasonably withheld)
with respect to any interest in real property held by Seller (with respect to
the Business) or Company such other environmental investigations or studies as
Buyer may desire and (c) review, as soon as available, copies of all reports,
renewals, filings, certificates, statements and other documents received by
Seller (with respect to the Business) or Company from any Governmental Entity.
4.2 Material Adverse Changes; Reports; Financial
Statements.
Seller will promptly notify Buyer of any event of which Seller
obtains knowledge which has had or might reasonably be expected to have a
material adverse effect on the Business or which if known as of the date hereof
would have been required to be disclosed to Buyer.
4.3 Conduct of Business.
Seller and Company agree with and for the benefit of Buyer
that none of (i) Seller, as to matters relating to Taxes or Tax Returns, to the
extent that the activities of Seller with respect to the Business are not
severable from Seller's other activities, (ii) Seller (other than with respect
to matters relating to Taxes or Tax Returns) with respect to the Business and
(iii) Company shall, without the prior written consent of Buyer:
(a) conduct the Business in any manner except in the ordinary
course consistent with past practice;
(b) amend, terminate, fail to renew or renegotiate any
Material Contract or default (or take or omit to take any action that,
with or without the giving of notice or passage of time, would
constitute a default) in any of its obligations under any Material
Contract or enter into any new Material Contract or take any action
that would jeopardize the continuance of its material supplier or
customer relationships;
(c) terminate, amend or fail to renew any existing insurance
coverage under which the Business is or the Products are insured;
(d) terminate or fail to renew or preserve any Permits used
in or necessary for the operation of the Business;
(e) incur or agree to incur any obligation or liability
(absolute or contingent) that is an Assumed Liability and that
individually calls for payment by
40
Seller or Company of more than $250,000 in the aggregate;
(f) make any loan, guaranty or other extension of credit, or
enter into any commitment to make any loan, guaranty or other
extension of credit, to or for the benefit of any director, officer,
employee or stockholder of Company or Seller or any of their
respective Associates or Affiliates;
(g) grant any general or uniform increase in the rates of
pay or benefits to officers, directors or employees (or a class
thereof) or any material increase in salary or benefits of any
officer, director, employee or agent of the Business or, other than
pursuant to the Retention Plan, pay any bonuses in excess of $5,000 in
the aggregate to any individual employee of the Business, or enter
into any new employment, collective bargaining or severance agreement
in which employees of the Business participate;
(h) sell, transfer, mortgage, encumber or otherwise dispose
of any assets or any liabilities, except for dispositions of property
not material in amount;
(i) issue, sell, redeem or acquire for value, or agree to do
so, any debt obligations or Equity Securities of Company;
(j) declare, issue, make or pay any dividend or other
distribution of assets, whether consisting of money, other personal
property, real property or other thing of value, to its shareholders,
or split, combine, dividend, distribute or reclassify any shares of its
Equity Securities;
(k) change or amend its charter documents or bylaws;
(l) make any capital expenditures or commitments with
respect thereto in excess of $200,000 individually or $500,000 in the
aggregate;
(m) make special or extraordinary payments to any person;
(n) make any material investment, by purchase, contributions
to capital, property transfers, or otherwise, in any other Person;
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(o) dispose of or permit to lapse any rights to the use of
any Intangible Property or dispose of or disclose any Intangible
Property not a matter of public knowledge;
(p) directly or indirectly terminate or reduce or commit to
terminate or reduce any bank line of credit or the availability of any
funds under any other agreement or understanding, other than through
the use thereof in the ordinary course;
(q) compromise or otherwise settle any claims, or adjust any
assertion or claim of a deficiency in Taxes (or interest thereon or
penalties in connection therewith), or file any appeal from an asserted
deficiency, except in a form previously approved by Buyer in writing,
or file or amend any Tax Return, in any case before furnishing a copy
to Buyer and affording Buyer an opportunity to consult with respect
thereto;
(r) make any Tax election or make any change in any method or
period of accounting or in any accounting policy, practice or
procedure;
(s) introduce any new method of management or operation in
respect of the Business;
(t) deviate from past practice in the ordinary course with
respect to maintenance of Inventory; or
(u) agree to or make any commitment to take any actions
prohibited by this Section 4.3.
4.4 Notification of Certain Matters.
Seller shall give prompt notice to Buyer, and Buyer shall give
prompt notice to Seller, of (i) the occurrence, or failure to occur, of any
event that would be likely to cause any representation or warranty contained in
this Agreement to be untrue or inaccurate in any material respect at any time
from the date of this Agreement to the Closing Date and (ii) any failure of
Buyer or Seller, as the case may be, to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement. No such notification shall affect the
representations or warranties of the parties or the conditions to their
respective obligations hereunder.
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4.5 Permits and Approvals.
(a) Seller and Xxxxx each agree to cooperate and use their
best efforts to obtain (and will immediately prepare all registrations, filings
and applications, requests and notices preliminary to all) Approvals and Permits
that may be necessary or which may be reasonably requested by Buyer to
consummate the transactions contemplated by this Agreement.
(b) To the extent that the Approval of a third party with
respect to any Material Contract is required in connection with the transactions
contemplated by this Agreement, Seller shall use its best efforts to obtain such
Approval prior to the Closing Date and in the event that any such Approval is
not obtained (but without limitation on Buyer's rights under Section 6.2(d)),
Seller shall cooperate with Buyer to ensure that Buyer obtains the benefits of
each such Material Contract. In addition, Seller shall indemnify and hold
harmless Buyer and Company for and against any and all Losses as a result,
directly or indirectly, of the failure to obtain any such Approval except for
any Losses resulting from the failure to obtain any Government Contract Novation
that is not obtained solely because of the nature, character or actions of Buyer
or any of its Affiliates. Seller agrees to pay and be responsible for any cost
or expense that may be required in order to assign to Company or permit Company
following the Closing to use Seller's Oracle product database, including, but
not limited to, any cost or expense incurred in connection with obtaining any
necessary Approval and/or any additional license fees.
4.6 Preservation of Business Prior to Closing Date.
During the period beginning on the date hereof and ending on
the Closing Date, (a) Seller will use its best efforts to preserve the Business
and to preserve the goodwill of customers, suppliers and others having business
relations with Seller (with respect to the Business) and Company and (b) Seller
and Buyer will consult with each other concerning, and Seller will cooperate
with Buyer and use Seller's best efforts to keep available to Buyer the services
of the officers and employees of Seller (with respect to the Business) and
Company that Buyer may wish to have Company retain. Nothing in this Section 4.6
shall obligate Buyer or Company after the Closing to retain or offer employment
to any officer or employee of Company.
4.7 Government Filings.
Each of Seller and its Affiliates and Buyer and its
Affiliates will make any and all filings required in
43
connection with the consummation of the transactions contemplated hereby under
the Xxxx-Xxxxx-Xxxxxx Act not later than 5 business days after the date hereof.
Each of Seller and its Affiliates and Buyer and its Affiliates will make any and
all filings required in connection with the consummation of the transactions
contemplated hereby under any and all other applicable Laws. Seller and Buyer
shall furnish each other such necessary information and reasonable assistance as
the other may reasonably request in connection with its preparation of necessary
filings or submissions under the provisions of such Laws. Seller and Buyer will
supply to each other copies of all correspondence, filings or communications,
including file memoranda evidencing telephonic conferences, by such party or its
affiliates with any Governmental Entity or members of its staff, with respect to
the transactions contemplated by this Agreement and any related or contemplated
or inconsistent transactions, except for documents filed pursuant to Item 4(c)
of the Xxxx-Xxxxx Xxxxxx Notification and Report Form or communications
regarding the same.
4.8 Elimination of Intercompany and Affiliate
Liabilities.
Prior to the Closing Date, Seller shall purchase, cause to be
repaid or (with respect to guarantees) assume liability for (i) any and all
loans or other extensions of credit made or guaranteed by Company to or for the
benefit of any director, officer, or employee of Seller or Company, or any of
their Associates (except for the $85,000 in loans to employees of the Business
that are Purchased Assets) and (ii) any and all loans, guarantees or other
extensions of credit of any amount made to or for the benefit of Seller or any
Affiliate of Seller. At the Closing Date, neither Buyer nor Company shall have
any continuing commitment, obligation or liability of any kind with respect to
the persons referred to in subsections (i) and (ii) above. Xxxxxx agrees to
indemnify Buyer and Company for any Losses with respect to any such commitment,
obligation or liability not fully assumed or discharged as contemplated.
4.9 Inconsistent Agreements.
Seller and Company will not, either directly or indirectly,
initiate, solicit or encourage and will use its best efforts to cause all of
their respective directors, officers, employees and agents not to initiate,
solicit or encourage any inquiry, offer or proposal with respect to, or furnish
any information relating to, or participate in any negotiations or discussions
concerning, or enter into any agreement contemplating or providing for, any
acquisition, merger, tender or exchange offer or other form of business
combination, or any acquisition or disposition of all or any
44
substantial part of the assets or the stock or other securities of Company or
the Business.
4.10 Contribution.
On or prior to the Closing, Seller will cause the Contribution
to be consummated without cost or obligation on the part of Company pursuant to
documentation and procedures reasonably satisfactory to Buyer and its counsel.
4.11 Provisions Respecting Government Contracts.
(a) This Section 4.11 sets forth the procedures that the
parties will use with respect to the assignment or change in control of all
Government Contracts and any claim, right or benefit arising thereunder or
resulting therefrom. Buyer, Seller and Company acknowledge and agree that
neither obtaining Government Contract Novations nor the written confirmations
referred to in Section 4.11(b) from Governmental Entities that such Government
Contract Novations are not required that are necessary to consummate the
transactions contemplated hereby (including, but not limited to, the
Contribution) will be a condition to the obligations of any of them to effect
the Closing.
(b) With respect to any Government Contract or any claim,
right and benefit arising thereunder or resulting therefrom, Seller, Company and
Buyer will use their best efforts to obtain the written consent of the other
parties to such Government Contract for the assignment or novation thereof to
Company and/or to the change in control of Company pursuant hereto, or written
confirmation from such parties reasonably satisfactory in form and substance to
Buyer that such consent is not required. As soon as practicable following the
date hereof, (i) with respect to each Prime Government Contract to which Seller
is a party, Seller shall either obtain written confirmation reasonably
satisfactory in form and substance to Buyer that novation of such Government
Contract is not required or submit to the relevant Responsible Contracting
Officer a written request that the U.S. Government enter into a Government
Contract Novation with Buyer with respect to such Prime Government Contract; and
(ii) with respect to each Government Contract that is not a Prime Government
Contract, Seller shall submit to the parties thereto documentation reasonably
satisfactory in form and substance to Buyer and Seller shall seek the written
waiver or approval of the other contracting party or parties thereto to the
transfer and assignment of all of Seller's claims, rights, benefits and
liabilities thereunder to Company at the Closing. In this regard, Seller,
Company and Buyer shall take all actions required or customary under the Federal
Acquisition Regulation (as supplemented by any individual agency regulation) and
Seller shall continue to
45
participate fully in, and cooperate fully with, such efforts following the
Closing Date. Except as provided in the immediately preceding sentence, in no
event shall Seller, Company or Buyer be obligated to pay any money to the U.S.
Government or any other Person or to offer or grant other financial or other
accommodations to the U.S. Government or any other Person in connection with
obtaining any Government Contract Novation or any such consent or waiver.
(c) If such novation, consent, waiver or confirmation is not
obtained with respect to any such Government Contract, Seller, Company and Buyer
will cooperate in an arrangement reasonably satisfactory to Buyer and Seller
under which Company or Buyer would obtain, to the extent practicable, the
claims, rights and benefits and assume the corresponding obligations thereunder
in accordance with this Agreement, including subcontracting, sub-licensing or
sub-leasing to Company, or under which Seller would enforce for the benefit of
Company, with Company assuming Seller's obligations, any and all claims, rights
and benefits of Seller against a third party thereto. Seller will promptly pay
to Company when received all monies received by Seller in connection with any
such arrangement.
(d) No instrument that any Governmental Entity requires
Seller, Company or Buyer to execute in connection with any novation or
assignment contemplated by this Section 4.11 (including, without limitation, a
novation agreement as contemplated by Federal Acquisition Regulation 42.1204)
shall alter the provisions of this Agreement concerning the allocation of assets
and liabilities between Buyer, Company and Seller. As to any liability allocated
by the provisions of this Agreement to Seller, Seller shall indemnify Company
and Buyer against, and hold Company and Buyer harmless from any claims by any
Governmental Entity against Company or Buyer for satisfaction of such
liabilities pursuant to any such novation instrument. As to any liability
allocated by the provisions of this Agreement to Company or Buyer, Company and
Buyer shall indemnify Seller against, and hold Seller harmless from, any claims
by any Governmental Entity against Seller for satisfaction of such liabilities
pursuant to such novation instrument.
4.12 Certain Material Contracts. To the extent that Seller and
Company have not made available to Buyer copies of any Material Contracts
because disclosure thereof is prohibited by the terms thereof or by Law, Seller
and Company shall, as promptly as practicable after the date hereof, seek and
use their respective best efforts to procure all such consents, authorizations
and approvals as may be necessary to obtain a waiver or amendment of such
prohibition such that copies of all such Material Contracts may be made
available to Buyer (or representatives of Buyer
46
holding necessary security clearances) for review, and shall promptly advise
Buyer upon receipt of any such consent, authorization or approval. Buyer shall
use Buyer's best efforts to review each Material Contract provided pursuant to
this Section 4.12 as promptly as practicable after the provision thereof to
Buyer.
4.13 Customers and Suppliers. Seller and Company shall, as
promptly as practicable after the date hereof, seek and use their respective
best efforts to arrange such meetings and telephone conferences with all
material customers and suppliers of the Business (including, but not limited to,
all customers and suppliers listed on Schedule 2.21) as may be necessary and
appropriate for Buyer to conduct a comprehensive review of Seller's and
Company's relations with customers and suppliers of the Business.
4.14 Backlog.
On the Closing Date, Seller shall deliver to Buyer a list of
Contracts constituting the customer backlog of the Business as of the most
recent practicable date prior to the Closing Date, which list shall be true,
correct and complete.
ARTICLE V
ADDITIONAL CONTINUING COVENANTS
5.1 Noncompetition.
(a) Restrictions on Competitive Activities. Xxxxxx agrees
that after the Closing Buyer and Company shall be entitled to the goodwill and
going concern value of the Business and to protect and preserve the same to the
maximum extent permitted by law. Seller also acknowledges that its management
contributions to the Business have been uniquely valuable and involve
proprietary information that would be competitively unfair to make available to
any competitor of Company. For these and other reasons and as an inducement to
Buyer to enter into this Agreement, Seller agrees that for a period of four
years after the date hereof neither Seller nor any of its Affiliates will,
directly or indirectly, for its own benefit or as agent for another carry on or
participate in the ownership, management or control of, or the financing of, or
be employed by, or consult for or otherwise render services to, or allow its
name or reputation to be used in or by any other present or future business
enterprise in the defense (except for (i) intelligence systems that are
manufactured by Seller's Telecommunications Group in Gaithersburg, Maryland and
are designed to monitor or intercept communication signals, (ii) products for
the telecommunications market currently
47
manufactured or in development by Xxxxxxx-Xxxxxxx including, but not limited to,
cellular and PCS base station subsystems, wireless local loop customer premise
equipment, repeater subsystems for point to multi-point and medium power
amplifiers and (iii) as an outside GaAs foundry for third parties) or space
industry or that otherwise competes with the Products or the Business in each
state of the United States and in each foreign jurisdiction in which the
Business is conducted or the Products are sold as of the Closing Date.
(b) Restrictions on Buyer's Competitive Activities.
Buyer recognizes that the parties will share the use of
certain Intangible Property after Closing. Buyer also recognizes that Seller has
developed proprietary designs for products for the telecommunications market
that are not included in the Contribution but which may be known to Company's
employees. For these and other reasons, and as an inducement to Seller to enter
into this Agreement, Xxxxx agrees that for a period of four years, Buyer and its
Affiliates shall not (i) manufacture Gallium Arsenide parts for third parties;
(ii) disclose to third parties confidential process and design rule information
related to the manufacture of Gallium Arsenide parts except as necessary for the
manufacture of parts solely for Buyer and its Affiliates; and (iii) manufacture
for the telecommunications market products that duplicate in whole or with minor
modifications the proprietary designs of products currently manufactured or in
development by Xxxxxxx-Xxxxxxx including, but not limited to, cellular and PCS
base station subsystems, wireless local loop customer premise equipment,
repeater subsystems for point to multi-point and medium power amplifiers.
(c) Exceptions. Nothing contained herein shall limit the
right of Buyer or Seller as an investor to hold and make investments in
securities of any corporation or limited partnership that is registered on a
national securities exchange or admitted to trading privileges thereon or
actively traded on NASDAQ or in a generally recognized over-the-counter market,
provided that Buyer's or Seller's, as the case may be, equity interest therein
does not exceed 5% of the outstanding shares or interests in such corporation or
partnership.
(d) Restrictions on Soliciting Employees. In addition, to
protect Buyer against any efforts by Seller to cause employees of Company to
terminate their employment, Xxxxxx agrees that for a period of four years
following the Closing Date, Seller will not directly or indirectly (i) induce
any employee of Company to leave Company or to
48
accept any other employment or position, or (ii) assist any other entity in
hiring any such employee. Xxxxx agrees that for a period of four years following
the Closing Date, Neither Buyer nor Company will directly or indirectly (i)
induce any employee of Seller to leave Seller or to accept any other employment
or position, or (ii) assist any other entity in hiring any such employee.
(e) Special Remedies and Enforcement. Buyer and Seller
recognize and agree that a breach by the other of them of any of the covenants
set forth in Sections 5.1(a), (b) or (d) could cause irreparable harm, that
remedies at law in the event of such breach would be inadequate, and that,
accordingly, in the event of such breach a restraining order or injunction or
both may be issued against the other party, in addition to any other rights and
remedies which are available. If either of Sections 5.1(a), (b) or (d) is more
restrictive than permitted by the Laws of the jurisdiction in which enforcement
thereof is sought, such Sections shall be limited to the extent required to
permit enforcement under such Laws. Without limiting the generality of the
foregoing, the parties intend that the covenants contained in Sections 5.1(a),
(b) and (d) shall be construed as a series of separate covenants, one for each
state or jurisdiction referred to therein. Except for geographic coverage, each
such separate covenant shall be deemed identical in terms. If, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants deemed
included in this Section 5.1, then such unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced.
5.2 Nondisclosure of Proprietary Data.
After the Closing, neither Seller nor any of its
representatives shall, at any time, make use of, divulge or otherwise disclose,
directly or indirectly, any Intangible Property or other proprietary data
(including, but not limited to, any customer list, record or financial
information) concerning the business or policies of Company that Seller or any
representative of Seller may have learned as a shareholder, employee, officer or
director of Company. In addition, neither Seller nor any of its representatives
shall make use of, divulge or otherwise disclose, directly or indirectly, to
persons other than Buyer, any confidential information concerning the business
or policies of Company and which may have been learned in any such capacity.
49
5.3 Certain Tax Matters.
(a) Any Tax sharing agreement between Seller and Company
shall be terminated as of the Closing Date and shall have no further effect for
any taxable year (whether the current year, a future year, or a past year).
(b) Seller and Xxxxx will join in making an election under
Section 338(h)(10) of the Code (and any corresponding elections under state,
local, or foreign tax law) (collectively a "Section 338(h)(10) Election") with
respect to the purchase and sale of the Stock. Seller will pay any Tax
attributable to the making of the Section 338(h)(10) Election and will indemnify
Buyer, Company, and their subsidiaries against any Losses or Taxes arising out
of any failure to pay such Tax. Seller will also pay any state, local, or
foreign Tax (and indemnify Buyer, Company, and their subsidiaries against any
Losses or Taxes arising out of any failure to pay such Tax) attributable to an
election under state, local, or foreign law similar to the election under
Section 338(g) of the Code (or which results from the making of an election
under Section 338(g) of the Code) with respect to the purchase and sale of the
Stock. In connection with any such election, Buyer shall propose, and Seller
shall consent, such consent not to be unreasonably withheld, to an allocation of
the Total Purchase Price amongst the Purchased Assets, including, but not
limited to, intangibles.
(c) Any Taxes for a period including a Pre-Closing Partial
Period and a Post-Closing Partial Period shall be apportioned between such
Pre-Closing Partial Period and such Post-Closing Partial Period, based, in the
case of real and personal property Taxes, on a per diem basis and, in the case
of other Taxes, on the actual activities, taxable income or taxable loss of
Company during such Pre-Closing Partial Period and such Post-Closing Partial
Period.
(d) Seller shall include Company in the consolidated Federal
income tax return filed by Seller for the period ending on or prior to the
Closing Date. Seller shall prepare books and working papers (including a closing
of the books) which will clearly demonstrate the income and activities of
Company for the period ending on the Closing Date and any Pre-Closing Partial
Period. It is Xxxxx's present intention to include Company in the consolidated
Federal Income tax returns filed by Buyer with respect to the 12 month period
beginning after the Closing Date (to the extent that Company qualifies to be so
included); provided, however, that the representations and warranties set forth
in this sentence shall be deemed not to have been breached or inaccurate in the
event that Buyer shall not so include Company in its consolidated Federal Income
Tax returns
50
because of any independent business reason of Buyer therefor.
(e) After the Closing, Seller shall, and shall cause its
respective Subsidiaries, Affiliates, and agents (including the Auditors) to,
cooperate fully with Buyer and Company in the preparation of all Tax Returns
required to be filed by Buyer or Company and shall provide, or cause to be
provided at Seller's sole cost and expense, to Buyer and Company any records and
other information requested by such parties in connection therewith. Seller
shall, and shall cause its Affiliates to, cooperate fully with Buyer and Company
in connection with any Tax investigation, audit or other proceeding. Buyer
shall, at its expense, furnish or cause to be provided to Seller, upon request,
records and other information relating to Company as is reasonably necessary for
the preparation of all Tax Returns required to be filed by Seller, Tax
investigations, audits or other proceedings.
5.4 Corporate Name Change; Trademark License Agreement.
Within five days after the Closing Date, Buyer shall cause
Company to amend Company's articles of incorporation to cause Company's
corporate name to be changed to a name that does not include "X-X" or any other
name or abbreviation that might be confused with "X-X" or "Xxxxxxx-Xxxxxxx" or
reflect sponsorship or endorsement by Seller. On or prior to the Closing, Buyer,
Seller and Company shall enter into the Trademark License Agreement.
5.5 Post-Closing Cooperation Generally.
The parties acknowledge and agree that the Ancillary
Agreements are intended to express their specific understandings with respect to
certain accommodations necessary to effect the orderly separation and the
successful ongoing operation of the Business and the Retained Businesses
following the Closing on mutually acceptable terms. The parties further agree
that they will in general cooperate in good faith in such other ways as may be
necessary or appropriate to effect such an orderly separation and the successful
ongoing operation of the Business and the Retained Businesses following the
Closing, including perfection and enforcement of rights relating to Intangible
Property.
5.6 Refund Claims and Warranty Claims.
Certain of the Customer Contracts grant or will grant the
customer or another Person a right to reduce the contract price or receive a
refund. Such claims by
51
customers and other Persons under Contracts that constitute or include the
Customer Contracts are referred to in this Agreement as "Refund Claims." Certain
of the Customer Contracts also confer warranty and similar rights on customers
or other Persons. Such claims under such rights are referred to in this
Agreement as "Warranty Claims." From and after the Closing, (a) Seller shall
have full responsibility for all refund, warranty, product liability and other
claims (i) under all Customer Contracts that were or are completed before the
Closing and (ii) with respect to all Products shipped by Seller or Company
before the Closing and (b) Buyer and Company shall have full responsibility for
all refund, warranty, product liability and other claims (i) under all Customer
Contracts entered into by Buyer or Company after the Closing and (ii) with
respect to all Products shipped by Buyer or Company after the Closing.
5.7 Warranty Work.
Buyer and Company shall perform (subject to Seller's consent
as described below) as Seller's contractor, all warranty work necessary to
satisfy all valid and legally-binding Warranty Claims for which Seller is
responsible pursuant to Section 5.6 ("Warranty Work"). However, before beginning
any Warranty Work, Buyer or Company shall notify Seller of the nature and scope
of the Warranty Claim and obtain Seller's prior written consent to perform the
Warranty Work. Seller's consent shall not be unreasonably withheld. If Seller
grants that consent, Buyer and Company shall perform the Warranty Work. Seller
shall bear the costs of that Warranty Work. The principles set forth on Schedule
5.7 shall be used to calculate the costs of Warranty Work. Seller shall be given
reasonable access to Buyer's and Company's relevant records and personnel to
enable Seller to verify such costs. Buyer and Company shall perform the Warranty
Work competently and in a timely manner and shall bear full responsibility for
any defects or claimed defects in any Warranty Work. Following the Closing,
Buyer and Company shall in general respond to and deal with customers bringing
any Warranty Claims for which Seller is responsible pursuant to Section 5.6 in a
manner consistent with the practices of Seller (with respect to the Business)
and Company with respect thereto prior to the Closing.
5.8 Change Orders.
Notwithstanding Sections 5.6 and 5.7, if Buyer or Company
authorizes any change orders or amendments to any Contract that affect the
obligations of Buyer, Company or Seller under that Contract, Seller shall not be
required to participate in or bear any cost respecting any Refund Claim
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or Warranty Claim connected with that change order or amendment.
5.9 Cooperation re: Refund Claims and Warranty Claims.
Following the Closing, Seller and Company shall cooperate in
good faith in responding to and discharging all Refund Claims and Warranty
Claims.
5.10 Prorations; Cooperation re: Collection of
Receivables.
(a) Seller is retaining the receivables and payables accrued
by Company or the Business before or as of the Closing. Accordingly, receivables
derived from Customer Contracts performed in part before the Closing and
performed in part after the Closing, as well as the expenses of performing those
Contracts and operating the Business, shall be prorated as of the close of
business on the Closing Date between Seller, on one hand, and Buyer and Company,
on the other hand. In the case of receivables derived from such Customer
Contracts and the direct expenses of performing those Contracts, the prorations
shall be based on the principles set forth on Schedule 5.10. The operating
expenses of the Business (for example, utilities, rent and employee costs) shall
be prorated based on the number of days elapsed during the relevant billing,
payment or other period that includes the Closing Date, unless proration on that
basis would be manifestly unfair. An example of manifest unfairness would be if
a water pipe broke on the premises to be subleased by Company under the Sublease
Agreements two days before the Closing and resulted in charges payable to the
water utility company for two million gallons of water during the period that
includes the Closing Date. Under that circumstance, Seller would pay those
incremental charges.
(b) Following the Closing, Seller and Company shall
cooperate in good faith to administer the collection of receivables of Company
or the Business, and shall each apply the same policies and procedures with
respect to the collection of receivables of Company or the Business, in each
instance whether accrued by Company or the Business prior to or subsequent to
the Closing. Seller and Company agree that to the extent that any payment is
received from a customer that is designated as being a payment in respect of any
particular invoice or shipment, such payment shall be applied to the payment or
shipment so designated by the customer. In the absence of any such designation,
any payments received from customers shall be applied against outstanding
receivables in the order originally invoiced.
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5.11 Post-Closing Status of Company.
Buyer covenants that during the 12 months after the Closing
(a) neither Buyer nor any other entity other than Company shall conduct the
Business and (b) Company shall not be merged into Buyer or liquidated; provided,
however, that the covenant set forth in this Section 5.11 shall be deemed not to
have been breached in the event that at any time during the 12 months after the
Closing Buyer or any other entity other than Company shall conduct the Business
or Company shall be merged into Buyer or liquidated because of any compelling
business reason (which shall include, but not be limited to, a restructuring in
order to accomplish any acquisition or refinancing) of Buyer therefor.
5.12 Employment of Employees of the Business.
(a) Subject to the provisions of Section 9.9, Buyer
shall, during the period between the date hereof and the Closing Date, determine
those employees of the Business to whom Company will offer employment as of the
Closing. Notwithstanding the foregoing, Company shall not be required to hire
any employee or continue the employment of any hired employee for any length of
time following the Closing. Seller shall, on or prior to the Closing, implement
any and all amendments to Seller's severance benefit plans and arrangements as
may be necessary such that any employee hired by Company as of the Closing Date
will not be entitled to any benefits thereunder as a result of the consummation
of the transactions contemplated by this Agreement or as a result of any
termination of employment of any such employee by Company after the Closing.
(b) (i) The Investment Plan is maintained pursuant to
Section 401(k) of the Code. Seller is obligated to match contributions to the
Investment Plan on a one-for-one basis with respect to the first 2% of
compensation contributed and a one-for-two basis with respect to the next 2% of
compensation contributed by an employee to the Investment Plan, with such
contributions made each pay period. All contributions to the Investment Plan due
to date have been made, and all contributions due through the Closing Date shall
be made by Seller.
(ii) Prior to the Closing, Seller and
Company shall take such actions as may be necessary or appropriate to terminate
the participation of the employees who are transferring to Company in the
Investment Plan and to cause the Investment Plan's assets attributable to such
employees to be held for or distributed to or for the benefit of such employees
as soon as it is administratively feasible after the Closing. The obligation to
hold or
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distribute the assets attributable to the employees referred to in the preceding
sentence may, if agreed to by the parties, be satisfied by a plan-to-plan
transfer from the Investment Plan to an appropriate plan covering the employees
designated by Buyer. If the parties do not agree on a plan-to-plan transfer,
then Seller shall cause such obligation shall be satisfied by causing the
Investment Plan to make available to each employee a distribution of his or her
entire account balance as soon as administratively feasible after the Closing.
(iii) The ESOP is an "employee stock
ownership plan" as defined in Section 4975(e)(7) of the Code. Seller has
contributed 1% of the compensation of each employee employed at year end to the
ESOP. All contributions to the ESOP due to date have been made, and all
contributions due through the Closing Date shall be made by Seller.
(iv) Prior to the Closing, Seller and
Company shall take such actions as may be necessary or appropriate to terminate
the participation of the employees who are transferring to Company in the ESOP
and to cause the ESOP's assets attributable to such employees to be held for or
distributed to or for the benefit of such employees as soon as it is
administratively feasible after the Closing. The obligation to hold or
distribute the assets attributable to the employees referred to in the preceding
sentence may, if agreed to by the parties, be satisfied by a plan-to-plan
transfer from the ESOP to an appropriate plan covering the employees designated
by Xxxxx. If the parties do not agree on a plan-to-plan transfer, then Seller
shall cause such obligation shall be satisfied by causing the ESOP to make
available to each employee a distribution of his or her entire account balance
as soon as administratively feasible after the Closing.
(v) Following Seller's satisfaction of the
obligations set forth herein with respect to the ESOP, no further contributions
will be due from Seller with respect to the ESOP or the Investment Plan.
(c) Buyer shall cause Company to provide group health plan
coverage effective as of the Closing Date to the Employees who were covered
under a group health plan of Seller immediately prior to the Closing. Neither
Buyer, Company nor any plan or plans they sponsor shall have any obligation with
respect to health plan claims of the employees incurred prior to the Closing,
even if such claims are not presented until after the Closing. Seller shall
insure that its group health plans provide coverage to pay health plan claims
incurred by Employees before the Closing according to the terms of Seller's
group health plans.
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(d) Buyer may cause Company to provide salary reduction health
and/or dependent care flexible spending plans to the Employees effective as of
the Closing. If Buyer does so, then (1) Buyer shall credit each Employee with
any unused health and flexible spending account balance as exists for such
Employee as of the Closing Date (treating any employee with a negative account
balance as having a zero account balance), and (2) Seller shall, within five
business days of the Closing Date, pay Company the aggregate amount of such
unused flexible spending account balances (treating any employee with a negative
account balance as having a zero account balance).
(e) Seller shall remain responsible for any worker's
compensation, long term disability and short term disability claims relating to
occurrences arising before the Closing, even if such claims are not presented
until after the Closing.
ARTICLE VI
CONDITIONS OF PURCHASE
6.1 General Conditions.
The obligations of the parties to effect the Closing shall be
subject to the following conditions:
(a) No Orders; Legal Proceedings. No Law or Order shall have
been enacted, entered, issued, promulgated or enforced by any
Governmental Entity, nor shall any Action have been instituted and
remain pending by any Governmental Entity at what would otherwise be
the Closing Date, which prohibits or restricts or would (if successful)
prohibit or restrict the transactions contemplated by this Agreement or
(with respect to obligations of Buyer only) which would not permit the
Business as presently conducted to continue unimpaired following the
Closing Date.
(b) Approvals. To the extent required by applicable Law, all
Permits and Approvals required to be obtained from any Governmental
Entity (other than Government Contract Novations) shall have been
received or obtained on or prior to the Closing Date and any applicable
waiting period under the Xxxx-Xxxxx-Xxxxxx Act shall have expired or
been terminated.
6.2 Conditions to Obligations of Buyer.
The obligations of Buyer to effect the Closing shall be
subject to the following conditions except to the extent waived in writing by
Xxxxx:
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(a) Representations and Warranties and Covenants of Seller
and Company. The representations and warranties of Seller and Company herein
contained shall be true in all material respects (provided, however, that where
a representation or warranty is already qualified by materiality, such
materiality qualifier shall be
disregarded for purposes of this condition) at the Closing Date with
the same effect as though made at such time; Seller and Company shall
have in all material respects performed all obligations and complied
with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing Date,
and Seller and Company shall have delivered to Buyer certificates in
form and substance satisfactory to Buyer dated the Closing Date and
signed by their respective Chief Executive Officers and Chief
Financial Officers to such effect.
(b) No Material Adverse Change. There shall not have been
any material adverse change in or affecting the Business subsequent to
the date hereof.
(c) Opinion of Counsel. Buyer shall have received at the
Closing from Xxxxxx Xxxxxx White & XxXxxxxxx, counsel to Seller and
Company, a favorable opinion dated the Closing Date covering the
matters set forth in Exhibit G.
(d) Third-Party Consents. Seller and Company shall have
obtained all Approvals and Permits listed on Schedule 6.2(d), each in
form and substance reasonably satisfactory to Buyer.
(e) Resignation of Directors and Certain Officers and
Employees. Each director and those officers and employees of Company
specified by Buyer by written notice to Seller not less than 5 days
prior to the Closing Date shall have submitted their resignations in
writing to Company (such resignations of officers and directors (in
such capacity) to be effective as of the Closing and such resignations
of employees to be effective immediately prior to the Closing).
(f) Ancillary Agreements. Seller and Company shall have
executed and delivered each of the Ancillary Agreements to which each
of them is to be a party.
(g) Contribution. The Contribution (other than any
Government Contract Novations necessary in connection therewith)
shall have been consummated without cost or obligation on the part of
Company pursuant to documentation and procedures reasonably
satisfactory to Buyer and its counsel.
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(h) Capital Markets. Trading in securities generally on the
New York or American stock exchanges or NASDAQ shall not have been
suspended, minimum or maximum prices shall not have been established on
any such exchange, a banking moratorium shall not have been declared by
New York or United States authorities, and there shall not have been an
outbreak or escalation of hostilities between the United States and any
foreign power, an outbreak or escalation of any other insurrection or
armed conflict involving the United States or any other national or
international calamity or emergency, or any material change in the
general financial markets of the United States which, in each case, in
the judgment of any lender to Buyer or any prospective underwriter of
securities to be issued by Buyer in connection with Xxxxx's obtaining
financing sufficient for Buyer to pay the Total Purchase Price, would
make it impractical or unadvisable to proceed with such financing.
(i) Certain Material Contracts. Buyer shall have been
afforded access to copies of each Material Contract (except for any
Material Contracts the disclosure to Buyer of which is prohibited by
Law) not provided to Buyer prior to the date hereof and shall have
concluded a review of the terms and conditions thereof, and such
review shall not have disclosed information not previously disclosed
by Seller or Company which Buyer reasonably believes has or is likely
to have a material adverse effect on the Business or is materially
adversely inconsistent with information disclosed to Buyer prior to
the date hereof.
6.3 Conditions to Obligations of Seller.
The obligations of Seller to effect the Closing shall be
subject to the following conditions, except to the extent waived in writing by
Seller:
(a) Representations and Warranties and Covenants of Buyer.
The representations and warranties of Buyer herein contained shall be
true in all material respects (provided, however, that where a
representation or warranty is already qualified by materiality, such
materiality qualifier shall be disregarded for purposes of this
condition) at the Closing Date with the same effect as though made at
such time; Buyer shall have in all material respects performed all
obligations and complied with all covenants and conditions required by
this Agreement to be performed or complied with by it at or prior to
the Closing Date, and Buyer shall have delivered to Seller certificates
of Buyer in form and
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substance satisfactory to Seller dated the Closing Date and signed by
its Chief Executive Officer and Chief Financial Officer to such effect.
(b) Opinion of Counsel. Seller shall have received at the
Closing from O'Melveny & Xxxxx, counsel to Xxxxx, a favorable opinion
dated the Closing Date covering the matters set forth in Exhibit H.
(c) Ancillary Agreements. Buyer shall have executed and
delivered each of the Ancillary Agreements to which it is to be a
party.
(d) Third-Party Consents. Seller and Company shall have
obtained all Approvals and Permits listed on Schedule 6.2(d).
ARTICLE VII
TERMINATION OF OBLIGATIONS; SURVIVAL
7.1 Termination of Agreement.
Anything herein to the contrary notwithstanding, this
Agreement and the transactions contemplated by this Agreement shall terminate if
the Closing does not occur on or before the close of business on December 15,
1997 unless extended by mutual consent in writing of Buyer and Seller and
otherwise may be terminated at any time before the Closing as follows and in no
other manner:
(a) Mutual Consent. By mutual consent in writing of Buyer
and Seller.
(b) Conditions to Buyer's Performance Not Met. By Buyer by
written notice to Seller if any event occurs or condition exists which
would render impossible the satisfaction of one or more conditions to
the obligations of Buyer to consummate the transactions contemplated
by this Agreement as set forth in Section 6.1 or 6.2.
(c) Conditions to Seller's Performance Not Met. By Seller by
written notice to Buyer if any event occurs or condition exists which
would render impossible the satisfaction of one or more conditions to
the obligation of Seller to consummate the transactions contemplated by
this Agreement as set forth in Section 6.1 or 6.3.
(d) Material Breach. By Buyer or Seller if there has been a
material misrepresentation or other material breach by the other party
(or, in the case of Buyer, by
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Seller or Company) in its representations, warranties and covenants set
forth herein; provided, however, that if such breach is susceptible to
cure, the breaching party shall have ten business days after receipt of
notice from the other party of its intention to terminate this
Agreement if such breach continues in which to cure such breach.
(e) Retention of Key Employees. By Buyer by written notice
to Seller if Xxxxx is not reasonably satisfied with arrangements made
to ensure that following the Closing Company will retain the services
of each of not more than ten employees of the
Business identified to Seller by Xxxxx in writing not later than 7
days after the date hereof; provided, however, that Xxxxx's
termination right set forth in this clause (f) shall expire and be of
no further force and effect as of 5:00 p.m. San Francisco Time on the
day that is two weeks after the date hereof.
(f) Customer and Supplier Relations. By Buyer by written
notice to Seller if (1) Buyer, after having been afforded the
opportunity to conduct a comprehensive review of Seller's and Company's
relations with customers and suppliers of the Business, shall have
become aware of information not previously disclosed by Seller or
Company which Buyer reasonably believes has or is likely to have a
material adverse effect on the Business or is materially adversely
inconsistent with information disclosed to Buyer prior to the date
hereof; provided, however, that Xxxxx's termination right set forth in
this clause (f)(1) shall expire and be of no further force and effect
as of 5:00 p.m. San Francisco Time on the day that is two weeks after
the date hereof (unless extended pursuant to the provisions of clause
(f)(2) below); or (2) if Buyer shall not be satisfied with the
arrangements made by Seller to afford Buyer the opportunity to conduct
a comprehensive review of Seller's and Company's relations with
customers and suppliers of the Business; provided, however, that
Xxxxx's termination right set forth in this clause (f)(2) shall expire
and be of no further force and effect as of 5:00 p.m. San Francisco
Time on the day that is two weeks after the date hereof (unless
extended pursuant to the provisions of this clause (f)(2)); and
provided, further, that in the event Buyer shall notify Seller prior to
such expiration of the termination right set forth in this clause
(f)(2) of Buyer's determination to terminate this Agreement pursuant to
this clause (f)(2), such notice shall not be effective if Seller shall
notify Buyer in writing within 24 hours of Seller's receipt of such
notice that Seller has extended the duration of
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Buyer's termination rights set forth in both clauses (f)(1) and (f)(2)
for an additional two weeks.
(g) Supplemental Deposit/Financing Commitment. By Seller or
by Buyer by written notice to the other pursuant to Section 1.8(b).
(h) Schedules By Buyer by written notice to Seller pursuant
to Section 9.20.
7.2 Effect of Termination.
In the event that this Agreement shall be terminated pursuant
to Section 7.1, all further obligations of the parties under this Agreement
shall terminate without further liability of any party to another; provided that
the obligations of the parties contained in Sections 1.8, 9.12 and 9.19 shall
survive any such termination. A termination under Section 7.1 shall not relieve
any party of any liability for a breach of, or for any misrepresentation under
this Agreement, or be deemed to constitute a waiver of any available remedy
(including specific performance if available) for any such breach or
misrepresentation.
7.3 Survival of Representations and Warranties.
The representations and warranties contained in or made
pursuant to this Agreement shall expire on the second anniversary of the Closing
except that (i) the representations and warranties contained in Sections 2.1(a),
2.2, 2.6(c), 2.19, 3.1 and 3.4 shall survive the Closing and shall remain in
full force and effect indefinitely, (ii) the representations and warranties
contained in Section 2.22 shall survive the Closing and shall remain in full
force and effect until the tenth anniversary of the Closing, (iii) the
representations and warranties contained in Sections 2.6(b) shall survive the
Closing and shall remain in full force and effect until the end of the day that
is sixth months following the Closing, (iv) the representations and warranties
contained in Section 2.20 shall survive the Closing and shall remain in full
force and effect until the final determination of the Adjustment Amount pursuant
to Section 1.6, (v) the representations and warranties contained in Section 2.4
shall continue through the expiration of the applicable statute of limitations
as the same may be extended (or, if a claim has been asserted prior to such
expiration, until the date of its final resolution), and (vi) if a claim or
notice is given under Article VIII with respect to any representation or
warranty prior to the applicable expiration date, such representation or
warranty shall continue indefinitely until such claim is finally resolved.
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7.4 Limitation on Obligations of Company.
Company's representations, warranties, and covenants hereunder
are solely for the benefit of Xxxxx. Notwithstanding anything to the contrary
contained herein, after the Closing Company shall have no obligations hereunder,
nor shall it be jointly or severally liable with Seller in connection with any
inaccuracy in or breach or nonperformance of any of the representations,
warranties, covenants or agreements made by Seller in or pursuant to this
Agreement. Any such inaccuracy in representations of or any breach by Company
shall have no effect on the obligations of Seller to Buyer hereunder.
ARTICLE VIII
INDEMNIFICATION
8.1 Obligations of Seller.
Xxxxxx agrees to indemnify and hold harmless Buyer, Company
and their respective directors, officers, employees, affiliates, agents and
assigns from and against any and all Losses of Buyer or Company, directly or
indirectly, as a result of, or based upon or arising from:
(a) any inaccuracy in or breach of any of the representations
and warranties made by Seller or Company in or pursuant to this
Agreement;
(b) any breach or nonperformance of any of the covenants or
agreements made by Seller or Company in or pursuant to this Agreement;
(c) any matter as to which Seller in other provisions of
this Agreement has agreed to indemnify Buyer or Company;
(d) the Excluded Liabilities;
(e) any third party claim or demand regarding the conduct
prior to the Closing of the Business;
(f) any violation of Law, prior to the Closing, by Seller or
Company including, without limitation, any Law dealing with health,
safety or environmental protection, including, but not limited to, any
action required to correct any condition that exists as of the Closing
that is in violation of any Law, which condition continues after the
Closing;
(g) the generation, use, transportation, treatment, storage,
release or disposal, before the
62
Closing, of Hazardous Substances by, or at any property
or facility of, Seller or Company;
(h) the presence of Hazardous Substances at any property or
facility other than those of Company for which Company is responsible
by reason of events antedating the Closing; and
(i) the threatened or pending Orders, Actions and Labor
Matters referred to in Schedule 2.9.
8.2 Obligations of Buyer.
Xxxxx agrees to indemnify and hold harmless Seller from and
against any Losses of Seller, directly or indirectly, as a result of, or based
upon or arising from:
(a) any inaccuracy in or breach of any of the representations
and warranties made by Buyer in or pursuant to this Agreement;
(b) any breach or nonperformance of any of the covenants or
agreements made by Buyer in or pursuant to this Agreement;
(c) any matter as to which Buyer in other provisions of this
Agreement has agreed to indemnify Seller;
(d) the Assumed Obligations;
(e) any third party claim or demand regarding the conduct
following the Closing of the Business; and
(f) any violation of Law following the Closing by Buyer or
Company (except for any violation of Law with respect to which Seller
is obligated to provide indemnity under this Agreement).
8.3 Certain Tax Matters.
(a) Seller Indemnity. Seller agrees to indemnify, defend and
hold harmless Buyer and Company against (i) any Tax payable by or on behalf of
Seller or any of its Affiliates or Company for any taxable period ending on or
prior to the Closing Date and any Pre-Closing Partial Period, (ii) any
deficiencies in any Tax payable by or on behalf of Seller or any of its
Affiliates or Company resulting from any audit by any taxing agency or authority
of any period ending on or prior to the Closing Date and any Pre-Closing Partial
Period, (iii) Taxes of any member of a consolidated or combined tax group of
which Seller or any of its Affiliates is, or was at any time, a member, for
which
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Company is jointly or severally liable as a result of its inclusion in such
group, (iv) any claim or demand for reimbursement or indemnification resulting
from any transfer by Seller prior to the Closing of any Tax benefits or credits
to any other person, provided, however that Seller does not agree to indemnify,
defend or hold harmless Buyer and Company with respect to Tax indemnification
obligations of Company under the leases listed in Schedule 8.3(a), (v) any Tax
liabilities arising out of the Contribution or the transfer of the Stock
(including, but not limited to, any sales Taxes), and (vi) with respect to any
Taxes due for Tax periods ending after the Closing Date, a pro-rata share of
such tax, calculated pursuant to Section 5.3. Xxxxxx further agrees to indemnify
Buyer from and against any Losses or Taxes Buyer may suffer or incur resulting
from, arising out of, relating to, in the nature of, or caused by any liability
of any of Seller, Company and their respective subsidiaries by contract or as a
transferee or successor.
(b) Audit Matters. Seller, on the one hand, and Buyer, on
the other hand, agree to give prompt notice to the other of any proposed
adjustment to Taxes for any period ending on or prior to the Closing Date or any
Pre-Closing Partial Period. Seller shall have the responsibility for, and the
right to control, at Seller's expense, the audit (and disposition thereof) of
any Tax Return relating to periods ending on or prior to the Closing Date and to
participate in the disposition of the audit of any Tax Return relating to the
periods ending after the Closing Date if such audit or disposition thereof could
give rise to a claim for indemnification hereunder. Buyer, at Buyer's expense,
shall have the right directly or through its designated representatives, to
review in advance and comment upon all submissions made in the course of audits
or appeals thereof to any Governmental Entity relating to periods ending on or
prior to the Closing Date and any Pre-Closing Partial Period or Post-Closing
Partial Period for which Seller has responsibility if such audit or appeal will
or might reasonably be expected to result in Buyer or Company having liability
for the Taxes at issue and to approve the disposition of any audit adjustment
with respect to such periods if such disposition will or might reasonably be
expected to result in an increase in Taxes of Buyer or Company for any period
beginning at or after the Closing Date, such consent not to be unreasonably
withheld.
(c) Xxxxx agrees to indemnify, defend and hold harmless
Seller against any tax apportionable to Buyer pursuant to Section 5.3(c).
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8.4 Procedure.
(a) Notice. Written notice to the Indemnifying Party of any
Loss or the existence of a third-party claim shall be given by the Indemnified
Party within 30 days after such Loss is suffered or receipt of a written
assertion of liability from the third party. The Indemnified Party shall not be
foreclosed by any failure to provide timely notice of any Loss or the existence
of a third party claim to the Indemnifying Party except to the extent that the
Indemnifying Party incurs an out-of-pocket expense or otherwise has been
materially prejudiced as a direct result of such delay.
(b) Defense. Other than with respect to Taxes, as to which
Section 8.3 controls to the extent inconsistent with this Section, if any claim,
demand or liability is asserted by any third party against any Indemnified
Party, the Indemnifying Party shall upon the written request of the Indemnified
Party defend any actions or proceedings brought against the Indemnified Party in
respect of matters embraced by the indemnity. The Indemnifying Party shall have
the right to control the defense of any Indemnifiable Claim; provided, however,
that the Indemnified Party shall have the right to control the defense of a
claim under either of the following circumstances: (i) the Indemnifying Party
fails to assume the defense of an Indemnifiable Claim within 15 days after
receiving written notice of the
existence of the claim or fails to diligently conduct the defense of any such
claim; or (ii) the Indemnified Party shall reasonably conclude that there is a
conflict of interest between the Indemnifying Party and the Indemnified Party in
the conduct of the defense of such claim or there are specific defenses
available to the Indemnified Party which are different from or additional to
those available to the Indemnifying Party, in either of which events the
Indemnifying Party shall pay the fees and disbursements of counsel to each of
the Indemnifying Party and the Indemnified Party. If the Indemnifying Party does
not assume such defense or the Indemnified Party has the right to control the
defense of the claim, the Indemnified Party may compromise or settle the claim
on behalf of and for the account and risk of the Indemnifying Party, who shall
be bound by the result. The Indemnifying Party shall not, without the written
consent of the Indemnified Party (which consent shall not be unreasonably
withheld), settle or compromise any Indemnifiable Claim or permit a default or
consent to entry of any judgment unless the claimant and the Indemnifying Party
provide to the Indemnified Party an unqualified release from all liability in
respect of the Claim. In all cases, the party without the right to control the
defense of an Indemnifiable Claim may participate in the defense at its own
expense.
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(c) Cooperation. The parties shall cooperate in the defense
of all third party claims which may give rise to Indemnifiable Claims hereunder.
In connection with the defense of any claim, each party shall make available to
the party controlling such defense any books, records or other documents within
its control and access to employees that are reasonably requested in the course
of such defense.
8.5 Limitations on Indemnification. Seller shall not be
required to indemnify any other Person under Section 8.1(a) unless the aggregate
of all amounts for which indemnity would otherwise be payable by Seller exceeds
$500,000, and, in such event, Seller shall be responsible only for the amount in
excess of such $500,000. Buyer shall not be required to indemnify any other
Person under Section 8.2(a) unless the aggregate of all amounts for which
indemnity would otherwise be payable by Buyer exceeds $500,000, and in such
event, Buyer shall be responsible only for the amount in excess of such
$500,000. Seller's indemnity obligations under Section 8.1(a) (except with
respect to any inaccuracy in or breach of any of the representations and
warranties contained in Sections 2.1(a), 2.2, 2.4, 2.6(c), 2.19 and 2.22) shall
be limited, in the aggregate, to an amount equal to $20 million. Buyer's
indemnity obligations under Section 8.2(a) shall be limited, in the aggregate,
to an amount equal to $20 million.
8.6 Tax Adjustments. Any amounts payable by an
Indemnifying Party to or on behalf of an Indemnified Party in respect of a
Loss shall be adjusted as follows:
(a) If such Indemnified Party is liable for any additional
Taxes as a result of the payment of amounts in respect of
a Loss, the Indemnifying Party will pay to the Indemnified Party in
addition to such amounts in respect of the Loss within 10 days after
being notified by the Indemnified Party of the payment of such
liability (x) an amount equal to such additional Taxes (the "Tax
Reimbursement Amount") plus (y) any additional amounts required to
pay additional Taxes imposed with respect to the Tax Reimbursement
Amount and with respect to amounts payable under this clause (y),
with the result that the Indemnified Party shall have received from
the Indemnifying Party, net of the payment of Taxes, an amount equal
to the Loss.
(b) The Indemnified Party shall reimburse the Indemnifying
Party an amount equal to the net reduction in any year in the
liability for Taxes (that are based upon or measured by income) of the
Indemnified Party or any member of a consolidated or combined tax group
of which the Indemnified Party is, or was at any time, part, which
reduction is actually realized with respect
66
to any period after the Closing Date and which reduction would not have
been realized but for the amounts paid (or any audit adjustment or
deficiency with respect thereto, if applicable) in respect of an
Indemnifiable Claim, or amounts paid by the Indemnified Party pursuant
to this paragraph (a "Net Tax Benefit"). The amount of any Net Tax
Benefit shall be paid not later than 15 days after the date on which
such Net Tax Benefit shall be realized. Any expenses associated with
the realization of a Net Tax Benefit or any contest or proceeding with
respect to a Net Tax Benefit shall be deemed to reduce such Net Tax
Benefit. Xxxxx agrees to provide Seller or its designated
representatives with such assistance and such documents and records
reasonably requested by them that are relevant to their ability to
determine whether a Net Tax Benefit has been realized including but not
limited to copies of Tax Returns, estimated tax payments, schedules,
and related supporting documents.
ARTICLE IX
GENERAL
9.1 Amendments; Waivers.
This Agreement and any schedule or exhibit attached hereto may
be amended only by agreement in writing of all parties. No waiver of any
provision nor consent to any exception to the terms of this Agreement or any
agreement contemplated hereby shall be effective unless in writing and signed by
the party to be bound and then only to the specific purpose, extent and instance
so provided.
9.2 Schedules; Exhibits; Integration.
Each schedule and exhibit delivered pursuant to the terms of
this Agreement shall be in writing and shall constitute a part of this
Agreement, although schedules need not be attached to each copy of this
Agreement. This Agreement, together with such schedules and exhibits,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith including, but not limited to, that certain
Confidentiality Agreement dated April 30, 1997 by and between Buyer and Seller.
9.3 Best Efforts; Further Assurances.
Each party will use its best efforts to cause all conditions
to its obligations hereunder to be timely satisfied and to perform and fulfill
all obligations on its
67
part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be effected substantially in
accordance with its terms as soon as reasonably practicable. The parties shall
cooperate with each other in such actions and in securing requisite Approvals.
Each party shall execute and deliver both before and after the Closing such
further certificates, agreements and other documents and take such other actions
as may be necessary or appropriate to consummate or implement the transactions
contemplated hereby or to evidence such events or matters. As used in this
Agreement, the term "best efforts" shall not mean efforts which require the
performing party to do any act that is unreasonable under the circumstances, to
make any capital contribution or to expend any funds other than reasonable
out-of-pocket expenses incurred in satisfying its obligations hereunder,
including but not limited to the fees, expenses and disbursements of its
accountants, actuaries, counsel and other professionals.
9.4 Governing Law.
This Agreement, the legal relations between the parties and
any Action, whether contractual or non-contractual, instituted by any party with
respect to matters arising under or growing out of or in connection with or in
respect of this Agreement, including, but not limited to, the negotiation,
execution, interpretation, coverage, scope, performance, breach, termination,
validity, or enforceability of this Agreement, shall be governed by and
construed in accordance with the laws of the State of California applicable to
contracts made and performed in such State and without regard to conflicts of
law doctrines, except to the extent that certain matters are preempted by
federal law or are governed as a matter of controlling law by the law of the
jurisdiction of incorporation of the respective parties.
9.5 Assignment.
Neither this Agreement nor any rights or obligations under it
are assignable except that Buyer may assign its rights hereunder (including but
not limited to its rights under Article VIII) to any Affiliate of Buyer.
9.6 Headings.
The descriptive headings of the Articles, Sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
68
9.7 Counterparts.
This Agreement and any amendment hereto or any other agreement
(or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document) and
shall become effective (unless otherwise provided therein) when one or more
counterparts have been signed by each party and delivered to the other party.
9.8 Publicity and Reports.
Seller and Xxxxx shall coordinate all publicity relating to
the transactions contemplated by this Agreement and, except to the extent
required by Law or applicable stock exchange rules or required in connection
with Buyer's efforts to obtain financing necessary for it to pay the Total
Purchase Price and adequately capitalize itself upon the consummation of the
transactions contemplated hereby, no party shall issue any press release,
publicity statement or other public notice relating to this Agreement, or the
transactions contemplated by this Agreement, without obtaining the prior consent
of the other parties hereto. Buyer and Seller shall each consult with the other
with respect to the form and content of any application or report made to any
Governmental Entity which relates to this Agreement or the transactions
contemplated hereby.
9.9 Parties in Interest.
This Agreement shall be binding upon and inure to the benefit
of each party, and nothing in this Agreement, express or implied, is intended to
confer upon any other Person any rights or remedies of any nature whatsoever
under or by reason of this Agreement except for the provisions of Article VIII
(which are intended to be for the benefit of the Persons provided for therein
and may be enforced by such Persons). Nothing in this Agreement is intended to
relieve or discharge the obligation of any third Person to (or to confer any
right of subrogation or action over against) any party to this Agreement.
9.10 Performance by Subsidiaries.
Each party agrees to cause its subsidiaries to comply with any
obligations hereunder relating to such subsidiaries and to cause its
subsidiaries to take any other action which may be necessary or reasonably
requested by the other party in order to consummate the transactions
contemplated by this Agreement.
69
9.11 Notices.
Any notice or other communication hereunder must be given in
writing and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism (provided that any notice so given is also mailed
or delivered as provided in clause (c)) or (c) mailed by certified or registered
mail, postage prepaid, receipt requested or delivered by reputable overnight
courier service as follows:
If to Buyer, addressed to:
TSMD Acquisition Corp.
c/o Mentmore Holdings, Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
With a copy to:
O'Melveny & Xxxxx
Embarcadero Center West
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-3305
Facsimile: 000-000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
If to Company (prior to the Closing) or Seller, addressed to:
Xxxxxxx-Xxxxxxx Company
Stanford Research Park
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-1223
Facsimile: 000-000-0000
Attn: X. Xxxxx Xxxxxxx
With a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-1900
Facsimile: 000-000-0000
Attn: Xxxxx X. X'Xxxx, Esq.
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
70
transmitted to the applicable number so specified in (or pursuant to) this
Section 9.11 and an appropriate answerback is received, (ii) if given by mail or
by overnight delivery, three days after such communication is deposited in the
mails with first class postage prepaid or delivered to the overnight courier,
addressed as aforesaid or (iii) if given by any other means, when actually
delivered at such address.
9.12 Expenses.
Seller, Company and Buyer shall each pay their own expenses
incident to the negotiation, preparation and performance of this Agreement and
the transactions contemplated hereby, including but not limited to the fees,
expenses and disbursements of their respective investment bankers, accountants
and counsel. Any such expenses of Company shall be paid by Seller prior to the
Closing.
9.13 Remedies; Waiver.
To the extent permitted by Law, all rights and remedies
existing under this Agreement and any related agreements or documents are
cumulative to and not exclusive of, any rights or remedies otherwise available
under applicable Law. No failure on the part of any party to exercise or delay
in exercising any right hereunder shall be deemed a waiver thereof, nor shall
any single or partial exercise preclude any further or other exercise of such or
any other right.
9.14 Attorney's Fees.
In the event of any Action by any party arising under or out
of, in connection with or in respect of, this Agreement including any
participation in bankruptcy proceedings to enforce against a party a right or
claim in such proceedings, the prevailing party shall be entitled to reasonable
attorney's fees, costs and expenses incurred in such Action. Attorney's fees
incurred in enforcing any judgement in respect of this Agreement are recoverable
as a separate item. The parties intend that the preceding sentence be severable
from the other provisions of this Agreement, survive any judgment and, to the
maximum extent permitted by law, not be deemed merged into such judgment.
9.15 Knowledge Convention.
Whenever any statement herein or in any schedule, exhibit,
certificate or other documents delivered to any party pursuant to this Agreement
is made "to knowledge" or "to best knowledge" or words of similar intent or
effect, such statement shall refer to the actual knowledge of those persons
listed on Schedule 9.15, after due inquiry, and each
71
such statement shall be deemed to include a representation that such inquiry has
been made.
9.16 Representation By Counsel; Interpretation.
Seller, Company and Buyer each acknowledge that each party to
this Agreement has been represented by counsel in connection with this Agreement
and the transactions contemplated by this Agreement. Accordingly, any rule of
Law, including but not limited to Section 1654 of the California Civil Code, or
any legal decision that would require interpretation of any claimed ambiguities
in this Agreement against the party that drafted it has no application and is
expressly waived. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of Xxxxx and Seller.
9.17 Specific Performance.
Seller and Buyer each acknowledge that, in view of the
uniqueness of the Business and the transactions contemplated by this Agreement,
each party would not have an adequate remedy at law for money damages in the
event that this Agreement has not been performed in accordance with its terms,
and therefore agrees that the other party shall be entitled to specific
enforcement of the terms hereof in addition to any other remedy to which it may
be entitled, at law or in equity.
9.18 Severability.
If any provision of this Agreement is determined to be
invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement shall remain in full force and effect provided that
the essential terms and conditions of this Agreement for Buyer and Seller remain
valid, binding and enforceable.
9.19 Confidentiality.
(a) Seller and Company agree 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 Intangible Property and information relating to product development,
price, distributor and customer lists, pricing and marketing plans, policies and
strategies, details of client and consultant contracts, operations methods,
product development techniques, business acquisition plans, new personnel
acquisition plans and all other confidential information with respect to the
Business, except as may be required by applicable Law, in which event Seller and
Company agree to, and shall cause their agents,
72
representatives, Affiliates, employees, officers and directors to, furnish only
that portion of such confidential information which they reasonably believe is
legally required to be provided and exercise their reasonable efforts to obtain
assurances that confidential treatment will be afforded such information, and
(ii) in the event that Seller, Company or any such agent, representative,
Affiliate, employee, officer or director becomes legally compelled to disclose
any such information, provide Buyer with prompt written notice of such
requirement so that Buyer may, at the expense of Xxxxx, seek a protective order
or other remedy. This Section 9.19(a) shall not apply to any information that,
at the time of disclosure, is known to the receiving party before disclosure
thereof, is independently developed by the receiving party, is or becomes
publicly available through no fault of the receiving party, is obtained by the
receiving party from a third party not known by the receiving party to be under
any obligation not to disclose such information and which the receiving party
has no reason to believe is not otherwise publicly available (provided, however,
that once Seller is advised that information obtained under such circumstance is
indeed confidential hereunder, this Section 9.19(a) shall thereafter apply to
such information) or is reasonably necessary in order for Seller to litigate any
claim against Buyer pursuant to this Agreement. Xxxxxx agrees and acknowledges
that remedies at law for any breach of its obligations under this Section
9.19(a) are inadequate and that in addition thereto Buyer shall be entitled to
seek equitable relief, including injunction and specific performance, in the
event of any such breach. Notwithstanding the foregoing, (x) Seller may make
such disclosures to the independent public accountants of Seller as may be
necessary in connection with their auditing of the books and records of Seller
and its Affiliates; provided, however, that such independent public accountants
shall enter into a confidentiality and nondisclosure agreement on substantially
the same terms as set forth in this Section 9.19(a), and (y) Seller, with the
consent of Buyer (which consent shall not be unreasonably withheld) may make
such disclosures in connection with defending any claim brought against Seller
or any of its Affiliates by any third person as may be reasonably necessary in
order for Seller to conduct its defense thereof; provided, however, that Seller
agrees to, and agrees to cause its agents, representatives, Affiliates,
employees, officers and directors to, exercise their reasonable efforts to
obtain assurances that confidential treatment will be afforded such information
and to seek a protective order or other remedy to preserve the confidentiality
of such information.
(b) During the period starting at the execution of this
Agreement and ending on the earlier of (A) the
73
Closing Date or (B) April 10, 2000, Buyer 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 to) all
Intangible Property, and information relating to product development, price,
distributor and customer lists, pricing and marketing plans, policies and
strategies, details of client and consultant contracts, operations methods,
product development techniques, business acquisition plans, new personnel
acquisition plans and all other confidential information with respect to the
Business, except as may be required by applicable Law, in which event Buyer
agrees to, and shall cause its agents, representatives, Affiliates, employees,
officers and directors to, furnish only that portion of such confidential
information which Buyer reasonably believes is legally required to be provided
and exercise its reasonable efforts to obtain assurances that confidential
treatment will be accorded such information, and (ii) in the event that Buyer or
any such agent, representative, Affiliate, employee, officer or director becomes
legally compelled to disclose any such information, provide Seller with prompt
written notice of such requirement so that Seller may, at the expense of Seller,
seek a protective order or other remedy. This Section 9.19(b) shall not apply to
any information that, at the time of disclosure, is known to the receiving party
before disclosure thereof, is independently developed by the receiving party, is
or becomes publicly available through no fault of the receiving party, or is
obtained by the receiving party from a third party not known by the receiving
party to be under any obligation not to disclose such information and which the
receiving party has no reason to believe is not otherwise publicly available
(provided, however, that once Buyer is advised that information obtained under
such circumstance is indeed confidential hereunder, this Section 9.19(b) shall
thereafter apply to such information) or is reasonably necessary in order for
Buyer to litigate any claim against Seller pursuant to this Agreement. Xxxxx
agrees and acknowledges that remedies at law for any breach of its obligations
under this Section 9.19(b) are inadequate and that in addition thereto Seller
shall be entitled to seek equitable relief, including injunction and specific
performance, in the event of any such breach. Notwithstanding the foregoing, (x)
Buyer may make such disclosures to the independent public accountants of Buyer
as may be necessary in connection with their auditing of the books and records
of Buyer, Company and their Affiliates; provided, however, that such independent
public accountants shall enter into a confidentiality and nondisclosure
agreement on substantially the same terms as set forth in this Section 9.19(b),
and (y) Buyer, with the consent of Seller (which consent shall not be
unreasonably withheld) may make such disclosures in connection with
74
defending any claim brought against Buyer or any of its Affiliates by any third
person as may be reasonably necessary in order for Buyer to conduct its defense
thereof; provided, however, that Xxxxx agrees to, and agrees to cause its
agents, representatives, Affiliates, employees, officers and directors to,
exercise their reasonable efforts to obtain assurances that confidential
treatment will be afforded such information and to seek a protective order or
other remedy to preserve the confidentiality of such information.
9.20 Schedules.
The parties acknowledge that the Schedules (including, but not
limited to, the Disclosure Schedule) other than Schedule 3.3 are incomplete as
of the date hereof (such incomplete Schedules (other than Schedule 6.2(d)) being
"Seller's Incomplete Schedules"). Seller shall deliver to Buyer and its counsel
for their review a complete and accurate version of each of Seller's Incomplete
Schedules not later than 5:00 p.m. San Francisco time on September 4, 1997.
Seller shall also provide Buyer with copies of any supporting documents and such
access to those officers and other employees of Seller and to Seller's legal
counsel as may be reasonably requested by Xxxxx and its legal counsel in
connection with their review of Seller's Incomplete Schedules. Buyer shall have
the right to terminate this Agreement by written notice to Seller as described
below in the event that Buyer is not satisfied with Seller's Incomplete
Schedules, as so revised; provided, however, that Buyer shall not be arbitrary
or capricious in determining to terminate this Agreement pursuant to this
Section 9.20. Not later than two business days after all such supporting
documents and access shall have been provided to Buyer, Buyer shall either (i)
advise Buyer that Seller's Incomplete Schedules, as revised by Seller, are
acceptable to Buyer and deliver to Seller Schedule 6.2(d), whereupon Seller's
Incomplete Schedules, as so revised, and Schedule 6.2(d), as so delivered, shall
become Schedules hereto, or (ii) advise Buyer that Buyer has determined to
terminate this Agreement pursuant to the provisions of this Section 9.20.
75
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized representative as of the date
first above written.
TSMD ACQUISITION CORP.
By: /s/ XXXXXXX X. XXX
-----------------------
Name: Xxxxxxx X. Xxx
Title: Vice-President
XXXXXXX-XXXXXXX COMPANY
By: /s/ X.X. XXXXXXX
-----------------------
Name: X.X. Xxxxxxx
Title: President
X-X TSMD INC.
By: /s/ X.X. XXXXXXX
-----------------------
Name: X.X. Xxxxxxx
Title: President
76
EXHIBIT A
An executed copy of this Exhibit, the GaAs/Thin Film Supply Agreement,
is filed separately as Exhibit 10.9.
EXHIBIT B
An executed copy of this Exhibit, the Cross License Agreement, is filed
separately as Exhibit 10.11.
EXHIBIT C
MARKETING AGREEMENT TERM SHEET
This agreement will pertain to products for which the owner of the intellectual
property and the manufacturer of the product is the same, but where it is to the
mutual advantage of both parties that sales and marketing efforts be provided by
the other party.
An example is a TO-8 amplifier, which is a product owned and built by TSMD, but
where the sales effort to Nortel is best handled by X-X. A second example is the
sale of X-X owned and built MMIC chips to a defense customer.
Key Terms:
o Prices to the customer are set by the builder/owner, following
consultation with the marketing partner.
o The products are branded by the builder/owner, and shipment,
collections, warranty efforts, and design responsibility all rest with
builder/owner.
o The marketing partner shall receive a commission of 10% for sales to
these customers, except that for sales to each customer in excess of
$1,000,000 in a given year, the commission shall be 8% of sales price.
o TSMD products will be marketed by X-X sales to the following
customers: Lucent, Nortel, Nokia and Ericsson (non-defense).
o X-X Telecom products will be marketed by TSMD to all defense customers.
EXHIBIT D
An executed copy of this Exhibit, the MIM/Glass Seal/Hybrid Assembly
Supply Agreement, is filed separately as Exhibit 10.10.
EXHIBIT E
Terms for Sub-sublease (one for each building)
Premises: A portion of Building 3 and a portion of Building 6 collectively
comprising no more than 120,000 square feet.
Ground Lessor: Stanford University.
Master Lessor: Building 6 - Morrco Properties Company
Building 3 - Lindco Properties Company (Assigned to Xxxxxx
Xxxxxxx)
Ground Lease: Building 6 - 9/1/72
Building 3 - 11/1/59
Master Lease: Building 6 - 10/31/75
Building 3 - 4/22/69
Term: Three years following closing of stock acquisition. No renewal rights or
purchase options.
Permitted Uses: Premises shall be used for the purpose of carrying out the purchased
business, and for no other purpose.
Base Rent: $2.03 per square foot per month.
Additional Rent: An amount to be determined for telephone service. (Sub-sublease is a
gross lease, except that Sub-sublessor shall provide telephone service to
Premises through the existing telephone switch, and, as additional rent,
Sub-sublessee shall pay its share of the costs of telephone service, in an
equitable amount to be agreed upon by the parties.) Sub-sublessor shall
pay all taxes, assessments and real property insurance premiums.
Warranties: Premises are suitable for the operation of the Business (as such term is
defined in the Stock Purchase Agreement).
Maintenance: Sub-sublessor shall physically maintain all of the premises and the
landscaping, and shall provide janitorial services and shall pay all costs
associated therewith.
E-1
Alterations: Any tenant improvements shall be performed by Sub-sublessee at Sub-
sublessee's cost. Sub-sublessee shall not be permitted to make any
alterations without Sub-sublessor's prior written approval, which may be
given or withheld in Sub-sublessor's reasonable discretion. Any
alterations approved by Sub-sublessor shall also be subject to the approval
of Stanford and Master Lessor, if required by the Ground Lease or the
Master Lease. If so required, Sub-sublessor shall coordinate with
Stanford and/or the Master Lessor to obtain such approvals. Sub-
sublessee shall be responsible for ensuring that any approved alterations
comply with law. Sub-sublessee shall also be responsible for all wiring
and installations necessary to put the premises into a condition for use by
Sub-sublessee's employees.
Taxes: Sub-sublessor shall pay all real property taxes assessed against the
Premises.
Security Deposit: None.
Environmental: The environmental representations and indemnifications set forth in the
Stock Purchase Agreement shall be restated in the Sub-sublease, by Sub-
sublessor in favor of Sub-sublessee.
In addition, the environmental provisions attached hereto as Schedule 1
shall be incorporated into the Sub-sublease.
Quiet Enjoyment/
Non-disturbance: Sub-sublessor shall obtain all necessary consents to the Sub-sublease as a
condition precedent to the execution of the Sub-sublease. Sub-sublessor
shall perform all of its obligations under the Ground Lease and Master
Lease. Sub-sublessor shall indemnify Sub-sublessee for all damages
resulting from Sub-sublessor's default under the Ground Lease or Master
Lease, unless such default is a direct result of Sub-sublessee's default
under the Sub-sublease. Sub-sublessor to comply with all applicable laws
and CC&Rs affecting the premises. Sub-sublessor covenants to exercise
all renewal options to extend the term of the Ground Lease and the Master
Lease through the expiration of the term of the Sub-sublease.
Insurance: Sub-sublessor shall maintain the insurance required by the Ground Lease and Master
Lease. Sub-sublessee shall maintain (i) insurance on its personal property,
equipment and trade fixtures and (ii) commercial general liability insurance
issued by insurers, with endorsements and in amounts customary in the industry, naming
Sub-sublessor, Stanford and Master Lessor as additional insureds.
E-2
Assignment
/Subletting: Sub-sublessee shall have no rights to assign the Sub-sublease or sublet all
or any portion of its interest in the premises, without Sub-sublessor's prior
written consent, which may be given or withheld in Sub-sublessor's sole
discretion, provided that Sub-sublessee may assign to affiliates without
Sub-sublessor's consent. Sub-sublessee may assign Sub-sublease, without
Sub-sublessor's consent, for financing purposes. The foregoing rights
shall be subject to Sub-sublessor's obligations under the Ground Lease and
the Master Lease.
DD&C: If the Ground Lessor or the Master Lessor terminates the Ground Lease or the Master
Lease in connection with an event of damage, destruction or condemnation, the
Sub-sublease shall also terminate, provided that Sub- sublessor shall in no event
exercise any rights of termination it may have under the Ground Lease or Master
Lease on account of such damage, destruction or condemnation, without the direction
or prior written consent of Sub-sublessee. Sub-sublessee shall be entitled to seek
condemnation award provided that such award does not affect Sub-sublessor's award.
Signage: Subject to Sub-sublessor's reasonable approval (as well as any required approval
from Stanford or Master Lessor), Sub-sublessee shall be permitted to place sings on
the Premises that are consistent with Sub-sublessor's existing signage.
Holdover: If Sub-sublessee holds over after the expiration of the term, Sub-sublessee shall
pay for each month that the holdover continues Base Rent equal to 100% of the Base
Rent in effect immediately prior to the expiration of the term. Additionally,
Sub-sublessee shall indemnify Sub-sublessor for all losses suffered by Sub-sublessor
as a result of such holdover, including without limitation, lost revenues due to
Sub-sublessor's inability to relet the Premises.
Incorporation of
Ground Lease and
Master Lease: The Sub-sublease shall restate in their entirety those provisions of the Master
Lease that shall apply to the Premises, provided that such provisions shall be
revised as necessary to properly describe the relationship between Sub-sublessor and
Sub-sublessee, in light of the fact that the Sub-sublease is a fully gross, space
lease.
Termination
Option: Sub-sublessee shall have the right to terminate the Sub-sublease as to (i) the
entire Premises, (ii) the entire portion of the Premises that are located in
Building 3, and/or (iii) the entire portion of the Premises that
E-3
are located in Building 6, upon six (6) months prior written notice to Sub-sublessor.
Surrender: On the expiration of the Sub-sublease, Sub-sublessee will surrender the
sub-subleased premises back to Sub-sublessor in substantially the condition
received, reasonable wear and tear and damage by casualty excepted.
There shall be two separate Sub-subleases; one of the portion of the Premises
located in Building 6, and one for the portion of the Premises located in
Building 3.
E-4
Schedule 1
Hazardous Substances Provision
(a) Tenant's Use. Tenant shall have the right to
store, use and handle Hazardous Substances on the Premises, provided
that (i) such Hazardous Substances are used in the operation of
Tenant's business or are brought onto the Premises in the ordinary
course of Tenant's business and used in compliance with applicable laws
and Landlord's reasonable procedures for the acquisition, use, storage,
handling and disposal of Hazardous Substances, (ii) Tenant shall not
cause to be brought upon the Premises any Hazardous Substances that
have not been previously stored or used at the Premises, without
Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed, and (iii) Landlord shall instruct
Tenant on compliance procedures necessary to ensure that such Hazardous
Substances are stored, used, handled and disposed of in compliance with
all applicable laws. In connection with its oversight and coordination
of the compliance procedures, Landlord shall (x) have access to all of
Tenant's operations within the Premises at all times, following
reasonable notice (or in the case of emergency, without notice) for the
purpose of monitoring Tenant's compliance with Landlord's compliance
procedures with respect to Hazardous Substances, (y) have Tenant's
reasonable cooperation in complying with such procedures, (z) promptly
notify Tenant of any release or discovery of Hazardous Substances at
the Premises not in compliance with applicable laws and Landlord's
procedures. Tenant shall indemnify, defend and hold Landlord harmless
from any and all Claims which arise during the Lease Term solely as a
result of Tenant's use of Hazardous Substances at the Premises during
the Lease Term. Further, notwithstanding anything to the contrary in
this Lease, but without limiting Tenant's monetary obligations under
the foregoing indemnity, Tenant is not permitted to maintain, repair,
remediate or otherwise conduct work with respect to the following
portions of the Premises: (i) structural elements of the Premises, the
building systems and portions of the Buildings containing insulation or
fireproofing material on or in exterior walls, columns, beams,
ceilings, pipes, ducts and other similar elements of the Buildings;
(ii) any portion of the Premises more than six (6) feet below ground
surface; or (ii) any portions of the Premises, the Buildings, the
Project or the Land that are contaminated with Hazardous Substances, as
of the Commencement Date, including, without limitation, any and all
portions of the Premises, the Buildings, the Project or the Land that
are designated as part of the [SUPERFUND SITE: WE NEED TO FURTHER
DEFINE THE CONTAMINATED AREAS].
(b) Environmental Communications. Landlord and Tenant
shall promptly after receipt or transmittal thereof, deliver to the
other copies of all material written communications given to or
received from any governmental agency, environmental consultant, or
other person or entity relating to Hazardous Substances in or removed
from the Premises, including, without limitation, copies of all claims,
E-5
reports, complaints, notices, warnings or asserted violations, relating
in any way to Hazardous Substances in, on, under or about the Premises.
E-6
EXHIBIT F
TRADEMARK LICENSE AGREEMENT
THIS TRADEMARK LICENSE AGREEMENT, dated as of ____________, is
made by and among XXXXXXX-XXXXXXX COMPANY, a California Corporation
("Xxxxxxx-Xxxxxxx"); STELLEX MICROWAVE SYSTEMS, INC., formerly known as X-X TSMD
INC., a California corporation and a wholly-owned subsidiary of Xxxxxxx-Xxxxxxx
("W -J TSMD"); and TSMD ACQUISITION CORP., a Delaware corporation ("TSMD
Acquisition").
WHEREAS, the parties have entered into that certain Stock
Purchase Agreement, dated as of August__, 1997 (the "Purchase Agreement"),
whereby TSMD Acquisition has agreed to purchase, and Xxxxxxx-Xxxxxxx has agreed
to sell, all of the outstanding stock of X-X TSMD; and
WHEREAS, in partial consideration for the Purchase Agreement
and in contemplation of the sale of X-X TSMD stock to TSMD Acquisition,
Xxxxxxx-Xxxxxxx will license to X-X TSMD and TSMD Acquisition the trademarks and
registrations thereto, and the notices, logo designs, marks, names, service
marks, tradenames, and trade dresses listed or described on Schedule 1
("Marks"); and
WHEREAS, Xxxxxxx-Xxxxxxx is the owner of the Marks; and
WHEREAS, in partial consideration of the Purchase Agreement,
Xxxxxxx-Xxxxxxx desires to xxxxx X-X TSMD and TSMD Acquisition use of the Marks
in connection with the Business, on the terms and conditions set forth herein;
and
NOW, THEREFORE, for and in consideration of the foregoing and
of the covenants, conditions, undertakings and mutual promises hereinafter set
forth, it is agreed by and among the parties as follows:
1. DEFINITIONS
For all purposes of this Trademark License Agreement, except
as otherwise expressly provided:
(a) the terms defined in this Section 1 have the meanings
assigned to them in this Section 1 and include the plural as well as the
singular;
(b) all references in this Trademark License Agreement to
designated "Sections," "Paragraphs" and other subdivisions are
to the designated Sections, Paragraphs and other subdivisions of
the body of this Trademark License Agreement;
(c) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms; and
(d) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Trademark License Agreement as a whole and
not to any particular Section, Paragraph or other subdivision.
As used in this Trademark License Agreement and the Schedules
and Exhibits delivered pursuant to this Trademark License Agreement, the
following definitions shall apply:
"Action" means any action, complaint, petition, investigation,
suit or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"Affiliate" means a Person that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, a specified Person.
"Business" means Business as that term is defined in the
Purchase Agreement.
"Closing" means the consummation of the purchase and sale
of stock under the Purchase Agreement.
"Effective Date" means the date of Closing.
"Governmental Entity" means any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"Inventory" means all finished products, work in
progress, parts, components and raw materials.
"Law" means any constitutional provision, statute or other
law, rule, regulation, or interpretation of any Governmental Entity and any
Order.
"Order" means any decree, injunction, judgment, order,
ruling, assessment or writ.
"Person" means an association, a corporation, an
individual, a partnership, a trust or any other entity or organization,
including a Governmental Entity.
"Territory" means all countries of the world and
throughout the universe.
"Trademark License Agreement" means this Trademark License
Agreement by and among Xxxxxxx-Xxxxxxx, X-X XXXX and TSMD
2
Acquisition as amended or supplemented together with all Schedules and Exhibits
attached or incorporated by reference.
"TSMD Group" means X-X TSMD and TSMD Acquisition,
collectively.
2. GRANT OF LICENSES
2.1 With respect to Inventory, sales materials, brochures, and
catalogues in existence on the Effective Date, Xxxxxxx-Xxxxxxx grants to TSMD
Acquisition and to X-X TSMD non-exclusive, royalty-free licenses in the
Territory to use the Marks in connection with the Business. The licenses granted
in this Paragraph 2.1 shall continue in force and effect for the life of
Xxxxxxx-Xxxxxxx'x property interest in the Marks, unless sooner terminated as
provided for herein.
2.2 With respect to all other products, materials and
services, Xxxxxxx-Xxxxxxx grants to TSMD Acquisition and to X-X TSMD
nonexclusive, royalty-free licenses in the Territory to use the Marks in
connection with the Business, provided that the Marks are used in combination
with X-X TSMD's registered, unregistered, or applied for trademark, notice,
label, logo design, mark, name, service mark, trade name, or trade dress. The
licenses granted in this Paragraph 2.2 shall continue in force and effect for
two years from the Effective Date of this Trademark License Agreement, unless
sooner terminated as provided for herein.
3. REPRESENTATIONS AND WARRANTIES OF XXXXXXX-XXXXXXX
3.1 Xxxxxxx-Xxxxxxx has the full right, power and authority to
enter into this Trademark License Agreement and to grant all licenses and rights
granted herein, and is under no legal prohibition, restraint, or restriction
with respect thereto.
3.2 No consents of any third parties are required for
Xxxxxxx-Xxxxxxx to enter into this Trademark License Agreement or to license the
rights licensed herein to TSMD Acquisition and X-X TSMD.
3.3 Xxxxxxx-Xxxxxxx owns, has the exclusive right to use,
sell, license or dispose of, and has the exclusive right to bring actions for
the infringement of, all trademarks and registrations thereof listed in
Schedule 1.
3.4 Xxxxxxx-Xxxxxxx has taken all appropriate actions and made
all applicable applications and filings pursuant to applicable Laws to perfect
or protect its interest in all trademarks and registrations thereof listed in
Schedule 1.
3
Xxxxxxx-Xxxxxxx shall, at Xxxxxxx-Xxxxxxx'x expense, take all necessary actions
to preserve the trademarks and registrations thereof listed in Schedule 1.
4. REPRESENTATIONS AND WARRANTIES OF THE TSMD GROUP
4.1 The TSMD Group has the full right, power and authority to
enter into this Trademark License Agreement, and it is under no legal
prohibition, restraint or restriction with respect thereto.
5. OWNERSHIP OF MARKS
5.1 The TSMD Group acknowledges the ownership of the Marks in
Xxxxxxx-Xxxxxxx and agrees that it will do nothing inconsistent with such
ownership. The TSMD Group agrees to assist Xxxxxxx-Xxxxxxx in recording this
Trademark License Agreement with appropriate government authorities. The TSMD
Group agrees that nothing in this Trademark License Agreement shall give the
TSMD Group any right, title, or interest in the Marks other than the right to
use the Marks in accordance with this Trademark License Agreement.
6. QUALITY STANDARDS AND MAINTENANCE
6.1 The TSMD Group agrees to cooperate with Xxxxxxx-Xxxxxxx in
facilitating Xxxxxxx-Xxxxxxx'x control of the nature and quality of the Marks.
The TSMD Group is familiar with the quality standards of Xxxxxxx-Xxxxxxx. The
TSMD Group shall use the Marks licensed to it by Xxxxxxx-Xxxxxxx hereunder only
in accordance with those same reasonable standards of quality currently used by
Xxxxxxx-Xxxxxxx, which standards shall be equal to, but which shall not exceed,
the standards of quality currently used by Xxxxxxx-Xxxxxxx, and such standards
of quality are acceptable to Xxxxxxx-Xxxxxxx. Xxxxxxx-Xxxxxxx shall have the
right once per year, upon reasonable advance written notice (at least ten (10)
business days in advance), to receive from the TSMD Group specimens of the TSMD
Group's use of the Marks, as may be reasonably necessary in order to confirm
that such quality control standards are being observed.
7. FORM OF USE
7.1 The TSMD Group agrees to use the Marks only in the form
and manner and with appropriate legends as illustrated in Exhibit A or as
reasonably prescribed from time to time by Xxxxxxx-Xxxxxxx.
4
8. PROTECTION AND MAINTENANCE OF MARKS
8.1 In the event that Xxxxxxx-Xxxxxxx or the TSMD Group learns
of an infringement, imitation, or other unauthorized use of the Marks by others,
the party discovering such unauthorized use shall notify the other party in
writing, and either or both of the parties shall have the right to bring action
against such person, firm or entity to stop such unauthorized use in accordance
with the following procedures:
(a) Xxxxxxx-Xxxxxxx may institute suit and, at its option or
as may be required by law, join TSMD Acquisition and X-X TSMD as plaintiffs.
Xxxxxxx-Xxxxxxx may select counsel of its choice, shall control the litigation,
shall bear the entire cost of such action, and shall be entitled to retain the
entire amount of any recovery by way of judgment, award, decree or settlement.
(b) If Xxxxxxx-Xxxxxxx determines not to institute suit, which
determination shall be communicated to TSMD Acquisition and X-X TSMD by notice
in writing given not more than sixty (60) days after Xxxxxxx-Xxxxxxx'x receipt
of written notification of such infringement or unfair competition, TSMD
Acquisition and/or X-X TSMD may institute suit, and, at their option or as may
be required by law, join Xxxxxxx-Xxxxxxx as plaintiff. TSMD Acquisition and X-X
TSMD may select counsel of their choice, shall control the litigation, shall
bear the entire costs of such litigation and shall be entitled to retain the
entire amount by way of judgment, award, decree or settlement.
(c) Each party shall cooperate with the other party in any
such actions against third parties, and may if such party desires, elect to be
represented by counsel of its choice, but at its own expense.
8.2 Xxxxxxx-Xxxxxxx shall bear all costs and expenses in
pursuing any existing applications for registration of the Marks and maintaining
and, if applicable, renewing any existing registrations for the Marks. In the
event Xxxxxxx-Xxxxxxx elects not to pursue any existing applications or maintain
or renew a registration pursuant to this Paragraph 8.2, then at the TSMD Group's
option and expense, the TSMD Group shall have the right (but not the obligation)
to assume responsibility for said application or registration.
8.3 TSMD Acquisition and X-X TSMD shall have the right (but
not the obligation) to seek trademark or other intellectual property protection
for the Marks in Xxxxxxx-Xxxxxxx'x name. Any and all expenses incurred in
connection with the foregoing shall be borne by TSMD Acquisition and X-X TSMD.
Xxxxxxx-Xxxxxxx shall, at the TSMD Group's expense, furnish the TSMD Group with
all reasonably requested information, assistance and
5
documentation to assist the TSMD Group in obtaining such registrations
including, without limitation, filing a joint application in those jurisdictions
where registration of a user or of a licensee is permitted or required by law.
Such registrations shall be deemed to be included in the grant of the licenses
set forth in Section 2 hereof.
9. SUBLICENSE AND TRANSFER
9.1 TSMD Acquisition and X-X TSMD shall have the right to
sublicense the licenses granted in Section 2 to any Affiliate of X-X TSMD or
TSMD Acquisition, upon the condition that such Affiliates are bound by the terms
and conditions of this Trademark License Agreement.
9.2 The licenses granted in Section 2 may be transferred upon
the sale of all or substantially all of the assets of X-X TSMD or TSMD
Acquisition.
9.3 Any assignment, sale or other disposition of any Mark by
Xxxxxxx-Xxxxxxx shall not affect the license rights acquired herein to such
Xxxx, and any such assignment, sale or other disposition shall be subject to
such license rights.
10. TERMINATION FOR CAUSE
10.1 If either party materially fails to perform or violates
any obligation pursuant to this Trademark License Agreement, then, upon thirty
(30) days written notice to the breaching party specifying such default
("Default Notice"), the non-breaching party may terminate this Trademark License
Agreement, unless:
(a) The breach specified in the Default Notice has been
cured within the thirty (30) day period; or
(b) The default reasonably requires more than thirty (30) days
to correct, and the defaulting party has begun substantial corrective action to
remedy the default within such thirty (30) day period and diligently pursues
such action, in which event, termination shall not be effective unless ninety
(90) days have expired from the date of the Default Notice without such
corrective action being completed and the default remedied.
11. EFFECT OF TERMINATION
11.1 Upon expiration or termination of this Trademark License
Agreement pursuant to Paragraph 2.2 or Section 10, the TSMD Group agrees to
discontinue all use of the Marks; provided, however, that if on the effective
date of the expiration or
6
termination of this Trademark License Agreement, the TSMD Group shall be in
possession of or own products utilizing the Marks, the licenses granted
hereunder shall be deemed to have been extended for such reasonable period of
time as will enable the TSMD Group to dispose of such products in the ordinary
course of business. Upon the disposition of the last of such products, the TSMD
Group shall discontinue the use of the Marks and shall cooperate with
Xxxxxxx-Xxxxxxx or its appointed agent to apply to the appropriate authorities
to cancel recording of this Trademark License Agreement from all government
records.
12. EFFECTIVE DATE
12.1 This Trademark License Agreement shall be effective
as of the Effective Date.
13. MISCELLANEOUS
13.1 Amendments; Waivers.
This Trademark License Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing of all parties. No
waiver of any provision nor consent to any exception to the terms of this
Trademark License Agreement shall be effective unless in writing and signed by
the party to be bound and then only to the specific purpose, extent and instance
so provided.
13.2 Schedules; Exhibits; Integration.
Each schedule and exhibit delivered pursuant to the terms of
this Trademark License Agreement shall be in writing and shall constitute a part
of this Trademark License Agreement, although schedules and exhibits need not be
attached to each copy of this Trademark License Agreement. This Trademark
License Agreement, together with such schedules and exhibits, constitutes the
entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements and understandings of the parties in connection
therewith, except for the Purchase Agreement.
7
13.3 Governing Law.
This Trademark License Agreement, the legal relations between
the parties, and any Action, whether contractual or non-contractual, instituted
by any party with respect to matters arising under or growing out of or in
connection with or in respect of this Trademark License Agreement, including,
but not limited to, the negotiation, execution, interpretation, coverage, scope,
performance, breach, termination, validity or enforceability of this Trademark
License Agreement, shall be governed by and construed in accordance with the
laws of the State of California applicable to contracts made and performed in
such State and without regard to conflicts of law doctrines, except to the
extent that certain matters are preempted by federal law or are governed as a
matter of controlling law by the law of the jurisdiction of incorporation of the
respective parties.
13.4 Headings.
The descriptive headings of the Sections and Paragraphs of
this Trademark License Agreement are for convenience only and do not constitute
a part of this Trademark License Agreement.
13.5 Counterparts.
This Trademark License Agreement and any amendments hereto may
be executed in one or more counterparts. All of such counterparts shall
constitute one and the same agreement and shall become effective when one or
more counterparts have been signed by each party and delivered to the other
party.
13.6 Notices.
Any notice or other communication hereunder must be given in
writing and (a) delivered in person, (b) transmitted by telex, telefax or
telecommunications mechanism (provided that any notice so given is also mailed
or delivered as provided in clause (c)) or (c) mailed by certified or registered
mail, postage prepaid, receipt requested or delivered by reputable overnight
courier service as follows:
8
If to TSMD Acquisition or X-X TSMD, addressed to:
TSMD Acquisition Corp.
c/o Mentmore Holdings, Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000-0000
Facsimile: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
With a copy to:
O'Melveny & Xxxxx
Embarcadero Center West
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-3305
Facsimile: 000-000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
If to Xxxxxxx-Xxxxxxx, addressed to:
Xxxxxxx-Xxxxxxx Company
Stanford Research Park
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-1223
Facsimile: 000-000-0000
Attn: Vice President and Chief Financial Officer
With a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxxxxxxx Xxxxxx
Xxxx Xxxx, XX 00000-1900
Facsimile: 000-000-0000
Attn: Xxxxx X. X'Xxxx, Esq.
or to such other address or to such other person as any party shall have last
designated by such notice to the other parties. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 13.6 and an appropriate answerback is received, (ii) if given by mail or
by overnight delivery, three days after such communication is deposited in the
mails with first class postage prepaid or delivered to the overnight courier,
addressed as aforesaid or (iii) if given by any other means, when actually
delivered at such address.
13.7 Expenses.
Xxxxxxx-Xxxxxxx and the TSMD Group shall each pay their own
expenses incident to the negotiation, preparation and
9
performance of this Trademark License Agreement and the transactions
contemplated hereby.
13.8 Remedies; Waiver.
To the extent permitted by Law, all rights and remedies
existing under this Trademark License Agreement and any related agreements or
documents are cumulative to and not exclusive of, any rights or remedies
otherwise available under applicable Law. No failure on the part of any party to
exercise or delay in exercising any right hereunder shall be deemed a waiver
thereof, nor shall any single or partial exercise preclude any further or other
exercise of such or any other right.
13.9 Attorney's Fees.
In the event of any Action by any party arising under, out of,
in connection with or in respect of this Trademark License Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
expenses incurred in such Action.
13.10 Representation By Counsel; Interpretation.
Xxxxxxx-Xxxxxxx and the TSMD Group each acknowledge that each
party to this Trademark License Agreement has been represented by counsel in
connection with this Trademark License Agreement. Accordingly, any rule of Law
or any legal decision that would require interpretation of any claimed
ambiguities in this Trademark License Agreement against the party that drafted
it has no application and is expressly waived. The provisions of this Trademark
License Agreement shall be interpreted in a reasonable manner to effect the
intent of the parties.
13.11 Specific Performance.
Xxxxxxx-Xxxxxxx and the TSMD Group each acknowledge that, in
view of the uniqueness of the transactions contemplated by this Trademark
License Agreement, each party would not have an adequate remedy at law for money
damages in the event that this Trademark License Agreement has not been
performed in accordance with its terms, and therefore agrees that the other
party shall be entitled to specific enforcement of the terms hereof in addition
to any other remedy to which it may be entitled, at law or in equity.
13.12 Severability.
If any provision of this Trademark License Agreement is
determined to be invalid, illegal or unenforceable by any Governmental Entity,
the remaining provisions of this Trademark
10
License Agreement shall remain in full force and effect provided that the
essential terms and conditions of this Trademark License Agreement for
Xxxxxxx-Xxxxxxx and the TSMD Group remain valid, binding and enforceable.
11
IN WITNESS WHEREOF, the parties hereto have caused this Trademark
License Agreement to be executed as of the day and year first above written.
XXXXXXX-XXXXXXX COMPANY
By: __________________________________
Name: ________________________________
Title: _______________________________
X-X TSMD INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
TSMD ACQUISITION CORP.
By: __________________________________
Name: ________________________________
Title: _______________________________
12
SCHEDULE 1
EXHIBIT A
Xxxxxxx-Xxxxxxx(TM) is a trademark of the Xxxxxxx-Xxxxxxx Company.
EXHIBIT G
Matters to be Covered in
Opinion of Counsel to Seller and Company
1. Each of Seller and Company has been duly incorporated and
is validly existing in good standing under the laws of the State of California,
with corporate power to own its properties and assets, to enter into the
Agreement and the Ancillary Agreements and to perform its obligations under the
Agreement and the Ancillary Agreements.
2. The execution, delivery and performance of the Agreement
and the Ancillary Agreements have been duly authorized by all necessary
corporate action on the part of each of Seller and Company, and the Agreement
and the Ancillary Agreements have been duly executed and delivered by each of
Seller and Company.
3. The Agreement and each of the Ancillary Agreements
constitutes the legally valid and binding obligation of each of Seller and
Company, enforceable against each of Seller and Company in accordance with its
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting creditors' rights generally
(including, without limitation, fraudulent conveyance laws) and by general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law.
4. The execution and delivery of, and performance of its
obligations on or prior to the date of this opinion under, the Agreement and the
Ancillary Agreements by each of Seller and Company do not (i) violate Seller's
or Company's Articles of Incorporation or Bylaws, (ii) violate, breach, or
result in a default under any existing obligation of or restriction on the
Seller or the Company under any agreement listed as an exhibit to Seller's most
recent annual report on Form 10-K or (iii) breach or otherwise violate any
existing obligation of or restriction on Seller or Company under any order,
judgment or decree of any California or federal court or governmental authority
known to us binding on Seller or Company.
5. No order, consent, permit or approval of any California or
federal governmental authority that we have, in the exercise of customary
professional diligence, recognized as applicable to Seller or Company or to
transactions of the type contemplated by the Agreement and the Ancillary
Agreements is required on the part of Seller
G-1
or Company for the execution and delivery of, and performance of its obligations
on or prior to the date of this opinion under, the Agreement and the Ancillary
Agreements, except for such as have been obtained or made.
6. The authorized capital stock of Company consists of 1,000
shares of Common Stock. The outstanding shares of the capital stock of Company
have been duly authorized by all necessary corporate action on the part of
Company and are validly issued, fully paid and non-assessable. Based solely upon
a review of records certified to us as the charter documents of Company and its
corporate minute books since _____ ___, 1997, the authorized but unissued shares
of capital stock of Company are not subject to any warrants, options, rights or
commitments granted by Seller or Company, and neither Company nor any subsidiary
of Company is obligated to issue, purchase or redeem any shares of Company's
capital stock. Upon payment for and delivery of the Stock in accordance with the
Agreement (assuming Buyer is a protected purchaser within the meaning of the
Uniform Commercial Code) acquiring the Stock in good faith without notice of any
adverse claim, Buyer will own the Stock free and clear of any adverse claim (as
defined in Article 8 of the Uniform Commercial Code).
G-2
EXHIBIT H
Matters to be Covered in Opinion of Counsel to Buyer
1. Buyer has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware, with corporate power to
own its properties and assets, to enter into the Agreement and the Ancillary
Agreements and to perform its obligations under the Agreement and the Ancillary
Agreements.
2. The execution, delivery and performance of the Agreement
and the Ancillary Agreements have been duly authorized by all necessary
corporate action on the part of Buyer, and the Agreement and the Ancillary
Agreements have been duly executed and delivered by Buyer.
3. Each of the Agreement and each of the Ancillary Agreements
constitutes the legally valid and binding obligation of Buyer, enforceable
against Buyer in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing and the possible unavailability of specific performance or injunctive
relief, regardless of whether considered in a proceeding in equity or at law.
4. The execution and delivery of, and performance of its
obligations on or prior to the date of this opinion under, the Agreement and the
Ancillary Agreements by Buyer do not (i) violate Buyer's Certificate of
Incorporation or Bylaws, (ii) violate, breach, or result in a default under any
existing obligation of or restriction on Buyer under any other agreement
identified to us by Buyer in a certificate executed by Buyer's Vice President
and General Counsel as being a material contract of Buyer or (iii) breach or
otherwise violate any existing obligation of or restriction on Buyer under any
order, judgment or decree of any California or federal court or governmental
authority known to us binding on Buyer.
5. No order, consent, permit or approval of any California or
federal governmental authority that we have, in the exercise of customary
professional diligence, recognized as applicable to Buyer or to transactions of
the type contemplated by the Agreement and the Ancillary Agreements is required
on the part of Buyer for the execution and delivery of, and performance of its
obligations on or prior to the date of this opinion under,
H-1
the Agreement and the Ancillary Agreements, except for such as have been
obtained.
H-2
DISCLOSURE SCHEDULE
This disclosure schedule ("Disclosure Schedule") is being delivered by
Xxxxxxx-Xxxxxxx Company, a California corporation ("Seller"), and X-X TSMD Inc.,
a California corporation and a wholly owned subsidiary of Seller ("Company"), in
connection with the Stock Purchase Agreement (the "Agreement") dated as of
August 29, 1997 by and among TSMD Acquisition Corp., a Delaware corporation
("Buyer"), Seller and Company. Capitalized terms used herein without definition
shall have the same meanings given to them in the Agreement.
Section 2.4(c)
Seller and Company are making the following disclosure with respect to
the last sentence of the representations contained in Section 2.4(c). With
respect to the leased personal property listed in Schedule 2.6(a), the following
agreements provide for Seller and Company to pay or indemnify the equipment
lessor for taxes incurred by the lessor:
1. Master lease agreement with Comdisco, Inc. dated January 14, 1985
and related purchase order number 9726-1.
2. Purchase order number 20831-1 with Xxxxx Speciality Gas.
3. Purchase order number D-2645500-l with VPSI.
4. Purchase order number 15765 and 8115 with Electro Rent Corporation.
5. Purchase order number 8090 with Continental Resources, Inc.
6. Financing Agreement 4124-50788 and related Product Schedule and
Payment Agreement with Hewlett-Packard dated April 12, 1997 and related purchase
order number 24752.
Section 2.5
With regard to the second sentence of Section 2.5 of the Agreement,
please be advised that Seller and Company are parties to certain contracts the
disclosure of which are prohibited either contractually or legally. Accordingly,
Seller or Company have not yet made copies of such agreements available to
Buyer.
Section 2.6(a)
With regard to the third sentence of Section 2.6(a) of the Agreement,
inventory liens by Raytheon on prepaid contracts for AMRAAM products under the
following purchase orders: 72-RYOO-68-7552, 72-RYOO-68-7515, 72-RYOO-68-7760,
72-RYO 1-68-2157, 72-WP02-68-0417, 72-WPO2-68-0419 and 72-WP02-68-0394.
Section 2.7
Schedule 2.7 does not provide a list of copyrighted material owned by
Seller (with respect to the Business) or Company. Such list is unavailable
because Seller does not track such copyrights even though Seller has, by
publishing certain materials, certain rights under copyright laws even though
the copyright is not registered.
Section 2.16
(a)(1) Each employee of Seller and Company receives an offer letter
which outlines the terms of their employment. Seller and Company have made
available to Buyer copies of the form of such letters, a copy of which is
attached as Exhibit B to Schedule 2.16. Seller represents and warrants that all
of the offer letters are substantially in the form attached as Exhibit B to
Schedule 2.16. Xxxxxx enters into non-disclosure, invention and assignment
agreements with all of its employees. Seller has provided Buyer with forms of
such agreements. Seller represents and warrants that all of the non-disclosure,
inventions and assignment agreements between Seller and its employees are
substantially in the forms provided to Buyer.
Section 2.17
Xxxxx Xxxxxx and Xxxxxxx Xxxxxx have executed promissory notes in favor
of Seller for the aggregate principal amount of $85,000. Exhibit A to Schedule
2.5(1) sets forth the details relating to such promissory notes.
Section 2.18
Seller (with respect to the Business) and Company are party to certain
customer contracts with Seller's units not within the Business. A list of such
contracts is set forth on Exhibit B to Schedule 2.5(1).
2
SCHEDULE 1.1
Excluded Assets
1. Accounts Receivable.
2. Deferred Tax Assets.
3. Other Current Assets - Prepaids.
4. All licensed intellectual property identified as such in Schedule 2.7.
5. All excluded patents identified on Exhibit A to this Schedule 1.1.
SCHEDULE 1.1 EXCLUDED ASSETS
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES
The following are excluded from license or transfer to TSMD:
(a)
====================================================================================================================================
Serial No./ Patent No./
Reference No. Title/First Named Inventor Filing Date Issue Date
------------------------------------------------------------------------------------------------------------------------------------
A-16178-6/AJT LOW TEMPERATURE CHEMICAL VAPOR DEPOSITION OF SILICON USSN 07/068,727 US 4,845,054
DIOXIDE Filed 06/29/87 Issued 07/04/89
------------------------------------------------------------------------------------------------------------------------------------
A-16178-7/AJT CVD REACTOR AND GAS INJECTION SYSTEM USSN 07/044,326 US 4,834,022
Filed 10/27/87 Issued 05/30/89
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-44048/AJT ATMOSPHERIC PRESSURE CHEMICAL VAPOR DEPOSITION USSN 07/128,806 US 4,834,020
APPARATUS AND METHOD; Xxxxxxxxxxx Filed 12/04/87 Issued 05/03/89
------------------------------------------------------------------------------------------------------------------------------------
A-44153/AJT CLEAN ROOM ROBOT; Xxxxxxx USSN 07/089,591 US 4,787,813
08/26/87 Issued 11/29/88
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1 TO PATENT CROSS LICENSE AGREEMENT
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES October 30, 1997
* Indicates that certain material has been omitted pursuant to a request
for confidential treatment. Such material is contained in a copy
of this document provided to the Securities and Exchange Commission.
1
====================================================================================================================================
Serial No./ Patent No./
Reference No. Title/First Named Inventor Filing Date Issue Date
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-52244/AJT ELECTRICALLY INSULATED PIPE COUPLING APPARATUS; Gralenski USSN 07/570,122 US 5,088,773
Filed 08/17/90 Issued 02/18/92
------------------------------------------------------------------------------------------------------------------------------------
A-52353/AJT/WSG INJECTOR AND METHOD FOR DELIVERING GASEOUS CHEMICALS TO USSN 07/542,243 US 5,136,975
A SURFACE; Xxxxxxxxxxx Filed 06/21/90 Issued 08/11/92
------------------------------------------------------------------------------------------------------------------------------------
A-52354/AJT/WSG SELF CLEANING ORIFICE; Kamian USSN 07/513,807 US 5,113,789
Filed 04/24/90 Issued 05/19/92
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-53836/AJT LIQUID SOURCE BUBBLER; Xxxxxx XXXX 07/601,270 US 5,078,922
Filed 10/22/90 Issued 01/07/92
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-53859/AJT LIQUID LEVEL SENSOR ASSEMBLY; Xxxxxxxx USSN 07/601,408 US 5,029,471
Filed 10/23/90 Issued 07/09/91
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1 TO PATENT CROSS LICENSE AGREEMENT
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES October 30, 1997
2
====================================================================================================================================
Serial No./ Patent No./
Reference No. Title/First Named Inventor Filing Date Issue Date
------------------------------------------------------------------------------------------------------------------------------------
A-56598/AJT HEATER FOR PROCESSING GASES; Xxxxxxx USSN 07/971,490 US 5,377,300
Filed 11/04/92 Issued 12/27/94
------------------------------------------------------------------------------------------------------------------------------------
A-56818/AJT LOW PHASE NOISE REFERENCE OSCILLATOR; Xxxxx USSN 08/091,615 US 5,341,110
Filed 07/14/93 Issued 08/23/94
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-58019/AJT CHEMICAL VAPOR DEPOSITION OF SILICON DIOXIDE USING USSN 08/071,516 US 5,304,398
HEXAMETHYLDISILAZANE; Krusell Filed 06/03/93 Issued 04/19/94
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1 TO PATENT CROSS LICENSE AGREEMENT
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES October 30, 1997
3
====================================================================================================================================
Serial No./ Patent No./
Reference No. Title/First Named Inventor Filing Date Issue Date
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-60164 /AJT/MSS METHOD OF PLANARIZING A LAYER OF MATERIAL; Fry USSN 08/447,809 US 5,668,063
Filed 5/23/95 Issued 09/16/97
------------------------------------------------------------------------------------------------------------------------------------
A-60785/AJT/MSS METHOD OF FORMING A FLUORINATED SILICON OXIDE LAYER USSN 08/386,647 US 5,571,576
USING PLASMA CHEMICAL VAPOR DEPOSITION; Qian Filed 02/10/95 Issued 11/05/96
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1 TO PATENT CROSS LICENSE AGREEMENT
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES October 30, 1997
4
====================================================================================================================================
Serial No./ Patent No./
Reference No. Title/First Named Inventor Filing Date Issue Date
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1 TO PATENT CROSS LICENSE AGREEMENT
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES October 30, 1997
5
====================================================================================================================================
Serial No./ Patent No./
Reference No. Title/First Named Inventor Filing Date Issue Date
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1 TO PATENT CROSS LICENSE AGREEMENT
EXCLUDED PATENTS/PATENT APPLICATIONS/INVENTION DISCLOSURES October 30, 1997
6
SCHEDULE 2.1
Officers & Directors
Officers
President: X. Xxxxx Xxxxxxx, Xx.
Secretary: Xxxxxxx X. Xxxxx
Treasurer: Xxxxx X. Xxxxxxxx
Directors
Xxxx X. Xxxxxxx
X. Xxxxxxx Xxxxxxx
X. Xxxxx Xxxxxxx, Xx.
SCHEDULE 2.5(g)
Certain Extensions of Credit
None
SCHEDULE 2.5(h)
Restrictions on Competition
1. Strategic Agreement and FOTT Agreement with Xxxxxx dated May 23, 1996
2. Teaming Agreement with Kaman Sciences Corporation dated August 13, 1996
3. Stock Purchase Agreement with Condor Systems, Inc. dated as of April 28,
1995
SCHEDULE 2.5(i)
Guarantees/Indemnities
Exhibit A attached to Schedule 2.5(i) is a copy of the indemnity agreement
between Xxxxxx and Xxxxx X. Xxxxxxx dated May 31, 1988.
EXHIBIT A
INDEMNITY AGREEMENT
This Indemnity Agreement ("Agreement") is made as of
May 31, 1988 by and between Xxxxxxx-Xxxxxxx Company, a California corporation
("Company"), and Xxxxx X. Xxxxxxx ("Indemnitee"), an officer of the Company.
RECITALS
A. The Indemnitee is currently serving or has agreed to
serve as an officer of the Company and in such capacity has rendered or will
render valuable services to the Company.
B. The Company has investigated the availability and
sufficiency of liability insurance and California statutory indemnification
provisions to provide its directors, officers, employees, and agents with
adequate protection against various legal risks and potential liabilities to
which such individuals are subject due to their positions with the Company and
has concluded that such insurance and statutory provisions may provide
inadequate and unacceptable protection to certain individuals requested to serve
as directors, officers, employees, and agents.
C. In order to induce and encourage highly experienced and
capable persons such as the Indemnitee to serve as officers of the Company, the
Board of Directors has determined, after due consideration and investigation of
the terms and provisions of this Agreement and the various other options
available to the Company and the Indemnitee in lieu hereof, that this Agreement
is not only reasonable and prudent but necessary to promote and ensure the best
interests of the Company and its shareholders.
AGREEMENT
NOW, THEREFORE, in consideration of the services of the
Indemnitee and in order to induce the Indemnitee to serve as an officer, the
Company and the Indemnitee do hereby agree as follows:
1. Definitions. As used in this Agreement
(a) The term "Proceeding" shall include any threatened,
pending or completed action, suit or proceeding, formal or
informal, whether brought in a civil, criminal or
administrative or investigative nature, by reason of the fact
that the Indemnitee is or was an officer of the Company, or is
or was serving at the request of the Company as a director,
officer, employee or agent of another corporation or other
enterprise, including service with respect to employee benefit
plans, whether or not he or she is serving in such capacity at
the time any liability or expense is incurred for which
indemnification or reimbursement is to be provided under this
Agreement.
-1-
(b) The term "Expenses' includes, without limitation,
attorneys' fees, disbursements and retainers, accounting and
witness fees, travel and deposition costs, expenses of
investigations, judicial or administrative proceedings and
appeals, amounts paid in settlement by or on behalf of
Indemnitee, and any expenses of establishing a right to
indemnification, pursuant to this Agreement or otherwise,
including reasonable compensation for time spent by the
Indemnitee in connection with the investigation, defense or
appeal of a Proceeding or action for indemnification for
which he or she is not otherwise compensated by the
Company or any third party. The term "Expenses" does not
indude the amount of judgments, fines, penalties or ERISA
excise taxes actually levied against the Indemnitee.
2. Agreement to Serve. The Indemnitee agrees to serve as an
officer of the Company at the will of the Company for so long as he or she
is duly elected or appointed or until such time as he or she tenders his
or her resignation in writing or is removed as an officer.
3. Indemnification in Third Party Actions. The Company
shall indemnify the Indemnitee if the Indemnitee is a party to or
threatened to be made a party to or is otherwise involved in any
Proceeding (other than a Proceeding by or in the name of the Company to
procure a judgment in its favor), by reason of the fact that the Indemnitee
is or was an officer of the Company, or is or was serving at the request of
the Company as a director, officer, employee or agent of another
corporation or other enterprise, including service with respect to employee
benefit plans, against all Expenses, judgments, fines, penalties and XXXXX
excise taxes actually and reasonably incurred by the Indemnitee in
connection with the defense or settlement of such a Proceeding, to the
fullest extent permitted by California law and the Company's Articles of
Incorporation; provided that any settlement of a Proceeding be approved in
writing by the Company.
4. Indemnification in Proceedings By or In the Name of the
Company. The Company shall indemnify the Indemnitee if the Indemnitee is a
party to or threatened to be made a party to or is otherwise involved in
any Proceeding by or in the name of the Company to procure a judgment in
its favor by reason of the fact that the Indemnitee was or is an officer of
the Company, or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation or other
enterprise, including service with respect to employee benefit plans,
against all Expenses, judgments, fines, penalties and XXXXX excise taxes
actually and reasonably incurred by the Indemnitee in connection with the
defense or settlement of such a Proceeding, to the fullest extent permitted
by California law and the Company's Articles of Incorporation.
5. Conclusive Presumption Regarding Standards of Conduct.
The Indemnitee shall be conclusively presumed to have met the relevant
standards of conduct, if any, as defined by California law, for
indemnification pursuant to this Agreement, unless a determination is made
that the Indemnitee has not met such standards (i) by the Board of
Directors by a majority vote of a quorum thereof
-2-
consisting of directors who were not parties to the Proceeding due to which
a claim is made under this Agreement, (ii) by the shareholders of the
Company by majority vote of a quorum thereof consisting of shareholders who
are not parties to the Proceeding due to which a claim is made under this
Agreement, (iii) in a written opinion by independent counsel, selection of
whom has been approved by the Indemnitee in writing, or (iv) by a court of
competent jurisdiction.
6. Indemnification of Expenses of Successful Party.
Notwithstanding any other provision of this Agreement, to the extent that
the Indemnitee has been successful in defense of any Proceeding or in
defense of any claim, issue or matter therein, on the merits or otherwise,
including the dismissal of a Proceeding without prejudice or the settlement
of a Proceeding without an admission of liability, the Indemnitee shall be
indemnified against all Expenses incurred in connection therewith to the
fullest extent permitted by California law.
7. Advances of Expenses. The Expenses incurred by the
Indemnitee in any Proceeding shall be paid promptly by the Company in
advance of the final disposition of the Proceeding at the written request
of the Indemnitee to the fullest extent permitted by California law;
provided that the Indemnitee shall undertake in writing to repay any
advances if it is ultimately determined that the Indemnitee is not entitled
to indemnification.
8. Partial Indemnification. If the Indemnitee is entitled
under any provision of this Agreement to indemnification by the Company for
a portion of the Expenses, judgments, fines, penalties or ERISA excise
taxes actually and reasonably incurred by him or her in the investigation,
defense, appeal or settlement of any Proceeding but not, however, for the
total amount of his or her Expenses, judgments, fines, penalties or ERISA
excise taxes, the Company shall nevertheless indemnity the Indemnitee for
the portion of Expenses, judgments, fines, penalties or ERISA excise taxes
to which the Indemnitee is entitled.
9. Indemnification Procedure; Determination of Right to
Indemnification.
(a) Promptly after receipt by the Indemnitee of notice
of the commencement of any Proceeding, the Indemnitee shall,
if a claim in respect thereof is to be made against the
Company under this Agreement, notify the Company of the
commencement thereof in writing. The omission to so notify the
Company will not relieve it under this Agreement unless the
Company shall have lost to the defense of any Proceeding as a
result of such omission to so notify.
(b) If a claim for indemnification or advances under this
Agreement is not paid by the Company within 30 days of receipt
of written notice, the rights provided by this Agreement shall
be enforceable by the Indemnitee in any court of competent
jurisdiction. The burden of providing by clear and convincing
evidence that indemnification or advances are not appropriate
shall be on the Company. Neither the failure of the directors
-3-
or shareholders of the Company or its independent legal
counsel to have made a determination prior to the commencement
of such action that indemnification or advances are proper in
the circumstances because the Indemnitee has met the
applicable standard of conduct, if any, nor an actual
determination by the directors or shareholders of the Company
or independent legal counsel that the Indemnitee has not met
the applicable standard of conduct, shall be a defense to the
action or create a presumption for the purpose of an action
that the Indemnitee has not me: the applicable standard of
conduct.
(c) The Indemnitee's Expenses incurred in connection
with any proceeding concerning his right to indemnification or
advances in whole or in part pursuant to this Agreement shall
also be indemnified by the Company regardless of the outcome
of such a proceeding.
(d) With respect to any Proceeding for which
indemnification is requested, the Company will be entitled to
participate therein at its own expense and, except as
otherwise provided below, to the extent that it may wish, the
Company may assume the defense thereof, with counsel
satisfactory to the Indemnitee. After notice from the Company
to the Indemnitee of its election to assume the defense of a
Proceeding, the Company will not be liable to the Indemnitee
under this Agreement for any Expenses subsequently incurred by
the Indemnitee in connection with the defense thereof, other
than as provided below. The Company shall not settle any
Proceeding in any manner which would impose any penalty or
limitation on the Indemnitee without the Indemnitee's written
consent. The Indemnitee shall have the right to employ his or
her own counsel in any Proceeding, but the fees and expenses
of such counsel incurred after notice from the Company of its
assumption of the defense of the Proceeding shall be at the
expense of the Indemnitee, unless (i) the employment of
counsel by the Indemnitee has been authorized by the Company,
(ii) the Indemnitee shall have reasonably concluded that there
may be a conflict of interest between the Company and the
Indemnitee in the conduct of the defense of a Proceeding, or
(iii) the Company shall not in fact have employed counsel to
assume the defense of a Proceeding, in each of which cases the
fees and expenses of the Indemnitee's counsel shall be
advanced by the Company. The Company shall not be entitled to
assume the defense of any Proceeding brought by or behalf of
the Company or as to which the Indemnitee has concluded that
there may be a conflict of interest between the Company and
the Indemnitee.
-4-
10. Limitations on Indemnification. No payments pursuant to
this Agreement shall be made by the Company:
(a) To indemnify or advance funds to the Indemnitee for
Expenses with respect to Proceedings initiated or brought
voluntarily by the Indemnitee and not by way of defense,
except with respect to Proceedings brought to establish or
enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under California
law, but such indemnification or advancement of expenses may
be provided by the Company in specific cases if the Board of
Directors finds it to be appropriate;
(b) To indemnify the Indemnitee for any Expenses,
judgments, fines, penalties or ERISA excise taxes sustained in
any Proceeding for which payment is actually made to the
Indemnitee under a valid and collectible insurance policy,
except in respect of any excess beyond the amount of payment
under such insurance;
(c) To indemnify the Indemnitee for any Expenses,
judgments, fines or penalties sustained in any Proceeding for
an accounting of profits made from the purchase or sale by the
Indemnitee of securities of the Company pursuant to the
provisions of Section 16(b) of the Securities Exchange Act of
1934, the rules and regulations promulgated thereunder and
amendments thereto or similar provisions of any federal, state
or local statutory law; and
(d) If a court of competent jurisdiction finally
determines that any indemnification hereunder is unlawful.
11. Maintenance of Liability Insurance.
(a) The Company hereby covenants and agrees that, as
long as the Indemnitee continues to serve as an officer of the
Company and thereafter as long as the Indemnitee may be
subject to any possible Proceeding, the Company, subject to
subsection (c), shall promptly obtain and maintain in full
force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and
reputable insurers.
(b) In all D&O Insurance policies, the Indemnitee shall
be named as an insured in such a manner as to provide the
Indemnitee the same rights and benefits as are accorded to the
most favorably insured of the Company's officers.
(c) Notwithstanding the foregoing, the Company shall
have no obligation to obtain or maintain D&O Insurance if the
Company determines, in its sole discretion, that such
insurance is not reasonably available, the premium costs for
such insurance are disproportionate to the
-5-
amount of coverage provided, the coverage provided by such
insurance is so limited by exclusions that it provides an
insufficient benefit, or the Indemnitee is covered by similar
insurance maintained by a subsidiary of the Company.
12. Indemnification Hereunder Not Exclusive. The
indemnification provided by this Agreement shall not be deemed exclusive of
any other rights to which the Indemnitee may be entitled under the Articles
of Incorporation, Bylaws, any agreement, vote of shareholders or
disinterested directors, provision of California law, or otherwise, both as
to action in his or her official capacity and as to action in another
capacity on behalf of the Company while holding such office.
13. Successors and Assigns. This Agreement shall be binding
upon, and shall inure to the benefit of the Indemnitee and his or her
heirs, executors, administrators and assigns, whether or not Indemnitee has
ceased to be a director or officer, and the Company and its successors and
assigns; provided that the obligations of the Company under this Agreement
shall not be assigned or delegated without the prior written consent of the
Indemnitee except that in the event that the Company shall merge or
consolidate with any other corporation or all or substantially all the
Company's business or assets shall be transferred in any manner to any
other person, such successor shall thereupon succeed to, and be subject to,
all rights, interests, duties and obligations of, and shall thereafter be
deemed for all purposes hereof to be, the Company hereunder.
14. Separability. Each and every paragraph, sentence, term and
provision of this Agreement is separate and distinct so that if any
paragraph, sentence, term or provision thereof shall be held to be invalid
or unenforceable for any reason, such invalidity or unenforceability shall
not affect the validity or enforceability of any other paragraph, sentence,
term or provision hereof. To the extent required, any paragraph, sentence,
term or provision of this Agreement may be modified by a court of competent
jurisdiction to preserve its validity and to provide the Indemnitee with
the broadest possible indemnification permitted under California law.
15. Savings Clause. If this Agreement or any paragraph,
sentence, term or provision hereof is invalidated on any ground by any
court of competent jurisdiction, the Company shall nevertheless indemnify
the Indemnitee as to any Expenses, judgments, fines, penalties or ERISA
excise taxes incurred with respect to any Proceeding to the full extent
permitted by any applicable paragraph, sentence, term or provision of this
Agreement that has not been invalidated or by any other applicable
provision of California law.
16. Interpretation; Governing Law. This Agreement shall be
construed as a whole and in accordance with its fair meaning. Headings are
for convenience only and shall not be used in construing meaning. This
Agreement shall be governed and interpreted in accordance with the laws of
the State of California.
17. Amendments. No amendment, waiver, modification,
termination or cancellation of this Agreement shall be effective unless in
writing signed by the party against whom enforcement is sought. The
indemnification rights afforded to the Indemnitee hereby are contract
rights and may not be diminished, eliminated or otherwise affected by
amendments to the Articles of Incorporation, Bylaws or by other agreements,
including D&O Insurance policies.
18. Counterparts. This Agreement may be expected in one or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have
been signed by each party and delivered to the other.
19. Notices. Any notice required to be given under this
Agreement shall be directed to Xxxxxxx-Xxxxxxx Company, 0000 Xxxxxxxx
Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000-0000, Attention: General Counsel, and
to Indemnitee at 0000 Xxxxxxxx Xxxxxx, Xxxxx Xxxx, XX 00000 or such other
address as either shall designate in writing.
IN WITNESS WHEREOF, the parties have executed this Indemnity
Agreement as of the date first written above.
INDEMNITEE
/s/ Xxxxx X. Xxxxxxx
---------------------------------------------
XXXXXXX-XXXXXXX COMPANY
By: /s/ X. Xxxxx Xxxxxxx
---------------------------------------------
Its: President
---------------------------------------------
-7-
SCHEDULE 2.5(j)
Power of Attorney & Agency
Because of geographical considerations, distributors and representatives of
Seller disclosed on Exhibit A to Schedule 2.5(f) have been granted agency
authority to negotiate on behalf of Seller as specified therein.
Freight forwarders have powers of attorney to execute customs documents to ship
Seller and Company products.
SCHEDULE 2.5(k)
Right of First Refusal
None
SCHEDULE 2.5(l)
Certain Obligations
1. Exhibit A attached to Schedule 2.5(I) sets forth a list of notes
receivable by Seller from certain affiliates of Seller.
2. Exhibit B attached to Schedule 2.5(1) sets forth a list of open orders
placed by the Seller with its affiliates as such orders relate to the
business.
EXHIBIT A
XXXXXXX-XXXXXXX COMPANY
ANALYSIS OF NOTES RECEIVABLE
APRIL, 1997
1. Note receivable, Xxxxxxx Xxxxxx per agreement 12/16/94 $100,000.00
1st year forgiveness (95) (25,000.00)
2nd year forgiveness (96) (25,000.00)
3rd year forgiveness (97) (8,654.00)
2. Note receivable, Xxxxx Xxxxxx per agreement 8/23/96 $35,000.00
1st year forgiveness (96) (3,533.00)
2nd year forgiveness (97) (3,028.00)
EXHIBIT B
OPEN ORDERS PLACED BY XXXXXXX-XXXXXXX
Purchase Sales Ordered
Customer Order Order Date Total Amount
-------- -------- ------- ------- ------------
XXXXXXX-XXXXXXX/GAITHERSBURG 29849 2010379 5/22/97 558.00
26156-15 2010469 5/31/97 920.00
26156-18 2010660 6/14/97 6,409.00
26156-18 2010717 6/19/97 57,817.00
30679 2010745 6/21/97 415.00
26156-21 2010804 6/26/97 21,199.00
31282 2010994 7/14/97 400.00
26156-23 2010998 7/14/97 480.00
28156-22 2011021 7/16/97 8,381.00
26156-24 2011068 7/23/97 2,593.00
26156-26 2011174 7/31/97 922.00
26156-25 2011175 7/31/97 1,605.00
26156-27 2011338 8/19/97 344.00
26156-28 2011367 8/21/97 8,081.00
XXXXXXX-XXXXXXX EUROPE, LIMITED 033739 2008742 12/20/96 540.00
033741 2008804 12/31/96 540.00
033744 2008813 12/31/96 540.00
101178 2010783 6/24/97 1,147.50
100461 2011220 8/6/97 46,086.39
100676 2011221 6/6/97 56,422.98
100457 2011222 8/6/97 47,234.88
101490 2011337 8/1/97 20,493.00
101570 2011365 8/21/97 5,310.00
1
SCHEDULE 2.5(o)
Non-Ordinary Course Contracts
None
SCHEDULE 2.6(a)
Real Property/Personal Property
Real Property
Set forth below is a list of real property leases that are material to the
Business:
1. Real property lease relating to Building 3.
2. Real property lease relating to Building 6.
Personal Property
Set forth below is a list of personal property that is material to the Business:
1. Master lease agreement with Comdisco, Inc. Dated January 14, 1985 and
related purchase order number 9726-1.
2. Purchase order number 20831-1 with Xxxxx Specialty Gas.
3. Purchase order number D-2645500-1 with VPSI.
4. Purchase order numbers 15765 and 8115 with Electro Rent Corporation.
5. Purchase order number 8090 with Continental Resources, Inc.
6. Financing Agreement 4124-50788 and related Product Schedule and Payment
Agreement with Hewlett-Packard dated April 12, 1997 and related
purchase order number 24752.
This Schedule 2.6(a) also incorporates by reference the contents of the
velo-bound "Asset List Summary".
SCHEDULE 2.7
Intellectual Property
Schedule 2.7 does not list Seller's (with respect to the Business) or
Company's Intellectual Property Rights because listing all such rights would be
unduly burdensome. Nonetheless, Seller acknowledges and agrees that each and
every Intellecutal Property Right used in the conduct of, connected with or
comprising the Business is a Purchased Asset. The parties agree that the
Intellectual Property Rights related to the fabrication and processing of Thin
Film parts will be transferred to Company and will be included as a Purchased
Asset. Subject to the terms and conditions of the GaAs/Thin Film Agreement and
the License Agreement, Seller will be licensed to such Intellectual Property
Rights. The parties further agree that the Intellectual Property Rights related
to the fabrication and processing of Gallium Arsenide parts remains the property
of Seller. Subject to the terms and conditions of the GaAs/Thin Film Agreement
and the License Agreement, Buyer and Company will be licensed to such
Intellectual Property.
1
0087704.01
SCHEDULE 2.7 to Purchase Agreement
TRANSFERRED Patents/Pending Patent Applications/Invention Disclosures to TSMD
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
G-16178-1/AJT VARIABLE LINE EXTENDER FOR WAVE USSN 721,333 US 4,677,400
GUIDE/Xxxxxxxx, et al. Filed 04/08/85 Issued 06/30/87
------------------------------------------------------------------------------------------------------------------------------------
G-16178-2/AJT HIGH FREQUENCY CONVERTER USSN 668,718 US 3,584,306
Filed Issued 06/08/71
Expired
------------------------------------------------------------------------------------------------------------------------------------
G-16178-3/AJT HIGH FREQUENCY CONVERTER/Xxxxxx Xxxxxxxx, et al USSN 851,923 US 3,638,126
Filed Issued 01/25/72
Expired
------------------------------------------------------------------------------------------------------------------------------------
G-16178-4/AJT MILLIMETER-WAVE ODD HARMONIC USSN 278,815 US 4,394,632
FREQUENCY MULTIPLIER/ Hu Filed 06/29/81 Issued 07/19/83
------------------------------------------------------------------------------------------------------------------------------------
G-16178-5/AJT MILLIMETER-WAVE STRIPLINE PLANAR USSN 364,289 US 4,412,354
MIXER/ Hu Filed 04/01/82 Issued 10/25/83
------------------------------------------------------------------------------------------------------------------------------------
A-25007/AJT PERIODIC PERMANENT MAGNET FOCUSED USSN 120,466 US 3,684,914
TRAVELING WAVE TUBE/ Xxxxxxx Issued 03/30/71 Issued 08/15/72
Expired
------------------------------------------------------------------------------------------------------------------------------------
A-31892/AJT/SCS THIN FILM MICROWAVE VOLTAGE USSN 851,458 US 4,156,211
CONTROLLED OSCILLATOR/Buswell, Evers, Xxxxxxx Filed 11/14/77 Issued 05/22/79
Expired
------------------------------------------------------------------------------------------------------------------------------------
A-36756/AJT Controlled Voltage Yttrium Iron Garnet (YIG) USSN 291,618 USSN 4,420,731
Resonator Apparatus Filed 8/10/81 Issued 12/13/83
Schiebold, Green Expired
------------------------------------------------------------------------------------------------------------------------------------
1
--------
* Indicates that certain material has been omitted pursuant to a request
for confidential treatment. Such material is contained in a copy
of this document provided to the Securities and Exchange Commission.
Schedule 2.7 to Purchase Agreement September 3, 1997
Transferred Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
FA-36756-JP/AJT Controlled Voltage Yttrium Iron Garnet (YIG) Appl. 139083/1982 JP 0000000 Japan
Resonator Apparatus Filed 08/10/82 Issued 12/14/88
Schiebold, Green
------------------------------------------------------------------------------------------------------------------------------------
A-37012/AJT RF Amplifier Circuit Employing FET Devices USSN 316,130 US 4,423,388
Xxxxxxxxx, Wilser, Oglesbee, Gold Filed 10/29/81 Issued 12/27/83
Expired
------------------------------------------------------------------------------------------------------------------------------------
A-37341/AJT HOUSING FOR MICROWAVE ELECTRONIC USSN 06/326,757 US 4,455,448
DEVICES; Xxxxxxxxx Filed 12/02/81 Issued 06/19/84
------------------------------------------------------------------------------------------------------------------------------------
A-40351/AJT Microwave Circuit Structure and Method of Mounting USSN 593,908 US 4,547,755
Xxxxxxx Filed 03/27/84 Issued 10/15/85
------------------------------------------------------------------------------------------------------------------------------------
A-43820/AJT WIDEBAND MICROWAVE MATRIX AMPLIFIER USSN 015,908 US 4,752,746
Niclas Filed 02/18/87 Issued 06/21/88
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-45171/AJT CONNECTOR ASSEMBLY FOR MICROWAVE USSN 38,539 US 4,737,123 All foreign
INTEGRATED CIRCUITS Filed 04/15/87 Issued 04/12/88 cases expired
Paler, Xxxxxxx, Buchholz, Xxxxx Expired
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-50202/AJT MICROWAVE NOTCH FILTER SUING PIN USSN 360,312 US 4,965,539
DIODE SHUNTED YIG RESONATOR Filed 06/02/89 Issued 10/23/90
Xxxxxx
------------------------------------------------------------------------------------------------------------------------------------
A-50847/AJT APPARATUS FOR LOW STRESS POLISHING USSN 455,182 US 4,965,967
OF SPHERICAL OBJECTS Filed 12/22/89 Issued 10/30/90
London
------------------------------------------------------------------------------------------------------------------------------------
2
Schedule 2.7 to Purchase Agreement September 3, 1997
Transferred Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
A-51965/AJT SURFACE MOUNT PACKAGE FOR RF DEVICES USSN 570,121 US 5,117,068
Xxxxxxx, Xxxxxxx Filed 08/17/90 Issued 05/26/92
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-54458/AJT RF GLASS FEEDTHROUGH SEAL AND METHOD USSN 756,462 US 5,170,142
Bier Filed 09/09/91 Issued 12/08/92
Expired
------------------------------------------------------------------------------------------------------------------------------------
A-56617/AJT HIGH FREQUENCY LIMITER AND SWITCH USSN 940,072 US 5,300,900
LIMITER CIRCUIT HAVING IMPROVED RECOVERY Filed 09/03/92 Issued 04/05/94
TIME
Xxxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-57396/AJT DUAL MODE LOGARITHMIC AMPLIFIER USSN 016,073 US 5,414,313
HAVING CASCADED STAGES Filed 02/10/93 Issued 05/09/95
Bamford, Crescrenzi, X'Xxxxxxx, Xxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
A-58859/AJT PROCESS FOR FORMING SOLID USSN 181,665 US 5,454,928
CONDUCTIVE VIAS IN SUBSTRATES Filed 01/14/94 Issued 10/03/95
Besser, Novice, Rogers, Washburn, White
------------------------------------------------------------------------------------------------------------------------------------
FA-58859-IL/AJT PROCESS FOR FORMING SOLID Appl. 112294 IL 112294 Israel
CNDUCTIVE VIAS IN SUBSTRATES Filed 01/10/95 Issued 02/02/97
Besser, Novice, Rogers, Washburn, White
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
3
Schedule 2.7 to Purchase Agreement September 3, 1997
Transferred Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SS-578-01 MICROWAVE INTEGRATED CIRCUIT USSN 542,724 US 5,102,029
PACKAGE TO ELIMINATE ALUMINA SUBSTRATE Filed 06/22/90 Issued 04/07/92
CRACKING
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
SS-578-01/DIV MICROWAVE INTEGRATED CIRCUIT USSN 809,699 US 5,175,611
PACKAGE TO ELIMINATE ALUMINA SUBSTRATE Filed 12/16/91 12/29/92
CRACKING
------------------------------------------------------------------------------------------------------------------------------------
SS-578-01/J MICROWAVE INTEGRATED CIRCUIT JP 0000000 Japan
PACKAGE TO ELIMINATE ALUMINA Issued 07/25/96
SUBSTRATE CRACKING
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
SS-578-01/UK MICROWAVE INTEGRATED CIRCUIT UK 2246470 UK
PACKAGE TO ELIMINATE ALUMINA Issued 10/05/94
SUBSTRATE CRACKING
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
4
Schedule 2.7 to Purchase Agreement September 3, 1997
Transferred Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
SS-578-02 DC-40 GHZ MODULE INTERFACE USSN 578,668 US 5,065,124
Xxxxxx Filed 09/04/90 Issued 11/12/91
------------------------------------------------------------------------------------------------------------------------------------
SS-578-02/F DC-40 GHZ MODULE INTERFACE FR 91 10348 France
Xxxxxx Issued 12/12/93
------------------------------------------------------------------------------------------------------------------------------------
SS-578-02/J DC-40 GHZ MODULE INTERFACE JP 0000000 Japan
Xxxxxx Issued 10/02/96
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
SS-578-09 WIDE PERCENTAGE BANDWIDTH USSN 778,303 US 5,175,518
MICROWAVE FILTER NETWORK AND METHOD OF Filed 10/15/91 Issued 12/29/92
MANUFACTURING SAME/
Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
SS-578-09/J WIDE PERCENTAGE BANDWIDTH MICROWAVE JP 0000000 Japan
FILTER NETWORK AND METHOD OF Issued 09/05/96
MANUFACTURING SAME/
Xxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
SS-578-09/UK WIDE PERCENTAGE BANDWITH UK 2260646 U.K.
MICROWAVE FILTER NETWORK AND METHOD Issued 01/10/96
OF MANUFACTURING SAME/ Singapore
Xxxxxxx Registration No.
9690452.9
------------------------------------------------------------------------------------------------------------------------------------
5
Schedule 2.7 to Purchase Agreement September 3, 1997
Transferred Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
SS-578-09/UK-DIV WIDE PERCENTAGE BANDWIDTH MICROWAVE UK 2266195 U.K.
FILTER NETWORK AND METHOD OF Issued 01/10/96
MANUFACTURING SAME/ Singapore
Xxxxxxx Registration No.
9690453.7
------------------------------------------------------------------------------------------------------------------------------------
N/A HOUSING FOR MICROWAVE ELECTRONIC USSN 326,757 US 4,455,448 Japan
DEVICES Filed 12/02/81 Issued 06/19/84
Xxxxxxxxx Expired
------------------------------------------------------------------------------------------------------------------------------------
A-28035 ELECTRON BOMBARDED SIMICONDUCTOR US 4,328,466
DEVICE WITH DOUBLY-DISTRIBUTED DEFLECTION Issued: 05/04/82
MEANS/ Xxxxx
------------------------------------------------------------------------------------------------------------------------------------
A-31006 YIG-TUNED BULK SEMICONDUCTOR OSCILLATOR/ US 4,048,588
Wilser Issued: 9/13/77
------------------------------------------------------------------------------------------------------------------------------------
A-30451 ELECTRON BOMBARDED SEMICONDUCTOR US 4,045,705
DEVICE/ Knight Issued: 08/30/77
------------------------------------------------------------------------------------------------------------------------------------
A-28757 METHOD OF FABRICATING AN ARRAY OF US 4,040,169
SEMICONDUCTOR DEVICES/ Rose Issued: 08/09/77
------------------------------------------------------------------------------------------------------------------------------------
A-29539 INTERCONNECTING CIRCUIT FOR EBS US 4,001,600
DIODES AND METHOD/ Xxxxxx Issued: 01/04/77
------------------------------------------------------------------------------------------------------------------------------------
A-27209 RECTANGULAR BEAM LAMINAR FLOW ELECTRON US 3,980919
GUN/ Xxxxx Issued: 09/14/76
------------------------------------------------------------------------------------------------------------------------------------
6
Schedule 2.7 to Purchase Agreement September 3, 1997
Transferred Patents/Patent Applications/Invention Disclosures
SCHEDULE 2.7 to Purchase Agreement
LICENSED Patents/Pending Patent Applications/Invention Disclosures to TSMD
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
A-49500/AJT LINEARIZED ATTENUATOR; Xxxxxx Closed
------------------------------------------------------------------------------------------------------------------------------------
A-50064/AJT METHOD OF FABRICATING MICROWAVE FET USSN 388,627 US 4,935,377
HAVING GATE WITH SUBMICRON LENGTH; Filed 08/01/89 Issued 06/19/90
GALLIUM-ARSENIC, ALUMINUM AND
FLUORINATED POLYMER
Xxxxxxxx, Xxxxxx
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-57779-AJT METHOD OF FABRICATING GROUP III-IV USSN 37,074 US 5,374,328
COMPUND SENICONDUCTOR DEVICES USING Filed 03/25/93 Issued 12/20/94
SELECTIVE ETCHING/Brunemeier, Remba, UNDER REISSUE
Resenblatt, Schmukler, Xxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
FA-57779-IL/AJT ETCH STOP MMIC PROCESS/Brunemeier, Appl. 108762 IL 108762 Xxxxxx
Xxxxx, Resenblatt, Schmukler, Xxxxxxxx Filed 02/24/94 Issued 02/28/96
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
1
Schedule 2.7 to Purchase Agreement September 3, 1997
Licensed Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-58046/AJT BIASED FET MIXER / USSN 149,671 US 5,513,390
Vice Filed 11/09/93 Issued 04/30/96
------------------------------------------------------------------------------------------------------------------------------------
A-58410/AJT FET MIXER HAVING TRANSMISSION LINE USSN 08/004,234 US 5,361,409
TRANSFORMER/Vice Filed 01/14/93 Issued 11/01/94
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-58410-2/AJT/RMA BALANCED REFLECTION TRANSFORMER/Vice USSN 08/376,126 US 5,551,074
Filed 01/19/95 Issued 08/07/96
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
2
Schedule 2.7 to Purchase Agreement September 3, 1997
Licensed Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
3
Schedule 2.7 to Purchase Agreement September 3, 1997
Licensed Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-62592/AJT/MSS METHOD OF CHARACTERIZING GROUP III-V USSN 08/571,518 US 5,639,343
EPITAXIAL SEMICONDUCTOR WAFERS Filed 12/13/95 Issued 06/17/97
INCORPORATING AN ETCH STOP LAYER
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-63334/AJT Co-Planar Waveguide Coupler/Xxxxx USSN 08/643,852 US 5,629,654
Filed May 6, 1996 Issued 05/13/97
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-63348/AJT/MSS METHOD OF FABRICATING SUB-MICRON USSN 08/638,950 US 5,652,179
GATE ELECTRODE BY ANGLE AND DIRECT Filed April 24, 1996 Issued 07/29/97
EVAPORATION; Xxxxxxxx, Xxx, Xxxxxxxx, Remba
------------------------------------------------------------------------------------------------------------------------------------
4
Schedule 2.7 to Purchase Agreement September 3, 1997
Licensed Patents/Patent Applications/Invention Disclosures
====================================================================================================================================
Serial No./ Patent No./ Foreign
Reference No. Title/Inventors Filing Date Issue Date Countries
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
A-62726/AJT CONNECTOR ASSEMBLY FOR DETACHABLY USSN 08/563,299 US 5,613,859
CONNECTING A PRINTED WIRING BOARD TO Filed 11/28/95 Issued 03/25/97
A COAXIAL TRANSMISSION LINE /Xxxxxx,
Xxxxxxxxxx
------------------------------------------------------------------------------------------------------------------------------------
*
------------------------------------------------------------------------------------------------------------------------------------
5
Schedule 2.7 to Purchase Agreement September 3, 1997
Licensed Patents/Patent Applications/Invention Disclosures
SCHEDULE 2.7 to Purchase Agreement
TRANSFERRED TRADEMARK REGISTRATIONS TO TSMD
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-15/XXX XXXXXX Appl. 194830 Reg. 1175891 US Nov. 3, 2001
Filed 11/24/78 Issued 11/03/91
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-16/AJT MINPAC & Design Appl. 194831 Reg. 1170981 US Sept. 29, 2001
Filed 11/24/78 Issued 09/29/81
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-19/AJT VERSA-AMP Appl. 73/736890 Reg. 1527959 US Mar. 7, 2009
Filed 06/27/88 Issued 03/07/89
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-15/XXX XXXXXX Appl. 1114802 Reg. 1114802 UNITED
Filed 05/23/79 Issued 05/23/79 KINGDOM
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-15/XXX XXXXXX Appl. 38407/1979 Reg. 0000000 JAPAN
Filed 05/22/79 Issued 04/30/82
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-16-XXX XXXXXX & DESIGN Appl. 1114803 Reg. B1114803 UNITED
Filed 05/23/79 Issued 05/23/79 KINGDOM
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-16/AJT MINPAC & DESIGN Appl. 38408/1979 Reg. 0000000 JAPAN
05/22/79 Issued 4/30/82
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 616970 Reg. 372628 CANADA
Filed 10/12/88 Issued 08/31/90
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 962966 Reg. 1495606 FRANCE
Field 10/25/88 Issued 10/25/88
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 24709C/88 Reg. 543452 ITALY
Filed 10/07/88 Issued 04/12/91
------------------------------------------------------------------------------------------------------------------------------------
1
Schedule 2.7 to Purchase Agreement
September 3, 1997
Transferred Trademark Registrations to TSMD
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. W38546/9WZ Reg. 1137904 GERMANY
Filed 10/05/88 Issued 04/17/89
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 1359376 Reg. 1359376 UNITED
Filed 09/30/88 Issued 09/30/88 KINGDOM
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 719847 Reg. 448982 BENELUX
Filed 09/27/88 Issued 03/06/89
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 63-111480 Reg. 0000000 JAPAN
Filed 09/29/88 Issued 02/28/92
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 88-08249 Reg. 218261 SWEDEN
Field 09/29/88 Issued 08/03/90
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-19/AJT VERSA-AMP Appl. 70558 Reg. 70558 ISRAEL
Filed 10/06/88 Issued 10/06/88
------------------------------------------------------------------------------------------------------------------------------------
2
Schedule 2.7 to Purchase Agreement
September 3, 1997
Transferred Trademark Registrations to TSMD
SCHEDULE 2.7 to Purchase Agreement
TRANSFERRED TRADEMARK REGISTRATIONS TO TSMD
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-001/AJT WJ & DESIGN Appl. Reg. 856401 US 09/10/2008
Filed Issued 09/10/68
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/002/AJT WJ & DESIGN Appl. 301929 Reg. 154299 Canada 11/24/2012
Filed 01/10/67 Issued 11/24/97
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/007/AJT WJ & DESIGN Appl. 2507/1967 Reg. 0000000 Japan 06/03/2006
Filed 01/17/67 Issued 12/03/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/008/XXX XX & DESIGN Appl. 5502/66 Reg. 120792 Sweden 08/25/2007
Filed 12/28/66 Issued 08/25/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/009/AJT WJ & DESIGN Appl. 2212 Reg. 356515 Switzerland 04/10/2007
Filed 04/11/67 Issued 04/10/87
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/010/AJT WJ & DESIGN Appl. 544980 Reg. 053238 Benelux 09/03/2006
Filed 09/03/71 Issued 09/03/86
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001011/AJT/MSS WJ & DESIGN Appl. 312973 Reg. 312973 India 03/08/2004
Filed 03/08/76 Issued 03/08/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/012/AJT WJ & DESIGN Appl. 65504 Reg. 44579 Iran 03/14/2006
Filed 03/14/76 Issued 03/14/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/013/AJT/MSS WJ & DESIGN Appl. 41726 Reg. 41726 Israel 01/11/2011
Filed 01/11/76 Issued 01/11/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/FR/AJT WJ & DESIGN Appl. 844849 Reg. 1398886 France 03/16/2007
Filed 03/16/87 Issued 03/16/87
------------------------------------------------------------------------------------------------------------------------------------
1
Licensed Trademarks
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/IT/AJT WJ & DESIGN Appl. 33747C/87 Reg. 537687 Italy 04/03/2007
Filed 04/03/87 Issued 12/21/90
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-001/JP/007/AJT/MSS WJ & DESIGN Appl. 08-136910 Reg. Japan
Filed 12/04/96 Issued
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-002/XXX XXXXXXX-XXXXXXX Appl. 259870 Reg. 866185 US 03/11/2009
Filed Issued 03/11/69
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/001/XXX XXXXXXX-XXXXXXX Appl. Reg. 111239 Belgium
Filed Issued 04/12/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/002/XXX XXXXXXX-XXXXXXX Appl. 301932 Reg. 164962 Canada 09/05/1999
Filed 01/10/67 Issued 09/05/69
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/004/XXX XXXXXXX-XXXXXXX Appl. W19000/22BWZ Reg. 879087 Germany 01/02/2007
Filed 01/02/67 Issued 01/02/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/009/XXX XXXXXXX-XXXXXXX Appl. 5499/1966 Reg. Sweden
Filed 10/28/66 Issued
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/009/XXX XXXXXXX-XXXXXXX Appl. 2493 Reg. 356476 Switzerland 04/11/2007
Filed 04/11/67 Issued 04/11/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/010/XXX XXXXXXX-XXXXXXX Appl. 544981 Reg. 053239 Benelux 09/03/2006
Filed 09/03/71 Issued 09/03/86
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/011/AJT/MSS XXXXXXX-XXXXXXX Appl. 312974 Reg. 312974 India 03/08/2004
Filed 03/08/76 Issued 03/08/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/013/AJT/MSS XXXXXXX-XXXXXXX Appl. 41727 Reg. 41727 Israel 01/10/2011
Filed 01/11/76 Issued 01/11/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/FR/XXX XXXXXXX-XXXXXXX Appl. 844848 Reg. 1398885 France 03/16/2007
Filed 03/16/87 Issued 03/16/87
------------------------------------------------------------------------------------------------------------------------------------
2
Licensed Trademarks
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-002/IT/XXX XXXXXXX-XXXXXXX Appl. 33746C/87 Reg. 506363 Italy 04/03/2007
Filed 04/03/87 Issued 03/22/89
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-003/XXX XXXXXXX-XXXXXXX WJ (AND Appl. Reg. 866186 US 09/10/2008
DESIGN) Filed Issued 03/11/69
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/001/XXX XXXXXXX-XXXXXXX WJ (AND Appl. Reg. 11241 Belgium
DESIGN) Filed Issued 04/12/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/002/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 301930 Reg. 167687 Canada 01/30/2000
DESIGN) Filed 01/10/67 Issued 01/30/70
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/004/XXX XXXXXXX-XXXXXXX WJ (AND Xxxx. W19002/22BWZ Reg. 878116 Germany 01/02/2007
DESIGN) Filed 01/02/67 Issued 01/02/87
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/008/AJT/MSS XXXXXXX-XXXXXXX WJ (AND Appl. 5500/66 Reg. 121677 Sweden 12/01/2007
DESIGN) Filed 12/28/66 Issued 12/01/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/009/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 2213 Reg. 356517 Switzerland 04/11/2007
DESIGN) Filed 04/11/67 Issued 04/11/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/010/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 544982 Reg. 053240 Benelux 09/03/2006
DESIGN) Filed 09/03/71 Issued 09/03/86
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/011/AJT/MSS XXXXXXX-XXXXXXX XX (AND Appl. 312975 Reg. 312975 India 03/08/2004
DESIGN) Filed 03/08/76 Issued 03/08/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/013/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 41728 Reg. 41728 Israel 01/11/2001
DESIGN) Filed 01/11/76 Issued 01/11/76
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/FR/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 844847 Reg. 1398884 France 03/16/2007
DESIGN) Filed 03/16/87 Issued 03/16/87
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-003/IT/XXX XXXXXXX-XXXXXXX WJ (AND Xxxx. 33745C/87 Reg. 537688 Italy 04/03/2007
DESIGN) Filed 04/03/87 Issued 12/21/90
------------------------------------------------------------------------------------------------------------------------------------
3
Licensed Trademarks
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-004/AJT XXXXXXX-XXXXXXX XX (AND Appl. 259872 Reg. 856400 US 09/10/1998
DESIGN) Filed 12/02/66 Issued 09/10/68
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/001/XXX XXXXXXX-XXXXXXX WJ (AND Appl. Reg. 11240 Belgium
DESIGN) Filed Issued 04/12/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/002/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 301931 Reg. 167688 Canada 01/30/2000
DESIGN) Filed 01/10/67 Issued 01/30/70
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/004/XXX XXXXXXX-XXXXXXX WJ (AND Xxxx. W18999/22BWZ Reg. 879086 Germany 01/02/2007
DESIGN) Filed 01/02/67 Issued 01/02/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/008/AJT/MSS XXXXXXX-XXXXXXX WJ (AND Appl. 5501/66 Reg. 121678 Sweden 12/012007
DESIGN) Filed 12/28/66 Issued 12/01/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/009/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 2214 Reg. 356516 Switzerland 04/10/2007
DESIGN) Filed 04/11/67 Issued 04/11/67
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004-010/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 544983 Reg. 053241 Benelux 09/03/2006
DESIGN) Filed 09/03/71 Issued 09/03/86
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/FR/XXX XXXXXXX-XXXXXXX XX (AND Appl. 844846 Reg. 1398883 France 03/16/2007
DESIGN) Filed 03/16/87 Issued 03/16/87
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-004/IT/XXX XXXXXXX-XXXXXXX WJ (AND Appl. 33748C/87 Reg. 506362 Italy 04/03/2007
DESIGN) Filed 04/03/87 Issued 03/22/89
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-008/AJT X-X DES Appl. Reg. 1041669 US 06/22/2006
Filed Issued 06/22/96
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-008/KR/AJT WJ & DESIGN (WHITE ON Appl. 28521/92 Reg. 281023 South Korea 12/08/2003
BLACK) Filed 10/12/92 Issued 12/08/93
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-009/AJT XXXXXXX XXXXXXX Appl. Reg. 1041670 US 06/22/2006
Filed Issued 06/22/96
------------------------------------------------------------------------------------------------------------------------------------
4
Licensed Trademarks
====================================================================================================================================
Serial No./ Registration No/
Reference No. Trademark Filing Date Issue Date Country Next Renewal Date
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-009/KR/XXX XXXXXXX-XXXXXXX Appl. 28522/92 Reg. 281024 South Korea 12/08/2003
Filed 10/12/92 Issued 12/08/93
------------------------------------------------------------------------------------------------------------------------------------
TA-21828-010/AJT WJ & DESIGN Appl. Reg. 1042169 US 06/29/2006
Filed Issued 06/29/96
------------------------------------------------------------------------------------------------------------------------------------
FTA-21828-010/KR/AJT XX XXXXXXX-XXXXXXX & Appl. 28520/92 Reg. 281022 South Korea 12/08/2003
DESIGN Filed 10/12/92 Issued 12/02/93
------------------------------------------------------------------------------------------------------------------------------------
5
Licensed Trademarks
SCHEDULE 2.8
Seller/Company Approval and Permits
Approva1s
1. Expiration of applicable waiting period under Xxxx-Xxxxx Xxxxxx.
2. Facility Security Clearance.
3. Third-Party Consents on Contracts.
All Customer Contracts listed on Schedule 2.5(a) require consent prior to
assignment. Supplier Contracts that require consents prior to assignment are the
Oracle software license (PO 22802), the Comdisco lease (PO 9726), and the Sun
Finance lease (PO 9602). The nondisclosure/teaming agreements disclosed on
Schedule 2.5(h) require consents prior to assignment.
SCHEDULE 2.9
LITIGATION
1. The California EPA issued an order finding that Seller is a responsible party
for groundwater contamination which flows through Seller's Palo Alto Plant site
and on the site itself. A number of other companies in the area as well as
Stanford University, the land owner, have been included in the order which
required the responsible parties to conduct an investigation into the cause of
the contamination. The order further required the parties to submit
recommendations on the actions to remediate the contamination. This regional
order applies to what has been designated by the State as the "Hillview/Xxxxxx
site." The primary sources of contamination were found to have migrated onto
Seller's property from off-site. Subsequent to a mediation among the responsible
parties to the Hillview/Xxxxxx site, a formula for allocation of costs for
investigation and remediation based on a determination of liability for such
costs was developed. The parties are in compliance with orders relating to this
cleanup effort. In 1991 Seller established a reserve for expected costs
associated with this effort, and nothing has occurred since that time which
would cause Seller to change that reserve.
2. The California EPA also ordered responsible or potentially responsible
parties to the Hillview/Xxxxxx site, in addition to participating in the total
site remediation, to investigate and remediate contamination that is specific to
their properties ("site specific"). The State has, in that regard, ordered
Seller to take necessary measures to clean up certain contamination which the
State believes was caused by Seller and not by contaminants flowing on-site from
other sources. Seller has likewise established a reserve for expected costs
associated with this effort, and nothing has occurred since that time which
would cause Seller to change that reserve.
3. On February 26, 1992 the DCAA held an exit conference with representatives
of Seller to present preliminary audit findings on Purchase Order No.
6-991010-B-F2 issued by Xxxxxx Aircraft Company and Purchase Order Nos.
75-R###-##-#### and 2561 issued
LITIGATION SCHEDULE
Page 2
by Raytheon Corporation. Both of these contracts are for Lot III data links
and RF processors in the AMRAAM missile program.
The DCAA contends that Seller failed to provide data that was current,
complete and accurate as of the date of final agreement on price between the
government and the prime contractors, Xxxxxx and Raytheon. The preliminary
findings indicated claims in the amount of $141,168 on the Xxxxxx contract and
$566,541 on the Raytheon contract. The Raytheon amount was later finalized by
DCAA at $520,211. Xxxxxx filed a reply to the findings issued by DCAA. A
contracting officer's final decision has not thereafter been received.
4. A dispute with the Naval Air Warfare Center ("NAWC"), Pt. Mugu, CA, has
arisen under Contract N00123-87-C-0059. For several years NAWC had taken the
position that certain frequency monitoring and direction-finding equipment that
Seller had supplied to NAWC in 1991 had failed to demonstrate compliance with
Contract requirements. On August 25, 1994 NAWC issued a Contracting Officer's
final decision terminating the Contract for default. On September 6, 1994 Seller
submitted a certified claim to NAWC for payment of the balance due under the
Contract in the amount of $620,030. On November 9, 1994 Seller filed an appeal
from the default termination decision with the Armed Services Board of Contract
Appeals ("ASBCA"). NAWC has thereafter issued a final decision in response to
Xxxxxx's September 6, 1994 claim denying the claim and Xxxxxx also filed an
appeal with the ASBCA from that final decision. NAWC filed a claim against
Seller for return of the progress payments made to Seller under the Contract in
the amount of $l,699.802. Discovery is pending.
5. By letter dated October 8, 1996, counsel for Synergy Microwave Corporation of
Paterson, NJ, claimed that Seller's use of the designation "SMJ" for its
surface-mount J-lead devices constituted a violation of Synergy Microwave's
rights of use to the initials "SMJ." Xxxxxx replied on November 22, 1996 that
those initials are merely used for identification and that Seller's use is
legally permitted. Synergy Microwave did not reply to the Seller's November 22,
1996 letter. No suit has been filed.
LITIGATION SCHEDULE
Page 3
6. By letter dated October 16, 1996, an attorney for Mini-Circuits, Inc. of New
York, alleged that Seller had violated Mini-Circuits' rights by recruiting one
named and other unnamed employees from Mini-Circuits' employ. Mini-Circuits had
threatened litigation based on unspecified violations of New York law. In
response, Xxxxxx has denied any wrongdoing in connection with the employment of
former Mini-Circuits' employees. No suit has been filed.
7. By letter dated September 30, 1996, PolyPhaser Corporation of Minden, NV
asserted that a Xxxxxxx-Xxxxxxx 1800 MHz amplifier infringes two PolyPhaser
patents. Following investigation of the claim, Xxxxxx responded stating that
there is no basis for a claim of infringement. No suit has been filed.
8. In 1991 Seller entered into a fixed price contract, MPO Contract No. MDA
904-91-C-3061 with the Maryland Procurement Office at Fort Xxxxxx X. Xxxxx,
Maryland for forty-five (45) digitally refreshed displays (DRD's), with an
option to purchase twenty-three (23) additional units. The option was exercised
fully and the total contract value was $2,102,575. A certificate of current cost
or pricing data was executed on January 31, 1991 and was transmitted to the
government on that date. Based upon a post-award audit, the DCAA issued two
reports dated September 24 and November 10, 1993, recommending a price
adjustment to the contract of $558,317.00, and alleging noncompliance with the
provisions of the Truth in Negotiations Act ("XXXX") 10 U.S. Code Section
2306(s). The basis of the alleged noncompliance was the Seller's decision to
purchase certain parts used in the manufacture of the DRD's from outside vendors
rather than fabricating them internally. The Seller responded that while the
decision to purchase the parts resulted in a cost savings to Seller, there was
no knowledge of such potential savings because Seller had received no responses
to requests for quotation at the time the cost data was prepared and certified.
As of this date, the procurement office has not issued a final decision in the
matter.
9. Xxxxxxx Xxxxxx, an employee resident in Massachusetts, filed a complaint with
the Massachusetts Commission Against Discrimination and the EEOC in April 1996
alleging age and disability discrimination in connection with his termination as
a
LITIGATION SCHEDULE
Page 4
sales representative for Seller in March 1996. Xx. Xxxxxx sought compensatory
damages for emotional suffering and damages for loss of future wages. Xxxxxx
responded to his complaint. The Commission has determined that there was no
cause to pursue Xx. Xxxxxx'x claim. He has not thereafter filed suit, but has
sought a review, by the Commission of its finding.
10. Xxxxxxx x. Xxxxxxx-Xxxxxxx Company was filed on April 26, 1996 as Case No.
CV 757641 in the Santa Xxxxx County Superior Court. The plaintiffs are 49 former
employees of Seller's Microwave Surveillance Systems Department who accepted
offers of employment by Condor Systems, Inc., when Condor purchased this unit in
May 1995. The original complaint sought damages of not less than $25,000 per
plaintiff plus punitive damages for alleged invasion of privacy, intentional and
negligent infliction of emotional distress, fraud and negligent
misrepresentation and intentional and negligent interference with prospective
economic advantage. In addition to Seller, the complaint named X. Xxxxx Xxxxxxx,
Xx., and Xxxxxxx X. Xxxx, as defendants. On July 6, 1996, an amended complaint
was filed, adding a cause of action for benefits under the Severance Pay Plan
for Reduction in Force or Layoff adopted by Seller in July 1991, together with
interest and attorney's fees. On August 27, 1996, a motion was filed on behalf
of defendants to compel 32 of the plaintiffs to submit their claims to
arbitration before The American Arbitration Association. These plaintiffs had
signed agreements with Seller providing for arbitration of employment disputes.
The motion also sought to stay the court proceedings as to the remaining
plaintiffs. On January 21, 1997, the court entered an order granting the motion
to compel arbitration, but denying the motion to stay proceedings as to the 17
plaintiffs who are not party to arbitration agreements. A responsive pleading
with respect to these plaintiffs was thereafter filed. Settlement with all
plaintiffs has been reached but release documents have not been executed by the
parties.
SCHEDULE 2.12
Insurance
See attached.
XXXXXXX-XXXXXXX COMPANY
Summary of Insurance
Date: 29 Aug 1997 Page 1 of 3
Carrier Limits Deductible Expires
------- ------ ---------- -------
Commercial General Liability Chubb $1 mil/occur $0 4/1/98
$2 mil gen agg ($50,000 WJE)
$2 mil products
$1 mil PI/Advert
$1 mil Fire
Business Auto Liability Chubb $1 mil liability $250 compreh. 4/1/98
$1 mil uninsured $500 collision
PD: listed vehicles
(only)
Umbrella (over CGL, auto, foreign GL National $10 mil xs primary None 4/1/98
and auto, EL (domestic & foreign)) Union
Excess Liability (follow form Umbrella) Chubb $25 mil xs $10 mil None 4/1/98
Workers' Comp/Employers' Liability Lumbermens WC: Statutory None 4/1/98
(For coverage outside California) EL: $1 mil
Excess Workers' Comp & EL National WC: Statutory excess None 4/1/00
(California excess over self-ins.) Union of $250,000 self-ins.
EL: $1 mil
D&O Liability Chubb $10 mil $0 Individual 10/15/97
$500,000 Corp
Fidicuiary & Employee Benefits Chubb $10 mil $10,000 10/15/97
Liability
Special Accident Coverage Chubb $5 mil None 10/15/97
(California excess over self-ins.)
Page 2 of 3
Carrier Limits Deductible Expires
------- ------ ---------- -------
Errors and Omissions (WJ Environ) London $1 mil/occur $100,000 1/1/98
$2 mil aggreg
Foreign CGL/Auto/Workers' Comp Chubb $1 mil None 4/1/98
(controlled master program)
Foreign Property/BI/B&M Chubb $10 mil/occur: PD&BI $ 1,000 4/1/98
(controlled master program) $1 mil OPP $5,000 EQ
$1 mil Contin BI 24 hr BI
$250,000 Tenants
Marine Cargo Firemans $5 mil/conv - Int'l $ 10,000 Until
Fund $2 mil/conv - USA Cancellation
Aviation Products Liability USAIG $20 mil aggregate None 4/1/98
Business Travel Accident AIG Life $300,000/accident None 1/1/99
$3 mil aggregate
Crime - Employee Recr Ass'n Hartford $40,000/occur None Until
Cancellation
CGL/Auto - Employee Recr Ass'n Chubb $1 mil/occur None 4/1/97
$2 mil gen aggr
Notary Bonds (various) Safeco $10,000 None Various
U.S. Customs-Importer/Broker Bond St. Xxxx $100,000 None 5/2/98
Fidelity and Crime Arkwright $2 mil employee theft $25,000 7/1/98
$2 mil forgery and
alteration
Page 3 of 3
Carrier Limits Deductible Expires
------- ------ ---------- -------
Domestic Property Insurance Arkwright $500 mil/occur: PD&BI $50,000 7/1/98
$100 mil/occur: Flood
$100 mil/occur: EQ
(but $0 EQ in Calif)
$1 mil MUL
$5 mil Svc Interruption
$3 mil CTE
$10 mil extra expense
SCHEDULE 2.20
Inventory Valuation
See attached.
Inventory shall be valued as determined in accordance with generally accepted
accounting principles (GAAP) consistently applied and practices normally used by
Seller in preparing its frnancial statements using the lower of cost or market.
Finished Goods inventory on production catalog orders is valued based on actual
physical count multiplied by a unit price based either on historical actuals or
a cost roll-up of the bill of material.
Raw Material inventory (prior to stockroom receipt) is valued based on purchase
order receipts multiplied by purchase order price.
Stockroom inventory is valued based on actual physical count multiplied by a
unit price based either on historical actuals, a cost roll-up of the bill of
material, or weighted moving average.
Work in process inventory on production fixed-price catalog orders is valued
based on actual costs incurred on outstanding work orders.
Work in process inventory on non-catalog fixed-price short-term contracts is
valued based on actual costs incurred and anticipated cost estimates-to-
complete in meeting contractual commitments or required milestones. Any
anticipated losses on contracts are charged to earnings when identified.
Seller's estimates have been consistently applied in accordance with
GAAP, and are based on the most recent cost input data at the time of the
estimate. Buyer should note that changes in business conditions and/or
operational structure and other unanticipated technical issues arising after the
date of the estimate may cause the actual total costs to vary substantially.
Long-term fixed-price contract costs and cost-plus-fixed-fee (CPPF) contract
costs are excluded from inventory.
SCHEDULE 3.3
Buyer Approvals and Permits
1. Buyer's ultimate parent entity will be required to file under the
Xxxx-Xxxxx-Xxxxxx Act. Xxxxx's purchase of the Stock will be subject to
the applicable waiting period (and any other restrictions) thereunder.
2. Xxxxx plans to make a voluntary filing with the Committee on Foreign
Investment in the United States under the Exon-Xxxxxx Amendment to
the Defense Production Act of 1950.
SCHEDULE 6.2(d)
[N.B.: This list covers third-party (i.e., non-governmental) consents only.
Section 6.1(b) of the Stock Purchase Agreement provides that all Permits and
Approvals (other than Government Contract Novations) required to be obtained
from any Governmental Entity (including the facility security clearances,
environmental and other permits, export licenses, consent to the transfer of the
Government Furnished Items, etc.) shall have been obtained on or prior to the
Closing Date and the HSR waiting period shall have expired or been terminated.]
1. Consents to assignment/change in control with respect to any and all
contracts with the following (and any subsidiaries or other affiliates
thereof):
x. Xxxxxx (including, but not limited to, Xxxxxx Missile
Systems Company and Xxxxxx Aircraft Co.).
b. Lockheed Xxxxxx (including, but not limited to,
Lockheed Xxxxxx Federal Systems, Lockheed Xxxxxx
Aerospace, Xxxxxx Xxxxxxxx, Xxxxxx Xxxxxxxx Millimeter
Technologies, etc.).
c. Raytheon (including, but not limited to, Raytheon Co. and
Raytheon TI Systems (RTIS), and including all consents/
documentation necessary to transfer the liened AMRAAM
inventory).
d. EDL Communications Ltd.
e. Motorola Inc.
f. E-Systems.
9. Nortel Ltd.
x. Xxxxxx Systems, Inc.
i. Boeing (including, but not limited to, Boeing North America)
2. "Split" of Oracle license/new Oracle license to Company.
3. Consent to assignment/change in control of Calif. Eastern Labs.
4. Consent to assignment/change in control of Hana Semiconductor.
5. Consent to assignment/change in control of MP World Electronic
Corporation.
1
6. Consent to assignment/change in control of Pacific Microwave
Corporation.
7. Consent to assignment/change in control of Fastech Microelectronics.
8. Consent to assignment/change in control of Comdisco.
9. Flatirons Labs Inc. shall have unconditionally assigned to Seller all
rights to the Jointly Owned Technology (as defined in the Technology
Development Agreement dated June 16, l994, as amended on September 2,
1997), which rights shall be transferred to Company or to Buyer at the
Closing. [Under review.]
10. Consent to assignment/change in control/release of collateral/negative
pledge of ABN-AMRO Bank, N.V., as Agent under Credit Agreement with
Seller dated November 30, 1995.
11. Consent to assignment/change in control of the counterparties to all
Nondisclosure/Proprietary/Teaming Agreements with any of the parties
referred to in Item 1 above.
12. [Representative/Distributor Agreements.] [Need to discuss
with Xxxxx.]
13. Consent to assignment/change in control of Stanford (ground lessor) and
Xxxxxx-Xxxxxxx (master lessor) re: Buildings 3, 5 and 6 leases.
2
SCHEDULE 8.3(a)
None.
The parties acknowledge that the Buyer is responsible for payment of Taxes due
for Tax periods ending after the Closing Date that apply to property leased by
the Company (subject to (a) the Tax allocation provisions of the Agreement
including, but not limited to, Section 5.3(c) of the Agreement and (b) any
indemnification by the Seller with respect thereto provided for under the
Agreement including, but not limited to, indemnification under Section
8.3(a)(vi) of the Agreement).
