ASSET PURCHASE AGREEMENT by and between LSI CORPORATION as Seller and NETAPP, INC. as Buyer dated as of March 9, 2011
Exhibit 2.1
by and between
LSI CORPORATION
as Seller
and
NETAPP, INC.
as Buyer
dated as of March 9, 2011
TABLE OF CONTENTS
Page | ||||||
1.
|
Definitions | 2 | ||||
1.1 Defined Terms | 2 | |||||
1.2 Additional Defined Terms | 12 | |||||
1.3 Other Definitional and Interpretive Matters | 13 | |||||
2.
|
Purchase and Sale of the Engenio Business | 14 | ||||
2.1 Purchase and Sale of Assets | 14 | |||||
2.2 Excluded Assets | 15 | |||||
2.3 Purchase Price | 17 | |||||
2.4 Assumed Liabilities | 17 | |||||
2.5 Excluded Liabilities | 18 | |||||
2.6 Further Assurances; Further Conveyances and Assumptions; Consent of Third Parties | 19 | |||||
2.7 Intellectual Property and Information | 21 | |||||
2.8 Bulk Sales Law | 21 | |||||
2.9 Taxes | 22 | |||||
2.10 Buyer Designee | 23 | |||||
2.11 Performance of Warranty Service; Warranty Reimbursement | 23 | |||||
3.
|
Representations and Warranties of Seller | 23 | ||||
3.1 Organization and Qualification | 23 | |||||
3.2 Subsidiaries | 24 | |||||
3.3 Authorization; Binding Effect | 24 | |||||
3.4 Non-Contravention; Consents | 24 | |||||
3.5 Title to Property; Principal Equipment; Sufficiency of Assets | 25 | |||||
3.6 Permits; Licenses | 26 | |||||
3.7 Real Estate; Environmental Matters | 26 | |||||
3.8 Compliance With Laws | 28 | |||||
3.9 Litigation | 28 | |||||
3.10 Business Employees | 28 | |||||
3.11 Contracts | 30 | |||||
3.12 Financial Information; Absence of Certain Changes | 31 | |||||
3.13 Intellectual Property | 32 | |||||
3.14 Product Liability and Recalls | 37 | |||||
3.15 Product Warranty | 37 | |||||
3.16 Inventory | 37 | |||||
3.17 Customer and Suppliers | 38 | |||||
3.18 Restrictions on the Engenio Business | 38 | |||||
3.19 Taxes | 38 | |||||
3.20 Brokers | 39 | |||||
4.
|
Representations and Warranties of Buyer | 39 | ||||
4.1 Organization and Qualification | 39 |
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Page | ||||||
4.2 Authorization; Binding Effect | 39 | |||||
4.3 Non-Contravention; Consents | 40 | |||||
4.4 Brokers | 40 | |||||
4.5 Sufficiency of Funds | 40 | |||||
5.
|
Certain Covenants | 41 | ||||
5.1 Access and Information | 41 | |||||
5.2 Conduct of the Engenio Business | 42 | |||||
5.3 Taxes | 43 | |||||
5.4 Business Employees | 44 | |||||
5.5 Collateral Agreements; Leased Equipment; Premises | 48 | |||||
5.6 Regulatory Compliance; Post-Closing Cooperation | 48 | |||||
5.7 Contacts with Suppliers and Customers | 49 | |||||
5.8 Use of the Seller Name | 49 | |||||
5.9 Non-Solicitation or Hiring of Transferred Employees | 51 | |||||
5.10 No Negotiation or Solicitation | 51 | |||||
5.11 Non-Competition | 51 | |||||
5.12 Post Closing Remittances | 52 | |||||
5.13 Prorations and Adjustments | 53 | |||||
5.14 Notification of Certain Matters | 53 | |||||
5.15 Title Insurance | 53 | |||||
5.16 Closing Statement | 54 | |||||
5.17 Indian Assets | 54 | |||||
6.
|
Confidential Nature of Information | 54 | ||||
6.1 Confidentiality Agreement | 54 | |||||
6.2 Seller’s Proprietary Information | 54 | |||||
6.3 Buyer’s Proprietary Information | 55 | |||||
6.4 Confidential Nature of Agreements | 56 | |||||
7.
|
Closing | 56 | ||||
7.1 Deliveries by Seller or the Subsidiaries | 56 | |||||
7.2 Deliveries by Buyer or a Buyer Designee | 57 | |||||
7.3 Closing Date | 57 | |||||
7.4 Contemporaneous Effectiveness | 58 | |||||
8.
|
Conditions Precedent to Closing | 58 | ||||
8.1 General Conditions | 58 | |||||
8.2 Conditions Precedent to Buyer’s Obligations | 58 | |||||
8.3 Conditions Precedent to Seller’s Obligations | 59 | |||||
9.
|
Indemnification | 59 | ||||
9.1 Effect of Investigation | 59 | |||||
9.2 Survival of Representations and Warranties | 60 | |||||
9.3 General Agreement to Indemnify | 60 | |||||
9.4 General Procedures for Indemnification | 62 |
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Page | ||||||
10.
|
Miscellaneous Provisions | 64 | ||||
10.1 Notices | 64 | |||||
10.2 Expenses | 64 | |||||
10.3 Entire Agreement; Modification | 64 | |||||
10.4 Assignment; Binding Effect; Severability | 65 | |||||
10.5 Governing Law | 65 | |||||
10.6 Consent to Jurisdiction | 65 | |||||
10.7 Waiver of Jury Trial | 66 | |||||
10.8 Execution in Counterparts | 66 | |||||
10.9 Public Announcement | 66 | |||||
10.10 No Third-Party Beneficiaries | 66 | |||||
11.
|
Termination; Amendment and Waiver | 67 | ||||
11.1 Termination | 67 | |||||
11.2 Effect of Termination | 67 | |||||
11.3 Amendment and Waiver | 67 | |||||
SIGNATURE PAGE | 69 |
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Schedules |
||
Schedule 1.1(a)
|
Individuals with Knowledge | |
Schedule 1.1(b)
|
Engenio Products | |
Schedule 1.1(c)
|
ONStor™ Products | |
Schedule 1.1(d)
|
Spare Parts Inventory Value | |
Schedule 2.1(a)
|
Contracts | |
Schedule 2.1(h)
|
Licenses | |
Schedule 2.1(j)
|
Governmental Permits | |
Schedule 2.1(k)
|
Domain Names | |
Schedule 2.2(f)
|
Excluded Contracts | |
Schedule 2.11
|
Warranty Reimbursement | |
Schedule 3.2
|
Subsidiaries | |
Schedule 3.4(b)
|
Required Consents | |
Schedule 3.7(a)
|
Leased Premises; Assumed Leases | |
Schedule 3.7(b)
|
Transferred Premises | |
Schedule 3.7(d)
|
Environmental Matters | |
Schedule 3.8
|
Compliance with Laws | |
Schedule 3.9
|
Litigation | |
Schedule 3.10(a)(i)
|
Business Employees | |
Schedule 3.10(a)(ii)
|
Unions and Works Councils | |
Schedule 3.10(b)
|
Employee Benefits | |
Schedule 3.11(a)
|
Material Contracts | |
Schedule 3.11(b)
|
Other Contracts Material to the Engenio Business | |
Schedule 3.12(a)
|
Financial Statements | |
Schedule 3.12(c)
|
Certain Events | |
Schedule 3.12(d)
|
Prepaid Revenues | |
Schedule 3.13
|
Intellectual Property | |
Schedule 3.14(b)
|
Product Liability and Recalls | |
Schedule 3.15(a)
|
Product Warranty Terms | |
Schedule 3.15(b)
|
Product Returns | |
Schedule 3.17
|
Customers and Suppliers | |
Schedule 5.3
|
Entity Level Allocation Statement | |
Schedule 5.4(b)
|
Offered Employees Minimum | |
Schedule 5.4(c)
|
Tuition Benefits; International Assignees | |
Schedule 5.4(d)
|
Severance Benefits | |
Schedule 7.1(b)
|
Required Closing Consents | |
Exhibits |
||
Exhibit A
|
Form of Assignment and Xxxx of Sale and Assumption Agreement | |
Exhibit B
|
Form of Intellectual Property Agreement | |
Exhibit C
|
Form of Lease Assignment | |
Exhibit D
|
Form of Real Estate Deed | |
Exhibit E
|
Form of Sublease | |
Exhibit F
|
Form of Transition Services Agreement | |
Exhibit G
|
Form of Amendment to the Supply Agreement |
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THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made as of March 9, 2011 by and between
LSI CORPORATION, a Delaware corporation (“Seller” or “LSI”), and NETAPP, INC., a
Delaware corporation (“Buyer”) (Buyer and Seller, together, the “Parties”).
R E C I T A L S
A. WHEREAS, Seller and its Subsidiaries (as hereinafter defined) are, among other things,
engaged through one of its business units (referred to herein as “Engenio Storage Group”)
in the Engenio Business (as hereinafter defined);
B. WHEREAS, the Engenio Business is comprised of certain assets and liabilities that are
currently part of Seller and its Subsidiaries;
C. WHEREAS, Seller and its Subsidiaries desire to sell, transfer and assign to Buyer or a
Buyer Designee (as hereinafter defined), and Buyer or a Buyer Designee desires to purchase and
assume from Seller and its Subsidiaries, the Purchased Assets (as hereinafter defined), and Buyer
or a Buyer Designee is willing to assume, the Assumed Liabilities (as hereinafter defined), in each
case as more fully described and upon the terms and subject to the conditions set forth herein; and
D. WHEREAS, Seller and its Subsidiaries and Buyer or a Buyer Designee desire to enter into
each Assignment and Xxxx of Sale and Assumption Agreement, the India Purchase Agreement, the
Intellectual Property Agreement, each Lease Assignment, the Real Estate Deed, each Sublease, the
Supply Amendment and the Transition Services Agreement (each as hereinafter defined, and
collectively, the “Collateral Agreements”).
NOW, THEREFORE, in consideration of the mutual agreements and covenants herein contained and
intending to be legally bound hereby, the parties hereto hereby agree as follows:
1. Definitions
1.1 Defined Terms
For the purposes of this Agreement the following words and phrases shall have the following
meanings:
“Affiliate” of any Person means any Person that controls, is controlled by, or is
under common control with such Person. As used herein, “control” (including the terms
“controlling”, “controlled by” and “under common control with”) means the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities or other interests, by
contract or otherwise.
“Assigned Intellectual Property” means all of the Intellectual Property and
Information owned by Seller or one of its Affiliates that is used or held for use primarily in the
operation or conduct of the Engenio Business and is being assigned to Buyer pursuant to the
Intellectual Property Agreement, which will set forth the Assigned Software, the Assigned Technical
Information, the Assigned Trademarks, and the Assigned Patents (as each such term is defined in the
Intellectual Property Agreement).
“Assignment and Xxxx of Sale and Assumption Agreement” means each agreement in
substantially the form set forth in Exhibit A.
“Assumed Leases” means the Leases identified on Schedule 3.7(a) to be assumed
or subleased by Buyer or a Buyer Designee pursuant to a Lease Assignment or Sublease as designated
on Schedule 3.7(a).
“Benefit Plan” means each Pension Plan, Welfare Plan and employment, compensation,
bonus, pension, profit sharing, deferred compensation, incentive compensation, stock ownership,
stock option, stock appreciation right, stock purchase, phantom stock or other equity compensation,
performance, retirement, thrift, savings, stock bonus, excess benefit, supplemental unemployment,
paid time off, perquisite, tuition reimbursement, outplacement, fringe benefit, vacation,
sabbatical, sick leave, severance, or retention, termination, change in control, redundancy policy,
workers’ compensation, retirement, cafeteria, disability, death benefit, hospitalization, medical,
dental, life insurance, accident benefit, welfare benefit or other plan, program, agreement or
arrangement, in each case maintained or contributed to, or required to be maintained or contributed
to, by Seller or its Subsidiaries or any ERISA Affiliate, or any plan covering non-United States
employees or former employees which if maintained or administered in or otherwise subject to the
laws of the United States would be described in this paragraph, in each case for the benefit of any
Business Employee.
“Business Day” means a day that is not (i) a Saturday, a Sunday or a statutory or
civic holiday in the State of New York, (ii) a day on which banking institutions are required by
Law to be closed in the State of New York, or (iii) a 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” means the employees of Seller or its Subsidiaries who are
principally engaged in performing services for the Engenio Business.
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“Business Records” means all books, records, ledgers, tangible data, disks, tapes,
other media-storing data and files or other similar information whether in hardcopy or computer
format and whether stored in network facilities or otherwise, in each case to the extent used or
held for use primarily in the operation or conduct of the Engenio Business, including any
advertising, promotional and media materials, training materials, trade show materials and videos,
engineering information, manuals and data, including databases for reference designs, product
datasheets, sales and purchase correspondence, including price lists, lists of present and former
customers, information concerning customer contacts, purchasing history and invoices, technical
characteristics and other information reasonably required for ongoing customer relationships, lists
of present and former suppliers or vendors, mailing lists, warranty information, catalogs, sales
promotion literature, advertising materials, brochures, bids, records of operation, accounting and
financial records, personnel and employment records, standard forms of documents, manuals of
operations or business procedures, designs, research materials and product testing reports, and any
information relating to any Tax imposed on any Purchased Assets or with respect to the Engenio
Business, but excluding portions of such items to the extent (i) they are included in, or primarily
related to, any Excluded Assets or Excluded Liabilities, or (ii) any applicable Law prohibits the
transfer of such information.
“Buyer Designee” means one or more Affiliates of Buyer identified to Seller in
accordance with Section 2.10 prior to the Closing Date.
“CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, 42 U.S.C. §§ 9601 et seq. as amended.
“Closing” means the closing of the transactions described in Article 7.
“Code” means the U.S. Internal Revenue Code of 1986, as amended.
“Confidentiality Agreement” means the Mutual Non-Disclosure Agreement between Seller
and Buyer dated January 11, 2011.
“Contracts” means all Third-Party contracts, agreements, leases and subleases, supply
contracts, commitments, purchase orders, sales orders, binding offers and instruments, or other
written or oral arrangements, used or held for use primarily in the operation or conduct of the
Engenio Business, to which Seller or a Subsidiary is a party, including the contracts identified as
to be assigned on Schedule 2.1(a) and including any such contracts, agreements, leases and
subleases, supply contracts, commitments, purchase orders, sales orders and instruments (i) for the
lease of machinery, equipment, motor vehicles, furniture or office equipment, (ii) for the
provision of goods or services to the Engenio Business, (iii) for the sale of goods or performance
of services by the Engenio Business, (iv) for the sale and distribution of the Engenio Products,
and (v) any such contracts, agreements, leases and subleases, supply contracts, commitments,
purchase orders, sales orders and instruments referred to in clauses (i) — (iv), inclusive, entered
into between the date hereof and the Closing Date by Seller or a Subsidiary to the extent such
Contracts entered into after the date hereof are entered into in the ordinary course of business
consistent with past practice and outstanding as of the Closing Date, but not the Excluded
Contracts.
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“Copyrights” means rights in works of authorship, including without limitation
copyrights, whether registered or unregistered and whether arising under the laws of the United
States or any other jurisdiction anywhere in the world, including moral rights, and all
registrations and applications for registration with respect thereto.
“Encumbrance” means any lien, encumbrance, claim, charge, security interest, mortgage,
pledge, easement, encroachment, building or use restriction, capital lease, conditional sale or
other title retention agreement, covenant or other similar restriction, adverse claims of ownership
or use, or other similar restriction or Third Party right affecting the Purchased Assets, but shall
not include Permitted Encumbrances.
“Engenio Business” means the worldwide design, engineering, manufacturing, use,
marketing, sale and distribution of external storage systems products and related embedded and
value-added software and other components for use in external storage markets consisting of open,
modular storage products comprised of complete systems and sub-assemblies configured from modular
components, as carried on and conducted by the Engenio Storage Group since January 1, 2006, but
excluding (a) the RAID adapter business of Seller which develops LSI® MegaRAID® and 3ware® storage
controllers and software, (b) the ONStor™ clustered NAS gateway and non-integrated file storage
products business of Seller which develops ONStor™ Products; (c) other semiconductor devices
supplied by Seller to the Engenio Storage Group, and (d) any billing, order entry, fulfillment,
accounting, collections or other corporate centralized functional organizations within, or
controlled by, Seller.
“Engenio Product(s)” means all products and components thereof to the extent such
components are owned, designed or manufactured by, or on behalf of, Seller or its Affiliates (but
not any semiconductor devices supplied by Seller to the Engenio Storage Group) that are used or
held for use primarily in the Engenio Business, including without limitation those listed on
Schedule 1.1(b), which are under development, produced, marketed or sold by Seller or an
Affiliate or Subsidiary of Seller, or have been developed, produced, marketed or sold by Seller or
an Affiliate or Subsidiary of Seller since January 1, 2006.
“Environmental Law” means any 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, the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., the Clean Water Act, 33
U.S.C. Section § 1251 et seq., the Clean Air Act, 42 U.S.C. § 7401 et seq., the Toxic Substance
Control Act, 15 U.S.C. § 2601 et seq., the Oil Pollution Act of 1990, 33 U.S.C. § 2701 et seq., and
the Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., or any other similar Law, as any
such Law has been amended or supplemented, and the regulations promulgated pursuant thereto.
“Environmental Liability” means any liability arising in connection with or in any way
relating to Seller or a Subsidiary, any property now or previously owned, leased or operated by
such Seller or a Subsidiary (or any predecessor thereof), the Engenio Business, or the
Purchased Assets which (i) arise under or relate to any Environmental Law and (ii) relate to
actions occurring or conditions existing on or before the Closing Date.
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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate” means each Subsidiary and any other Person that, together with
Seller or any of the Subsidiaries is (or at the relevant time was) treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code and the regulations thereunder.
“Excluded Contracts” means those Contracts (i) identified in Schedule 2.2(f),
(ii) under which performance by Seller or an Affiliate of Seller has been completed and for which
there is no remaining warranty, maintenance, or support obligation and under which performance by
the counterparty has been completed and for which there is no remaining payment obligation of such
party, (iii) that constitute a General Purchase Agreement, or (iv) primarily related to Excluded
Assets or Excluded Liabilities.
“Excluded Taxes” means any liability, obligation or commitment, whether or not
accrued, assessed or currently due and payable, with respect to (i) any Taxes of Seller or its
Affiliates (including any liability of Seller or its Affiliates for the Taxes of any other Person
(other than Buyer or its Affiliates) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or foreign law)), as a transferee or successor, by contract or otherwise,
(ii) any Taxes relating to, pertaining to, or arising out of, the Engenio Business or the Purchased
Assets for any Pre-Closing Tax Period, including all interest, penalties or other amounts with
respect thereto accruing in Post-Closing Tax Periods, and (iii) any Taxes required by Law to be
paid by Seller or any Subsidiary (or withheld from Seller by Buyer or a Buyer Designee) as a result
of their sale of Purchased Assets in any jurisdiction (including any mandatory withholding Taxes)
other than (x) any Transfer Taxes to be paid by Buyer or a Buyer Designee under Section 2.9(b) and
(y) any Taxes to the extent deducted an withheld by Buyer or a Buyer Designee at Closing pursuant
to Section 2.9(a).
“Fixtures and Supplies” means all fixtures, improvements, furniture, furnishings,
office and other supplies, vehicles, and other tangible personal property owned by Seller or a
Subsidiary and used or held for use primarily in the operation or conduct of the Engenio Business
that are located on the Transferred Premises or at the real property which is leased pursuant to
the Assumed Leases, including desks, tables, chairs, file cabinets, racks, cubicles and other
storage devices and office supplies and any additions, improvements, replacements and alterations
thereto between the date hereof and the Closing Date and all warranties and guarantees, if any,
express or implied with respect to the foregoing, but excluding any such items primarily related to
Excluded Assets or Excluded Liabilities.
“GAAP” means U.S. generally accepted accounting principles.
“General Purchase Agreements” means Third-Party supply contracts or other agreements
between Seller or an Affiliate of Seller 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 and not used or held for use primarily in the operation or conduct of the Engenio
Business.
“Governmental Body” means any legislative, executive or judicial unit of any
governmental entity (supranational, national, federal, provincial, state or local) or any
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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 or a Subsidiary with respect to the
Engenio Business or the Premises and necessary for the operation of the Engenio Business or the
Premises as currently conducted under applicable Laws, including those identified on Schedule
2.1(j).
“Hazardous Substance” means (i) any hazardous, toxic or dangerous waste, substance or
material defined as such pursuant to any Environmental Law, (ii) asbestos or PCBs 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.
“HSR Act” means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended.
“India Purchase Agreement” means an agreement reasonably satisfactory to both parties
for the sale or transfer of Purchased Assets in India.
“Information” means any and all documented and undocumented information (excluding
Patents), including any technical information, Trade Secrets and other confidential information,
data and drawings of whatever kind in whatever medium, specifications, techniques, know-how,
network configurations and architectures, APIs, subroutines, techniques, user interfaces, URLs
works of authorship, algorithms, formulae, protocols, schematics, compositions, processes, designs,
bills of material, sketches, photographs, graphs, drawings, samples, non-patented inventions,
discoveries, developments and ideas, build instructions, Software code (in any form, including
source code and executable or object code), build scripts, test scripts, databases and data
collections, past and current manufacturing and distribution methods and processes, tooling
requirements, current and anticipated customer requirements, price lists, part lists, customer
lists, market studies, business plans, database technologies, systems, structures, architectures,
improvements, devices, concepts, methods and information, however documented and whether or not
embodied in any tangible form, and any and all notes, analysis, compilations, studies, summaries,
and other material containing or based, in whole or in part, on any information included in the
foregoing, and including all tangible embodiments of any of the foregoing. “Information” does not
include any semiconductor integrated circuit design or manufacturing technology.
“Intellectual Property” means all intellectual property rights arising from or
associated with any of the following, whether protected, created or arising under the laws of the
United States or any other jurisdiction anywhere in the world: (a) Copyrights, (b) Trademarks, (c)
Patents, (d) Trade Secrets, (e) mask work rights and other rights protecting integrated circuit or
chip topographies or designs, and any applications for registration therefor, (f) rights in
databases and data collections (including knowledge databases, customer lists and customer
databases), whether registered or unregistered, and any applications for registration therefor; (g)
rights in URL and domain name registrations, (h) rights in inventions (whether or not patentable)
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and improvements thereto, and (i) any other proprietary, intellectual or industrial property rights
of any kind or nature now known or hereafter recognized in any jurisdiction worldwide.
“Intellectual Property Agreement” means the agreement in substantially the form set
forth in Exhibit B.
“Inventory” means all inventory, wherever located, including raw materials, work in
process, recycled materials, demo and evaluation inventory, finished products, inventoriable
supplies, and non-capital spare parts owned by Seller or an Affiliate or Subsidiary and used or
held for use primarily in the operation or conduct of the Engenio Business, and any rights of
Seller or a Subsidiary to the warranties received from suppliers and any related claims, credits,
rights of recovery and set-off with respect to such Inventory, but only to the extent such rights
are assignable, but excluding any such items primarily related to Excluded Assets or Excluded
Liabilities.
“IRS” means the U.S. Internal Revenue Service.
“knowledge of Seller” or “to Seller’s knowledge” means the actual knowledge of
the individuals specified on Schedule 1.1(a) after reasonable investigation.
“Law” means any supranational, national, federal, state, provincial or local law,
statute, ordinance, rule, regulation, code, order, judgment, injunction or decree of any country.
“Lease” means the lease to be assigned or subleased, as the case may be, together with
all amendments, modifications or supplements thereto, for any of the Leased Premises.
“Lease Assignment” means each assignment agreement with respect to a Lease in
substantially the form set forth in Exhibit C.
“Leased Equipment” means the vehicles, computers, servers, machinery and equipment and
other similar items leased and used or held for use by Seller or a Subsidiary primarily in the
operation or conduct of the Engenio Business but excluding any such items primarily related to
Excluded Assets or Excluded Liabilities.
“Leased Premises” means the real property identified on Schedule 3.7(a),
together with all rights, easements and privileges appertaining or relating to such real
property, and all improvements located thereon, that is leased by Seller or a Subsidiary from Third
Parties and used or held for use by Seller or a Subsidiary primarily in the operation or conduct of
the Engenio Business.
“Licensed Intellectual Property” means all of the Intellectual Property and
Information that is being licensed to Buyer pursuant to the Intellectual Property Agreement, which
sets forth
the Licensed Software, the Licensed Technical Information and the Licensed Patents (as each
such term is defined in the Intellectual Property Agreement).
“Licenses” means all licenses, agreements and other arrangements identified on
Schedule 2.1(h) under which Seller or a Subsidiary has the right to use any Intellectual
Property or Information of a Third Party which is used or held for use primarily in the operation
or conduct
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of the Engenio Business but not (i) the Nonassignable Licenses, (ii) Contracts for
non-customized Software that is licensed solely in executable or object code form pursuant to a
nonexclusive, internal use software license, and not incorporated into, or used directly in, the
development, manufacturing or distribution of, any of the Engenio Products or services of the
Engenio Business and is generally available to the public on standard, non-negotiated terms
(“Standard Software”), or (iii) any such items primarily related to Excluded Assets or
Excluded Liabilities.
“Nonassignable Licenses” means those Licenses of Intellectual Property or Information
under which Seller or an Affiliate of Seller is the licensee that are (i) not to be assigned as set
forth on Schedule 2.1(h) or (ii) related to other businesses of Seller or an Affiliate of
Seller and not used or held for use primarily in the operation or conduct of the Engenio Business,
including Contracts for Standard Software and corporate wide information technology licenses used
to operate Seller’s retained businesses.
“ONStor™ Products” means those clustered NAS gateway and non-integrated file storage
products listed on Schedule 1.1(c).
“Patents” means patents or patent applications worldwide of any kind or nature
(including industrial designs and utility models that are subject to statutory protection), and any
renewals, reissues, reexaminations, extensions, continuations, continuations-in-part, divisions and
substitutions relating to any of the patents and patent applications, as well as all related
counterparts to such patents and patent applications, wheresoever issued or pending anywhere in the
world.
“Pension Plan” means each “employee pension benefit plan” (within the meaning
of Section 3(2) of ERISA) or similar equivalent under applicable Laws other than the United States.
“Permitted Encumbrances” means any (i) statutory lien for Taxes, assessments and other
governmental charges or liens of carriers, landlords, warehouseman, mechanics and material men
incurred in the ordinary course of business, in each case for sums not yet due and payable, (ii)
liens incurred or deposits made in the ordinary course of the Engenio 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, government
contracts, performance and return of money bonds and similar obligations, (iii) licenses or
covenants granted by Seller or an Affiliate of Seller in connection with sales of products or
patent licensing activities in the ordinary course of business, (iv) any use or other building
restriction set forth in the Leases for the Leased Premises, (v) any Encumbrances that are set
forth on the title commitment for the Transferred Premises and (vi) any Encumbrance or minor
imperfection in title and minor encroachments, if any, that, individually or in the aggregate, are
not material in amount, do not materially interfere with the conduct of the Engenio
Business or with the use of the Purchased Assets and do not materially affect the value of the
Purchased Assets or the Engenio Business.
“Person” means any individual, corporation, partnership, firm, association, joint
venture, joint stock company, trust, unincorporated organization or other entity, or any government
or
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regulatory, administrative or political subdivision or agency, department or instrumentality
thereof.
“Post-Closing Tax Period” means any Tax period beginning after the Closing Date, and,
in the case of any Straddle Period, the portion of such Straddle Period beginning the day after the
Closing Date.
“Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date
and, in the case of any Straddle Period, the portion of such Straddle Period ending on the Closing
Date.
“Premises” means the (i) Leased Premises, (ii) the Transferred Premises, and (iii) the
premises owned by Seller or a Subsidiary that are not being transferred hereunder, in each case
that are used by the Engenio Business.
“Principal Equipment” means all personal property of Seller or a Subsidiary used or
held for use by Seller or a Subsidiary primarily in the operation or conduct of the Engenio
Business including such personal property located (i) on the Transferred Premises, at the real
property which is leased pursuant to the Assumed Leases or at the Bangalore facility or (ii) at any
other facility owned, leased or operated by or for the Engenio Business or at any contract
manufacturer or original design manufacturer and including without limitation all computers,
laptops, cell phone devices, smartphones, servers, printers, copiers, faxes, machinery, equipment
(including any related replacement or spare parts, components dies, molds, tools, and tooling),
phone or conferencing equipment, network equipment, data processing equipment and peripheral
equipment and other similar items of personal property, but not (x) the Leased Equipment, (y) any
such items primarily related to Excluded Assets or Excluded Liabilities, or (z) any such item of
Principal Equipment abandoned by Buyer, at its sole election, that remains at any facility of
Seller or its Subsidiary (other than the Transferred Premises or the real property being leased
pursuant to the Assumed Leases) for 30 days following the Closing Date. Principal Equipment
includes rights to the warranties received from the manufacturers and distributors of such items
and to any related claims, credits, rights of recovery and set-off with respect to such items, but
only to the extent that such rights are assignable.
“Real Estate Deed” means a limited warranty deed with respect to the Transferred
Premises, in substantially the form set forth in Exhibit D.
“Return” means any return, declaration, report, claim for refund, or information
return or statement, and any other document filed or required to be filed in respect of any Tax,
including any schedule or attachment thereto or amendment thereof.
“Seller Material Adverse Effect” means any fact, circumstance, change, condition or
effect that, individually or when taken together with all other such facts, circumstances, changes,
conditions or effects that exist at the date of determination of the occurrence of the Seller
Material Adverse Effect, has or is reasonably likely to have a material adverse effect on the
business, operations, financial condition or results of operations of the Engenio Business, taken
as a whole, or Seller’s ability to perform its obligations under this Agreement and the Collateral
Agreements or consummate the transactions contemplated hereby or thereby; provided,
however,
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that no facts, circumstances, changes, conditions or effects (by themselves or
when aggregated with any other facts, circumstances, changes, conditions or effects) resulting
from, relating to or arising out of the items enumerated in sub-clauses (i) to (vi) below shall be
deemed to be or constitute a Seller Material Adverse Effect, and no facts, circumstances, changes,
conditions or effects resulting from, relating to or arising out of the following (by themselves or
when aggregated with any other facts, circumstances, changes or effects) shall be taken into
account when determining whether a Seller Material Adverse Effect has occurred or may, would or
could occur: (i) general economic, financial or political conditions in the United States or any
other jurisdiction in which the Engenio Business has substantial business or operations, and any
changes therein (including any changes arising out of acts of terrorism, war, weather conditions or
other force majeure events), to the extent that such conditions do not have a materially
disproportionate impact on the Engenio Business, taken as a whole, relative to other external
storage businesses of comparable size; (ii) conditions in the storage industry, and any
industry-wide changes therein (including any changes arising out of acts of terrorism, war, weather
conditions or other force majeure events), to the extent that such conditions do not have a
materially disproportionate impact on the Engenio Business, taken as a whole, relative to other
external storage businesses of comparable size; (iii) conditions in the financial markets, and any
changes therein (including any changes arising out of acts of terrorism, war, weather conditions or
other force majeure events), to the extent that such conditions do not have a materially
disproportionate impact on the Engenio Business, taken as a whole, relative to other external
storage businesses of comparable size; (iv) acts of terrorism or war to the extent that such acts
do not have a materially disproportionate impact on the Engenio Business, taken as a whole,
relative to other external storage businesses of comparable size; (v) directly from the
announcement or pendency of this Agreement and the transactions contemplated hereby, including
negative reactions of any OEMs or customers to the sale announcement; or (vi) directly from
compliance by Seller or its Subsidiaries with the express terms of this Agreement or the failure by
Seller or its Subsidiaries to take any action that is prohibited by this Agreement.
“Software” means any and all (a) computer programs, including any and all software
implementations of algorithms, heuristics models and methodologies, whether in source code or
object code, (b) testing, validation, verification and quality assurance materials, (c) databases,
conversion, interpreters and compilations, including any and all data and collections of data,
whether machine readable or otherwise, (d) descriptions, schematics, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing, (e) software development
processes, practices, methods and policies recorded in permanent form, relating to any of the
foregoing, (f) performance metrics, sightings, bug and feature lists, build, release and change
control manifests recorded in permanent form, relating to any of the foregoing and (g) all
documentation, including user manuals, web materials, and architectural and design specifications
and training materials, relating to any of the foregoing.
“Straddle Period” means any Tax period that begins on or before and ends after the
Closing Date.
“Sublease” means each sublease with respect to a Lease in substantially the form set
forth in Exhibit E.
“Subsidiary” means each entity listed on Schedule 3.2.
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“Supply Amendment” means the amendment to that certain Master OEM Agreement effective
as of June 17, 2005 between Seller and Buyer in substantially the form set forth in Exhibit
G.
“Tax” means a tax of any kind, and all charges, fees, customs, levies, duties,
imposts, required deposits or other assessments, whether federal, state, local or foreign,
including all net income, capital gains, gross income, gross receipt, property, franchise, sales,
use, excise, registration, withholding, payroll, employment, social security, worker’s
compensation, unemployment, occupation, capital stock, ad valorem, value added, transfer, gains,
profits, net worth, asset, transaction, real property, personal property, alternative, add-on
minimum, escheat or estimated tax or other tax, including any interest, penalties or additions to
tax with respect thereto, whether disputed or not, imposed upon any Person by any taxing or social
security authority or other Governmental Body under applicable Law.
“Third Party” means any Person not an Affiliate of the other referenced Person or
Persons.
“Trademarks” means trademarks, trade names, corporate names, business names, trade
styles, service marks, service names, logos, slogans, 800 numbers, or other source or business
identifiers and general intangibles of like nature, together with goodwill associated therewith,
whether registered or unregistered and whether arising under the laws of the United States or any
state or territory thereof or any other jurisdiction anywhere in the world, and registrations and
applications for registration with respect to any of the foregoing.
“Trade Secrets” means all information of any kind or nature, in whatever form and
whether or not embodied in a tangible medium, including customer lists, concepts, ideas, methods,
processes, know-how, methodologies, designs, plans, schematics, xxxx of materials, drawings,
formulae, technical data, specifications, research and development information, technology and
product roadmaps, models, data bases, marketing materials and other proprietary or confidential
information, in each case to the extent any of the foregoing derives economic value from not being
generally known to other Persons who can obtain economic value from its disclosure or use,
excluding any Copyrights or Patents that cover or protect any of the foregoing.
“Transferred Premises” means the real property identified on Schedule 3.7(b),
together with all rights, easements and privileges appertaining or relating to such real property,
and all improvements located on such real property.
“Transition Services Agreement” means the agreement in substantially the form set
forth in Exhibit F.
“Warranty Cap” means fourteen million five hundred thousand U.S. dollars ($14,500,000)
less the fair market value of spare parts Inventory transferred to Buyer useable to service
warranty obligations for Engenio Products listed on Schedule 1.1(b) sold prior to the
Closing, which fair market value shall not exceed the dollar amount set forth on Schedule
1.1(d).
“Welfare Plan” means each “employee welfare benefit plan” (within the meaning
of Section 3(1) of ERISA) or similar applicable Laws of jurisdictions other than the United States.
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1.2 Additional Defined Terms
For purposes of this Agreement, the following terms shall have the meanings specified in the
Sections indicated below:
Term | Section | |
“Accrued Amounts”
|
Section 5.4(g) | |
“Agreement”
|
Preamble | |
“Allocation”
|
Section 5.3(c) | |
“Antitrust Division”
|
Section 5.6(b) | |
“ARD Jurisdiction”
|
Section 5.4(b) | |
“ARD Regulations”
|
Section 2.4(d) | |
“Asset Level Allocation Statement”
|
Section 5.3(c) | |
“Assigned Patents”
|
Section 3.13(a) | |
“Assigned Registered IP”
|
Section 3.13(a) | |
“Assigned Trademarks”
|
Section 3.13(a) | |
“Assumed Liabilities”
|
Section 2.4 | |
“Balance Sheet”
|
Section 3.12(a) | |
“Bulk Sales Laws”
|
Section 2.8 | |
“Buyer”
|
Preamble | |
“Buyer Indemnified Party”
|
Section 9.3(b) | |
“Buyer Proprietary Information”
|
Section 6.3 | |
“Buyer Savings Plan”
|
Section 5.4(f) | |
“Cap Amount”
|
Section 9.3(f) | |
“Closing Date”
|
Section 7.3 | |
“Closing Statement”
|
Section 5.16 | |
“Collateral Agreements”
|
Recital D | |
“Engenio Intellectual Property”
|
Section 3.13(b) | |
“Engenio Storage Group”
|
Recital A | |
“Engenio Trade Secrets”
|
Section 3.13(g) | |
“Employment Related Liabilities”
|
Section 2.5(g) | |
“Entity Level Allocation Statement”
|
Section 5.3(b) | |
“Excluded Assets”
|
Section 2.2 | |
“Excluded Leased Equipment”
|
Section 5.5(b) | |
“Excluded Liabilities”
|
Section 2.5 | |
“FTC”
|
Section 5.6(b) | |
“Indemnified Party”
|
Section 9.3(a) | |
“Indemnifying Party”
|
Section 9.4(a) | |
“Leave Employees”
|
Section 5.4(b) | |
“Losses”
|
Section 9.3(a) | |
“LSI”
|
Preamble | |
“Material Contracts”
|
Section 3.11(a) | |
“Nonassignable Assets”
|
Section 2.6(c) | |
“Offered Employees”
|
Section 5.4(b) | |
“Parties”
|
Preamble | |
“Property Taxes”
|
Section 2.9(c) | |
“Purchase Price”
|
Section 2.3 |
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Term | Section | |
“Purchased Assets”
|
Section 2.1 | |
“Purchased Leased Equipment”
|
Section 5.5(b) | |
“Reasonable Efforts”
|
Section 5.8(a)(v) | |
“Required Closing Consents”
|
Section 7.1(b) | |
“Required Consents”
|
Section 3.4(b) | |
“Securities Act”
|
Section 5.14(a) | |
“Seller”
|
Preamble | |
“Seller Indemnified Party”
|
Section 9.3(c) | |
“Seller Name”
|
Section 5.8(a) | |
“Seller Proprietary Information”
|
Section 6.2 | |
“Shared Contracts”
|
Section 2.6 | |
“Termination Date”
|
Section 11.1(e) | |
“Third-Party Claim”
|
Section 9.4(a) | |
“Threshold Amount”
|
Section 9.3(f) | |
“Transfer Taxes”
|
Section 2.9(b) | |
“Transferred Employees”
|
Section 5.4(b) | |
“Unaudited Business Financials”
|
Section 3.12(a) | |
“WARN Act”
|
Section 3.10(j) |
1.3 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 starting reference date in calculating such period shall be excluded. If the last
day of such period is a non-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 all
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. The 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.
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(f) Currency. All currency references included herein shall refer to United States
dollars.
(g) Reasonable Commercial Efforts. 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 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 not, by
itself, an indication that the obligated party did or did not in fact utilize its reasonable
commercial efforts in attempting to accomplish the objective.
(h) 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. Any matter disclosed by either party on any one Schedule with
respect to any representation, warranty or covenant of such party shall be deemed disclosed for
purposes of all other representations, warranties or covenants of such party to the extent that it
is reasonably apparent from such disclosure that it also relates to such other representations,
warranties or covenants.
2. Purchase and Sale of the Engenio 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, on the Closing Date, Seller shall, or shall cause
one or more of its Subsidiaries, as appropriate, to, grant, bargain, sell, transfer, assign, convey
and deliver to Buyer or one or more Buyer Designees, and Buyer or one or more Buyer Designees shall
purchase, acquire and accept from Seller or the applicable Subsidiary, all of the right, title and
interest in, to and under the Purchased Assets that Seller or the applicable Subsidiary owns,
leases, licenses, possesses or uses as the same shall exist on the Closing Date, wherever located,
free and clear of Encumbrances. For purposes of this Agreement, “Purchased Assets” means
all the assets, properties and rights used or held for use by Seller or the applicable Subsidiary
primarily in the operation or conduct of the Engenio Business, whether tangible or intangible,
real, personal or mixed, including the asset categories set forth or described in paragraphs (a)
through (s) below (except in each case for the Excluded Assets), to the extent used or held for use
primarily in the operation or conduct of the Engenio Business, 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 Seller’s or the applicable Subsidiary’s books or financial statements:
(a) the Contracts;
(b) the Assumed Leases and any deposits related thereto;
(c) the Transferred Premises;
(d) the Principal Equipment and Purchased Leased Equipment;
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(e) the Fixtures and Supplies;
(f) the Inventory;
(g) the Assigned Intellectual Property;
(h) the Licenses;
(i) the Business Records;
(j) the Governmental Permits (but only to the extent that such Governmental Permits are
assignable or transferable to Buyer);
(k) the registered domain names listed on Schedule 2.1(k);
(l) all prepaid expenses for leased and rented equipment;
(m) all prepaid deposits for customer orders to be completed after the Closing Date;
(n) all Seller’s lease deposits for the Assumed Leases;
(o) all Third Party prepaid royalties and maintenance and support for Licenses;
(p) all rights to the claims, causes of action, rights of recovery, and rights of set-off,
made or asserted against any Person on or after the Closing Date relating to the Purchased Assets,
whether arising out of actions or conditions occurring prior to, on, or after the Closing Date,
including all rights to xxx for or assert claims against and seek remedies for past, present and
future infringements of any of the Assigned Intellectual Property and rights of priority and
protection of interests therein and to retain any and all damages, settlement amounts and other
amounts therefrom;
(q) all guarantees, warranties, indemnities and similar rights in favor of Seller or an
applicable Subsidiary related to the items identified in clauses (a) through (h) above;
(r) the goodwill of the Engenio Business; and
(s) in the event Buyer or a Buyer Designee establishes or maintains a healthcare reimbursement
or spending account program as of the Closing Date for Transferred Employees then, with respect to
each such Transferred Employee who as of the Closing Date has a positive balance in Seller’s
healthcare reimbursement or spending account program, each such Transferred Employee’s balance in
Seller’s health reimbursement or spending account shall be credited to the healthcare reimbursement
or spending account program of Buyer or an applicable Buyer Designee.
2.2 Excluded Assets
Notwithstanding the provisions of Section 2.1, it is hereby expressly acknowledged and agreed
that the Purchased Assets shall not include, and neither Seller nor any Subsidiary is granting,
bargaining, selling, transferring, assigning, conveying or delivering to Buyer or a Buyer
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Designee,
and neither Buyer nor any Buyer Designee is purchasing, acquiring or accepting from Seller or any
Subsidiary, any of the rights, properties or assets set forth or described in paragraphs (a)
through (k) below (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 or its Affiliate’s receivables, cash, cash equivalents, bank deposits or
similar cash items (other than deposits related to the Assumed Leases) or employee receivables;
(b) any Intellectual Property or Information of Seller or any Affiliate other than the
Assigned Intellectual Property or the Licensed Intellectual Property;
(c) any (i) confidential personnel records pertaining to any Business Employee to the extent
applicable Law prohibits the transfer of such information, or (ii) other books and records that
Seller or any Affiliate of Seller is required by Law to retain; provided, however,
that Buyer shall have the right, to the extent permitted by Law and subject to reasonable
restrictions, to make copies of any portions of such retained confidential personnel records and
other books and records that relate to the Engenio Business, the Purchased Assets, the Assumed
Liabilities or the Transferred Employees; and (iii) any information management system of Seller or
any Affiliate of Seller other than those used or held for use primarily in the operation or conduct
of the Engenio Business;
(d) any claim, right or interest of Seller or any Affiliate of Seller in or to any refund,
rebate, abatement or other recovery for Excluded Taxes, together with any interest due thereon or
penalty rebate arising therefrom;
(e) subject to Section 5.8, any rights to, or the use of, the “LSI” or “LSI
Corporation” trademarks;
(f) the Excluded Contracts, the Nonassignable Licenses and the Excluded Leased Equipment;
(g) any insurance policies or rights of proceeds thereof;
(h) except as specified in Section 2.1, any of Seller’s or any Affiliate’s rights, claims or
causes of action against Third Parties relating to the assets, properties or operations of the
Engenio Business arising out of transactions occurring prior to, and including, the Closing Date;
(i) except as specifically provided in Section 5.4 or the applicable Assignment and Xxxx of
Sale and Assumption Agreement for any particular jurisdiction, any of the assets of the Benefits
Plans;
(j) all other assets, properties, interests and rights of Seller or any Affiliate relating
primarily to (i) the RAID adapter business of Seller which develops LSI® MegaRAID® and 3ware®
storage controllers and software and (ii) the ONStor™ clustered NAS gateway and non-integrated file
storage products business of Seller which develops ONStor™ Products; and
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(k) all other assets, properties, interests and rights of Seller or any Affiliate not related
primarily to the Engenio Business.
2.3 Purchase Price
In consideration of the grant, bargain, sale, transfer, assignment, conveyance and delivery by
Seller and the Subsidiaries of the Purchased Assets to Buyer or a Buyer Designee, and in addition
to assuming the Assumed Liabilities, Buyer and/or a Buyer Designee(s) shall pay to Seller or the
applicable Subsidiary at the Closing, an aggregate amount equal to four hundred eighty million
dollars ($480,000,000) (the “Purchase Price”) in cash by wire transfer of immediately
available funds to an account designated by Seller’s written instructions to Buyer at least two (2)
Business Days prior to the Closing Date.
2.4 Assumed Liabilities
On the Closing Date, Buyer or one or more Buyer Designee shall execute and deliver to Seller
each Assignment and Xxxx of Sale and Assumption Agreement and one or more Lease Assignments or
Subleases pursuant to which Buyer or any such Buyer Designee shall accept, assume and agree to pay,
perform or otherwise discharge, in accordance with the respective terms and subject to the
respective conditions thereof, the Assumed Liabilities. For purposes of this Agreement,
“Assumed Liabilities” means the liabilities and obligations set forth or described in
paragraphs (a) through (d) below, whether or not any such liability or obligation has a value for
accounting purposes or is carried or reflected on or specifically referred to in either Seller’s or
the applicable Subsidiary’s books or financial statements:
(a) the liabilities and obligations arising after the Closing Date under the Assumed Leases
and the transferred Contracts, Licenses and Governmental Permits, but excluding the liabilities and
obligations set forth in Sections 2.5(h), 2.5(i), and 2.5(j);
(b) with respect to the Engenio Business, any support obligations and product warranty and
sales return liabilities arising after the Closing Date from sales in the ordinary course of
business after the Closing Date of the Engenio Products listed on Schedule 1.1(b);
(c) any support obligations and any product warranty liabilities arising after the Closing
Date from sales in the ordinary course of Business of the Engenio Products listed on Schedule
1.1(b) on or before the Closing Date but only to the extent that such support obligations
(including personnel costs) and product warranty liabilities exceed the Warranty Cap; and
(d) except as provided herein, the obligations and liabilities with respect to the Transferred
Employees (including European Union Council Directive 77/187 as amended by the European Union
Council Directive 2001/23 (Acquired Rights Directive) or any local laws which implement the same
(the “ARD Regulations”)), the Engenio Business or the Purchased Assets in
any of the foregoing cases arising from, or in connection with, the operation or conduct of
the Engenio Business or the ownership of the Purchased Assets by Buyer or a Buyer Designee after
the Closing Date.
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2.5 Excluded Liabilities
Neither Buyer nor any Buyer Designee shall assume or be obligated to pay, perform or otherwise
assume or discharge any liabilities or obligations of Seller or any of its Affiliates, 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”). For the avoidance of doubt, the parties agree that the Excluded
Liabilities include, but are not limited to, any and all liabilities or obligations set forth or
described in paragraphs (a) through (n) below, whether or not any such liability or obligation has
a value for accounting purpose or is carried or reflected on or specifically referred to in
Seller’s or the applicable Subsidiary’s books or financial statements:
(a) any liability or obligation that arises from, or in connection with, the operation or the
conduct of the Engenio Business or the ownership of the Purchased Assets on or prior to the Closing
Date;
(b) any Excluded Taxes;
(c) any Environmental Liabilities;
(d) any liability or obligation arising out of or related to any Excluded Asset;
(e) any trade payable that arises from, or in connection with, the operation or the conduct of
the Engenio Business or the ownership of the Purchased Assets on or prior to the Closing Date;
(f) any indebtedness for borrowed money or guarantees thereof of Seller and its Subsidiaries
or intercompany obligations of Seller or any Subsidiary;
(g) except as set forth in Section 5.4(c), any liability or obligation relating to or arising
out of (i) the employment and/or any termination of such employment by Seller or any Subsidiary of
any employee or former employee of Seller or a Subsidiary on or before the Closing Date, including
any and all liability or obligation relating to wages, remuneration, compensation, unreimbursed
expenses, benefits, severance, pensions, sabbatical, vacation, personal days, floating holidays or
other paid-time-off, working time related benefits, time savings accounts, end of career
indemnities, 13th month payment or similar, anniversary bonus, early retirement, old-age
part-time (Altersteilzeit) (including any amounts which Seller or any Subsidiary has
book-reserved), reconciliation of interests (Interessenausgleich), social plans (Sozialplan), works
council negotiation procedure, social security and related costs (together, the
“Employment-Related Liabilities”) of the employees or former employees of the Seller or any
Subsidiary or Seller’s or any Subsidiary’s obligation to comply with the ARD Regulations, in each
case, that are accrued or in the course of accrual or relate to periods prior to and on the Closing
Date or that relate on a prorate temporis basis to the period prior and including the
Closing Date; (ii) any employee’s or former employee’s or his/her dependents’ rights or
obligations under any fringe benefit of employment with Seller or a Subsidiary, including any
Benefit Plan; (iii) any retention payments owed to Business Employees pursuant to arrangements
entered into on or prior to the Closing Date by Seller or a Subsidiary; and/or (iv) the employment
or the termination of employment (whether before, on or after Closing) or the transfer by
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operation
of Law, in each case as a result of the transaction contemplated by this Agreement, of any person
who is not a Transferred Employee but who claims or is deemed to transfer to the Buyer or any Buyer
Designee by operation of Law, including, without limitation, liabilities and obligations and Losses
arising from, or connected with, any Employment-Related Liabilities;
(h) any liability and obligation which arises out of or relates to any breach, default or
violation by Seller or its Affiliates of the Assumed Leases and the Contracts, Licenses and
Governmental Permits occurring on or prior to the Closing Date or which arises out of violation of
applicable Law, in each case by Seller or its Affiliates;
(i) except as set forth in Section 2.4(c), any support obligations (including personnel costs)
and any product warranty liabilities arising from sales of Engenio Products listed on Schedule
1.1(b) on or before the Closing Date;
(j) any support obligations (including personnel costs) and any product warranty and sales
return or product return liabilities arising from sales of ONStor™ Products on, before or after the
Closing Date;
(k) any liability or obligation in connection with, or relating to, any actions, suits, claims
or proceedings against Seller or any Subsidiary which arise out of, accrue, or relate to (i) the
operation or conduct of the Engenio Business or (ii) the ownership of the Purchased Assets in each
case on or before the Closing Date;
(l) any benefit liability or obligation relating to or arising in connection with Section
4980B of the Code (COBRA) or otherwise by operation of applicable Law to provide continuation of
health care coverage to employees or former employees of Seller or a Subsidiary or their dependents
arising from a qualifying event occurring on or before the Closing Date;
(m) any liability or obligation arising from any (i) customer rebates or market development
funds on or before the Closing Date and (ii) sales returns or product returns arising from sales of
Engenio Products listed on Schedule 1.1(b) on or before the Closing Date; and
(n) except as set forth in Section 5.4(c), any liability or obligation arising from or
relating to any Benefit Plan.
2.6 Further Assurances; Further Conveyances and Assumptions; Consent of Third Parties
(a) From time to time following the Closing to the extent permitted by applicable Law and
subject to reasonable restrictions, Seller shall, or shall cause its Affiliates to, make available
to Buyer or a Buyer Designee such confidential data and information in personnel records of
Transferred Employees as is reasonably necessary for Buyer to integrate such
employees into Buyer’s or a Buyer Designee’s workforce and comply with its obligations under
Section 5.4.
(b) From time to time following the Closing, 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
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further
actions, as may be necessary or appropriate to assure fully to Buyer and its Affiliates and each of
their respective successors or assigns, all of the properties, rights, titles, interests, estates,
remedies, powers and privileges intended to be conveyed to Buyer or a Buyer Designee under this
Agreement and the Collateral Agreements and to assure fully to Seller and its Affiliates and each
of their respective successors and assigns, the assumption of the liabilities and obligations
intended to be assumed by Buyer or a Buyer Designee under this Agreement and the Collateral
Agreements, and to otherwise make effective the transactions contemplated hereby and thereby
(including (i) transferring back to Seller or a Subsidiary any asset or liability not contemplated
by this Agreement to be a Purchased Asset or an Assumed Liability, respectively, which asset or
liability was transferred to Buyer or a Buyer Designee at the Closing, and (ii) transferring to
Buyer or a Buyer Designee any asset or liability contemplated by this Agreement to be a Purchased
Asset or an Assumed Liability, respectively, which was not transferred to Buyer or a Buyer Designee
at the Closing).
(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, Lease, 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”) (provided that in the event that Buyer or a Buyer Designee
notifies Seller that any Purchased Asset should be transferred notwithstanding the right of a Third
Party to cancel in the event of an assignment, then such Purchased Asset that is cancelable by a
Third Party in the event of assignment shall not be included as a Nonassignable Asset for purposes
of this Agreement) unless and until such consents shall have been obtained. Seller shall use all
reasonable commercial efforts to obtain such consents and deliver any required notices prior to
Closing, and Buyer shall, and shall cause its Affiliates to, cooperate with Seller to obtain such
consents promptly. To the extent permitted by applicable Law, in the event consents to the
assignment thereof cannot be obtained, Seller and Buyer shall, and shall cause their respective
Affiliates to, cooperate in a mutually agreeable arrangement under which (i) Buyer or a Buyer
Designee would obtain the benefits and assume the obligations under such Nonassignable Assets in
accordance with this Agreement including by sub-contracting, sub-licensing, or sub-leasing to Buyer
or a Buyer Designee, or (ii) such Nonassignable Assets would be held, as of and from the Closing
Date, by Seller or the applicable Subsidiary in trust for Buyer or a Buyer Designee and the
covenants and obligations thereunder would be performed by Buyer or a Buyer Designee in Seller’s or
such Subsidiary’s name and all benefits and obligations existing thereunder would be for Buyer’s or
the applicable Buyer Designee’s account. Seller shall, and shall cause its Affiliates to, also take
or cause to be taken at Buyer’s or a Buyer Designee’s expense such actions in its name or otherwise
as Buyer may reasonably request so as to provide Buyer or the applicable Buyer Designee with the
benefits of the Nonassignable Assets and to effect collection of money or other consideration that
becomes due and payable under the Nonassignable Assets, and Seller
or the applicable Subsidiary shall promptly pay over to Buyer or the applicable Buyer Designee
all money or other consideration received by it in respect to all Nonassignable Assets. If after
the Closing Date any Nonassignable Asset becomes assignable (either because consent for the
assignment thereof is obtained or otherwise), Seller shall promptly notify Buyer and assign or
transfer such previously Nonassignable Asset to Buyer or the applicable Buyer Designee.
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(d) Buyer and Seller shall, and shall cause their respective Affiliates to, use their
respective reasonable commercial efforts to obtain, or to cause to be obtained, any consent,
substitution, approval, or amendment required to transfer all rights and obligations under any and
all Contracts, Leases, Licenses, Governmental Permits, certificates, approvals, authorizations or
other rights or obligations or liabilities that constitute Assumed Liabilities. In the case of any
agreements which include obligations with respect to products of Seller other than Engenio Products
(the “Shared Contract”), Buyer and Seller shall, and shall cause their respective
Affiliates to, obtain consent and amend such agreement to remove any obligations with respect to
such products other than Engenio Products. In the event such amendment is not obtained prior to
the Closing Date, then such Shared Contract shall be deemed to be a Nonassignable Asset in
accordance with this Section 2.6 (provided, however, that, in connection with such
Nonassignable Asset, Buyer shall have no obligation to perform any of the obligations with respect
to products other than Engenio Products).
(e) As of and from the Closing Date, Seller on behalf of itself and its Affiliates 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 or its
Affiliates under the Nonassignable Assets and appoints Buyer its attorney-in-fact to act in its
name on its behalf or in the name of the applicable Affiliate of Seller and on such Affiliate’s
behalf with respect thereto.
(f) Notwithstanding anything in this Agreement to the contrary, unless and until any consent
or approval with respect to any Nonassignable Asset is obtained, such Nonassignable Asset shall not
constitute a Purchased Asset and any associated liability shall not constitute an Assumed Liability
for any purpose under this Agreement.
(g) As reasonably requested by Buyer, Seller will identify the licenses included in the
Nonassignable Assets and shall cooperate with and assist Buyer, at Buyer’s reasonable request and
expense, to obtain licenses or arrangements to replace the licenses, services and assets provided
with respect to any Nonassignable Asset.
2.7 Intellectual Property and Information
Unless expressly set forth in this Agreement, the Intellectual Property Agreement or in any
Collateral Agreement, no title, right or license of any kind is granted to Buyer pursuant to this
Agreement with respect to the Intellectual Property or Information of Seller or any Affiliate of
Seller, either directly or indirectly, by implication, by estoppel or otherwise.
2.8 Bulk Sales Law
Buyer hereby waives compliance by Seller and any Subsidiary with the requirements and
provisions of any “bulk-transfer” Laws of any jurisdiction (collectively, the “Bulk
Sales Laws”), including Article 6 of the California and Kansas Uniform Commercial Code, in each
case that may otherwise be applicable with respect to the sale of any or all of the Purchased
Assets to Buyer or a Buyer Designee. Seller agrees that the indemnification obligations set forth
in Section 9.3(b)(ii) shall apply to Buyer’s waiver of the Bulk Sales Laws.
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2.9 Taxes
(a) Buyer or a Buyer Designee shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to Seller or any Subsidiary such amounts as Buyer or
any Buyer Designee is legally required to deduct and withhold under the Code, or any Tax Law with
respect to Taxes resulting from Seller’s or any Subsidiary’s sale of Purchased Assets in any
jurisdiction; provided that such right to deduct and withhold shall not apply to
any Transfer Taxes allocated to Buyer or a Buyer Designee under Section 2.9(b). Buyer shall provide
Seller with written notice of any requirement to so deduct or withhold any amount no less than five
(5) days prior to the Closing Date, and shall provide Seller with a receipt from the applicable
Governmental Body documenting the remittance of such deduction or withholding under the Code or any
such Law as soon as reasonably practicable after the date of such deduction or withholding, but in
any event not later than thirty (30) days following any such payment. To the extent that amounts
are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the Person in respect of whom such deduction and withholding was made.
(b) The Party prescribed by applicable Law as primarily liable for the payment thereof shall
be responsible for and timely pay any sales, use, stamp, registration, documentary, filing,
recording, transfer, value added or similar fees or Taxes (including all applicable real estate
transfer Taxes) (“Transfer Taxes”) incurred in connection with the transfer of the
Purchased Assets and the assumption of the Assumed Liabilities to and by, respectively, Buyer and
Buyer Designees pursuant to this Agreement. In the case and to the extent of value added and
similar Taxes incurred in connection with the transactions contemplated hereby that are recoverable
by Buyer or a Buyer Designee, such Taxes shall be invoiced by Seller or its Subsidiaries to Buyer
or Buyer Designee, as applicable, paid by Buyer or Buyer Designee to Seller or its Subsidiaries, as
applicable, and remitted by Seller or its Subsidiaries, as applicable, to the relevant Governmental
Body in accordance with applicable Law, and Buyer or Buyer Designee shall be entitled to such
recovery. The Party prescribed by Law as primarily liable for the payment of such Transfer Taxes
shall prepare all necessary documents (including all Returns) with respect to all such amounts in a
timely manner. The applicable party shall file such Returns and pay such Taxes and shall provide
evidence satisfactory to the other party that such Returns have been filed and Transfer Taxes have
been paid. Buyer and Seller shall cooperate to minimize the amount of Transfer Taxes.
(c) All real property Taxes, personal property Taxes and similar ad valorem obligations
(“Property Taxes”) levied with respect to the Purchased Assets for a Straddle Period shall
be apportioned between Seller and Buyer based on the number of days of such Straddle
Period, and Seller shall be liable for the proportionate amount of Property Taxes that is
attributable to the Pre-Closing Tax Period within such Straddle Period, and Buyer shall be liable
for the proportionate amount of Property Taxes that is attributable to the Post-Closing Tax Period
within such Straddle Period. Any refund, rebate, abatement or other recovery of Property Taxes
attributable to the Pre-Closing Tax Period shall be for the account of Seller, and any refund,
rebate, abatement or other recovery of Property Taxes attributable to the Post-Closing Tax Period
shall be for the account of Buyer. Upon receipt of any xxxx (or any refund, rebate, abatement, or
other recovery) for such Property Taxes, Buyer or Seller, as applicable, shall present a statement
to the other setting forth the amount of reimbursement to which each is entitled under this
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Section 2.9(c) together with such supporting evidence as is reasonably necessary to calculate the proration
amount. The proration amount shall be paid by the party owing it to the other within ten (10) days
after delivery of such statement. In the event that Buyer or Seller makes any payment for which it
is entitled to reimbursement under this
Section 2.9(c), the applicable party shall make such
reimbursement promptly but in no event later than ten (10) days after the presentation of a
statement setting forth the amount of reimbursement to which the presenting party is entitled along
with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement.
(d) Following the Closing, Buyer and Seller shall cooperate as reasonably requested for the
purpose of enabling the requesting party to (i) make any election relating to Taxes, (ii) prepare
Returns with respect to the Engenio Business or the Purchased Assets or (iii) to prepare for and
defend audits or other Tax-related examinations by a Governmental Body with respect to the Engenio
Business and the Purchased Assets. Such cooperation shall be at the expense of the requesting
party.
2.10 Buyer Designee
The Parties agree that Buyer may assign the right to purchase certain of the Purchased Assets
to one or more Buyer Designees or that one or more Buyer Designees may enter into a Collateral
Agreement. Notwithstanding any such assignment or execution of a Collateral Agreement by a Buyer
Designee, Buyer shall remain liable for, and any such assignment or execution shall not relieve
Buyer of, its obligations hereunder or thereunder. Any reference to Buyer in this Agreement shall
to the extent applicable also be deemed a reference to the applicable Buyer Designee, except where
in context of this Agreement such use would not be appropriate.
2.11 Performance of Warranty Service; Warranty Reimbursement
Buyer agrees to perform the warranty service arising from sales of Engenio Products listed on
Schedule 1.1(b)on, before or following the Closing Date. Seller shall pay to Buyer the
Warranty Cap amount as set forth on Schedule 2.11.
3. Representations and Warranties of Seller
Except as set forth in the Schedules attached hereto and delivered by Seller to Buyer prior to
the execution of this Agreement, Seller represents and warrants to Buyer that:
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
Engenio Business as currently conducted by it and to own or lease and operate the Purchased Assets
and conduct the Engenio Business. 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 operation or conduct of the Engenio
Business requires such qualification, except where the failure to be so
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qualified or in good
standing, individually or in the aggregate, has not had and could not reasonably be expected to
have a Seller Material Adverse Effect.
3.2 Subsidiaries
Schedule 3.2 sets forth a list of each Subsidiary of Seller that has title to any
Purchased Asset or any Assumed Liability, together with its jurisdiction of organization. No other
Affiliate of Seller owns any assets used or held for use primarily in the operation or conduct of
the Engenio Business. Each entity is duly organized and validly existing and in good standing (in
any jurisdiction that recognizes such concept) under the Laws of its jurisdiction of organization
and has all requisite corporate or similar power and authority to own, lease and operate the
Purchased Assets owned by it and to carry on its portion of the Engenio Business as presently
conducted. Each Subsidiary of Seller set forth on Schedule 3.2 is duly qualified to do
business and is in good standing as a foreign corporation or other entity (in any jurisdiction that
recognizes such concept) in each jurisdiction where the ownership or operation of its properties
and assets or the operation or conduct of the Engenio Business requires such qualification, except
for failures to be so duly organized, validly existing, qualified or in good standing that,
individually or in the aggregate, have not had and could not reasonably be expected to have a
Seller Material Adverse Effect.
3.3 Authorization; Binding Effect
(a) (i) Seller has all requisite corporate power and authority to execute, deliver and perform
this Agreement and the Collateral Agreements to which it will be a party and to effect the
transactions contemplated hereby and thereby, and the execution, delivery and performance of this
Agreement and the Collateral Agreements to which it will be a party has been duly authorized by all
requisite corporate action.
(ii) Each Subsidiary that has title to any Purchased Asset or any Assumed Liability has all
requisite corporate power and authority to execute, deliver and perform the Collateral Agreements
to which it will be a party and to effect the transactions contemplated thereby, and the execution,
delivery and performance of the Collateral Agreements to which it will be a party has been duly
authorized by all requisite corporate action.
(b) This Agreement has been duly executed and delivered by Seller and this Agreement is, and
the Collateral Agreements to which Seller and each Subsidiary that has title to any Purchased Asset
or any Assumed Liability will be a party when duly executed and delivered by Seller or such
Subsidiary will be, valid and legally binding obligations of Seller or such
Subsidiary, enforceable against Seller or such Subsidiary, as applicable, 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.
3.4 Non-Contravention; Consents
(a) Assuming that all Required Consents have been obtained, the execution, delivery and
performance of this Agreement by Seller and the Collateral Agreements by Seller or any
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Subsidiary
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, or conflict with, any provision of
Seller’s or the applicable Subsidiary’s charter, by-laws or similar organizational document, (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 mortgage, deed of trust, conveyance to
secure debt, note, loan, indenture, lien, lease, agreement, license, permit, instrument, order,
judgment, decree or other arrangement or commitment to which Seller or the applicable Subsidiary is
a party or by which it is bound and which relates to the Engenio Business or the Purchased Assets
or (iii) violate any applicable Law, order, judgment, decree, rule or regulation of any court or
any Governmental Body having jurisdiction over Seller, a Subsidiary, the Engenio Business or the
Purchased Assets, other than in the case of clauses (ii) and (iii), any such violations, breaches,
defaults, accelerations or cancellations of obligations or rights that, individually or in the
aggregate, are not and could not reasonably be expected to be material to the Engenio Business,
taken as a whole.
(b) No consent, approval, order or authorization of, or registration, declaration or filing
with, any Person is required to be obtained by Seller or a Subsidiary in connection with the
execution, delivery and performance of this Agreement and the Collateral Agreements to which Seller
or such Subsidiary will be a party or for the consummation of the transactions contemplated hereby
or thereby by Seller or such Subsidiary, except for (i) any filings required to be made under the
HSR Act and any applicable filings required under foreign antitrust Laws, (ii) consents or
approvals of Governmental Bodies or other Third Parties that are required to transfer or assign to
Buyer or a Buyer Designee any Purchased Assets or assign the benefits of or delegate performance
with regard thereto in any material respect, which are set forth in Schedule 3.4(b) (items
(i) and (ii) being referred to herein as the “Required Consents”) and (iii) such consents,
approvals, orders, authorizations, registrations, declarations or filings the failure of which to
be obtained or made, individually or in the aggregate, are not and could not reasonably be expected
to be material to the Engenio Business, taken as a whole.
3.5 Title to Property; Principal Equipment; Sufficiency of Assets
(a) Seller or a Subsidiary has and at the Closing will have good and valid title to, or a
valid and binding leasehold interest or license in, all real and personal tangible Purchased Assets
free and clear of any Encumbrance except for Permitted Encumbrances.
(b) Each material item of Principal Equipment is in good operating condition and repair,
subject to normal wear and tear, suitable for the purposes for which it is currently being used,
but is otherwise being transferred on a “where is” and, as to condition, “as is” basis.
(c) Except for (i) the assets that will be used in connection with providing services under
the Transition Services Agreement, (ii) the assets and Business Employees not transferred to Buyer
or a Buyer Designee at Buyer’s written request and (iii) the Excluded Assets (other than those set
forth in Section 2.2(k)), the Purchased Assets and the Transferred Employees and the other rights
to be acquired or licensed under this Agreement and the Collateral Agreements (including the
services to be provided pursuant to the Transition Services Agreement) constitute (x) all property,
assets, personnel and rights that are used or held for use by Seller or a Subsidiary
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primarily in the operation or conduct of the Engenio Business and (y) all property, assets and
rights that are necessary for the operation or conduct of the Engenio Business as currently
conducted. In the event this Section 3.5(c) is breached because Seller or a Subsidiary has in good
faith failed to identify and transfer any asset or property or provide any service used or held for
use primarily in the Engenio Business, such breach shall be deemed cured if Seller or the
applicable Subsidiary promptly transfers such properties or assets or provides such services to
Buyer or a Buyer Designee at no additional cost to Buyer or a Buyer Designee.
3.6 Permits; Licenses
Except as set forth in Schedule 2.1(j), there are no material Governmental Permits
necessary for or used by Seller or a Subsidiary to operate the Engenio Business as now being
operated or to use or occupy the Premises, which Governmental Permits are required by currently
effective Laws. Seller or one of its Subsidiaries owns, holds or possesses in their own name, all
Governmental Permits necessary to own or lease, operate and use the Purchased Assets or own, use or
occupy the Premises and to carry on and conduct the Engenio Business and its operations as
presently conducted, except for such Governmental Permits, the absence of which, individually or in
the aggregate, is not material to the Engenio Business. The Governmental Permits held, owned or
possessed by Seller or a Subsidiary are valid and in full force and effect and no proceeding is
recorded, pending or, to Seller’s knowledge, threatened seeking the suspension, modification,
limitation or revocation of any such Governmental Permit. Neither Seller nor any Subsidiary is in
material violation of or default under any such Governmental Permits.
3.7 Real Estate; Environmental Matters
(a) Schedule 3.7(a) contains a complete and accurate list of the Leased Premises and
the Assumed Leases. Buyer has been provided with a complete and correct copy of each Assumed
Lease. Except as set forth in Schedule 3.7(a), each Assumed Lease is in full force and
effect and neither Seller nor any Subsidiary has violated, and, to Seller’s knowledge, the landlord
has not violated or waived, any of the material terms or conditions of any Assumed Lease and all
the material covenants to be performed by Seller or a Subsidiary, and to Seller’s knowledge, the
landlord under each Assumed Lease prior to the date hereof have been performed in all material
respects.
(b) Schedule 3.7(b) contains a complete and accurate list of the Transferred Premises.
Seller or a Subsidiary has good and marketable title to the Transferred Premises in accordance
with Kansas Law. The Transferred Premises are in good operating condition and repair, subject to
ordinary wear and tear, suitable for the purposes for which it is currently being used, but is
otherwise being transferred on a “where is” and, as to condition, “as is” basis. Except as set
forth in Schedule 3.7(b), none of such Transferred Premises are subject to any Encumbrance
except for Permitted Encumbrances. No Third Party is in possession of any of the Transferred
Premises or the Leased Premises (or any portion thereof).
(c) The use of any Premises, as presently used by the Engenio Business, does not violate in
any material respect any local zoning or similar land use or other applicable Laws.
Neither Seller nor any Subsidiary is in violation of or in noncompliance with any covenant,
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condition, restriction, order or easement affecting any Premises except where such violation or
noncompliance, individually or in the aggregate, is not or could not reasonably be expected to be
material to the Engenio Business, taken as a whole. There is no pending or, to Seller’s knowledge,
threatened condemnation or similar proceeding affecting any Premises.
(d) Except as set forth in Schedule 3.7(d), in respect of the Engenio Business and the
Premises:
(i) the operations of the Engenio Business and the Premises comply in all material respects
with all applicable Environmental Laws;
(ii) Seller and each Subsidiary has obtained all environmental, health and safety Governmental
Permits required by or related to any Environmental Law and necessary for its operations, and all
such Governmental Permits are in good standing, and Seller and each Subsidiary 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, individually or in the aggregate, is not or could
not reasonably be expected to be material to the Engenio Business, taken as a whole;
(iii) since January 1, 2008, none of Seller, any Subsidiary or any of the Premises or the
operations of the Engenio Business, have been subject to any on-going or previous investigation by,
order from or agreement with any Person respecting (A) any Environmental Law, or (B) any remedial
action arising from the release or threatened release of a Hazardous Substance into the
environment;
(iv) neither Seller nor any Subsidiary is subject to any judicial or administrative
proceeding, order, judgment, decree or settlement alleging or addressing a violation of or
liability under any Environmental Law;
(v) Seller or each applicable Subsidiary 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, individually or in the aggregate, has not had and could
not reasonably be expected to have a Seller Material Adverse Effect;
(vi) Seller and its Subsidiaries have provided or made available to Buyer all material
reports, assessments, compliance reports or audits, remedial actions plans or similar documents
relating to any material environmental conditions of the Premises that are in Seller’s possession;
(vii) To Seller’s knowledge, there is no asbestos containing material or lead based paint
containing materials in at, on, under or within the Transferred Premises;
(viii) neither Seller nor any Subsidiary has received any written notice, or to Seller’s
knowledge, other claim 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
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(ix) there have been no releases or to Seller’s knowledge, threatened releases of any
Hazardous Substances into, on or under any of the Premises by Seller or its Affiliates or, to
Seller’s knowledge, any other Person, in any case in such a way as to create any liability
(including the costs of investigation and remediation) under any applicable Environmental Law.
3.8 Compliance With Laws
(a) Except as set forth on Schedule 3.8, with respect to the Purchased Assets, the
Licensed Intellectual Property, the Engenio Products and the Engenio Business, Seller and each
Subsidiary is in compliance in all material respects with all applicable Laws and all decrees,
orders, judgments, writs, injunctions, permits and licenses of or from Governmental Bodies by which
the Engenio Business, the Licensed Intellectual Property, the Engenio Products or the Purchased
Assets are bound or affected.
(b) Without limiting the generality of the foregoing, neither Seller nor any of its
Subsidiaries, nor, to Seller’s knowledge, any agent, employee or other Person associated with or
acting on behalf of Seller or its Subsidiaries, has, directly or indirectly, used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to
political activity, made any unlawful payment to any foreign or domestic government official or
employee or to any foreign or domestic political party or campaign from corporate funds, violated
any provision of the Foreign Corrupt Practices Act of 1977, as amended or any money laundering
laws, or similar legislation in applicable jurisdictions or made any bribe, rebate, payoff,
influence payment, kickback or other similar unlawful payment.
3.9 Litigation
Except as set forth on Schedule 3.9, there is no action, suit, consent decree,
proceeding, arbitration or governmental investigation pending or, to Seller’s knowledge, threatened
by, against or involving Seller or any Subsidiary, the Engenio Business, the Purchased Assets, the
Assumed Liabilities or the Transferred Employees (i) which seeks to restrain or enjoin the
consummation of the transactions contemplated hereby or (ii) with respect to the Engenio Business,
the Purchased Assets, the Assumed Liabilities or the Transferred Employees that, individually or in
the aggregate, has been or could reasonably be expected to be material to the Engenio Business,
taken as a whole. To Seller’s knowledge, there is no basis for any such action, suit, decree,
proceeding, arbitration or investigation not disclosed on Schedule 3.9.
3.10 Business Employees
(a) Schedule 3.10(a)(i) contains a complete and accurate list of all the Engenio
Business Employees as of March 2, 2011, showing for each Business Employee, the name, title,
location, service date, leave status (active or inactive), annual base salary or wages, annual
incentive/bonus or commission opportunity and 2011 salary increase. Except as set forth on
Schedule 3.10(a)(ii), (i) no Business Employee is covered by any union, collective
bargaining agreement or other similar labor agreement; (ii) to Seller’s knowledge, are there no
pending union, works council or similar labor organizing activities or arrangements; and (iii) in
the three years prior to the date hereof, there has been no labor dispute, other than routine
individual grievances, or any activity or proceeding by a labor union or representative thereof to
organize
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the Business Employees, or any lockouts, strikes, slowdowns, work stoppages or threats thereof
by or with respect to Business Employees. No unfair labor practice, labor dispute or labor charge
or complaint is pending or, to the knowledge of Seller, threatened with respect to any Business
Employee.
(b) Except as set forth in Schedule 3.10(b), neither Seller nor any Subsidiary
currently maintains, contributes to or has any liability under any Benefit Plan. With respect to
each of the Benefit Plans identified on Schedule 3.10(b), Seller has made available to
Buyer true and complete copies of the most recent plan or summary or other written description
describing all material terms thereof.
(c) Each Benefit Plan that is intended to be qualified under Section 401(a) of the Code has
received a favorable determination letter, or has pending or has time remaining in which to file an
application for such determination, from the IRS, and to the knowledge of Seller, no fact exists
indicating that any such determination letter should be revoked or not issued or reissued.
(d) Other than as set forth in Schedule 3.10(b), no Benefit Plan is, and Seller, any
Subsidiary or any ERISA Affiliate does not sponsor or maintain or has previously sponsored,
maintained, contributed to, incurred an obligation to contribute to, or is or was required to
contribute to: (i) any “multiemployer plan” as defined in Section 3(37) or 4011(a)(3) of
ERISA, or (ii) any pension plan subject to Title IV of ERISA, Part 3 of Title I of ERISA or Section
412 of the Code.
(e) No Benefit Plan provides for retiree or post-employment health, disability or life
benefits to any Business Employee, and Seller, any Subsidiary or any ERISA Affiliate has not
promised to or contracted with any Business Employee (either individually or to Business Employees
as a group) with retiree health or other retiree employee welfare benefits.
(f) Neither the execution nor the delivery of this Agreement or the Collateral Agreements or
the consummation of the transactions contemplated hereby, either alone or in combination with
another event, will (i) entitle any Business Employee to any payment from Seller or any Subsidiary;
(ii) increase the amount of compensation or benefits due from Seller or any Subsidiary to any such
employee; (iii) accelerate the vesting, funding or time of payment of any compensation, equity
award or other benefits from Seller or any Subsidiary; or (iv) result in the payment of any
“excess parachute payment” within the meaning of Section 280G of the Code or any similar
provisions of foreign, state or local Law.
(g) Neither Seller nor any Subsidiary maintains or sponsors any “nonqualified deferred
compensation plan” within the meaning of Section 409A(d)(1) of the Code in which a Business
Employee participates and may incur an additional tax under Section 409A of the Code.
(h) Each Benefit Plan that covers any Business Employee outside of the United States or is
otherwise not subject to ERISA or the Code has been maintained in substantial compliance with its
terms and with the requirements prescribed by any and all applicable Laws (including without
limitation any special provisions relating to the tax status of contributions to, earnings of
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or distributions from such Benefit Plans where each such Benefit Plan was intended to have
such tax status).
(i) With respect to the Engenio Business, there is not presently pending or existing, and to
Seller’s knowledge there is not threatened, (i) any strike, slowdown, picketing, or work stoppage,
(ii) any application for certification of a collective bargaining agent, (iii) any controversies or
disputes pending, or to Seller’s knowledge, threatened between Seller or any Subsidiary and any of
its employees, or (iv) any claims, litigation or disputes by a works council or other applicable
Government Body, which controversies, claims, litigation or disputes, individually or in the
aggregate, are or could reasonably be expected to be material to the Engenio Business, taken as a
whole.
(j) Except for the defined benefit plan set forth on Schedule 3.10(b) with respect to Business
Employees located in Germany, no Business Employee has a contractual right to any defined benefit
pension or rights under an occupational pension plan.
(k) In the twelve (12) months prior to the date hereof, no Business Employee located in the
European Union has transferred to the Engenio Business from another business unit of Seller or any
of its Subsidiaries or pursuant to the ARD Regulations.
3.11 Contracts
(a) Schedule 3.11(a) contains a complete and accurate list of all existing Contracts
of Seller or a Subsidiary that:
(i) involve or could reasonably be expected to involve payments by or to Seller or a
Subsidiary either of more than $250,000 per year or more than $500,000 in the aggregate over the
full term thereof;
(ii) contain any provision or covenant prohibiting or limiting the ability of Seller or a
Subsidiary to (A) engage in any activity relating to or involving the Engenio Business (including
geographical restrictions), (B) to compete in any line of business, directly or indirectly, with
any Person as to the Engenio Business;
(iii) provide for “most favored nation” terms, including such terms for pricing, and that is
material to the Engenio Business;
(iv) create or obligate Seller or a Subsidiary to participate in any joint venture or similar
arrangement with respect to or affecting the Engenio Business or the Purchased Assets;
(v) contain material maintenance, warranty, support or similar obligations, other than as set
forth on the standard terms and conditions of sale included in Schedule 3.15;
(vi) for any distributor, original equipment manufacturer, reseller, value added reseller,
sales, agency or manufacturer’s representative relationships that is material to the Engenio
Business; and
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(vii) constitute any other agreement, commitment, arrangement or plan not made in the ordinary
course of business that is material to the Engenio Business (clauses (i) through (vii)
collectively, the “Material Contracts”).
(b) Schedule 3.11(b) contains a complete and accurate list of all contracts,
agreements, commitments, purchase orders, and instruments that are material to the Engenio Business
but are not included in the Purchased Assets.
(c) Each Material Contract is valid, binding and enforceable against Seller or the applicable
Subsidiary and, to Seller’s knowledge, the other parties thereto in accordance with its terms and
is in full force and effect. Neither Seller nor any Subsidiary is in default under or in breach of
or is otherwise delinquent in performance under any Material Contract (and neither Seller nor any
Subsidiary has received any notice alleging any such default, breach or delinquency). 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 material default under, any Material Contract
and no event has occurred that, with notice or lapse of time, or both, would constitute such a
material default. Seller or a Subsidiary has made available to Buyer true and complete copies of
all Material Contracts.
3.12 Financial Information; Absence of Certain Changes
(a) Schedule 3.12(a) contains true and complete copies of the following unaudited
financial statements of the Engenio Business (the “Unaudited Business Financials”):
(i) unaudited balance sheet of the Engenio Business as of December 31, 2010 (the “Balance
Sheet”);
(ii) unaudited balance sheet of the Engenio Business as of December 31, 2009; and
(iii) unaudited statements of operations of the Engenio Business for the years ended December
31, 2010, 2009 and 2008.
(b) The Unaudited Business Financials were prepared on the basis of the books and records
(which are accurate and complete in all material respects) of the Engenio Business (in each case,
as of the date of such Unaudited Business Financials) and in accordance with GAAP consistently
applied throughout the periods covered, except for the omission of footnotes and for normal
year-end adjustments. The Unaudited Business Financials present fairly, in all material respects,
the financial position of the Engenio Business as of the dates thereof and the results of its
operations and cash flows for each of the periods then ended in conformity with GAAP except for (i)
the omission of footnotes and normal year-end adjustments; and (ii) any potential adjustments
relating to the tax provision in the statements of operations or to any line items in the balance
sheets affected by tax related adjustments. The Closing Statement will be prepared on the basis of
the books and records of the Engenio Business and each line item thereof will be prepared in
accordance with GAAP applied consistently with the Unaudited Business Financials.
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(c) Except as set forth in Schedule 3.12(c), since the date of the Balance Sheet, the
Engenio Business has been conducted by Seller and the Subsidiaries in the ordinary course
consistent with past practices and there has not been:
(i) any event, occurrence, development or state of circumstances or facts which, individually
or in the aggregate, has had or could reasonably be expected to have a Seller Material Adverse
Effect;
(ii) any creation or other incurrence of any Encumbrance on any Purchased Asset other than in
the ordinary course of business consistent with past practices;
(iii) failure to timely pay when due any material obligation related to the Engenio Business;
(iv) any material damage, destruction or other casualty loss (whether or not covered by
insurance) affecting the Engenio Business or any Purchased Asset;
(v) any transaction or commitment made, or any contract or agreement entered into, by Seller
or a Subsidiary relating to the Engenio Business or any Purchased Asset (including the acquisition
or disposition of any assets) or any relinquishment by Seller or a Subsidiary of any contract or
other right, in either case, material to the Engenio Business, other than transactions and
commitments other than in the ordinary course of business consistent with past practices and those
contemplated by this Agreement and the Collateral Agreements;
(vi) any change in any method of accounting or accounting practice by Seller or a Subsidiary
with respect to the Engenio Business;
(vii) any (i) employment, retention, bonus, deferred compensation, severance, retirement or
other similar agreement entered into with any Business Employee (or any amendment to any such
existing agreement), (ii) change in compensation or other benefits payable to any Business Employee
pursuant to any severance or retirement plans or policies thereof, or (iii) grant of any severance
or termination pay to any Business Employee;
(viii) any labor dispute, other than routine individual grievances, or any activity or
proceeding by a labor union or representative thereof to organize the Business Employees, or any
lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to Business
Employees; or
(ix) any shipments or sales of quantities of Engenio Products to customers, including
distributors, other than in the ordinary course consistent with their past requirements.
(d) Except as set forth in Schedule 3.12(d), Seller has not received or booked any
prepaid revenues for the Engenio Business applicable to performance due after the Closing Date.
3.13 Intellectual Property
(a) Seller or one of its Affiliates owns exclusively all right, title and interest in and to
the Assigned Intellectual Property, free and clear of all Encumbrances other than Permitted
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Encumbrances. Seller or one of its Affiliates owns or has a valid right to grant the licenses
to the Licensed Intellectual Property that it is licensing to Buyer pursuant to the Intellectual
Property Agreement. Seller and its Affiliates have not received any notice or claim challenging
Seller’s or any of its Affiliates’ ownership of any Assigned Intellectual Property or suggesting
that any other Person has any claim of legal or beneficial ownership or exclusive rights with
respect thereto, nor to Seller’s knowledge is there a reasonable basis for any claim that Seller or
its Affiliates, as applicable, does not so own any of such Assigned Intellectual Property.
Schedule A of Appendix F to the Intellectual Property Agreement contains a complete and
accurate list of all registered Trademarks and pending applications for registration of Trademarks
that are to be assigned to Buyer or a Buyer Designee (the “Assigned Trademarks”).
Schedule A of Appendix G to the Intellectual Property Agreement contains a complete and
accurate list of all Patents that are to be assigned to Buyer or a Buyer Designee (the
“Assigned Patents” and, together with the Assigned Trademarks, the “Assigned Registered
IP”), and there are no registered Copyrights and pending applications for registration of
Copyrights being assigned to Buyer of a Buyer Designee. The appendices to the Intellectual
Property Agreement attached hereto identify as of the date of this Agreement (i) each item of
Assigned Registered IP in which Seller has or purports to have an ownership interest of any nature
(whether exclusively, jointly with another Person, or otherwise), (ii) the jurisdiction in which
such item of Assigned Registered IP has been registered or filed and the applicable application,
registration, or serial or other similar identification number, and (iii) any other Person that has
an ownership interest in such item of Assigned Registered IP and the nature of such ownership
interest. The parties acknowledge that the appendices to the Intellectual Property Agreement may
be updated by mutual written agreement of the parties prior to the Closing to ensure that any lists
accurately reflect the Assigned Registered IP to be transferred pursuant to the terms and
conditions of this Agreement. Seller will provide to Buyer at Closing (i) complete and accurate
copies of all applications, material correspondence with Governmental Bodies or registration
organizations, and other material documents related to each such item of Assigned Registered IP in
Seller’s possession, and (ii) a listing of all actions, filings and payment obligations due to be
made to any Governmental Body within one hundred and eighty (180) days following the date of
Closing with respect to each item of Assigned Registered IP. Seller has not received any notice or
claim challenging the validity or enforceability of any of the Assigned Registered IP or indicating
an intention on the part of any Person to bring a claim that any of the Assigned Registered IP is
invalid or unenforceable, nor to Seller’s knowledge is there a reasonable basis for any claim that
any of the Assigned Registered IP is either invalid or unenforceable. All Assigned Registered IP
has been registered or obtained in accordance with all applicable legal requirements, and Seller
has timely paid all filing, examination, issuance, post registration and maintenance fees and
annuities associated with or required with respect thereto. To Seller’s knowledge, none of the
Assigned Registered IP has been or is now involved in any interference, reissue, reexamination,
opposition, cancellation or similar proceeding and no such action is or has been threatened.
Seller has not taken any action or failed to take any action that would result in the abandonment,
cancellation, forfeiture, relinquishment, invalidation or unenforceability of any Assigned
Registered IP.
(b) Except as set forth in Schedule 3.13(b), in connection with the operation of the
Engenio Business,
(i) To Seller’s knowledge, none of Seller or any of its Affiliates has infringed,
misappropriated or otherwise violated any Intellectual Property rights of any Third Party;
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(ii) there is no suit, or proceeding pending against or, to Seller’s knowledge, threatened
against or a written or, to Seller’s knowledge, oral claim affecting, the Engenio Business (x)
based upon, or challenging or seeking to deny or restrict, the rights of Seller or any of its
Affiliates in any of the Assigned Intellectual Property or the Licensed Intellectual Property
(collectively, the “Engenio Intellectual Property”), (y) alleging that the use of the
Engenio Intellectual Property or any services provided, processes used, or products manufactured,
used, imported, offered for sale or sold with respect to the Engenio Business conflict with,
misappropriate, infringe or otherwise violate any Intellectual Property of any Third Party, or (z)
alleging that Seller or any of its Affiliates infringed, misappropriated, or otherwise violated any
Intellectual Property of any Third Party in connection with the operation of the Engenio Business;
and
(iii) (A) the Engenio Intellectual Property constitutes all the Intellectual Property and
Information owned by or licensed (to the extent Seller has a right to license or sublicense Buyer
thereunder without payment of a fee) to Seller or one of its Affiliates that is used or held for
use primarily in the operation or conduct of the Engenio Business; (B) there exist no restrictions
on the disclosure, use, license or transfer of the Engenio Intellectual Property (other than the
restrictions imposed in the Intellectual Property Agreement or by applicable Law); (C) the
consummation of the transactions contemplated by this Agreement will not alter, impair or
extinguish any of the Engenio Intellectual Property; (D) the Licenses set forth on Schedule
2.1(h) (the “Inbound License Agreements”) constitute all Licenses of Seller or one of
its Subsidiaries to the Intellectual Property or Information of Third Parties that are used or held
for use primarily in the operation or conduct of the Engenio Business, other than licenses for
Standard Software, non-disclosure agreements and other similar agreements that are not material to
the Engenio Business; and (E) the Assigned Intellectual Property and Licensed Intellectual Property
constitute all of the Intellectual Property and Information owned by Seller that are necessary for
the operation or conduct of the Engenio Business as currently conducted (provided that this
subsection (E) shall not be interpreted as a representation regarding non-infringement, which is
addressed in subsection (b)(i) above). No loss or expiration of Seller’s or one of its
Subsidiary’s rights to use any Intellectual Property or Information licensed to Seller or any of
its Subsidiaries under any Inbound License Agreement is pending or to the knowledge of Seller,
threatened.
(c) Schedule 3.13(c) lists the companies that design, manufacture, market, sell or
distribute external storage systems products and related embedded and value-added software and
other components (other than semiconductor devices) with which Seller or its Subsidiaries have
entered into Contracts by which the Seller or its Subsidiaries are bound, and which Assigned
Registered IP may be subject to, containing any covenant or other provision that in any way limits
or restricts the ability of Seller or a Subsidiary to use, assert, enforce, or otherwise exploit
any Assigned Registered IP anywhere in the world. Neither Seller nor its Subsidiaries have (i)
transferred ownership of (whether a whole or partial interest), or granted any exclusive right to
use, any Assigned Intellectual Property to any Person; (ii) transferred ownership of (whether a
whole or partial interest) or granted any exclusive right to use any improvements to or derivative
works of any Assigned Intellectual Property; or (iii) granted rights to any Person to create
improvements to or derivative works of any material Assigned Intellectual Property that is or would
be owned by such Person or exclusively licensed to such Person.
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(d) At the Closing, Seller will assign to Buyer free and clear of any Encumbrance the Assigned
Intellectual Property and will license to Buyer the Licensed Intellectual Property, in each case in
accordance with the Intellectual Property Agreement.
(e) None of the Assigned Intellectual Property has been adjudged invalid or unenforceable in
whole or part and, to Seller’s knowledge, all Assigned Intellectual Property is valid and
enforceable.
(f) Seller and its Affiliates have taken reasonable actions to maintain and protect the
Assigned Intellectual Property, including payment of applicable maintenance fees and filing of
applicable statements of use other than certain foreign applications which Seller or an Affiliate
thereof, in its reasonable business judgment, has abandoned in the ordinary course of business.
(g) Seller and its Affiliates have taken reasonable steps to maintain the confidentiality of
all Trade Secrets relating to the Engenio Business (“Engenio Trade Secrets”) and other
information that at any time constituted a Trade Secret relating to the Engenio Business, including
taking steps to ensure that any Engenio Trade Secrets disclosed by Seller or any of its Affiliates
to a Third Party are subject to the confidentiality undertakings set forth in an applicable
non-disclosure agreement. To Seller’s knowledge, there has been no misappropriation of any
material Engenio Trade Secrets. Seller and its Affiliates have not disclosed, nor is Seller or any
of its Affiliates under any contractual or other obligation to disclose, to another Person any
Engenio Trade Secrets, except pursuant to an enforceable confidentiality agreement or undertaking,
and, to Seller’s knowledge, no Person has materially breached any such agreement or undertaking.
Without limiting the generality of the foregoing, Seller has and enforces in a commercially
reasonable manner a policy requiring each Business Employee and independent contractor who has
participated in the creation of any Engenio Intellectual Property or have had access to any Engenio
Trade Secrets to enter into non-disclosure and invention assignment agreements substantially in
Seller’s standard forms (which have previously been provided to Buyer).
(h) To Seller’s knowledge, no Business Employee or independent contractor of Seller or any of
its Affiliates who is employed in connection with the Engenio Business is obligated under any
agreement or subject to any judgment, decree or order of any court or Governmental Body, or any
other restriction that could reasonably be expected to materially interfere with such Business
Employee or independent contractor carrying out his or her duties for Seller or such Affiliate, as
applicable, or that could reasonably be expected to materially conflict with the Assigned
Intellectual Property, the Licensed Intellectual Property or the Engenio Business as presently
conducted.
(i) To Seller’s knowledge, none of the Software (other than Software code currently under
development) used or held for use primarily in the operation or conduct of the Engenio Business and
owned, developed, marketed, distributed, licensed, sold, or otherwise made available to any Person
by Seller or a Subsidiary as used in the Engenio Business (collectively,
“Company Software”) (i) contains any bug, defect, or error that materially and
adversely affects the use, functionality, or performance of such Company Software or any product or
system containing or used in conjunction with such Company Software or (ii) fails to comply in any
material respect with any applicable warranty or other contractual commitment relating to the
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use,
functionality, or performance of such Company Software, or any product or system containing or used
in conjunction with such Company Software.
(j) To Seller’s knowledge, no Company Software contains any “back door,” “drop dead device,”
“time bomb,” “Trojan horse,” “virus,” “worm,” “spyware” or “adware” (as such terms are commonly
understood in the software industry) or any other code designed or intended to have, or capable of
performing or facilitating, any of the following functions: (i) disrupting, disabling, harming, or
providing unauthorized access to, a computer system or network or other device on which such code
is stored or installed or (ii) compromising the privacy or data security of a user or damaging or
destroying any data or file without the user’s consent (collectively, “Malicious Code”).
Seller implements commercially reasonable measures designed to prevent the introduction of
Malicious Code into Company Software, including firewall protections and regular virus scans.
(k) Other than as set forth in Schedule 3.13(k), (i) no source code for any Company
Software has been delivered, licensed, or made available to any escrow agent or other Person who is
not, as of the date of this Agreement, an employee of Seller; (ii) Seller does not have any duty or
obligation (whether present, contingent, or otherwise) to deliver, license, or make available the
source code for any Company Software to any escrow agent or other Person; and (iii) no event has
occurred, and no circumstance or condition exists, that (with or without notice or lapse of time)
will, or could reasonably be expected to, result in the delivery, license, or disclosure of any
source code for any Company Software to any other Person who is not, as of the date of this
Agreement, an employee of Seller.
(l) No material Company Software is subject to any “copyleft” or other obligation or condition
(including any obligation or condition under any “open source” license such as the GNU Public
License, Lesser GNU Public License, or Mozilla Public License) that (i) could require, or could
condition the use or distribution of such material Company Software or portion thereof on, (A) the
disclosure, licensing, or distribution of any source code for any portion of such material Company
Software or (B) the granting to licensees of the right to make derivative works or other
modifications to such material Company Software or portions thereof or (ii) could otherwise impose
any limitation, restriction, or condition on the right or ability of Sellers to use, distribute or
charge for any material Company Software.
(m) There are no march-in or reversion rights to any Governmental Body or any public or
private university, college, or other educational or research institution for any Assigned
Intellectual Property. To Seller’s knowledge, the Assigned Intellectual Property is not subject to
a compulsory licensing scheme due to Seller’s participation as a member or promoter of, or a
contributor to, any industry standards body or similar organization. Neither Seller nor any
Subsidiary has entered into a Contract with any other Person that licenses any Assigned Registered
IP in accordance with any compulsory licensing scheme due to Seller’s participation
as a member or promoter of, or a contributor to, any industry standards body or similar
organization.
(n) Neither the execution, delivery, or performance of this Agreement nor the consummation of
any of the transactions or agreements contemplated by this Agreement will, with or without notice
or the lapse of time, result in, or give any other Person the right or option
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to cause or declare,
(i) a loss of, or Encumbrance on, any material Assigned Intellectual Property; (ii) the material
release, disclosure, or delivery of the source code for any material Company Software, or of any
Information, by or to any escrow agent or other Person; or (iii) the grant, assignment, or transfer
by Seller to any other Person of any license or other right or interest under, to, or in any
material Assigned Intellectual Property.
3.14 Product Liability and Recalls
(a) Each Product produced or sold by Seller or a Subsidiary in connection with the Engenio
Business is, and at all times up to and including the sale thereof has been, in compliance in all
material respects with all applicable Laws. To Seller’s knowledge, there is no material design or
manufacturing defect that has been established or is being investigated with respect to any such
Product.
(b) Except as set forth in Schedule 3.14(b), since January 1, 2008, there has been no
action, suit, claim, inquiry, proceeding or investigation in any case by or before any court or
Governmental Body pending or, to Seller’s knowledge, threatened against or involving the Engenio
Business relating to any Product alleged to have been designed, manufactured or sold by the Engenio
Business and alleged to have been defective or improperly designed or manufactured, nor, to
Seller’s knowledge, has there been any pattern of product failure relating to any Product designed,
manufactured or sold by the Engenio Business.
(c) Since January 1, 2008, there has been no pending, or to Seller’s knowledge, threatened
recall or investigation of any Product sold by Seller or a Subsidiary in connection with the
Engenio Business.
3.15 Product Warranty
(a) Schedule 3.15(a) includes copies of the standard terms and conditions of sale for
the Engenio Products (containing applicable guaranty, warranty and indemnity provisions and support
obligations). Except as set forth in Schedule 3.15(a), the products manufactured by the
Engenio Business have been sold by the Engenio Business in accordance with the standard terms and
conditions of sale.
(b) Schedule 3.15(b) sets forth a complete and accurate listing of any Engenio
Products for which one percent or more have either been returned to Seller by customers or for
which Seller has received return requests from customers, since December 31, 2008.
3.16 Inventory
The Inventory is, and as of the Closing Date will be, valued in accordance with GAAP of
quality and quantity usable and saleable in the ordinary course of the Engenio Business consistent
with past practice, except in each case for excess, obsolete items and items of below-standard
quality that have been reserved for or written down to estimated net realizable value in accordance
with GAAP applied on a basis consistent with past practices as set forth in the Balance Sheet.
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3.17 Customer and Suppliers
Schedule 3.17 contains a list setting forth the five (5) largest customers of the
Engenio Business, by dollar amount, over the twelve (12) months ended December 31, 2010 (and the
amount of sales with respect to each such customer during such twelve month period), and the five
(5) largest suppliers of the Engenio Business, by dollar amount, over the twelve (12) months ended
December 31, 2010 (and the amounts paid to each such supplier during such twelve month period).
Seller has no knowledge of, and has not received written notice of the intention of any of such
customers or suppliers to cease doing business with Seller. All purchase and sale orders and other
commitments for purchases and sales made by Seller or any Subsidiary in connection with the Engenio
Business have been made in the ordinary course of business in accordance with past practices, and
no payments have been made to any supplier or customers or any of their respective representatives
other than payments to such suppliers or their representatives for the payment of the invoiced
price of supplies purchased or goods sold in the ordinary course of business.
3.18 Restrictions on the Engenio Business
Except for this Agreement, there is no agreement, judgment, injunction, order or decree
materially affecting (i) Seller’s or a Subsidiary’s conduct of the Engenio Business as currently
conducted, or (ii) to Seller’s knowledge, Buyer’s ability to conduct the Engenio Business after the
Closing as currently conducted by Seller.
3.19 Taxes
There are no liens for Taxes upon any of the Purchased Assets other than Permitted
Encumbrances. No action, proceeding or, to Seller’s knowledge, investigation has been instituted
against Seller or any Subsidiary (to the extent related to the Engenio Business or the Purchased
Assets). Seller and each Subsidiary has duly and timely filed all Returns that it was required to
file; all such Returns were correct and complete in all material respects; and all Taxes of Seller
or its Subsidiaries owed or shown as due on any Return have been paid. Seller and its Subsidiaries
(to the extent related to the Engenio Business or the Purchased Assets) have withheld and paid all
Taxes required to have been withheld and paid in connection with amounts paid or owing by them to
any employee, independent contractor, creditor, stockholder or other third party except where the
failure to make such payment, individually or in the aggregate, is not or could not reasonably be
expected to be material to the Engenio Business, taken as a whole. Neither Seller nor any
Subsidiary has received any claim in writing in the last two (2) years from a Governmental Body or
social security administration in a jurisdiction where any Seller or
Subsidiary (to the extent related to the Engenio Business or the Purchased Assets) does not
file Returns that such Seller or Subsidiary is or may be subject to taxation by that jurisdiction.
None of the Purchased Assets (a) is property required to be treated as owned by another person
pursuant to the provisions of Section 168(f)(8) of the U.S. Internal Revenue Code of 1954 and in
effect immediately before the enactment of the Tax Reform Act of 1986, (b) constitutes “tax-exempt
use property” or “tax-exempt bond financed property” within the meaning of Section 168 of the Code,
(c) secures any debt the interest of which is tax-exempt under Section 103(a) of the Code, or (d)
is subject to a 467 rental agreement as defined in Section 467 of the Code. Seller
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(and not any of
Seller’s Affiliates) is the beneficial owner of the Assigned Intellectual Property and the Licensed
Intellectual Property.
3.20 Brokers
Other than Xxxxxxx Xxxxx & Co., as to which Seller shall have full responsibility and for
which Buyer shall not have any liability, 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 or any Affiliate of Seller.
4. Representations and Warranties of Buyer
Except as set forth in Schedules attached hereto and delivered by Buyer to Seller prior to the
execution of this Agreement, Buyer represents and warrants to Seller that:
4.1 Organization and Qualification
Each of Buyer and any Buyer Designee is a corporation, limited partnership, or other legal
entity duly organized, validly existing and in good standing (in any jurisdiction in which such
concept exists) under the Laws of the jurisdiction of its incorporation or organization and each of
Buyer and any Buyer Designee has all requisite legal power and authority to carry on its business
as currently conducted by it and to own or lease and operate its properties. Each of Buyer and any
Buyer Designee 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 where
the failure to be so qualified or in good standing, individually or in the aggregate, has not had
and could not reasonably be expected to have a material adverse effect on Buyer or on Buyer’s or
any Buyer Designee’s ability to consummate the transactions under this Agreement and the Collateral
Agreements.
4.2 Authorization; Binding Effect
(a) Each of Buyer and any Buyer Designee has all requisite corporate power and authority to
execute, deliver and perform this Agreement and the Collateral Agreements to which it will be a
party, as the case may be, and to effect the transactions contemplated hereby and thereby and the
execution, delivery and performance of this Agreement and the Collateral Agreements by Buyer has
been duly authorized by all requisite corporate action and, to the
extent not completed on the date hereof by a Buyer Designee, will be duly authorized by all
requisite corporate action.
(b) This Agreement has been duly executed and delivered by Buyer and this Agreement is, and
the Collateral Agreements to which Buyer or a Buyer Designee will be a party when duly executed and
delivered by Buyer or such Buyer Designee will be, valid and legally binding obligations of Buyer
or such Buyer Designee enforceable against Buyer or such Buyer Designee 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,
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moratorium, insolvency and similar Laws
of general application affecting the rights and remedies of creditors and by general equity
principles.
4.3 Non-Contravention; Consents
(a) Assuming that the consents specified in Section 4.3(b) below have been obtained, the
execution, delivery and performance of this Agreement and the Collateral Agreements by Buyer and
any Buyer Designee 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 or any Buyer
Designee’s charter or by-laws or similar organizational document, (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 mortgage, deed of trust, conveyance to secure debt, note, loan,
indenture, lien, lease, agreement, instrument, order, judgment, decree or other arrangement or
commitment to which Buyer or any Buyer Designee is a party or by which it or its assets or
properties are bound, or (iii) violate any applicable Law, order, judgment, injunction, decree,
rule or regulation of any court or any Governmental Body having jurisdiction over Buyer or any
Buyer Designee or any of their respective properties, other than in the case of clauses (ii) and
(iii), any such violations, breaches, defaults, accelerations or cancellations of obligations or
rights that, individually or in the aggregate, have not had and could not be reasonably expected to
have a material adverse effect on Buyer or on Buyer’s or any Buyer Designee’s ability to consummate
the transactions under this Agreement and the Collateral Agreements.
(b) No consent, approval, order or authorization of, or registration, declaration or filing
with, any Person is required to be obtained by Buyer or any Buyer Designee in connection with the
execution, delivery and performance of this Agreement or the Collateral Agreements or for the
consummation of the transactions contemplated hereby or thereby, except for (i) any filings
required to be made under the HSR Act and any applicable filings required under foreign antitrust
Laws, and (ii) such consents, approvals, orders, authorizations, registrations, declarations or
filings the failure of which to be obtained or made, individually or in the aggregate, have not had
and could not reasonably be expected to have a material adverse effect on Buyer or on Buyer’s or
any Buyer Designee’s ability to consummate the transactions under this Agreement and the Collateral
Agreements.
4.4 Brokers
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
Buyer or any Affiliate of Buyer.
4.5 Sufficiency of Funds
Buyer: (i) has sufficient funds available to pay the Purchase Price and any expenses incurred
by Buyer in connection with the transactions contemplated by this Agreement or the Collateral
Agreements; (ii) has the resources and capabilities (financial or otherwise) to perform its
obligations hereunder and under the Collateral Agreements; and (iii) has not incurred any
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obligation, commitment, restriction or liability of any kind, absolute or contingent, present or
future, which would impair or adversely affect its ability to perform its obligations hereunder and
under the Collateral Agreements.
5. Certain Covenants
5.1 Access and Information
(a) Seller shall give, or cause its Subsidiaries to give, to Buyer and its Affiliates, and
their respective officers, employees, accountants, counsel and other representatives reasonable
access during Seller’s or the applicable Subsidiary’s normal business hours throughout the period
prior to the Closing to all of Seller’s or the applicable Subsidiary’s properties, books,
contracts, commitments, reports of examination and records relating to the Engenio Business, the
Transferred Employees, the Purchased Assets and the Assumed Liabilities (subject to any limitations
that are reasonably required to preserve any applicable attorney-client privilege or legal or
contractual Third-Party confidentiality obligation). Seller shall assist, and cause its
Subsidiaries to assist, Buyer and its Affiliates in making such investigation and shall cause its
counsel, accountants, engineers, consultants and other non-employee representatives to be
reasonably available to any of them for such purposes.
(b) After the Closing Date, Seller and Buyer shall provide, and shall cause their respective
Affiliates to provide, to each other and to their respective officers, employees, accountants,
counsel and other representatives, upon request (subject to any limitations that are reasonably
required to preserve any applicable attorney-client privilege or legal or contractual Third-Party
confidentiality obligation), reasonable access for inspection and copying of all Business Records,
Governmental Permits, Licenses, Contracts and any other information existing as of the Closing Date
and relating to the Engenio Business, the Purchased Assets, the Assumed Liabilities or the
Transferred Employees and shall make their respective personnel reasonably available for
interviews, depositions and testimony in any legal matter concerning transactions contemplated by
this Agreement, the operations or activities relating to the Engenio Business, the Purchased
Assets, the Assumed Liabilities or the Transferred Employees and as otherwise may be necessary or
desirable to enable the party requesting such assistance to: (i) comply with any reporting, filing
or other requirements imposed by any Governmental 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 reasonable and
necessary out-of-pocket costs and expenses, if any, 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(b) shall be during normal business hours and upon
reasonable prior notice 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.
(c) Buyer agrees to preserve all Business Records, Licenses and Governmental Permits in
accordance with its corporate policies related to preservation of records. Buyer further agrees
that, to the extent Business Records, Licenses or Governmental Permits are placed in
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storage, they will be kept in such a manner as to make individual document retrieval
possible in a reasonably expeditious manner.
5.2 Conduct of the Engenio Business
From and after the date of this Agreement and until the Closing Date, except as otherwise
contemplated by this Agreement or as set forth in the Schedules hereto or as Buyer shall otherwise
consent to in writing, Seller and its Subsidiaries, with respect to the Engenio Business:
(a) will carry on the Engenio Business in the ordinary course consistent with past practice
and consistent therewith use its reasonable commercial efforts to keep intact the Engenio Business,
keep available the services of the Business Employees and preserve the relationships of the Engenio
Business with customers, suppliers, licensors, licensees, distributors and others that have a
business relationship with the Engenio Business;
(b) in the ordinary course consistent with past practice maintain the Purchased Assets in good
operating condition and repair or restore such assets as necessary for the operation of the Engenio
Business in the ordinary course of business;
(c) will not permit, other than as may be required by Law or a Governmental Body, all or any
of the Purchased Assets (real or personal, tangible or intangible) presently and actively used or
held for use primarily in the operation or conduct of the Engenio Business to be transferred, sold,
licensed, disposed of, or subjected to any Encumbrance, other than sales of Inventory in the
ordinary course of business consistent with past practice and Section 5.2(c);
(d) will not sell Inventory outside of the ordinary course of business consistent with past
practice, including with respect to pricing, discounting practices, bundling, sales volume and
services levels, and will maintain Inventory sufficient to meet expected customer requirements,
consistent with past practice, including sufficient raw materials, capacity and work in process in
light of anticipated demand and customary cycle times and sufficient finished goods Inventory for
satisfaction of customer orders on hand at Closing and Inventory will be in an amount that at the
Closing shall have a value of no less than $35 million in the aggregate as calculated in accordance
with the Balance Sheet;
(e) will not acquire any asset that will be a Purchased Asset except in the ordinary course of
business consistent with past practice;
(f) will not fail to pay when due any material obligation related to the Engenio Business;
(g) will not enter into, terminate or materially extend, amend, modify or waive any right with
respect to any Material Contract except for purchase orders entered in the ordinary course of
business consistent with past practice;
(h) will not sell, lease, license, abandon, permit to lapse, or otherwise transfer, or create
or incur any Encumbrance on, any of the assets, securities, properties, or interests of the Engenio
Business (including the Assigned Intellectual Property), including not taking any action
to abandon, disclose, misuse, or misappropriate the Assigned Intellectual Property in any manner
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(other than non-exclusive licenses (other than patent portfolio licenses or cross licenses)
in the ordinary course of business consistent with past practice) or assert or threaten any claims
with respect to the Assigned Intellectual Property;
(i) will not incur or assume any liabilities, obligations or indebtedness for borrowed money,
other than in the ordinary course of business consistent with past practice or that will constitute
Excluded Liabilities;
(j) will not increase the salaries (except for the 2011 salary increase reflected on
Schedule 3.10(a)(i)), wage rates, other compensation or fringe benefits of, or grant any
severance or termination payment (other than as required by Law) to, any Business Employee;
(k) fail to comply in any material respect with all Laws applicable to the Engenio Business or
the Purchased Assets;
(l) will not make, change or revoke any Tax election; file any amended Return; enter into any
closing agreement; settle or compromise any Tax claim or assessment; or consent to any extension or
waiver of the limitation period applicable to any claim or assessment with respect to Taxes, in
each case to the extent such action could reasonably be expected to adversely affect the Purchased
Assets or the Engenio Business;
(m) will not do any other act which would cause any representation or warranty of Seller in
this Agreement to be or become untrue in any material respect or intentionally omit to take any
action necessary to prevent any such representation or warranty from being untrue in any material
respect;
(n) will use reasonable efforts to continue the construction of laboratories and facilities at
the Transferred Premises in the manner and according to the schedule as currently contemplated by
Seller immediately prior to the date hereof; and
(o) will not enter into any agreement or commitment with respect to any of the foregoing.
5.3 Taxes
(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 or a Subsidiary to any Business Employee in connection with the
operation or conduct of the Engenio Business for any Pre-Closing Tax Period, 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 or a Buyer Designee to any Transferred Employee with
respect any Post-Closing Tax Period. For the avoidance of doubt, nothing in this paragraph is
intended to modify or adjust the substantive liability of Buyer and Seller under this Agreement
with respect to the Taxes described in this paragraph.
(b) The allocation of the Purchase Price between the Seller and each Subsidiary shall be as
set forth on Schedule 5.3 hereto, as adjusted pursuant to this Section 5.3 (the “Entity
Xxxxx
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Xxxxxxxxxx Xxxxxxxxx”). No later than five (5) days prior to the Closing Date, Buyer
shall deliver to Seller an updated Entity Level Allocation Statement.
(c) Not later than sixty (60) days after the Closing Date, Buyer shall prepare and deliver to
Seller (i) a final Entity Level Allocation Statement, and (ii) an allocation of the Purchase Price
among the Purchased Assets (including a separate allocation for each separate purchase reflected on
the final Entity Level Allocation Statement) in accordance with Section 1060 of the Code and the
Treasury regulations promulgated thereunder (and any similar provision of state, local or foreign
law, as appropriate) (the “Asset Level Allocation Statement”). Seller and Buyer shall work
in good faith to resolve any disputes relating to the Asset Level Allocation Statement. If Seller
and Buyer are unable to resolve any such dispute, such dispute shall be resolved promptly by a
nationally recognized accounting firm acceptable to Buyer and Seller, the costs of which shall be
borne equally by Buyer and Seller. The Parties agree that they will not, and will not permit any
of their respective Affiliates to, take a position (except as required pursuant to any order of a
Governmental Body) on any Return or in any audit or examination before any Governmental Body that
is in way inconsistent with the final Entity Level Allocation Statement or the Asset Level
Allocation Statement (the final Entity Level Allocation Statement and Asset Level Allocation
Statement, together, the “Allocation”). If the Purchase Price is adjusted pursuant to
Section 9.3(d), the Allocation shall be adjusted in a manner consistent with the procedures set
forth in this Section 5.3(c).
(d) Seller shall promptly notify Buyer in writing upon receipt by Seller of notice of any
pending or threatened Tax audits or assessments relating to the income, properties or operations of
Seller that reasonably may be expected to relate to or give rise to a lien on the Purchased Assets
or the Engenio Business. Each of Buyer and Seller shall promptly notify the other in writing upon
receipt of notice of any pending or threatened Tax audit or assessment challenging the Allocation.
(e) Seller shall deliver to Buyer at the Closing a properly executed affidavit prepared in
accordance with Treasury Regulations section 1.1445-2(b) certifying Seller’s non-foreign status.
5.4 Business Employees
(a) Prior to the Closing, Seller shall update the information provided in Schedule
3.10(a)(i) as of the Closing Date.
(b) As of the Closing Date, Buyer shall make offers of employment to at least the number of
Business Employees of Seller set forth on Schedule 5.4(b) whom shall be specifically
identified by Buyer prior to the Closing and whom shall include all Business Employees located in a
country that has adopted the ARD Regulations in the event Buyer has made an offer of employment to
one or more Business Employees in such country (such country, an “ARD Jurisdiction”), but
shall not otherwise include any Business Employee located in any country that is an ARD
Jurisdiction (the “Offered Employees”). Seller and any applicable Subsidiary shall
cooperate and assist in facilitating Buyer’s or a Buyer Designee’s offers and will not take any
action, or cause any of the Subsidiaries to take any action, which would impede, hinder,
interfere or otherwise compete with Buyer’s or a Buyer Designee’s effort to hire any Business
Employees.
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Promptly after the date hereof, Seller will provide to Buyer all information not
provided in Schedule 3.10(a) required to be disclosed by applicable Law of the jurisdiction
in which the Business Employee is located in connection with the sale of the Engenio Business. To
the extent permitted by applicable Law, including data privacy and data protection Laws, Seller
agrees to provide Buyer with such information reasonably requested by Buyer to assist it with
complying with the terms of this Section 5.4 and to assist Buyer with determining the wages paid to
the Transferred Employees (as defined below) with respect to the period beginning on January 1,
2011 and ending on the Closing Date. Seller shall be responsible for any employment action related
to any Business Employee who is not an Offered Employee. To the extent any notification or
consultation requirements or works council negotiation procedures are imposed by applicable Law
with regard to the transfer of Business Employees to Buyer or any of its Affiliates, Seller and
Buyer agree to cooperate to ensure that such notification or consultation requirements or works
council negotiation procedures are timely completed. Without limiting the foregoing, each Party
shall comply with all applicable Laws in connection with the transfer of the Offered Employees to
Buyer or a Buyer Designee, including with respect to notice, consultation and other procedural
requirements. The parties will enter into an Assignment and Xxxx of Sale and Assumption Agreement
or other appropriate documentation for relevant jurisdictions outside the United States where
necessary or appropriate for the transfer of such Offered Employees and shall cooperate to complete
all requisite consultation and related objection periods prior to the Closing Date. Any Offered
Employee who accepts Buyer’s offer of employment and commences employment with Buyer or a Buyer
Designee shall be referred to as a “Transferred Employee.” Employment of the Transferred
Employees with Buyer or a Buyer Designee shall be effective as of the day following the close of
business on the Closing Date; provided, that with respect to Offered Employees employed outside the
European Union who, as of the Closing Date, are on Seller-approved leave (the “Leave
Employees”), employment with Buyer or a Buyer Designee shall be effective as of (i) with
respect to Leave Employees absent due to leave that is not protected under applicable Law, within
90 days after the Closing Date or (ii) with respect to Leave Employees absent due to protected
leave under applicable Law, no later than the first Business Day following the end of the protected
leave period.
(c) Where terms are not dictated by applicable Law, Buyer or a Buyer Designee shall provide,
or shall cause to be provided, to Transferred Employees, until at least March 31, 2012 during their
employment with Buyer or a Buyer Designee, at a minimum, the same base salaries or, as applicable,
base wage rates, offered by Seller or the applicable Subsidiary immediately prior to the Closing
Date (but taking into account the 2011 salary increases) as set forth on Schedule
3.10(a)(i). Buyer or a Buyer Designee shall provide, or shall cause to be provided, to
Transferred Employees either (at Buyer’s discretion) employee benefits that are no less favorable
in the aggregate than either (i) those benefits provided to similarly situated employees of Buyer
or the applicable Buyer Designee (taking into account employee’s seniority and service with Seller
or Buyer or their respective Affiliates, as applicable) or (ii) the employee benefits that they
were offered by Seller or the applicable Subsidiary immediately prior to the Closing Date as set
forth on Schedule 3.10(b). Except as expressly set forth in this Section 5.4, no Benefit
Plans or assets of any Benefit Plan shall be transferred to Buyer or any Affiliate of Buyer. Buyer
will take all action necessary to ensure that, to the extent permitted under applicable Buyer or
Buyer Designee Benefit Plans, such Benefit Plans shall recognize (i) for purposes of satisfying any
deductibles, co-pays and out-of-pocket maximums during the coverage period that includes the
Closing Date, any payment made by any Transferred Employee towards deductibles, co-pays and
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out-of-pocket maximums in any health or other insurance plan of Seller or a Subsidiary during the
coverage period that includes the Closing Date and (ii) for purposes of determining eligibility to
participate and vesting and, in the case of any Buyer severance plan or program (if any), benefit
accruals, all service with Seller or a Subsidiary prior to the Closing, including service with
predecessor employers that was recognized by Seller or a Subsidiary, provided that such service
shall not be recognized to the extent such recognition would result in a duplication of benefits.
Buyer or the applicable Buyer Designee will continue to provide tuition assistance to those
Transferred Employees who are receiving such benefits as of the Closing Date for the current
academic session, in each case as set forth on Schedule 5.4(c). Buyer or the applicable
Buyer Designee will honor the terms and conditions of Seller’s international assignee program,
including repatriation upon completion of assignment, completion bonuses, Tax equalization and Tax
return preparation, with respect to Transferred Employees who are on international assignment as of
the Closing Date, in each case as set forth on Schedule 5.4(c), except that these costs
shall be allocated between the parties based on the portion of the international assignment
occurring before or on the Closing Date (which shall be Seller’s or the applicable Subsidiary’s
obligation) and after the Closing Date (which shall be Buyer’s or the applicable Buyer Designee’s
obligation).
(d) Seller and Buyer intend that the transactions contemplated by this Agreement shall not
constitute a severance of employment, under the terms of any Benefit Plan of Seller of any
Subsidiary, of any Transferred Employee prior to or upon the consummation of the transactions
contemplated hereby and that such employees will have continuous and uninterrupted employment
immediately before and immediately after the Closing Date. Notwithstanding anything to the
contrary in this Agreement, Buyer shall provide, at a minimum, severance benefits substantially
equivalent to the benefits contained in the plans listed or as described on Schedule 5.4(d)
to Transferred Employees whose employment is terminated involuntarily by Buyer on or before March
31, 2012 other than terminations in circumstances that would not require payments of severance
benefits under Seller’s severance plan.
(e) To the extent permitted under applicable Buyer Benefit Plans, (i) Buyer shall use
commercially reasonable efforts to waive any pre-existing condition exclusion (to the extent such
exclusion was waived under applicable health and Welfare Plans offered to the Transferred Employees
by Seller or a Subsidiary) and proof of insurability, and (ii) the medical and dental plans
maintained by Buyer and any Affiliate of Buyer shall recognize as dependents of the Transferred
Employees the dependents recognized by Seller’s or the applicable Subsidiary’s medical and dental
plans.
(f) As soon as practicable following the Closing Date, Buyer shall cause one or more defined
contribution savings plans intended to qualify under sections 401(a) and 401(k) of the Code (the
“Buyer Savings Plan”) to provide for the receipt of Transferred Employees’ lump sum cash
distributions, in the form of an eligible rollover distribution from the LSI Corporation 401(k)
Plan, provided such rollovers are made at the election of the Transferred Employees and in
accordance with the terms of the Buyer Savings Plan. Seller shall cause the LSI Corporation
401(k) Plan to fully vest Transferred Employees in their accounts immediately prior to the
Closing and permit the Transferred Employees to elect a lump sum cash distribution of benefits
accrued through the Closing Date in accordance with the Code.
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(g) Seller shall make and be responsible for incentive compensation payments, if any, earned
by the Transferred Employees for the period from January 1, 2011 to and including the Closing Date
under the applicable incentive plans in effect for any such period (including any pro rata amount
with respect to such period under a plan or program ending or vesting on or after the Closing
Date). Buyer shall not assume or otherwise become liable for, and Seller shall not transfer to
Buyer, any liabilities of Seller with respect to accrued but unused vacation and sabbatical leave
(collectively, the “Accrued Amounts”). At the Closing, Seller shall pay to each
Transferred Employee the Accrued Amount with respect to such Transferred Employee; provided, that
with respect to Transferred Employees in the European Union, Seller shall pay to Buyer each such
Transferred Employee’s applicable Accrued Amount, including for the avoidance of doubt, any
applicable employee’s and employer’s social contributions, in each case to the extent required
pursuant to applicable Law.
(h) As soon as practicable following the Closing, Seller shall provide Buyer with a schedule
setting forth the number of employees and the work location of each employee of Seller or any
Subsidiary in the United States who terminated employment within the ninety (90) day period prior
to the Closing Date.
(i) Notwithstanding anything herein to the contrary, nothing in this Agreement shall require
Buyer or a Buyer Designee to employ any Business Employees, or to employ any Transferred Employee
on anything other than an at-will basis, terminable at any time with or without cause unless
required otherwise under applicable Law. Nothing in this Section 5.4, expressed or implied, shall
confer upon any employee or former employee of Seller or any Subsidiary or related entities
(including, without limitation, the Transferred Employees) any rights or remedies (including,
without limitation, any right to employment or continued employment for any specified period) of
any nature or kind whatsoever, under or by reason of this Section 5.4. It is expressly agreed that
the provisions of this Section 5.4 are not intended to be for the benefit of or otherwise be
enforceable by, any third party, including, without limitation, any Transferred Employees. No
provision of this Section 5.4 shall create any rights in any such persons in respect of any
benefits that may be provided under any Benefit Plan or any plan or arrangement which may be
established or maintained by Buyer, shall be construed to establish, amend, or modify an Benefit
Plan or any other benefit plan, program, agreement or arrangement nor shall require Seller, Buyer
or any Affiliate of Seller or Buyer to continue or amend any particular benefit plan and any such
plan may be amended or terminated in accordance with its terms and applicable Law.
(j) Seller or a Subsidiary shall use reasonable commercial efforts to cause each Transferred
Employee located in India to enter into a general release of claims against Seller in customary
form.
(j) The Seller and its Subsidiaries shall execute and perform all such deeds, documents, and
acts as may be reasonably required to continue to make available to Transferred
Employees in India their respective account balances in the Provident Fund Plan and the
Gratuity Fund following their transfer to Buyer or a Buyer Designee.
(k) None of the Business Employees in India are “workmen” as defined under Indian Law.
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5.5 Collateral Agreements; Leased Equipment; Premises
(a) On or prior to the Closing Date, Buyer or a Buyer Designee shall execute and deliver to
Seller, and Seller or the applicable Subsidiary shall execute and deliver to Buyer or a Buyer
Designee, the Collateral Agreements. In addition, on or prior to the Closing Date Buyer and Seller
shall negotiate in good faith an arm’s-length customer and technical support agreement from Buyer
to Seller related to Engenio Products currently used by Seller in its information technology
infrastructure.
(b) Promptly after the date hereof, Seller shall provide Buyer with the costs and other terms
applicable to the Leased Equipment and Buyer shall decide whether such Leased Equipment will (a)
transfer to Buyer or a Buyer Designee as of the Closing Date by Buyer or a Buyer Designee assuming
the leases for such equipment, (b) become the property of Buyer or a Buyer Designee as of the
Closing Date by Buyer or a Buyer Designee paying for the costs of purchasing such equipment
pursuant to the leases (the “Purchased Leased Equipment”), or (c) remain the property of
Seller or a Subsidiary as of the Closing Date (the “Excluded Leased Equipment”).
(c) Prior to the Closing Date, parties agree to negotiate in good faith to demarcate in a
manner reasonably acceptable to Buyer and Seller (i) the portion of the Transferred Premises that
will be leased on a transition basis to Seller pursuant to the Transition Services Agreement, and
(ii) the portion of the Assumed Leases to be subleased by Seller or its Subsidiary to Buyer or a
Buyer Designee.
5.6 Regulatory Compliance; Post-Closing Cooperation
(a) Subject to Section 5.6(b), upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable commercial efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this Agreement, including
using reasonable commercial efforts to accomplish the following: (i) the taking of all acts
necessary to cause the conditions to Closing to be satisfied as promptly as practicable; (ii) the
obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental
Bodies and the making of all necessary registrations and filings (including filings with
Governmental Bodies, if any) and the taking of all steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by any Governmental Body; (iii) the obtaining
of all necessary consents, approvals or waivers from Third Parties; (iv) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement
or the Collateral Agreements or the consummation of the transactions contemplated hereby or
thereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Body vacated or reversed; and (v)
the execution and delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and the Collateral
Agreements.
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(b) Seller and Buyer shall timely and promptly make all filings which may be required by each
of them in connection with the consummation of the transactions contemplated hereby under the HSR
Act and any state, foreign or multinational antitrust legislation or by any other foreign or
multinational governmental authority, and the parties shall respectively use all reasonable
commercial efforts to cause the receipt of approval of, or prompt termination or expiration of the
applicable waiting period under such Laws. Seller and Buyer agree that their respective initial
filings under the HSR Act and in respect of any foreign antitrust approval shall be made no later
than the fifth (5th) Business Day following the date of this Agreement. Each party shall
furnish to the other such necessary information and assistance as the other party may reasonably
request in connection with the preparation of any necessary filings or submissions by it to any
U.S. federal or state or foreign or multinational governmental agency, including any filings
necessary under the provisions of the HSR Act. Each party shall provide the other party the
opportunity to make copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between such party or its representatives, on the one hand, and the
Federal Trade Commission (the “FTC”), the Antitrust Division of the United States
Department of Justice (the “Antitrust Division”) or any state, foreign or multinational
Governmental Body or members of their respective staffs, on the other hand, with respect to this
Agreement or the transactions contemplated hereby. Each party agrees to inform promptly the other
party of any communication made by or on behalf of such party to, or received by or on behalf of
such party from, the FTC, the Antitrust Division or any other state, foreign or multinational
Governmental Body regarding any of the transactions contemplated hereby.
5.7 Contacts with Suppliers and Customers
Prior to the Closing, Seller and Buyer agree to cooperate to prepare a communications plan for
business partners of the Engenio Business, and in contacting any suppliers to, or customers of, the
Engenio Business in connection with or pertaining to any subject matter of this Agreement or the
Collateral Agreements and to facilitate the transition of the Engenio Business, including the
preparation of letters to all customers, suppliers, distributors and other business partners of the
Engenio Business to notify them of the Closing and provide information regarding the transition of
the Engenio Business to Buyer. The Seller will be responsible for contacting parties to any
Contracts for which consent is required in connection with their assignment pursuant to this
Agreement. Notwithstanding anything to the contrary contained herein, this Agreement shall not
affect Seller’s continuing right to contact customers and suppliers in connection with the
operation or conduct of the Engenio Business nor Buyer’s continuing right to contact customers and
suppliers in connection with the operation or conduct of its business.
5.8 Use of the Seller Name
(a) Buyer and Seller agree as follows:
(i) Except as provided below, immediately after the Closing Date, Buyer and any Buyer Designee
shall cease using “LSI,” or “LSI Corporation” or other similar xxxx (the
“Seller Name”) and any other trademark, design or logo previously or currently used by
Seller or any of its Affiliates (other than those that are transferred pursuant to the Intellectual
Property
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Agreement) in all invoices, letterhead, advertising and promotional materials, office
forms or business cards;
(ii) Except as provided below, within three (3) months after the Closing Date, Buyer shall (A)
remove any other trademark, design or logo previously or currently used by Seller or any of its
Affiliates from all buildings, signs and vehicles of the Engenio Business; and (B) cease using the
Seller Name and any other trademark, design or logo previously or currently used by Seller or any
of its Affiliates (other than those that are transferred pursuant to the Intellectual Property
Agreement) in electronic databases, web sites, product instructions, packaging and other materials,
printed or otherwise.
(iii) Buyer and Buyer Designees shall not be required at any time to remove the Seller Name
and any other trademark, design or logo previously or currently used by Seller or any of its
Affiliates from Inventory of the Engenio Business that is in existence as of the Closing Date, nor
shall Buyer nor Buyer Designees be required at any time to remove such Seller Name and any such
other trademark, design or logo from schematics, plans, manuals, drawings, machinery, tooling
including hand tools, and the like of the Engenio Business in existence as of the Closing Date to
the extent that such instrumentalities are used in the ordinary internal operation or conduct of
the Engenio Business and are neither generally observed by the public nor intended for use as means
to effectuate or enhance sales;
(iv) Buyer and Buyer Designees shall have the right to sell existing Inventory and to use
existing packaging, labeling, containers, supplies, advertising materials, technical data sheets
and any similar materials bearing the Seller Name or any other trademark, design or logo previously
or currently used by Seller or any of its Affiliates until the earlier of (A) one year after the
Closing Date or (B) the depletion of existing Inventory;
(v) Buyer and Buyer Designees shall use Reasonable Efforts (as defined below) to remove the
Seller Name and any other trademark, design or logo previously or currently used by Seller or any
of its Affiliates (other than those that are transferred pursuant to the Intellectual Property
Agreement) from those assets of the Engenio Business (such as, but not limited to, tools, molds,
and machines) used in association with the Engenio Products or otherwise reasonably used in the
operation or conduct of the Engenio Business after the Closing. For the purposes of this Section
5.8(a)(v), “Reasonable Efforts” means Buyer and Buyer Designees shall remove the Seller
Name from such assets but only at such time when such asset is not operated or otherwise is taken
out of service in the normal course of business due to regular maintenance or repair (but only for
such repairs or maintenance where such removal could normally be undertaken, for example, repair or
maintenance of a mold cavity) whichever occurs first; provided that, in no event shall Buyer or any
Buyer Designee use the Seller Name after the date which is one (1) year from the Closing Date.
Buyer and Buyer Designees shall not be required to perform such removal on such assets that are not
or are no longer used to manufacture the Engenio Products or other parts, or if discontinuance of
use of such assets is
reasonably anticipated during such time period, or from assets stored during that period
provided that such marks are removed upon such asset’s return to service or prior to their sale or
other disposition.
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(vi) Seller hereby grants to Buyer and Buyer Designees a limited right to use the Seller Name
and associated trademarks, designs and logos as specified in, and during the periods, if any,
specified in clauses (i) — (v) above.
(vii) Buyer and its Affiliates shall also have the right to use (in a factual manner that
constitute fair use pursuant to applicable Law) the Seller Name solely to the extent necessary to
communicate that the Engenio Products were formerly owned by Seller.
(b) In no event shall Buyer or any Affiliate of Buyer advertise or hold itself out as LSI or
an Affiliate of LSI after the Closing Date.
5.9 Non-Solicitation or Hiring of Transferred Employees
None of Seller, any of its representatives or any of its Affiliates will at any time prior to
the date that is one year after the date hereof, directly or indirectly, solicit the employment of
or hire any Transferred Employee without Buyer’s prior written consent. 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 or directed to Transferred
Employees. This restriction shall not apply to any employee whose employment was involuntarily
terminated other than for cause by Buyer a Buyer Designee, or their respective successors, after
the Closing.
5.10 No Negotiation or Solicitation
Prior to the Closing Date, Seller and its Affiliates will not (and Seller will cause each of
its employees, officers, representatives and agents or advisors not to and shall cause its
Affiliates to cause employees, officers, representatives and agents or advisors not to) directly or
indirectly (a) solicit, initiate, entertain, encourage or accept the submission of any proposal,
offer or any discussions relating to or that might reasonably be expected to lead to or result in
any proposal or offer from any Person relating to the direct or indirect acquisition of the Engenio
Business or any portion of the Purchased Assets (other than purchases of Engenio Products or
services from the Engenio Business in the ordinary course of business consistent with past
practice), or (b) participate in any discussions or negotiations regarding the Engenio Business,
furnish any information with respect thereto, or assist or participate in, or facilitate or
encourage in any other manner any effort or attempt by any Person to do or seek any of the
foregoing. Seller will notify Buyer if any Person makes any proposal, offer, inquiry or contact
with respect to any of the foregoing within two (2) Business Days after receipt of any such offer
or proposal, including the identity of the Person making such proposal, offer, inquiry or contact
and all material terms thereof.
5.11 Non-Competition
(a) Seller agrees that, as part of the consideration for the payment of the Purchase Price,
for a period of three (3) years immediately following the Closing Date, neither Seller nor any of
its Affiliates will, directly or indirectly, as a principal, stockholder, joint venturer or
otherwise, operate, perform or have any ownership interest in any business that designs, develops,
manufactures, markets, sells, installs or distributes products in competition with the Engenio
Business, except that Seller may (i) continue the activities of its RAID adapter business
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which develops LSI® MegaRAID® and 3ware® storage controllers and software and the ONStor™ clustered NAS
gateway and non-integrated file storage products business of Seller which develops ONStor™
Products, and (ii) purchase or otherwise acquire by merger, purchase of assets, stock (including
investing as a minority shareholder), controlling interest or otherwise any Person or business or
engage in any similar merger and acquisition activity with any Person the primary business of which
is not in competition with the Engenio Business, provided that Seller may not provide any such
business access or license to any of the Assigned Intellectual Property for use in any business or
product line that competes with the Engenio Business. For the purposes of this Section 5.11(a),
ownership of securities of a company whose securities are publicly traded under a recognized
securities exchange not in excess of 5% of any class of such securities shall not be considered to
be competition with the Engenio Business, and a Person shall not be considered to be in the
“primary business” of competing with the Engenio Business if such Person derives less than
20% of its revenues from products that compete with the Engenio Business. For the avoidance of
doubt, the parties agree that the agreements and limitations set forth in this Section 5.11 shall
not apply to any entity that acquires all or part of Seller in any transaction.
(b) Seller acknowledges that the restrictions set forth in Section 5.11(a) constitute a
material inducement to Buyer’s entering into and performing this Agreement. Seller further
acknowledges, stipulates and agrees that a breach of such obligation could result in irreparable
harm and continuing damage to Buyer for which there may be no adequate remedy at Law and further
agrees that in the event of any breach of said obligation, Buyer may be entitled to injunctive
relief and to such other relief as is proper under the circumstances.
(c) If any provision contained in this Section shall for any reason be held invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Section 5.11, but this Section 5.11 shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein. It is the intention
of the parties that if any of the restrictions or covenants contained herein is held to cover a
geographic area or to be for a length of time which is not permitted by applicable Law, or in any
way construed to be too broad or to any extent invalid, such provision shall not be construed to be
null, void and of no effect, but to the extent such provision would be valid or enforceable under
applicable Law, a court of competent jurisdiction shall construe and interpret or reform this
Section 5.11 to provide for a covenant having the maximum enforceable geographic area, time period
and other provisions (not greater than those contained herein) as shall be valid and enforceable
under such applicable Law.
5.12 Post Closing Remittances
If on or after the Closing Date, either Party receives a payment from a Third Party (including
a customer of the Engenio Business) that, pursuant to the terms hereof, should have been paid to
the other Party, the Party who receives the payment agrees to hold in trust and remit such payment
to the Party entitled thereto within five (5) Business Days of such receipt.
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5.13 Prorations and Adjustments
(a) Except as otherwise expressly provided herein, all ordinary course expenses for (i) rents
and other charges or amounts payable included in the Purchased Assets and transferred to Buyer
hereunder and (ii) gas, electricity, water, sewer, rent and telephone charges at the Leased
Premises and the Transferred Premises, in each case, for the period prior to the Closing Date, will
be for the account of Seller and for the period on and after the Closing Date shall be for the
account of Buyer. If any Party actually makes any payments that are, in whole or in part,
designated as payments for the period allocated to the other Party under this Section 5.13, such
other Party shall promptly reimburse such amounts to the Party so making such payments.
(b) For purposes of calculating prorations, Buyer shall be deemed to own the Purchased Assets,
and, therefore be responsible for the expense thereof, as of 12:01 a.m. local time on the day after
the Closing Date. All prorations shall be made on the basis of the actual number of days of the
month that shall have elapsed as of the Closing Date and based upon a 365-day year. The amount of
the prorations shall be subject to adjustment after the Closing, as and when complete and accurate
information becomes available, and the Parties agree to cooperate and use their good faith efforts
to make such adjustments.
5.14 Notification of Certain Matters
Seller shall give prompt written notice to Buyer of (a) the occurrence or non-occurrence of
any event, the occurrence or non-occurrence of which could reasonably be expected to cause any
representation or warranty of Seller in this Agreement to be untrue or inaccurate at or prior to
the Closing in any material respect and (b) any failure of Seller in any material respect to comply
with or satisfy any covenant, condition or agreement to be complied with or satisfied by it
hereunder, and Buyer shall give prompt written notice to Seller of (x) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is could reasonably be
expected to cause any representation or warranty of Buyer in this Agreement to be untrue or
inaccurate at or prior to the Closing in any material respect and (y) any failure of Buyer in any
material respect to comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 5.14 shall not limit or otherwise affect any remedies available to the
Party receiving such notice.
5.15 Title Insurance
Seller will cooperate with Buyer in Buyer’s obtaining title insurance policies with respect to
such of the Transferred Premises and Leased Premises as Buyer shall determine. In addition, Seller
will provide an affidavit to Buyer’s title insurance company in reasonable and customary
form sufficient for such title insurance company to remove the “standard exceptions,”
including any exception for mechanics’ or material suppliers’ liens and any exception for “parties
in possession,” and sufficient for the title insurance company to insure any “gap” period prior to
recording the instrument of transfer due to Seller’s actions.
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5.16 Closing Statement
Within ten Business Days after the Closing Date, Seller shall deliver to Buyer a schedule
calculated as of the Closing Date of those line items of the Purchased Assets and Assumed
Liabilities that are being transferred or assumed, as applicable, pursuant to this Agreement and
that would be required to be set forth on a balance sheet prepared in accordance with GAAP (the
“Closing Statement”). At least five Business Days prior to the Closing Date, Seller shall
deliver a good faith estimate of the amounts to be set forth on the Closing Statement.
5.17 Indian Assets
Buyer and Seller will take all actions reasonably required to xx-xxxx and bond Purchased
Assets located in India to the extent required by, or otherwise beneficial under, applicable Law.
6. Confidential Nature of Information
6.1 Confidentiality Agreement
Buyer agrees that the Confidentiality Agreement shall apply to (a) all documents, materials
and other information that it shall have obtained regarding Seller or its Affiliates 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 Buyer 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 Closing and shall be of no
further force and effect thereafter with respect to information of Seller or its Affiliates the
ownership of which is transferred to Buyer or a Buyer Designee.
6.2 Seller’s Proprietary Information
(a) Except as provided in Section 6.2(b), after the Closing and for a period of five (5) years
following the Closing Date, Buyer agrees that it will keep confidential all of Seller’s and its
Affiliates’ Information that is received from, or made available by, Seller in the course of the
transactions contemplated hereby, and marked or identified at the time of disclosure as the
proprietary or confidential information of Seller (“Seller Proprietary Information”),
including, for purposes of this Section 6.2, information about the Engenio Business’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 Seller Proprietary Information the
ownership of which is transferred to Buyer or a Buyer Designee as part of the Purchased Assets.
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(b) Notwithstanding the foregoing, such Seller Proprietary Information shall not be deemed
confidential and Buyer shall have no obligation with respect to any such Seller Proprietary
Information that:
(i) at the time of disclosure was already known to Buyer other than as a result of this
transaction, free of restriction as evidenced by documentation in Buyer’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 Buyer;
(iii) is received by Buyer from a Third Party without similar restriction and without breach
of any agreement;
(iv) to the extent it is independently developed by Buyer; or
(v) is, subject to Section 6.2(c), required to be disclosed under applicable Law or judicial
process.
(c) If Buyer (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 Seller Proprietary Information, Buyer will promptly notify Seller
of such request or requirement and will cooperate with Seller such that Seller 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, Buyer (or any of its Affiliates) is in the opinion of Buyer’s
counsel compelled to disclose the Seller Proprietary Information or else stand liable for contempt
or suffer other censure or penalty, Buyer (or its Affiliate) may disclose only so much of the
Seller Proprietary Information to the party compelling disclosure as is required by Law. Buyer
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 Seller Proprietary Information.
6.3 Buyer’s Proprietary Information
(a) Except as provided in Section 6.3(b), after the Closing Date and for a period of five (5)
years thereafter, Seller agrees that it will keep confidential all of Seller’s and its Affiliates’
Information that is received from, or made available by, Buyer in the course of the transactions
contemplated hereby and marked or identified at the time of disclosure as the proprietary or
confidential information of Buyer, or the ownership of which or exclusive use of which is
transferred to Buyer as part of the Purchased Assets (collectively, “Buyer Proprietary
Information”), including, for purposes of this Section 6.3, information about the Engenio
Business’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, other technical and business information and information regarding Business
Employees.
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(b) Notwithstanding the foregoing, such Buyer Proprietary Information regarding the Engenio
Business shall not be deemed confidential and Seller shall have no obligation with respect to any
such Buyer Proprietary Information that:
(i) is or becomes publicly known through publication, inspection of a product, or otherwise,
and through no negligence or other wrongful act of Seller;
(ii) is received by Seller after the Closing Date from a Third Party without similar
restriction and without breach of any agreement; or
(iii) is, subject to Section 6.3(c), required to be disclosed under applicable Law or judicial
process.
(c) If Seller (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 Buyer Proprietary Information regarding the Engenio Business,
Seller will promptly notify Buyer of such request or requirement and will cooperate with Buyer such
that Buyer 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, Seller (or any of its
Affiliates) is in the opinion of Seller’s counsel compelled to disclose the Buyer Proprietary
Information or else stand liable for contempt or suffer other censure or penalty, Seller (or its
Affiliate) may disclose only so much of the Buyer Proprietary Information to the party compelling
disclosure as is required by Law. Seller 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 Buyer Proprietary Information.
6.4 Confidential Nature of Agreements
Except to the extent that disclosure thereof is required under accounting, stock exchange or
federal securities or labor relations Laws disclosure obligations or pursuant to legal process,
both parties agree that the terms and conditions of this Agreement, the Collateral Agreements and
all Schedules, attachments and amendments hereto and thereto shall be considered confidential or
proprietary information protected under this Article 6. Notwithstanding anything in this Article 6
to the contrary, in the event that any such Information is also subject to a limitation on
disclosure or use contained in another written agreement between Buyer and Seller or either of
their respective Affiliates that is more restrictive than the limitation contained in this Article
6, then the limitation in such agreement shall supersede this Article 6.
7. Closing
At the Closing, the following transactions shall take place:
7.1 Deliveries by Seller or the Subsidiaries
On the Closing Date, Seller shall, or shall cause a Subsidiary to, execute and deliver to
Buyer or a Buyer Designee the following:
(a) the Collateral Agreements;
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(b) the consents, waivers or approvals identified by Buyer on Schedule 7.1(b) (the
“Required Closing Consents”);
(c) a certificate of an appropriate officer of Seller, dated the Closing Date, certifying to
the fulfillment of the conditions set forth in Sections 8.2(a) and (b), and an incumbency
certificate of an Assistant Secretary of Seller, dated the Closing Date, in customary form; and
(d) all such other bills of sale, assignments and other instruments of assignment, transfer or
conveyance as Buyer or a Buyer Designee may reasonably request or as may be otherwise necessary to
evidence and effect the sale, transfer, assignment, conveyance and delivery of the Purchased Assets
to Buyer or a Buyer Designee or to put Buyer or a Buyer Designee in actual possession or control of
the Purchased Assets; provided that all information (including documents) capable of electronic
transmission will be transmitted to Buyer or the applicable Buyer Designee in such manner, in which
case such information shall not be transferred in any tangible form, and any inadvertent transfer
of a tangible manifestation of such information shall promptly be returned to Seller or the
applicable Selling Subsidiary upon discovery of Buyer’s or such Buyer Designee’s receipt
thereof.
7.2 Deliveries by Buyer or a Buyer Designee
On the Closing Date, Buyer shall, or shall cause a Buyer Designee to, execute and deliver to
Seller or a Subsidiary the following:
(a) the Purchase Price;
(b) the Collateral Agreements;
(c) a certificate of an appropriate officer of Buyer, dated the Closing Date, certifying to
the fulfillment of the conditions set forth in Sections 8.3(a) and (b), and an incumbency
certificate of an Assistant Secretary of Seller of Buyer, dated the Closing Date, in customary
form; and
(d) all such other documents and instruments as Seller or a Subsidiary may reasonably request
or as may be otherwise necessary or desirable to evidence and effect the assumption by Buyer or a
Buyer Designee of the Assumed Liabilities.
7.3 Closing Date
The Closing shall take place at the offices of LSI, 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx, at
10:00 a.m. local time within three (3) Business Days following the date on which the last of the
conditions specified in Article 8 to be satisfied or waived has been satisfied or waived (other
than conditions which can only be satisfied on the Closing Date, but subject to the satisfaction or
waiver of such conditions), or at such other place or time or on such other date as Seller and
Buyer may agree upon in writing (such date and time being referred to herein as the “Closing
Date”); provided, however, that notwithstanding the foregoing, in no event
shall the Closing Date occur prior to May 6, 2011.
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7.4 Contemporaneous Effectiveness
All acts and deliveries prescribed by this Article 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. Conditions Precedent to Closing
8.1 General Conditions
The respective obligations of Buyer and Seller to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing, of each of the
following conditions:
(a) Legal Proceedings. No Governmental Body shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, non-appealable judgment, decree, injunction or
other order which is in effect on the Closing Date and which prohibits, restricts or delays
consummation of the transactions contemplated by this Agreement or the Collateral Agreements and
there shall be no pending lawsuit, claim or legal action relating to the transactions contemplated
by this Agreement or any of the Collateral Agreements which seeks to prohibit or restrict the
transactions contemplated by this Agreement.
(b) Antitrust Laws. Any applicable waiting period or approvals of a Governmental Body
under the HSR Act or applicable foreign antitrust Laws, respectively, relating to the transactions
contemplated by this Agreement or the Collateral Agreements shall have expired or been terminated.
8.2 Conditions Precedent to Buyer’s Obligations
The obligations of Buyer to effect the Closing of the transactions contemplated hereby are
subject to the fulfillment, prior to or at the Closing, of each of the following conditions, any of
which may be waived in writing by Buyer:
(a) Representations and Warranties of Seller True and Correct at Closing. The
representations and warranties of Seller contained in this Agreement or in any certificate
delivered pursuant to the provisions of this Agreement that are qualified by the words “material,”
“Seller Material Adverse Effect” and similar phrases shall be true and correct in all respects at
and as of date of this Agreement and at and as of the Closing Date, except to the extent that such
representations and warranties are made as of a specified date, in which case such representations
and warranties shall be true and correct in all respects as of the specified date, and the
representations and warranties of Seller contained in this Agreement or in any Schedule,
certificate or document delivered pursuant to the provisions hereof that are not so qualified shall
be true and correct in all material respects at and as of date of this Agreement and at and as of
the Closing Date, except to the extent that such representations and warranties are made as of a
specified date, in which case such representations and warranties shall be true and correct in all
material respects as of the specified date.
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(b) Performance by Seller. Seller and/or the applicable Subsidiary shall have
delivered all of the documents required under Section 7.1 and shall have otherwise performed in all
material respects all obligations and agreements and complied in all material respects with all
covenants required by this Agreement to be performed or complied with by it prior to or at the
Closing, including executing the Collateral Agreements.
(c) Seller Material Adverse Effect. There shall not have occurred a Seller Material
Adverse Effect from the date hereof to the Closing Date.
8.3 Conditions Precedent to Seller’s Obligations
The obligations of Seller to effect the Closing of the transactions contemplated hereby are
subject to the fulfillment, prior to or at the Closing, of each of the following conditions, any of
which may be waived in writing by Seller:
(a) Representations and Warranties of Buyer True and Correct at Closing. The
representations and warranties of Buyer contained in this Agreement or in any certificate delivered
pursuant to the provisions of this Agreement that are qualified by the words “material,” “material
adverse effect” and similar phrases shall be true and correct in all respects at and as of the date
of this Agreement and at and as of the Closing Date as though such representations and warranties
were made at and as of the Closing Date, except to the extent that such representations and
warranties are made as of a specified date, in which case such representations and warranties shall
be true and correct in all respects as of the specified date, and the representations and
warranties of Buyer contained in this Agreement or in any Schedule, certificate or document
delivered pursuant to the provisions hereof or in connection with the transactions contemplated
hereby that are not so qualified shall be true and correct in all material respects at and as of
the date of this Agreement and at and as of the Closing Date as though such representations and
warranties were made at and as of the Closing Date, except to the extent that such representations
and warranties are made as of a specified date, in which case such representations and warranties
shall be true and correct in all material respects as of the specified date.
(b) Performance by Buyer. Buyer and/or the applicable Buyer Designee shall have
delivered all of the documents required under Section 7.2 and shall have otherwise performed in all
material respects all obligations and agreements and complied in all material respects with all
covenants required by this Agreement to be performed or complied with by it prior to or at the
Closing, including executing the Collateral Agreements.
9. Indemnification
The rights and obligations of Buyer and Seller under this Agreement shall be subject to the
following terms and conditions:
9.1 Effect of Investigation
The right to indemnification or other remedy of Buyer or its Affiliates hereunder based on the
representations, warranties, covenants and agreements herein will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable of being
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acquired) at any time, by the Buyer or its Affiliates, whether before or after the execution
and delivery of this Agreement or the Closing, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant or agreement.
9.2 Survival of Representations and Warranties
The representations and warranties of Buyer and Seller contained in this Agreement shall
survive the Closing solely for purposes of this Article 9 and such representations and warranties
shall terminate at the close of business on the date that is eighteen (18) months after the Closing
Date; provided, however, that (i) the representations and warranties in Section
3.7(d) with respect to environmental matters and the representations and warranties relating to Tax
and ERISA matters shall survive the Closing and shall terminate at the close of business on the
120th day following the expiration of the applicable statute of limitations with respect
to the environmental, Tax or ERISA liabilities in question (giving effect to any waiver, mitigation
or extension thereof), (ii) the representations and warranties in Section 3.13 shall terminate at
the close of business on the date that is twenty-four (24) months after the Closing Date and (iii)
the representations and warranties in Section 3.2 with respect to authorization and Section 3.5(a)
with respect to title shall survive indefinitely. Neither Seller nor Buyer shall have any
liability whatsoever with respect to any such representations or warranties after the applicable
expiration date; provided, however, that, notwithstanding anything herein to the
contrary, the obligations of Buyer or Seller to indemnify and hold harmless any Indemnified Party
shall not terminate with respect to any claim or right to indemnification as to which such
Indemnified Party shall have made in good faith and with reasonable specificity under the
circumstances before the applicable expiration date, provided notice to the Indemnifying Party in
accordance with this Article 9 and, in such case, such claim or right to indemnification shall
survive indefinitely until such claim has been finally resolved.
9.3 General Agreement to Indemnify
(a) Seller and Buyer shall indemnify, defend and hold harmless the other party hereto, and
Affiliates thereof, and any director, officer, employee or agent of such other party or Affiliates
thereof (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) subject to Section 9.2, any breach or any failure of any
representation or warranty of such party contained in this Agreement or any certificate delivered
in connection with this Agreement to have been true when made and at and as of the Closing Date, 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 and Affiliates thereof, and any
director, officer, employee or agent of Buyer or Affiliates thereof (each a “Buyer Indemnified
Party”) from and against any Losses incurred by Buyer or any Buyer Indemnified Party arising
out of, resulting from, or relating to: (i) the Excluded Liabilities; (ii) Buyer’s waiver of, or
noncompliance with, any applicable Bulk Sales Laws; and (iii) any claim, demand or
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liability for Taxes relating to, pertaining to, or arising out of the Engenio Business or the
Purchased Assets for any Pre-Closing Tax Period.
(c) Buyer further agrees to indemnify and hold harmless Seller and Affiliates thereof, and any
director, officer, employee or agent of Seller or Affiliates thereof (each a “Seller
Indemnified Party”) from and against any Losses incurred by Seller or any Seller Indemnified
Party arising out of, resulting from, or relating to: (i) any failure of Buyer to discharge any of
the Assumed Liabilities; and (ii) any claim, demand or liability for Taxes relating to, pertaining
to, or arising out of the Engenio Business or the Purchased Assets for any Post-Closing Tax Period.
(d) Amounts payable in respect of the parties’ indemnification obligations shall be treated as
an adjustment to the Purchase Price for Tax purposes and shall be treated as such by Buyer and
Seller on their Returns to the extent permitted by law. Whether or not the Indemnifying Party (as
defined below) chooses to defend or prosecute any Third-Party Claim (as defined below), both
parties hereto shall cooperate in the defense or prosecution thereof and shall furnish such
records, information and testimony, and attend such conferences, discovery proceedings, hearings,
trials and appeals, as may be reasonably requested in connection therewith or as provided in
Section 5.1.
(e) The indemnification obligations of each party hereto under this Article 9 shall inure to
the benefit of the directors, officers and Affiliates of the other party hereto on the same terms
as are applicable to such other party.
(f) The Indemnifying Party’s liability for all claims made under Section 9.3(a)(i) 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 five tenths of one percent
(0.5%) of the Purchase Price (the “Threshold Amount”) in which case the Indemnifying Party
shall be liable for the entire amount of such Losses (subject to the limit set forth in clause
(ii)) and not just the amount of the Losses that exceeds the Threshold Amount, and (ii) the
Indemnifying Party’s aggregate liability for all such claims shall not exceed ten percent (10%) of
the Purchase Price (the “Cap Amount”); provided, however, in no event shall
the limitations in clauses (i) and (ii) of this Section 9.3(f) apply to (a) Losses resulting from
fraud or intentional misrepresentation or (b) Losses arising out of breaches of the representations
and warranties set forth in Sections 3.3, 3.5(a) and 3.20. The Indemnified Party may not make a
claim for indemnification under Section 9.3(a)(i) after the expiration of the applicable survival
period specified in Section 9.2; provided, however, that, notwithstanding anything
herein to the contrary, so long as such Indemnified Party shall have, before the applicable
expiration date, provided notice of a claim (made in good faith and with reasonable specificity
under the circumstances) before the applicable expiration date to the Indemnifying Party in
accordance with this Article 9, then, in such case, such claim or right to indemnification shall
survive indefinitely until such claim has been finally resolved. Notwithstanding anything herein
to the contrary, for purposes of this Article 9, all “materiality”, “Seller Material Adverse
Effect” and similar qualifications in the representations and warranties contained in this
Agreement (or contained, incorporated or referenced in any certificate delivered pursuant to this
Agreement) shall be disregarded for purposes of calculating the amount of such Losses, but shall
not be disregarded for purposes of determining whether a breach of any such representation or
warranty
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contained in this Agreement (or contained, incorporated or referenced in any certificate
delivered pursuant to this Agreement) has occurred.
(g) The indemnification provided in this Article 9 shall be the sole and exclusive remedy
after the Closing Date for damages available to the parties to this Agreement for breach of any of
the terms, conditions, covenants, representations or warranties contained herein or any right,
claim or action arising from the transactions contemplated by this Agreement; provided,
however, this exclusive remedy for damages does not preclude a party from bringing an
action for (i) specific performance or other equitable remedy to require a party to perform its
obligations under this Agreement or any Collateral Agreement or (ii) fraud or intentional
misrepresentation.
(h) Notwithstanding anything contained in this Agreement to the contrary, no party shall be
liable to the other party for indirect, special, punitive, exemplary or consequential loss or
damage arising out of this Agreement, provided, however, the foregoing shall not be
construed to preclude recovery by the Indemnified Party in respect of Losses directly incurred from
Third Party Claims. Both parties shall mitigate their damages.
(i) The rights to indemnification under this Section 9.3 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.
9.4 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 shall 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 and to
the extent that the Indemnifying Party has suffered material prejudice by such failure). If the
Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party, then
the Indemnifying Party shall have the right, but not the obligation, exercisable by written notice
to the Indemnified Party within twenty (20) 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 of such Third-Party Claim only if such Third-Party Claim (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; provided further, that in the case
where Seller is the Indemnifying Party, as additional requirements in addition to the foregoing,
the Seller shall only be permitted to assume the defense of such Third-Party Claim in the event
that the monetary damages that are sought (or that would reasonably be expected to be sought) in
connection with such Third-Party Claim do not exceed the Cap Amount or such lesser remaining amount
after deducting therefrom the amount of all other previously paid and outstanding unpaid and/or
unresolved claims pursuant to
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this Article 9. If the Indemnifying Party has not acknowledged in writing its obligation to
indemnify the Indemnified Party, then the Indemnified Party shall have the right to assume and
control the defense against such Third Party Claim. In the event that any party exercises its right
to undertake any such defense against any Third Party Claim as provided above, then the other
parties shall cooperate in such defense and make available at such cooperating party expense all
witnesses, pertinent records, materials and information in such party’s possession and control
relating thereto as is reasonably required to by the party conducting the defense.
(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, conditioned or delayed) unless such settlement or judgment
relates solely to monetary damages and, in addition, in the case where Seller is the Indemnifying
Party, such monetary damages do not exceed the Cap Amount or such lesser remaining amount after
deducting therefrom the amount of all other previously paid and outstanding unpaid and/or
unresolved claims pursuant to this Article 9. 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 the Indemnifying Party has not assumed the
defense pursuant to this Section 9.4 with the written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld, conditioned 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; but failure to give such notice shall not relieve the Indemnifying Party of any liability
hereunder (unless and to the extent that the Indemnifying Party has suffered material prejudice by
such failure). Such notice shall specify the basis for such claim, the amount thereof, if known,
and the method of computation thereof, all with reasonable particularity and shall contain a
reference to the provisions of this Agreement in respect of which such a claim shall be incurred.
Such notice shall be given promptly after the Indemnified Party becomes aware of the basis for each
such a claim. The Indemnifying Party shall, within thirty (30) days after receipt of such notice
of an indemnified Loss, and subject to the limitations set forth in Section 9.3, (i) pay or cause
to be paid to the Indemnified Party the amount of such Loss specified in such notice which the
Indemnifying Party does not contest, or (ii) notify the Indemnified Party if it wishes to contest
the existence or amount of part or all of such a Loss by stating with particularity the basis upon
which it contests the existence or amount thereof.
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10. Miscellaneous Provisions
10.1 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.
If to Seller, to:
|
LSI Corporation | |
Attn: Chief Financial Officer | ||
0000 Xxxxxx Xxxx | ||
Xxxxxxxx, XX 00000 | ||
Xxxxxx Xxxxxx of America | ||
Facsimile: (000) 000-0000 | ||
With a copy to:
|
LSI Corporation | |
Attn: Vice President — Law | ||
0000 Xxxxxxxx Xxxxxxx XX | ||
Xxxxxxxxx, XX 00000 | ||
Xxxxxx Xxxxxx of America | ||
Facsimile: (000) 000-0000 | ||
If to Buyer, to:
|
NetApp, Inc. | |
Attention: General Counsel | ||
000 Xxxx Xxxx Xxxxx | ||
Xxxxxxxxx, XX 00000 | ||
Xxxxxx Xxxxxx of America | ||
Facsimile: (000) 000-0000 | ||
With a copy to:
|
Xxxxxx & Xxxxxxx LLP | |
000 Xxxxx Xxxxx | ||
Xxxxx Xxxx, Xxxxxxxxxx 00000 | ||
Xxxxxx Xxxxxx of America | ||
Attention: Xxxxx Xxxxxx and Xxx Xxxxxx | ||
Facsimile: (000) 000-0000 |
10.2 Expenses
Except as otherwise provided herein, each party to this Agreement will bear all of the fees,
costs and expenses incurred by it in connection with the transactions contemplated hereby, whether
or not such transactions are consummated.
10.3 Entire Agreement; Modification
The agreement of the parties, which consists of this Agreement, the Schedules and Exhibits
hereto and the documents referred to herein, sets forth the entire agreement and
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understanding between the parties and supersedes any prior agreement or understanding,
written or oral, relating to the subject matter of this Agreement, including the Confidentiality
Agreement. No amendment, supplement, modification or waiver of this Agreement shall be binding
unless executed in writing by the party to be bound thereby, and in accordance with Section 11.3.
10.4 Assignment; Binding Effect; Severability
This Agreement may not be assigned by any party hereto without the other party’s written
consent; provided, that Buyer may transfer or assign in whole or in part to one or more Buyer
Designee its right to purchase all or a portion of the Purchased Assets, but no such transfer or
assignment will relieve Buyer of its obligations hereunder. 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 hereto. 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.
10.5 Governing Law
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS PERFORMED ENTIRELY WITHIN THAT STATE, 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.
10.6 Consent to Jurisdiction
Each of Buyer and Seller irrevocably submits to the exclusive jurisdiction of (i) the Supreme
Court of the State of New York, New York County, and (ii) the United States District Court for the
Southern District of New York, for the purposes of any suit, action or other proceeding arising out
of this Agreement or any transaction contemplated hereby (and each agrees that no such action, suit
or proceeding relating to this Agreement or any transaction contemplated hereby shall be brought by
it or any of its Affiliates except in such courts). Buyer further agrees, and Seller further
agrees, that service of any process, summons, notice or document by U.S. registered mail to such
Person’s respective address set forth in Section 10.1 above shall be effective service of process
for any action, suit or proceeding in New York with respect to any matters to which it has
submitted to jurisdiction as set forth above in the immediately preceding sentence. Each of Buyer
and Seller irrevocably and unconditionally waives (and agrees not to plead or claim), any objection
to the laying of venue of any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York
County, or (ii) the United States District Court for the Southern District of New York or that any
such action, suit or proceeding brought in any such court has been brought in an inconvenient
forum.
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10.7 Waiver of Jury Trial
Each party hereby waives, and agrees to cause each of its Affiliates to waive, to the fullest
extent permitted by applicable Law, any right it may have to a trial by jury in respect of any
litigation directly or indirectly arising out of, under or in connection with this Agreement. Each
party (i) certifies that no representative of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other parties hereto have been induced to
enter into this Agreement by, among other things, the mutual waivers and certifications in this
Section 10.7.
10.8 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.
10.9 Public Announcement
Prior to the 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, 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, or require notification
to the other Party of, communications or disclosures necessary to comply with accounting, stock
exchange or federal securities or labor relations Law disclosure obligations.
10.10 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 and their respective successors or assigns (other than the right to
indemnification of Indemnified Parties hereunder) any rights (including Third-Party beneficiary
rights), remedies, obligations or liabilities under or by reason of this Agreement or (b)
constitute the parties hereto 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 to employment or continued employment or 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, any comparable applicable Law of any other jurisdiction, 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
exists 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.
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11. Termination; Amendment and Waiver
11.1 Termination
This Agreement may be terminated at any time prior to the Closing Date by:
(a) Mutual Consent. The mutual written consent of Buyer and Seller;
(b) Failure of Buyer Condition. Buyer upon written notice to Seller if any of the
conditions to the Closing set forth in Section 8.2 shall have become incapable of fulfillment by
the Termination Date and shall not have been waived in writing by Buyer;
(c) Failure of Seller Condition. Seller upon written notice to Buyer if any of the
conditions to the Closing set forth in Section 8.3 shall have become incapable of fulfillment by
the Termination Date and shall not have been waived in writing by Seller;
(d) Court or Administrative Order. Buyer or Seller if (i) there shall be in effect a
final, non-appealable order of a court or government administrative agency of competent
jurisdiction prohibiting the consummation of the transactions contemplated hereby or (ii) if there
shall be any Law that makes consummation of the transactions contemplated hereby illegal or
otherwise prohibited; or
(e) Delay. Buyer or Seller if the Closing shall not have occurred by July 31, 2011
(the “Termination Date”); provided, however, that the party seeking
termination pursuant to clause (b), (c) or (e) is not then in breach in any material respect of any
of its representations, warranties, covenants or agreements contained in this Agreement.
11.2 Effect of Termination
In the event of the termination of this Agreement in accordance with Section 11.1, this
Agreement shall become void and have no effect, without any liability on the part of any party or
its directors, officers or stockholders, except for the obligations of the parties hereto as
provided in Article 6 relating to the obligations of Buyer and Seller to keep confidential certain
information, Section 10.2 relating to certain expenses, Section 10.9 relating to publicity and this
Section 11.2. Nothing in this Section 11.2 shall be deemed to release either party from any
liability for any knowing, willful and material breach of any representation, warranty, covenant or
agreement hereunder prior to termination.
11.3 Amendment and Waiver
The Agreement may be amended with respect to any provision contained herein at any time prior
to the Closing Date by action of the parties hereto taken by their Boards of Directors or by their
duly authorized officers or employees, whether before or after such party’s action.
Any term or condition hereof may be waived and at any time prior to the Closing Date by the
party hereto which is entitled to the benefits thereof by action taken by its Board of Directors or
its duly authorized officer or employee, whether before or after the action of such party. Any such
amendment or waiver shall be evidenced by a written instrument duly executed on behalf of each
party by its duly authorized officer or employee. The failure of either party to enforce at
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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.
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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.
LSI CORPORATION |
||||
By: | /s/ Xxxx Xxxxxxxxx | |||
Name: | Xxxx Xxxxxxxxx | |||
Title: | President and Chief Executive Officer | |||
NETAPP, INC. |
||||
By: | /s/ Xxxxxx Xxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxx | |||
Title: | President and Chief Executive Officer | |||
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