Exhibit 1. Form of Asset Purchase Agreement
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:
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"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.
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"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
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.
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"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.
"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.
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"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.
"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
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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
Third Party Claim 11.03
Transaction Agreements 13.09
Transfer Taxes 8.03
Transferred Employees 9.02
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7.04
WARN Act
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;
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(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.
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(f) Seller and Buyer shall enter into the Registration Rights
Agreement.
(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
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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 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
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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 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.
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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.
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
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(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.
(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
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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.
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
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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.
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.
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(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. (a) 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
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
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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;
(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
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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 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.
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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 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,
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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 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
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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:
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
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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.
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.
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(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
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.
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"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, 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
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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,
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.
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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.
(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
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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
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.
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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.
(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, (i) 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
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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 (ii) 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.
(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
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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
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.
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(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).
(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
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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.
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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
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employees against and agrees to hold each of them harmless from any and all
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
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Indemnified Party relating to a Third Party Claim other than those notices and
documents separately addressed to the Indemnifying Party.
(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.
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ARTICLE 12
TERMINATION
SECTION 12.01. Grounds For Termination. This Agreement may be
terminated at any time prior to the Closing.
(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
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such notice, request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
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
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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.
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",
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"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
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: ___________________________________
Name:
Title:
AAS, INC.
By: ___________________________________
Name:
Title:
AT&T WIRELESS SERVICES, INC.
By: ___________________________________
Name:
Title:
[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
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Exhibit 2. Form of Registration Rights Agreement dated January 14, 2002
XXXXX CORPORATION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "AGREEMENT") is made effective
as of _________, 2002 (the "EFFECTIVE DATE"), by and between Xxxxx Corporation,
a Delaware corporation (the "COMPANY"), and AT&T Wireless Services, Inc., a
Delaware corporation (the "SHAREHOLDER").
RECITALS
A. The Company and Shareholder are parties to an Asset Purchase
Agreement dated the date hereof (together with the exhibits and schedules
thereto, the "ASSET PURCHASE AGREEMENT"), pursuant to which Shareholder shall
sell or license certain tangible and intangible assets relating to the Business
(as defined in the Asset Purchase Agreement) to the Company and the Company
shall, among other things, issue 8,200,000 shares of its Common Stock (the
"SHARES") to Shareholder.
B. The entry into this Agreement is a condition of the Asset Purchase
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, all parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
"AFFILIATE" means any person directly or indirectly controlling,
controlled by, or under common control with, Shareholder. For the purposes of
this definition, "control" when used with respect to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities, by contract or otherwise; the terms "controlling
and controlled" have meanings correlative to the foregoing.
"AFFILIATED HOLDER" means a Holder that has, or whose Affiliate has, a
representative on the Company's Board of Directors, and such Holder's
Affiliates. A Holder and such Holder's Affiliates shall cease to be an
Affiliated Holder at such time as such
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Holder (or such Holder's Affiliate) no longer has a representative on the Board
of Directors, provided, however, that in the event such representative ceases to
serve on the Company's Board of Directors during a Black-Out Period, such Holder
and such Holder's Affiliates shall be deemed to be an Affiliated Holder until
the termination of such Black-Out Period.
"BLACK-OUT PERIOD" means any period during which executive officers and
directors of the Company are generally prohibited from engaging in trades in the
Company's securities pursuant to the Company's Xxxxxxx Xxxxxxx Policy.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's common stock, par value $.001 per
share.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"HOLDER" means the Shareholder, for so long as such person holds any
Registrable Securities, or any person holding Registrable Securities to whom the
rights under this Agreement have been transferred in accordance with Section 10
hereof.
"XXXXXXX XXXXXXX POLICY" means the policy adopted by the Company's Board
of Directors, as such may be amended from time to time, relating to transactions
in the Company's securities by the Company's executive officers and directors.
"PERMITTED WINDOW" means, with respect to an Affiliated Holder, the
period during which such Affiliated Holder is permitted to sell Registrable
Securities pursuant to the Registration Statement under Section 4(a) of this
Agreement. Except as otherwise set forth in this Agreement, a Permitted Window
shall (i) commence upon the termination of a Black-Out Period, and (ii)
terminate upon the commencement of the next succeeding Black-Out Period.
"REGISTRABLE SECURITIES" means the Shares and any shares of Common Stock
of the Company issued or issuable to a Holder in respect of the Shares upon any
conversion, stock split, stock dividend, recapitalization, merger or other
reorganization; provided, however, that shares of Common Stock shall be treated
as Registrable Securities only if and so long as such shares have not been
registered or sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction.
"REGISTER", "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of the effectiveness of such
registration statement by the Commission.
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"REGISTRATION EXPENSES" means all expenses, except Selling Expenses,
incurred by the Company in complying with Section 4 hereof, including without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, NASD fees and
expenses and blue sky fees and expenses.
"RESTRICTED SECURITIES" means the securities of the Company required to
bear a legend as described in Section 3 hereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SELLING EXPENSES" means all underwriting discounts, selling commissions
and stock transfer taxes applicable to the securities registered by the Holders
and, except as provided herein, all fees and disbursements of counsel for any
Holder.
2. Restrictions on Transferability. Each Holder will not sell, pledge,
assign, encumber or otherwise transfer, or agree to sell, pledge, assign,
encumber or otherwise transfer, directly or indirectly, any Registrable
Securities, except:
(a) to an Affiliate of Shareholder; provided that such Affiliate
agrees in writing to be bound by the terms of this Agreement;
(b) pursuant to an effective registration statement;
(c) pursuant to Rule 144 of the General Rules and Regulations of
the Securities Act;
(d) pursuant to a tender or exchange offer made by the Company or
recommended by the Company's board of directors to the Company's stockholders;
or
(e) (i) during the period beginning on the date hereof and ending
on the second anniversary of this Agreement, in a transaction with the prior
written consent of the Company, which consent shall not be unreasonably
withheld, and (ii) after the second anniversary of this Agreement, in a
transaction or series of transactions so long as (A) each transferee is not
transferred more than five percent (5%) of the Company's outstanding voting
securities, and after such transaction and all such transactions made pursuant
to this Section 2(e) such transferee will not directly or indirectly
"beneficially own" (as determined pursuant to Rule 13d-3 under the Exchange Act
as in effect on the date hereof) more than five percent (5%) of the Company's
outstanding voting securities, (B) the transferee agrees in writing to be bound
by the terms of this Agreement and (C) in the opinion of counsel satisfactory to
the Company (it being agreed that Xxxxxxx Coie LLP is counsel satisfactory to
the company), the transfer may be made without registration under the Securities
Act.
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3. Restrictive Legend. Until such time as the Shares have been
registered under the Securities Act or otherwise may be sold by a Holder
pursuant to Rule 144(k) thereunder, each certificate representing the Shares or
any other securities issued in respect of such securities upon any stock split,
stock dividend, recapitalization, merger or other reorganization shall be
stamped or otherwise imprinted with the following legend:
THE SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. SUCH SECURITIES MAY NOT BE TRANSFERRED
UNLESS A REGISTRATION STATEMENT UNDER SAID ACT IS IN EFFECT AS
TO SUCH TRANSFER OR, IN THE OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY, SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER SAID ACT.
Each Holder consents to the Company making a notation on its records and
giving instructions to any transfer agent of its capital stock in order to
implement the restrictions on transfer established in this Agreement.
4. Registration on Form S-3.
(a) Registration. It being the intent of the parties to this
Agreement that the Holders of Registrable Securities be able to sell
such securities pursuant to a registration statement declared effective
by the Commission, the Company shall use its reasonable efforts to cause
a registration statement on Form S-3, any successor form, or, if Form
S-3 or any successor form is not then available to effect a registration
of the Registrable Securities, on such form as is then available
(collectively, a "REGISTRATION STATEMENT") covering all Registrable
Securities to be filed within 30 days after the date of this Agreement
and to cause such Registration Statement to become effective within 90
days after the date of this Agreement. The Company shall use its
commercially reasonable efforts to keep such registration statement
effective until the later of (i) the second anniversary of the date of
this Agreement and (ii) the date on which Shareholder or its Affiliates
no longer has a representative on the Company's Board of Directors, or
such earlier date upon which no Holder holds any Registrable Securities
(the "REGISTRATION TERMINATION DATE").
(b) Limitations on Registration and Sale of Registrable
Securities. Notwithstanding anything in this Agreement to the contrary,
the Company's obligations and the Holders' rights under this Section 4
are subject to the limitations and qualifications set forth below, which
may be waived in writing by the Company.
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(i) The Company shall have no obligation to keep
effective a registration statement hereunder following the
Registration Termination Date.
(ii) The Affiliated Holders will sell Registrable
Securities pursuant to a registration effected hereunder only
during a Permitted Window, subject to paragraph (iii) of this
Section 4(b); provided, however, that if the Company permits an
executive officer or a director of the Company to sell
Registrable Securities outside of a Permitted Window pursuant to
a written trading plan established in accordance with and
meeting the requirements of Rule 10b5-1(c) under the Exchange
Act (a "10B5-1 PLAN"), the Company shall notify the Affiliated
Holders of such occurrence and permit (A) the Affiliated Holders
to effect a 10b5-1 Plan so long as such plan contains provisions
reasonably acceptable to the Company and (B) the Affiliated
Holders to sell Registrable Securities pursuant to such plan
outside of a Permitted Window, subject to paragraph (iii) of
this Section 4(b).
(iii) If the Company furnishes to the Holders a
certificate signed by the President or Chief Financial Officer
of the Company stating that, in the good faith judgment of the
Board of Directors of the Company, it would be seriously
detrimental to the Company for a Registration Statement to be
effected, or a Permitted Window to be in effect, due to (A) the
existence of a material development or potential material
development involving the Company which the Company would be
obligated to disclose in the prospectus contained in the
Registration Statement, which disclosure would in the good faith
judgment of the Board of Directors be premature or otherwise
inadvisable or (B) the existence of other facts or circumstances
as a result of which the prospectus contained or to be contained
in the Registration Statement includes or would include an
untrue statement of a material fact or omits or would omit to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances under which they were made or then existing, the
Company may defer the filing of, or the request for
effectiveness with respect to, as applicable, the Registration
Statement, suspend the commencement of a Permitted Window or
effect an early termination of a Permitted Window that has
commenced with respect to Affiliated Holders or otherwise
suspend any other Holder's right to sell Registrable Securities
pursuant to the Registration Statement, as the case may be. Each
Holder agrees that, immediately upon receipt of the certificate
referred to above, it shall forthwith discontinue offers and
sales of Registrable Securities pursuant to the Registration
Statement until the earlier of (X) effectiveness of the
Registration Statement, in the case of delay or deferral of the
filing or effectiveness thereof, or (Y) notification to each
Affiliated Holder of the commencement of another Permitted
Window and to each other Holder of the lifting of the suspension
of such Holder's right
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to dispose of Registrable Securities pursuant to the
Registration Statement and delivery to such Affiliated Holder
and other Holders and any underwriter of the Registrable
Securities copies of a supplemented or amended prospectus (each,
a "PERMITTED DELAY"). The Registration Termination Date shall be
extended (I) for a period equal to the number of days that occur
during a Permitted Delay and (II) for an additional period equal
to the number of days that occur during a Permitted Delay on
which there is no Black-Out Period in effect. The Company may
elect to so defer, delay or terminate under clause (A) above
only to the extent that the event referred to in clause (A) also
gives rise to a Black-Out Period applicable to all of the
Company's executive officers and directors under the Company's
Xxxxxxx Xxxxxxx Policy (and the certificate furnished to the
Holders so certifies); provided, however, that unless otherwise
agreed to by the Company and the Holders of a majority of the
Registrable Securities then outstanding no Permitted Delay shall
exceed the shorter of (1) a period of one hundred twenty (120)
days from the date the certificate referred to above is
furnished to the Holders, (2) fifteen (15) days after the
Company's public announcement of the event referred to in such
certificate, or (3) immediately after the Company has notified
the Holders that it has determined that the event referred to in
the certificate is no longer in existence or is no longer
material, which notice shall be delivered to the Holders
promptly following such determination. If the Company elects to
so defer, delay or terminate under clause (B) above, the Company
shall use its commercially reasonable efforts to amend the
Registration Statement, supplement the prospectus contained
therein or take such other action as may be necessary to
eliminate the situation described in clause (B) as soon as
practicable, but in no event later than five (5) business days
after the certificate referred to above is furnished to the
Holders. Any Holder receiving any notice from the Company with
respect to the matters covered by this Section 4(b)(iii) shall
keep the fact and content of such notice, and the event or
circumstances giving rise to such notice, confidential, except
that such Holder may reveal such information to his attorney to
protect his interest, provided such Holder informs such attorney
that the information is confidential and may not be used for any
purpose, including trading in the Company's securities.
(iv) At any time that the Company is obligated under
this Agreement to permit the Holders to sell Registrable
Securities pursuant to a Registration Statement, the Company
may, instead of maintaining an effective Registration Statement
for the benefit of the Holders, include, with the consent of
such Holders, such Registrable Securities in a registration
effected for the benefit of the Company and/or other selling
stockholders. In the event that such registration is in
connection with an underwritten offering, the Holders
participating in such registration shall enter into an
underwriting
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agreement in customary form with the managing underwriter
selected by the Company, notwithstanding the provisions of
Section 4(c).
(c) Underwriting. At the election of the Holders representing a
majority of the Registrable Securities then outstanding (the "DECIDING
HOLDERS") sales of Registrable Securities under this Section 4 may be
made through an underwriting managed by an underwriter selected by the
Company and acceptable to Deciding Holders (the "MANAGING UNDERWRITER")
provided that at the time of such sales disposition of Registrable
Securities by the Holders participating in such underwritten offering is
otherwise permitted pursuant to the terms of this Agreement. The Company
shall, together with all Holders proposing to distribute their
Registrable Securities through such underwriting, enter into an
underwriting agreement in customary form with the Managing Underwriter.
If any Holder of Registrable Securities disapproves of the terms of the
underwriting, such person may elect to withdraw therefrom by written
notice to the Company. Any Holder so withdrawing shall not sell any
Registrable Securities pursuant to a registration effected under this
Agreement until after the completion of such underwritten distribution.
Nothing in this section shall require the Holders to select and sell any
of the Shares through a Managing Underwriter.
(d) Registration Procedures. In connection with any registration
required under this Agreement, the Company shall take the actions set
forth below.
(i) Prior to filing any registration statement,
prospectus, amendment or supplement with the Commission in
connection with any registration hereunder, the Company shall
furnish to one counsel selected by the Holders of a majority of
the Registrable Securities copies of such documents.
(ii) The Company shall notify each Holder of any stop
order issued or threatened by the Commission and will take all
reasonable actions required to prevent the entry of such stop
order or to remove it if entered.
(iii) The Company shall comply with the provisions of
the Securities Act with respect to the disposition of all
Registrable Securities covered by a registration statement filed
pursuant to this Agreement in accordance with the intended
methods of disposition by the Holders as set forth in such
registration statement.
(iv) The Company shall furnish to each Holder and each
underwriter, if any, of Registrable Securities covered by a
registration statement filed pursuant to this Agreement such
number of copies of such registration statement, each amendment
and supplement thereto (in each case including all exhibits
thereto), and the prospectus included in such registration
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statement (including each preliminary prospectus), and such
other documents as a selling Holder may reasonably request in
order to facilitate the disposition of the Registrable
Securities owned by such Holder.
(v) The Company shall use its best efforts to register
or qualify the Registrable Securities under the securities or
"blue sky" laws of each State of the United States of America as
any of the Holders or underwriters, if any, of the Registrable
Securities covered by a registration statement filed hereunder
reasonably requests, and shall do any and all other acts and
things which may be reasonably necessary or advisable to enable
each selling Holder and each underwriter, if any, to consummate
the disposition in such States of the Registrable Securities
owned by such selling Holders; provided that the Company shall
not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify
but for this subsection (v), (B) subject itself to taxation in
any such jurisdiction or (C) consent to general service of
process in any such jurisdiction.
(vi) The Company shall promptly notify each Holder
entitled to sell Registrable Securities pursuant to a
registration statement filed pursuant to this Agreement of the
happening of any event which comes to the Company's attention
if, as a result of such event, the prospectus included in the
registration statement filed under this Agreement contains any
untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
and the Company shall promptly prepare and furnish to each
Holder and file with the Commission (in the case of any event of
the kind described in Section 4(b)(iii), no later than the
expiration of the applicable period referred to therein) a
supplement or amendment to such prospectus so that such
prospectus will no longer contain any untrue statement of a
material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. Each Holder agrees that,
if so directed by the Company, such Holder will deliver to the
Company all copies, other than permanent file copies then in
such Holder's possession, of the most recent prospectus covering
Registrable Securities at the time of receipt of such notice.
(vii) The Company shall take all such other reasonable
and customary actions as each Holder or the underwriters, if
any, may reasonably request in order to expedite or facilitate
the disposition of the Registrable Securities in accordance with
the terms of this Agreement.
(viii) The Company shall make available for inspection
by the Holders, any underwriter participating in any disposition
pursuant to a registration statement filed under this Agreement,
and any attorney,
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accountant or other agent retained by such Holders or
underwriters, all financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries, as such person may reasonably request for the
purpose of confirming that such registration statement does not
contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading, provided that the Company obtains reasonably
satisfactory assurances that such information will be used
solely for such purpose and will be held in confidence (except
to the extent that it is included in the registration
statement). The Company shall cause the officers, directors and
employees of the Company and each of its subsidiaries to supply
such information and respond to such inquiries as any Holder or
underwriter may reasonably request or make for the purpose of
confirming that such registration statement does not contain any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading,
provided that the Company obtains reasonably satisfactory
assurances that such information will be used solely for such
purpose and will be held in confidence (except to the extent
that it is included in the registration statement).
(ix) The Company may require each Holder promptly to
furnish in writing to the Company such information regarding
such Holder, the plan of distribution of the Registrable
Securities and other information as the Company may from time to
time reasonably request or as may be legally required in
connection with such registration
(x) The Company shall notify each Affiliated Holder of
the commencement or termination of a Permitted Window no later
than the time the Company notifies its executive officers and
directors of the termination or commencement of the
corresponding Black-Out Period; provided, however, that the
Company need not notify an Affiliated Holder of the termination
or commencement of any regularly scheduled Black-Out Periods
relating to the closing of the Company's fiscal quarters, which
periods commence on the first day of the last month of each
fiscal quarter and terminate at the end of the second full
trading day after the Company publicly announces its results for
such quarter.
(e) The Company represents and warrants that, as of the date
hereof, (i) it meets the requirements for the use of Form S-3 for
registration of the offer and sale of the Registrable Securities by the
Holders and (ii) the Company is not aware of any event or circumstance
that would give the Company the right to defer or delay filing of the
Registration Statement pursuant to Section 4(b)(iii) hereof.
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5. Other Registration Rights. The Holders acknowledge that
certain other stockholders of the Company may now or hereafter have
registration rights, and that such other stockholders may be entitled to
sell their securities at the same time, or pursuant to the same
registration and underwriting, as the Holders hereunder.
6. Expenses of Registration. All Registration Expenses incurred
in connection with the Company's obligations hereunder shall be borne by
the Company. All Selling Expenses relating to securities proposed to be
registered hereunder shall be borne by the Holders of such securities
pro rata on the basis of the number of shares proposed to be sold by
each of them during the applicable Permitted Window; provided, however,
that the Company shall pay for the fees of one counsel to the
Shareholder in an amount not to exceed $10,000.
7. Indemnification.
(a) The Company will indemnify each Holder, each of its officers
and directors, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act, with respect to which registration relating to such
Holder's Registrable Securities has been effected pursuant to this
Agreement, against all claims, losses, damages or liabilities (or
actions in respect thereof), arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in
any registration statement or prospectus relating to the Registrable
Securities (as amended or supplemented if the Company shall have
furnished any amendment or supplement thereto) or any preliminary
prospectus incident to any such registration, or based on any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading, except
insofar as any such claim, loss, damage or liability arises out of or is
based on any information relating to such Holder or the plan of
distribution furnished to the Company in writing by such Holder or
controlling person, and stated to be specifically for use therein;
provided that the foregoing indemnity agreement is subject to the
condition that, insofar as it relates to any such untrue statement,
alleged untrue statement, omission or alleged omission made in a
preliminary prospectus, such indemnity agreement shall not inure to the
benefit of any person, if a copy of the final prospectus or an amended
or supplemental prospectus, as applicable, was not furnished to the
person asserting the loss, liability, claim or damage at or prior to the
time such action is required by the Securities Act, and if the final
prospectus or the amended or supplemented prospectus, as applicable,
would have cured the defect giving rise to the loss, liability, claim or
damage. In no event, however, shall the Company have any indemnification
obligation to the extent that the claims, losses, damages or liabilities
as to which indemnification is sought are in connection with an offer or
sale made by a person other than the Company in violation of the terms
of this Agreement (a "VIOLATION").
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(b) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which a registration
hereunder is effected, indemnify the Company, each of its directors and
officers, each person who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, and
each other such Holder, each of its officers and directors and each
person controlling such Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against all claims,
losses, damages and liabilities (or actions in respect thereof) arising
out of or based on (i) a Violation by such Holder or (ii) any untrue
statement (or alleged untrue statement) of a material fact contained in
any such registration statement or prospectus, or any omission (or
alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but,
in the case of clause (ii) above, only to the extent that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in
reliance upon and in conformity with written information furnished to
the Company by such Holder. Notwithstanding the foregoing, the liability
of each Holder under this subsection 7(b) shall be limited in an amount
equal to the public offering price of the shares sold by such Holder,
unless such liability arises out of or is based on a Violation or
willful misconduct by such Holder.
(c) Each party entitled to indemnification under this Section 7
(the "INDEMNIFIED PARTY") shall give written notice to the party
required to provide indemnification (the "INDEMNIFYING PARTY") promptly
after such Indemnified Party has knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to
assume the defense of any such claim or any litigation resulting
therefrom, provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be approved by
the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at
such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve
the Indemnifying Party of its obligations under this Agreement unless
the failure to give such notice is materially prejudicial to an
Indemnifying Party's ability to defend such action and provided further,
that the Indemnifying Party shall not assume the defense for matters as
to which there is a conflict of interest or there are separate and
different defenses available to the Indemnified Party and the
Indemnifying Party. It is understood that the Indemnifying Party shall
not, in connection with any proceeding or related proceedings in the
same jurisdiction, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Parties. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party (whose consent shall not be unreasonably
withheld), consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to
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such Indemnified Party of a release from all liability in respect to
such claim or litigation.
(d) If the indemnification provided for in this Section 7 is
unavailable to an Indemnified Party in respect of any losses, claims,
damages or liabilities referred to herein, then each such Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute
to the amount paid or payable by such Indemnified Party as a result of
such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company,
Shareholder and any underwriters from the offering of the securities, or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause (i) but also the relative
fault of the Company, Shareholder and any underwriters in connection
with the statements or omissions that resulted in such losses, claims,
damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company,
Shareholder and any underwriter shall be deemed to be in the same
respective proportions as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses)
received by each of the Company and Shareholder and the total
underwriting discounts and commissions received by such underwriter, in
each case as set forth in the table on the cover of the prospectus, bear
to the aggregate public offering price of the securities. The relative
fault of the Company, Shareholder and any underwriters shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
such party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission.
The Company and Shareholder agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation or by any other method of allocation that does not
take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages or
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal
or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
8. Information by Holder. Each Holder of Registrable Securities
included in any registration hereunder shall furnish to the Company such
information regarding such Holder, the Registrable Securities held such
Holder and the
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distribution proposed by such Holder as the Company may request in
writing and as shall be required in connection with any registration
referred to in this Agreement.
9. Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission which may
permit the sale of the Restricted Securities to the public without
registration, the Company agrees to use reasonable efforts, at any time
after the second anniversary of the Effective Date, to:
(a) Make and keep public information available, as those terms
are understood and defined in Rule 144 under the General Rules and
Regulations of the Securities Act; and
(b) File with the Commission in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act.
10. Transfer of Registration Rights. If the Shareholder
transfers Registrable Securities to an Affiliate as permitted by Section
2(a) hereof or any other person permitted pursuant to Section 2(e)
hereof, the rights to cause the Company to register such Registrable
Securities granted to the Shareholder under Section 4 may be assigned by
the Shareholder to such transferee, provided that (i) such transfer is
otherwise effected in accordance with applicable securities laws and the
terms of this Agreement, (ii) such transferee acquires at least
1,000,000 shares of Registrable Securities (as adjusted for stock
splits, stock dividends, stock combinations and the like), (iii) written
notice of such transfer of Registrable Securities and registration
rights to such transferee is promptly given to the Company and (iv) such
transferee agrees in writing to be bound by the provisions of this
Agreement. In the event of a transfer of registration rights in
accordance with this Section 10, the Company shall, upon written request
from the transferee, prepare and file with the Commission, and provide
such transferee a reasonable number of copies of, a prospectus
supplement which names such transferee as a selling stockholder.
11. Amendment. Except as otherwise provided above, any provision
of this Agreement may be amended or the observance thereof may be waived
(either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and
Holders of a majority of the Registrable Securities remaining at the
time such amendment or waiver is made, provided such amendment or waiver
affects all Holders uniformly.
12. Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Washington, without regard to
conflict of laws provisions.
13. Entire Agreement. This Agreement constitutes the full and
entire understanding and Agreement among the parties regarding the
matters set forth herein. Except as otherwise expressly provided herein,
all other agreements
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regarding the registration rights of the Shareholder shall hereby
expire. The provisions hereof shall inure to the benefit of, and be
binding upon the successors, assigns, heirs, executors and
administrators of the parties hereto.
14. Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be mailed by
registered or certified mail, postage prepaid, or otherwise delivered by
facsimile transmission, by hand or by messenger, addressed:
(a) if to Shareholder, to:
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx XX
Xxxxxxxx 0
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: General Counsel
or at such other address as the Shareholder shall have furnished to the
Company, with a copy to:
AT&T Wireless Services, Inc.
0000 000xx Xxxxxx XX
Xxxxxxxx 0
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Vice President and Chief Counsel-Intellectual
Property
(b) if to the Company, to:
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Xxxxx Corporation
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Chief Financial Officer
or at such other address as the Company shall have furnished to the
Holders, with a copy to:
Xxxxx Xxxx & Xxxxxxxx
0000 Xx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
(c) if to any other Holder, at such address as such Holder shall
have furnished to the Company.
Each such notice or other communication shall for all purposes
of this Agreement be treated as effective or having been given when
delivered if delivered personally or by facsimile or e-mail
transmission, or, if sent by mail, at the earlier of its receipt or 72
hours after the same has been deposited in a regularly maintained
receptacle for the deposit of the United States mail, addressed and
mailed as aforesaid.
15. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
XXXXX CORPORATION
By:
Title:
AT&T WIRELESS SERVICES, INC.
By:
Title:
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[SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT]
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