EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
dated as of
January 14, 2002
among
XXXXX CORPORATION,
AAS, INC.
and
AT&T WIRELESS SERVICES, INC.
TABLE OF CONTENTS
Page
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ARTICLE 1
DEFINITIONS
Section 1.01. Definitions.....................................................1
ARTICLE 2
PURCHASE AND SALE
Section 2.01. Purchase and Sale...............................................7
Section 2.02. Excluded Assets.................................................7
Section 2.03. Assumed Contract................................................7
Section 2.04. Excluded Liabilities............................................7
Section 2.05. Purchase Price; Allocation Of Purchase Price....................8
Section 2.06. Closing.........................................................9
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Section 3.01. Corporate Existence and Power..................................10
Section 3.02. Corporate Authorization........................................10
Section 3.03. Governmental Authorization.....................................10
Section 3.04. Noncontravention...............................................11
Section 3.05. Required and Other Consents....................................11
Section 3.06. Buyer Common Stock Ownership...................................11
Section 3.07. Assumed Contract...............................................11
Section 3.08. Compliance with Laws and Court Orders..........................12
Section 3.09. Properties.....................................................12
Section 3.10. Sufficiency of and Title to the Purchased Assets...............13
Section 3.11. Omitted Intentionally..........................................13
Section 3.12. Intellectual Property Litigation...............................13
Section 3.13. Licenses and Permits...........................................13
Section 3.14. Inventories....................................................13
Section 3.15. Finders' Fees..................................................13
Section 3.16. Environmental Compliance.......................................14
Section 3.17. Purchase for Investment........................................15
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.01. Corporate Existence And Power..................................15
Section 4.02. Corporate Authorization........................................16
Section 4.03. Governmental Authorization.....................................16
Section 4.04. Non-contravention..............................................16
Section 4.05. Capitalization.................................................17
Section 4.06. SEC Filings....................................................17
Section 4.07. Financial Statements...........................................18
Section 4.08. Absence Of Certain Changes.....................................18
Section 4.09. No Undisclosed Material Liabilities............................19
Section 4.10. Compliance With Laws And Court Orders..........................19
Section 4.11. Litigation.....................................................19
Section 4.12. Finders' Fees..................................................20
Section 4.13. Offering of Securities.........................................20
Section 4.14. HSR Act........................................................20
ARTICLE 5
COVENANTS OF SELLER
Section 5.01. Conduct Of The Business........................................20
Section 5.02. Access To Information; Confidentiality.........................20
Section 5.03. Notices Of Certain Events......................................22
Section 5.04. Post-Closing Cooperation.......................................22
ARTICLE 6
COVENANTS OF BUYER
Section 6.01. Confidentiality................................................23
Section 6.02. Access To Information Not A Waiver; Access.....................23
Section 6.03 . Director Appointment...........................................23
Section 6.04. Employee Cost Reimbursement....................................23
ARTICLE 7
COVENANTS OF BUYER, ACQUISITION SUBSIDIARY AND SELLER
Section 7.01. Further Assurances.............................................24
Section 7.02. Public Announcements...........................................24
Section 7.03. Trademarks; Tradenames.........................................24
Section 7.04. WARN Act.......................................................24
ARTICLE 8
TAX MATTERS
Section 8.01. Tax Definitions................................................25
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Section 8.02. Tax Matters....................................................25
Section 8.03. Tax Cooperation; Allocation of Taxes...........................26
ARTICLE 9
EMPLOYEE BENEFITS
Section 9.01. ERISA Representations..........................................27
Section 9.02. Employees and Offers of Employment.............................28
Section 9.03. Seller's Employee Benefit Plan.................................28
Section 9.04. Buyer Benefit Plans............................................28
Section 9.05. No Third Party Beneficiaries...................................29
ARTICLE 10
CONDITIONS TO CLOSING
Section 10.01. Conditions To Obligations Of Buyer, Acquisition Subsidiary
and Seller..................................................29
Section 10.02. Conditions To Obligation Of Buyer And Acquisition Subsidiary..29
Section 10.03. Conditions To Obligation Of Seller............................32
ARTICLE 11
SURVIVAL; INDEMNIFICATION
Section 11.01. Survival......................................................34
Section 11.02. Indemnification...............................................34
Section 11.03. Procedures....................................................35
Section 11.04. Limitations...................................................36
ARTICLE 12
TERMINATION
Section 12.01. Grounds For Termination.......................................36
Section 12.02. Effect Of Termination.........................................37
ARTICLE 13
MISCELLANEOUS
Section 13.01. Notices.......................................................37
Section 13.02. Amendments and Waivers........................................39
Section 13.03. Expenses......................................................39
Section 13.04. Successors and Assigns........................................39
Section 13.05. Governing Law.................................................39
Section 13.06. Jurisdiction..................................................39
Section 13.07. WAIVER OF JURY TRIAL..........................................40
Section 13.08. Counterparts; Third Party Beneficiaries.......................40
Section 13.09. Entire Agreement..............................................40
Section 13.10. Bulk Sales Laws...............................................40
Section 13.11. Captions......................................................40
Section 13.12. Severability..................................................40
Section 13.13. Specific Performance..........................................41
Exhibit A List of Purchased Assets
Exhibit B List of Assumed Contracts
Exhibit C List of Angel Products
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Exhibit D List of Employees
Exhibit E Form of Lease Assignment and Assumption Agreement
Exhibit F Form of Intellectual Property Agreement
Exhibit G Form of Registration Rights Agreement
Exhibit H Form of Strategic Alliance Agreement
Exhibit I Form of Interim Services Agreement
Exhibit J Form of Landlord Consent
Exhibit K Form of Landlord Estoppel Certificate
Exhibit L Form of Broadcom Consent
Exhibit M Form of Broadcom Assignment
Exhibit N Form of WindRiver Consent
Exhibit O Form of WindRiver Closing Assignment
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ASSET PURCHASE AGREEMENT
AGREEMENT dated as of January 14, 2002 among Xxxxx Corporation, a Delaware
corporation ("Buyer"), AAS, Inc., a Delaware corporation and a wholly-owned
subsidiary of Buyer ("Acquisition Subsidiary"), and AT&T Wireless Services,
Inc., a Delaware corporation ("Seller"),
W I T N E S S E T H :
WHEREAS, Seller is engaged in a business referred to as Project Angel,
relating to the development, manufacture and assembly of certain fixed wireless
equipment including the Products (as defined below) (the "Business");
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to sell
to Buyer, certain assets of Seller relating to the Business, subject to the
assumption of certain liabilities, upon the terms and subject to the conditions
set forth herein;
WHEREAS, Buyer has formed Acquisition Subsidiary for the purpose of
acquiring such assets and assuming such liabilities, upon the terms and subject
to the conditions set forth herein;
WHEREAS, Buyer desires to license from Seller, and Seller desires to
license to Buyer, intellectual property related to the Products on the terms
and conditions set forth in the Intellectual Property Agreement (as defined
below);
WHEREAS, Buyer and Seller desire to enter into a strategic alliance on the
terms and conditions set forth in the Strategic Alliance Agreement (as defined
below).
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions.
(a) The following terms, as used herein, have the following meanings:
"Acquisition" means the acquisition of the Purchased Assets and the
Intangible Assets and the assumption of the Assumed Contract by Acquisition
Subsidiary and the license of certain intellectual property related to the
Products pursuant to the Intellectual Property Agreement.
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling, controlled by, or under common control with such
other Person.
"Ancillary Agreements" means, the Lease Assignment and Assumption
Agreement, the Intellectual Property Agreement and the Assignment and
Assumption Agreement thereunder, the Strategic Alliance Agreement, the
Registration Rights Agreement and the Interim Services Agreement.
"Buyer Balance Sheet" means the consolidated balance sheet of Buyer as of
September 30, 2001 and the footnotes therein set forth in the Buyer's
quarterly report on Form 10-Q for its fiscal quarter ended September 30, 2001.
"Buyer Balance Sheet Date" means September 30, 2001.
"Buyer Disclosure Schedules" means the schedules prepared and delivered by
Buyer and dated as of the date hereof which set forth the exceptions to Buyer's
and Acquisition Subsidiary's representations and warranties contained herein
and certain other information called for by this Agreement.
"Buyer Material Adverse Effect" means a material adverse effect on (x) the
business, assets or results of operations of Buyer and its Subsidiaries, taken
as a whole, or (y) the ability of Buyer or Acquisition Subsidiary to perform
its obligations under this Agreement and the Ancillary Agreements, except, in
each case, any such effect resulting from or arising in connection with (i)
this Agreement, the Ancillary Agreements, or the transactions contemplated
hereby and thereby or the announcement or pendency thereof, (ii) changes or
conditions affecting Buyer's industry generally or (iii) changes in economic,
regulatory or political conditions generally; provided that any change in the
market price of the Buyer Common Stock shall not be taken into account in
determining whether a Buyer Material Adverse Effect has occurred.
"Buyer's Knowledge" means the actual knowledge of Xxxxxx Xxx-Xxxxxx,
President and Chief Executive Officer, and Xxxxxx Xxxxx, Chief Financial
Officer.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, and any rules or regulations promulgated
thereunder.
"Closing Date" means the date of the Closing.
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"Employment Agreement" means an employment agreement between Buyer and a
person identified on Exhibit D as a "key employee," offering employment with
Buyer to such person subject to consummation of the Closing.
"Environmental Law" means any federal, state, local or foreign law
(including, without limitation, common law), treaty, judicial decision,
regulation, rule, judgment, order, decree, injunction, permit or governmental
restriction or any agreement of any governmental authority or other third party
relating to the environment, human health and safety or to pollutants,
contaminants, wastes or chemicals or any toxic, radioactive, ignitable,
corrosive, reactive or otherwise hazardous substances, wastes or materials.
"Environmental Liabilities" means any and all liabilities arising in
connection with or in any way relating to the ownership or operation (by Seller
or any predecessor of Seller with respect to the Business) of the Business (as
currently or previously conducted by Seller or any predecessor of Seller with
respect to the Business) or the Purchased Assets or relating to any activities
or operations by Seller (or any predecessor of Seller with respect to the
Business) occurring or conducted at the Real Property or at any site formerly
owned or operated in connection with the Business (including, without
limitation, offsite disposal), whether accrued, contingent, absolute,
determined, determinable or otherwise, which (i) arise under or relate to any
Environmental Law and (ii) relate to actions occurring or conditions existing
on or prior to the Closing Date (including, without limitation, any matter
disclosed or required to be disclosed in Seller Disclosure Schedule 3.16).
"Environmental Permits" means all permits, licenses, franchises,
certificates, approvals and other similar authorizations of governmental
authorities relating to or required by Environmental Laws and affecting, or
relating in any way to, the PRC Assets.
"Hazardous Substances" means any pollutant, contaminant, waste or chemical
or any toxic, radioactive, ignitable corrosive, reactive or otherwise hazardous
substance, waste or material or any substance, waste or material having any
constituent elements displaying any of the foregoing characteristics including,
without limitation, petroleum, its derivatives, by-products and other
hydrocarbons, as so regulated under any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property Agreement" means the Intellectual Property
Agreement between Seller and Buyer in the form attached hereto as Exhibit F.
"Intellectual Property Rights" means (i) inventions, whether or not
patentable, reduced to practice or made the subject of one or more pending
patent applications, (ii) national and multinational statutory invention
registrations, patents and patent applications (including all reissues,
divisions, continuations, continuations-in-part, extensions and reexaminations
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thereof) registered or applied for in the United States and all other nations
throughout the world, all improvements to the inventions disclosed in each such
registration, patent or patent application, (iii) trademarks, service marks,
trade dress, logos, domain names, trade names and corporate names (whether or
not registered) in the United States and all other nations throughout the
world, including all variations, derivations, combinations, registrations and
applications for registration of the foregoing and all goodwill associated
therewith, (iv) copyrights (whether or not registered) and registrations and
applications for registration thereof in the United States and all other
nations throughout the world, including all derivative works, moral rights,
renewals, extensions, reversions or restorations associated with such
copyrights, now or hereafter provided by law, regardless of the medium of
fixation or means of expression, (v) computer software, (including source code,
object code, firmware, operating systems and specifications), (vi) trade
secrets and, whether or not confidential, business information (including
pricing and cost information, business and marketing plans and customer and
supplier lists) and know-how (including manufacturing and production processes
and techniques and research and development information), (vii) industrial
designs (whether or not registered), (viii) databases and data collections,
(ix) copies and tangible embodiments of any of the foregoing, in whatever form
or medium, (x) all rights to obtain and rights to apply for patents, and to
register trademarks and copyrights, (xi) all rights in all of the foregoing
provided by treaties, conventions and common law and (xii) all rights to xxx or
recover and retain damages and costs and attorneys' fees for past, present and
future infringement or misappropriation of any of the foregoing.
"Interim Services Agreement" means the Interim Services Agreement between
Seller and Acquisition Subsidiary in the form attached hereto as Exhibit I.
"Landlord" means L&A Xxxxxxx Family Partners, L.P., a California limited
partnership, Xxxxxxx Xxxxxxxx, Xxxxxxx Xxxxxxx and J. Xxxxxxx Xxxxxxxx, as
successor Trustees of the Xxxxxx X. Xxxxx 1992 Revocable Trust, and Xxx
Enterprises, a California general partnership, successor in interest to
Opus/Puget Western I., L.L.C. under the Lease.
"Landlord Consent" means the consent of Landlord substantially in the form
attached hereto as Exhibit J.
"Landlord Estoppel Certificate" means the Landlord Estoppel Certificate
substantially in the form attached hereto as Exhibit K.
"Lease Assignment and Assumption Agreement" means the Assignment and
Assumption Agreement between Seller and Acquisition Subsidiary substantially in
the form attached hereto as Exhibit E.
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"Lien" means, with respect to any property or asset, any mortgage, lien,
pledge, charge, security interest, encumbrance or other adverse claim of any
kind in respect of such property or asset. For the purposes of this Agreement,
a Person shall be deemed to own subject to a Lien any property or asset which
it has acquired or holds subject to the interest of a vendor or lessor under
any conditional sale agreement, capital lease or other title retention
agreement relating to such property or asset.
"Offer Letters" shall mean letters from Buyer offering employment, subject
to consummation of the Closing, to persons listed on Exhibit D.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.
"PRC Assets" means the Purchased Assets, the Intangible Assets and the
Assumed Contract.
"Products" means the products set forth on Exhibit C.
"Registration Rights Agreement" means the Registration Rights Agreement
between Seller and Buyer in the form attached hereto as Exhibit G.
"Securities Act" means the Securities Act of 1933, as amended.
"Seller Disclosure Schedules" means the schedules prepared and delivered
by Seller and dated as of the date hereof which set forth the exceptions to
Seller's representations and warranties contained herein and certain other
information called for by this Agreement.
"Seller Material Adverse Effect" means a material adverse effect on or
impairment of (x) the ability of Seller, or the ability of Buyer and its
Subsidiaries after the Closing Date, to manufacture, sell or support the
Products, or (y) Seller's ability to perform its obligations under this
Agreement and the Ancillary Agreements except, in each case, any such effect
resulting from or arising in connection with (i) this Agreement, the Ancillary
Agreements, or the transactions contemplated hereby and thereby or the
announcement thereof, (ii) changes or conditions affecting Seller's industry
generally or (iii) changes in economic, regulatory or political conditions
generally.
"Seller's Knowledge" means the actual knowledge of Xxxxxxx Xxxxx,
President, AT&T Fixed Wireless Services, and Xxxxx Xxxxxxxxx, Vice President
and Chief Counsel - Intellectual Property.
"Strategic Alliance Agreement" means the Strategic Alliance Agreement
between Seller and Buyer in the form attached hereto as Exhibit H.
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"Subsidiary" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at any time directly or indirectly owned by such Person.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
Term Section
Allocation Statement 2.05
Apportioned Obligations 8.03
Assumed Contract 2.03
Buyer Common Stock 2.05
Buyer Preferred Stock 4.05
Buyer SEC Documents 4.06
Buyer Warranty Breach 11.02
Claim 11.03
Closing 2.06
Code 8.01
Damages 11.02
Employee Plans 9.01
Exchange Act 3.03
Excluded Assets 2.02
Excluded Liabilities 2.04
Indemnified Party 11.03
Indemnifying Party 11.03
Intangible Assets 2.05
Lease 3.09
Multiemployer Plan 9.01
Mutual NDA 6.01
Other Consents 3.05
Permits 3.13
Permitted Liens 3.09
Post-Closing Tax Period 8.03
Pre-Closing Tax Period 8.01
Purchased Assets 2.01
Purchase Price 2.05
Real Property 3.09
Required Consents 3.05
Right 4.05
Rights Agreement 4.05
Seller Warranty Breach 11.02
Series A Preferred Stock 4.05
Stock Consideration 2.05
Tax 8.01
Taxing Authority 8.01
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Third Party Claim 11.03
Transaction Agreements 13.09
Transfer Taxes 8.03
Transferred Employees 9.02
WARN Act 7.04
ARTICLE 2
PURCHASE AND SALE
Section 2.01. Purchase and Sale. Except as otherwise provided below, upon
the terms and subject to the conditions of this Agreement, Acquisition
Subsidiary agrees to purchase from Seller and Seller agrees to sell, convey,
transfer, assign and deliver, or cause to be sold, conveyed, transferred,
assigned and delivered, to Acquisition Subsidiary at the Closing, free and
clear of all Liens, other than Permitted Liens, all of Seller's right, title
and interest in, to and under the assets set forth on Exhibit A (collectively,
the "Purchased Assets") as the same shall exist on the Closing Date.
Section 2.02. Excluded Assets. Each of Buyer and Acquisition Subsidiary
expressly understands and agrees that all assets and properties of Seller not
set forth on Exhibit A shall be excluded (the "Excluded Assets") from the
Purchased Assets.
Section 2.03. Assumed Contract. Upon the terms and subject to the
conditions of this Agreement, Acquisition Subsidiary agrees, effective at the
time of the Closing, to assume only the liabilities set forth on Exhibit B (the
"Assumed Contract").
Section 2.04. Excluded Liabilities. Notwithstanding any provision in this
Agreement or any other writing to the contrary, Acquisition Subsidiary is
assuming only the Assumed Contract and the Third Party Software Agreements (as
defined in the Intellectual Property Agreement), and is not assuming any other
liability or obligation of Seller (or any predecessor of Seller with respect to
the Business) of whatever nature, whether presently in existence or arising
hereafter. All such other liabilities and obligations shall be retained by and
remain obligations and liabilities of Seller (all such liabilities and
obligations not being assumed being herein referred to as the "Excluded
Liabilities"). Notwithstanding any provision in this Agreement or any other
writing to the contrary, Excluded Liabilities include:
(a) any liability or obligation of Seller, or any member of any
consolidated, affiliated, combined or unitary group of which Seller is or
has been a member, for Taxes; provided that Transfer Taxes incurred in
connection with the transactions contemplated by this Agreement and
Apportioned Obligations shall be paid in the manner set forth in Section
8.03 hereof;
7
(b) any liability or obligation relating to employees, former
employees, employee benefits or compensation arrangements existing on or
prior to the Closing Date, including, without limitation, any liability or
obligation under any of employee benefit agreements, plans or other
arrangements listed on Seller Disclosure Schedules 9.01(a) or (c);
(c) any Environmental Liability;
(d) all obligations and liabilities arising from any action, suit,
investigation, or proceeding relating to the Purchased Assets or the
Intangible Assets that are pending on the Closing Date against Seller or
any Purchased Asset before any court or arbitrator or any governmental
body, agency or official;
(e) all liabilities and obligations relating to any products
manufactured or sold by Seller on or prior to the Closing Date (excluding
any products or assets included in the Purchased Assets), including,
without limitation warranty obligations and product liabilities; and
(f) any liability or obligation relating to an Excluded Asset.
Nothing in this Section 2.04 shall be deemed to supersede or in any way
invalidate Buyer's indemnification obligations under Section 11.02(b)(ii) of
this Agreement or under Sections 4.4, 6.1 and 6.2 of the Intellectual Property
Agreement.
Section 2.05. Purchase Price; Allocation Of Purchase Price. (a) The
purchase price for the Purchased Assets and the rights, benefits, liabilities
and obligations under the Assumed Contract and under the Intellectual Property
Agreement (the "Intangible Assets") (the "Purchase Price") is $16,008,570 in
cash and 8,200,000 shares (the "Stock Consideration") of common stock (as
adjusted for stock splits, consolidations and the like), par value $.001 per
share, of Buyer ("Buyer Common Stock") for all Purchased Assets and the
Intangible Assets. The Purchase Price shall be paid as provided in Section
2.06.
(b) As soon as practicable after the Closing, Buyer shall deliver to
Seller a statement (the "Allocation Statement") allocating the Purchase Price
(plus liabilities under the Assumed Contract, to the extent properly taken into
account under Section 1060 of the Code) among the Purchased Assets and
Intangible Assets in accordance with Section 1060 of the Code; provided that
Buyer and Seller shall cooperate in the preparation of the Allocation
Statement, Seller shall have the right to approve the Allocation Statement
(which approval shall not be withheld unreasonably) and Buyer shall use
commercially reasonable efforts to prepare the Allocation Statement in order to
minimize Transfer Taxes.
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(c) Seller and Buyer agree to (i) be bound by the Allocation Statement and
(ii) act in accordance with the Allocation Statement for all tax and accounting
purposes.
(d) Not later than 30 days prior to the filing of their respective Forms
8594 relating to this transaction, each party shall deliver to the other party
a copy of its Form 8594.
Section 2.06. Closing. The closing (the "Closing") of the purchase and
sale of the Purchased Assets and the assumption of the Assumed Contract
hereunder shall take place at the offices of Xxxxx Xxxx & Xxxxxxxx, 0000 Xx
Xxxxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, on February 4, 2002, or, if all the
conditions in Article 10 shall not have been satisfied or waived by such date,
as soon as possible thereafter after satisfaction or waiver of the last to be
fulfilled of the conditions set forth in Article 10 that by their terms are not
to occur at the Closing, or at such other time or place as Buyer and Seller may
agree. At the Closing, amongst other things called for by this Agreement and
the Ancillary Agreements:
(a) Acquisition Subsidiary shall deliver, or cause to be delivered,
to Seller $16,008,570 in immediately available funds by wire transfer to
an account of Seller with a bank designated by Seller (or if not so
designated, then by certified or official bank check payable in
immediately available funds to the order of Seller in such amount).
(b) Acquisition Subsidiary shall deliver, or cause to be delivered,
to Seller duly authorized and executed stock certificates representing the
Stock Consideration.
(c) Seller and Acquisition Subsidiary shall enter into the Lease
Assignment and Assumption Agreement, and Seller shall deliver to
Acquisition Subsidiary such bills of sale, endorsements, consents,
assignments and other good and sufficient instruments of conveyance and
assignment as the parties and their respective counsel shall deem
reasonably necessary or appropriate to vest in Acquisition Subsidiary all
right, title and interest in, to and under the Purchased Assets and the
Assumed Contract.
(d) Seller and Buyer shall enter into the Intellectual Property
Agreement.
(e) Seller and Buyer shall enter into the Strategic Alliance
Agreement.
(f) Seller and Buyer shall enter into the Registration Rights
Agreement.
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(g) Seller and Acquisition Subsidiary shall enter into the Interim
Services Agreement.
(h) Seller shall deliver to Acquisition Subsidiary all Required
Consents in each case in form and substance reasonably satisfactory to
Acquisition Subsidiary.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as disclosed in the Seller Disclosure Schedules, Seller hereby
represents and warrants to Buyer as of the date hereof and as of the Closing
Date that:
Section 3.01. Corporate Existence and Power. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all corporate powers and all material
governmental licenses, authorizations, permits, consents and approvals required
to carry on the Business as now conducted.
Section 3.02. Corporate Authorization. The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby are within
Seller's corporate powers and have been duly authorized by all necessary
corporate action on the part of Seller. This Agreement constitutes, and when
duly executed and delivered each Ancillary Agreement will constitute, a valid
and binding agreement of Seller.
Section 3.03. Governmental Authorization. The execution, delivery and
performance by Seller of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby require no
action by or in respect of, or filing with, any governmental body, agency or
official other than (i) compliance with and filings under Section 13(d) and
Section 16 of the Securities Exchange Act of 1934 (the "Exchange Act"), (ii)
those that may be required solely by reason of Buyer's or Acquisition
Subsidiary's (as opposed to any other third party's) participation in the
Acquisition and the other transactions contemplated hereby and by the Ancillary
Agreements or the Permits that are required in connection with its use or
operation of the PRC Assets after the Closing Date and (iii) any other actions
or filings by Seller the absence of which would not reasonably be expected to
have, individually or in the aggregate, a Seller Material Adverse Effect.
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Section 3.04. Noncontravention. The execution, delivery and performance by
Seller of this Agreement and the Ancillary Agreements and the consummation by
Seller of the transactions contemplated hereby and thereby do not and will not
(i) violate the certificate of incorporation or bylaws of Seller, (ii) assuming
compliance with the matters referred to in Section 3.03, violate any applicable
law, rule, regulation, judgment, injunction, order or decree, (iii) assuming
the obtaining of all Required and Other Consents, constitute a default under or
give rise to any right of termination, cancellation or acceleration of any
right or obligation of Seller or to a loss of any benefit relating to the
Assumed Contract or any other agreement or instrument by which any of the
Purchased Assets is or may be bound or (iv) result in the creation or
imposition of any Lien, except for Permitted Liens, on any Purchased Asset,
except, in the case of clauses (ii) and (iii), for such violations, failures to
obtain any such consent or other action, defaults, terminations, cancellations,
accelerations, changes, losses or Liens that would not reasonably be expected
to have, individually or in the aggregate, a Seller Material Adverse Effect.
Section 3.05. Required and Other Consents. (a) Seller Disclosure Schedule
3.05(a) sets forth each agreement, contract or other instrument binding upon
Seller or any Permit (including, without limitation, any Environmental Permit)
requiring a consent or other action by any Person as a result of the execution,
delivery and performance of this Agreement and the Ancillary Agreements by
Seller, except such consents or actions as would not, individually or in the
aggregate, if not received or taken by the Closing Date have a material adverse
effect on or impairment of (x) the ability of Seller to manufacture, sell or
support the Products, or (y) Seller's ability to perform its obligations under
this Agreement and the Ancillary Agreements except, in each case, any such
effect resulting from or arising in connection with (i) this Agreement, the
Ancillary Agreements, or the transactions contemplated hereby and thereby or
the announcement thereof, (ii) changes or conditions affecting Seller's
industry generally or (iii) changes in economic, regulatory or political
conditions generally (the "Required Consents").
(b) Seller Disclosure Schedule 3.05(b) sets forth each other consent or
action by any Person (the "Other Consents") under such agreements, contracts or
other instruments or such Permits that are necessary with respect to the
execution, delivery and performance of this Agreement and the Ancillary
Agreements.
Section 3.06. Buyer Common Stock Ownership. Except as set forth on Seller
Disclosure Schedule 3.06, none of Seller or any of its Affiliates is the
beneficial owner of any shares of Buyer Common Stock.
Section 3.07. Assumed Contract. The Assumed Contract is a valid and
binding agreement of Seller and to Seller's Knowledge is in full force and
effect, and to Seller's Knowledge neither Seller nor any other party thereto is
in material default or breach under the terms of such Assumed Contract, and, to
Seller's Knowledge, no event or circumstance has occurred that, with notice or
11
lapse of time or both, would constitute any material event of default
thereunder. As of the date of this Agreement, to Seller's Knowledge, Seller has
not received notice that any party to the Assumed Contract intends to terminate
the Assumed Contract. True and complete copies of such Assumed Contract have
been delivered to Buyer.
Section 3.08. Compliance with Laws and Court Orders. Seller is not in
violation of, and, to Seller's Knowledge, is not under investigation with
respect to and has not been threatened to be charged with or given notice of
any violation of, any law, rule, regulation, judgment, injunction, order or
decree applicable to the Purchased Assets, except for violations that have not
had and could not reasonably be expected to have, individually or in the
aggregate, a Seller Material Adverse Effect.
Section 3.09. Properties. (a) Seller Disclosure Schedule 3.09(a) correctly
describes all real property leased by Seller under the Net Lease Agreement
dated October 31, 1995 by and among Landlord's predecessor in interest,
Opus/Puget Western I, L.L.C., Seller and Seller's predecessor in interest,
XxXxx Property Investments, Inc., as amended by Amendment 1 to Net Lease
Agreement dated January 3, 1996 and Amendment 2 to Net Lease Agreement dated
September 18, 1996 (as amended, the "Lease"), the rights and obligations under
which Lease are being assigned to and assumed by Acquisition Subsidiary (the
"Real Property"), any title insurance policies and surveys with respect thereto
in the possession of Seller, and any Liens thereon granted by or, to Seller's
Knowledge, imposed by operation of law through Seller, specifying the name of
the lessor or sublessor, the lease term and basic annual rent.
(b) Seller has good and marketable title to all Purchased Assets and has a
valid leasehold interest in the Real Property. No Purchased Asset is subject to
any Lien, except Liens which do not materially detract from the value of such
Purchased Asset, or materially interfere with any present use of such Purchased
Asset, including Liens for current Taxes not yet due and payable (the
"Permitted Liens").
(c) To Seller's Knowledge, (i) the plants, buildings and structures
included in the Real Property have no material defects, (ii) are in good
operating condition and repair and have been reasonably maintained consistent
with standards generally followed in the industry (giving due account to the
age and length of use of same, ordinary wear and tear excepted), (iii) are
adequate and suitable for their present uses and (iv) are structurally sound.
(d) To Seller's Knowledge, the plants, buildings and structures included
in the Real Property currently have access to (i) public roads or valid
easements over private streets or private property for such ingress to and
egress from all such plants, buildings and structures and (ii) water supply,
storm and sanitary sewer facilities, telephone, gas and electrical connections,
fire protection, drainage and other public utilities, in each case as is
12
necessary for the conduct of the Business as it has heretofore been conducted.
(e) To Seller's Knowledge, the use, occupancy and operation of the Real
Property as currently used, occupied and operated, does not constitute a
nonconforming use under applicable building, zoning, subdivision and other land
use and similar laws, regulations and ordinances.
Section 3.10. Sufficiency of and Title to the Purchased Assets. Upon
consummation of the transactions contemplated hereby, Acquisition Subsidiary
will have acquired good and marketable title in and to each of the Purchased
Assets and a valid leasehold interest in the Real Property, free and clear of
all Liens granted by, or to Seller's Knowledge imposed by operation of law
through, Seller, except for Permitted Liens.
Section 3.11. Omitted Intentionally. [reserved].
Section 3.12. Intellectual Property Litigation. To the actual knowledge,
without investigation, of Seller's Vice President and Chief Counsel -
Intellectual Property, there is no suit or proceeding pending against, or
currently threatened in writing against, Seller and affecting the Products or
the PRC Assets which alleges that the Products or PRC Assets infringe,
misappropriate or otherwise violate any Intellectual Property Right of any
third party.
Section 3.13. Licenses and Permits. To Seller's Knowledge, Seller
Disclosure Schedule 3.13 correctly describes each material governmental
license, franchise, permit, certificate, approval or other similar
authorization obtained by Seller that affects, or relates in any way to, the
Products or the PRC Assets (the "Permits") together with the name of the
government agency or entity issuing such Permit. Except as set forth on the
Seller Disclosure Schedule 3.13, to Seller's Knowledge, (i) the Permits are
valid and in full force and effect and (ii) Seller is not in default, and no
condition exists that with notice or lapse of time or both would constitute a
default, under the Permits. Seller makes no representation or warranty that the
Permits are sufficient for the use, operation, sale, lease or license by Buyer
or Acquisition Subsidiary of the PRC Assets after Closing.
Section 3.14. Inventories. The inventories included in the Purchased
Assets are owned free and clear of all Liens granted by, or to Seller's
Knowledge imposed by operation of law through, Seller, except Permitted Liens.
Section 3.15. Finders' Fees. Except for Xxxxxxx Xxxxx, whose fees will be
paid by Seller, there is no investment banker, broker, finder or other
intermediary which has been retained by or is authorized to act on behalf of
Seller who might be entitled to any fee or commission in connection with the
transactions contemplated by this Agreement or the Ancillary Agreements.
13
Section 3.16. Environmental Compliance. (a) Except as disclosed on Seller
Disclosure Schedule 3.16, to Seller's Knowledge:
(i) in connection with or relating to the Purchased Assets, PRC
Assets or Real Property, no notice, notification, demand, request for
information, citation, summons or order has been received by Seller, no
complaint has been filed, no penalty has been assessed and no
investigation, action, claim, suit, proceeding or review is pending or, to
Seller's Knowledge, threatened against Seller by any governmental entity
or other Person with respect to any matters relating to the PRC Assets and
relating to or arising out of any Environmental Law;
(ii) there are no Environmental Liabilities arising in connection
with or in any way relating to the Purchased Assets, PRC Assets or Real
Property of any kind whatsoever, whether accrued, contingent, absolute,
determined, determinable or otherwise, arising under or relating to any
Environmental Law, and there are no facts, events, conditions, situations
or set of circumstances which could reasonably be expected to result in or
be the basis for any such liability;
(iii) no polychlorinated biphenyls, radioactive material, lead,
asbestos-containing material, incinerator, sump, surface impoundment,
lagoon, landfill, septic, wastewater treatment or other disposal system or
underground storage tank (active or inactive) is or has been present at,
on or under any Real Property or in any Purchased Asset;
(iv) no Hazardous Substance has been discharged, disposed of, dumped,
injected, pumped, deposited, spilled, leaked, emitted or released at, on
or under any Real Property;
(v) no Real Property, nor any property to which Hazardous Substances
located on or resulting from the use of any Purchased Asset or Real
Property have been transported, nor any property to which Seller has,
directly or indirectly, transported or arranged for the transportation of
any Hazardous Substances, is listed or, to Seller's Knowledge, proposed
for listing on the National Priorities List promulgated pursuant to
CERCLA, on CERCLIS (as defined in CERCLA) or on any similar federal,
state, local or foreign list of sites requiring investigation or cleanup;
and
(vi) in connection with the Purchased Assets, PRC Assets and Real
Property, Seller is in compliance with all Environmental Laws and has and
is in compliance with all Environmental Permits; such Environmental
Permits are valid and in full force and effect and are transferable and
will not be terminated or impaired or become terminable as a result of the
transactions contemplated hereby.
14
(b) To Seller's Knowledge, there has been no environmental investigation,
study, audit, test, review or other analysis conducted in relation to any
Purchased Asset or Real Property which has not been delivered to Buyer prior to
the date hereof.
(c) None of the Purchased Assets is located in New Jersey or Connecticut.
Section 3.17. Purchase for Investment. Seller is an "accredited investor"
as defined in Rule 501 under the Securities Act. Seller is acquiring the Stock
Consideration for investment for its own account and not with a view to, or for
sale in connection with, any distribution thereof. Seller has sufficient
knowledge and experience in financial and business matters so as to be capable
of evaluating the merits and risks of its investment in the Stock Consideration
and is capable of bearing the economic risks of such investment. Seller has
been provided, to its satisfaction, the opportunity to ask questions concerning
the terms and conditions of the offering and sale of the Stock Consideration
pursuant to this Agreement, has had all such questions answered to its
satisfaction and has been supplied all additional information Seller deemed
necessary to verify the accuracy of the information furnished to Seller. Seller
acknowledges that the Stock Consideration delivered at the Closing will not be
registered under the Securities Act and will bear a legend indicating the same.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as disclosed in the Buyer Disclosure Schedules, Buyer hereby
represents and warrants to Seller as of the date hereof and as of the Closing
Date that:
Section 4.01 . Corporate Existence And Power. Each of Buyer and
Acquisition Subsidiary is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has
all corporate powers and all governmental licenses, authorizations, permits,
consents and approvals required to carry on its business as now conducted,
except for those licenses, authorizations, permits, consents and approvals the
absence of which would not have, individually or in the aggregate, a Buyer
Material Adverse Effect. Buyer is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, have a Buyer Material
Adverse Effect. Buyer has heretofore delivered to Seller true and complete
copies of the certificate of incorporation and bylaws of Buyer as currently in
effect. Acquisition Subsidiary has not engaged in any activities other than in
connection with or as contemplated by this Agreement or the Ancillary
Agreements.
15
Section 4.02. Corporate Authorization. The execution, delivery and
performance by Buyer and Acquisition Subsidiary of this Agreement and the
Ancillary Agreements and the consummation by Buyer and Acquisition Subsidiary
of the transactions contemplated hereby and thereby are within the corporate
powers of Buyer and Acquisition Subsidiary and have been duly authorized by all
necessary corporate action on the part of Buyer and Acquisition Subsidiary.
This Agreement constitutes, and when duly executed and delivered each Ancillary
Agreement to which it is a party will constitute, a valid and binding agreement
of each of Buyer and Acquisition Subsidiary.
Section 4.03. Governmental Authorization. The execution, delivery and
performance by Buyer and Acquisition Subsidiary of this Agreement and the
Ancillary Agreements and the consummation by Buyer and Acquisition Subsidiary
of the transactions contemplated hereby and thereby require no action by or in
respect of, or filing with, any governmental body, agency or official, other
than (i) compliance with any applicable requirements of the Securities Act, the
Exchange Act and any other securities laws, whether state or foreign, (ii)
those that may be required solely by reason of Seller's (as opposed to any
other third party's) participation in the Acquisition and the other
transactions contemplated hereby and by the Ancillary Agreements and (iii) any
actions or filings the absence of which would not be reasonably expected to
have, individually or in the aggregate, a Buyer Material Adverse Effect.
Section 4.04. Non-contravention. The execution, delivery and performance
by Buyer and Acquisition Subsidiary of this Agreement and the Ancillary
Agreements and the consummation by Buyer and Acquisition Subsidiary of the
transactions contemplated hereby and thereby do not and will not (i)
contravene, conflict with, or result in any violation or breach of any
provision of the certificate of incorporation or bylaws of Buyer or Acquisition
Subsidiary, (ii) assuming compliance with the matters referred to in Section
4.03, contravene, conflict with or result in a violation or breach of any
provision of any law, rule, regulation, judgment, injunction, order or decree,
(iii) require any consent or other action by any Person under, constitute a
default under, or cause or permit the termination, cancellation, acceleration
or other change of any right or obligation or the loss of any benefit to which
Buyer or any of its Subsidiaries is entitled under any provision of any
agreement or other instrument binding upon Buyer or any of its Subsidiaries or
any license, franchise, permit, certificate, approval or other similar
authorization affecting, or relating in any way to, the assets or business of
Buyer and its Subsidiaries or (iv) result in the creation or imposition of any
Lien on any asset of Buyer or any of its Subsidiaries, except, in the case of
clauses (ii), (iii) and (iv), for such contraventions, conflicts, violations,
failures to obtain any such consent or other action, defaults, terminations,
cancellations, accelerations, changes, losses or Liens that would not be
reasonably expected to have, individually or in the aggregate, a Buyer Material
Adverse Effect.
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Section 4.05. Capitalization. (a) The authorized capital stock of Buyer
consists of 105,000,000 shares consisting of 100,000,000 shares of Buyer Common
Stock and 5,000,000 shares of Preferred Stock, par value $.001 per share
("Buyer Preferred Stock"), of which 800,000 shares are designated Series A
Participating Preferred Stock ("Series A Preferred Stock"). As of December 31,
2001, there were outstanding 52,534,698 shares of Buyer Common Stock, no shares
of Buyer Preferred Stock and employee stock options to purchase an aggregate of
8,181,300 shares of Buyer Common Stock (of which options to purchase an
aggregate of 5,701,721 shares of Buyer Common Stock were exercisable).
(b) Buyer has made available to Seller a complete and correct copy of the
Rights Agreement dated as of July 23, 2001, between Buyer and American Stock
Transfer and Trust Company, as Trustee (the "Rights Agreement"), pursuant to
which one right to purchase one one-hundredth of a share of Series A Preferred
Stock (each, a "Right") was issued in respect of each share of Buyer Common
Stock outstanding on August 16, 2001, and one Right will be issued in respect
of each share of Buyer Common Stock issued after that date.
(c) All outstanding shares of capital stock of Buyer have been duly
authorized and validly issued and are fully paid and nonassessable.
(d) Except as set forth in this Section 4.05 and for issuances of Buyer
Common Stock and Rights since December 31, 2001, resulting from the exercise of
stock options or the grant of stock based compensation to directors or
employees, to Buyer's Knowledge there are no outstanding (i) shares of capital
stock or voting securities of Buyer, (ii) securities of Buyer convertible into
or exchangeable for shares of capital stock or voting securities of Buyer or
(iii) options or other rights to acquire from Buyer or other obligation of
Buyer to issue, any capital stock, voting securities or securities convertible
into or exchangeable for capital stock or voting securities of Buyer. To
Buyer's Knowledge there are no outstanding obligations of Buyer or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any of the securities
referred to in clause (i), (ii) or (iii) above.
(e) The shares of Buyer Common Stock to be issued as part of the Purchase
Price have been duly authorized and, when issued and delivered in accordance
with the terms of this Agreement, will have been validly issued and will be
fully paid and nonassessable and the issuance thereof is not subject to any
preemptive or other similar right..
Section 4.06. SEC Filings. Buyer has delivered or made available to Seller
(i) its annual reports on Form 10-K for its fiscal years ended December 31,
1999 and 2000, (ii) its quarterly reports on Form 10-Q for its fiscal quarters
ended March 31, 2001, June 30, 2001 and September 30, 2001, (iii) its proxy or
information statements relating to meetings of or actions taken without a
meeting by Buyer's stockholders held since December 31, 1999, and (iv) all of
17
its other reports, statements, schedules and registration statements filed with
the SEC since December 31, 1999 (the documents referred to in this Section
4.06(a), collectively, the "Buyer SEC Documents").
(b) As of its filing date, except as set forth on Buyer Disclosure
Schedule 4.06(b) each Buyer SEC Document complied as to form in all material
respects with the applicable requirements of the Securities Act and Exchange
Act, as the case may be.
(c) As of its filing date, each Buyer SEC Document filed pursuant to the
Exchange Act did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
(d) Each Buyer SEC Document that is a registration statement, as amended
or supplemented, if applicable, filed pursuant to the Securities Act, as of the
date such registration statement or amendment became effective, did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading.
Section 4.07. Financial Statements. To Buyer's Knowledge, the audited
consolidated financial statements and unaudited consolidated interim financial
statements of Buyer included in the Buyer SEC Filings fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of Buyer and its consolidated Subsidiaries as
of the dates thereof and their consolidated results of operations and cash
flows for the periods then ended (subject to normal year-end adjustments in the
case of any unaudited interim financial statements).
Section 4.08. Absence Of Certain Changes. To Buyer's Knowledge, since the
Buyer Balance Sheet Date, the business of Buyer and its Subsidiaries has been
conducted in the ordinary course consistent with past practice and, except as
disclosed on Buyer Disclosure Schedule 4.08 to Buyer's Knowledge:
(a) there has not been any event, occurrence, development or state of
circumstances or facts that has had or could reasonably be expected to have,
individually or in the aggregate, a Buyer Material Adverse Effect;
(b) there has not been any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital stock of
Buyer, or any repurchase, redemption or other acquisition by Buyer or any of
its Subsidiaries of any outstanding shares of capital stock or other securities
of, or other ownership interests in, Buyer or any of its Subsidiaries;
18
(c) there has not been any material change in any method of accounting,
method of tax accounting, or accounting practice by Buyer or any of its
Subsidiaries, except for any such change required by reason of a concurrent
change in generally accepted accounting principles or Regulation S-X under the
Exchange Act; and
(d) except as set forth on Buyer Disclosure Schedule 4.08(d) and other
than in connection with the transactions contemplated in this Agreement and in
the Ancillary Agreements and the replacement or assignment of third party
contracts that Seller was a party to in connection with or relating to the
Business, Buyer has not entered into any material agreement within the meaning
of Item 601 of Regulation S-K under the Exchange Act.
Section 4.09. No Undisclosed Material Liabilities. To Buyer's Knowledge,
there are no liabilities or obligations of Buyer or any of its Subsidiaries of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, other than:
(a) liabilities or obligations disclosed and provided for in the Buyer
Balance Sheet or in the notes thereto or in the Buyer SEC Documents filed prior
to the date hereof;
(b) liabilities not required under generally accepted accounting
principles to be shown on the Buyer Balance Sheet; and
(c) liabilities or obligations incurred in the ordinary course of business
consistent with past practices since the Buyer Balance Sheet Date that would
not reasonably be expected to have, individually or in the aggregate, a Buyer
Material Adverse Effect.
Section 4.10. Compliance With Laws And Court Orders. Buyer and each of its
Subsidiaries is and, since December 31, 1999, has been in compliance with, and
to the knowledge of Buyer is not under investigation with respect to and has
not been threatened to be charged with or given notice of any violation of, any
applicable law, rule, regulation, judgment, injunction, order or decree, except
for violations that have not had and would not reasonably be expected to have,
individually or in the aggregate, a Buyer Material Adverse Effect.
Section 4.11. Litigation. Except as set forth in the Buyer SEC Documents
prior to the date hereof or as set forth on Buyer Disclosure Schedule 4.11, to
Buyer's Knowledge, there is no action, suit, investigation or proceeding (or
any basis therefor) pending against, or threatened against or affecting, Buyer,
any of its Subsidiaries, any present or former officer, director or employee of
Buyer or any of its Subsidiaries or any other Person for whom Buyer or any
Subsidiary may be liable or any of their respective properties before any court
or arbitrator or any governmental body, agency or official, domestic, foreign
or supranational, that, if determined or resolved adversely in accordance with
19
the plaintiff's demands, would reasonably be expected to have, individually or
in the aggregate, a Buyer Material Adverse Effect or that in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
Acquisition or any of the other transactions contemplated hereby or by the
Ancillary Agreements, or that would require disclosure pursuant to Item 103 of
Regulation S-K under the Exchange Act.
Section 4.12. Finders' Fees. Except for Xxxxxxx, Xxxxx & Co., whose fees
will be paid by Buyer, there is no investment banker, broker, finder or other
intermediary that has been retained by or is authorized to act on behalf of
Buyer who might be entitled to any fee or commission from the Seller or any of
its Affiliates upon consummation of the transactions contemplated by this
Agreement or the Ancillary Agreements.
Section 4.13. Offering of Securities. None of Buyer, Acquisition
Subsidiary or any Person acting on their behalf has taken or will take any
action which might subject the offering, issuance or sale of the Stock
Consideration to Seller to the registration requirements of Section 5 of the
Securities Act.
Section 4.14. HSR Act. Pursuant to the rules and regulations promulgated
pursuant to the HSR Act, including but not limited to 16 C.F.R. 801.10(c)(3),
Buyer has in good faith determined that the fair market value of the Purchased
Assets and the Intangible Assets is $50 million or less and thus, no filing is
required under the HSR Act.
ARTICLE 5
COVENANTS OF SELLER
Seller agrees that:
Section 5.01. Conduct Of The Business. From the date hereof until the
Closing Date, Seller will not:
(a) sell, lease, license or otherwise dispose of any Purchased Assets or
the Assumed Contract, or agree or commit to do any of the foregoing; or
(b) (i) take or agree or commit to take any action that would make any
representation or warranty of Seller hereunder or in any Ancillary Agreement
inaccurate in any material respect at, or as of any time prior to, the Closing
Date or (ii) omit or agree or commit to omit to take any action necessary to
prevent any such representation or warranty from being inaccurate in any
respect at any such time.
Section 5.02. Access To Information; Confidentiality. (a) No investigation
by Buyer or Acquisition Subsidiary or other information received by Buyer or
20
Acquisition Subsidiary shall operate as a waiver or otherwise affect any
representation, warranty or agreement given or made by Seller hereunder.
(b) After the Closing, Seller and its Affiliates will hold, and will use
reasonable efforts to cause their respective officers, directors, employees,
accountants, counsel, consultants, advisors and agents to hold, in confidence,
unless compelled to disclose by judicial or administrative process or by other
requirements of law, all confidential documents and information concerning the
PRC Assets, except to the extent that such information can be shown to have
been (i) in the public domain through no fault of Seller or its Affiliates or
(ii) later lawfully acquired by Seller from sources other than those related to
its prior ownership of the PRC Assets, provided, however, that notwithstanding
anything to the contrary in this Section 5.02(b), as more particularly set
forth in Section 4.4 of the Intellectual Property Agreement, Seller shall have
no any obligation to take any action for the preservation or protection of any
AWS Rights (as defined in the Intellectual Property Agreement). The obligation
of Seller and its Affiliates to hold any such information in confidence shall
be satisfied if they exercise the same care with respect to such information as
they would take to preserve the confidentiality of their own similar
information.
(c) On and after the Closing Date, Seller will afford promptly to Buyer,
Acquisition Subsidiary and their agents reasonable access to the books of
account, financial and other records relating to the Business (including,
without limitation, accountant's work papers), employees and auditors to the
extent necessary for Buyer or Acquisition Subsidiary in connection with any
audit, investigation, dispute or litigation (other than a dispute between Buyer
or its Affiliates with Seller or its Affiliates); provided that any such access
shall not unreasonably interfere with the conduct of the business of Seller and
Seller may limit such access to the extent Seller, in its reasonable
discretion, deems necessary to protect or avoid harm to the AWS Trade Secrets
or the AWS Patent Rights (as each of those terms is defined in the Intellectual
Property Agreement). Buyer shall bear all of the out-of-pocket costs and
expenses (including, without limitation, attorneys' fees, but excluding
reimbursement for general overhead, salaries and employee benefits) reasonably
incurred in connection with the foregoing. Buyer, Acquisition Subsidiary and
their Affiliates will hold, and will use all reasonable efforts to cause their
respective officers, directors, employees, accountants, counsel, consultants,
advisors and agents to hold, in confidence, unless compelled to disclose by
judicial or administrative process or by other requirements of law, all
confidential documents and information concerning the information and documents
and records disclosed pursuant to this Section 5.01(c), except to the extent
that such information can be shown to have been (i) in the public domain
through no fault of Buyer or its Affiliates or (ii) later lawfully acquired by
Buyer from sources other than those related to the access provided by Seller to
Buyer, Acquisition Subsidiary and their Affiliates, employees and agents under
this Section 5.01(c). Nothing in this Agreement shall limit, in the event of a
dispute between Buyer or its Affiliates with Seller or its Affiliates, a
21
party's right to obtain discovery from the other party to the full extent
permitted under applicable law.
Section 5.03. Notices Of Certain Events. Seller shall promptly notify
Buyer of:
(a) any notice or other communication from any Person to Seller alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement or the Ancillary Agreements;
(b) any notice or other communication from any governmental or regulatory
agency or authority to Seller in connection with the transactions contemplated
by this Agreement or the Ancillary Agreements;
(c) any actions, suits, claims, investigations or proceedings commenced
or, to Seller's Knowledge threatened, against, Seller that relate to, involve
or otherwise affect the sale of the PRC Assets pursuant to this Agreement or
that would have been required to have been disclosed pursuant to Section 3.12;
and
(d) the damage or destruction by fire or other casualty of any Purchased
Asset or part thereof prior to the Closing or in the event that any Purchased
Asset or part thereof becomes, prior to the Closing, the subject of any
proceeding or, to Seller's Knowledge, threatened proceeding for the taking
thereof or any part thereof or of any right relating thereto by condemnation,
eminent domain or other similar governmental action.
Section 5.04. Post-Closing Cooperation. After the Closing, Seller shall
reasonably cooperate with, and shall cause its officers, employees, agents,
auditors and representatives to reasonably cooperate with, Buyer and
Acquisition Subsidiary to ensure the orderly transition of the PRC Assets from
Seller to Acquisition Subsidiary. Such cooperation shall include, without
limitation, using reasonable efforts to provide such historical financial
statements or other financial information relating to the Business and/or the
PRC Assets that is reasonably necessary to prepare such historical or pro forma
financial statements as are, in the opinion of Buyer's independent public
accountants, required in order for Buyer to register the Stock Consideration as
contemplated by the Registration Rights Agreement. Notwithstanding anything to
the contrary, Seller shall in no event have any obligation to provide services
of any kind to Buyer or Acquisition Subsidiary except as expressly contemplated
in the Interim Services Agreement.
ARTICLE 6
COVENANTS OF BUYER
Buyer agrees that:
22
Section 6.01. Confidentiality. Buyer acknowledges and agrees that all
confidential documents and information concerning the Business, the PRC Assets
or Seller furnished to Buyer or its Affiliates in connection with the
transactions contemplated by this Agreement and the Ancillary Agreements shall
be subject to the terms and conditions of that certain Mutual Nondisclosure
Agreement dated as of August 17, 2001 among Buyer and Seller, as amended by
that certain letter agreement dated as of October 31, 2001 between Buyer and
Seller, that certain letter agreement dated as of November 15, 2001 between
Buyer and Seller, and a side letter dated October 31, 2001, between Buyer and
Seller (collectively, the "Mutual NDA").
Section 6.02. Access To Information Not A Waiver; Access. (a) No
investigation by Seller or other information received by Seller shall operate
as a waiver or otherwise affect any representation, warranty or agreement given
or made by Buyer hereunder.
(b) On and after the Closing Date, Buyer and Acquisition Subsidiary will
afford promptly to Seller and its agents reasonable access to its properties,
books, records, employees and auditors to the extent necessary to permit Seller
to determine any matter relating to its rights and obligations hereunder or to
any period ending on or before the Closing Date; provided that any such access
by Seller shall not unreasonably interfere with the conduct of the business of
Buyer or Acquisition Subsidiary. Seller and its Affiliates will hold, and will
use all reasonable efforts to cause their respective officers, directors,
employees, accountants, counsel, consultants, advisors and agents to hold, in
confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential documents and information
concerning the information and documents and records disclosed pursuant to this
Section 6.02(b), except to the extent that such information can be shown to
have been (i) in the public domain through no fault of Seller or its Affiliates
or (ii) later lawfully acquired by Seller from sources other than those related
to the access provided by Buyer to Seller and their Affiliates, employees and
agents under this Section 6.02(b).
Section 6.03. Director Appointment. Buyer agrees to use its best efforts
to duly elect Xxxxx Xxxxxxx to Buyer's Board of Directors as soon as practical
following the Closing.
Section 6.04. Employee Cost Reimbursement. In the event that the Closing
has not occurred by January 31, 2002, Buyer agrees to reimburse Seller, in an
amount not to exceed $1,025,355 per month (which cap shall be prorated for
partial months), for all compensation and benefits costs actually incurred by
Seller and due for the period following such date with respect to the employees
set forth on Exhibit D hereto until (i) the Closing or (ii) if the Closing does
not occur, the termination of this Agreement in accordance with the terms of
12.01. Such reimbursement shall be made promptly following Seller's written
request therefor is delivered to Buyer.
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ARTICLE 7
COVENANTS OF BUYER, ACQUISITION SUBSIDIARY AND SELLER
Buyer, Acquisition Subsidiary and Seller agree that:
Section 7.01. Further Assurances. (a) Subject to the terms and conditions
of this Agreement, Buyer, Acquisition Subsidiary and Seller will use all
reasonable efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary or desirable under this Agreement or
under applicable laws and regulations to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements. Seller, Buyer and
Acquisition Subsidiary agree to execute and deliver such other documents,
certificates, agreements and other writings and to take such other actions as
may be necessary or desirable in order to consummate the transactions
contemplated by this Agreement and the Ancillary Agreements and to vest in
Acquisition Subsidiary good and marketable title to the Purchased Assets.
(b) Seller hereby constitutes and appoints, effective as of the Closing
Date, Acquisition Subsidiary and its successors and assigns as the true and
lawful attorney of Seller with full power of substitution in the name of
Acquisition Subsidiary, or in the name of Seller but for the benefit of
Acquisition Subsidiary, to institute and prosecute all proceedings which
Acquisition Subsidiary may in its sole discretion deem proper in order to
assert or enforce any right, title or interest in, to or under the Purchased
Assets and the Intangible Assets, and to defend or compromise any and all
actions, suits or proceedings in respect of the Purchased Assets and the
Intangible Assets. Acquisition Subsidiary shall be entitled to retain for its
own account any amounts collected pursuant to the foregoing powers, including
any amounts payable as interest in respect thereof.
Section 7.02. Public Announcements. The parties agree to consult with each
other before issuing any press release or making any public statement with
respect to this Agreement or the Ancillary Agreements or the transactions
contemplated hereby or thereby and, except for any press releases and public
statements the making of which may be required by applicable law (including the
rules and regulations of the National Association of Securities Dealers, Inc.
and the Nasdaq National Market System) or any listing agreement with any
national securities exchange, will not issue any such press release or make any
such public statement prior to such consultation.
Section 7.03. Trademarks; Tradenames. (a) Buyer and its Affiliates shall
not use, and shall be required to remove or obscure, any Seller marks or names
that include "AT&T" or "AT&T Wireless" or the like, or that otherwise indicate
Seller as the source of origin of any Purchased Assets sold or otherwise
disposed of by Buyer or its Affiliates after the Closing.
Section 7.04. WARN Act. The parties agree to cooperate in good faith to
determine whether any notification may be required under the Worker Adjustment
24
and Retraining Notification Act (the "WARN Act") as a result of the
transactions contemplated by this Agreement. Buyer will be responsible for
providing any notification that may be required under the WARN Act with respect
to any Transferred Employees. Seller will be responsible for providing any
notification that may be required under the WARN Act with respect to any
employees of the Business that are not Transferred Employees.
ARTICLE 8
TAX MATTERS
Section 8.01. Tax Definitions. The following terms, as used herein, have
the following meanings:
"Code" means the Internal Revenue Code of 1986, as amended.
"Pre-Closing Tax Period" means (i) any Tax Period ending on or before the
Closing Date and (ii) with respect to a Tax Period that commences before but
ends after the Closing Date, the portion of such period up to and including the
Closing Date.
"Tax" means (i) any tax, governmental fee or other like assessment or
charge of any kind whatsoever (including, but not limited to, withholding on
amounts paid to or by any Person), together with any interest, penalty,
addition to tax or additional amount imposed by any governmental authority (a
"Taxing Authority") responsible for the imposition of any such tax (domestic or
foreign), or (ii) liability for the payment of any amounts of the type
described in (i) as a result of being party to any agreement or any express or
implied obligation to indemnify any other Person.
Section 8.02. Tax Matters. Seller hereby represents and warrants to Buyer
that
(i) Seller has timely paid, or has established in accordance with
generally accepted accounting principles applied on a basis consistent
with that of preceding periods, adequate reserves for payment of all Taxes
which will have been required to be paid on or prior to the date hereof,
the non-payment of which would result in a Lien, other than Permitted
Liens, on any Purchased Asset, would otherwise adversely affect the PRC
Assets or would result in Buyer becoming liable or responsible therefor.
(ii) Seller has established, in accordance with generally accepted
accounting principles applied on a basis consistent with that of preceding
periods, adequate reserves for the payment of all Taxes which arise from
or with respect to the Purchased Assets or the operation of the Business
and are incurred in or attributable to the Pre-Closing Tax Period, the
non-payment of which would result in a Lien, other than Permitted Liens,
25
on any Purchased Asset, would otherwise adversely affect the PRC Assets or
would result in Buyer becoming liable therefor.
Section 8.03. Tax Cooperation; Allocation of Taxes. (a) Buyer and Seller
agree to furnish or cause to be furnished to each other, upon request, as
promptly as practicable, such information and assistance relating to the PRC
Assets and the Purchased Assets (including, without limitation, access to books
and records) as is reasonably necessary for the filing of all Tax returns, the
making of any election relating to Taxes, the preparation for any audit by any
Taxing Authority, and the prosecution or defense of any claim, suit or
proceeding relating to any Tax. Buyer and Seller shall retain all books and
records with respect to Taxes pertaining to the PRC Assets for a period of at
least six years following the Closing Date. At the end of such period, each
party shall have the right to take possession, at its own expense, of such
books and records of the other party; provided that the receiving party shall
have provided written notice to the providing party within no less than one
month and no more than three months prior to the end of such period; provided
further that in lieu of delivering possession of such books and records, the
providing party may provide a covenant to the requesting party that the
providing party will not destroy such books and records without first offering
to deliver them to the receiving party. Seller and Buyer shall cooperate with
each other in the conduct of any audit or other proceeding relating to Taxes
involving the Purchased Assets or the PRC Assets.
(b) All real property taxes, personal property taxes and similar ad
valorem obligations with respect to the Purchased Assets payable in respect of
the taxable period in which the Closing Date occurs (collectively, the
"Apportioned Obligations") shall be apportioned between Seller and Buyer based
on the number of days of such taxable period included in the Pre-Closing Tax
Period and the number of days of such taxable period after the Closing Date
(with respect to any such taxable period, the "Post-Closing Tax Period").
Seller shall be liable for the proportionate amount of such taxes that is
attributable to the Pre-Closing Tax Period, and Buyer shall be liable for the
proportionate amount of such taxes that is attributable to the Post-Closing Tax
Period.
(c) All excise, sales, use, value added, registration stamp, recording,
documentary, conveyancing, franchise, property, transfer, gains and similar
Taxes, levies, charges and fees (collectively, "Transfer Taxes") incurred in
connection with the transactions contemplated by this Agreement shall be borne
equally by Seller and Buyer, except that Seller shall be responsible to pay no
more than $650,000 in Transfer Taxes and Buyer shall be responsible for, and
indemnify Seller against, any amounts in excess thereof. Buyer and Seller shall
cooperate and act in good faith to minimize Transfer Taxes, including providing
each other with any appropriate exemption certifications and other similar
documentation.
(d) Apportioned Obligations and Taxes described in Section 8.03(c) shall
be timely paid, and all applicable filings, reports and returns shall be filed,
26
as provided by applicable law. The paying party shall be entitled to
reimbursement from the non-paying party in accordance with Section 8.03(b) or
(c), as the case may be. Upon payment of any such Apportioned Obligation or
Tax, the paying party shall present a statement to the non-paying party setting
forth the amount of reimbursement to which the paying party is entitled under
Section 8.03(b) or (c), as the case may be together with such supporting
evidence as is reasonably necessary to calculate the amount to be reimbursed.
The non-paying party shall make such reimbursement promptly but in no event
later than 10 days after the presentation of such statement. Any payment not
made within such time shall bear interest at a rate per annum equal to the
Prime Rate as published in the Wall Street Journal, Eastern Edition for each
day until paid.
ARTICLE 9
EMPLOYEE BENEFITS
Section 9.01. ERISA Representations. Seller hereby represents and warrants
to Buyer that:
(a) Seller Disclosure Schedule Section 9.01(a) contains a correct and
complete list identifying each material "employee benefit plan", as defined in
Section 3(3) of ERISA, each employment, severance or similar contract, plan,
arrangement or policy and each other plan or arrangement (written or oral)
providing for compensation, bonuses, stock option or other stock related rights
or other forms of incentive or deferred compensation, vacation benefits,
severance benefits, retirement benefits, health, or medical or other employee
benefits which is maintained, administered or contributed to by Seller or any
Affiliates of Seller and covers any employee or former employee of the
Business. Copies of such plans (and, if applicable, related trust or funding
agreements or insurance policies) and all amendments thereto and written
interpretations thereof have been made available to Buyer together with the
most recent annual report (Form 5500 including, if applicable, Schedule B
thereto) prepared in connection with any such plan or trust. Such plans are
referred to collectively herein as the "Employee Plans".
(b) Neither Seller nor any ERISA Affiliate of Seller has (i) engaged in,
or is a successor or parent corporation to an entity that has engaged in, a
transaction described in Sections 4069 or 4212(c) of ERISA or (ii) incurred, or
reasonably expects to incur prior to the Closing Date, (A) any liability under
Title IV of ERISA arising in connection with the termination of, or a complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA or (B) any liability under Section 4971 of the Code that in either
case could become a liability of Buyer or any of its ERISA Affiliates after the
Closing Date.
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(c) None of Seller, any ERISA Affiliate of Seller and any predecessor
thereof contributes to, or has in the past contributed to, any multiemployer
plan, as defined in Section 3(37) of ERISA (a "Multiemployer Plan").
(d) Each Employee 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 Internal Revenue Service, and Seller is not aware of any
reason why any such determination letter should be revoked or not be reissued.
Seller has made available to Buyer copies of the most recent Internal Revenue
Service determination letters with respect to each such Employee Plan. Each
Employee Plan has been maintained in material compliance with its terms and
with the requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, which are
applicable to such Employee Plan.
Section 9.02. Employees and Offers of Employment. On or prior to the
Closing Date, Buyer shall offer employment to those active employees of the
Business listed on Exhibit D; provided, that Buyer may terminate at any time
after the Closing Date the employment of any employee who accepts such offer.
Any such offers shall be at such salary or wage and benefit levels and on such
other terms and conditions as Buyer shall in its sole discretion deem
appropriate. Notwithstanding the foregoing, Buyer agrees that for a period of
12 months following the Closing Date, Buyer shall provide, and cause its
Affiliates to provide, any Transferred Employee who is terminated within 12
months after the Closing Date severance pay in an amount equal to that which
such Transferred Employee would have received under the terms of the AT&T
Wireless Severance Pay Plan in effect immediately prior to the Closing Date in
the event of such termination. The employees who accept and commence employment
with Buyer are hereinafter collectively referred to as the "Transferred
Employees". Seller will not take, and will cause each of its subsidiaries not
to take, any action which would impede, hinder, interfere or otherwise compete
with Buyer's effort to hire any Transferred Employees. Buyer shall not assume
responsibility for any Transferred Employee until such employee commences
employment with Buyer.
Section 9.03. Seller's Employee Benefit Plan.
Seller's Employee Benefit Plan. Subject to the approval of the
Compensation Committee of Seller's Board of Directors, options granted to
Transferred Employees under Seller's Adjustment Plan shall be fully vested as
of the Closing Date. The accounts of Transferred Employees in Seller's 401(k)
Plan shall be fully vested as of the Closing Date, subject to any limitation on
such vesting acceleration as may be required under the Code. Seller shall pay
all salary, bonus and other compensation due to Transferred Employees on or
promptly after the Closing Date in accordance with the terms of the Employee
Plans and applicable law.
Section 9.04. Buyer Benefit Plans. Buyer or one of its Affiliates will
recognize all service of the Transferred Employees with Seller or any of its
28
Affiliates to the full extent credited by Seller, but only for purposes of
eligibility to participate in those employee benefit plans, within the meaning
of Section 3(3) of ERISA, in which the Transferred Employees are enrolled by
Buyer or one of its Affiliates immediately after the Closing Date. With respect
to any such employee benefit plans, Buyer and its Affiliates shall (i) waive
all limitations as to preexisting conditions, exclusions and waiting periods
applicable to each Transferred Employee (and his or her covered spouse and
dependents), and (ii) provide such Transferred Employee (and his or her covered
spouse and dependants) with credit for any co-payments and deductibles paid by
such Transferred Employee under any comparable Employee Plan prior to the
Closing Date.
Section 9.05. No Third Party Beneficiaries. No provision of this Article
shall create any third party beneficiary or other rights in any employee or
former employee of Seller.
ARTICLE 10
CONDITIONS TO CLOSING
Section 10.01. Conditions To Obligations Of Buyer, Acquisition Subsidiary
and Seller. The obligations of Buyer, Acquisition Subsidiary and Seller to
consummate the Closing are subject to the satisfaction of the following
condition:
(a) No provision of any applicable law or regulation and no judgment,
injunction, order or decree shall prohibit the consummation of the
Closing.
Section 10.02. Conditions To Obligation Of Buyer And Acquisition
Subsidiary. The obligations of each of Buyer and Acquisition Subsidiary to
consummate the Closing are subject to the satisfaction of the following further
conditions:
(a) The representations and warranties of Seller set forth in this
Agreement and each Ancillary Agreement, disregarding all qualifications
and exceptions contained therein relating to materiality or Seller
Material Adverse Effect or any similar standard or qualification, shall be
true and correct at and as of the Closing Date as if made at and as of
such date, except to the extent such representations and warranties
expressly relate to an earlier date (in which case such representations
and warranties shall be true and correct in all material respects as of
such earlier date), except where the failure of such representations or
warranties to be true and correct would not, individually or in the
aggregate, have a Seller Material Adverse Effect. Buyer shall have
received a certificate to such effect on the Closing Date.
29
(b) Seller shall have performed in all material respects all
agreements and covenants required to be performed by it under this
Agreement and each Ancillary Agreement prior to the Closing Date. Buyer
shall have received a certificate to such effect on the Closing Date.
(c) There shall not be threatened, instituted or pending any action
or proceeding by any Person before any court or governmental authority or
agency, domestic or foreign, seeking to restrain, prohibit or otherwise
interfere with the ownership or operation by Buyer or any of its
Affiliates of all or any material portion of the Purchased Assets, the
Intangible Assets or the business or assets of Buyer or any of its
Affiliates or to compel Buyer or any of its Affiliates to dispose of all
or any material portion of the Purchased Assets or the Intangible Assets
or of Buyer or any of its Affiliates or seeking to require divestiture by
Buyer or any of its Affiliates of any Purchased Assets or Intangible
Assets.
(d) There shall not be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the purchase of the Purchased
Assets or Intangible Assets, by any court, government or governmental
authority or agency, domestic or foreign, that, in the reasonable judgment
of Buyer could, directly or indirectly, result in any of the consequences
referred to in clauses 10.02(c)(i) and 10.02(c)(ii) above.
(e) Seller shall have executed and delivered such bills of sale,
endorsements, consents, assignments and other good and sufficient
instruments of conveyance and assignment as the parties and their
respective counsel shall deem reasonably necessary or appropriate to vest
in Acquisition Subsidiary all right, title and interest in, to and under
the Purchased Assets.
(f) Seller shall have executed and delivered the License Agreement.
(g) Seller shall have executed and delivered the Strategic Alliance
Agreement.
(h) Seller shall have executed and delivered the Registration Rights
Agreement.
(i) Seller shall have executed and delivered the Interim Services
Agreement.
(j) Each of the Lease Assignment and Assumption Agreement, the
Landlord Estoppel Certificate and the Landlord Consent shall have been
executed and delivered by the parties thereto and shall continue to be in
full force and effect.
30
(k) Each of the 4 persons identified on Exhibit D as a "key employee"
shall have accepted an offer of employment by executing and delivering to
Buyer an Employment Agreement and each such Agreement shall be in full
force and effect.
(l) Ninety percent (90%) of the persons identified on Exhibit D as
"first level employees" shall have accepted an offer of employment by
executing and delivering to Buyer an Offer Letter and none of such
acceptances shall have been revoked or otherwise made invalid.
(m) Seventy-five percent (75%) of the persons identified on Exhibit D
as "second level employees" shall have accepted an offer of employment by
executing and delivering to Buyer an Offer Letter and none of such
acceptances shall have been revoked or otherwise made invalid.
(n) Seller shall have received, and delivered to Acquisition
Subsidiary, all Required Consents and all consents, authorizations or
approvals from the governmental agencies referred to in Section 3.03, in
each case in form and substance reasonably satisfactory to Buyer, and no
such consent, authorization or approval shall have been revoked.
(o) Buyer and/or Acquisition Subsidiary shall have entered into
contracts with Aetna U.S. Healthcare with respect to medical and with
Preferred Administrative Services with respect to dental and vision, each
reasonably acceptable to Buyer, pursuant to which medical, dental and
vision coverage will be provided to each Transferred Employee.
(p) Buyer shall have received all documents it may reasonably request
relating to the existence of Seller and the authority of Seller for this
Agreement and the Ancillary Agreements, all in form and substance
reasonably satisfactory to Buyer.
(q) Seller's Vice President and Chief Counsel - Intellectual
Property, shall have executed and delivered a certificate certifying, to
his actual knowledge without investigation, that during the period from
the date of this Agreement until Closing, Seller has not granted any
license or sublicense which, if granted during the term of the
Intellectual Property Agreement, would violate Seller's covenants under
Section 2.3, 3.3 or 4.1 of the Intellectual Property Agreement.
(r) Each of Seller and Broadcom Corporation ("Broadcom") shall have
executed and delivered a consent substantially in the form of Exhibit L
attached hereto and an Assignment and Assumption Agreement in
substantially the form of Exhibit M attached hereto ("Broadcom
Assignment"); provided, however, that this condition shall be deemed not
to have been satisfied only if Broadcom will not agree to enter into a
31
Broadcom Assignment under which Broadcom releases Seller from liabilities
and obligations arising prior to the effective date of such Broadcom
Assignment and, prior to the Closing Date, Seller will not agree to enter
into a Broadcom Assignment that releases Seller only from liabilities and
obligations after the effective date thereof.
(s) Each of Seller and WindRiver Systems, Inc. ("WindRiver") shall
have executed and delivered a consent substantially in the form of Exhibit
N attached hereto and an Assignment and Assumption Agreement in
substantially the form of Exhibit O attached hereto ("WindRiver
Assignment"); provided, however, that this condition shall be deemed not
to have been satisfied only if WindRiver will not agree to enter into a
WindRiver Assignment under which WindRiver releases Seller from
liabilities and obligations arising prior to the effective date of such
WindRiver Assignment and, prior to the Closing Date, Seller will not agree
to enter into a WindRiver Assignment that releases Seller only from
liabilities and obligations after the effective date thereof.
Section 10.03. Conditions To Obligation Of Seller. The obligation of
Seller to consummate the Closing is subject to the satisfaction of the
following further conditions:
(a) The representations and warranties of Buyer set forth in this
Agreement and each Ancillary Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Buyer Material Adverse
Effect or any similar standard or qualification, shall be true and correct at
and as of the Closing Date as if made at and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date
(in which case such representations and warranties shall be true and correct in
all material respects as of such earlier date), except where the failure of
such representations or warranties to be true and correct would not,
individually or in the aggregate, have a Buyer Material Adverse Effect. Seller
shall have received a certificate to such effect on the Closing Date.
(b) Each of Buyer and Acquisition Subsidiary shall have performed in all
material respects all agreements and covenants required to be performed by it
under this Agreement and each Ancillary Agreement prior to the Closing Date.
Seller shall have received a certificate to such effect on the Closing Date.
(c) Acquisition Subsidiary shall have delivered, or caused to be
delivered, to Seller $16,008,570 in immediately available funds by wire
transfer to an account of Seller with a bank designated by Seller (or if not so
designated, then by certified or official bank check payable in immediately
available funds to the order of Seller in such amount).
32
(d) Acquisition Subsidiary shall have delivered, or caused to be
delivered, to Seller duly authorized and executed stock certificates
representing the Stock Consideration.
(e) Buyer shall have amended its Rights Agreement to (i) except Seller and
its Affiliates from the definition of Acquiring Person as a result of the
approval, execution or delivery of this Agreement or the consummation of the
transactions hereunder and (ii) provide that none of Seller and its Affiliates
shall become an Acquiring Person solely as a result of (a) the acquisition of
shares of Buyer Common Stock by Buyer resulting in a decrease in the number of
outstanding shares of Buyer Common Stock or (b) Seller's representative on the
Board of Directors of Buyer receiving stock or options in their capacity as a
director of Buyer.
(f) Buyer shall have executed and delivered the Intellectual Property
Agreement.
(g) Buyer shall have executed and delivered the Strategic Alliance
Agreement.
(h) Buyer shall have executed and delivered the Registration Rights
Agreement.
(i) Buyer and Acquisition Subsidiary shall have executed and delivered the
Interim Services Agreement.
(j) Each of the Lease Assignment and Assumption Agreement and the Landlord
Consent shall have been executed by the parties thereto and shall continue to
be in full force and effect.
(k) Buyer shall have received, and delivered to Seller, all consents,
authorizations or approvals from governmental agencies referred to in Section
4.03, in each case in form and substance reasonably satisfactory to Seller, and
no such consent, authorization or approval shall have been revoked.
(l) Seller shall have received a standby letter of credit, in
substantially the form required under the Lease Assignment and Assumption
Agreement and reasonably acceptable to Seller and the issuing bank, for the
account of Buyer in the face amount of $4,206,608 for the benefit of Seller
relating to outstanding rental obligations under the Lease.
(m) Seller shall have received all documents it may reasonably request
relating to the existence of Buyer and Acquisition Subsidiary and the authority
of Buyer and Acquisition Subsidiary for this Agreement and each Ancillary
Agreement, all in form and substance reasonably satisfactory to Seller.
33
ARTICLE 11
SURVIVAL; INDEMNIFICATION
Section 11.01. Survival. The representations and warranties of the parties
hereto contained in this Agreement or in any certificate or other writing
delivered pursuant hereto or in connection herewith shall terminate and be of
no further force and effect after the Closing, provided, that the
representations and warranties set forth in Sections 3.05, 3.07, 3.09(b),
3.09(c). 3.10, 3.13, 3.14, 4.05(a), 4.05(d), 4.05(e), 4.07, 4.08, 4.09 and 4.11
shall survive the Closing until the first anniversary of the Closing Date.
Notwithstanding the preceding sentence, any representation or warranty in
respect of which indemnity may be sought under this Agreement shall survive the
time at which it would otherwise terminate pursuant to the preceding sentence,
if prior to such time, a claim for indemnification is brought in accordance
with Section 11.03 below against the party from whom such indemnity is be
sought.
Section 11.02. Indemnification. (a) Seller hereby indemnifies Buyer, its
Affiliates and their respective directors, officers and employees against and
agrees to hold each of them harmless from any and all damage, loss, liability
and expense (including, without limitation, reasonable expenses of
investigation and reasonable attorneys' fees and expenses in connection with
any action, suit or proceeding whether involving a third party claim or a claim
solely between the parties hereto) ("Damages") incurred or suffered by Buyer,
its Affiliates or any of their respective directors, officers or employees
arising out of:
(i) any misrepresentation or breach of warranty (each such
misrepresentation and breach of warranty a "Seller Warranty Breach") of
the representations made in Sections 3.05, 3.07, 3.09(b), 3.09(c), 3.10,
3.13 or 3.14 or breach of covenant or agreement made or to be performed by
Seller pursuant to this Agreement; or
(ii) any Excluded Liability;
regardless of whether such Damages arise as a result of strict liability of
Buyer, its Affiliates or any of their respective directors, officers or
employees; provided that with respect to indemnification by Seller for any
Seller Warranty Breach pursuant to Section 11.02(a)(i), (A) Seller shall not be
liable unless the aggregate amount of Damages with respect to any Seller
Warranty Breach (determined without regard to any materiality qualification
contained in any representation, warranty or covenant giving rise to the claim
for indemnity hereunder) exceeds $450,000 and (B) Seller's maximum liability
for all such Seller Warranty Breaches shall not exceed $4,500,000.
(b) Buyer and Acquisition Subsidiary jointly and severally hereby
indemnify Seller, its Affiliates and their respective directors, officers and
employees against and agrees to hold each of them harmless from any and all
34
Damages incurred or suffered by Seller, its Affiliates or any of their
respective directors, officers or employees arising out of:
(i) any Assumed Contract;
(ii) any misrepresentation or breach of warranty (each such
misrepresentation and breach of warranty a "Buyer Warranty Breach") of the
representations made in Sections 4.05(a), 4.05(d), 4.05(e), 4.07, 4.08,
4.09 or 4.11 or breach of covenant or agreement made or to be performed by
Buyer pursuant to this Agreement; provided that with respect to the
representations in Section 4.05(a), there shall not be deemed to be a
Buyer Warranty Breach with respect to such Section unless the
representations in that Section fail to be true in all material respects;
or
(iii) events occurring or conditions arising after the Closing Date
and resulting from the ownership, operation, sale, lease or license by
Buyer or its Affiliates of the PRC Assets, or the use by Buyer or its
Affiliates of the Intellectual Property Rights licensed by Seller under
the License Agreement (including the manufacture, sale, lease or license
of any products by Buyer or its Affiliates);
regardless of whether such Damages arise as a result of strict liability of
Seller, its Affiliates or any of their respective directors, officers or
employees; provided that with respect to indemnification by Buyer for any Buyer
Warranty Breach pursuant to Section 11.02(b)(ii), (A) Buyer shall not be liable
unless the aggregate amount of Damages with respect to any Buyer Warranty
Breach (determined without regard to any materiality qualification contained in
any representation, warranty or covenant giving rise to the claim for indemnity
hereunder) exceeds $450,000 and (B) Buyer's maximum liability for all such
Buyer Warranty Breaches shall not exceed $4,500,000.
Section 11.03. Procedures. (a) The party seeking indemnification under
Section 11.02 (the "Indemnified Party") agrees to give prompt notice to the
party against whom indemnity is sought (the "Indemnifying Party") of the
assertion of any claim, or the commencement of any suit, action or proceeding
("Claim") in respect of which indemnity may be sought under such Section and
will provide the Indemnifying Party such information with respect thereto that
the Indemnifying Party may reasonably request. The failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party of its obligations
hereunder, except to the extent such failure shall have adversely prejudiced
the Indemnifying Party. Thereafter, the Indemnified Party shall deliver to the
Indemnifying Party, promptly following the Indemnified Party's receipt thereof,
copies of all notices and documents (including court papers) received by the
Indemnified Party relating to a Third Party Claim other than those notices and
documents separately addressed to the Indemnifying Party.
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(b) The Indemnifying Party shall be entitled to participate in the defense
of any Claim asserted by any third party ("Third Party Claim") and, subject to
the limitations set forth in this Section, shall be entitled to control and
appoint lead counsel for such defense, in each case at its expense.
(c) If the Indemnifying Party shall assume the control of the defense of
any Third Party Claim in accordance with the provisions of this Section 11.03,
(i) the Indemnifying Party shall obtain the prior written consent of the
Indemnified Party (which shall not be unreasonably withheld) before entering
into any settlement of such Third Party Claim, if the settlement does not
release the Indemnified Party from all liabilities and obligations with respect
to such Third Party Claim or the settlement imposes injunctive or other
equitable relief against the Indemnified Party and (ii) the Indemnified Party
shall be entitled to participate in the defense of such Third Party Claim and
to employ separate counsel of its choice for such purpose. The fees and
expenses of such separate counsel shall be paid by the Indemnified Party.
Each party shall cooperate, and cause their respective Affiliates to
cooperate, in the defense or prosecution of any Third Party Claim and shall
furnish or cause to be furnished such records, information and testimony, and
attend such conferences, discovery proceedings, hearings, trials or appeals, as
may be reasonably requested in connection therewith.
Section 11.04. Limitations. (a) EXCEPT AS SET FORTH IN ARTICLES 3, 8 AND 9
ABOVE, SELLER MAKES NO OTHER EXPRESS WARRANTIES OR MAKES ANY IMPLIED OR
STATUTORY WARRANTIES OF ANY KIND REGARDING OR RELATING TO THE PURCHASED ASSETS.
SELLER SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES REGARDING THE
PURCHASED ASSETS, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.
(b) Notwithstanding anything to the contrary in this Agreement, in no
event shall any party be obligated to indemnify the other party for any
indirect, special, incidental or consequential damages of any kind including,
without limitation, any damages for loss of profits, loss of use, business
interruption, loss of data, or cost of cover in connection with or arising out
of this Agreement whether alleged as a breach of contract or tortious conduct,
including negligence, even if such party has been advised of the possibility of
such damages.
ARTICLE 12
TERMINATION
Section 12.01. Grounds For Termination. This Agreement may be terminated
at any time prior to the Closing.
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(a) by mutual written agreement of Seller and Buyer;
(b) by either Seller or Buyer if the Closing shall not have been
consummated on or before February 28, 2002, provided that the right to
terminate this Agreement pursuant to this Section 12.01(b) shall not be
available to any party whose breach of any provision of this Agreement results
in the failure of the transactions contemplated hereby to be consummated by
such time; or
(c) by either Seller or Buyer if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clauses
12.01(b)or 12.01(c) shall give notice of such termination to the other parties.
Section 12.02. Effect Of Termination. If this Agreement is terminated as
permitted by Section 12.01, this Agreement shall become void and of no effect
and such termination shall be without liability of either party (or any
stockholder, director, officer, employee, agent, consultant or representative
of such party) to the other party to this Agreement; provided that if such
termination shall result from the (i) willful failure of either party to
fulfill a condition to the performance of the obligations of the other party,
(ii) failure to perform a covenant of this Agreement or (iii) breach by either
party hereto of any representation or warranty or agreement contained herein,
such party shall be liable for liquidated damages in the amount of $200,000.
The Mutual NDA and the provisions of Section 6.01, Section 6.04, Section 13.03,
Section 13.05, Section 13.06 and Section 13.07 of this Agreement shall survive
any termination hereof pursuant to Section 12.01.
ARTICLE 13
MISCELLANEOUS
Section 13.01. Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including facsimile transmission) and
shall be given,
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if to Buyer or Acquisition Subsidiary, to:
Xxxxx Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Chief Financial Officer
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Fax: (000) 000-0000
if to Seller, to:
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx XX,
Xxxxxxxx 0
Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
with a copy to:
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx XX,
Xxxxxxxx 0
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President and Chief Counsel
- Intellectual Property
Fax: (000) 000-0000
and a copy to:
Xxxxxxx Coie LLP
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx XxXxxx
Fax: (000) 000-0000
All such notices, requests and other communications shall be deemed received on
the date of receipt by the recipient thereof if received prior to 5 p.m. in the
place of receipt and such day is a business day in the place of receipt.
Otherwise, any such notice, request or communication shall be deemed not to
have been received until the next succeeding business day in the place of
receipt.
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Section 13.02. Amendments and Waivers. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed, in the case of an amendment, by each party to this
Agreement, or in the case of a waiver, by the party against whom the waiver is
to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
Section 13.03. Expenses. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
Section 13.04. Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
Section 13.05. Governing Law. Agreement shall be governed by and construed
in accordance with the law of the State of Washington, without regard to the
conflicts of law rules of such state.
Section 13.06. Jurisdiction. Except as otherwise expressly provided in
this Agreement or the Ancillary Agreements, the parties hereto agree that any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the Ancillary
Agreements or the transactions contemplated hereby or thereby shall be brought
in a federal court located in the Western District of the State of Washington
or any Washington state court located in King County, so long as one of such
courts shall have subject matter jurisdiction over such suit, action or
proceeding, and that any cause of action arising out of this Agreement shall be
deemed to have arisen from a transaction of business in the State of
Washington, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing,
each party agrees that service of process on such party as provided in Section
13.01 shall be deemed effective service of process on such party.
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Section 13.07. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE ANCILLARY AGREEMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
Section 13.08. Counterparts; Third Party Beneficiaries. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart hereof signed by the other party hereto. No
provision of this Agreement is intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
Section 13.09. Entire Agreement. The provisions of this Agreement, the
Ancillary Agreements and the Mutual NDA (collectively, the "Transaction
Agreements") contain the entire agreement between the parties relating to the
subject matters of such Transaction Agreements, and supersede all prior
agreements and understandings relating to the subject matter thereof. The
Transaction Agreements shall be interpreted to achieve the objectives and
intent of the parties as set forth in the text and factual recitals of such
Transaction Agreements. It is specifically agreed that no evidence of
discussions during the negotiation of the Transaction Agreements, or drafts
written or exchanged, may be used in connection with the interpretation or
construction of such Transaction Agreements.
Section 13.10. Bulk Sales Laws. Buyer, Acquisition Subsidiary and Seller
each hereby waive compliance by Seller with the provisions of the "bulk sales",
"bulk transfer" or similar laws of any state. Subject to the allocation of
Transfer Taxes set forth in Section 8.03, Seller agrees to indemnify and hold
Buyer and Acquisition Subsidiary harmless against any and all claims, losses,
damages, liabilities, costs and expenses incurred by Buyer or any of its
Affiliates as a result of any failure to comply with any such "bulk sales",
"bulk transfer" or similar laws; provided, that Seller does not indemnify and
hold Buyer and Acquisition Subsidiary harmless against any additions to tax,
penalties or interest imposed on Buyer or any of its Affiliates by a Taxing
Authority that would not have been imposed upon Buyer or Seller if the
provisions of the "bulk sales", "bulk transfer" or similar laws of such Taxing
Authority's state had been complied with.
Section 13.11. Captions. The captions herein are included for convenience
of reference only and shall be ignored in the construction or interpretation
hereof.
Section 13.12. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
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terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner so that the transactions contemplated hereby
may be consummated as originally contemplated to the fullest extent possible.
Section 13.13. Specific Performance. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof
in any federal court located in the Western District of the State of Washington
or any Washington state court located in King County, in addition to any other
remedy to which they are entitled at law or in equity.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XXXXX CORPORATION
By: /s/ Xxxxxx Xxx-Xxxxxx
-----------------------------
Name: Xxxxxx Xxx-Xxxxxx
Title: Chief Executive Officer
and President
AAS, INC.
By: /s/ Xxxxxx Xxx-Xxxxxx
-----------------------------
Name: Xxxxxx Xxx-Xxxxxx
Title: Chief Executive Officer
and President
AT&T WIRELESS SERVICES, INC.
By: /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman and CEO
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
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