Exhibit 2.1
AMENDED AND RESTATED
AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
BY AND BETWEEN
LUCENT TECHNOLOGIES INC.
AS SELLER
AND
SCC COMMUNICATIONS CORP.
AS BUYER
DATED AS OF MAY 11, 2001
TABLE OF CONTENTS
1. Definitions...................................................................................2
1.1 Defined Terms........................................................................2
1.2 Other Definitional and Interpretive Matters..........................................9
2. Purchase and Sale of the Business.............................................................9
2.1 Purchase and Sale of Assets..........................................................9
2.2 Excluded Assets.....................................................................10
2.3 Purchase Price......................................................................11
2.4 Assumed Liabilities.................................................................12
2.5 Excluded Liabilities................................................................12
2.6 Further Assurances; Further Conveyances and Assumptions; Consent of Third Parties...12
2.7 No Licenses.........................................................................14
2.8 Bulk Sales Laws.....................................................................14
2.9 Taxes...............................................................................14
2.10 Escrow..............................................................................14
3. Representations and Warranties of Seller.....................................................14
3.1 Organization and Qualification......................................................14
3.2 IP-Guardian.........................................................................15
3.3 Authorization; Binding Effect.......................................................15
3.4 Non-Contravention; Consents.........................................................15
3.5 Title to Property; Principal Equipment; Sufficiency of Assets.......................16
3.6 Permits; Licenses...................................................................17
3.7 Real Estate.........................................................................17
3.8 Compliance With Laws; Litigation....................................................17
3.9 Business Employees..................................................................17
3.10 Material Contracts..................................................................18
3.11 Environmental Matters...............................................................18
3.12 Financial Statement; Absence of Changes.............................................19
3.13 Intellectual Property...............................................................20
3.14 Inventory...........................................................................21
3.15 Absence of Certain Changes or Events................................................21
3.16 Customers...........................................................................22
3.17 Deferred Revenue....................................................................22
3.18 Brokers.............................................................................22
3.19 Disclosure..........................................................................22
3.20 Investment..........................................................................23
3.21 Books and Records...................................................................23
3.22 No Other Seller Representations or Warranties.......................................23
4. Representations and Warranties of Buyer......................................................24
4.1 Organization and Qualification......................................................24
4.2 Authorization; Binding Effect.......................................................24
4.3 Reports and Financial Statements....................................................24
4.4 No Violations.......................................................................25
4.5 Registration Rights.................................................................26
4.6 Brokers.............................................................................26
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4.7 Disclosure..........................................................................26
4.8 No Other Buyer Representations and Warranties.......................................26
4.9 Sufficiency of Funds................................................................27
5. Certain Covenants............................................................................27
5.1 Access and Information..............................................................27
5.2 Tax Reporting and Allocation of Consideration.......................................28
5.3 Business Employees..................................................................28
5.4 Marketing Agreement.................................................................29
5.5 Contacts with Suppliers and Customers...............................................29
5.6 Sale by Buyer of Inventory Marked With Seller's Name................................29
5.7 Non-Solicitation of Employees.......................................................29
5.8 Certain Equipment...................................................................30
5.9 Certificate of Designation..........................................................31
5.10 Financial Statements................................................................31
6. Confidential Nature of Information...........................................................31
6.1 Confidentiality Agreement...........................................................31
6.2 Seller's Proprietary Information....................................................32
7. Closing......................................................................................33
7.1 Deliveries by Seller and IP-Guardian................................................33
7.2 Deliveries by Buyer.................................................................34
7.3 Contemporaneous Effectiveness.......................................................34
8. Status of Agreements.........................................................................34
8.1 Survival of Representations and Warranties..........................................35
8.2 General Agreement to Indemnify......................................................35
8.3 General Procedures for Indemnification..............................................37
9. Miscellaneous Provisions.....................................................................38
9.1 Notices.............................................................................38
9.2 Expenses............................................................................39
9.3 Entire Agreement; Modification......................................................39
9.4 Assignment; Binding Effect; Severability............................................39
9.5 Governing Law.......................................................................39
9.6 Execution in Counterparts...........................................................39
9.7 Public Announcement.................................................................40
9.8 No Third Party Beneficiaries........................................................40
10. Waiver of Agreement..........................................................................40
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SCHEDULES
SCHEDULE 2.1 Subset of Purchased Assets
SCHEDULE 2.1(d) Purchased Leased Equipment
SCHEDULE 2.1(h) Principal Equipment
SCHEDULE 2.2(f) Excluded Contracts
SCHEDULE 2.2(i) Excluded Leased Equipment
SCHEDULE 2.3(c) Contingent Shares
SCHEDULE 2.4(d) Leased Equipment
SCHEDULE 3.4 Required Consents
SCHEDULE 3.6(a) Governmental Permits
SCHEDULE 3.6(b) Licenses
SCHEDULE 3.8(a) Compliance with Laws
SCHEDULE 3.8(b) Litigation
SCHEDULE 3.9(a) Business Employees
SCHEDULE 3.9(b) Benefit Plans
SCHEDULE 3.10 Material Contracts
SCHEDULE 3.11 Environmental Matters
SCHEDULE 3.12(a) Financial Statements
SCHEDULE 3.12(c) Exceptions
SCHEDULE 3.13(b) Third-Party Claims
SCHEDULE 3.13(d) Intellectual Property
SCHEDULE 3.14 Inventory
SCHEDULE 3.15 Absence of Certain Changes or Events
SCHEDULE 3.16 Customers
SCHEDULE 3.17 Prepayments and Deposits
SCHEDULE 4.4(b) Required Approvals
SCHEDULE 5.2(b) Allocation of Consideration
SCHEDULE 5.3(a) Employees
EXHIBITS
EXHIBIT A Form of Assignment and Xxxx of Sale
EXHIBIT B Form of Assumption Agreement
EXHIBIT C Form of CPE Intellectual Property Agreement
EXHIBIT D Form of Cross Receipt
EXHIBIT E Form of Escrow Agreement
EXHIBIT F Form of Non CPE Intellectual Property Agreement
EXHIBIT G Form of Certificate of Designation
EXHIBIT H Form of Registration Rights Agreement
EXHIBIT I Form of Stockholders Agreement
EXHIBIT J Form of Subcontracted Services Agreement
EXHIBIT K Form of Transition Services Agreement
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AMENDED AND RESTATED
AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
THIS AMENDED AND RESTATED AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
(this "AGREEMENT") is made as of May 11, 2001 by and between LUCENT TECHNOLOGIES
INC., a Delaware corporation having an office at 000-000 Xxxxxxxx Xxxxxx, Xxxxxx
Xxxx, Xxx Xxxxxx 00000-0000 ("SELLER"), and SCC COMMUNICATIONS CORP., a Delaware
corporation having an office at 0000 Xxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx 00000-0000
("BUYER"). Buyer and Seller are referred to together herein as the "PARTIES" or
interchangeably as a "PARTY."
R E C I T A L S
A. WHEREAS, the Parties entered into an Agreement for the Purchase and
Sale of Assets dated October 16, 2000 (the "Initial Agreement");
B. WHEREAS, the Parties desire to amend and restate the Initial
Agreement as set forth herein;
C. WHEREAS, Seller is, among other things, engaged through a unit of
its New Ventures Group in (i) the sale and licensing of emergency 911 systems,
including hardware and software for the routing of 911 emergency calls and
associated identification and location data to appropriate public safety
answering points, (ii) the sale and licensing of record management systems and
call handling equipment related to emergency 911 systems (the "CPE BUSINESS"),
and (iii) the maintenance and upgrade of such systems (collectively, the
"BUSINESS");
D. WHEREAS, the Business is composed of certain assets and liabilities
that are currently part of Seller;
E. WHEREAS, Seller desires to sell, transfer and assign to Buyer, and
Buyer desires to purchase from Seller, the Purchased Assets (as hereinafter
defined), and Buyer is willing to assume the Assumed Liabilities (as hereinafter
defined) from Seller, in each case as more fully described and upon the terms
and subject to the conditions set forth herein; and
F. WHEREAS, Seller, and in certain cases IP-Guardian (as defined
below), and Buyer desire to enter into the following agreements: the Assignment
and Xxxx of Sale; the Assumption Agreement; the Intellectual Property
Agreements; the Transition Services Agreement; the Escrow Agreement; the
Subcontracted Services Agreement; the Registration Rights Agreement; the
Stockholders Agreement; and the Cross Receipt (each as defined below, and
collectively the "COLLATERAL AGREEMENTS").
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NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the Parties hereby
agree as follows:
1. DEFINITIONS
1.1 DEFINED TERMS
For the purposes of this Agreement, in addition to the words and
phrases that are described throughout the body of this Agreement, the following
words and phrases shall have the following meanings:
"ACCEPTING EMPLOYEES" has the meaning assigned in Section 5.3(a).
"AFFILIATE" of any Person means any Person that controls, is controlled
by, or is under common control with such Person. As used herein, "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract or otherwise.
"AGGREGATE PURCHASE PRICE" has the meaning assigned in Section 2.3(d).
"AGREEMENT" has the meaning assigned in the preamble hereof.
"ASSET ACQUISITION STATEMENT" has the meaning assigned in Section
5.2(b).
"ASSIGNED AGREEMENT" means the Technology Transfer Agreement between
Seller and 911 Mapping Systems, Inc., effective June 1, 1998.
"ASSIGNMENT AND XXXX OF SALE" means the agreement in the form set forth
as EXHIBIT A.
"ASSUMED LIABILITIES" means the liabilities and obligations of Seller
assumed by Buyer pursuant to the Assumption Agreement and Section 2.4.
"ASSUMPTION AGREEMENT" means the agreement in the form set forth as
EXHIBIT B.
"BENEFIT PLAN" means, in respect of any Business Employee, each
"employee benefit plan," as defined in Section 3(3) of ERISA (including any
"multiemployer plan" as defined in Section 3(37) of ERISA) and any other
profit-sharing, bonus, stock option, stock purchase, stock ownership, pension,
retirement, severance, deferred compensation, excess benefit, supplemental
unemployment, post-retirement medical or life insurance, welfare or incentive
plan, or sick leave, long-term disability, medical, hospitalization, life
insurance, other insurance plan, or other employee benefit plan, program or
arrangement, whether written or unwritten, qualified or non-qualified, funded or
unfunded, maintained or contributed to by Seller.
"BUSINESS" has the meaning assigned in Recital C hereof.
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"BUSINESS DAY" means a day that is not a Saturday, a Sunday or a
statutory or civic holiday in the State of New York or any other day on which
the principal offices of Seller or Buyer are closed or become closed prior to
2:00 p.m., local time.
"BUSINESS EMPLOYEES" has the meaning assigned in Section 3.9(a).
"BUSINESS RECORDS" means all books, records, ledgers and files or other
similar information used primarily in, or necessary to, the conduct of the
Business, including price lists, customer lists, vendor lists, mailing lists,
warranty information, catalogs, sales promotion literature, advertising
materials, brochures, records of operation, standard forms of documents, manuals
of operations or business procedures, research materials, reports or summaries
relating to any environmental conditions or consequences of any operation,
present or former as well as any studies, reports, or summaries relating to any
environmental aspect or the general condition of the Purchased Assets, and
product testing reports required by any national, federal, state, provincial or
local court, administrative body or other Governmental Body of any country, but
excluding any such items to the extent (i) they are included in, or primarily
related to, any Excluded Assets or Excluded Liabilities, (ii) any applicable Law
prohibits their transfer, or (iii) they are confidential personnel records.
"BUYER" has the meaning assigned in the preamble hereof.
"BUYER REPORTS" has the meaning assigned in Section 4.3(a).
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. Sections 9601 ET SEQ. as amended.
"CLOSING PRICE" has the meaning assigned in Section 8.2(d).
"CODE" means the U.S. Internal Revenue Code of 1986, as amended.
"COLLATERAL AGREEMENTS" has the meaning assigned in Recital F hereof.
"COMMON STOCK" has the meaning assigned in Section 2.3(a).
"CONFIDENTIALITY AGREEMENT" means the agreement between Seller and
Buyer dated April 11, 2000.
"CONTINGENT SHARES" has the meaning assigned in Section 2.3(c).
"CONTRACTS" means all contracts, agreements, leases and subleases,
licenses, supply contracts, purchase orders, sales orders and other instruments
used or held for use in each case primarily in, or necessary to, the conduct of
the Business that are in effect on the date hereof, to which Seller is a party
for (i) the lease of machinery and equipment, motor vehicles, or furniture and
office equipment, (ii) the provision of goods or services to the Business, or
(iii) the sale of goods or performance of services by the Business, including
teaming agreements relating thereto.
"COUNSEL FOR BUYER" means Xxxx and Xxxx LLP.
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"COUNSEL FOR SELLER" means a corporate counsel of Seller.
"CPE BUSINESS" has the meaning assigned in Recital C hereof.
"CPE INTELLECTUAL PROPERTY AGREEMENT" means the agreement in the form
set forth as EXHIBIT C.
"CROSS RECEIPT" means the agreement in the form attached hereto as
EXHIBIT D.
"DEFERRED REVENUE" has the meaning assigned in Section 3.17.
"DISCLOSING PARTY" has the meaning assigned in Section 6.2(c).
"ENCUMBRANCE" means any liability, lien, claim, charge, security
interest, mortgage, pledge, easement, encumbrance, conditional sale or other
title retention agreement, covenant or other similar restrictions or Third Party
rights affecting the Purchased Assets.
"ENVIRONMENTAL LAW" means any foreign, local, county, state or federal
Law that governs the existence of or provides a remedy for release of Hazardous
Substances, the protection of persons, natural resources or the environment, the
management of Hazardous Substances, or other activities involving Hazardous
Substances including under CERCLA or any other similar foreign, federal, state,
local or county Laws, in each case as in effect on or prior to the date hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ESCROW AGENT" means Xxxxx Fargo Bank MN, N.A., as escrow agent under
the Escrow Agreement.
"ESCROW AGREEMENT" means the agreement in the form attached hereto as
EXHIBIT E.
"ESCROW SHARES" has the meaning set forth in Section 2.3(d).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCLUDED ASSETS" means the properties and assets of the Business
excluded from the Purchased Assets by Section 2.2.
"EXCLUDED CONTRACTS" means (i) the Lease, (ii) those Contracts
identified in SCHEDULE 2.2(f), (ii) those Contracts under which performance by
Seller or an Affiliate has been completed and for which there is no continuing
obligation, (iii) those Contracts relating to any General Purchase Agreement and
not to any other Contract, or (iv) those Contracts relating solely to Excluded
Assets or Excluded Liabilities.
"EXCLUDED LEASED EQUIPMENT" means the Leased Equipment set forth on
Schedule 2.2(i).
"EXCLUDED LIABILITIES" means the liabilities and obligations that are
not assumed by Buyer as provided in Section 2.5.
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"FINANCIAL STATEMENTS" has the meaning assigned in Section 3.12(a).
"FIXTURES AND SUPPLIES" means all furniture, furnishings, office
supplies and similar tangible personal property owned by Seller whether or not
used or held for use in, or necessary to, the conduct of the Business, including
desks, tables, chairs, file cabinets and other storage devices and office
supplies.
"GAAP" means generally accepted accounting principles as applied in the
United States.
"GENERAL PURCHASE AGREEMENTS" means Third Party supply contracts or
other agreements between Seller or an Affiliate and a Third Party pursuant to
which Seller or an Affiliate purchases products or services from such Third
Party for any of Seller's or an Affiliate's businesses other than solely for the
Business.
"GOVERNMENTAL BODY" means any legislative, executive or judicial unit
of any governmental entity (foreign, federal, state or local) or any department,
commission, board, agency, bureau, official or other regulatory, administrative
or judicial authority thereof.
"GOVERNMENTAL PERMITS" means all governmental permits and licenses,
certificates of inspection, approvals or other authorizations issued to Seller
with respect to the Business and necessary to the conduct of the Business as
currently conducted under applicable Laws.
"HAZARDOUS SUBSTANCE" means (i) any hazardous, toxic or dangerous
waste, substance or material defined as such in (or for the purposes of) any
Environmental Law, including Environmental Laws relating to or imposing
liability or standards or conduct concerning any hazardous, toxic or dangerous
waste, substance or material in effect on the date of this Agreement, (ii)
asbestos or Polychlorinated Biphenyls, and (iii) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Body pursuant to any Environmental Law or any health and safety or
similar Law, and which may or could pose a hazard to the health and safety of
workers at or users of any properties of Seller or the Subsidiary or cause
damage to the environment.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"INDEMNIFIED PARTY" has the meaning assigned in Section 8.2(a).
"INDEMNIFYING PARTY" has the meaning assigned in Section 8.3(a).
"INITIAL AGREEMENT" has the meaning assigned in Recital A hereof.
"INTELLECTUAL PROPERTY" means all of the copyrights, know how, patents,
service marks, trademarks, trade secrets and other proprietary rights that
Seller or IP-Guardian is assigning or licensing to Buyer pursuant to the
Intellectual Property Agreements, to the extent set forth therein
"INTELLECTUAL PROPERTY AGREEMENTS" means, together, the CPE
Intellectual Property Agreement and the Non-CPE Intellectual Property Agreement.
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"INVENTORY" means all inventory, wherever located, including raw
materials, work in process, recycled materials, maintenance supplies,
finished products, inventoriable supplies, and non-capital spare parts owned
by Seller and used or held for use primarily in, or necessary to, the conduct
of the Business, and all rights of Seller under express or implied warranties
received from suppliers and any related claims, credits, rights of recovery
and setoff with respect to such Inventory, but only to the extent such rights
are assignable, but excluding any inventory included in Excluded Assets.
"IP-GUARDIAN" means Lucent Technologies Guardian I Corp., a Delaware
corporation.
"IRS" means the U.S. Internal Revenue Service.
"LAWS" means any national, federal, state, provincial or local law,
statute, ordinance, rule, regulation, code, order, judgment, injunction or
decree.
"LEASED EQUIPMENT" means the computers, servers, machinery and
equipment and other items leased and used by Seller primarily in, or
necessary to, conduct of the Business listed on SCHEDULE 2.4(d).
"LICENSES" means all licenses, agreements and other arrangements
under which Seller has the right to use or otherwise operate under any
Proprietary Information or Intellectual Property of a Third Party to the
extent used primarily in, or necessary to, the conduct of the Business.
"LOSSES" has the meaning assigned in Section 8.2(a).
"MATERIAL ADVERSE EFFECT" means a material and adverse effect on (i)
the assets (including any Purchased Asset), business, financial condition or
results of operations of the Business taken as a whole, (ii) the ability of
Seller to consummate the transactions contemplated by this Agreement, or
(iii) the ability of Buyer to consummate the transactions contemplated by
this Agreement.
"MATERIAL CONTRACTS" has the meaning assigned in Section 3.10.
"NONASSIGNABLE ASSETS" has the meaning assigned in Section 2.6(c).
"NONASSIGNABLE LICENSES" means those Licenses that are not
assignable to Buyer by their terms.
"NON-CPE INTELLECTUAL PROPERTY AGREEMENT" means the agreement in the
form set forth as EXHIBIT F.
"PARTY" and "PARTIES" have the meanings assigned in the preamble
hereof.
"PENSION PLAN" has the meaning assigned in Section 3.9(c).
"PERMITTED ENCUMBRANCES" means any (i) liens for taxes, assessments
and other governmental charges or of landlords, liens or carriers,
warehousemen, mechanics and material men incurred in the ordinary course of
business, in each case for sums not yet due and payable or
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due but not delinquent or being contested in good faith by appropriate
proceedings, (ii) liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security or to secure the performance of tenders,
statutory obligations, surety and appeal bonds, bids, leases, governmental
contracts, performance and return of money bonds and similar obligations,
(iii) purchase money liens, (iv) licenses granted by Seller or an Affiliate
in connection with sales of products in the ordinary course of business, and
(v) any Encumbrance or minor imperfection in title and minor encroachments,
if any, not material in amount that, individually or in the aggregate, do not
materially interfere with the use of or materially affect the value of a
Purchased Asset.
"PERSON" means any individual, corporation, partnership, firm,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any government or regulatory, administrative
or political subdivision or agency, department or instrumentality thereof.
"PREFERRED STOCK" means the Series A preferred stock, $0.001 par
value per share, of Buyer with the rights and preferences set forth in the
Certificate of Designation in the form attached hereto as EXHIBIT G.
"PRINCIPAL CUSTOMERS" has the meaning assigned in Section 3.16.
"PRINCIPAL EQUIPMENT" means the computers, servers, software,
machinery, maintenance machinery and equipment and other similar items used
by Seller primarily in, or necessary to, the conduct of the Business but not
any such items related to Excluded Assets or Excluded Liabilities. Principal
Equipment includes rights to the licenses and warranties received from the
manufacturers and distributors of said items and to any related claims,
credits, rights of recovery and setoff with respect to said items, but only
to the extent such rights are assignable. A list of Principal Equipment is
set forth on SCHEDULE 2.1(h).
"PROPRIETARY INFORMATION" means all information (whether or not
protectable by patent, copyright, mask works or trade secret rights) not
generally known to the public, including works of authorship, inventions,
discoveries, patentable subject matter, patent applications, industrial
models, industrial designs, trade secrets, trade secret rights, software,
works, copyrightable subject matters, mask works, know-how and show-how,
specifications, technical manuals and data, libraries, blueprints, drawings,
proprietary processes, product information and development work-in-process.
"PURCHASE PRICE" has the meaning assigned in Section 2.3(d).
"PURCHASED ASSETS" has the meaning assigned in Section 2.1.
"PURCHASED LEASED EQUIPMENT" means the Leased Equipment set forth on
SCHEDULE 2.1(d).
"REASONABLE COMMERCIAL EFFORTS" means that the obligated Party is
required to make a diligent, reasonable and good faith effort to accomplish
the applicable objective. Such obligation, however, does not require an
expenditure of funds or the incurrence of a liability on
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the part of the obligated Party, nor does it require that the obligated Party
act in a manner that would be contrary to normal commercial practices in
order to accomplish the objective. The fact that the objective is or is not
actually accomplished is no indication that the obligated Party did or did
not in fact utilize its Reasonable Commercial Efforts in attempting to
accomplish the objective.
"RECIPIENT" has the meaning assigned in Section 6.2(b)(i).
"REGISTRATION RIGHTS AGREEMENT" means the agreement in the form
attached hereto as EXHIBIT H.
"REQUIRED CONSENTS" has the meaning assigned in Section 3.4(b).
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" has the meaning assigned in the preamble hereof.
"SEQUENT EQUIPMENT" means the equipment ordered by Seller pursuant
to that certain Purchase Order dated as of September 27, 1999 under that
certain OEM Purchase Agreement effective as of October 1, 1997 by and between
Seller and Sequent Computers Systems, Inc., and owned by Seller, or which
Seller is obligated to purchase as of the date hereof.
"SOFTWARE" has the meaning assigned to it in the Intellectual
Property Agreements.
"STOCKHOLDERS AGREEMENT" means the agreement in the form attached
hereto as EXHIBIT I.
"SUBCONTRACTED SERVICES AGREEMENT" means the agreement in the form
attached hereto as EXHIBIT J.
"TAXES" means, all taxes of any kind, charges, fees, customs,
levies, duties, imposts, required deposits or other assessments, including,
all net income, capital gains, gross income, gross receipt, property,
franchise, sales, use, excise, withholding, payroll, employment, social
security, worker's compensation, unemployment, occupation, capital stock, ad
valorem, value added, transfer, gains, profits, net worth, asset,
transaction, and other taxes, imposed upon any Person by federal, foreign,
state, or local Law or taxing authority, together with any interest and any
penalties, or additions to tax, with respect to such taxes.
"THIRD PARTY" means with respect to a given Person, any Person not
an Affiliate of such given Person.
"THIRD-PARTY CLAIM" has the meaning assigned in Section 8.3(a).
"TRADING DAY" has the meaning assigned in Section 8.2(d).
"TRANSITION SERVICES AGREEMENT" means the agreement in the form
attached hereto as EXHIBIT K.
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1.2 OTHER DEFINITIONAL AND INTERPRETIVE MATTERS
Unless otherwise expressly provided, for purposes of this Agreement,
the following rules of interpretation shall apply:
(a) CALCULATION OF TIME PERIOD. When calculating the period
of time before which, within which or following which any act is to be done
or step taken pursuant to this Agreement, the date that is the reference date
in calculating such period shall be excluded. If the last day of such period
is a not a Business Day, the period in question shall end on the next
succeeding Business Day.
(b) GENDER AND NUMBER. Any reference in this Agreement to
gender shall include both genders, and words imparting the singular number
only shall include the plural and vice versa.
(c) HEADINGS. The provision of a Table of Contents, the
division of this Agreement into Articles, Sections and other subdivisions,
and the insertion of headings are for convenience of reference only and shall
not affect or be utilized in construing or interpreting this Agreement. All
references in this Agreement to any "SECTION" are to the corresponding
Section of this Agreement unless otherwise specified.
(d) HEREIN. Words such as "HEREIN," "HEREINAFTER," "HEREOF"
and "HEREUNDER" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
(e) INCLUDING. The word "INCLUDING" or any variation
thereof means "INCLUDING WITHOUT LIMITATION" and shall not be construed to
limit any general statement that it follows to the specific or similar items
or matters immediately following it.
(f) SCHEDULES AND EXHIBITS. The Schedules and Exhibits
attached to this Agreement shall be construed with and as an integral part of
this Agreement to the same extent as if the same had been set forth verbatim
herein.
2. PURCHASE AND SALE OF THE BUSINESS
2.1 PURCHASE AND SALE OF ASSETS
Upon the terms and subject to the conditions of this Agreement and
in reliance on the representations and warranties contained herein, Seller or
IP-Guardian hereby grants, bargains, sells, transfers, assigns, conveys and
delivers to Buyer, and Buyer purchases, acquires and accepts from Seller or
IP-Guardian, all of the right, title and interest in, to and under the
Purchased Assets that Seller or IP-Guardian possesses and has the right to
transfer as the same shall exist on the date hereof. For purposes of this
Agreement, "PURCHASED ASSETS" means all the assets, properties and rights
used by Seller or the Subsidiary, whether tangible or intangible, real,
personal or mixed, set forth or described in Sections 2.1(a) through 2.1(i),
inclusive (except in each case for the Excluded Assets), whether or not any
of such assets, properties or rights have any value for accounting purposes
or are carried or reflected on or specifically referred to in
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Seller's books or financial statements (Schedule 2.1 attached hereto
identifies a subset of the Purchased Assets that have been capitalized as
reflected in Seller's books and financial records):
(a) the Business Records;
(b) the Contracts;
(c) the Inventory;
(d) the Purchased Leased Equipment;
(e) the Licenses;
(f) the Assigned Agreement;
(g) the Intellectual Property;
(h) the Principal Equipment; and
(i) the Governmental Permits, but only to the extent
assignable or transferable to Buyer.
2.2 EXCLUDED ASSETS
Notwithstanding the provisions of Section 2.1, it is hereby
expressly acknowledged and agreed that the Purchased Assets do not include,
and neither Seller nor IP-Guardian is selling, transferring, assigning,
conveying or delivering to Buyer, and Buyer is not purchasing, acquiring or
accepting from Seller or IP-Guardian, the following (the rights, properties
and assets expressly excluded by this Section 2.2 or otherwise excluded by
the terms of Section 2.1 from the Purchased Assets being referred to herein
as the "EXCLUDED ASSETS"):
(a) any of Seller's receivables, cash, bank deposits or
similar cash items or employee receivables;
(b) any Proprietary Information of Seller or IP-Guardian
other than the Intellectual Property;
(c) any (i) confidential personnel records, subject to
Section 2.6(a) below, pertaining to any Business Employee; (ii) other books
and records that Seller is required by Law to retain or that Seller
reasonably determines are necessary or advisable to retain; PROVIDED,
HOWEVER, that Buyer shall have the right to make copies of any portions of
such retained books and records that relate to the Business or any of the
Purchased Assets; and (iii) information management system of Seller other
than those used primarily in, or necessary to, the conduct of the Business
and contained within computer hardware included as a Purchased Asset pursuant
to Section 2.1(d) or (h);
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(d) any claim, right or interest of Seller in or to any
refund, rebate, abatement or other recovery for Taxes, together with any
interest due thereon or penalty rebate arising therefrom, for any periods
prior to the date hereof;
(e) subject to Section 5.6, all "Lucent Technologies"
marked sales and marketing or packaging materials, samples, prototypes, other
similar Lucent Technologies-identified sales and marketing or packaging
materials and any marketing studies;
(f) the Excluded Contracts and the Nonassignable Licenses;
(g) any insurance policies or rights of proceeds thereof;
(h) any of Seller's rights, claims or causes of action
against Third Parties relating to the assets, properties, business or
operations of Seller arising out of transactions occurring prior to, and
including the date hereof;
(i) Excluded Leased Equipment;
(j) all other assets, properties, interests and rights of
Seller not related primarily to, and not necessary to, the Business;
(k) the Sequent Equipment; and
(l) Fixtures and Supplies.
2.3 PURCHASE PRICE
(a) In exchange for the Purchased Assets and Seller's
licensing the TYPE A PATENTS and TYPE B PATENTS, each as defined in the CPE
Intellectual Property Agreement, and obligating itself with respect to the
covenant not to license TYPE A PATENTS or granting a limited right to bring
suit under a TYPE A PATENT, in reliance upon the representations and
warranties set forth in Section 3 hereof, and subject to the provisions of
Sections 2.3(b) and Section 2.10, Buyer hereby assumes, and agrees that it
will fully and timely pay, perform and otherwise discharge, the Assumed
Liabilities and is issuing to Seller a total of 2,190,668 shares of Buyer's
fully paid and non-assessable common stock, $.001 par value per share
("COMMON STOCK").
(b) In consideration for IP-Guardian licensing the TYPE A
PATENTS and TYPE B PATENTS and obligating itself with respect to the covenant
not to license TYPE A PATENTS or granting a limited right to bring suit under
a TYPE A PATENT, Buyer is issuing to IP-Guardian a total of 59,332 shares of
Buyer's fully paid and non-assessable Common Stock.
(c) On July 1, 2003 (or, if later, the second business day
following the date on which the number of Contingent Shares (as defined
below) is determined in accordance with the procedure set forth in SCHEDULE
2.3(c)), Buyer shall, subject to and on the conditions set forth on SCHEDULE
2.3(c), issue to Seller the number of shares, if any, of Preferred Stock (the
"CONTINGENT SHARES") determined as set forth in SCHEDULE 2.3(c).
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(d) The shares of Common Stock being issued to Seller and
IP-Guardian pursuant to Sections 2.3(a) and (b) are collectively referred to
herein as the "PURCHASE PRICE" and together with the Contingent Shares issued
pursuant to SECTION 2.3(c), the "AGGREGATE PURCHASE PRICE." Shares
representing twenty percent of the Purchase Price (the "ESCROW SHARES") are
being deposited in escrow by Seller pursuant to Section 2.10 and will be held
and disposed of in accordance with the terms of the Escrow Agreement. Seller
and IP-Guardian are entitled to receive the remainder of the Purchase Price
on the date hereof.
2.4 ASSUMED LIABILITIES
Contemporaneously herewith, Buyer is executing and delivering to
Seller the Assumption Agreement pursuant to which Buyer is accepting,
assuming and agreeing to pay, perform or otherwise discharge, in accordance
with the respective terms (including the terms relating to timelines of
performance) and subject to the respective conditions thereof, the
liabilities and obligations of Seller pursuant to and under the Assumed
Liabilities. "ASSUMED LIABILITIES" means the following obligations and
liabilities, whether or not any such obligation or liability has a value for
accounting purposes or is carried or reflected on or specifically referred to
in either Seller's books or financial statements:
(a) the obligations and liabilities expressly set forth in
the Transition Services Agreement;
(b) the obligations under the Contracts, other than the
Excluded Contracts, and the Licenses, other than the Nonassignable Licenses;
(c) the obligations under the Governmental Permits, to the
extent to Seller remains or would become liable thereunder at any time after
the date hereof;
(d) the obligations and liabilities under leases in respect
of the Leased Equipment, other than Excluded Leased Equipment; and
(e) the obligations underlying Permitted Encumbrances to
the extent such obligations relate to Purchased Assets, excluding without
limitation obligations in connection with workers' compensation, unemployment
insurance and other types of social security.
2.5 EXCLUDED LIABILITIES
Buyer has not assumed and is not obligated to pay, perform or
otherwise assume or discharge any liabilities or obligations of Seller,
whether direct or indirect, known or unknown, absolute or contingent, except
for the Assumed Liabilities (all of such liabilities and obligations not so
assumed being referred to herein as the "EXCLUDED LIABILITIES").
2.6 FURTHER ASSURANCES; FURTHER CONVEYANCES AND ASSUMPTIONS;
CONSENT OF THIRD PARTIES
(a) As soon as practicable following the date hereof,
Seller hereby agrees to provide copies or make available to Buyer, to the
extent legally permissible, all non-confidential
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data in personnel records of Accepting Employees as are reasonably necessary
for Buyer to transition the Accepting Employees into Buyer's records.
(b) From time to time following the date hereof, Seller and
Buyer shall, and shall cause their respective Affiliates to, execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquittances and such other instruments, and shall take such
further actions, as may be necessary or appropriate to assure fully to Buyer
and its respective successors or assigns, all of the properties, rights,
titles, interests, estates, remedies, powers and privileges intended to be
conveyed to Buyer under this Agreement and the Collateral Agreements and to
assure fully to Seller and its successors and assigns, the assumption of the
liabilities and obligations intended to be assumed by Buyer under this
Agreement and the Collateral Agreements, and to otherwise make effective the
transactions contemplated hereby and thereby.
(c) Nothing in this Agreement nor the consummation of the
transactions contemplated hereby shall be construed as an attempt or
agreement to assign any Purchased Asset, including any Contract, License,
Governmental Permit, certificate, approval, authorization or other right,
which by its terms or by Law is nonassignable without the consent of a Third
Party or a Governmental Body or is cancelable by a Third Party in the event
of an assignment ("NONASSIGNABLE ASSETS") unless and until such consents
shall be given or such rights terminated or waived. Seller agrees to
cooperate with Buyer at its request to obtain such consents promptly;
PROVIDED, HOWEVER, that such cooperation shall not require Seller to remain
secondarily liable or to make any payment to obtain any such consent with
respect to any Nonassignable Asset.
(d) Seller and Buyer shall use their Reasonable Commercial
Efforts to obtain, or to cause to be obtained, any consent, substitution,
approval, or amendment required to novate all obligations under any and all
Contracts (other than any and all Excluded Contracts) or other obligations or
liabilities that constitute Purchased Assets and Assumed Liabilities. To the
extent permitted by applicable Law, in the event consents to the assignment
thereof cannot be obtained, such Nonassignable Assets shall be held, as and
from the date hereof, by Seller in trust for Buyer and the covenants and
obligations thereunder shall be performed by Buyer in Seller's or one of its
subsidiary's name and all benefits and obligations existing thereunder shall
be for Buyer's account. Seller shall take or cause to be taken at Buyer's
expense such action in its name or otherwise as Buyer may reasonably request
so as to provide Buyer with the benefits of the Nonassignable Assets and to
effect collection of money or other consideration to become due and payable
under the Nonassignable Assets, and Seller shall promptly pay over to Buyer
all money or other consideration received by it in respect to all
Nonassignable Assets.
(e) As of and from the date hereof, Seller authorizes
Buyer, to the extent permitted by applicable Law and the terms of the
Nonassignable Assets, at Buyer's expense, to perform all the obligations and
receive all the benefits of Seller under the Nonassignable Assets and
appoints Buyer its attorney-in-fact to act in its name on its behalf or in
the name of Seller with respect thereto.
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2.7 NO LICENSES
Unless expressly set forth in this Agreement, either Intellectual
Property Agreement or the Subcontracted Services Agreement, no title, right
or license of any kind is granted to Buyer pursuant to this Agreement with
respect to Seller's or any of its Affiliate's Proprietary Information, either
directly or indirectly, by implication, by estoppel or otherwise.
2.8 BULK SALES LAWS
Buyer hereby waives compliance by Seller with the requirements and
provisions of any "bulk sales" Laws of any jurisdiction, including Article 6
of the New York Commercial Code, that may otherwise be applicable with
respect to the sale of any or all of the Purchased Assets to Buyer.
2.9 TAXES
(a) Buyer shall pay all applicable Taxes and all recording
and filing fees that may be imposed, assessed or payable by reason of the
operation or as a result of this Agreement including the sales, transfers,
leases, rentals, licenses, and assignments contemplated hereby, except for
Seller's net income and capital gains taxes or franchise or other taxes based
on Seller's net income.
(b) Buyer shall be responsible for all Taxes attributable
to, levied upon or incurred in connection with the Purchased Assets
pertaining to the period (or that portion of the period) beginning on the
calendar day after the date hereof. Seller shall be responsible for all Taxes
attributable to, levied upon or incurred in connection with the Purchased
Assets pertaining to the period (or that portion of the period) prior to or
on the date hereof.
2.10 ESCROW
Contemporaneously herewith, Buyer is delivering to the Escrow Agent
a stock certificate (issued in the name of the Escrow Agent or its nominee)
representing the Escrow Shares, for the purpose of securing the
indemnification obligations of Seller set forth in this Agreement. The Escrow
Shares shall be held by the Escrow Agent under the Escrow Agreement. Pursuant
to the terms thereof, the Escrow Shares shall be held as a trust fund and
shall not be subject to any lien, attachment, trustee process or any other
judicial process of any creditor or any party, and shall be held and
distributed solely for the purposes and in accordance with the terms of the
Escrow Agreement. Except as provided in Section 8.2(d), the Escrow Shares
shall be the sole source of payment of amounts owed to Buyer for
indemnification claims made pursuant to Section 8.2(a).
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND QUALIFICATION
Seller is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware and has all requisite
corporate power and authority to carry on the
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Business as currently conducted and to own or lease and operate the Purchased
Assets. Seller is duly qualified to do business and is in good standing as a
foreign corporation (in any jurisdiction that recognizes such concept) in
each jurisdiction where the ownership or operation of the Purchased Assets or
the conduct of the Business requires such qualification, except for failures
to be so qualified or in good standing, as the case may be, that could not
reasonably be expected to have a Material Adverse Effect.
3.2 IP-GUARDIAN
IP-Guardian is duly organized and validly existing under the Laws of
the State of Delaware.
3.3 AUTHORIZATION; BINDING EFFECT
(a) Seller has all requisite corporate power and authority
to execute and deliver this Agreement and the Collateral Agreements to which
it is a party and to effect the transactions contemplated hereby and thereby
and has duly authorized the execution, delivery and performance of this
Agreement and the Collateral Agreements to which it is a party by all
requisite corporate action.
(b) IP-Guardian has all requisite corporate power and
authority to execute and deliver the Collateral Agreements to which it is a
party and to effect the transactions contemplated thereby and has duly
authorized the execution, delivery and performance of the Collateral
Agreements to which it is a party by all requisite corporate action.
(c) This Agreement has been duly executed and delivered by
Seller and this Agreement is a valid and legally binding obligation of
Seller, enforceable against Seller in accordance with its terms. Each of the
Collateral Agreements has been duly executed and delivered by Seller or
IP-Guardian (as applicable), and is a valid and legally binding obligation of
such party, enforceable against such party in accordance with its terms. Each
of the preceding sentences is limited to the extent that enforcement of the
rights and remedies created by this Agreement or any Collateral Agreement may
be affected by bankruptcy, reorganization, moratorium, insolvency and similar
Laws of general application affecting the rights and remedies of creditors
and by general equity principles.
3.4 NON-CONTRAVENTION; CONSENTS
(a) Assuming that all Required Consents listed in SCHEDULE
3.4 have been obtained, the execution, delivery and performance of this
Agreement by Seller and the Collateral Agreements by Seller or IP-Guardian
that is a party thereto and the consummation of the transactions contemplated
hereby and thereby do not and will not: (i) result in a breach or violation
of any provision of Seller's or IP-Guardian's charter, by-laws or similar
organizational document, (ii) violate the provision of any Law applicable to
Seller or IP-Guardian, (iii) violate or result in a breach of or constitute
an occurrence of default under any provision of, result in the acceleration
or cancellation of any obligation under, or give rise to a right by any party
to terminate or amend its obligations under, any mortgage, deed of trust,
conveyance to secure debt, note, loan, indenture, lien, lease, agreement,
instrument, order, judgment, decree or other
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arrangement or commitment to which Seller or IP-Guardian is a party or by
which any of their respective properties which relate to the Business are or
may be bound, which violation, breach or default could be reasonably expected
to have a Material Adverse Effect, or (iv) violate any order, judgment,
decree, rule or regulation of any court or any Governmental Body having
jurisdiction over Seller, IP-Guardian or the Purchased Assets and which
relates to the Business or the Purchased Assets, which violation could be
reasonably expected to have a Material Adverse Effect.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Body or any other
Person is required to be obtained by Seller or IP-Guardian in connection with
the execution and delivery of this Agreement and the Collateral Agreements to
which Seller or IP-Guardian will be a party or for the consummation of the
transactions contemplated hereby or thereby by Seller or IP-Guardian, other
than (i) any filings required to be made under the HSR Act and any applicable
filings required under foreign antitrust Laws, (ii) the consents or approvals
of Third Parties that are required to transfer or assign to Buyer any
Purchased Assets or Assumed Liabilities or assign the benefits of or delegate
performance with regard thereto, which are set forth on SCHEDULE 3.4 (items
(i) and (ii) being referred to herein as the "REQUIRED CONSENTS") and (iii)
such consents, approvals, orders, authorizations, registrations, declarations
or filings where failure of compliance could not reasonably be expected to
have a Material Adverse Effect.
3.5 TITLE TO PROPERTY; PRINCIPAL EQUIPMENT; SUFFICIENCY OF ASSETS
(a) Seller has good and valid title to, or a valid and
binding leasehold interest or license in, all Purchased Assets. The delivery
to Buyer of the instruments of transfer of ownership contemplated by this
Agreement will vest good and marketable title to the Purchased Assets in
Buyer, free and clear of all Encumbrances, except for the Permitted
Encumbrances.
(b) All of the Principal Equipment and Leased Equipment,
other than the Excluded Leased Equipment, necessary to conduct the Business,
whether owned or leased, are in all material respects, in reasonable
operating condition and repair, in light of its respective age, and are
adequate for the conduct of the Business as currently conducted by Seller.
(c) Except for (i) the assets that will be retained by
Seller in connection with providing services under the Transition Services
Agreement and (ii) the Excluded Assets, the Purchased Assets and the Business
Employees and the rights to be acquired under this Agreement and the
Collateral Agreements (including the services to be provided pursuant to the
Transition Services Agreement) include all assets, personnel and rights that
are used primarily in, or necessary to, the conduct of the Business as
currently conducted by Seller. In the event this Section 3.5(c) is breached
because Seller has in good faith failed to transfer any Purchased Assets,
such breach shall be deemed cured if Seller promptly transfers such
properties or assets or provide such services to Buyer at no additional cost
to Buyer.
(d) A list of the Principal Equipment is attached to the
Assignment and Xxxx of Sale.
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3.6 PERMITS; LICENSES
Except as set forth on SCHEDULE 3.6(a), there are no Governmental
Permits that are necessary or used by Seller to operate the Business as now
being operated and are required by currently effective Laws, other than
Governmental Permits the absence of which would not be reasonably likely to
have a Material Adverse Effect. Except as set forth on SCHEDULE 3.6(b), there
are no Licenses used by Seller primarily in, or necessary to, the conduct of
the Business, other than (i) Nonassignable Licenses and (ii) Licenses the
absence of which would not, in the aggregate, be reasonably likely to have a
Material Adverse Effect.
3.7 REAL ESTATE
Seller does not lease any real property that is used by Seller
primarily in, or is necessary to, the conduct of the Business.
3.8 COMPLIANCE WITH LAWS; LITIGATION
(a) Except as set forth on SCHEDULE 3.8(a), with respect to
the Business, Seller is in compliance in all material respects with all
applicable Laws and all decrees, orders, judgments, permits and licenses of
or from Governmental Bodies except for failures to comply which could not
reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth on SCHEDULE 3.8(b), there are no
actions, suits, proceedings or governmental investigations pending or, to
Seller's knowledge, threatened against it that could reasonably be expected
to have a Material Adverse Effect.
3.9 BUSINESS EMPLOYEES
(a) SCHEDULE 3.9(a) contains a complete and accurate list
(as of the date five days prior to the date hereof) of all the employees of
Seller employed in the Business as of the date hereof (individually a
"BUSINESS EMPLOYEE," and collectively, the "BUSINESS EMPLOYEES"), showing for
each Business Employee the position held and aggregate annual compensation
for Seller's last fiscal year. None of the Business Employees is represented
by any union, collective bargaining or other similar labor agreements.
(b) Except as set forth in SCHEDULE 3.9(b), with respect to
all Business Employees, Seller does not currently maintain, contribute to or
have any liability under any Benefit Plan. Seller has not maintained or
contributed to any Benefit Plan with respect to which it has any liability.
With respect to each of the Benefit Plans identified on SCHEDULE 3.9(b),
Seller has made available to Buyer true and complete copies of the most
recent summary plan or other written description. Each Benefit Plan listed on
SCHEDULE 3.9(b) has been operated in material compliance with applicable Law,
including ERISA. Each Benefit Plan which is an "employee pension benefit
plan" within the meaning of Section 3(2) of ERISA ("PENSION PLAN") and which
is intended to be qualified under Section 401(a) of the Code, has received a
favorable determination letter from the Internal Revenue Service with respect
to "TRA" (as defined in Section 1 of Rev. Proc. 93-39), and Seller is not
aware of any circumstances likely to result in revocation of any such
favorable determination letter. Except as disclosed on SCHEDULE 3.9(b),
Seller does not have any obligations for retiree health and life benefits
under any Benefit Plan or
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has ever represented, promised or contracted (whether in oral or written
form) to any employee that such employee would be provided with retiree
health or life benefits. Any amount that could be received (whether in cash,
property, or vesting of property) as a result of the transaction contemplated
by this Agreement by any officer, director, employee or independent
contractor of Seller, who is a "disqualified individual" (as defined in
proposed Treasury Regulation Section 1.280G-1), under any Contract, other
than the Excluded Contracts, would not be characterized as an "excess
parachute payment" (as defined in Section 280G of the Code).
(c) As relates to the Business, there is not presently
pending or existing, and to Seller's knowledge there is not threatened, (i)
any strike, slowdown, picketing, work stoppage or material labor trouble, or
(ii) any application for certification of a collective bargaining agent.
3.10 MATERIAL CONTRACTS
SCHEDULE 3.10 contains a complete and accurate list of all
outstanding Contracts, other than Excluded Contracts, that would require over
the full term thereof payments of more than $175,000 (the "MATERIAL
CONTRACTS"). The Material Contracts include all existing contracts and
commitments of Seller meeting the specified threshold that (i) are primarily
related to the Business or (ii) by which the Purchased Assets may be bound or
affected, in each case whether written or oral. Each Material Contract is
valid, binding and enforceable against Seller and, to Seller's knowledge, the
other parties thereto in accordance with its terms, and is in full force and
effect. Except as set forth on SCHEDULE 3.10, Seller has not received any
notice that it is in default or breach of or is otherwise delinquent in
performance under any such Material Contracts, and, to Seller's knowledge,
each of the other parties thereto has performed in all material respects all
obligations required to be performed by it under, and is not in default in
any material respect under, any of such Material Contracts and no event has
occurred that, with notice or lapse of time, or both, would constitute such a
default. True, correct and complete copies of the Material Contracts
constituting Purchased Assets have previously been delivered or made
available by Seller to Buyer.
3.11 ENVIRONMENTAL MATTERS
Except as set forth in SCHEDULE 3.11 and in respect of the Business:
(a) the operations of the Business comply in all material
respects with all applicable Environmental Laws;
(b) Seller has obtained all environmental, health and
safety Governmental Permits necessary for its operations with respect to the
Business, and all such Governmental Permit are in good standing and Seller is
in compliance with all terms and conditions of such permits except where the
failure to obtain, maintain in good standing or be in compliance with, such
permits could not reasonably be expected to have a Material Adverse Effect;
(c) to the best of Seller's knowledge, neither Seller nor
the operations of the Business are subject to any on-going investigation by,
order from or agreement with any Person respecting (i) any Environmental Law,
or (ii) any remedial action arising from the release or threatened release of
a Hazardous Substance into the environment;
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(d) with respect to the Business, Seller is not subject to
any judicial or administrative proceeding, order, judgment, decree or
settlement alleging or addressing a violation of or liability under any
Environmental Law;
(e) with respect to the Business, Seller has filed all
notices required to be filed under any Environmental Law indicating past or
present treatment, storage or disposal of a Hazardous Substance or reporting
a spill or release of a Hazardous Substance into the environment except where
the failure to file any such notices could not reasonably be expected to have
a Material Adverse Effect;
(f) with respect to the Business, to Seller's knowledge,
Seller has not received any written notice to the effect that it is or may be
liable to any Person as a result of the release or threatened release of a
Hazardous Substance; and
(g) Seller has delivered to Buyer true and complete copies
of all asbestos and other environmental reports, if any, disclosing the
presence of asbestos or other Hazardous Materials on the Leased Premises.
3.12 FINANCIAL STATEMENT; ABSENCE OF CHANGES
(a) SCHEDULE 3.12(a) contains true and complete copies of
the following financial statements of the Business (the "FINANCIAL
STATEMENTS"): audited statements of net assets to be sold of the Business as
of December 31, 2000 and 1999, and related statements of net sales, cost of
sales and direct operating expenses for each of the three years in the period
ended December 31, 2000.
(b) The Financial Statements were prepared in accordance
with GAAP, except as otherwise permitted by the Securities and Exchange
Commission in writing in connection with the transactions contemplated
hereby, including as contemplated by that certain letter of Buyer to the
Securities and Exchange Commission dated August 8, 2000, that certain letter
of the Securities and Exchange Commission to Buyer dated August 16, 2000,
that certain letter of Buyer to the Securities and Exchange Commission dated
September 27, 2000 and that certain letter of the Securities and Exchange
Commission to Buyer dated October 2, 2000. Each of the line items reflected
in the Financial Statements has been determined and reflected in accordance
with GAAP. The Financial Statements were prepared on the basis of the books
and records of the Business (in each case, as of the date of such Financial
Statements).
(c) The Financial Statements fairly present, as of their
respective dates, the financial condition, assets and liabilities of the
Business and the results of operations of the Business for the periods
indicated, except as contemplated by Section 3.12(b). Except as provided in
Schedule 3.12(c), the Financial Statements fairly present, as of their
respective dates, all obligations of Seller with respect to the contracts and
commitments for the sale of goods or the provision of services by the
Business.
(d) Since December 31, 2000, Seller has conducted and
operated the Business in the ordinary course and the Business has not
suffered any change that would constitute a Material Adverse Effect (other
than a Material Adverse Effect arising out of or resulting from
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any actions of Buyer, the public announcement of the Initial Agreement or the
transactions contemplated thereby, including the loss of personnel, customers
or suppliers or the delay or cancellation of orders for products).
(e) The Business has no liability (whether known or
unknown, whether absolute or contingent, whether liquidated or unliquidated
and whether due or to become due), except for (i) liabilities shown on the
statement of net assets referred to in Section 3.12 as at December 31, 2000,
(ii) liabilities which have arisen since December 31, 2000 in the ordinary
course of business and which are similar in nature and amount to the
liabilities which arose during the comparable period of time in the
immediately preceding fiscal year period; (iii) contractual liabilities
incurred in the ordinary course of business which are not required by GAAP to
be reflected on a balance sheet; and (iv) liabilities incurred by the Seller
and with respect to which Buyer will not have any liability or obligation as
a result of the transactions contemplated by this Agreement or otherwise.
3.13 INTELLECTUAL PROPERTY
(a) Subject to the Assignment of Agreement described in
Section 2.04 of each of the Intellectual Property Agreements, Seller or
IP-Guardian owns all right, title and interest in and to the Intellectual
Property being assigned to Buyer pursuant to the Intellectual Property
Agreements and have a valid right to grant the licenses to all the
Intellectual Property that Seller or IP-Guardian are licensing to Buyer
pursuant to the Intellectual Property Agreements. To the Business Employees'
knowledge and subject to the agreements set forth on Schedule 3.13(d), no
Third Party has any ownership interest, joint or otherwise, in or to any
Intellectual Property (other than patents) being assigned pursuant to the
Intellectual Property Agreements. To the Business Employees' knowledge,
neither Seller nor IP-Guardian has licensed or transferred such Intellectual
Property (other than patents) to any Third Party, except for such license or
transfer as would not have a Material Adverse Effect.
(b) Except as otherwise disclosed in SCHEDULE 3.13(b), to
Seller's knowledge, there are no claims or demands of any Third Party
pertaining to Intellectual Property, excluding immaterial assertions of
rights which have not been presented in the form of a specific claim or
demand, with respect to the operation of the Business by Seller or
IP-Guardian as of the date hereof. No proceedings have been instituted or, to
Seller's knowledge, are pending which challenge the rights of Seller or
IP-Guardian in respect thereof, excluding immaterial assertions of rights
which have not been presented in the form of a specific claim or demand.
Seller and IP-Guardian have protected the Intellectual Property being
transferred to Buyer in accordance with their customary practices with
respect to protection of confidential information.
(c) Seller or IP-Guardian are providing, either by
assignment or license to Buyer in accordance with the Intellectual Property
Agreements, all of the Intellectual Property owned by Seller or IP-Guardian
or as to which Seller or IP-Guardian has a right to license which Buyer
requires to conduct the Business after the date hereof, and to make, have
made, use, lease, import, offer to sell or sell the products, as such
products existed as of the date hereof, of the Business and otherwise to
conduct the Business in the manner in which Seller operated it as of the date
hereof. Seller or IP-Guardian have not transferred to AVAYA or AGERE (as
defined in the CPE Intellectual Property Agreement), any patents which are
not licensed pursuant to the
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Intellectual Property Agreements which Buyer requires to conduct the Business
after the date hereof, or to make, have made, use, lease, import, offer to
sell or sell the products, as such products existed as of the date hereof, of
the Business and otherwise to conduct the Business in the manner in which
Seller operated it as of the date hereof. Seller or IP-Guardian have not
entered into any agreements restricting their rights to grant to Buyer
licenses of any patents which Buyer requires to conduct the Business after
the date hereof, and to make, have made, use, lease, import, offer to sell or
sell the products, as such products existed as of the date hereof, of the
Business and otherwise to conduct the Business in the manner in which Seller
operated it as of the date hereof. To the Business Employees' knowledge,
Schedules A and B of Appendix E to the Intellectual Property Agreements
accurately list all trademark registrations and applications for
registration, and all common law trademark rights, that are (i) necessary for
the conduct of the Business as currently conducted and (ii) currently used by
Seller in the conduct of the Business. Buyer's sole remedy for breach of this
Section 3.13 shall be the assignment or licensing by Seller or IP-Guardian to
Buyer, at no cost to Buyer, in accordance with the transfers and licenses
provided in the Intellectual Property Agreements of those components of such
technology which are required by Buyer to conduct the Business after the date
hereof or which were used or were available for use by Seller in the conduct
of the Business prior to the date hereof, and to make, have made, use, lease,
import, offer to sell or sell any products of the Business as to which
ownership or license rights were not adequately conveyed. Notwithstanding the
foregoing, under no circumstance shall Seller be required to grant to Buyer a
license, right, or other permission to use the trademarks "Lucent," "Lucent
Technologies," "Xxxx Labs" or the Lucent Innovation Ring logo, other than as
set forth in this Agreement or either Intellectual Property Agreement.
(d) To the Business Employees' knowledge, all agreements
associated with, or which grant or acquire any rights with respect to, the
Third Party Intellectual Property necessary for the operation of the Business
as conducted on the date hereof, are listed and described in SCHEDULE 3.13(d).
3.14 INVENTORY
There is no Inventory as of the date hereof.
3.15 ABSENCE OF CERTAIN CHANGES OR EVENTS
Except as set forth on SCHEDULE 3.15, since December 31, 2001,
Seller has not entered into any transaction relating to the Business which is
not in the ordinary course of the operations of the Business, and, without
limiting the generality of the foregoing, Seller has not, as it relates to
the Business:
(a) incurred any material obligation or liability for
borrowed money;
(b) discharged or satisfied any lien or encumbrance or paid
any obligation or liability other than current liabilities reflected in the
statement of net assets dated December 31, 2000;
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(c) mortgaged, pledged or subjected to lien, charge or
other encumbrance any of the Purchased Assets other than Permitted
Encumbrances;
(d) sold or purchased, assigned or transferred any of its
tangible assets or cancelled any debts or claims, except for inventory sold
and raw materials purchased in the ordinary course of business;
(e) made any amendment to or termination of any Material
Contract or done any act or omitted to do any act which would cause the
breach of any Material Contract;
(f) suffered any casualty losses, whether insured or
uninsured, and whether or not in the control of Seller, in excess of $250,000
in the aggregate, or waived any rights of any value;
(g) authorized or issued recall notices for any of its
products or initiated any safety investigations; or
(h) received written notice of any litigation, warranty
claim or products liability claims.
3.16 CUSTOMERS
SCHEDULE 3.16 sets forth a true, correct and complete list of the
names, addresses and total sales of the six largest customers of the Business
during the eighteen months ended December 31, 2000 (the "PRINCIPAL
CUSTOMERS"). None of the Principal Customers has notified Seller in writing
that it intends to discontinue its relationship with Seller.
3.17 DEFERRED REVENUE
SCHEDULE 3.17 sets forth, as of the date hereof, all prepayments or
deposits, with respect to the Business, from customers for products to be
shipped, or services to be performed under Contracts (excluding Excluded
Contracts) after the date hereof which have been received by Seller as of the
date hereof, along with a description of such products or services less
prepaid costs in respect thereof (the "DEFERRED REVENUE").
3.18 BROKERS
Other than Carreden Group Incorporated and PricewaterhouseCoopers
LLP, the fees and expenses of which will be paid by Seller, no broker,
investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Seller.
3.19 DISCLOSURE
The representations and warranties contained in this Article 3
(including the Schedules referred to in such representations and warranties)
do not contain any untrue statement of a material fact and, when taken
together, do not omit to state any material fact necessary in order
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to make such representations, warranties or statements not misleading in
light of the circumstance under which made.
3.20 INVESTMENT
Seller (a) understands that the shares of Common Stock and Preferred
Stock constituting the Aggregate Purchase Price being delivered to Seller
have not been registered under the Securities Act or under any state
securities Laws, and are being offered and sold in reliance upon U.S. federal
and state exemptions for transactions not involving any public offering, (b)
is acquiring such shares solely for its own account for investment purposes,
and not with a view to the distribution thereof, (c) is a sophisticated
investor with knowledge and experience in business and financial matters, (d)
has received certain information concerning Buyer and has had the opportunity
to obtain additional information as desired in order to evaluate the merits
and the risks inherent in holding such shares and (e) is an "accredited
investor" (as defined in Rule 501(a)) under the Securities Act.
3.21 BOOKS AND RECORDS
The general ledgers and books of account of Seller relating to the
Business, all federal, state and local income, franchise, property and other
tax returns filed by Seller with respect to the Purchased Assets and Assumed
Liabilities, and all other books and records of Seller are complete and
correct and have been maintained in accordance with good business practice
and in accordance with all applicable procedures required by Laws, except in
each case for such deviations therefrom as are not reasonably likely to have
a Material Adverse Effect.
3.22 NO OTHER SELLER REPRESENTATIONS OR WARRANTIES
(a) Except for the representations and warranties contained
in this Article 3, none of Seller, any Affiliate or any other Person makes
any representations or warranties, and Seller hereby disclaims any other
representations or warranties, whether made by Seller or any Affiliate, or
any of their officers, directors, employees, agents or representatives, with
respect to the execution and delivery of this Agreement or any Collateral
Agreement, the transactions contemplated hereby or the Business,
notwithstanding the delivery or disclosure to Purchaser or its
representatives of any documentation or other information with respect to any
one or more of the foregoing.
(b) Seller has not been induced by and has not relied upon
any representations, warranties or statements, whether express or implied,
made by Buyer, any Affiliate, or any agent, employee, attorney or other
representative of Buyer or by any Person representing or purporting to
represent Buyer that are not expressly set forth in this Agreement or in the
Collateral Agreements (including the Schedules and Exhibits hereto and
thereto), whether or not any such representations, warranties or statements
were made in writing or orally.
(c) Seller acknowledges that it has made its own assessment
of the future of Buyer's business and is sufficiently experienced to make an
informed judgment with respect thereto. Seller further acknowledges that
neither Buyer nor any Affiliate has made any warranty, express or implied, as
to the future of Buyer's business or the value of the Common Stock, or
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with respect to any forecasts, projections or business plans prepared by or
on behalf of Buyer and delivered to Seller in connection with the negotiation
and execution of this Agreement, although to Buyer's knowledge any such
forecasts, projections or business plans were prepared based upon reasonable
assumptions.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 ORGANIZATION AND QUALIFICATION
Buyer is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware, and Buyer has all requisite
corporate power and authority to carry on its business as currently conducted
and to own or lease and operate its properties. Buyer is duly qualified to do
business and is in good standing as a foreign corporation (in any
jurisdiction that recognizes such concept) in each jurisdiction where the
ownership or operation of its assets or the conduct of its business requires
such qualification, except for failures to be so qualified or in good
standing, as the case may be, that could not reasonably be expected to have a
material adverse effect on Buyer's business taken as a whole. True, correct
and complete copies of the Certificate of Incorporation and Bylaws of Buyer,
each as amended to date, have been previously delivered to Seller, are
complete and correct, and no amendments have been made thereto or have been
authorized since the date thereof.
4.2 AUTHORIZATION; BINDING EFFECT
(a) Buyer has all requisite corporate power and authority
to execute and deliver this Agreement and the Collateral Agreements and to
effect the transactions contemplated hereby and thereby and has duly
authorized the execution, delivery and performance of this Agreement and the
Collateral Agreements by all requisite corporate action.
(b) The Board of Directors of Buyer, at a meeting duly
called and held, has, with the affirmative vote of at least a majority of the
members of the Board of Directors of Buyer, approved this Agreement and the
issuance of the shares of Common Stock and Preferred Stock constituting the
Aggregate Purchase Price and the other transactions contemplated hereby.
(c) This Agreement and the Collateral Agreements have been
duly executed and delivered by Buyer and are valid and legally binding
obligations of Buyer, enforceable against it in accordance with their
respective terms, except to the extent that enforcement of the rights and
remedies created hereby and thereby may be affected by bankruptcy,
reorganization, moratorium, insolvency and similar Laws of general
application affecting the rights and remedies of creditors and by general
equity principles.
4.3 REPORTS AND FINANCIAL STATEMENTS.
(a) Buyer has previously furnished or made available to
Seller complete and accurate copies, as amended or supplemented, of (a) its
Annual Report on Form 10-K for the fiscal year ended December 31, 2000, as
filed with the Securities and Exchange Commission and (b) all other reports
filed by Buyer under Section 13 or subsections (a) or (c) of Section 14 of
the
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Exchange Act with the Securities and Exchange Commission since March 29, 2001
(such reports are collectively referred to herein as the "BUYER REPORTS").
The Buyer Reports constitute all of the documents required to be filed by
Buyer under Section 13 or subsections (a) or (c) of Section 14 of the
Exchange Act with the Securities and Exchange Commission from March 29, 2001
through the date of this Agreement. The Buyer Reports complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations thereunder when filed. As of their respective dates, the Buyer
Reports did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The audited financial statements and unaudited interim
financial statements of Buyer included in the Buyer Reports (i) complied as
to form in all material respects with applicable accounting requirements and
the published rules and regulations of the Securities and Exchange Commission
with respect thereto when filed, (ii) were prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby (except
as may be indicated therein or in the notes thereto), (iii) fairly present
the consolidated financial condition, results of operations and cash flows of
Buyer as of the respective dates thereof and for the periods referred to
therein, and (iv) are consistent with the books and records of Buyer.
(b) Since the date of the most recently filed Buyer Report,
Buyer has conducted and operated its business in the ordinary course and such
business has not suffered any change that would constitute a Material Adverse
Effect (other than a Material Adverse Effect arising out of or resulting from
any actions of Seller, the public announcement of the Initial Agreement or
the transactions contemplated thereby, including the loss of personnel,
customers or suppliers or the delay or cancellation of orders for products).
4.4 NO VIOLATIONS
(a) The execution, delivery and performance of this
Agreement and the Collateral Agreements by Buyer and the consummation of the
transactions contemplated hereby and thereby do not and will not (i) result
in a breach or violation of any provision of Buyer's charter or by-laws, (ii)
violate or result in a breach of or constitute an occurrence of default under
any provision of, result in the acceleration or cancellation of any
obligation under, or give rise to a right by any party to terminate or amend
its obligations under, any material mortgage, deed of trust, conveyance to
secure debt, note, loan, indenture, lien, lease, agreement, instrument,
order, judgment, decree or other material arrangement or commitment to which
Buyer is a party or by which it or its assets or properties are bound, or
(iii) violate any material order, judgment, decree, rule or regulation of any
court or any Governmental Body having jurisdiction over Buyer or any of its
properties.
(b) No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental Body or any other
Person is required to be obtained by Buyer in connection with the execution
and delivery of this Agreement and the Collateral Agreements or the
consummation of the transactions contemplated hereby or thereby other than
(i) any filings required to be made under the HSR Act and any applicable
filings required under foreign antitrust Laws, (ii) filings required under
the Securities Act or Exchange Act, and (iii) such consents, approvals,
orders, authorizations, registrations, declarations or filings where failure
of
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compliance would not, individually or in the aggregate, have a material
adverse effect on Buyer's ability to consummate the transactions contemplated
hereby.
4.5 REGISTRATION RIGHTS
Buyer has delivered to Seller a true, correct and complete copy of
(i) the registration agreement dated April 19, 2000 between Buyer and Genesis
Select Corporation and (ii) the registration rights agreement dated May 10,
2001 between Buyer and RS Investment Management Co. LLC. Other than such
agreements, there are no agreements to which Buyer is a party or by which it
is bound under which Buyer is obligated to register any securities of Buyer
under the Securities Act.
4.6 BROKERS
Other than JPMorgan H&Q, a division of Chase Securities Inc., the
fees and expenses of which will be paid by Buyer, no broker, investment
banker, financial advisor or other Person is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based on
arrangements made by or on behalf of Buyer or an Affiliate.
4.7 DISCLOSURE
The representations and warranties contained in this Article 4
(including the Schedules referred to in such representations and warranties)
do not contain any untrue statement of a material fact and, when taken
together, do not omit to state any material fact necessary in order to make
such representations, warranties or statements not misleading in light of the
circumstances under which they were made.
4.8 NO OTHER BUYER REPRESENTATIONS AND WARRANTIES
(a) Except for the representations and warranties contained
in this Article 4, Buyer does not make any representations or warranties, and
Buyer hereby disclaims any other representations or warranties, whether made
by Buyer, or any of its officers, directors, employees, agents or
representatives, with respect to the execution and delivery of this Agreement
or any Collateral Agreement or the transactions contemplated hereby,
notwithstanding the delivery or disclosure to Seller or its representatives
of any documentation or other information with respect to any one or more of
the foregoing.
(b) With respect to the Purchased Assets, the Business or
any other rights or obligations to be transferred hereunder or under the
Collateral Agreements, or pursuant hereto or thereto, Buyer has not been
induced by and has not relied upon any representations, warranties or
statements, whether express or implied, made by Seller, any Affiliate, or any
agent, employee, attorney or other representative of Seller or by any Person
representing or purporting to represent Seller that are not expressly set
forth in this Agreement or in the Collateral Agreements (including the
Schedules and Exhibits hereto and thereto), whether or not any such
representations, warranties or statements were made in writing or orally.
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(c) Buyer acknowledges that it has made its own assessment
of the future of the Business and is sufficiently experienced to make an
informed judgment with respect thereto. Buyer further acknowledges that
neither Seller nor any Affiliate has made any warranty, express or implied,
as to the future of the Business or its profitability for Buyer, or with
respect to any forecast, projections or business plans prepared by or on
behalf of Seller and delivered to Buyer in connection with the Business and
the negotiation and execution of this Agreement, although to Seller's
knowledge any such forecasts, projections or business plans were prepared
based upon reasonable assumptions.
4.9 SUFFICIENCY OF FUNDS
Buyer (a) has funds available to pay any expenses incurred by Buyer
in connection with the transactions contemplated by this Agreement; (b) has
the resources and capabilities (financial or otherwise) to perform hereunder
and under the Collateral Agreements; and (c) has not incurred any
obligations, commitment, restriction or liability of any kind, absolute or
contingent, present or future, which would impair or adversely affect such
resources and capabilities.
5. CERTAIN COVENANTS
5.1 ACCESS AND INFORMATION
(a) After the date hereof, Seller and Buyer will provide,
and will cause their respective Affiliates to provide, to each other and to
their respective officers, employees, counsel and other representatives, upon
request (subject to any limitations that are reasonably required to preserve
any applicable attorney-client privilege or Third Party confidentiality
obligation), reasonable access for inspection and copying of all Business
Records, Governmental Permits, Licenses (other than Nonassignable Licenses),
Contracts (other than Excluded Contracts) and any other information existing
as of the date hereof and relating to the Business, the Purchased Assets or
the Assumed Liabilities, and will make their respective personnel reasonably
available for interviews, depositions and testimony in any legal matter
concerning transactions, operations or activities relating to the Business or
the Purchased Assets or Assumed Liabilities, and as otherwise may be
necessary or desirable to enable the Party requesting such assistance to: (i)
comply with reporting, filing or other requirements imposed by any foreign,
local, state or federal court, agency or regulatory body; (ii) assert or
defend any claims or allegations in any litigation or arbitration or in any
administrative or legal proceeding other than claims or allegations that one
Party to this Agreement has asserted against the other; or (iii) subject to
clause (ii) above, perform its obligations under this Agreement. The Party
requesting such information or assistance shall reimburse the other Party for
all out-of-pocket costs and expenses incurred by such Party in providing such
information and in rendering such assistance. The access to files, books and
records contemplated by this Section 5.1(a) shall be during normal business
hours and upon not less than two Business Days' prior written request and
shall be subject to such reasonable limitations as the Party having custody
or control thereof may impose to preserve the confidentiality of information
contained therein.
(b) Buyer agrees to preserve all Business Records, Licenses
and Governmental Permits for at least seven years after the date hereof. In
the event Buyer determines to destroy or dispose of any Business Records,
Licenses or Governmental Permits
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after this seven year period, it shall use its good faith efforts to notify
Seller at least ninety days prior to the planned destruction or disposition
and shall make such Business Records, Licenses or Governmental Permits
available to Seller prior to such destruction or disposition.
5.2 TAX REPORTING AND ALLOCATION OF CONSIDERATION
(a) Seller and Buyer acknowledge and agree that (i) Seller
will be responsible for and will perform all tax withholding, payment and
reporting duties with respect to any wages and other compensation paid by
Seller to any Business Employee in connection with operating the Business
prior to or on the date hereof, and (ii) Buyer will be responsible for and
will perform all tax withholding, payment and reporting duties with respect
to any wages and other compensation paid by Buyer to any Accepting Employee
in connection with operating the Business after the date hereof.
(b) Seller and Buyer recognize their mutual obligations
pursuant to Section 1060 of the Code to timely file IRS Form 8594 (the "ASSET
ACQUISITION STATEMENT") with each of their respective federal income tax
returns. The allocation of the Purchase Price among the Purchased Assets is
set forth in SCHEDULE 5.2(B) hereto. Seller and Buyer agree to cooperate in
the preparation of the Asset Acquisition Statement for timely filing in each
of their respective federal income tax returns. Neither Seller nor Buyer
shall file any tax return taking a position inconsistent with the Purchase
Price allocation set forth in SCHEDULE 5.2(B). The parties further agree that
the value of the Contingent Shares, if any, issued pursuant to this Agreement
shall be allocated in the same manner and in the same percentages as are
utilized to allocate the Purchase Price in SCHEDULE 5.2(B).
5.3 BUSINESS EMPLOYEES
(a) Buyer shall make offers of employment to all Business
Employees listed on SCHEDULE 5.3(A) hereto. Business Employees who accept
Buyer's offer of employment will have terminated his or her employment with
Seller or any Affiliate of Seller. Those Business Employees who accept
Buyer's offer will become employees of Buyer following the close of business
on the date hereof (the "ACCEPTING EMPLOYEES").
(b) Buyer shall provide Accepting Employee with a total
compensation package of salary and benefits (on an aggregate basis) at least
comparable to that offered by Buyer to similarly situated employees of Buyer.
To the extent permitted by the terms of such plans and policies, Buyer's
benefit plans and policies, including vacation, floating holidays,
retirement, severance and welfare plans, shall recognize (i) for purposes of
satisfying any deductibles during the coverage period that includes the date
hereof, any payment made by any Accepting Employee towards deductibles in any
health or other insurance plan of Seller, and (ii) for purposes of
determining eligibility to participate, vesting and for any schedule of
benefits based on service (other than for benefits accrued under any defined
benefit plan), all service with Seller, including service with predecessor
employers that was recognized by Seller and any prior unbridged service with
Seller. Seller will continue to provide relocation assistance to those
Business Employees receiving it as of the date hereof and tuition assistance
to those Business Employees who are receiving such benefits as of the date
hereof for the current academic session.
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(c) Employment with Buyer of Accepting Employees shall be
effective as of the Business Day following the close of business on the date
hereof, except that the employment of (i) individuals receiving disability
benefits or on approved leave of absence on the date hereof will become
effective as of the date they present themselves for work with Buyer and,
notwithstanding Section 5.3(a) such individual shall not be treated as a
Accepting Employee for purpose of this Agreement and (ii) individuals who are
in the process of applying for visas will become effective as of the date
that their visas are transferred to Buyer and in the interim will continue to
be employed by Seller and made available pursuant to the Transition Services
Agreement to Buyer who shall reimburse Seller for all direct costs of such
employment.
(d) To the extent permitted by the terms of such plans and
policies, Buyer agrees that its health and welfare plans shall waive any
pre-existing condition exclusion (to the extent such exclusion was waived
under applicable health and welfare plans offered to the Accepting Employees
by Seller) and any proof of insurability. Seller agrees to transfer the
cafeteria plan accounts and experience of Accepting Employees to
substantially equivalent plans to be established by Buyer to the extent
permitted by applicable plan terms and applicable Laws.
(e) Buyer shall ensure that a defined contribution plan
that it maintains shall accept rollover distributions under Section 402 of
the Code, in cash, from or on behalf of any Accepting Employee.
5.4 MARKETING AGREEMENT
Seller's New Ventures Group, a division of Seller, shall assist
Buyer's efforts to develop reseller agreements or joint marketing agreements
with the switch and wireless divisions of Seller pursuant to which those
divisions will either offer for sale products and services of Buyer's
business or provide marketing assistance.
5.5 CONTACTS WITH SUPPLIERS AND CUSTOMERS
Seller and Buyer will cooperate in communication with suppliers and
customers to accomplish the transfer of the Purchased Assets and Assumed
Liabilities to Buyer on the date hereof.
5.6 SALE BY BUYER OF INVENTORY MARKED WITH SELLER'S NAME
Buyer agrees that it (i) shall xxxx product, both internally and
externally, with Buyer's name and xxxx and shall cease as of the date hereof
to xxxx product with the names, marks or other indicia of "Lucent," "Lucent
Technologies" or other similar xxxx; PROVIDED, HOWEVER, that for a period of
twelve months following the date hereof, Buyer may continue to use or dispose
of any existing stock of Inventory or packaging or shipping materials on hand
that bear the xxxx "Lucent," "Lucent Technologies" or other similar xxxx, in
a manner consistent with that employed immediately prior to the date hereof,
and (ii) shall not advertise or hold itself out as Seller or an Affiliate
thereof after the date hereof.
5.7 NON-SOLICITATION OF EMPLOYEES
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Without Seller's prior written consent, none of Buyer, any of their
respective representatives or any of its Affiliates will at any time prior to
one year from the date hereof, directly or indirectly, solicit the employment
of any employee of Seller with whom Buyer its representatives or its
Affiliates have had contact or were provided information in connection with
the transactions proposed by this Agreement, other than the Business
Employees. The term "solicit the employment" shall not be deemed to include
generalized searches for employees through media advertisements, employment
firms or otherwise that are not focused on persons employed by Seller. This
restriction shall not apply to any employee whose employment with Seller is
involuntarily terminated by Seller after the date hereof. Solicitation of
employment shall be deemed to occur if the persons who perform such
solicitation have knowledge of this Agreement or if such persons have no
knowledge of this Agreement but Buyer's employees with knowledge of this
Agreement have advance knowledge of any such solicitation.
5.8 CERTAIN EQUIPMENT
(a) Buyer agrees that during the one year period following
the date of this Agreement, it will purchase all or part of the Sequent
Equipment for its database product sales and/or its internal use related to
new system installations, including its outsourcing on behalf of Ameritech
Corporation ("AMERITECH"), which service it intends to migrate to the Sequent
Equipment, before making new purchases of or entering into any lease with
respect to substantially equivalent hardware. Except as is provided above
with regard to the Ameritech opportunity, Buyer shall have no obligation to
utilize Sequent Equipment in connection with current sales and support of
Buyer's Tandem-based customers.
(b) On the first anniversary of the date hereof, Buyer
shall purchase all of the Sequent Equipment not previously purchased pursuant
to Section 5.8(a) above.
(c) The aggregate purchase price of the Sequent Equipment
and related Informix software licenses shall be $4,790,000; provided,
however, that such purchase price shall be pro-rated in the event of a
separate purchase of less than all the Sequent Equipment purchased pursuant
to Section 5.8(a) and 5.8(b) above.
(d) The purchase price for any Sequent Equipment purchased
pursuant to Section 5.8(a) shall be payable upon delivery. The purchase price
for any Sequent Equipment purchased pursuant to Section 5.8(b) shall be
payable in four (4) equal installments on each of August 1, 2002, November 1,
2002, February 1, 2003 and May 1, 2003.
(e) Upon Buyer's full payment of the above purchase price,
Seller will convey to Buyer all of Seller's right, title and interest in and
to the Sequent Equipment and the Informix software licenses. To the best of
the Business Employees' knowledge, the manufacturer's warranty on the Sequent
Equipment begins upon shipment to the end user customer; and to the best of
the Business Employees' knowledge, the Informix software licenses are
assignable to Buyer (subject to the consent of Informix Corporation, which
consent, under the terms of the applicable agreement, is not to be
unreasonably withheld); however, Seller makes no other representations or
warranties with respect to such hardware or software.
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5.9 CERTIFICATE OF DESIGNATION
If any Contingent Shares are to be issued pursuant to Section 2.3(c)
hereof, within two business days following the date on which the number of
Contingent Shares is determined in accordance with the procedure set forth in
SCHEDULE 2.3(C), Buyer shall file the Certificate of Designation with the
Secretary of State of the State of Delaware.
5.10 FINANCIAL STATEMENTS
If despite the Buyer's Reasonable Commercial Effort to avoid same,
the Buyer shall be obligated to provide financial statements with respect to
the Business for any period ending after December 31, 2000 or as of any date
after December 31, 2000 in connection with any filing made pursuant to the
Securities Act or Exchange Act, then Seller shall use its Reasonable
Commercial Efforts to engage a "Big 5" accounting firm or other nationally
recognized accounting firm reasonably acceptable to the Buyer, to conduct an
audit of, or if no audit is required, to perform the procedures specified by
the American Institute of Certified Public Accountants for a review of
interim financial information as described in Statement of Auditing Standards
No. 71, Interim Financial Information, with respect to, such financial
statements. The parties agree that time shall be of the essence in arranging
for and completing such audit or review, as the case may be. The parties
further agree to use Reasonable Commercial Efforts to make available such
records and personnel as are necessary for the completion of the audit or
review. All fees and expenses of the accounting firm conducting such audit or
review shall be paid in equal amounts by Seller and Buyer. In addition, if
within fifteen days of the date of this Agreement, the Buyer determines that
there is a reasonable likelihood that financial statements for the first
quarter of the year ending December 31, 2001 will be required by the Buyer,
Seller shall engage PricewaterhouseCoopers LLP to commence such review or
audit and the parties shall share the resulting expenses in the same manner.
6. CONFIDENTIAL NATURE OF INFORMATION
6.1 CONFIDENTIALITY AGREEMENT
Buyer and Seller agree that the Confidentiality Agreement shall
apply to (a) all documents, materials and other information that it shall
have obtained during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before
or after the date of this Agreement), any investigations made in connection
therewith and the preparation of this Agreement and related documents and (b)
all analyses, reports, compilations, evaluations and other materials prepared
by a Party or its counsel, accountants or financial advisors that contain or
otherwise reflect or are based upon, in whole or in part, any of the provided
information; PROVIDED, HOWEVER, that subject to Section 6.2(a), the
Confidentiality Agreement shall terminate as of the date hereof and shall be
of no further force and effect thereafter with respect to information of
Seller or the Subsidiary the ownership of which is transferred to Buyer.
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6.2 SELLER'S PROPRIETARY INFORMATION
(a) Except as provided in Section 6.2(b), until the fifth
anniversary of the date hereof, each Party agrees that it will keep
confidential all of the other Party's Proprietary Information that is
received from, or made available by, a Party or in the course of the
transactions contemplated hereby, including, for purposes of this Section
6.2, information about each Party's business plans and strategies, marketing
ideas and concepts, especially with respect to unannounced products and
services, present and future product plans, pricing, volume estimates,
financial data, product enhancement information, business plans, marketing
plans, sales strategies, customer information (including customers'
applications and environments), market testing information, development
plans, specifications, customer requirements, configurations, designs, plans,
drawings, apparatus, sketches, software, hardware, data, prototypes,
connecting requirements or other technical and business information, except
for such Proprietary Information as is conveyed to Buyer as part of the
Purchased Assets.
(b) Notwithstanding the foregoing, such Proprietary
Information shall not be deemed confidential and neither Party shall have an
obligation with respect to any such Proprietary Information that:
(i) at the time of disclosure was already known to
the party receiving such Proprietary Information (the "RECIPIENT" ) other
than through this transaction, free of restriction as evidenced by
documentation in the Recipient's possession;
(ii) is or becomes publicly known through
publication, inspection of a product, or otherwise, and through no negligence
or other wrongful act of the Recipient;
(iii) is received by the Recipient from a Third
Party without similar restriction and without breach of any agreement;
(iv) to the extent it is independently developed
by the Recipient; or
(v) is, subject to Section 6.2(c), required to be
disclosed under applicable Law or judicial process.
(c) If the Recipient (or any of its Affiliates) is
requested or required (by oral question, interrogatory, request for
information or documents, subpoena, civil investigative demand or similar
process) to disclose any Proprietary Information, the Recipient will promptly
notify the party disclosing Proprietary Information (the "DISCLOSING PARTY"),
of such request or requirement and will cooperate with the Disclosing Party
such that the Disclosing Party may seek an appropriate protective order or
other appropriate remedy. If, in the absence of a protective order or the
receipt of a waiver hereunder, the Recipient (or any of its Affiliates) is in
the written opinion of the Recipient's counsel compelled to disclose the
Proprietary Information or else stand liable for contempt or suffer other
censure or significant penalty, the Recipient (or its Affiliate) may disclose
only so much of the Proprietary Information to the party compelling
disclosure as is required by Law. The Recipient will exercise its (and will
cause its Affiliates to exercise their) Reasonable Commercial Efforts to
obtain a protective order or other reliable assurance that confidential
treatment will be accorded to such Proprietary Information.
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(d) Except to the extent that disclosure thereof is
required under accounting, stock exchange, Nasdaq National Market or
applicable federal and state securities Laws disclosure obligations, the
terms and conditions of this Agreement, and all attachments and amendments
hereto and thereto shall be considered Proprietary Information protected
under this Section 6. Notwithstanding anything in this Section 6 to the
contrary, in the event that any such Proprietary Information is also subject
to a limitation on disclosure or use contained in another written agreement
between Buyer and Seller that is more restrictive than the limitation
contained in this Section 6, then the limitation in such agreement shall
supersede this Section 6.
7. CLOSING
7.1 DELIVERIES BY SELLER AND IP-GUARDIAN
Contemporaneously herewith:
(a) Seller and IP-Guardian (as applicable) are, executing
and delivering to Buyer the Collateral Agreements;
(b) Seller is delivering to Buyer all consents, waivers or
approvals theretofore obtained by Seller with respect to the sale of the
Purchased Assets or the consummation of the transactions contemplated by this
Agreement or the Collateral Agreements and all such other bills of sale,
assignments and other instruments of assignment, transfer or conveyance as
Buyer has reasonably requested or as may be otherwise necessary to evidence
and effect the sale, transfer, assignment, conveyance and delivery of the
Purchased Assets to Buyer and to vest in Buyer good, clear, record and
marketable title to the Purchased Assets;
(c) Seller is delivering to Buyer an opinion of Counsel for
Seller dated as of the date hereof;
(d) IP-Guardian is delivering to Buyer an investment
representation letter containing representations substantially equivalent to
the representations made by Seller in Section 3.20;
(e) Seller and IP-Guardian are delivering to Buyer
certificates of the Secretary or an Assistant Secretary of Seller and
IP-Guardian certifying the names and signatures of the officers of Seller and
IP-Guardian, as the case may be, authorized to sign this Agreement, the
Collateral Agreements and the other documents being delivered by such party
hereunder and thereunder;
(f) Seller and IP-Guardian are delivering to Buyer good
standing certificates for Seller and IP-Guardian from the Secretary of State
of the State of Delaware, each dated as of a date not earlier than five
Business Days prior to the date hereof and accompanied by a bring-down good
standing certificate dated as of the date hereof;
(g) Seller is delivering to Buyer such other documents,
instruments or certificates as Buyer may have reasonably requested; and
(h) Seller is delivering to Buyer the Financial Statements.
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7.2 DELIVERIES BY BUYER
Contemporaneously herewith:
(a) Buyer is delivering to Seller certificates for the
shares of Common Stock constituting the Purchase Price issuable to Seller and
IP-Guardian (except for the Escrow Shares as set forth in Section 2.3) in
accordance with Section 2.3;
(b) Buyer is executing and delivering to Seller the
Collateral Agreements;
(c) Buyer is delivering to the Escrow Agent a certificate
for the Escrow Shares and is delivering to Seller a copy of such certificate;
(d) Buyer is delivering to Seller an opinion of Counsel for
Buyer dated as of the date hereof;
(e) Buyer is delivering to Seller a true and complete copy,
certified by the Secretary or an Assistant Secretary of Buyer, of the
resolutions duly and validly adopted by the Board of Directors of Buyer
evidencing its authorization of the execution and delivery of this Agreement
and the Collateral Agreements and the consummation of the transactions
contemplated hereby and thereby;
(f) Buyer is delivering to Seller a certificate of the
Secretary or an Assistant Secretary of Buyer certifying the names and
signatures of the officers of Buyer authorized to sign this Agreement and the
Collateral Agreements and the other documents being delivered by Buyer
hereunder and thereunder;
(g) Buyer is delivering to Seller a good standing
certificate for Buyer from the Secretary of State of the State of Delaware,
dated as of a date not earlier than five Business Days prior to the date
hereof and accompanied by a bring-down good standing certificate dated as of
the date hereof; and
(h) Buyer is delivering to Seller evidence of the obtaining
of or the filing with respect to, any required approvals set forth on
SCHEDULE 4.4(b).
7.3 CONTEMPORANEOUS EFFECTIVENESS
The execution and delivery of this Agreement and all acts and
deliveries prescribed by this Section 7, regardless of chronological
sequence, will be deemed to occur contemporaneously and simultaneously on the
occurrence of the last act or delivery, and none of such acts or deliveries
will be effective until the last of the same has occurred.
8. STATUS OF AGREEMENTS
The rights and obligations of Buyer and Seller under this Agreement
shall be subject to the following terms and conditions:
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8.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Seller contained in this
Agreement shall (a) survive the date hereof and any investigation at any time
made by or on behalf of Buyer and (b) expire on the date one year following
the date hereof; PROVIDED THAT the representations and warranties in Section
3.5(a) shall survive without limitation. The representations and warranties
of Buyer contained in this Agreement shall not survive the date hereof;
PROVIDED THAT the representations and warranties in Section 4.3(a) shall
survive for one year following the date hereof. Neither Seller nor Buyer
shall have any liability whatsoever with respect to any such representations
or warranties after the survival period for such representation or warranty
expires.
8.2 GENERAL AGREEMENT TO INDEMNIFY
(a) Seller and Buyer shall indemnify, defend and hold
harmless the other Party and any director, officer or Affiliate of the other
Party (each an "INDEMNIFIED PARTY") from and against any and all claims,
actions, suits, proceedings, liabilities, obligations, losses, and damages,
amounts paid in settlement, interest, costs and expenses (including
reasonable attorney's fees, court costs and other out-of-pocket expenses
incurred in investigating, preparing or defending the foregoing)
(collectively, "LOSSES") incurred or suffered by any Indemnified Party to the
extent that the Losses arise by reason of, or result from (i) the failure of
any representation or warranty of such Party contained in this Agreement to
have been true in all material respects when made and as of the date hereof
or (ii) the breach by such Party of any covenant or agreement of such Party
contained in this Agreement to the extent not waived by the other Party.
(b) Seller further agrees to indemnify and hold harmless
Buyer from and against any Losses incurred by Buyer arising out of, resulting
from, or relating to: (i) the Excluded Liabilities; (ii) Buyer's waiver of
any applicable Bulk Sales Laws; (iii) any claim, demand or liability for the
Taxes accruing in connection with the Purchased Assets prior to and including
the date hereof; (iv) any warranty claim or product liability claim relating
to (A) products manufactured or sold by Seller prior to the date hereof or
(B) the Business or its operation prior to the Date hereof; and (v) any
claims of any Business Employee employed by Buyer in connection with any
Benefit Plan of Seller or such Business Employee's employment prior to and
including the date hereof.
(c) Buyer further agrees to indemnify and hold harmless
Seller with respect to: (i) any failure of Buyer to discharge any of the
Assumed Liabilities; (ii) any claim, demand or liability for the Taxes
referred to in Section 2.9; and (iii) any medical, health or disability
claims of any Accepting Employee, except for claims for expenses incurred on
or before the close of business on the date hereof.
(d) Amounts payable in respect of Seller's indemnification
obligations may be, at Seller's option, (i) paid by wire transfer of
immediately available funds or (ii) recovered from the Escrow Shares or other
shares of Common Stock constituting a portion of the Purchase Price) by
dividing the dollar amount of such payable amount by the average of the
Closing Prices of the Common Stock for the ten Trading Days ending on the
third Trading Day immediately preceding the date of distribution of the
relevant Escrow Shares by the Escrow Agent or the
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delivery date of such other shares of Common Stock by Seller, as the case may
be. "CLOSING PRICE," on any Trading Day, shall mean the last reported sale
price, or in case no such sale takes place on such day, the average of the
closing bid and asked prices, for the Common Stock. "TRADING DAY" shall mean
(i) a day on which the Common Stock is traded on the principal stock exchange
on which the Common Stock has been listed, or (ii) if the Common Stock is not
listed on any stock exchange, a day on which the Common Stock is traded in
the over-the-counter market, as reported by the Nasdaq National Market, or
(iii) if the Common Stock is not listed on any stock exchange or traded on
the Nasdaq National Market, a day on which the Common Stock is traded in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding to its
functions of reporting prices). All indemnification by Buyer hereunder shall
be effected by wire transfer of immediately available funds in the amount of
the indemnification liability.
(e) The amount of the Indemnifying Party's liability under
this Agreement shall be determined taking into account any applicable
insurance proceeds actually received by, and other savings, including tax
savings, that actually reduce the overall impact of the Losses upon, the
Indemnified Party. The indemnification obligations of each Party under this
Section 8 shall inure to the benefit of the directors, officers and
Affiliates of the other Party on the same terms as are applicable to such
other Party.
(f) The Indemnifying Party's liability for all claims
including those made under Section 8.2(a) shall be subject to the following
limitations: (i) the Indemnifying Party shall have no liability for such
claims until the aggregate amount of the Losses incurred shall exceed
$100,000, provided that, after the $100,000 threshold is reached, the
Indemnifying Party shall be liable for losses from the first dollar of
Losses, (ii) Seller's aggregate liability for all claims shall not exceed the
number of Escrow Shares; and (iii) Buyer's aggregate liability for all claims
shall not exceed $7,500,000. The Indemnified Party may not make a claim for
indemnification under Section 8.2(a) for breach by the Indemnifying Party of
a particular representation or warranty after the expiration of the survival
period specified in Section 8.2. For purposes solely of this Section 8, all
representations and warranties of Seller in Section 3 (other than Section
3.19) and all representations and warranties of Buyer in Section 4.3 shall be
construed as if the term "material" (and variations thereof) were omitted
from such representations and warranties. Notwithstanding anything in this
Agreement to the contrary, neither Party shall be liable to the other Party
for punitive damages arising out of this Agreement, PROVIDED, HOWEVER, the
foregoing language shall not be construed to preclude recovery by the
Indemnified Party in respect of Losses directly incurred from Third-Party
Claims.
(g) The rights to indemnification under Section 8.2 shall
not be subject to set-off for any claim by the Indemnifying Party against any
Indemnified Party, whether or not arising from the same event giving rise to
such Indemnified Party's claim for indemnification.
(h) Except with respect to claims based on fraud, the
indemnification provided in this Article 8 shall be the sole and exclusive
remedy after the date hereof for damages available to the Parties with
respect to claims resulting from or relating to any breach of any of the
terms, conditions, representations or warranties contained herein or any
right, claim or action arising from the transactions contemplated by this
Agreement; PROVIDED, HOWEVER, this
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exclusive remedy for damages shall not preclude a Party from bringing an
action for specific performance or other equitable remedy to require the
other Party to perform its obligations under this Agreement.
8.3 GENERAL PROCEDURES FOR INDEMNIFICATION
(a) The Indemnified Party seeking indemnification under
this Agreement shall promptly notify the Party against whom indemnification
is sought (the "INDEMNIFYING PARTY") of the assertion of any claim, or the
commencement of any action, suit or proceeding by any Third Party, in respect
of which indemnity may be sought hereunder and will give the Indemnifying
Party such information with respect thereto as the Indemnifying Party may
reasonably request, but failure to give such notice shall not relieve the
Indemnifying Party of any liability hereunder (unless the Indemnifying Party
has suffered material prejudice by such failure). The Indemnifying Party
shall have the right, but not the obligation, exercisable by written notice
to the Indemnified Party within thirty days of receipt of notice from the
Indemnified Party of the commencement of or assertion of any claim, action,
suit or proceeding by a Third Party in respect of which indemnity may be
sought hereunder (a "THIRD-PARTY CLAIM"), to assume the defense and control
the settlement of such Third-Party Claim that (i) involves (and continues to
involve) solely money damages, or (ii) involves (and continues to involve)
claims for both money damages and equitable relief against the Indemnified
Party that cannot be severed, where the claims for money damages are the
primary claims asserted by the Third Party and the claims for equitable
relief are incidental to the claims for money damages.
(b) The Indemnifying Party or the Indemnified Party, as the
case may be, shall have the right to participate in (but not control), at its
own expense, the defense of any Third-Party Claim that the other is
defending, as provided in this Agreement.
(c) The Indemnifying Party, if it has assumed the defense
of any Third-Party Claim as provided in this Agreement, shall not consent to
a settlement of, or the entry of any judgment arising from, any such
Third-Party Claim without the Indemnified Party's prior written consent
(which consent shall not be unreasonably withheld) unless such settlement or
judgment relates solely to monetary damages. The Indemnifying Party shall
not, without the Indemnified Party's prior written consent, enter into any
compromise or settlement that (i) commits the Indemnified Party to take, or
to forbear to take, any action, or (ii) does not provide for a complete
release by such Third Party of the Indemnified Party. The Indemnified Party
shall have the sole and exclusive right to settle any Third-Party Claim, on
such terms and conditions as it deems reasonably appropriate, to the extent
such Third-Party Claim involves equitable or other non-monetary relief
against the Indemnified Party, and shall have the right to settle any
Third-Party Claim involving money damages for which Seller has not assumed
the defense pursuant to this Section 8.3 with the written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed.
(d) In the event an Indemnified Party shall claim a right
to payment pursuant to this Agreement, such Indemnified Party shall send
written notice of such claim to the Indemnifying Party. Such notice shall
specify the basis for such claim. As promptly as possible after the
Indemnified Party has given such notice, and subject to the limitations set
forth in Section 8.2, the Indemnified Party and the Indemnifying Party shall
establish the merits and
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amount of such claim by mutual agreement, or, if necessary, by arbitration in
a manner reasonably determined by mutual agreement of such parties.
9. MISCELLANEOUS PROVISIONS
9.1 NOTICES
All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given upon receipt if (i) mailed by
certified or registered mail, return receipt requested, (ii) sent by Federal
Express or other express carrier, fee prepaid, (iii) sent via facsimile with
receipt confirmed, or (iv) delivered personally, addressed as follows or to
such other address or addresses of which the respective Party shall have
notified the other.
(a) If to Seller, to: Lucent Technologies Inc.
New Ventures Group
Attn: Group President, NVG
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Lucent Technologies Inc.
Attn: Xxxx Xxxxxx, Esq.
000 Xxxxxxxx Xxxxxx, Xxxx 0X-000
Xxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Facsimile: (000) 000-0000
and
Xxxxxxx X. Xxxxxxxx, Esq.
XxXxxxxx & English, LLP
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Facsimile: (000) 000-0000
(b) If to Buyer, to: SCC Communications Corp.
Attn: Chief Executive Officer
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxx X. Xxxxxxx, Esq.
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
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9.2 EXPENSES
Except as otherwise provided in this Agreement, each party to this
Agreement shall bear all the fees, costs and expenses that are incurred by it
in connection with the transactions contemplated hereby, whether or not such
transactions are consummated.
9.3 ENTIRE AGREEMENT; MODIFICATION
The agreement of the Parties, which is comprised of this Agreement,
the Schedules and Exhibits hereto and the documents referred to in Section 7
hereof, sets forth the entire agreement and understanding between the Parties
and supersedes any prior agreement or understanding, written or oral,
relating to the subject matter of this Agreement, including the Initial
Agreement. With respect to the Purchased Assets, the Business, or any other
rights or obligations to be transferred hereunder or pursuant hereto, neither
Party has been induced by or has relied upon any representations, warranties,
or statements, whether express or implied, made by the other Party, its
agents, employees, attorneys or other representatives or by any Person
representing or purporting to represent the other Party that are not
expressly set forth in this Agreement or the Collateral Agreements (including
the Schedules and Exhibits hereto and thereto), whether or not any such
representations, warranties or statements were made in writing or orally. No
amendment, supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the Party to be bound thereby.
9.4 ASSIGNMENT; BINDING EFFECT; SEVERABILITY
This Agreement may not be assigned by either Party without the other
Party's written consent. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the successors, legal representatives
and permitted assigns of each Party. The provisions of this Agreement are
severable, and in the event that any one or more provisions are deemed
illegal or unenforceable the remaining provisions shall remain in full force
and effect unless the deletion of such provision shall cause this Agreement
to become materially adverse to either Party, in which event the Parties
shall use Reasonable Commercial Efforts to arrive at an accommodation that
best preserves for the Parties the benefits and obligations of the offending
provision.
9.5 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK IRRESPECTIVE OF THE CHOICE OF
LAWS PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS
OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.
9.6 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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9.7 PUBLIC ANNOUNCEMENT
Upon signing of this Agreement, Seller and Buyer shall prepare a
mutually agreeable release announcing the transaction contemplated hereby.
Except for such press release, neither Seller nor Buyer shall, without the
approval of the other after the date hereof, make any press release or other
announcement concerning the existence of this Agreement or the terms of the
transactions contemplated by this Agreement, except as and to the extent that
any such Party shall be so obligated by Law, in which case the other Party
shall be advised and the Parties shall use their Reasonable Commercial
Efforts to cause a mutually agreeable release or announcement to be issued;
PROVIDED, HOWEVER, that the foregoing shall not preclude communications or
disclosures necessary to comply with accounting, stock exchange, Nasdaq
National Market or applicable federal and state securities Law disclosure
obligations.
9.8 NO THIRD PARTY BENEFICIARIES
Nothing in this Agreement, express or implied, is intended to or
shall (a) confer on any Person other than the Parties hereto and their
respective successors or assigns any rights (including Third Party
beneficiary rights), remedies, obligations or liabilities under or by reason
of this Agreement, or (b) constitute the Parties as partners or as
participants in a joint venture. This Agreement shall not provide Third
Parties with any remedy, claim, liability, reimbursement, cause of action or
other right in excess of those existing without reference to the terms of
this Agreement. Nothing in this Agreement shall be construed as giving to any
Business Employee, or any other individual, any right or entitlement under
any Benefit Plan, policy or procedure maintained by Seller, except as
expressly provided in such Benefit Plan, policy or procedure. No Third Party
shall have any rights under Section 502, 503 or 504 of ERISA or any
regulations thereunder because of this Agreement that would not otherwise
exist without reference to this Agreement. No Third Party shall have any
right, independent of any right that exist irrespective of this Agreement,
under or granted by this Agreement, to bring any suit at law or equity for
any matter governed by or subject to the provisions of this Agreement.
10. WAIVER OF AGREEMENT
The failure of either Party to enforce at any time any provision of
this Agreement shall not be construed to be a waiver of such provision nor
shall it in any way affect the validity of this Agreement or the right of
such Party thereafter to enforce each and every such provision. No waiver of
any breach of this Agreement shall be held to constitute a waiver of any
other or subsequent breach.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, each Party has caused this Agreement to be duly
executed on its behalf by its duly authorized officer as of the date first
written above.
LUCENT TECHNOLOGIES INC.
By: __________________________
Name:
Title:
SCC COMMUNICATIONS CORP.
By: __________________________
Name:
Title:
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