ASSET PURCHASE AGREEMENT between PHOENIX TECHNOLOGIES LTD. and XTOOL MOBILE SECURITY, INC. Dated as of August 2, 2007
Exhibit 10.18
between
and
XTOOL MOBILE SECURITY, INC.
Dated as of August 2, 2007
This Asset Purchase Agreement (the “Agreement”) is entered into as of August 2, 2007,
by and between Phoenix Technologies Ltd., a Delaware corporation (“Buyer”) and XTool Mobile
Security, Inc., a Nevada corporation (“Seller”).
RECITALS
A. Buyer is in the business of developing and selling core system software and platform
software products for connected digital devices;
B. Seller is in the business of developing and selling laptop computer software security
products, including products for anti-theft tracking recovery, data encryption and back-up, asset
audits and remote delete (all Seller products hereinafter referred to as the “Business
Products”); and
C. Buyer desires to acquire from Seller, and Seller desires to sell to Buyer, intellectual
property and technology assets relating to the Business Products on the terms and subject to the
conditions set forth in this Agreement (the “Purchase Transaction”).
AGREEMENT
NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties and
covenants set forth below, Buyer and Seller agree as follows:
1. Definitions.
1.1 Definitions. As used in this Agreement, the following terms shall have the
following meanings:
(a) “Absolute Litigation Matters” means (i) the patent infringement litigation between
Absolute Software, Inc. and Absolute Software Corp. (together, “Absolute”) on the one hand
and Seller on the other hand (Absolute Software, Inc. et al v. Stealth Signal, Inc., U.S. District
Court Southern District of Texas – Case No. H-05-1416) and (ii) any other current or future dispute
between Seller and Absolute:
(b) “Affiliate” means with respect to any Person, a Person directly or indirectly
controlling or controlled by or under common control with such Person.
(c) “Xxxxx Amendment” means the Amendment to Patent License Agreement between Seller
and Xxxxx Xxxxx in the form attached hereto as Exhibit E.
(d) “Xxxxx Consent” means the amendment request letter from Seller to Xxxxx Xxxxx in
the form attached hereto as Exhibit A.
(e) “Xxxxx License Agreement” means the Patent License Agreement dated August 3, 2005
between Seller and Xxxxx Xxxxx as the same may be amended from time to time.
(f) “Xxxx of Sale and Assignment” means the Xxxx of Sale and Assignment of Purchased
Assets between Seller and Buyer in the form attached hereto as Exhibit G, assigning to
Buyer all of Seller’s right, title and interest in and to the Purchased Assets
(g) “Change of Control” means the occurrence of any of the following: (i) the sale,
lease, conveyance or other disposition of all or substantially all of Buyer’s assets to any
“person” (as such term is used in Section 13(d) of the Securities Exchange Act of 1934, as amended
(the “Act”)), entity or group of persons acting in concert; (ii) any person or group of
persons becoming the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of Buyer representing 50% or more of the total voting power represented
by Buyer’s then outstanding voting securities; (iii) a merger or consolidation of Buyer with any
other corporation, other than a merger or consolidation that would result in the voting securities
of Buyer outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity or its controlling
entity) more than 50% of the total voting power represented by the voting securities of Buyer or
such surviving entity (or its controlling entity) outstanding immediately after such merger or
consolidation; or (iv) a contest for the election or removal of members of the board of directors
of Buyer that results in the removal from the board of at least 50% of the incumbent members of the
board.
(h) “Closing” means the consummation of the transactions contemplated hereby.
(i) “Closing Date” has the meaning set forth in Section 3.1.
(j) “Consulting Services” means the consulting services to be provided by Seller to
Buyer following the Closing as set forth in the Exhibit A (Statement of Work or “SOW”) to the
Consulting Services Agreement.
(k) “Consulting Services Agreement” means the Consulting Services Agreement between
Buyer and Seller in the form attached hereto as Exhibit B.
(l) “Governmental Authorizations” means the permits, authorizations, consents or
approvals of any Governmental Entity which are a condition to the lawful consummation of the
transactions contemplated hereby listed on Schedule 1.1(m) to this Agreement.
(m) “Governmental Entity” means any court, or any federal, state, provincial,
territory, municipal or other governmental authority, department, commission, board, agency or
other instrumentality (domestic or foreign).
(n) “Intellectual Property Assets” means all intellectual property owned or licensed
(as licensor or licensee) by Seller in which Seller has a proprietary interest, including:
(i) Seller’s domain names, trade names, registered and unregistered trademarks, service marks
and applications;
(ii) all patents, patent applications and inventions and discoveries that may be patentable;
(iii) all registered and unregistered copyrights in both published works and unpublished
works;
(iv) all technology, ideas, inventions, designs, proprietary information, license rights,
specifications, know-how, formulae, routines, trade secrets, technical data and manuals, product
information and data, software, source code, design and code documentation, design information,
methodologies, testing procedures, processes, engineering work papers, and notes, development
work-in-process, and other proprietary information and materials of any kind;
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(v) all other intangible assets, properties and rights (whether or not appropriate steps have
been taken to protect, under applicable law, such other intangible assets, properties or rights);
and
(vi) all goodwill associated with each and all of the foregoing.
(o) “Lien” means any mortgage, pledge, lien, security interest, option, covenant,
condition, restriction, encumbrance, charge or other third-party claim of any kind, but excluding
all obligations, restrictions and limitations contained in contracts or licenses disclosed in this
Agreement or the Seller Disclosure Schedules.
(p) “New Product Contract” means a customer contract between Buyer and a third party
Buyer customer for the license of a New Product from Buyer to such
customer. [**]
(q) “New Products” means any product sold, licensed or distributed by the Buyer after
Closing that contains, utilizes or incorporates the Purchased Assets, in whole or in part.
(r) “Non-Competition Agreement” means the Non-Competition Agreement between Buyer on
the one hand and each of the Principals on the other hand in the form attached hereto as
Exhibit C.
(s) “Person” means an individual, corporation, partnership, association, trust,
government or political subdivision or agent or instrumentality thereof, or other entity or
organization.
(t) “Principals” refers to Xxxxx Xxxxxxx and Xxxxxxxx Xxxxxx Xxxxxxx.
(u) “Seller Disclosure Schedules” or “Schedules” means the Disclosure
Schedules delivered by the Seller simultaneously with the execution and delivery of this Agreement.
(v) “Sub-License Agreement” means the Sub-License Agreement between Seller and Buyer
in the form attached hereto as Exhibit D.
(w) “Taxes” means all taxes, however denominated, including any interest, penalties or
other additions to tax that may become payable in respect thereof, (i) imposed by any federal,
territorial, state, local, province or foreign government or any agency or political subdivision of
any such government, for which Buyer could become liable as successor to or transferee of the
Purchased Assets or which could become a charge against or lien on any of the Purchased Assets,
which taxes shall include, without limiting the generality of the foregoing, all sales and use
taxes, ad valorem taxes, excise taxes, business license taxes, occupation taxes, real and personal
property taxes, stamp taxes, environmental taxes, real property gains taxes, transfer taxes,
payroll and employee withholding taxes, unemployment insurance contributions, social security
taxes, and other governmental charges, and other obligations of the same or of a similar nature to
any of the foregoing, which are required to be paid, withheld or collected, or (ii) any liability
for amounts referred to in (i) as a result of any obligations to indemnify another person.
2. Sale and Purchase
2.1 Transfer of Assets. Subject to the terms and conditions of this Agreement, except
as set forth on Schedule 2.2, Seller shall sell, assign, grant, transfer, and deliver (or
cause to be sold, assigned, granted, transferred and delivered) to Buyer, or to any Affiliate of
Buyer designated by Buyer (so long as such Affiliate joins in this Agreement as a signatory and is
bound by its terms and conditions), and Buyer shall purchase and accept from Seller as of the
Closing Date, free and clear of all Liens, all of Seller’s
[THE SYMBOL [**] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.]
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rights, title and interest in and to all
of the Intellectual Property Assets of Seller that are necessary for the use of the Business
Products or relate to, are used in, or are derived from the Business Products as of the date of
this Agreement (the “Purchased Assets”).
2.2 Excluded Assets. Buyer agrees that any Intellectual Property Assets listed in
Schedule 2.2 shall be excluded from the Purchased Assets (the “Excluded Assets”),
including, but not limited to, the Xxxxx License Agreement and Seller’s rights thereunder and (b)
the domain names, web-pages, e-mail addresses and trademarks of the Seller listed therein. For
purposes of clarification, any cause of action or claim of right that Seller has or may have
against Absolute in connection with any Absolute Litigation Matters, and any resulting judgment,
settlement or award in Seller’s favor, shall be deemed an Excluded Asset.
2.3 Excluded Liabilities. Buyer shall not assume and shall not be liable for, and
Seller and its direct or indirect subsidiaries shall retain and remain solely liable for and
obligated to discharge, all of the debts, contracts, agreements, royalty and license fees,
commitments, obligations and other liabilities of any nature whatsoever of Seller and its direct
and indirect subsidiaries, whether known or unknown, accrued or not accrued, fixed or contingent,
including, but not limited to (i) any fees or amounts relating to the Excluded Assets; (ii) any
fees or amounts owed or due on any of the Purchased Assets as of the Closing Date; and (iii) any
costs, expenses, judgment, settlement, award or other liabilities relating to any Absolute
Litigation Matters.
2.4 Purchase Price. Subject to the performance by Seller and Buyer of all of their
obligations under this Agreement, in consideration of the acquisition of the Purchased Assets under
Section 2.1, Buyer agrees to pay to an account or accounts designated by Seller, from time to time,
up to an aggregate amount equal to $5,000,000 (such aggregate amount, the “Total Purchase
Price”) in immediately available funds in accordance with the following payment schedule,
subject to the conditions, terms and adjustments set forth in this Agreement:
(a) On the Closing Date, Buyer will pay Seller $3,500,000 (the “Initial Purchase
Price”);
(b) Buyer will pay Seller $750,000 following [**] (the “First Earn-out”), [**] (the
“First Earn-out Date”); and
(c) Buyer will pay Seller $750,000 upon [**] (the “Second Earn-out”), [**] (the
“Second Earn-out Date”).
Each earn-out shall be subject to complete forfeiture if achievement of the applicable metric does
not occur by the stated date. Any such forfeiture will be deemed an adjustment to the Total
Purchase Price in an amount equal to the forfeited earn-out. [**]
2.5 Purchase Price Allocation. The Total Purchase Price shall, for purposes of
complying with the requirements of Section 1060 of the Internal Revenue Code of 1986, as amended,
and the regulations thereunder, be allocated in accordance with the allocation statement attached
hereto as Exhibit F (the “Allocation Statement”). If the Total Purchase Price is
adjusted as a result of the forfeiture of the First Earn-out and/or the Second Earn-out pursuant to Section 2.4, or as a result
of any indemnification claims pursuant to Section 10, then the parties agree that such adjusted
Total Purchase Price (the “Adjusted Purchase Price”) shall be allocated in the same
proportion as set forth on the attached Allocation Statement. Buyer and Seller agree to each
prepare and file on a timely basis with the Internal Revenue Service (and applicable state tax
authorities) substantially identical Internal Revenue Service Forms 8594 (and corresponding state
tax forms) consistent with such allocation of the Total Purchase
[THE SYMBOL [**] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.]
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Price (or, if applicable, the
Adjusted Purchase Price). If any Tax authority challenges such allocation, the party receiving
notice of such challenge shall give the other prompt written notice thereof and the parties shall
cooperate in order to preserve the effectiveness of such allocation.
3. Closing
3.1 Closing. Subject to the terms and conditions of this Agreement, the Closing shall
take place on the date that is three (3) business days after all conditions precedent in Sections 8
and 9 have been satisfied or waived or as the parties may otherwise agree, but in any case no later
than thirty (30) days from the date hereof (the “Closing Date”).
3.2 Actions at the Closing. At the Closing, Seller shall deliver the Purchased Assets
to Buyer, Buyer shall deliver the Initial Purchase Price to Seller, and Buyer and Seller shall take
such actions and execute and deliver such agreements, bills of sale and other instruments and
documents as necessary or appropriate to effect the transactions contemplated by this Agreement in
accordance with its terms, including without limitation the following:
(a) Purchase Price. Buyer shall deliver the Initial Purchase Price to Seller.
(b) Title. Seller shall provide reasonable evidence of valid title to such of the
Purchased Assets as Buyer may reasonably request in writing prior to the Closing, in form and
substance reasonably satisfactory to Buyer.
(c) Seller Documents. At the Closing, Seller shall deliver to Buyer any and all
documents required to satisfy the conditions set forth in Section 8 of this Agreement and any other
closing documents reasonably requested by Buyer.
(d) Buyer Documents. At the Closing, Buyer shall deliver to Seller any and all
documents required to satisfy the conditions set forth in Section 9 of this Agreement and any other
closing documents reasonably requested by Seller.
(e) Non-Competition Agreements. At the Closing, the Seller shall deliver to the Buyer
the duly executed Non-Competition Agreements.
(f) Consulting Services Agreement. At the Closing, the Seller shall deliver to the
Buyer a duly executed Consulting Services Agreement.
(g) Sub-License Agreement. At the Closing, the Seller shall deliver to the Buyer a
duly executed Sub-License Agreement.
(h) Xxxx of Sale and Assignment. At the Closing, the Seller shall deliver to Buyer a
duly executed Xxxx of Sale and Assignment.
(i) Post-Closing Actions. Subsequent to the Closing Date, Seller shall, and shall
cause any Affiliate of Seller to, from time to time execute and deliver, upon the request of Buyer,
all such other and further materials and documents and instruments of conveyance, transfer or
assignment as may reasonably be requested by Buyer to effect, record or verify the transfer to and
vesting in Buyer of Seller’s and any of Seller’s Affiliates’ right, title and interest in and to
the Purchased Assets, free and clear of all Liens in accordance with the terms of this Agreement.
4. Representations and Warranties of Seller
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Except as may be set forth in a Seller Disclosure Schedule and any limiting or qualifying
language contained in the representation and warranty, each representation and warranty set out in
this Section 4 is not qualified in any way whatsoever; will not merge on Closing or by reason of
the execution and delivery of any agreement, document or instrument at the Closing; and will remain
in force on and after the Closing Date until the one (1) year anniversary of the Closing Date
Seller represents and warrants to Buyer as follows:
4.1 Organization. Seller is a company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has full corporate power and
authority and the legal right to execute and deliver this Agreement and all of the other agreements
and instruments to be executed and delivered by Seller pursuant hereto, and to consummate the
transactions contemplated hereby and thereby.
4.2 Authority. The execution and delivery of this Agreement (and all other agreements
and instruments contemplated under this Agreement) by Seller, the performance by Seller of its
obligations hereunder and thereunder, and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly authorized by all necessary action, if any, by the
Board of Directors and shareholders of Seller, and no other act or proceeding on the part of or on
behalf of Seller or its shareholders is necessary to approve the execution and delivery of this
Agreement and such other agreements and instruments, the performance by Seller of its obligations
hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby.
The signatory officers of Seller have the power and authority to execute and deliver this Agreement
and all of the other agreements and instruments to be executed and delivered by Seller pursuant
hereto, to consummate the transactions hereby and thereby contemplated and to take all other
actions required to be taken by Seller pursuant to the provisions hereof and thereof.
4.3 Execution and Binding Effect. This Agreement has been duly and validly executed
and delivered by Seller and constitutes, and the other agreements and instruments to be executed
and delivered by Seller pursuant hereto, upon their execution and delivery by Seller, will
constitute (assuming, in each case, the due and valid authorization, execution and delivery thereof
by Buyer), legal, valid and binding agreements of Seller, enforceable against Seller in accordance
with their respective terms except as enforceability may be limited by bankruptcy, insolvency,
moratorium, or other laws affecting the enforcement of creditors’ rights generally or provisions
limiting competition, and by equitable principles.
4.4 Consents and Approvals of Governmental Entities. Other than the Governmental
Authorizations, there is no requirement applicable to Seller to make any filing, declaration or
registration with, or to obtain any permit, authorization, consent or approval of, any Governmental
Entity as a condition to the lawful consummation by Seller of the transactions contemplated by this
Agreement and the other agreements and instruments to be executed and delivered by Seller pursuant
hereto or the consummation by Seller of the transactions contemplated herein or therein.
4.5 No Violation. Neither the execution, delivery and performance of this Agreement
and all of the other agreements and instruments to be executed and delivered pursuant hereto, nor
the consummation of the transactions contemplated hereby or thereby, will, with or without the
passage of time or the delivery of notice or both, (a) conflict with, violate or result in any
breach of the terms, conditions or provisions of the organizational documents of Seller, (b)
result in a violation or breach of, or constitute a default or require the consent of any Person
(or give rise to any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any contract, notice, bond, mortgage, indenture, license, franchise,
permit, agreement, lease or other instrument or obligation to which Seller is a party or by which
Seller or any of the Purchased Assets may be bound, (c) to Seller’s
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knowledge, violate any statute,
ordinance or law or any rule, regulation, order, writ, injunction or decree of any Governmental
Entity applicable to Seller or by which any properties or assets of Seller may be bound, or (d)
result in any cancellation of, or obligation to repay, any grant, loan or other financial
assistance received by Seller from any Governmental Entity.
4.6 Intellectual Property.
(a) Other than the Excluded Assets set forth on Schedule 2.2, the Purchased Assets include all
of Seller’s rights, title and interest in and to all of the Intellectual Property Assets of Seller
that relate to, are used in, or are derived from the Business Products as of the date of this
Agreement.
(b) Seller holds good and conveyable title or license to the Purchased Assets and has the
complete and unrestricted power and the unqualified right to sell, assign, transfer and deliver the
Purchased Assets.
(c) Upon consummation of the transactions contemplated by this Agreement, Buyer will acquire
good and conveyable title or license to the Purchased Assets, free and clear of any Liens.
(d) There exists no restriction (contractual, governmental or otherwise) on the use or
transfer of the Purchased Assets.
(e) Except for the licensor under any license, no Person other than Seller has any right or
interest in any of the Purchased Assets, including the right to grant interests in any of the
Purchased Assets to third parties.
(f) No notice of any violation of any law relating to any of the Purchased Assets has been
received by Seller.
(g) Except as set forth in the Schedule 4.6(g), the execution, delivery and
performance of this Agreement and the consummation of the transactions contemplated hereby
(including without limitation the incorporation of any of the Purchased Assets in any product of
Buyer or an affiliate of Buyer) will not (i) breach or violate any instrument or agreement relating
to any of the Purchased Assets, (ii) to Seller’s knowledge, cause the forfeiture or termination or
give rise to a right of forfeiture or termination of any of the Purchased Assets or (iii) to
Seller’s knowledge, in any way impair the right of Buyer or any of its affiliates to display, make,
use, sell, offer for sale, license or dispose of, or to bring any action for the infringement of,
any of the Purchased Assets or portion thereof.
(h) None of the Purchased Assets violate any license or agreement to which Seller is a party
or, to Seller’s knowledge, infringes any copyright, patent, trademark, service xxxx, trade secret
or other intellectual property or other proprietary right of any other party.
(i) There is, to Seller’s knowledge, no unauthorized use, infringement or misappropriation on
the part of any third party of any of the Purchased Assets.
(j) Seller has taken commercially reasonable steps to maintain the secrecy and confidentiality
of, and its proprietary rights in, the Purchased Assets, including, without limitation, entering
into confidentiality and invention assignment agreements (“CIAA”) with all current and
former officers and employees of and consultants to Seller with access to or knowledge of the
Purchased Assets. To Seller’s knowledge, none of such current or former officers, employees or
consultants is in breach of their CIAA with Seller.
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(k) Schedule 4.6(k) sets forth a complete and accurate list of all applications,
filings, publications and other formal actions made or taken pursuant to federal, state, local and
foreign laws by Seller to perfect or protect its interest in the Purchased Assets, including,
without limitation, all patents, patent applications, trademarks, trademark applications, service
marks and copyright or mask work registrations.
(l) All fees payable by the Seller to maintain Seller’s rights in the Purchased Assets,
including, without limitation, royalties and license fees in connection therewith due and payable
on or before the Closing Date, have been paid by Seller or will be paid by Seller within a
reasonable period after the Closing and are listed on Schedule 4.6(l).
(m) Schedule 4.6(m) sets forth a complete and accurate list of all intellectual
property licensed by Seller that are a part of, incorporated into or are otherwise used in the
Business Products as of the date of this Agreement including, but not limited to, any off-the-shelf
software and any source code developed by and licensed from any third parties. The Purchased
Assets do not contain, use or otherwise link to any GNU Public License Code or other open source
code or libraries. Seller has provided Buyer copies of all licenses and license agreements (or
links thereto) for the intellectual property listed on Schedule 4.6(m).
(n) Neither Seller nor any other Person authorized to act on its behalf has disclosed or
delivered to any Person, or permitted the disclosure or delivery to any escrow agent or other
Person of, any Seller source code included in the Purchased Assets. No event has occurred, and no
circumstance or condition exists, that (with or without notice or lapse of time, or both) shall, or
would reasonably be expected to, result in the disclosure or delivery by Seller or any other Person
authorized to act on its behalf to any Person of any such source code.
4.7 Tools. Schedule 4.7 sets forth a complete and accurate list of all
software and hardware tools necessary for the development, debugging, building, testing,
maintenance and use of the Business Products as of the date of this Agreement.
4.8 Litigation; Other Claims.
(a) Other than the Absolute Litigation Matters and the matters disclosed on Schedule
4.8, there is no pending or, to Seller’s knowledge, threatened claim or litigation contesting
the validity, ownership or right to display, make, use, sell, offer for sale, import, license or
dispose of any of the Purchased Assets, nor is there, to Seller’s knowledge, any basis for any such
claim, nor has Seller received any notice asserting that any of the Purchased Assets or the
proposed use, sale, license or disposition thereof conflicts or will conflict with the rights of
any other party, nor is there any basis for any such assertion.
(b) There are no claims, actions, suits, inquiries, proceedings, or investigations against
Seller, or any of its officers, directors or shareholders, relating to the Purchased Assets which
challenges or seeks to prevent, enjoin, alter or materially delay any of the transactions
contemplated hereby, nor is Seller aware of any basis for such claims, actions, suits, inquiries,
proceedings, or investigations.
4.9 Defaults. Seller is not in default under or with respect to any judgment, order,
writ, injunction or decree of any court or any Governmental Entity which could reasonably be
expected to have an adverse effect on any of the Purchased Assets. There does not exist any
default by Seller or, to Seller’s knowledge, by any other Person, or event that, with notice or
lapse of time, or both, would constitute a default under any agreement entered into by Seller which
could reasonably be expected to
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have an adverse effect on the Purchased Assets, and no notices of
breach thereof have been received by Seller.
4.10 Schedules. The Seller Disclosure Schedules are complete and accurate.
4.11 Brokers and Finders; Other Parties.
(a) Neither Seller nor any of its officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fee, commission or finder’s fee in connection
with the Purchase Transaction contemplated by this Agreement.
(b) Schedule 4.11 lists all of the contingent fee agreements or any other agreements
or arrangements between Seller and Xxxxx Xxxxx or any Person whereby such Person may have a right
to receive any payments from Seller or Buyer upon the consummation of the Purchase Transaction or a
portion of the consideration to be paid to Seller in connection with the Purchase Transaction (the
amounts payable under any such agreements or arrangements, the “Transaction Fees”). Buyer
has provided copies of all agreements set forth on Schedule 4.11.
4.12 Fair Consideration; No Fraudulent Conveyance. The sale of the Purchased Assets
pursuant to this Agreement is made in exchange for fair and equivalent consideration. Seller is
not entering into this Agreement or any of the other agreements referenced in this Agreement with
the intent to defraud, delay or hinder its creditors and the consummation of the transactions
contemplated by this Agreement, and the other agreements referenced in this Agreement, will not
have any such effect. The transactions contemplated in this Agreement or any agreements referenced
in this Agreement will not constitute a fraudulent conveyance, or otherwise give rise to any right
of any creditor of Seller to any of the Purchased Assets after the Closing.
4.13 Tax Matters. Seller has paid, or will pay, all Taxes for any Tax period (or
portion thereof) ending before the close of business on the date preceding the Closing Date.
5. Representations and Warranties of Buyer
Buyer represents and warrants to Seller as follows:
5.1 Organization. Buyer is a corporation duly formed and validly existing under the
laws of Delaware, and has full corporate power and authority and the legal right to execute and
deliver this Agreement and all of the other agreements and instruments to be executed and delivered
by Buyer pursuant hereto, and to consummate the transactions contemplated hereby and thereby.
5.2 Authority. The execution and delivery of this Agreement (and all other agreements
and instruments contemplated hereunder) by Buyer, the performance by Buyer of its obligations
hereunder and thereunder, and the consummation by Buyer of the transactions contemplated hereby and
thereby have been duly authorized by all necessary action, if any, by the Board of Directors of
Buyer, and no other act or proceeding on the part of Buyer or its shareholders is necessary to
approve the execution and delivery of this Agreement and such other agreements and instruments, the
performance by Buyer of its obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby. The signatory officers of Buyer have the power and
authority to execute and deliver this Agreement and all of the other agreements and instruments to
be executed and delivered by Buyer pursuant hereto, to consummate the transactions hereby and
thereby contemplated and to take all other actions required to be taken by Buyer pursuant to the
provisions hereof and thereof.
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5.3 Execution and Binding Effect. This Agreement has been duly and validly executed
and delivered by Buyer and constitutes, and the other agreements and instruments to be executed and
delivered by Buyer pursuant hereto, upon their execution and delivery by Buyer, will constitute
(assuming, in each case, the due and valid authorization, execution and delivery thereof by
Seller), legal, valid and binding agreements of Buyer, enforceable against Buyer in accordance with
their respective terms, except as enforceability may be limited by bankruptcy, insolvency,
moratorium, or other laws affecting the enforcement of creditors’ rights generally or provisions
limiting competition, and by equitable principles.
5.4 Consent and Approvals. There is no requirement applicable to Buyer to make any
filing, declaration or registration with, or to obtain any permit, authorization, consent or
approval of, any Governmental Entity as a condition to the lawful consummation by Buyer of the
transactions contemplated by this Agreement and the other agreements and instruments to be executed
and delivered by Buyer pursuant hereto, except for filings (a) which are referred to in the Seller
Disclosure Schedule or (b) the failure of making which would not have a material adverse effect on
the transactions contemplated hereby.
5.5 No Violation. Neither the execution, delivery and performance of this Agreement
and of all the other agreements and instruments to be executed and delivered pursuant hereto, nor
the consummation of the transactions contemplated hereby or thereby, will, with or without the
passage of time or the delivery of notice or both, (a) conflict with, violate or result in any
breach of the terms, conditions or provisions of the organizational documents of Buyer,
(b) conflict with or result in a violation or breach of, or constitute a default or require consent
of any Person (or give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any notice, bond, mortgage, indenture, license,
franchise, permit, agreement, lease or other instrument or obligation to which Buyer is a party or
by which Buyer or any of its properties or assets may be bound, or (c) to Buyer’s knowledge,
violate any statute, ordinance or law or any rule, regulation, order, writ, injunction or decree of
any Governmental Entity applicable to Buyer or by which any of its properties or assets may be
bound.
[**]
6. Covenants.
6.1 Third Party Consents. Seller and Buyer shall use commercially reasonable efforts
to obtain, within the applicable time periods required, all waivers, permits, consents (including
the Xxxxx Consent and Xxxxx Amendment), Governmental Authorizations and approvals and to effect all
registrations, filings and notices with or to third parties or Governmental Entities which are
necessary to consummate the transactions contemplated by this Agreement so as to preserve all
rights of, and benefits to, the Buyer in the Purchased Assets.
6.2 No Other Bids. Until the earlier to occur of (a) the Closing or (b) the
termination of this Agreement pursuant to its terms, Seller shall not, and Seller shall not
authorize any of its officers, directors, employees or other representatives to, directly or
indirectly, (i) initiate, solicit or encourage (including by way of furnishing information
regarding the Seller’s business or the Purchased Assets) any inquiries, or make any statements to
third parties which may reasonably be expected to lead to any proposal concerning the sale of the
Purchased Assets (or any proposal for a transaction that would include the disposition of any or
all of the Purchase Assets, including a sale of any of Seller’s outstanding capital stock or a
merger of Seller with another Person) or (ii) negotiate, engage in any substantive discussions, or
enter into any agreement, with any Person concerning the sale of the Purchased Assets (or any
transaction that would include the disposition of any or all of the Purchase Assets, including a
sale of any of Seller’s outstanding capital stock or a merger of Seller with another Person).
[THE SYMBOL [**] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.]
-10-
6.3 Post-Closing Access to Information. If, after the Closing Date, it is necessary
for a party hereto to obtain additional information within the other party’s possession relating to
the Purchased Assets or any other transaction contemplated herein, such other party will furnish or
cause its representatives to furnish such information to the requesting party.
6.4 Post-Closing Cooperation. Seller agrees that, if reasonably requested by Buyer,
it will cooperate with Buyer, at Buyer’s expense, in enforcing the terms of any agreements between
Seller and any third party involving the Purchased Assets, including without limitation terms
relating to confidentiality and the protection of intellectual property rights (but, for purposes
of clarity, excluding any claim or enforcement action relating to the Xxxxx License Agreement). In
the event that Buyer is unable to enforce its intellectual property rights against a third party as
a result of a rule or law barring enforcement of such rights by a transferee of such rights, Seller
agrees to reasonably cooperate with Buyer by assigning to Buyer such rights as may be required by
Buyer to enforce its intellectual property rights in its own name. If such assignment still does
not permit Buyer to enforce its intellectual property rights against the third party, Seller agrees
to initiate proceedings against such third party in Seller’s name, provided that Buyer shall be
entitled to participate in such proceedings and provided further that Buyer shall be responsible
for the expenses of such proceedings. If the Seller or its representatives participate in any
proceedings pursuant to this Section 6.4, the Seller shall be reimbursed for all costs associated
with such participation including, but not limited to, the Seller’s legal fees, travel costs and
reasonable compensation as agreed to by the parties for time spent by the Seller or its
representatives in participating in the proceedings.
6.5 Public Announcements. Seller shall not make any public disclosure regarding this
Agreement and the transactions contemplated herein without the prior written consent of Buyer;
provided, however, that nothing contained herein shall prevent Seller from furnishing any
information required by a Governmental Entity. Buyer will provide prior notice to and consult with
Seller prior to making any public disclosure regarding this Agreement and the transactions
contemplated herein.
6.6 Confidentiality. This Agreement and the transactions and other agreements
contemplated herein are subject to the Mutual Non-Disclosure Agreement dated July 6, 2007 between
Buyer and Seller (the “Mutual NDA”).
6.6 Post-Closing Actions. Subsequent to the Closing Date, the Seller and the Buyer
shall each deliver or cause to be delivered to the other following the Closing Date such additional
instruments as the other may reasonably request for the purpose of fully carrying out this
Agreement. Without limiting the foregoing, Seller shall, from time to time, execute and deliver,
upon the request of Buyer, all such other and further materials and documents and instruments of
conveyance, transfer or assignment as may reasonably be requested by Buyer to effect, record or verify the transfer to, and vesting
in Buyer, of Seller’s right, title and interest in and to the Purchased Assets, free and clear of
all Liens, in accordance with the terms of this Agreement.
6.7 Taxes. Seller shall be responsible for paying, shall promptly discharge when due,
and shall reimburse, indemnify and hold harmless Buyer from, any sales or use, transfer, real
property gains, excise, stamp, or other similar Taxes arising from, imposed on or attributable to
the transactions contemplated by this Agreement.
6.8 Seller’s Conduct of the Business Prior to Closing. During the period from the
date of this Agreement to the Closing Date, Seller shall promptly notify Buyer of any material,
adverse event, occurrence or emergency not in the ordinary course of business involving the
Purchased Assets. Except as approved in writing by Buyer in advance, prior to the Closing, Seller
will not (a) create, incur or assume any obligation which would in any material way affect the
Purchased Assets; (b) sell, dispose of
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or encumber any of the Purchased Assets or license any
Purchased Assets to any third party; or (c) make any material changes to any of the Purchased
Assets without Buyer’s prior written consent or at Buyer’s request.
6.9 Seller’s Customers. Seller shall be responsible for all of its commitments and
obligations under any license, service, consulting or other agreement with any customer, vendor or
other third party and shall indemnify Buyer against any Damages relating to or arising from such
commitments and obligations in accordance with Section 10. Pursuant to the Non-Competition
Agreements, Seller shall not, and shall cause its resellers and distributors and other partners not
to, license or sell any Business Products from and after the three (3) month anniversary of the
Closing Date.
6.10 Payments to Third Parties. Seller shall be responsible for the payment of all
Transaction Fees and shall indemnify Buyer against any Damages relating to or arising from any
Transaction Fees in accordance with Section 10.
[**]
7. License to Seller.
7.1 License. Subject to the terms and conditions of this Agreement, upon the Closing
of the Purchase Transaction, Buyer shall grant to Seller a non-exclusive, non-transferable,
worldwide and royalty-free license to utilize the Purchased Assets (the “Seller License”)
for the sole purpose of supporting Business Products sold and licensed by Seller prior to, and for
a period of up to three (3) months following, the Closing Date. The Seller License does not give
Seller any right to sub-license the Purchased Assets to any third party.
7.2 Term. The Seller License shall be effective on the Closing Date and shall expire
on the [**]. Buyer may terminate the Seller License for any material failure by Seller to perform
Seller’s obligations under this Section 7 or the Agreement that is not remedied within thirty (30)
days of written notice from Buyer. At the expiration or termination of the Seller License Term,
Seller shall return or destroy all copies of the Purchased Assets and related materials, and an
authorized officer shall certify such return or destruction to Buyer in writing.
7.3 Confidential Information. The Purchased Assets shall be and remain the
confidential and proprietary information of Buyer during and following the Seller License Term and
shall be subject to the Mutual NDA.
7.4 Disclaimer of Warranty. THE PURCHASED ASSETS SHALL BE LICENSED “AS IS” TO SELLER.
BUYER MAKES NO REPRESENTATIONS OR WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY REPRESENTATIONS OR WARRANTIES AS TO MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, OR NON-INFRINGEMENT. IN NO EVENT WILL BUYER BE LIABLE TO THE SELLER FOR ANY INDIRECT,
INCIDENTAL, SPECIAL OR CONSEQUENTIAL PENALTIES OR DAMAGES, INCLUDING LOST PROFITS, ARISING FROM THE
SELLER LICENSE OR SELLER’S USE OF THE PURCHASED ASSETS, EVEN IF BUYER HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
8. Conditions to Buyer’s Obligations.
The obligations of Buyer under this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions, all or any of which may be waived by Buyer
in writing, except as otherwise provided by law:
[THE SYMBOL [**] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.]
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8.1 Representations and Warranties True; Performance; Certificate.
(a) The representations and warranties of Seller contained in this Agreement shall be true and
correct in all material respects as of the Closing Date with the same effect as though such
representations and warranties had been made or given again at and as of the Closing Date;
(b) Seller shall have performed and complied with all of its agreements, covenants and
conditions required by this Agreement to be performed or complied with by them prior to or on the
Closing Date; and
(c) The conditions set forth in this Section 8 have been fulfilled or satisfied, unless
otherwise waived in writing by Buyer.
8.2 Consents. All Governmental Authorizations and required third-party consents,
including the Xxxxx Consent and Xxxxx Amendment, shall have been obtained.
8.3 No Proceedings or Litigation.
(a) No preliminary or permanent injunction or other order shall have been issued by any
Governmental Entity, nor shall any statute, rule, regulation or executive order be promulgated or
enacted by any Governmental Entity which prevents the consummation of the transactions contemplated
by this Agreement.
(b) No suit, action, claim, proceeding or investigation before any Governmental Entity shall
have been commenced and be pending against any of the parties, or any of their respective
Affiliates, associates, officers or directors, seeking to prevent transactions contemplated by this
Agreement, including, without limitation, the sale of the Purchased Assets or asserting that the
sale of the Purchased Assets would be illegal or create liability for damages or which may have a
Material Adverse Effect on the Purchased Assets.
8.4 Documents. This Agreement, the exhibits and schedules attached hereto, and any
other instruments of conveyance and transfer and all other documents to be delivered by Seller at
the Closing and all actions of Seller required by this Agreement and the exhibit agreements, or
incidental thereto, and all related matters, shall be in form and substance reasonably satisfactory
to Buyer and Buyer’s counsel and shall be in full force and effect.
8.5 Governmental Filings. The parties shall have made any required filing with
Governmental Entities in connection with this Agreement and the exhibit agreements, and any
approvals related thereto shall have been obtained or any applicable waiting periods shall have
expired. If a proceeding or review process by a Governmental Entity is pending in which a decision
is expected, Buyer shall not be required to consummate the transactions contemplated by this
Agreement until such decision is reached or rendered, notwithstanding Buyer’s legal ability to
consummate the transactions contemplated by this Agreement prior to such decision being reached or
rendered. Buyer shall be liable for any fees and expenses relating to filings with any
Governmental Entities.
8.6 Material Adverse Change. There has not been a material adverse change to the
Purchased Assets.
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9. Conditions to Seller’s Obligations
The obligations of Seller under this Agreement are subject to the fulfillment, prior to or on
the Closing Date, of each of the following conditions, all or any of which may be waived in writing
by Seller, except as otherwise provided by law:
9.1 Representations and Warranties True; Performance.
(a) The representations and warranties of Buyer contained in this Agreement shall be true and
correct in all material respects as of the Closing Date with the same effect as though such
representations and warranties had been made or given again at and as of the Closing Date;
(b) Buyer shall have performed and complied with all of its agreements, covenants and
conditions required by this Agreement to be performed or complied with by them prior to or on the
Closing Date; and
(c) The conditions set forth in this Section 9 have been fulfilled or satisfied, unless
otherwise waived in writing by Seller.
9.2 No Proceeding or Litigation. No preliminary or permanent injunction or other
order shall have been issued by any Governmental Entity, nor shall any statute, rule, regulation or
executive order be promulgated or enacted by any Governmental Entity which prevents the
consummation of the transactions contemplated by this Agreement.
9.3 Documents. This Agreement, any other instruments of conveyance and transfer and
all other documents to be delivered by Buyer to Seller at the Closing and all actions of Buyer
required by this Agreement or incidental thereto, and all related matters, shall be in form and
substance reasonably satisfactory to Seller and Seller’s counsel.
9.4 Consents. All Governmental Authorizations and required third-party consents,
including the Xxxxx Consent and Xxxxx Amendment, shall have been obtained.
10. Indemnification.
10.1 Survival of Representations and Warranties. All representations and warranties
in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the
consummation of the transactions contemplated hereby and continue
until the [**] anniversary of the
Closing Date (the “Indemnity Termination Date”); provided that if any claims for
indemnification have been asserted with respect to any such representations and warranties prior to
the Indemnity Termination Date, the representations and warranties on which any such claims are
based shall continue in effect until final resolution of any claims, and provided,
further, that (a) the representations in Sections 4.1 [Organization], 4.2 [Authority], 4.3
[Execution and Binding Effect] and 4.5 [No Violation] shall continue indefinitely; (b) the
representations and warranties set forth in Section 4.6
[Intellectual Property] shall survive [**]; and
(c) representations and warranties relating to Taxes shall survive until thirty (30) days after
expiration of all applicable statutes of limitations relating to such Taxes. All covenants and
agreements set forth in the Agreement shall continue indefinitely.
10.2 Indemnification by Seller. Subject to the limitations set forth in this Section
10, from and after the Closing Date, Seller shall protect, defend, indemnify and hold harmless
Buyer and Buyer’s Affiliates, officers, directors, employees, representatives and agents (each of
the foregoing Persons is hereinafter referred to individually as a
“Buyer Indemnified
Person” and collectively as “Buyer Indemnified Persons”)
[THE SYMBOL [**] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.]
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from and against any and all
losses, costs, damages, liabilities, fees (including without limitation attorneys’ fees) and
expenses (collectively, the “Damages”), that any of the Buyer Indemnified Persons incurs or
reasonably anticipates incurring by reason of or in connection with (a) any claim, demand, action
or cause of action alleging misrepresentation, breach of, or default in connection with, any of the
representations, warranties, covenants or agreements of the Seller contained in this Agreement,
including any exhibits or schedules attached hereto (b) any Excluded Asset; (c) any Excluded
Liability; or (d) Seller’s utilization of the Purchased Assets prior to Closing and from and after
the Closing pursuant to Section 7. Damages in each case shall be net of the amount of any
insurance proceeds and indemnity and contribution actually recovered by Buyer.
10.3 Indemnification by the Buyer. Subject to the limitations set forth in this
Section 10, from and after the Closing Date, Buyer shall protect, defend, indemnify and hold
harmless Seller and Seller’s Affiliates, officers, directors, employees, representatives and agents
(each of the foregoing Persons is hereinafter referred to individually as a “Seller Indemnified
Person” and collectively as “Seller Indemnified Persons”) from and against any and all
Damages, that any of the Seller Indemnified Persons incurs or reasonably anticipates incurring by reason of or in connection with (a) any claim,
demand, action or cause of action alleging misrepresentation, breach of, or default in connection
with, any of the representations, warranties, covenants or agreements of the Buyer contained in
this Agreement, including any exhibits or schedules attached hereto or (b) Buyer’s utilization of
the Purchased Assets from and after the Closing. Damages in each case shall be net of the amount
of any insurance proceeds and indemnity and contribution actually recovered by Seller.
10.4 Procedures Relating to Indemnification.
(a) Upon incurring or reasonably anticipating the incurrence of Damages, a Seller Indemnified
Person or Buyer Indemnified Person (an “Indemnified Person”) will deliver to the Buyer or
the Seller, as applicable ( an “Indemnifying Person”), a letter signed by an authorized
representative of Indemnified Person (a “Claim Notice”) which describes in reasonable
detail the claimed Damages. If the Indemnifying Person does not object to such Claim Notice within
ten (10) business days, the Indemnifying Person shall be deemed to have accepted the claim or
claims set forth in the Claim Notice and shall waive and forfeit any right to dispute such claims.
The Indemnifying Person shall then promptly pay the claimed amount to an account designated by the
Indemnified Person. If Seller is the Indemnifying Person and Seller does not promptly pay the
claimed amount to the Buyer Indemnified Person or Seller disputes the claimed amount, Buyer shall
be entitled to offset the claimed amount from any earn-out Seller may be entitled to received under
Section 2.4 or, in the case of a dispute, delay payment of any earn-out until such dispute is
resolved.
(b) If the Indemnifying Person objects to any or all claims set forth in a Claim Notice, the
Indemnifying Person shall deliver a letter signed by an officer or duly authorized representative
of the Indemnifying Person (an “Objection Notice”) which describes in reasonable detail the
Indemnifying Person’s objections. The parties will then negotiate in good faith to resolve any
outstanding issues.
(c) In order for an Indemnified Person to be entitled to any indemnification provided for
under this Agreement in respect of, arising out of or involving a claim made by any third party
against the Indemnified Person (a “Third-Party Claim”), such Indemnified Person must
provide the Indemnifying Person with a Claim Notice regarding the Third-Party Claim promptly and in
any event within ten (10) days after receipt by such Indemnified Person of written notice of the
Third-Party Claim; provided, however, that failure to give such notification shall not affect the
indemnification provided hereunder except to the extent the Indemnifying Person shall have been
actually and materially prejudiced as a result of such failure. Thereafter, the Indemnified Person
shall deliver to the Indemnifying Person, promptly
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after the Indemnified Person’s receipt thereof,
copies of all notices and documents (including court papers) received by the Indemnified Person
relating to the Third-Party Claim.
(d) If a Third-Party Claim is made against an Indemnified Person, the Indemnified Person shall
have the right to participate in the defense thereof and, at its own expense, to employ counsel
reasonably acceptable to the Indemnifying Person, separate from the counsel employed by the
Indemnifying Person, it being understood that the Indemnifying Person shall control such defense.
the Indemnifying Person shall be liable for the fees and expenses of counsel employed by the
Indemnified Person for any period during which the Indemnifying Person has not assumed the defense
thereof. All the parties hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the Indemnifying Person’s request) the provision
to the Indemnifying Person of records and information which are reasonably relevant to such
Third-Party Claim, and making officers, directors, employees and agents of the Indemnified Person
available on a mutually convenient basis to provide information, testimony at depositions, hearings
or trials, and such other assistance as may be reasonably requested by the Indemnifying Person. Notwithstanding the foregoing, in the event
a Third-Party Claim is made against an Indemnified Person as to which such Indemnified Person is
entitled to seek indemnification hereunder and such Indemnified Person reasonably concludes that
the Indemnifying Person lacks the financial and personnel resources to vigorously defend such
Indemnified Person, that the Indemnifying Person has failed to assume the defense of the
Indemnified Person, or that the Indemnifying Person is not diligently defending such Indemnified
Person, then in each such case the Indemnified Person may elect to retain the defense of such
Third-Party Claim and will be entitled to be reimbursed by the Indemnifying Person for its Losses
incurred in such defense (including, without limitation, reasonable attorneys fees), such
expenditures to be reimbursed promptly after submission of invoices therefor. Whether or not the
Indemnifying Person shall have assumed the defense of a Third-Party Claim, the Indemnified Person
shall not admit any liability with respect to, or settle, compromise or discharge, such Third-Party
Claim without the Indemnifying Person’s prior written consent (which consent shall not be
unreasonably withheld or delayed). the Indemnifying Person shall not admit any liability with
respect to, or settle, compromise or discharge any Third-Party Claim without the Indemnified
Person’s prior written consent (which consent shall not be unreasonably withheld or delayed);
provided, however, that such consent shall not be required for any settlement, compromise or
discharge of a Third-Party Claim that by its terms obligates the Indemnifying Person to pay the
full amount of the liability in connection with such Third-Party Claim, which releases the
Indemnified Person completely in connection with such Third-Party Claim, and which does not
otherwise have any material adverse effect on the Indemnified Person.
10.5 Threshold and Cap. Notwithstanding any other provision of this Section 10 to the
contrary:
(a) Except for claims relating to or arising from Section 10.2(b), (c) and (d) and Sections
6.9 and 6.10, a Buyer Indemnified Person shall be entitled to indemnification under Section 10.2
only when the aggregate of Damages incurred by the Buyer Indemnified
Persons exceeds $[**] (the
“Threshold Amount”), at which time the Buyer Indemnified Person shall be entitled to be
indemnified against and compensated and reimbursed for all Damages, including the Threshold Amount;
(b) Except for claims relating to or arising from Section 10.2(b), (c) and (d) and Sections
6.9 and 6.10, or arising from Seller fraud or willful misconduct, the Seller shall not be required
to make any indemnification payment pursuant to Section 10.2 after the Seller has paid to all Buyer
Indemnified Persons an amount in the aggregate equal to
[**] (such sum, the “Indemnity
Cap”);
(c) Except for claims relating to Section 10.3(b), a Seller Indemnified Person shall be
entitled to indemnification under Section 10.3 only when the aggregate of Damages incurred by the
[THE SYMBOL [**] IS USED TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SEC. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTION.]
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Seller Indemnified Persons exceeds the Threshold Amount, at which time the Seller Indemnified
Person shall be entitled to be indemnified against and compensated and reimbursed for all Damages,
including the Threshold Amount; and
(d) Except for claims relating to Section 10.3(b) or arising from Buyer fraud or willful
misconduct, the Buyer shall not be required to make any indemnification payment pursuant to Section
10.3 after the Buyer has paid to all Seller Indemnified Persons an amount in the aggregate equal to
the Indemnity Cap.
10.6 Treatment of Indemnification Claims. All indemnification payments made under this
Agreement shall be treated by all parties as an adjustment to the Total Purchase Price.
11. Termination.
11.1 Termination of Agreement. This Agreement may be terminated at any time prior to
the Closing:
(a) By mutual written consent of Buyer and Seller;
(b) By Buyer or Seller if any Governmental Entity shall have issued an order, decree or ruling
or taken any other action restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement; or
(c) By either party if the Closing does not occur on or before the thirty (30) day anniversary
of the date hereof.
11.2 Procedure and Effect of Termination. In the event of termination of this
Agreement by any or all of the parties pursuant to Section 11.1, written notice shall be given to
each other party specifying the provision of Section 11.1, pursuant to which such termination is
made and shall become void and there shall be no liability on the part of Buyer or Seller (or their
respective officers, directors, partners or Affiliates), except as a result of any breach of this
Agreement by such party or to the extent such a party is entitled to indemnification under Section
10 of this Agreement.
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12. Miscellaneous.
12.1 Amendments and Waivers. Any term of this Agreement may be amended or waived with
the written consent of the parties or their respective successors and assigns. Any amendment or
waiver effected in accordance with this Section 12.1 shall be binding upon the parties and their
respective successors and assigns.
12.2 Successors and Assigns. The terms and conditions of this Agreement shall inure
to the benefit of and be binding upon the respective successors and permitted assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement.
12.3 Governing Law; Juridiction. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed
and interpreted in accordance with the laws of the State of California, without giving effect to
principles of conflicts of law. The parties agree to submit to the non-exclusive jurisdiction of
the Superior Court of Santa Xxxxx County, California and/or to the jurisdiction of the United
States District Court for the Northern District of California with respect to any legal action
related to this Agreement.
12.4 Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one instrument.
12.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
12.6 Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon receipt, when delivered personally or by courier, overnight
delivery service or confirmed facsimile, or forty-eight (48) hours after being deposited in the
regular mail as certified or registered mail (airmail if sent internationally) with postage
prepaid, if such notice is addressed to the party to be notified at such party’s address or
facsimile number as set forth below, or as subsequently modified by written notice:
If to Buyer:
Phoenix Technologies Ltd.
000 Xxxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
000 Xxxxxx Xxxxx Xx.
Xxxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
If to Seller:
XTool Mobile Security, Inc.
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx, President
Fax: (000) 000-0000
0000 Xxxxxxxx Xx., Xxx. 000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxxx, President
Fax: (000) 000-0000
12.7 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good faith,
in order to maintain the
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economic position enjoyed by each party as close as possible to that under
the provision rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded
from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision
were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its
terms.
12.8 Entire Agreement. This Agreement and the documents referred to herein are the
product of both of the parties hereto, and constitute the entire agreement between such parties
pertaining to the subject matter hereof and thereof, and merge all prior negotiations and drafts of
the parties with regard to the transactions contemplated herein and therein. Any and all other
written or oral agreements existing between the parties hereto regarding such transactions are
expressly canceled.
12.9 Advice of Legal Counsel. Each party acknowledges and represents that, in
executing this Agreement, it has had the opportunity to seek advice as to its legal rights from
legal counsel and that the person signing on its behalf has read and understood all of the terms
and provisions of this Agreement. This Agreement shall not be construed against any party by
reason of the drafting or preparation thereof.
[Signature pages follow]
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This Agreement has been duly executed and delivered by the duly authorized officers of Seller
and Buyer as of the date first above written.
| PHOENIX TECHNOLOGIES LTD. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| XTOOL MOBILE SECURITY, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
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