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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
between
RF TECHNOLOGY, INC.,
a Connecticut corporation,
and
Adaptive Broadband Corporation,
a Delaware corporation,
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TABLE OF CONTENTS
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ARTICLE 1 SALE AND PURCHASE OF THE ASSETS.................................................. 1
1.1 Assets........................................................................... 1
1.2 Excluded Assets.................................................................. 2
ARTICLE 2 THE CLOSING...................................................................... 3
2.1 Place and Date................................................................... 3
2.2 Purchase Price................................................................... 3
2.3 Allocation of Purchase Price..................................................... 5
2.4 Assumption of Liabilities........................................................ 6
2.5 Deliveries....................................................................... 8
2.6 Consent of Third Parties......................................................... 8
2.7 Books and Records................................................................ 9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF SELLER......................................... 9
3.1 Organization, Standing, Etc. of Seller; Corporate Authorization; Enforceability.. 9
3.2 Certificate of Incorporation and Bylaws.......................................... 10
3.3 Compliance with Other Instruments and Laws....................................... 10
3.4 Governmental Authorizations And Consents......................................... 10
3.5 No Violations.................................................................... 10
3.6 Financial Statements............................................................. 10
3.7 Absence of Certain Changes or Events............................................. 11
3.8 Title to and Completeness of Assets.............................................. 13
3.9 Intellectual Property............................................................ 13
3.10 Benefit Plans.................................................................... 14
3.11 Litigation....................................................................... 15
3.12 Taxes............................................................................ 15
3.13 Contracts........................................................................ 16
3.14 Insurance........................................................................ 16
3.15 Environmental Matters............................................................ 16
3.16 Brokers.......................................................................... 17
3.17 Inventory........................................................................ 17
3.18 Notes and Accounts Receivable.................................................... 17
3.19 Year 2000 Compliance............................................................. 17
3.20 Product Warranties............................................................... 17
3.21 Governmental Approvals........................................................... 17
3.22 Leased Real Property............................................................. 18
3.23 Accuracy and Completeness of Disclosure.......................................... 18
3.24 Representations and Warranties Correct........................................... 18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES Of BUYER.......................................... 18
4.1 Organization and Standing of Buyer; Certificate of Incorporation and Bylaws...... 18
4.2 Authorization and Financing...................................................... 18
4.3 Enforceability................................................................... 19
4.4 Compliance with Other Instruments and Laws....................................... 19
4.5 Governmental Authorizations and Consents......................................... 19
4.6 Litigation....................................................................... 19
4.7 Brokers.......................................................................... 19
4.8 Section 203...................................................................... 19
ARTICLE 5 Covenants of SELLER.............................................................. 20
5.1 Conduct of Business.............................................................. 20
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5.2 Confidentiality................................................................................ 20
5.3 Due Diligence Access........................................................................... 20
5.4 No Shop........................................................................................ 20
5.5 Employee Benefits And Termination.............................................................. 21
Article 6 COVENANTS OF BUYER............................................................................ 21
6.1 Confidentiality................................................................................ 21
6.2 Investigation.................................................................................. 21
Article 7 COVENANTS AND AGREEMENTS OF ALL PARTIES....................................................... 22
7.1 Best Efforts; Further Assurances............................................................... 22
7.2 Certain Filings................................................................................ 22
7.3 Public Announcements........................................................................... 22
7.4 Use Of Business Names By Buyer................................................................. 22
7.5 Consents; Cooperation.......................................................................... 23
7.6 Liability For Transfer Taxes................................................................... 23
7.7 Insurance...................................................................................... 24
7.8 Employees...................................................................................... 24
7.9 Tax And Accounting Cooperation And Retention................................................... 24
7.10 Transition Services................................................Error! Bookmark Not Defined.
7.11 Costs Of Post-closing Obligations.............................................................. 25
Article 8 CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE.................................................. 25
8.1 Accuracy Of Representations And Warranties..................................................... 26
8.2 Performance.................................................................................... 26
8.3 Certificate.................................................................................... 26
8.4 No Injunction.................................................................................. 26
8.5 HSR ACT........................................................................................ 26
8.6 Consents And Financing......................................................................... 26
8.7 Transfer Documents............................................................................. 26
8.8 Minimum Purchase Price......................................................................... 27
8.9 Non-competition................................................................................ 27
8.10 Opinion........................................................................................ 27
8.11 Disclosure Schedule............................................................................ 26
ARTICLE 9 CONDITIONS TO OBLIGATION TO SELLER TO CLOSE.................................................. 27
9.1 Accuracy Of Representations And Warranties..................................................... 28
9.2 Performance.................................................................................... 28
9.3 Certificate.................................................................................... 28
9.4 No Injunction.................................................................................. 28
9.5 HSR ACT........................................................................................ 28
9.6 Consents....................................................................................... 28
9.7 Assumption Agreement........................................................................... 28
9.8 Non-solicitation............................................................................... 28
9.9 Guaranty....................................................................................... 28
8.10 Opinion........................................................................................ 28
Article 10 TERMINATION.................................................................................. 28
10.1 Right To Terminate Agreement................................................................... 28
10.2 Effect Of Termination.......................................................................... 29
Article 11 CERTAIN REMEDIES AND LIMITATIONS............................................................. 29
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11.1 Expiration of Representations, Warranties and Covenants.......................... 29
11.2 Indemnity by Seller.............................................................. 30
11.3 Indemnity by Buyer............................................................... 30
11.4 Defense of Third-Party Actions................................................... 31
11.5 Limitation to Indemnification Obligations........................................ 32
11.6 Subsequent Recoveries............................................................ 32
11.7 Subrogation...................................................................... 32
11.8 Notice as to Representations..................................................... 32
ARTICLE 12 MISCELLANEOUS.................................................................... 33
12.1 Definition of Certain Terms...................................................... 33
12.2 Knowledge........................................................................ 38
12.3 Memorandum; Disclaimer of Projections............................................ 38
12.4 Expenses......................................................................... 38
12.5 Notices.......................................................................... 39
12.6 Assignment....................................................................... 40
12.7 Entire Agreement; Amendment; Governing Law; Etc.................................. 40
12.8 Counterparts..................................................................... 41
12.9 Venue............................................................................ 41
12.10 Attorney's Fees.................................................................. 41
12.11 Third-Party Rights............................................................... 41
12.12 Titles and Headings.............................................................. 41
12.13 Exhibits and Schedules........................................................... 41
12.14 Pronouns......................................................................... 41
12.15 Severability..................................................................... 41
12.16 Interpretation................................................................... 41
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iii.
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement") is entered into as of June
27, 2000 by and between RF Technology, Inc., a Connecticut corporation
("Buyer"), and Adaptive Broadband Corporation, a Delaware corporation
("Seller").
Recitals
A. Seller, through an unincorporated division, is in the broadcast
quality microwave radio communications business (as more specifically defined in
Section 12.1 of this Agreement, the "Business").
B. Buyer wishes to purchase or acquire from Seller, and Seller wishes to
sell, assign and transfer to Buyer, substantially all the assets of the
Business, and Buyer has agreed to assume certain specified liabilities of the
Business, all for the purchase price, and upon the terms and subject to the
conditions herein set forth.
C. Capitalized terms used herein without separate definitions have the
meanings given to such terms in Section 12.1.
Now, Therefore, in consideration of the premises and of the
representations, warranties and covenants hereinafter set forth, the parties
hereby agree as follows:
ARTICLE 1
SALE AND PURCHASE OF THE ASSETS
1.1 Assets. Subject to and upon the terms and conditions set forth in
this Agreement, at the Closing, Seller shall sell, assign, transfer, convey and
deliver to Buyer, and Buyer shall purchase and acquire from Seller, all right,
title and interest of Seller in and to the names and marks "MRC" and "Microwave
Radio Corporation", the goodwill related thereto, and any name or mark derived
from or including the foregoing and including, without limitation, all logos,
signs or symbols incorporating said names (collectively the "Logos"),
properties, assets, contracts and rights of every nature, kind and description,
tangible and intangible (including goodwill), whether real, personal or mixed,
whether accrued, contingent or otherwise and whether now existing or hereinafter
acquired (other than the Excluded Assets) that relate to the Business
(collectively, the "Assets"), including, without limitation:
(a) all of the Fixed Assets, Intellectual Property and Contracts;
(b) all notes and accounts receivable of the Business, including
intercompany notes and accounts receivable arising out of the sale of equipment
at fair market value to other divisions and subsidiaries of the Seller, but not
including other intercompany receivables from Seller or its Affiliates;
1.
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(c) all inventories of raw material, work in process, finished
products, goods, spare parts, replacement and component parts and office and
other supplies of the Business (the "Inventories");
(d) all of the other assets (except Excluded Assets) that are
reflected on the 1999 Financials as adjusted and updated to the March Balance
Sheet in the Ordinary Course, including prepaid expenses, advance payments,
security deposits and prepaid items relating to the Assets, as adjusted through
the Closing Date in the Ordinary Course;
(e) all of the Books and Records;
(f) all rights under express or implied warranties in favor of Seller
with respect to the Assets or the Business;
(g) to the extent their transfer is permitted by law, all
Governmental Approvals, including all applications therefor;
(h) all rights to causes of action, lawsuits, claims and demands of
any nature available to or being pursued by Seller in connection with the Assets
or the Assumed Liabilities;
(i) all guarantees, warranties, letters of credit, indemnities and
similar rights in favor of Seller in connection with the Assets or the Business;
(j) all computer hardware and software used in the Business,
including all rights under licenses and other instruments or agreements relating
thereto;
(k) all rights in and to real property, including leases, use rights,
variances, leasehold interests and easements related thereto; and
(l) all vehicles.
1.2 Excluded Assets. Notwithstanding anything contained in Section 1.1
hereof to the contrary, the Assets do not include any of the following (herein
referred to collectively as the "Excluded Assets"):
(a) all cash and cash equivalents, such as certificates of deposit,
treasury bills and similar types of investments, and marketable securities;
(b) all parts or portions of the books and records solely to the
extent relating to or used in the business of Seller and not relating to or used
in the Business;
(c) all insurance policies maintained by Seller and all rights of
action, lawsuits, claims and demands, rights of recovery and set-off, and
proceeds, under or with respect to such insurance policies, except to the extent
the coverage thereof remains available after the Closing for pre- or
post-Closing claims relating to the Business, the Assets or the Assumed
Liabilities;
2.
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(d) inter-company accounts (including corporate-level accounts) and
notes receivable from Seller and its Affiliates excluded pursuant to 1.1(b)
above;
(e) the name and mark "Adaptive Broadband" and any name or mark to
the extent derived from or including the foregoing, including without
limitation, all logos, corporate symbols or logos incorporating "Adaptive
Broadband," and the name and mark "California Microwave" and any name or mark to
the extent derived from or including the foregoing, including without
limitation, all logos, corporate symbols or logos incorporating "California
Microwave" (the "Excluded Intellectual Property");
(f) all rights to causes of action, lawsuits, claims and demands of
any nature available to or being pursued by Seller solely to the extent arising
out of or based on the Excluded Assets or Excluded Liabilities except to the
extent resulting in or relating to any loss, damage, claim, liability,
obligation or expense to Buyer or the Business or giving rise to any lien upon
any of the Assets;
(g) all rights, title and interest of Seller in and to prepaid
accrued franchise and income taxes of the Business and any claims for any
refund, credit, rebate or abatement with respect to accrued franchise and income
taxes of the Business for any period or portion thereof through the Closing
Date, and any interest payable with respect thereto;
(h) all accounts receivable due from DFAS for the TSSR product; and
(i) the assets listed on Schedule 1.2.
ARTICLE 2
THE CLOSING
2.1 Place and Date. The closing of the sale and purchase of the Assets
(the "Closing") and the assumption of the Assumed Liabilities shall take place
at 10:00 a.m. local time on the third business day following the date upon which
each of the conditions to closing set forth in Articles 8 and 9 of this
Agreement shall have been satisfied, at the offices of REED SMITH SHAW & MCCLAY
LLP, One Riverfront Plaza, First Floor, Newark, New Jersey, or such other time
and place upon which the parties may agree. The day on which the Closing
actually occurs is herein sometimes referred to as the "Closing Date."
2.2 Purchase Price.
(a) On the terms and subject to the conditions set forth in this
Agreement, Buyer agrees to pay to Seller, as consideration for the Assets and
the Business, an aggregate amount (the "Purchase Price") in United States
dollars equal to the sum of the Closing Payment plus or minus the Adjustment, as
the case may be, but in no event in excess of $20,750,000, and to assume the
Assumed Liabilities as provided in Section 2.4.
(b) At the Closing, the Buyer shall pay the Closing Payment of
$19,251,000 to the Seller. The Closing Payment shall be paid by the wire
transfer of immediately available
3.
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funds to such bank account or accounts as are specified by Seller in written
instructions given to Buyer at least three business days prior to the Closing.
(c) The Purchase Price shall be subject to adjustment as follows:
(i) Promptly following the Closing Date, but in no event more
than thirty days thereafter, Seller shall prepare and deliver the Closing Date
Balance Sheet to Buyer. The Closing Date Balance Sheet shall be prepared in
accordance with the Accounting Calculation. Buyer shall provide Seller such
cooperation and such access to the Books and Records as may reasonably be
required for the preparation of the Closing Date Balance Sheet.
PricewaterhouseCoopers LLP will audit the Closing Date Balance Sheet on behalf
of Buyer in accordance with the Accounting Calculation and deliver the results
of said audit within 60 days of delivery of the Closing Date Balance Sheet.
Seller shall provide PricewaterhouseCoopers LLP with access to all officers,
employees and professional advisors of Seller, each of whom shall be directed to
assist PricewaterhouseCoopers LLP in its audit, and shall provide access to such
books and records of Seller and provide all such information concerning Seller
and the Business as PricewaterhouseCoopers LLP shall deem necessary or
appropriate for the purposes of completing its audit. The Closing Date Balance
Sheet, as audited by PricewaterhouseCoopers LLP (the "Audited Closing Date
Balance Sheet") shall be compared against the amounts set forth on the April
Balance Sheet. Within 15 days of the delivery of the Audited Closing Date
Balance Sheet, (i) Seller shall deliver to Buyer cash in the amount by which the
net asset value shown on the April Balance Sheet exceeds the net asset value
shown on the Audited Closing Date Balance Sheet or (ii) Buyer shall deliver to
Seller cash in the amount by which the net asset value shown on the Audited
Closing Date Balance Sheet exceeds the net asset value shown on the April
Balance Sheet (with such excess amounts referred to collectively as the
"Adjustment"). The Adjustment shall be paid by the wire transfer of immediately
available funds to such bank account or accounts as are specified by the party
entitled to receive the Adjustment in written instructions given to the party
required to pay the Adjustment at least three business days prior to date upon
which payment of the Adjustment is required pursuant to this Section.
(ii) Seller shall have 10 days following delivery of the
Adjustment calculation to notify Buyer in writing of any objections to the
Adjustment. Seller's failure to so object during such 10-day period shall
constitute approval of the Adjustment. Upon any such objection, Seller and Buyer
shall use their best efforts to resolve any differences with respect to the
Adjustment within ten business days. In the event the parties are unable to
resolve such dispute within ten business days, the party otherwise required to
pay the Adjustment shall pay the undisputed portion of the Adjustment to the
party otherwise entitled to receive the Adjustment on the first business day
following the end of the ten business day resolution period pending the final
determination of the Adjustment and the parties shall mutually designate a firm
of independent certified public accountants of national reputation not otherwise
providing services to Seller, Buyer or any Affiliate of either of them to
determine the accuracy of the Adjustment. All disputed portions of the
Adjustment shall bear interest at the rate of 8.5 percent (8.5%) per annum from
the date of the written objection to the date of payment. In the event the
parties are unable to agree to such firm of independent public accountants of
national reputation, they shall each designate a firm of independent public
accountants of national reputation, which firms shall designate a third firm of
independent public accountants of national reputation for
4.
<PAGE>
resolving any disputes under this Section. The parties agree that with respect
to disputes arising under this Section, the sole issue to be determined by the
independent public accountants shall be the accuracy of the Closing Date Balance
Sheet, as adjusted. The independent public accountants shall have no power and
no authority to make any provision or award for any punitive damages, exemplary
or consequential damages. The independent public accountants shall render their
decision within 30 days following the date that the parties shall have concluded
their cases. Allocation of the fees and expenses charged by the independent
public accountants shall be in direct proportion to the amount of the Adjustment
allocated to each of Seller and Buyer by such independent public accountants.
(iii) In the event the Purchase Price would otherwise exceed
$20,750,000 following final resolution of all disputes relating to the
Adjustment, an amount of the accounts receivable set forth on the Audited
Closing Date Balance Sheet, as adjusted, equal to the excess of the calculated
purchase price over $20,750,000 (the "Excess Receivables") shall be deemed a
part of the Excluded Assets and shall not be acquired by the Buyer. The Excess
Receivables shall be those which are first collected following the Closing.
Buyer shall collect the Excess Receivables for and on behalf of Seller and shall
deliver amounts collected in respect thereof to the Seller promptly, but in no
event later than the second business day following the end of the week in which
such Excess Receivables are collected provided, that Buyer shall deliver to
Seller all Excess Receivables collected by Buyer between the Closing and the
final resolution of all disputes relating to the Adjustment within 48 hours of
said final resolution. By way of example, if the purchase price, as calculated
from the Audited Closing Date Balance Sheet, as adjusted, would otherwise be
$21,750,000, the Purchase Price shall be $20,750,000, the Seller shall retain
$1,000,000 of accounts receivable and the Buyer shall pay to the Seller the
first $1,000,000 of collections from the accounts receivable of the Business
that are collected following the Closing.
(iv) In the event the Closing Date shall be before June 30,
2000, the Purchase Price shall be reduced by the amount of all 401(k) employer
matching accounts or accounts which would have accrued but for the Closing in
respect of employees of Seller to be employed by Buyer following the Closing,
which amount Buyer shall deduct from the Closing Payment. Buyer shall use said
amount for the benefit of those former employees of the Business who Buyer shall
have employed following the Closing in Buyer's sole and absolute discretion. The
provisions of this Section is solely for the benefit of Seller and Buyer and
shall not be deemed to create any third party beneficiary right on the part of
any person, including without limitation, any current, past or future employee
of Seller or Buyer or any past, current or future Affiliate of any of them.
(v) Notwithstanding any contrary provision contained in this
Agreement, Buyer shall have the free, unfettered and unrestricted right to own
and operate the Assets and the Business as its own and to employ, refrain from
employing or terminate any former employee of the Business from and after the
Closing pending and following any calculation, audit or dispute resolution
regarding the Purchase Price or otherwise.
2.3 Allocation of Purchase Price. The parties agree to allocate the
aggregate of the Purchase Price and the Assumed Liabilities among the Assets,
including solely for this purpose
5.
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the agreements described in Sections 8.9 and 9.8, in accordance with section
1060 of the Code as may be mutually agreed to by the parties within 180 days
following the Closing. All such mutually agreed to allocations shall be used by
each party in preparing any filings required pursuant to Section 1060 of the
Code or any similar provisions of state or local law and all relevant income and
franchise tax returns. In the event the parties shall fail to agree upon an
allocation pursuant to this Section, each shall allocate the Purchase Price in
good faith. Neither Buyer nor Seller will take any position before any taxing
authority or in any judicial proceeding that is inconsistent with such mutually
agreed to allocations, if any, without the prior consent of the other party. The
parties shall in good faith exercise reasonable efforts to support any mutually
agreed allocations in any audit proceedings initiated by any taxing authority.
2.4 Assumption of Liabilities.
(a) Subject to the terms and conditions set forth herein, at the
Closing, Buyer shall assume and agree to pay, honor, perform and discharge when
due the following liabilities and obligations relating to the Assets and the
Business (the "Assumed Liabilities"):
(i) all early termination payment obligations, but not
retention incentive obligations, of Seller under all severance and retention
incentive agreements between Seller and employees of Seller engaged in the
Business to the extent that:
(A) the employees are employed by Buyer, at Buyer's sole
and absolute discretion, for more than ninety days immediately following the
Closing Date (or employee's date of hire by Buyer, if later); and
(B) the employees' agreements are set forth in Schedule
2.4(a); and
(C) the Seller would be bound to make such payments to
such employees if those employees were employed by Seller immediately prior to
termination of employment;
(ii) The obligations of Seller for the payment of commissions
which are accrued but not yet payable to salespersons who are Hired Employees
and accumulated paid time off obligations under Seller's existing PTO program
for Hired Employees.
(iii) The performance of all product warranty obligations of
Seller relating to the Business for which reserves exist on the April Balance
Sheet (as adjusted in the Audited Closing Date Balance Sheet) which arise
following the Closing from products sold by the Business prior to the Closing in
bona fide transactions with third parties in the Ordinary Course to the extent
of such reserves;
(iv) all liabilities and obligations of Seller to be paid or
performed from and after the Closing Date under or relating to the Disclosed
Contracts included among the Assets;
6.
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(v) all liabilities and obligations of Seller (other than
those liabilities specifically listed below) relating to or arising out of the
ordinary course operation of the Business solely to the extent of reserves
therefor set forth on the April Balance Sheet (as adjusted in the Audited
Closing Date Balance Sheet);
(vi) obligations arising out of Buyer's operation of the
Business following the Closing; and
(vii) the liabilities listed on Schedule 2.4(c).
(b) In no event shall Buyer assume or in any way be responsible for
any of the debts, claims, commitments, fees, expenses, liabilities and
obligations of Seller or the Business not specifically assumed pursuant to this
Section 2.4 (collectively, the "Excluded Liabilities") and Seller shall remain
liable therefor. In furtherance of, and not in limitation or lieu of the
immediately preceding sentence, the Excluded Liabilities shall include:
(i) Federal, State and local Tax liabilities, including
penalties and interest for any periods or partial periods prior to the Closing
Date or otherwise attributable to Seller;
(ii) liabilities arising out of the Excluded Assets;
(iii) pending or threatened litigation or claims or obligations
asserted or unasserted, contingent or otherwise, to the extent arising or based
on events or matters prior to the Closing, whether or not based on or arising
from injury to property, person or business or otherwise based in tort, or any
criminal or quasi-criminal claims or obligations or any claims based directly or
indirectly on Hazardous Materials or otherwise on state or federal environmental
laws;
(iv) obligations to Seller's employees (including without
limitation pension, accrued vacation, salary, and other benefits liabilities)
other than those certain obligations specifically set forth in Section 2.4(a)(i)
and 2.4(a)(ii);
(v) obligations, liabilities, costs, expenses, losses, fees
and claims of any type or nature unless set forth in the Closing Date Balance
Sheet or otherwise included in the definition of Assumed Liabilities.
(c) Notwithstanding the provisions of this Section, in the event:
(i) the amount of accounts receivable set forth on the Audited
Closing Date Balance Sheet which are not collectible by Buyer using commercially
reasonable efforts exceeds the reserve for uncollectible accounts receivable set
forth on the Audited Closing Date Balance Sheet (the "A/R Differential"); or
(ii) the cost to Buyer to comply with Seller's product warranty
claim obligations meeting the specifications set forth in (b), above, exceeds
the reserve for said product
7.
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warranty claims set forth on the Audited Closing Date Balance Sheet (the
"Warranty Differential"); or
(iii) the amount of reserves for defective, lost or outdated
inventory of Seller set forth on the Audited Closing Date Balance Sheet is less
than the actual value of said defective, lost or outdated inventory (the
"Inventory Differential"); then
if and to the extent the Seller shall show that the amount of the reserve was
calculated in accordance with the Reserve Calculation Procedure as defined
below, then the Buyer shall have no claims back against Seller for the A/R
Differential, the Warranty Differential or Inventory Differential, as the case
may be, and the amount of said payment shall not constitute a Loss pursuant to
Section 11.2 of this Agreement. For purposes of this Section only, the term
"Reserve Calculation Procedure" shall mean that the reserve was calculated in
good faith after due inquiry using prudent business judgment and in accord with
both GAAP and Seller's own internal systems and existing normal credit
procedures.
2.5 Deliveries. At the Closing, Seller shall deliver to Buyer such
assignments and other good and sufficient instruments of transfer as shall be
satisfactory in form and substance to Buyer, and shall be effective to vest in
Buyer good and marketable title, free and clear of any and all liens and
encumbrances or rights and claims of others, other than Permitted Liens, to all
of the Assets, and Buyer shall deliver to Seller such instruments of assumption
as shall be satisfactory in form and substance to Seller to ensure that Buyer
has assumed all of the Assumed Liabilities.
2.6 Consent of Third Parties. Notwithstanding anything to the contrary
in this Agreement, this Agreement shall not constitute an agreement to assign or
transfer (a) any Governmental Approval; (b) any instrument, contract, lease,
permit or other agreement or arrangement with any Governmental Authority or any
claim, right or benefit arising thereunder or resulting therefrom; or (c) any
instrument, contract, lease, permit or other agreement or arrangement with any
other Person or any claim, right or benefit arising thereunder or resulting
therefrom (the failure, loss or breach of any of which would not result in a
material Adverse Effect on the Business), (with the preceding (a), (b) and (c)
referred to collectively herein as "Non-Consent Contracts ") if any assignment
or transfer or an attempt to make such an assignment or transfer without the
consent of a third party would constitute a breach or violation thereof or
affect adversely the rights of Buyer or Seller thereunder; and any transfer or
assignment to Buyer by Seller of any interest under any such Non-Consent
Contracts that requires the consent of a third party shall be made subject to
such consent or approval being obtained. In the event any such Non-Consent
Contracts consent or approval is not obtained on or prior to the Closing Date,
Seller shall (a) continue to use its best efforts to obtain any such approval or
consent after the Closing Date until such time as such consent or approval has
been obtained without any third-party cost to Buyer, (b) hold such Non-Consent
Contracts on behalf of Buyer and provide such services as shall be reasonably
necessary on the part of Seller to maintain the same and to maintain good
relations with the customers, lessors or other parties thereto, (c) cooperate
with Buyer in any lawful arrangement to provide that Buyer shall receive the
benefits under any such Non-Consent Contracts, including performance by Seller,
as agent, and (d) enforce and perform for the account of Buyer any rights of
Seller arising from such Non-Consent Contracts, provided that Buyer shall
undertake to pay, perform, discharge or satisfy the
8.
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corresponding liabilities and obligations for the enjoyment of such benefit to
the extent Buyer would have been responsible therefor if such consent or
approval had been obtained and Seller shall cause all payments which would
otherwise be payable pursuant to the Non-Consent Contracts to be paid directly
to an account owned and controlled by the Buyer.
2.7 Books and Records. From and after the Closing and until the sixth
anniversary thereof, (a) Seller agrees to grant to Buyer, upon reasonable notice
and during normal business hours, reasonable access to any books and records
that pertain to the Business and any employees necessary to an understanding
thereof, and to such other books, records and employees of Seller as are
necessary or appropriate to complete, comply with or respond to any audit or
Governmental or judicial report, return, investigation, request, action, demand,
inquiry or subpoena, and (b) Buyer agrees to grant to Seller, upon reasonable
notice and during normal business hours, reasonable access to any Books and
Records included in the Assets that pertain to the operations of the Business on
or prior to the Closing Date as are necessary or appropriate to complete, comply
with or respond to any audit or Governmental or judicial report, return,
investigation, request, action, demand, inquiry, or subpoena. From and after the
date of this Agreement, Buyer and Seller shall each use commercially reasonable
efforts to preserve all books, records and other documents, materials and
information relevant to the representations, warranties and covenants set forth
in this Agreement for a period of six years following Closing.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Subject to the limitations set forth in Section 11.1, Seller hereby makes
the following representations and warranties. Seller and Buyer specifically
agree that the following representations and warranties may be subject to
certain unintentional errors and omissions on the part of Seller. In the absence
of fraud on the part of Seller, Seller shall not be liable to Buyer for damages,
liabilities, costs or expenses (including reasonable attorney fees) incurred or
payable by Buyer which are less than $50,000 in the aggregate, and only such
amounts which are in excess of $50,000 in the aggregate(which are referred to
collectively as the "Excess Materiality") shall be included as a Loss pursuant
to Section 11.2. Notwithstanding the foregoing, in all cases, the following
representations and warranties are at all times subject to Buyer's rights in
equity to cause compliance by Seller with, and to cause Seller to convey to
Buyer such rights as Seller would have obtained but for a breach of, the
following representations and warranties.
3.1 Organization, Standing, Etc. of Seller; Corporate Authorization;
Enforceability.
(a) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on the Business as currently conducted
and to own or lease and to operate the properties of the Business. Seller is
qualified to do business and is in good standing in each state of the United
States in which the Business is conducted that requires such qualification.
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(b) The execution and delivery of this Agreement and all other
documents and instruments executed or to be executed by Seller pursuant to this
Agreement, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate and other action
on the part of Seller. This Agreement and all other documents and instruments
executed or to be executed by Seller pursuant to this Agreement have been, or
will have been, at the time of their respective executions and deliveries, duly
executed and delivered by a duly authorized officer of Seller.
(c) This Agreement constitutes the valid and legally binding
obligation of Seller, enforceable in accordance with its terms, except as such
enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws
relating to or affecting the rights of creditors generally.
3.2 Certificate of Incorporation and Bylaws. Copies of the certificate of
incorporation and bylaws or other organizational documents of Seller have been
made available to Buyer, and each such copy is true, correct and complete.
3.3 Compliance with Other Instruments and Laws. The execution and
delivery of this Agreement and all other documents and instruments executed or
to be executed by Seller pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby, will not conflict with or result
in any violation of or default under any provision (a) of the charter or bylaws
of Seller, or (b) of any mortgage, indenture, trust, lease, partnership or other
agreement or other instrument, permit, concession, grant, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to Seller, the Business or the Assets.
3.4 Governmental Authorizations And Consents. Except as set forth on
Schedule 3.4, no consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority, agency, bureau
or commission, or any third party, are required to be obtained or made by Seller
in connection with Seller's execution, delivery and performance of, and the
validity and enforceability of this Agreement, other than a filing with the
Federal Trade Commission and the Department of Justice under the HSR Act.
3.5 No Violations. Seller is not and has not been in violation of any
term of its certificate of incorporation or bylaws or other charter documents
or, to its knowledge, any mortgage, indenture, instrument or agreement
applicable to the Business relating to indebtedness for borrowed money or of any
judgment, decree or order applicable to the Business or to which the Assets may
be subject, or of any term of any other Contract which is among the Assets.
Seller is not and has not been in violation of any law, ordinance, rule or
governmental regulation applicable to the Business or any of the Assets.
3.6 Financial Statements. Seller has delivered to Buyer (a) the unaudited
balance sheet ("June Balance Sheet") and the related unaudited statements of
operations of the Business as of and for the year ended June 30, 1999 and the
six months ended December 31, 1999 (collectively the "1999 Financials") and (b)
the unaudited balance sheet and the related unaudited statement of operations of
the Business as of and for the nine-month period ended
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March 31, 2000 (the "March Balance Sheet") (the 1999 Financials and the March
Balance Sheet, including the notes thereto, hereinafter being referred to
collectively as the "Financial Statements") and the April Balance Sheet. The
Financial Statements have been prepared in accordance with GAAP consistent with
past practices and present fairly in all material respects the financial
position of the Business as of the dates thereof and the results of its
operations for the periods then ended, except that the March Balance Sheet was
prepared on an interim basis, and is subject to non-material normal year-end
adjustments. The April Balance Sheet was, and the Closing Date Balance Sheet
will be, prepared in accordance with the Accounting Calculation and, except to
the extent that the Accounting Calculation diverges from GAAP, presents and will
present fairly in all material respects the financial position of the Business
as of April 30, 2000 and the Closing Date, respectively. In respect of the
Business and the Assets Seller has no liabilities, obligations or commitments
(and, to the knowledge of Seller, there is no basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rise to any liability, including without
limitation, liabilities or obligations of Seller arising out of cost overruns or
rate adjustments), except for liabilities, obligations or commitments: (i) set
forth on the face of the Financial Statements or the April Balance Sheet
(provided that liabilities, obligations and commitments to the extent
numerically quantified in the notes thereto shall be deemed to be set forth on
the face thereof); (ii) which have arisen after April 30, 2000 in the Ordinary
Course (none of which results from, arises out of, relates to, is in the nature
of, or was caused by any breach of contract, breach of warranty, tort,
infringement, or violation of law); (iii) constituting Excluded Liabilities; or
(iv) reflected and identified as such in the Disclosure Schedule.
3.7 Absence of Certain Changes or Events.
(a) Except as set forth in Schedule 3.7, since March 31, 2000, other
than in the Ordinary Course, (1) Seller has not, with respect to the Business or
the Assets, entered into any transaction and (2) there has been no Adverse
Effect on the Business.
(b) Except as set forth in Schedule 3.7, since June 30, 1999, there
has been no material Adverse Effect on the Business, the Seller has conducted
the Business in the Ordinary Course, and has used commercially reasonable
efforts to maintain the Business, Assets, its relations with employees,
suppliers, licenses and operations related to the Business as an ongoing
business in accordance with past custom and practice. Without limiting the
generality of the foregoing, since March 31, 2000, in each case as related to
the Business and the Assets:
(i) Seller has not sold, leased, transferred, mortgaged or
assigned any of the Assets, tangible or intangible, other than inventory in the
Ordinary Course (which shall not include to Seller or its Affiliates);
(ii) No party (including Seller) has other than in the Ordinary
Course accelerated, terminated, materially modified, or canceled any agreement,
contract, lease, sublease, license, or sublicense (or series of related
agreements, contracts, leases, subleases, licenses, and sublicenses), by which
the Business or the Assets are bound excluding purchase orders and sales orders
entered into in the Ordinary Course, and cancellation, modifications and
terminations thereof;
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(iii) Seller has not made any capital expenditures (or
series of related capital expenditures) involving more than $50,000 in the
aggregate or outside the Ordinary Course;
(iv) Seller has not made any capital investment in, any loan
to, or any acquisition of the securities or assets of any other person relating
to the Business or the Assets;
(v) Seller has not imposed any Lien (other than Permitted
Liens) upon any of the Assets or the Business;
(vi) Seller has not cancelled, compromised, waived or
released any right or claim (or series of related rights and claims), either
involving more than $50,000 in the aggregate or outside the Ordinary Course;
(vii) Seller has not granted any license or sublicense of
any right, under or with respect to any Intellectual Property other than in the
Ordinary Course;
(viii) Seller has not incurred, assumed, guaranteed or
discharged any obligation or liability, absolute, accrued, contingent or
otherwise, whether due or to become due, or any indebtedness for borrowed money,
except current liabilities for trade or business obligations incurred in
connection with the purchase of goods or services in the Ordinary Course;
(ix) Seller has not received any notice of termination of
any contract, lease or other agreement, and, to the knowledge of Seller, Seller
has no reason to expect any such notice;
(x) Seller has not suffered any damage to or destruction or
loss of any of the Assets (whether or not covered by insurance), in any case or
in the aggregate, in excess of $25,000;
(xi) Seller has not made any change in the rate of
compensation, commission, bonus or other direct or indirect remuneration payable
outside the Ordinary Course or in excess of $10,000 to any single person
employed primarily by or in the Business and located in Billerica, MA or
operating as a sales person for the Business (each of which persons are listed
on Schedule 3.7 and all of whom are referred to collectively as the "Business
Employees"), or paid or agreed or orally promised to pay, conditionally or
otherwise, any bonus, incentive, retention or other compensation, retirement,
welfare, fringe or severance benefit or vacation pay, to or in respect of any
Business Employees, distributor or agent of the Business outside the Ordinary
Course or in excess of $10,000;
(xii) Seller has not encountered any labor union organizing
activity or had any actual or threatened employee strikes, work stoppages,
slowdowns or lockouts. Seller acknowledges that there are no unions or
collective bargaining agreements and, to Seller's knowledge, there has not been
any union organizing action in connection with the Business;
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(xiii) There has been no change made or authorized in the
charter or bylaws of the Seller which would effect Seller's authority to the
execute or deliver this Agreement or consummate the transactions contemplated
hereby;
(xiv) Seller has not made any loans to, or entered into any
other transactions with any of the Business Employees outside the Ordinary
Course;
(xv) Seller has not entered into any employment contracts,
written or oral, or modified the terms of any existing such contracts or
agreements to which any of the Business Employees is party;
(xvi) Seller has not adopted, amended, modified, or terminated
any bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of the Business Employees, or taken any such
action with respect to any other Employee Benefit Plan which would have any
effect on any of the Business Employees outside of the Ordinary Course;
(xvii) Seller has not made any other change in employment terms
for any of the Business Employees outside the Ordinary Course and has not
transferred any officer, employee or contractor providing services to, for or on
behalf of the Business;
(xviii) Seller has not made or pledged to make any charitable or
other capital contributions using the Assets outside the Ordinary Course;
(xix) To the knowledge of Seller, there has not been any
other occurrence, event, incident, action, failure to act, or transaction
outside the Ordinary Course involving the Business or the Assets other than
economic and market events outside the control of Seller.
3.8 Title to and Completeness of Assets. Except as set forth in Schedule
3.8, Seller has good title to all tangible personal property of the Business
included in the Assets. Except as set forth in Schedule 3.8, all tangible
personal property of the Business included in the Assets are owned free and
clear of all liens, mortgages, pledges, charges, security interests or
encumbrances except for Permitted Liens. The tangible assets are in good
operating condition, subject to normal wear and tear. Except as set forth on
Schedule 3.8, the Assets constitute all of the assets presently used by Seller
to operate the Business and, to the Seller's knowledge, permit Buyer to conduct
the Business as presently conducted and timely fulfill the obligations of the
Business to its customers, suppliers, contractors, employees and regulators
without the addition of any further assets, including real or personal property,
tangible or intangible.
3.9 Intellectual Property.
(a) Seller owns, or is licensed or otherwise possesses the right
to use, all Intellectual Property necessary for the operation of the Business
substantially as presently conducted.
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(b) Schedule 3.9 sets forth a list of patents, registered copyrights,
registered trademarks, registered trade names and registered service marks, and
any pending applications therefor, included in the Intellectual Property.
(c) To Seller's knowledge, except as set forth on Schedule 3.9, no
claims with respect to the Intellectual Property have been asserted and are
pending as of the date of this Agreement (1) to the effect that the sale,
licensing or use of any of the products of the Business infringes any other
party's valid copyright, trademark, service mark, trade secret or other
intellectual property right, (2) against the use by Seller of any trademarks,
service marks, trade names, trade secrets, copyrights, patents, technology,
know-how or computer software programs or applications used in the Business as
currently conducted, or (3) challenging the ownership by Seller of any of the
Intellectual Property that Seller purports to own.
3.10 Benefit Plans.
(a) Except as set forth on Schedule 3.10, Seller does not maintain,
is not a party to, does not contribute to and is not obligated to contribute to
any of the following in connection with the Business (whether or not set forth
in a written document):
(i) Any employee benefit plan, employee pension benefit plan,
employee welfare benefit plan, or multi-employer plan, all as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
regardless of whether or not a plan is exempt from some or all of the otherwise
applicable requirements of ERISA; or
(ii) Any bonus, deferred compensation, incentive, restricted
stock, stock purchase, stock option, stock appreciation right, debenture,
supplemental pension, profit sharing, royalty pool, severance or termination
pay, loan guarantee, relocation assistance, employee loan or other extensions of
credit, or other similar plan, program, agreement, policy, commitment,
arrangement or benefit currently in effect which is applicable to any present or
former employee or his or her survivors (whether or not published or generally
known).
(b) As to each plan, program, agreement, policy, commitment,
arrangement or benefit listed on Schedule 3.10 (a "Benefit Plan"), Seller has
made available to Buyer complete, accurate and current copies of the text
(including amendments) of the Benefit Plan if previously reduced to writing or
has provided in Schedule 3.10 a description of all material elements of the
Benefit Plan if not previously reduced to writing. With respect to each employee
benefit plan (as defined in section 3(3) of ERISA) listed on Schedule 3.10,
Seller has made available to Buyer the following:
(i) Where applicable, the most recent summary plan description,
as described in section 102 of ERISA;
(ii) Any summary of material modifications which has been
distributed to participants or filed with the U.S. Department of Labor but which
has not been incorporated in an updated summary plan description furnished under
paragraph (1) above;
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(iii) The annual reports, as described in section 103 of ERISA,
for the most recent three plan years for which an annual report has been
prepared (including any schedules);
(iv) Where applicable, the actuarial reports for the most
recent three reporting periods for which such a report has been prepared; and
(v) Any trust agreement, investment management agreement,
contract with an insurance company or service provider, administration agreement
or other contract, agreement or insurance policy.
(vi) With respect to each Benefit Plan:
(vii) All of the currently applicable requirements of ERISA and
regulations thereunder have been fully and timely complied with in all respects;
(viii) There is no act or omission of Seller, or any other person
or entity, which would constitute a violation of or prohibited act under any
applicable section of ERISA or the Code, or regulations under either, and no
amendment to such Benefit Plan is precluded by any waiver, extension or prior
amendment described in Section 412(f)(1) of the Code; and
(ix) All contributions, premiums or other payments due from
Seller to (or under) such Benefit Plan for all periods prior to the date of this
Agreement have been fully paid or adequately provided for on the books of Seller
and all accruals have been made in accordance with prior practices.
3.11 Litigation. Except as disclosed in Schedule 3.11, there are no
actions, suits, proceedings or governmental investigations pending or, to
Seller's knowledge, threatened against Seller involving the Business or the
Assets, at law or in equity or before any court, governmental department,
commission, board, agency, authority or instrumentality, domestic or foreign, or
that have been settled, dismissed or resolved on or since March 31, 2000. Seller
is not subject to any judgment, stipulation, order or decree arising from any
action, suit, proceeding or investigation.
3.12 Taxes. Except as set forth in Schedule 3.12, with respect to Taxes:
(a) Seller has filed or will file or cause to be filed (or
extensions of the time for filing have been or will be duly filed), within the
time prescribed by law, all Tax Returns relating to the Business that are or
were required to be filed under Federal, state, local or any foreign laws for
all taxable periods ending on or prior to the Closing Date;
(b) Seller has, within the time and in the manner prescribed by
law, paid all Taxes that are shown to be due and payable on Returns filed prior
to the Closing and has adequately reserved for all Taxes accrued but not yet
payable.
(c) Seller has not consented to extend the limitations period for
the assertion of any claim for any federal, state or local tax liability.
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3.13 Contracts. Seller has made available to Buyer a copy or description of
any outstanding written or oral (a) contract or arrangement for the employment
of any person by Seller relating to the Business; (b) mortgage, indenture, note
or installment obligation or other instrument or contract relating to the
Business or the Assets; (c) guaranty of any obligation by Seller and relating to
the Business; (d) lease of real or personal property relating to the Business or
the Assets; (e) agreement for the purchase by Seller of equipment relating to
the Business or the Assets involving outstanding commitments, together with all
other similar agreements and commitments; (f) open sales contract and each
completed sales contract since December 31, 1999; (g) any profit sharing, stock
option, stock purchase, stock appreciation, deferred compensation, severance,
bonus, or other plan or arrangement for the benefit of the current or former
directors, officers, and employees of the Seller employed in the Business; (h)
any agreement under which it has advanced or loaned any amount to any of the
directors, officers, and employees of the Seller employed in the Business
outside the Ordinary Course; (i) any agreement under which the consequences of a
default or termination could have an Adverse Effect on the Business; (j) any
agreement limiting the freedom or obligation of Seller or Buyer to compete in
the Business, with any person or other entity or in any geographical area. A
list or description of each of the items described in the previous sentence
together with any other agreement providing for payments or potential damages
(the "Contracts") is set forth on Schedule 3.13. Each of the Contracts was
entered into in the Ordinary Course. Except as disclosed in Schedule 3.13, all
of the Contracts are in full force and effect and, as to each Contract, there
does not exist thereunder any default on the part of Seller, and there does not
exist any event, occurrence or condition, including the consummation of the
transactions contemplated hereunder, which (after notice, passage of time, or
both) would constitute a default thereunder.
3.14 Insurance. Schedule 3.14 contains a list of all insurance policies
maintained by or on behalf of or covering Seller in connection with the Business
(the "Policies"). Seller has made available to Buyer copies of all current
declaration sheets relating to the Policies. Except as noted on Schedule 3.14,
to Seller's knowledge as of the date of this Agreement, the Policies are in full
force and effect, no notices of cancellation or nonrenewal have been received by
Seller with respect thereto, and all premiums due thereon have been paid.
3.15 Environmental Matters.
Except as set forth on Schedule 3.15, to the knowledge of Seller:
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(a) In connection with the operation of the Business or the ownership
of the Assets, Seller is in compliance with all applicable environmental
federal, state and local laws and ordinances, including, but not limited to, the
Resource Conservation Recovery Act (42 U.S.C. 6901, et seq.), the Comprehensive
Environmental Responsibility and Liability Act (42 U.S.C. 9601 et seq.) and the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 136 et seq.).
(b) There have been no claims, litigation, administrative proceedings,
whether actual or threatened, or judgments or orders, relating to any hazardous
substances, hazardous wastes, discharges, emissions or other forms of pollution
relating in any way to the operation of
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the Business or to any real estate owned or leased by Seller and used in the
operation of the Business (collectively, "Real Estate").
(c) Except in accordance with all applicable environmental federal,
state and local laws, there have been no hazardous substances or hazardous
wastes, as defined by the Resource Conservation and Recovery Act (42 U.S.C.
Subsection 6901, et seq.) and the Comprehensive Environmental Responsibility
Compensation and Liability Act (42 U.S.C. Subsection 9601, et seq.), generated,
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manufactured, refined, transported, treated, stored, handled or disposed of on
the Real Estate by Seller or, to Seller's knowledge, any lessor, previous owner
or occupant of the Real Estate or any other person.
(d) There have been no discharges, spillages or disposals of hazardous
substances or Hazardous Materials on the Real Estate by Seller, or, to Seller's
knowledge, any lessor or previous owner or occupant of the Real Estate or any
other person.
3.16 Brokers. With the exception of fees and expenses payable to SG Cowen
and certain employees of Seller and its Affiliates, each of which shall be paid
by Seller, all negotiations relating to this Agreement, and the transactions
contemplated hereby, have been carried on without the participation of any
Person acting on behalf of Seller or its Affiliates in such manner as to give
rise to any valid claim against Buyer for any brokerage or finder's commission,
fee or similar compensation, or for any bonus payable to any officer, director,
employee, agent or sales representative of or consultant to Seller or its
Affiliates upon consummation of the transactions contemplated hereby or thereby.
3.17 Inventory. The inventory of the Business is and will be properly
reflected on the April Balance Sheet and the Closing Balance Sheet.
3.18 Notes and Accounts Receivable. All notes and accounts receivable of
the Seller are and will be properly reflected on the April Balance Sheet and the
Closing Balance Sheet.
3.19 Year 2000 Compliance. The Assets, including but not limited to the
hardware and software owned or used by the Seller in connection with the
Business, are capable of accounting for all calculations using a century and
date sensitive algorithm for the Year 2000 as well as the years prior to and
after Year 2000, and the fact that Year 2000 is a leap year, all without loss of
functionality.
3.20 Product Warranties. The product warranty obligations of Seller are and
will be properly reflected on the April Balance Sheet and the Closing Date
Balance Sheet as of their respective dates.
3.21 Governmental Approvals. Except as set forth on Schedule 3.21, there is
a Governmental Approval for all aspects of the Business and Assets requiring a
Governmental Approval. Each Governmental Approval is in full force and effect,
is not in default, all fees payable in connection therewith have been paid and
Seller has received no notice that it has not complied with the terms of the
Governmental Approval.
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3.22 Leased Real Property. All of the Seller's leasehold interests in real
property and improvements with respect to said leased real property (including,
without limitation, all construction in progress) leased (but not owned) by the
Seller and used directly or indirectly in connection with the Business, or to
which the Seller may have any leasehold rights and which are used in connection
with the Business are described on Schedule 3.22 (the "Leases").
3.23 Accuracy and Completeness of Disclosure. No representation, warranty,
statement or disclosure made by the Seller or its Representatives in this
Agreement or the schedules or exhibits hereto or in any other materials
furnished or to be furnished to the Buyer or its Representatives contains or
shall contain any untrue statement of a material fact, or omits or shall omit to
state a material fact necessary to be stated herein or therein or necessary to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading. Seller has no liabilities,
obligations or commitments of any nature relating to the Business or the Assets
(whether or not known, unknown, absolute, contingent, matured, accrued or
otherwise), except for liabilities, obligations or commitments: (a) disclosed or
reserved for in the April Balance Sheet (not including the notes thereto); or
(b) incurred in the Ordinary Course following the date of the April Balance
Sheet.
3.24 Representations and Warranties Correct. All representations and
warranties of Seller contained in this Agreement shall be true and correct in
all respects on and as of the Closing Date with the same force and effect as if
such representations and warranties had been made on and as of the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Subject to the limitations set forth in Section 11.1, Buyer represents and
warrants to Seller as follows:
4.1 Organization and Standing of Buyer; Certificate of Incorporation and
Bylaws. Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to enter into this Agreement, to carry out the transactions
contemplated hereby and to perform its obligations hereunder. Copies of the
certificate of incorporation and bylaws or other organizational documents of
Buyer have been made available to Seller, and each such copy is true, correct
and complete.
4.2 Authorization and Financing. The execution and delivery of this
Agreement and all other documents and instruments executed or to be executed by
Buyer pursuant to this Agreement, and the consummation of the transactions
contemplated hereby and thereby, will, upon approval by the boards of directors
and shareholders of Vislink plc and its subsidiaries, have been duly authorized
by all necessary corporate and other action on the part of Buyer. Buyer shall
have obtained financing for the consummation of the transactions contemplated by
this Agreement on terms acceptable to Buyer. This Agreement and all other
documents and instruments executed or to be executed by Buyer pursuant to this
Agreement have been, or will
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have been, at the time of their respective executions and deliveries, duly
executed and delivered by a duly authorized officer of Buyer.
4.3 Enforceability. This Agreement constitutes the valid and legally
binding obligation of Buyer, enforceable in accordance with its terms, except as
such enforceability may be limited by equitable principles and by applicable
bankruptcy, insolvency, reorganization, arrangement, moratorium or similar laws
relating to or affecting the rights of creditors generally.
4.4 Compliance with Other Instruments and Laws. The execution and delivery
of this Agreement and all other documents and instruments executed or to be
executed by Buyer pursuant to this Agreement, and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
any violation of or default under any provision of (a) of the charter or bylaws
of Buyer, or (b) any material mortgage, indenture, instrument or any judgment,
order or decree applicable to Buyer or any of its properties or assets, the
result of which, with respect to items identified in clause (b) would (either
individually or in the aggregate) have a material adverse effect on the
operations or financial condition of Buyer and its subsidiaries, taken as a
whole or would materially impair Buyer's ability to consummate the transactions
contemplated hereby (a "Material Adverse Effect on Buyer").
4.5 Governmental Authorizations and Consents. No material consents,
licenses, approvals or authorizations of, or registrations or declarations with,
any Governmental Authority, bureau, agency or commission, or, except for the
approval of the boards of directors and shareholders of Vislink plc and its
subsidiaries, any third party, are required to be obtained or made by Buyer in
connection with Buyer's execution, delivery and performance of and the validity
and enforceability of this Agreement, other than (a) a filing with the Federal
Trade Commission and the Department of Justice under the HSR Act and (b) other
consents, licenses, approvals, authorizations, registrations or declarations,
where the failure to obtain such would not have a Material Adverse Effect on
Buyer.
4.6 Litigation. As of the date of this Agreement, no action, suit,
proceeding or governmental investigation is pending or to Buyer's knowledge,
threatened against Buyer or its properties, at law or in equity or before any
court, governmental department, commission, board, agency, authority or
instrumentality, domestic or foreign, that seeks to question, delay or prevent
the consummation of the transactions contemplated hereby.
4.7 Brokers. All negotiations relating to this Agreement, and the
transactions contemplated hereby, have been carried on without the participation
of any Person acting on behalf of Buyer or its Affiliates in such manner as to
give rise to any valid claim against Seller for any brokerage or finder's
commission, fee or similar compensation.
4.8 Section 203. Buyer is not and, for the three years preceding the date
of the Agreement, has not been an "interested stockholder" of Seller within the
meaning of Section 203 of the Delaware General Corporation Law.
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ARTICLE 5
COVENANTS OF SELLER
5.1 Conduct of Business. Between the date of this Agreement and the
Closing Date, except as contemplated by this Agreement or referred to in the
Disclosure Schedule, and except as may be necessary to carry out the
transactions contemplated by this Agreement or any transaction contemplated by
or relating to any of the contracts or other matters referred to in this
Agreement or the Disclosure Schedule, Seller shall not, without Buyer's consent
(which consent shall not be unreasonably withheld or delayed by Buyer):
(a) enter into any transaction in connection with the Business or
the Assets outside the Ordinary Course;
(b) conduct the Business in a manner that departs from the manner
in which the Business was being conducted prior to the date of this Agreement;
or
(c) agree or commit to do any act or omit to do any act which would
cause the representations and warranties of the Seller not to be true and
complete, subject to the $50,000 exception set forth in the first paragraph of
Article 3, as of the Closing as if made on the Closing Date.
5.2 Confidentiality. Prior to the Closing, Seller shall hold in strict
confidence, and shall cause each of its Affiliates to hold in strict confidence,
all documents and information obtained with respect to Buyer. Seller shall not
permit any of such documents or information to be improperly utilized or to be
disclosed or conveyed to any other person or entity, and Seller shall comply in
all respects with the provisions of the Confidentiality Agreement between Seller
and Vislink plc dated January 28, 2000 (the "Confidentiality Agreement"). The
parties agree that the Confidentiality Agreement shall terminate and be of no
further force or effect as of the Closing.
5.3 Due Diligence Access. Seller shall provide to Buyer and its officers,
employees, accountants, legal counsel, bankers and other agents and
representatives (collectively, "Representatives") during normal business hours
and upon not less than 24 hours notice complete access to the Business, the
Assets and all facilities, books and records relating to the Business and the
Assets but not comprising a part thereof and shall direct Seller's
Representatives to cooperate fully with Buyer and Buyer's Representatives in
connection with Buyer's due diligence investigation of Seller, including without
limitation, by providing originals or copies (duly certified if so requested by
Buyer) of such books and records. Buyer may, during normal business hours and
upon reasonable advance notice, speak to customers and others having business
relationships with Seller from and after the date hereof. Seller and its
Representatives shall be entitled to participate in any contact initiated by
Buyer or its Representatives with any customer of Seller.
5.4 No Shop. Unless and until this Agreement is terminated in
accordance with its terms, none of Seller or any of its Representatives shall,
directly or indirectly, (a) solicit, initiate
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or encourage submission of proposals or offers from any person relating to any
acquisition or purchase of all or any portion of the assets of, or a merger,
consolidation or business combination with Seller or any part thereof which
includes any part of the Business or the Assets (an "Acquisition Proposal") or
(b) participate in any discussions or negotiations regarding or furnish to any
other person or entity any information with respect to or otherwise cooperate in
any way with furtherance of any Acquisition Proposal by any person or entity. If
Seller or any of its Representatives shall receive any Acquisition Proposal or
any inquiry regarding any such proposal, the recipient shall promptly inform
Buyer. Seller hereby specifically grants to Buyer the right and remedy to have
the provisions of this Section specifically enforced by any court having equity
jurisdiction, it being acknowledged that any such breach or threatened breach
will or may cause irreparable injury to Buyer and that money damages will or may
not provide an adequate remedy to Buyer. The equity rights of Buyer shall be in
addition to, and not in lieu of, any other rights and remedies available to
Buyer at law or in equity. Notwithstanding the foregoing provisions of this
Section, an Acquisition proposal which (i) relates to the sale of securities of
the Seller or the sale of substantially all of the assets of the Seller or which
relates to a merger, consolidation or business combination involving the Seller
as a whole and (ii) specifically excludes the Business and the Assets and
confirms the existence and enforceability of this Agreement shall not be deemed
to constitute a breach of this Section.
5.5 Employee Benefits and Termination. Effective as of the Closing, Seller
shall terminate the employment of and pay to each employee and officer of Seller
employed in the Business who is offered and accepts employment with Buyer (which
offer shall be at Buyer's sole and absolute discretion) all salary, all
retention incentive obligations and all other obligations of Seller to said
employees and officers which do not form a part of the Assumed Liabilities and
which have accrued (or which would otherwise have accrued but for the
transaction contemplated hereby) through the Closing Date.
ARTICLE 6
COVENANTS OF BUYER
6.1 Confidentiality. Through the Closing Date, Buyer shall hold in strict
confidence, and shall cause each of its Affiliates to hold in strict confidence,
all documents and information obtained with respect to Seller. Buyer shall not
permit any of such documents or information to be improperly utilized or to be
disclosed or conveyed to any other person or entity, and Buyer shall comply in
all respects with the provisions of the Confidentiality Agreement prior to the
termination of the Confidentiality Agreement in accordance with the provisions
of Section 5.2 of this Agreement.
6.2 Investigation. In conducting its review of the Business, Buyer shall
not interfere in any material manner with the Business or with the performance
of Seller's employees.
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ARTICLE 7
COVENANTS AND AGREEMENTS OF ALL PARTIES
7.1 Best Efforts; Further Assurances. Subject to the terms and conditions
of this Agreement, each party will use its best efforts, but without the
obligation to expend undue amounts of time, effort or money, to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary or
desirable under applicable laws and regulations to consummate the transactions
contemplated by this Agreement. Buyer and Seller each will 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 or
implement expeditiously the transactions contemplated by this Agreement. Each
party agrees, at any time and from time to time after the Closing Date, upon
reasonable request from the other party, to do, execute, acknowledge and
deliver, as appropriate, such further acts, deeds, assignments, transfers,
conveyances and powers of attorney as may reasonably be required for the better
assigning, transferring, granting, conveying, assuring and confirming to such
other party and for assuring the full use and enforcement by the Buyer, or its
successors and assigns, of any of the businesses, assets, properties or
liabilities to be assigned to it or retained by such party as provided herein.
7.2 Certain Filings. Buyer and Seller shall cooperate with one another (a)
in determining whether any action by or in respect of, or filing with, any
governmental body, agency, official or authority is required, or any actions,
consents, approvals or waivers are required to be obtained from parties to any
Contracts, in connection with the consummation of the transactions contemplated
by this Agreement and (b) in taking such actions or making any such filings, in
furnishing such information as may be required in connection therewith,
including without limitation filings under the HSR Act, and in seeking timely to
obtain any such actions, consents, approvals or waivers. At the Closing, Seller
shall provide Buyer with a copy of all filings and submissions made by Seller
pursuant to the HSR Act or in response to governmental inquiries concerning
filings and submissions made pursuant to the HSR Act.
7.3 Public Announcements. Except for press releases and disclosures to be
made upon the execution of this Agreement, the consummation of the transactions
contemplated hereby and any termination hereof and such other disclosures as may
be required by any law, rule, bylaw or regulation of any governmental authority,
stock exchange or inter-dealer network, any party proposing to issue any press
release or similar public announcement or communication shall use commercially
reasonable efforts to provide copies of such disclosures in good faith with the
other party before doing so through and including the Closing Date.
7.4 Use of Business Names by Buyer.
(a) Buyer acknowledges that Seller has the absolute and exclusive
proprietary right to all names, marks, trade names, trademarks, service names
and service marks incorporating "Adaptive Broadband" or any similar name and to
all logos incorporating Adaptive Broadband or any similar name. All rights of
Seller and its Affiliates to the same and the goodwill represented thereby and
pertaining thereto are being retained by Seller. Buyer agrees that it will not,
and will cause the Business not to, use the Adaptive Broadband name, the
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"California Microwave" name or any similar names or any logo incorporating any
such names or any similar names in any manner, including in connection with the
sale of any products or services or otherwise in the conduct of the Business,
except as expressly permitted by Section 7.4(b).
(b) For a period of six months from the Closing Date (the "Window
Period"), Seller shall and hereby irrevocably grants, effective as of the
Closing Date, on a fully-paid, royalty-free basis, to Buyer the right to use the
Adaptive Broadband logo and the Adaptive Broadband name in connection with the
operation of the Business as currently conducted including, during the Window
Period, to (1) use any molds or castings included in the equipment or machinery
included in the Assets despite the appearance thereon and on the products
manufactured therewith of the Adaptive Broadband name or the Adaptive Broadband
logo, (2) market and sell all such products produced by the Business and (3) use
any other assets on hand included in the Assets, including, without limitation,
any catalogs, invoices, packaging material or stationery, bearing the Adaptive
Broadband name or Adaptive Broadband logo (provided, however, that Buyer shall
use its commercially reasonable efforts to cease its use of the Adaptive
Broadband name and the Adaptive Broadband logo within three months). Immediately
upon the expiration of the Window Period, Buyer shall cease to use in any manner
the Adaptive Broadband name or the Adaptive Broadband logo incorporating such
name and remove or obliterate such name or the Adaptive Broadband logo from any
molds, castings, products or other assets and clearly and prominently mark the
new name of the Business thereon. At all times following the Closing, Buyer
shall not indicate that Buyer or the Business is affiliated with Seller or any
of its affiliates, and Seller shall not indicate that Seller is affiliated with
Buyer or any of its Affiliates.
7.5 Consents; Cooperation. In furtherance of the provisions of Section
7.1, and not in limitation thereof, Seller and Buyer will each use their best
efforts, but without the obligation to expend undue amounts of time, effort or
money:
(a) to obtain prior to the earlier of the date required (if so
required) or the Closing Date, all authorizations, consents, orders, permits or
approvals of, or notices to, or filings, registrations or qualifications with,
all governmental authorities or any other person or entity that are required on
their respective parts, for the consummation of the transactions contemplated by
this Agreement;
(b) to furnish to each other such information and assistance as may
reasonably be requested in connection with the foregoing; and
(c) to (i) take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Agreement and (ii) refrain from
taking any action which reasonably could be expected to render any
representation or warranty contained in this Agreement untrue or incorrect in
any respect as of the Closing.
7.6 Liability for Transfer Taxes. Buyer and Seller shall each be
responsible for and pay in a timely manner 50 percent of all sales, use, value
added, documentary, stamp, gross
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receipts, registration, transfer, conveyance, excise, recording, license and
other similar Taxes and fees ("Transfer Taxes"), arising out of or in connection
with or attributable to the Closing. Each party hereto shall prepare and subject
to extensions, timely file all Tax Returns required to be filed in respect of
Transfer Taxes that are the primary responsibility of such party under
applicable law.
7.7 Insurance. Buyer shall obtain and continuously maintain, from the
Closing Date until the expiration of the representations, warranties and
covenants pursuant to Section 11.1, insurance policies with respect to the
Business and the Assets on terms and with coverage comparable to those policies
maintained by businesses similar in size and nature to the Business. From and
after the Closing Date, Seller shall provide to Buyer all such information,
documentation, access to facilities and personnel during normal business hours
and upon reasonable notice (not less than 48 hours) as Buyer or its counsel
shall reasonably require for the purpose of enforcing and prosecuting Buyer's
insurance rights pursuant to Section 1.2(c).
7.8 Employees. Buyer shall be entitled to offer employment to any, all or
none of the employees of the Business in Buyer's sole and absolute discretion.
Each employee of the Business employed by Buyer shall receive credit for time
served as an employee of Seller (including any predecessor entity thereto) for
purposes of eligibility for benefits under Buyer's benefit plans, subject to any
initial qualification or probationary periods generally applicable to such
benefit plans. Nothing herein shall restrict Buyer in the exercise of its
independent business judgment, as to the terms and conditions under which such
employment shall continue, the duration of such employment, the basis on which
such employment is terminated or the compensation or benefits provided to
employees of the Business. Nothing herein shall be deemed to constitute an
agreement to employ any employee of the Business, nor shall anything set forth
in this Agreement grant or create any third party beneficiary or other rights on
behalf of any officer, employee or contractor of Seller or Buyer, each of which
is specifically disclaimed by the parties to this Agreement.
7.9 Tax and Accounting Cooperation and Retention.
(a) Buyer and Seller shall each at their own expense cooperate with,
and make available to, each other such Tax data and other information as may be
reasonably required in connection with (1) the preparation or filing of any Tax
return, election, consent or certification, or any claim for refund or the
preparation of the parties' respective financial statements, (2) any
determinations of liability for Taxes, or (3) any audit, examination or other
proceeding in respect of Taxes ("Tax Data"). Such cooperation shall include
without limitation making their respective employees and independent auditors
reasonably available on a mutually convenient basis for all reasonable purposes,
including without limitation, to provide explanations and background information
and to permit the copying of books, records, schedules, work papers, notices,
revenue agent reports, settlement or closing agreements and other documents
containing the Tax Data ("Tax Documentation"). If a third party is retained in
connection with any review hereunder, the party retaining such third party shall
be responsible for any fees and expenses of such third party.
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(b) All Tax Data and the Tax Documentation shall be retained until
one year after the expiration of all applicable statutes of limitations
(including extensions thereof); provided, however, that in the event an audit,
examination, investigation or other proceeding has been instituted prior to the
expiration of an applicable statute of limitations all Tax Data and Tax
Documentation relating thereto shall be retained until there is a final
determination thereof (and the time for any appeal has expired).
7.10 Transition Services. In addition to its other obligations under the
terms of this Agreement, Seller shall make the services of its internal auditor
and human services personnel available to Buyer at such times, for such periods
and in such locations as Buyer shall request. Said services shall be provided at
no cost to Buyer (provided that after the 30th day following the Closing, Buyer
shall pay the reasonable travel costs incurred by Seller's internal auditor in
the performance of his duties under this Section) for the purposes of assisting
Buyer in the transition of the business from Seller to Buyer, including without
limitation, for accounting, record keeping, contract and computer systems and
records transition, and employee transition. Seller shall provide Buyer with
access to Seller's e-mail services for a period of 30 days following the
Closing. The parties agree that Seller shall provide Buyer access to all
computer systems, data, programs and records currently maintained by Seller for,
on behalf of or in connection with the Business and the Assets or which are used
or accessed by the Business as of the date hereof until such time as all such
data and records are transferred to Buyer as part of the Assets.
7.11 Costs of Post-Closing Obligations. Whenever, pursuant to the terms of
this Agreement, Buyer or Seller is required to provide access to facilities or
assets or to provide originals or copies of documentation of any form or nature
to another party to this Agreement, the same shall be provided at no charge.
Whenever, pursuant to the terms of this Agreement, Buyer or Seller is required
to provide or make employees or officers available as witnesses, consultants or
advisors to another party, to the auditors or legal counsel of another party or
to the legal counsel of any insurer, the party shall be obligated to provide
access to such employees or officers only during normal business hours upon not
less than 24 hours notice. Except for the services required under Sections 7.1,
7.2 and 7.10, which shall be provided without charge, subject to the 30 day
period set forth in Section 7.10 the party required to provide access to its
officers or employees shall be entitled to bill, and the other party shall
promptly pay, each itemized bill submitted for the reasonable out of pocket
travel and meal expenses for each employee providing services for more than 30
days. Out of pocket travel and meal expenses shall be deemed reasonable if they
are in accordance with the employer's guidelines for expense reimbursement for
its employees generally.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF BUYER TO CLOSE
The obligations of Buyer to purchase the Business and the Assets and
otherwise consummate the transactions that are to be consummated at the Closing
are subject to the satisfaction, as of the Closing Date, of the following
conditions (any of which may be waived by Buyer in whole or in part):
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8.1 Accuracy of Representations and Warranties. The representations and
warranties of Seller set forth in Article 3 shall be complete and accurate in
all material respects as of the Closing, as though made on and as of the Closing
Date.
8.2 Performance. Seller shall have performed all obligations and complied
with all covenants required by this Agreement to be performed or complied with
by Seller on or before the Closing Date.
8.3 Certificate. Buyer shall have received from a duly authorized officer
of Seller a certificate dated the Closing Date confirming, to such person's
knowledge after due inquiry, that the conditions in Sections 8.1 and 8.2 have
been met.
8.4 No Injunction. There shall not be in effect, as of the Closing, any
injunction or other binding order of any court or other tribunal having
jurisdiction over Buyer, Seller or the Assets or Business that prohibits Buyer's
purchase of the Business and the Assets or Seller's sale of the Business and the
Assets.
8.5 HSR Act. Any applicable waiting period under the HSR Act relating to
the transactions contemplated hereby shall have expired or been terminated.
8.6 Consents and Financing. All third party approvals, consents, waivers
and authorizations required to be obtained by Seller and Buyer in connection
with the transactions contemplated by this Agreement shall have been obtained
and shall be in full force and effect, except where the failure to obtain such
consents did not and would not reasonably be expected to result in a material
Adverse Effect on the Business or the transactions contemplated by this
Agreement. Buyer shall have obtained financing for the consummation of the
transactions contemplated hereby on terms acceptable to Buyer and the directors
and shareholders of Vislink plc shall have approved this Agreement and the
transactions contemplated hereby.
8.7 Transfer Documents. Seller shall have delivered to Buyer at the
Closing all documents, certificates and agreements necessary to transfer to
Buyer title to the Assets, free and clear of any and all Liens thereon, other
than Permitted Liens, including without limitation:
(a) a Bill of Sale, Assignment and General Conveyance, in
substantially the form annexed hereto as Exhibit A;
(b) assignments of all Contracts and Intellectual Property and
assignments of each other agreements and instruments constituting Assets, the
breach of which other agreements and instruments could have a material Adverse
Effect on the Business, dated as of the Closing Date, assigning to Buyer all
Seller's right, title and interest therein and thereto;
(c) an assignment of each lease, other than leases for real property,
the breach of which could have a material Adverse Effect on the Business, and an
assignment of all real property leases, in each case duly executed by each party
thereto and dated as of the Closing Date; and
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(d) certificates of title to all material motor vehicles included in
the Assets to be transferred to Buyer hereunder, duly endorsed for transfer to
Buyer as of the Closing Date together with all other certificates and documents
as may be required to transfer said motor vehicles.
8.8 Minimum Purchase Price. No less than five (5) business days prior to
the Closing, Buyer shall have received Seller's good faith estimate that the net
assets of Seller as would be calculated from the Audited Closing Date Balance
Sheet shall be $6,500,000 or greater. In the event Seller is unable to deliver
such an estimate to Buyer or such estimate states that Seller believes in good
faith that the net assets of Seller as would be calculated from the Audited
Closing Date Balance Sheet is expected to be less than $6,500,000, Seller shall
give notice of its inability to deliver or of its belief, as the case may be,
within two days of becoming aware of the same. If Buyer determines not to close
as a result of Seller's notice, Buyer shall have five days following its receipt
of Seller's notice in which to transmit notice to Seller of Buyer's intent not
to close and Buyer shall thereafter have no obligation to close the transactions
contemplated by this Agreement. In the event Buyer fails to transmit such notice
of intent not to close, Buyer shall be bound to close the transactions
contemplated by this Agreement. If the net assets of Seller as would be
calculated from the Audited Closing Date Balance Sheet is expected to be less
than $6,500,000 as a result of events relating to the Business which result from
the good faith operation of the Business in the Ordinary Course, the refusal of
Buyer to close shall constitute a termination pursuant to Section 10.1(a).
8.9 Non-Competition. Seller shall have executed a Non-Competition/Non-
Disclosure Agreement in substantially the form annexed to this Agreement as
Exhibit B and a Non-Solicitation Agreement in substantially the form annexed to
this Agreement as Exhibit C.
8.10 Opinion. Buyer shall have received an opinion of Cooley Godward LLP,
legal counsel to the Seller, in the form annexed hereto as Exhibit D.
8.11 Disclosure Schedule. In the event Seller shall have delivered a
Disclosure Schedule and said Disclosure Schedule shall contain changes not
previously agreed to by Buyer in writing or which changes cause an Excess
Materiality, the Disclosure Schedule shall be acceptable to Buyer in Buyer's
sole discretion. In the event a Disclosure Schedule shall have been prepared and
delivered by Seller in good faith and shall contain only matters which occurred
in the Ordinary Course, the refusal of Buyer to accept the Disclosure Schedule
shall entitle Seller or Buyer to terminate this Agreement and such termination
shall be deemed a termination pursuant to Section 10.1(a).
ARTICLE 9
CONDITIONS TO OBLIGATION OF SELLER TO CLOSE
The obligation of Seller to sell the Business and the Assets and otherwise
consummate the transactions that are to be consummated at the Closing is subject
to the satisfaction, as of the Closing Date, of the following conditions (any of
which may be waived by Seller):
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9.1 Accuracy of Representations and Warranties. The representations and
warranties of Buyer set forth in Article 4 shall be accurate in all material
respects as of the Closing, as though made on and as of the Closing Date.
9.2 Performance. Buyer shall have performed all obligations and complied
with all covenants required by this Agreement to be performed or complied with
by Buyer on or before the Closing Date.
9.3 Certificate. Seller shall have received from Ian Scott-Gall or James
Trumper, as representatives of the Buyer a certificate of Buyer dated the
Closing Date confirming, to such person's knowledge after due inquiry, that the
conditions in Sections 9.1 and 9.2 have been met.
9.4 No Injunction. There shall not be in effect, as of the Closing, any
injunction or other binding order of any court or other tribunal having
jurisdiction over Seller or that prohibits the sale of the Business and the
Assets.
9.5 HSR Act. Any applicable waiting period under the HSR Act relating to
the transactions contemplated hereby shall have expired or been terminated.
9.6 Consents. All approvals, consents, waivers and authorizations required
to be obtained by Buyer in connection with the transactions contemplated by this
Agreement shall have been obtained and shall be in full force and effect, except
where the failure to obtain such consents did not and would not reasonably be
expected to result in a material adverse effect on the transactions contemplated
by this Agreement.
9.7 Assumption Agreement. Seller shall have received from Buyer an
Assumption Agreement, in substance and form satisfactory to Seller, under which
Buyer shall have assumed the Assumed Liabilities.
9.8 Non-Solicitation. Buyer shall have executed a Non-Solicitation
Agreement in substantially the form annexed to this Agreement as Exhibit C.
9.9 Guaranty. Vislink plc shall have reexecuted its guaranty of certain
obligations of Buyer dated June 27, 2000.
9.10 Opinion. Buyer shall have received opinions of legal counsel to the
Buyer and Vislink plc, in the forms annexed hereto as Exhibits E and F,
respectively.
ARTICLE 10
TERMINATION
10.1 Right to Terminate Agreement. This Agreement may be terminated prior
to the Closing:
(a) by the mutual written agreement of Seller and Buyer;
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(b) by written notice of Buyer at any time after 90 days after
signing, if the Closing shall not have occurred on or prior to such date;
provided, however, that the right to terminate this Agreement under this Section
10.1(b) shall not be available to Buyer if the action of Buyer or any of its
Affiliates has been a principal cause of or resulted in the failure of the
Closing to occur on or before such date and such action or failure to act
constitutes a breach of this Agreement; or
(c) by written notice of Seller at any time after 90 days after
signing, if the Closing shall not have occurred on or prior to such date;
provided, however, that the right to terminate this Agreement under this Section
10.1(c) shall not be available to Seller if (i) Seller has failed to comply with
the provision of Section 5.3 of this Agreement or (ii) the action of Seller or
any of its Affiliates has otherwise been a principal cause of or resulted in the
failure of the Closing to occur on or before such date and such action or
failure to act constitutes a breach of this Agreement.
10.2 Effect of Termination. Upon the termination of this Agreement pursuant
to Section 10.1:
(a) Buyer shall promptly cause to be returned to Seller all documents
and information obtained in connection with this Agreement and the transactions
contemplated by this Agreement and all documents and information obtained in
connection with Buyer's investigation of the Business, including any copies made
by or supplied to Buyer or any of Buyer's Representatives of any such documents
or information; and
(b) No party hereto shall have any obligation or liability to the
other parties hereto, except that the parties hereto shall remain bound by the
provisions of this Section 10.2 and Sections 6.1, 7.3 and Article 12 and by the
provisions of the Confidentiality Agreement.
ARTICLE 11
CERTAIN REMEDIES AND LIMITATIONS
11.1 Expiration of Representations, Warranties and Covenants. The covenants
set forth in this Agreement which are to be completed on or before the Closing
shall terminate and expire, and shall cease to be of any force or effect, on the
Closing Date, and all liability of the parties hereto with respect to such
covenants shall thereupon be extinguished. This Section 11.1 shall not limit any
covenant or agreement of the parties that by its terms contemplates performance
after the Closing Date or to which a representation of fulfillment or
completeness shall have been falsely made. All of the representations and
warranties of Seller set forth in this Agreement other than those which relate
to, arise out of or are based on title to the Assets, environmental matters,
Taxes, ERISA, criminal matters, injury to property or person and other torts and
discrimination based on race, sex or religion (collectively, the "Exempt
Matters"), shall terminate and expire, and shall cease to be of any force or
effect, at 5:00 p.m. (California time) on the second anniversary of the Closing
Date, and all liability with respect to such representations and warranties
shall thereupon be extinguished.
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11.2 Indemnity by Seller.
(a) Subject to the provisions of Section 11.1 hereof relating to the
survival of representations and warranties and the other limitations contained
herein, from and after the Closing, Seller agrees to indemnify, defend and hold
harmless Buyer and its Affiliates (collectively, the "Buyer Indemnitees")
against (and to pay within 30 days of demand) all claims, losses, liabilities,
obligations, damages, deficiencies, costs and expenses, including without
limitation, losses resulting from the defense, settlement and/or compromise of a
claim and/or demand and/or assessment, reasonable attorneys', accountants' and
expert witnesses' fees, costs and expenses of investigation, and the costs and
expenses of enforcing the indemnification provided hereunder (hereafter
individually a "Loss" and collectively "Losses") incurred by any of the Buyer
Indemnitees and arising out of or relating to: (i) all Excluded Assets; (ii) all
liabilities not forming a part of the Assumed Liabilities; (iii) any
misrepresentation or breach of any representation or warranty made by Seller in
this Agreement; and (iv) any breach of any covenant, agreement or obligation of
Seller contained in this Agreement.
(b) Seller shall not be required to indemnify Buyer Indemnitees with
respect to any claim for indemnification resulting from or arising out of
matters described above pursuant to Section 11.2(a), unless and until the
aggregate amount of all Losses by Buyer Indemnitees equals or exceeds one
percent (1.0%) of the Purchase Price (the "Bucket"). When Losses equal or exceed
the Bucket, Seller shall pay one-half of the Bucket plus all Losses in excess of
the Bucket regardless of amount. Seller's maximum liability to Buyer Indemnitees
under this Section 11.2 shall not exceed $8,500,000 in the aggregate except for
matters which are based on or which arise from or out of the Exempt Matters, as
to which no limit applies.
11.3 Indemnity by Buyer. Subject to the provisions of Section 11.1 hereof
relating to the survival of representations and warranties and the other
limitations contained herein, from and after the Closing, Buyer agrees to
indemnify, defend and hold harmless the Seller and each of its Affiliates,
officers, directors, employees, agents and stockholders (collectively, the
"Seller Indemnitees") against (and to pay within 30 days of demand) the amount
of any PTO or accrued but unpaid commissions of Hired Employees which were
included in the Assumed Liabilities but which Seller is nonetheless found liable
to pay to any Hired Employee and the amount of all Losses incurred by any of the
Seller Indemnitees and arising out of or relating to: (i) any Assumed
Liabilities; (ii) any material misrepresentation or material breach of any
representation or warranty made by Buyer in this Agreement; and (iii) any
material breach of any covenant, agreement or obligation of Buyer contained in
this Agreement.
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11.4 Defense of Third-Party Actions.
(a) If either a Buyer Indemnitee, on the one hand, or a Seller
Indemnitee, on the other hand (the "Indemnitee"), receives notice or otherwise
obtains knowledge of any matter or any threatened matter that may give rise to
an indemnification claim against the other party (the "Indemnifying Party"),
then the Indemnitee shall promptly deliver to the Indemnifying Party a written
notice (an "Indemnification Notice") describing such matter in reasonable
detail. The timely delivery of such written notice by the Indemnitee to the
Indemnifying Party shall not be a condition precedent to any liability on the
part of the Indemnifying Party under this Article 11 with respect to such
matter, except to the extent that the Indemnifying Party has suffered actual
prejudice by such failure. Upon delivery of an Indemnification Notice, the
Indemnifying Party shall promptly undertake the defense of such matter using a
firm reasonably acceptable to the Indemnitee. The Indemnitee shall have the
right to employ separate counsel in any of the foregoing actions, claims or
proceedings and to participate in the defense thereof and the fees and expenses
of such counsel shall be at the expense of the Indemnitee unless both Indemnitee
and Indemnifying Party are named as parties and Indemnitee's counsel shall in
good faith determine that representation by the same counsel is inappropriate.
In the event that the Indemnifying Party shall, within ten days after receiving
an Indemnification Notice fails to assume the defense thereof, Indemnitee shall
have the right to undertake the defense, compromise or settlement of such
action, claim or proceeding for the account of the Indemnifying Party subject to
the right of the Indemnifying Party to assume the defense of such Loss with
counsel reasonably satisfactory to the Indemnified Person at any time prior to
the settlement, compromise or final determination thereof. Anything in this
Section 11 to the contrary notwithstanding, the Indemnifying Party shall not,
without Indemnitee's prior written consent, settle or compromise any action or
claim or consent to the entry of any judgment with respect to any Loss for
anything other than money damages paid by the Indemnifying Party. The
Indemnifying Party may, without the Indemnitee's prior written consent, settle
or compromise any such action, claim or proceeding or consent to entry of any
judgment with respect to any such Loss that requires solely the payment of money
damages by the Indemnifying Party and that includes as an unconditional term
thereof the release by the claimant or the plaintiff of Indemnitee from all
liability in respect of such Loss.
(b) the Indemnitee shall make available to the Indemnifying Party all
books, records and other documents and materials that are under the direct or
indirect control of the Indemnitee or any of the Indemnitee's agents and that
the Indemnifying Party considers necessary or desirable for the defense of such
matter;
(c) the Indemnitee shall execute such documents and take such other
actions as the Indemnifying Party may reasonably request for the purpose of
facilitating the defense of, or any settlement, compromise or adjustment
relating to, such matter;
(d) the Indemnitee shall otherwise fully cooperate as reasonably
requested by the Indemnifying Party in the defense of such matter; and
(e) the Indemnitee shall not admit any liability with respect to such
matter.
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11.5 Limitation to Indemnification Obligations. Neither party shall be
required to indemnify any Indemnitee:
(a) to the extent such indemnity is limited by operation of law;
(b) to the extent Losses of such Indemnitee were caused by actual
fraud, willful misconduct, bad faith or gross negligence of such Indemnitee or
any of its Affiliates, officers, directors, employees and agents or by any
inaccuracy in, or breach of, any written certification, covenant, representation
or warranty made or, in the case of a covenant, to be performed, by any such
Indemnitee or any of its Affiliates, officers, directors, employees and agents
(unless and to the extent any such inaccuracy or breach is attributable to any
written certification, representation or warranty provided by the Indemnifying
Party;
(c) to the extent an Indemnitee shall have already received
indemnification for any such Losses hereunder, shall have received compensation
for any such Losses from other sources, or such Losses are covered by any
insurance policies.
11.6 Subsequent Recoveries. Following the Closing, if any amount is paid by
an Indemnifying Party in discharge of any claim for indemnification and such
amount (or part thereof) is subsequently recovered (whether by payment,
discount, credit, set-off or otherwise) by any Indemnitee from an unrelated
third party in respect of the matter in relation to which such claim was made,
such Indemnitee shall, to the fullest extent permitted by Law, pay to the
Indemnifying Party a sum corresponding to such amount recovered from such third
party less all costs and expenses (including without limitation attorney's fees
and other fees and expenses) of such recovery.
11.7 Subrogation. To the extent that the Indemnifying Party makes or is
required to make any indemnification payment to the Indemnitee, the Indemnifying
Party shall be entitled to exercise, and shall be subrogated to, any rights and
remedies (including rights of indemnity, rights of contribution and other rights
of recovery) that the Indemnitee or any of the Indemnitee's affiliates may have
against any other person with respect to any Losses, circumstances or matter to
which such indemnification payment is directly or indirectly related. The
Indemnitee shall permit the Indemnifying Party to use the name of the Indemnitee
and the names of the Indemnitee's Affiliates in any transaction or in any
proceeding or other matter involving any of such rights or remedies; and the
Indemnitee shall take such actions as the Indemnifying Party may reasonably
request for the purpose of enabling the Indemnitee to perfect or exercise the
Indemnifying Party's right of subrogation hereunder.
11.8 Notice as to Representations. Without limiting any of the other
obligations of the respective parties hereunder, if at any time after the date
of this Agreement, Buyer shall have any reason to believe that any
representation or warranty made by Seller hereunder may have been untrue, Buyer
shall promptly provide Seller written notice to that effect, indicating the
basis for Buyer's belief that such representation or warranty may have been
untrue. For purposes of this Article 11, Seller shall not be deemed to have
breached any representation or warranty if, prior to the Closing Date, Seller
provides Buyer with written notice clearly stating the existence
32.
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of the breach and Seller consummates the purchase of the Business and the Assets
notwithstanding such written notice.
ARTICLE 12
MISCELLANEOUS
12.1 Definitions of Certain Terms. In addition to such other capitalized
terms as are defined elsewhere in this Agreement, as used herein, the terms
defined in this Section 12.1 wherever used in this Agreement shall have the
following respective meanings:
"1999 Financials" has the meaning set forth in Section 3.6.
"Accounting Calculation" when applied to the preparation or audit of
any balance sheet, shall mean that the balance sheet is prepared in accordance
with GAAP with the following exceptions: (i) GAAP shall be supplemented by the
methods and procedures which have been used by Seller and which are set forth on
Exhibit F to this Agreement with all domestic and foreign receivables reserved
at the rate of 5% for receivables due 61-90 days from invoice date, 50% for
receivables due 91-180 days from invoice date and 100% for receivables due more
than 180 days from invoice date, (ii) all equipment manufactured or sold by
Tandberg Television ASA (NDS) and comprising a part of the assets included in
the balance sheet shall be valued separately in accordance with the foregoing
procedures to assure the adequacy of reserves with respect thereto, (iii) no
Excluded Assets or demonstration and customer service equipment previously
expensed shall be included as part of the value of the assets and (iv) for
purposes of determining materiality in any individual instance or in the
aggregate, the Business shall be considered as a separate entity not contained
in or forming a part of any consolidated or consolidating group.
"Adverse Effect on the Business" shall mean an adverse effect on the
business, financial condition, results of operations or prospects of the
Business or on the condition or use by Buyer of the Assets.
An "Affiliate" of a Person or entity shall mean a Person or entity
that is a stockholder, director, officer, employee, agent, attorney, accountant
or representative of that Person or entity, a Person or entity that directly or
indirectly controls, is controlled by or is under common control with that
Person or entity and any stockholder, director, officer, agents, attorney,
accountant or representative of any such controlled, controlling or common
control entity. For purposes of this definition, the term "control" shall
include, but not be limited to the power to vote 25% or more of the outstanding
equity interests of an entity.
"Agreement" shall mean this Asset Purchase Agreement (including the
Exhibits and the Schedules), as the same from time to time may be amended,
supplemented or waived.
"Applicable Law" shall mean all applicable provisions of all (i)
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any Governmental Authority, (ii)
Government Approvals and (iii) orders, decisions, injunctions, judgments, awards
and decrees of or agreements with any Governmental Authority.
33.
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"April Balance Sheet" means the balance sheet of the Business as of
April 30, 2000 as prepared by Seller in accordance with the Accounting
Calculation.
"Assets" shall have the meaning set forth in Section 1.1 hereof.
"Assumed Liabilities" has the meaning set forth in Section 2.4.
"Balance Sheet Amount" shall mean the net asset amount shown on the
April Balance Sheet, calculated in accordance with the Accounting Calculation.
"Benefit Plan" has the meaning set forth in Section 3.10(b).
"Books and Records" shall mean all books and records, files, texts,
data, including manuals, price lists, mailing lists, lists of customers,
suppliers and contractors production data, sales and promotional materials,
purchasing materials, personnel records, manufacturing and quality control
records and procedures, research and development files, all other files and
accounting records and all other data and information (regardless of the media
in which stored), in each case to the extent relating to or used in the
Business.
"Business" shall mean the microwave radio communications business of
Seller as primarily conducted from Sellers facility in Billerica, Massachusetts,
and which includes designing, manufacturing, producing, marketing, selling and
otherwise providing, microwave communications equipment and services for the
broadcast industry and government. For the avoidance of doubt, the term
"Business" does not include, and specifically excludes all the assets to the
extent used in connection with, and all employees and Intellectual Property to
the extent specifically related to Seller's AB-Access product. The parties agree
that all Intellectual Property which cannot, by its nature or form, be separated
into that which is used by the Business and that which is not shall be licensed
or conveyed to Buyer on a nonexclusive royalty and fee free basis in perpetuity
and without restriction subject to all restrictions on the Intellectual Property
imposed by third parties from whom such intellectual Property is obtained;
provided that Buyer shall use such Intellectual Property solely in connection
with the operation of the Business and the Assets and any expansions of any of
them and provided further that Buyer shall not be entitled to transfer,
sublicense or otherwise convey its rights to use such Intellectual Property to
an unaffiliated third party without Seller's prior written consent other than
upon a sale of the Business or a sale of the Assets to which such Intellectual
Property is related.
"Business Employee" has the meaning set forth in Section 3.7(b)(xi).
"Buyer" has the meaning set forth in the first paragraph of this
Agreement.
"Buyer Indemnitees" has the meaning set forth in Section 11.2(a).
"Closing" shall mean the closing of the transactions contemplated by
this Agreement as set forth in Section 2.1.
"Closing Date" shall have the meaning set forth in Section 2.1.
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"Closing Date Balance Sheet" shall mean the balance sheet of the
Business as of the Closing Date as prepared by Seller in accordance with the
Accounting Calculation.
"Closing Payment" shall mean $19,251,000, the sum of the Balance Sheet
Amount plus the sum of $8,500,000.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" has the meaning set forth in Section 5.2.
"Consent" shall mean any consent, approval, authorization, variance,
waiver, permit, grant, franchise, concession, agreement, license, exemption or
order of, registration, certificate, declaration or filing with, or report or
notice to, any Person, including but not limited to any Governmental Authority.
"Contracts" shall mean all rights under all agreements, contracts,
commitments, orders, licenses, leases and other instruments and arrangements
(whether written or oral) to which Seller is, or at the Closing will be, a
party, or by which it or any of its assets is, or at the Closing will be, bound
primarily in connection with the Business, the Assets or the Assumed
Liabilities.
"Disclosed Contract" shall mean a written contract or agreement, a
copy of which is delivered to Buyer or its Representatives as part of Sellers'
due diligence disclosure to Buyer or which is set forth on Schedule 12.
"Disclosure Schedule" shall mean a written schedule prepared by Seller
containing proposed changes to the schedules to this Agreement for events
occurring between June 9, 2000 and the Closing. Buyer shall be under no
obligation to accept any changes proposed in respect of any schedule which
change, if not waived by Buyer, would constitute a breach of this Agreement or
would cause any representation or warranty to be untrue when made or as of the
Closing unless such change has previously been agreed to by Buyer in writing or
unless all such changes do not, in the aggregate, cause an Excess Materiality.
Seller shall deliver an initial draft of any proposed Disclosure Statement to
Buyer not less than five days prior to Closing and shall deliver a final
proposed draft thereof not less than 24 hours prior to the Closing. A draft
shall be deemed a Disclosure Schedule under the terms of this Agreement if and
to the extent accepted by Buyer in writing.
"Excess Materiality" has the meaning set forth in the preamble to
Article III.
"Excluded Assets" has the meaning set forth in Section 1.2.
"Excluded Intellectual Property" has the meaning set forth in Section
1.2(e)
"Excluded Liabilities" has the meaning set forth in Section 2.5.
"1999 Financials" has the meaning set forth in Section 3.6.
35.
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"Fixed Assets" shall mean all machinery, equipment, furniture,
fixtures, furnishings, vehicles, tools, dies, molds and other tangible personal
property owned by Seller and related to the Business as of March 31, 2000,
including, without limitation, the fixed assets located at Seller's facilities
located at Billerica, Massachusetts.
"GAAP" shall mean United States generally accepted accounting
principles, consistently applied and consistent with past practices.
"Governmental Approval" shall mean any Consent of, with or to any
Governmental Authority.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any governmental authority,
agency, department, board, commission or instrumentality of the United States,
any State of the United States or any political subdivision thereof, any
tribunal or arbitrator(s) of competent jurisdiction and any self-regulatory
organization.
"Hazardous Materials" shall mean any substance, material or waste that
is regulated by any local Governmental Authority, the State of California, the
State of Massachusetts or the United States Government, including, without
limitation, any material or substance that is (1) defined as a "hazardous
waste," "hazardous material," "hazardous substance," "extremely hazardous waste"
or "restricted hazardous waste" under any provision of any applicable law, (2)
petroleum, (3) asbestos, (4) designated as a "hazardous substance" pursuant to
Section 311 of the Clean Water Act, 33 U.S.C.(S). 1251 et seq. (33 U.S.C.(S).
1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C.(S).
1317), (5) defined as a "hazardous waste" pursuant to Section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C.(S). 6901 et seq. (42
U.S.C.(S). 6903), or (6) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C.(S). 9601 et seq. (42 U.S.C.(S). 9601). Notwithstanding the
foregoing, the term "Hazardous Materials" shall not include materials in a
quantity commonly used in an office building the spill or disposal of which
could not reasonably give rise to a Loss.
"Hired Employees" shall mean those employees of Seller employed in the
Business whom Buyer intends to hire following the Closing and who are identified
by Buyer in a written schedule delivered to Seller who (i) execute a letter
agreement with Seller in form and substance acceptable to Buyer and Seller
wherein they agree to remain employed by Seller, at Sellers discretion, through
the Closing and to accept credit under a paid time off ("PTO") program
maintained by Buyer for and in lieu of PTO accumulated under Seller's PTO
program, (ii) execute a letter agreement with Buyer in form and substance
acceptable to Buyer and Seller wherein they agree to accept employment with
Buyer following the Closing, and (iii) in fact remain employed by Seller until,
and accept employment from Buyer immediately following the Closing.
36.
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"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"Indemnifying Party" has the meaning set forth in Section 11.4.
"Intellectual Property" shall mean all intellectual property rights
including all patents, pending patent applications, registered and unregistered
copyrights, copyright applications, inventions, trade secrets, inventions,
processes, designs, formulae, research and development data, and know-how,
computer software owned, leased or licensed or other intellectual property, the
trademarks, service marks, trade names, logos and any applications and all
similar intangible property rights and tangible embodiments of any of the
foregoing, in each case used in the conduct of the Business, other than the
Excluded Intellectual Property together with all internet addresses, sites and
site materials which relate to the Business to the extent the same do not
include the names "California Microwave" or "Adaptive Broadband".
"Inventories" has the meaning set forth in Section 1.1(c).
"Lien" shall mean any mortgage, pledge, hypothecation, security
interest, encumbrance, lease, sublease, occupancy agreement, adverse claim or
interest, easement, covenant, encroachment, burden, option, lien, right of first
refusal or other similar restrictions.
"Logos" has the meaning set forth in Section 1.1.
"Loss" has the meaning set forth in Section 11.2.
"March Balance Sheet" has the meaning set forth in Section 3.6.
"Ordinary Course" shall mean in the ordinary course of business
consistent with Seller's past practices during the 24 months immediately
preceding the date of this Agreement other than with respect to the sale of the
Business.
"Permitted Liens" shall mean (i) mechanics,' carriers' or
warehouseman's Liens arising in any of the Ordinary Course which do not in the
aggregate adversely affect the value of any of the Assets or impair the use of
any of them in the operation of the Business; (ii) minor survey exceptions,
minor encumbrances, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning restrictions as to the use of real properties which
do not materially interfere with the use, occupation and enjoyment of the real
property comprising a part of the Assets; and (iii) Liens listed on Schedule 3.8
hereto.
"Person" shall mean any natural person, firm, partnership,
association, corporation, company, limited liability company, trust, business
trust, Governmental Authority or other entity.
"Policies" has the meaning set forth in Section 3.14.
37.
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"Pre-Closing Tax Period" shall mean any period ending with, on or
prior to the Closing Date with respect to which Seller is required to report
and/or pay any Tax relating to the Business.
"Purchase Price" has the meaning set forth in Section 2.2.
"Seller" means and includes Adaptive Broadband Corporation and each of
its subsidiaries and divisions.
"Seller Indemnitees" has the meaning set forth in Section 11.3.
"Tax Data" has the meaning set forth in Section 7.9.
"Tax Documentation" has the meaning set forth in Section 7.9.
"Taxes" in the plural and "Tax" in the singular shall mean all
federal, state, local and foreign taxes, including income, employment (including
social security, withholding and state disability), excise, property, sales,
use, franchise, and other taxes, together with all interest, additions to tax
and penalties relating thereto.
"Tax Return" shall mean any return, report, declaration, form, claim
for refund or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Transfer Taxes" has the meaning set forth in Section 7.6.
"Window Period" has the meaning set forth in Section 7.4.
12.2 Knowledge. As used in this Agreement, a corporate party's "knowledge"
means the knowledge of any director or executive officer of such party and, in
the case of Seller, also includes the persons listed on Schedule 12.2.
12.3 Memorandum; Disclaimer of Projections. Seller makes no representation
or warranty to Buyer except as specifically made in this Agreement. In
particular, Seller makes no representation or warranty to Buyer with respect to
any financial projection or forecast delivered by or on behalf of Seller to
Buyer. Buyer acknowledges that (a) there are uncertainties inherent in
attempting to make such projections and forecasts, (b) it is familiar with such
uncertainties, (c) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts so
furnished to it and (d) it shall have no claim against Seller with respect
thereto.
12.4 Expenses. If the purchase of the Assets is consummated or if this
Agreement is terminated other than as a result of a breach by Seller of the
provisions of Section 5.4 of this Agreement, in which case all expenses shall be
borne by Seller in addition to all other rights of Buyer in law and equity,
Seller and Buyer shall pay their own respective expenses and costs incidental to
the preparation of this Agreement, the performance and compliance with all
agreements contained in this Agreement to be performed or complied with by them
and the
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consummation of the transactions contemplated hereby, provided that each party
shall pay one half of any filing fees required in connection with the HSR Act.
The rights granted pursuant to this Section shall be in addition to all rights
which Buyer may have at law or equity for a breach of this Agreement.
12.5 Notices. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (c) sent by next-day or overnight mail or
delivery or (d) sent by facsimile transmission or telegram. All such notices,
requests, demands, waivers and other communication shall be deemed to have been
received (w) if by personal delivery on the day after such delivery, (x) if by
certified or registered mail, on the seventh business day after the mailing
thereof, (y) if by next-day or overnight mail or delivery, on the day delivered,
(z) if by facsimile or telegram, on the next day following the day on which such
facsimile or telegram was sent, provided that a copy is also sent by certified
or registered mail.
If to Buyer:
Vislink plc
Marlborough House
Charnham Lane
Hungerford,
Berkshire RG17 0EY
Attention: Chief Financial Officer
Tel: 01488 685500
Fax: 01488 685501
with a copy to:
Reed Smith Shaw & McClay LLP
One Riverfront Plaza
Newark, New Jersey 07102
Attention: Jeff Ellentuck
Tel: 973-621-3182
Fax: 973-621-3199
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If to Seller, to:
Adaptive Broadband Corporation
1143 Borregas Avenue
Sunnyvale, CA 94089
Attention: Kenneth J. Wees
Tel: 408-743-3436
Fax: (408) 743-3482
with a copy to:
Cooley Godward LLP
One Maritime Plaza, 20/th/ Floor
San Francisco, CA 94111
Attention: Kenneth L. Guernsey
Tel: (415) 693-2091
Fax: (415) 951-3699
or, in each case, to such other address as may be specified in writing to the
other parties.
Any party may give any notice, instruction or communication in connection
with this Agreement using any other means (including personal delivery, telecopy
or ordinary mail), but no such notice, instruction or communication shall be
deemed to have been delivered unless and until it is actually received by the
party to whom it was sent. Any party may change the address to which notices,
instructions or communications are to be delivered by giving the other parties
to this Agreement notice thereof in the manner set forth in this Section 12.5.
12.6 Assignment. No party may assign or otherwise transfer this Agreement
or any of its rights hereunder to any person or entity, without the prior
written consent of Buyer and Seller; provided that this Agreement may be
assigned by Buyer to one or more direct or indirect subsidiaries of Vislink plc.
Subject to the foregoing, this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their successors and assigns.
12.7 Entire Agreement; Amendment; Governing Law; Etc. This Agreement
(together with the preamble, exhibits and schedules hereto and the agreements,
documents and instruments referred to herein, each of which are incorporated
herein by this reference) embody the entire agreement and understanding among
the parties hereto with respect to the subject matter hereof. This Agreement may
be amended, modified, waived, discharged or terminated only by (and any consent
hereunder shall be effective only if contained in) an instrument in writing
signed by the party against which enforcement of such amendment, modification,
waiver, discharge, termination or consent is sought. This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware
as it applies to contracts to be performed entirely within the State of
Delaware.
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12.8 Counterparts. This Agreement may be executed in several counterparts,
each of which is an original, but all of which shall constitute one instrument.
12.9 Venue. If any legal proceeding or other action relating to this
Agreement or any of the other agreements being executed and delivered in
connection herewith, or any of the transactions contemplated hereby or thereby,
is brought or otherwise initiated, the venue therefor shall be in Wilmington,
Delaware, which shall be deemed to be a convenient forum. Each of the parties
hereto hereby expressly and irrevocably consents and submits to the jurisdiction
of the Federal and State courts located in or whose jurisdictions include the
City of Wilmington, Delaware in connection with any such legal proceeding or
other action.
12.10 Attorney's Fees. In the event that either party hereto initiates any
legal action arising out of or in connection with this Agreement, the prevailing
party shall be entitled to recover from the other party all reasonable
attorneys' fees, expert witness fees and expenses incurred by the prevailing
party in connection herewith.
12.11 Third Party Rights. The parties do not intend to confer any benefit
hereunder on any person or entity other than the parties hereto and their
respective successors in interest.
12.12 Titles and Headings. Titles and headings of sections of this
Agreement and the "Table of Contents," the "Table of Exhibits," the "Table of
Schedules" and the "Index of Schedules" included herewith, are for convenience
of reference only and shall not affect the construction of any provision of this
Agreement.
12.13 Exhibits and Schedules. Each of the Exhibits and Schedules referred
to herein and attached hereto is an integral part of this Agreement and is
incorporated herein by this reference.
12.14 Pronouns. All pronouns and any variations thereof used in this
Agreement shall be deemed to refer to the masculine, feminine or neuter,
singular or plural, as appropriate.
12.15 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any jurisdiction, as to such jurisdiction, shall be
ineffective to the extent of such invalidity or unenforceability, without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
12.16 Interpretation. Each party acknowledges that such party, either
directly or through such party's representatives, has participated in the
drafting of this Agreement and any applicable rule of constructions that
ambiguities are to be resolved against the drafting party should not be applied
in connection with the construction or interpretation of this Agreement.
41.
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In Witness Whereof, the parties hereto have duly caused this Agreement to
be executed as of the date first above written.
Buyer
RF Technology, Inc.,
a Connecticut corporation,
By: /s/ Ian Scott-Gall
---------------------------------
Its: Director
-------------------------------
Seller
Adaptive Broadband Corporation
a Delaware corporation
By: /s/ Kenneth J. Wees
---------------------------------
Its: Vice President, General Counsel &
---------------------------------
Secretary
---------
42.
