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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): February 2, 1996 (January 31,
1996)
OSICOM TECHNOLOGIES, INC.
-------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEW JERSEY 0-15810 22-2367234
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(STATE OR JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
1800 STEWART STREET, SANTA MONICA, CALIFORNIA 90404
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (310) 828-7496
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ITEM 7. - FINANCIAL STATEMENTS AND EXHIBITS
(a) The financial statements of the business acquired are expected to be
filed by amendment to this filing within sixty (60) days of the
earliest date reported herein.
(b) The pro forma financial information will be included with Form 10-KSB
for the year ended January 31, 1996.
(c) Index to Exhibits
2.1 Plan of Acquisition - Asset Sale Agreement by and among
Rockwell International Corporation, Osicom
Technologies, Inc., and Meret Optical Communications,
Inc.
2.2 Guaranty
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Osicom Technologies, Inc.
-------------------------
(Registrant)
Date: February 9, 1996 By /s/ Sharon Gill Chadha
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Sharon Gill Chadha
Chief Executive Officer
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Exhibit 2.1 Plan of Acquisition - Asset Sale Agreement by and among Rockwell
International Corporation, Osicom Technologies, Inc., and Meret
Optical Communications, Inc.
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ASSET SALE AGREEMENT
Dated as of January 18, 1996
by and among
ROCKWELL INTERNATIONAL CORPORATION,
OSICOM TECHNOLOGIES, INC., and MERET OPTICAL
COMMUNICATIONS,INC.
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
1. Assets to be Acquired........................................... 2
2. Liabilities to be Assumed....................................... 7
3. Purchase Price; Post-Closing Adjustment......................... 10
3(a). Closing Payment .................................. 10
3(b). Closing Balance Sheet ............................ 10
3(c). Post-Closing Adjustment .......................... 12
4. Closing ........................................................ 12
5. Representations and Warranties of Seller........................ 13
5(a). Corporate Organization ........................... 13
5(b). Corporate Authorization .......................... 13
5(c). No Violation or Conflict ......................... 14
5(d). Governmental Authorizations ...................... 15
5(e). Real Property .................................... 15
5(f). Personal Property ................................ 16
5(g). Contracts ........................................ 17
5(h). Compliance With Laws ............................. 19
5(i). Permits .......................................... 19
5(j). Litigation ....................................... 20
5(k). Intellectual Property ............................ 20
5(l). Conduct of Business Since
December 31, 1995.............................. 20
5(m). Employees ........................................ 22
5(n). Insurance ........................................ 22
5(o). Employee Benefit Plans ........................... 22
6. Representations and Warranties of Buyer ........................ 23
6(a). Corporate Organization ........................... 23
6(b). Corporate Authorization .......................... 23
6(c). No Violation or Conflict ......................... 23
6(d). Consents, Approvals or Authorizations............. 24
6(e). Litigation ....................................... 24
6(f). Information ...................................... 25
6(g). Funds ............................................ 25
7. Investigation by Buyer; Confidentiality......................... 26
8. Covenants....................................................... 26
8(a). Conduct of Business Prior to
the Closing Date............................... 26
8(b). Transfer Taxes ................................... 27
</TABLE>
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<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
8(c). Further Assurances ............................. 27
8(d). Post Closing Access;
Preservation of Records...................... 28
8(e). Reasonable Best Efforts ........................ 29
8(f). Allocation of Consideration .................... 30
8(g). Interim Use of Seller's
Trademark, Trade Name and Corporate Symbol... 31
8(h). Assumption of Obligations ...................... 34
8(i). Insurance ...................................... 35
8(j). Cash Management ................................ 36
8(k). Intellectual Property .......................... 37
8(l). Certain Intercompany Indebtedness .............. 41
9. Employment Arrangements, Benefits and Pension Plans .......... 41
9(a). Employment ..................................... 41
9(b). Severance Benefits ............................. 42
9(c). Welfare Plans .................................. 43
9(d). Indemnification ................................ 43
10. Conditions Precedent to the Obligation of Buyer............... 44
10(a). Representations and Warranties ................. 44
10(b). Covenants and Agreements ....................... 44
10(c). Opinion of Counsel ............................. 44
10(d). No Adverse Order of Injunction ................. 45
11. Conditions Precedent to the Obligation of Seller.............. 45
11(a). Representations and Warranties ................. 45
11(b). Covenants and Agreements ....................... 45
11(c). Opinion of Counsel ............................. 46
11(d). No Adverse Order of Injunction ................. 46
11(e). Delivery of the Note ........................... 46
11(f). Delivery of the Guaranty ...................... 46
12. Finder's Fees; Brokers........................................ 46
13. Waiver of Compliance with Bulk Transfer Laws.................. 47
</TABLE>
ii
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<TABLE>
<CAPTION>
Section Page
- - ------- ----
<S> <C>
14. No Survival of Representations and Warranties................. 47
15. Indemnification............................................... 48
15(a). Indemnification by Seller ........................ 48
15(b). Indemnification by Buyer ......................... 49
15(c). Notice of Circumstance ........................... 50
15(d). Certain Limitations .............................. 51
15(e). Termination of Indemnification Obligations........ 53
16. Termination; Effect of Termination............................ 54
16(a). Termination ...................................... 54
16(b). Effect of Termination ............................ 54
17. Miscellaneous................................................. 55
17(a). Costs Incident to Preparation of Agreement........ 55
17(b). Parties in Interest .............................. 55
17(c). Eminent Domain or Casualty ....................... 55
17(d). Assignment; Successors and Assigns................ 56
17(e). Notices .......................................... 56
17(f). Waiver; Remedies ................................. 58
17(g). Entire Agreement ................................. 58
17(h). Amendment ........................................ 58
17(i). Counterparts ..................................... 58
17(j). Governing Law .................................... 59
17(k). Exhibits and Schedules ........................... 59
17(l). Captions, Currency ............................... 59
17(m). Publicity ........................................ 60
17(n). No Representations or Warranties.................. 60
17(o). Severability ..................................... 61
17(p). Consent to Jurisdiction .......................... 61
17(q). Definition of 'Knowledge' ........................ 62
</TABLE>
Exhibit A - Form of Buyer's Note
Exhibit B - Form of Guarantor's Guaranty
Exhibit C - Accounting Methods
Exhibit D - Form of Seller's Counsel Opinion
Exhibit E - Form of Buyer's Counsel Opinion
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SCHEDULES
Schedule 1(a)(x) - Marks Used in Business
Schedule 1(a)(xi) - Patents and Maskworks
Schedule 1(b)(iii) - Retained Leases
Schedule 3(c)(ii) - Baseline Balance Sheet
Schedule 5(c) - Consents
Schedule 5(d) - Governmental Authorizations
Schedule 5(e)(i) - Transferred Leased Properties
Schedule 5(g) - Contracts
Schedule 5(h) - Compliance with Laws
Schedule 5(j) - Seller Litigation
Schedule 5(k) - Intellectual Property
Schedule 5(l) - Conduct of Business Since September 30, 1995
Schedule 5(n) - Insurance
Schedule 5(o) - Employee Benefit Plans
Schedule 6(d) - Buyer Consents, Approvals or Authorizations
Schedule 6(e) - Buyer Litigation
Schedule 8(a) - Conduct of Business Prior to the Closing Date
Schedule 8(f) - Allocation of Consideration
Schedule 8(h)(i) - Assumption of Obligations
Schedule 8(h)(ii) - Shared Agreements
Schedule 9(a) - Employees
iv
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ASSET SALE AGREEMENT
ASSET SALE AGREEMENT dated as of January 18, 1996 by and among ROCKWELL
INTERNATIONAL CORPORATION, a Delaware corporation ("Seller"), OSICOM
TECHNOLOGIES, INC. a New Jersey corporation ("Guarantor"), and MERET OPTICAL
COMMUNICATIONS, INC., a California corporation and wholly-owned subsidiary of
Guarantor.
W I T N E S S E T H :
WHEREAS, Seller, through its Network Systems division (and its
predecessors), has engaged and is engaged in the business of designing,
developing, manufacturing, marketing and selling diverse data communication
products, including remote access products and high-performance network adapters
based on industry standard protocols such as TCP/IP, IPX, SNMP, Ethernet, FDDI,
ISDN and industry standard buses such as PCI/PMC, VME, ISA, EISA and Sbus (such
business, as heretofore and currently conducted, is collectively referred to
herein as the "Business");
WHEREAS, upon the terms and subject to the conditions hereinafter set
forth, Seller desires to sell and Buyer desires to purchase substantially all of
the assets of Seller primarily relating to the Business;
WHEREAS, Guarantor is willing to guarantee the obligations of Buyer in
connection with the purchase of such assets; and
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WHEREAS, upon the terms and subject to the conditions hereinafter set
forth, Seller desires to transfer and Buyer desires to assume certain of the
liabilities of Seller relating to the Business;
NOW, THEREFORE, in consideration of the premises, the mutual agreements
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller, Buyer and Guarantor do
hereby agree as follows:
SECTION 1. Assets to be Acquired.
(a) Subject to the terms and conditions set forth herein, on the
Closing Date (as defined in Section 4) Seller shall sell, convey, assign,
transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller,
all of Seller's right, title and interest in and to all of the assets (tangible
and intangible), rights, contracts, leases and agreements used primarily in or
relating primarily to the Business (other than Retained Assets, as defined in
Section 1(b)), as the same shall exist on the Closing Date, including, but not
limited to, the following:
(i) all machinery, equipment, tooling, vehicles,
furniture and fixtures, leasehold improvements, repair parts, tools,
and plant and office equipment, together with any rights or claims of
Seller arising out of the breach of any express or implied warranty by
the manufacturers or sellers of any of such assets or any component
part thereof;
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(ii) all inventories, including work-in-process, finished
goods, materials, parts, accessories and supplies;
(iii) all accounts and notes receivable;
(iv) all financial, accounting and operating data and
records (other than such data and records (i) which relate to Retained
Assets, (ii) which relate to former employees of Seller or (iii) the
transfer of which is prohibited by applicable law or contract),
including, without limitation, all books, records, notes, sales and
sales promotional data, advertising materials, credit information, cost
and pricing information, customer and supplier lists, reference
catalogs, payroll and personnel records and other similar property,
rights and information;
(v) all commercial and technical information, including
engineering, production and other designs, drawings, specifications,
formulas, technology, computer programs, software, processes and
proprietary information, trade secrets, copyrights and know-how
relating thereto;
(vi) all leases, license agreements, contracts,
agreements, sale orders, purchase orders, open bids and other
commitments set forth on Schedule 5(e)(i) or 5(g) or not required to be
set forth on Schedule 5(e)(i) or 5(g) pursuant to the terms of Section
5(e)(i) or 5(g), respectively (collectively, the "Contracts");
(vii) all prepaid expenses, deposits and retentions held by
third parties under Contracts;
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(viii) all licenses, franchises, permits, authorizations and
approvals to the extent the same are transferable;
(ix) any and all goodwill and going concern value of the
Business, if any;
(x) all marks and any rights therein listed on Schedule
1(a)(x) to the extent that such marks have acquired any trademark or
service mark status, together with the goodwill of the Business, if
any, connected with the use of, and symbolized by, the marks; and
(xi) all patents, patent applications, inventions,
invention disclosures and mask work registrations listed on Schedule
1(a)(xi).
The assets to be sold, conveyed, assigned, transferred and delivered by Seller
to Buyer pursuant to this Agreement are hereinafter collectively referred to as
the "Assets". The Assets will include all additions to and replacements of any
of the items described in this Section 1(a) between the date of this Agreement
and the Closing Date, and will exclude all deletions, sales or other disposals
of any of the foregoing between the date of this Agreement and the Closing
Date.
(b) Notwithstanding anything contained herein to the contrary, the
Assets to be sold, conveyed, assigned, transferred and delivered by Seller to
Buyer hereunder shall not include any of the following (collectively, the
"Retained Assets"):
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(i) all cash, cash equivalents, bank accounts and bank
account credit balances, deposits, funds, securities, short term
investments, certificates of deposit, notes, checks, drafts and similar
instruments;
(ii) all right, title and interest in and to the marks or
names "Rockwell", "Rockwell International", Seller's corporate logo or
any other trademarks, tradenames or service marks of Seller or its
subsidiaries, or any applications or registrations thereof, except as
expressly provided in Section 8(g);
(iii) those leases of real property listed on Schedule
1(b)(iii);
(iv) all marks and any rights therein other than those
listed on Schedule 1(a)(x) to the extent that such marks listed on
Schedule 1(a)(x) have acquired any trademark or service mark status;
(v) all patents, patent applications, inventions,
invention disclosures and mask work registrations other than those
listed on Schedule 1(a)(xi);
(vi) all pension plan and other benefit plan assets
relating to present or former employees of Seller;
(vii) all policies of insurance, fidelity, surety or
similar bonds and the coverages afforded thereby;
(viii) all rights to refunds of all Federal, state, local or
foreign income and franchise Taxes (as defined in Section 8(f)(ii)) and
all other taxes and all assessments,
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including, without limitation, gross receipts, property, sales, use or
other taxes and estimated taxes relating thereto (and interest and
penalties thereon), actually paid or payable by Seller with respect to
all taxable periods ending on or before the Closing Date and the
portion ending on the Closing Date of any taxable period that begins
before but has not ended by the Closing Date; and
(ix) all licenses or rights of Seller or its subsidiaries
(with respect to the Business) under any intellectual property of third
parties which cannot be sublicensed or transferred by Seller (without
any action by or cost to Seller) in connection with the sale or
transfer of the Business.
(c) Seller shall deliver to Buyer at the Closing (as defined in
Section 4) such bills of sale and instruments of transfer as shall reasonably be
requested by Buyer to effect or evidence the sale, conveyance, assignment,
transfer and delivery of the Assets to Buyer.
(d) Anything contained herein to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any Contract if an
assignment or attempted assignment of the same without the consent of the other
party or parties thereto would constitute a breach thereof or in any way impair
the rights of Seller or Buyer thereunder. Seller shall, prior to the Closing,
use its reasonable efforts (it being understood that such efforts shall not
include any requirement of Seller or any
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of its subsidiaries or affiliates to expend money or offer or grant any
financial accommodation to any third party) as requested by Buyer, and Buyer
shall cooperate in all reasonable respects with Seller, to obtain all consents
and waivers and to resolve all impracticalities of assignments or transfers
necessary to convey to Buyer the Assets. If such consent is not obtained or if
an attempted assignment would be ineffective or would impair Seller's or Buyer's
rights under any such Contract so that Buyer would not receive all such rights,
then (x) Seller shall use its reasonable efforts (it being understood that such
efforts shall not include any requirement of Seller or any of its subsidiaries
or affiliates to expend money or offer or grant any financial accommodation to
any third party) to provide or cause to be provided to Buyer the benefits of any
such Contract and Seller shall promptly pay or cause to be paid to Buyer when
received all moneys received by Seller with respect to any such Contract and (y)
Buyer shall pay, perform and discharge on behalf of Seller all of Seller's
debts, liabilities, obligations and commitments thereunder in a timely manner
and in accordance with the terms thereof.
SECTION 2. Liabilities to be Assumed.
(a) Subject to the terms and conditions set forth herein, in
consideration for the sale, conveyance, assignment, transfer and delivery of the
Assets to Buyer, on the Closing Date Seller shall assign, convey and transfer to
Buyer, and Buyer shall assume and undertake to pay, perform and discharge, in a
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timely manner and in accordance with the terms thereof, all of Seller's debts,
liabilities, obligations and commitments (contractual or otherwise):
(i) arising under or relating to any Contract (including,
without limitation, any warranty obligation in respect thereof);
(ii) reflected on the Baseline Balance Sheet (as defined
in Section 3(c)(ii)) (or referred to in the notes thereto) or arising
since December 31, 1995 and reflected on the Closing Balance Sheet (as
defined in Section 3(c)(i)) (or referred to in the notes thereto); and
(iii) arising out of or relating to the operation of the
Business prior to the Closing Date which are not contained in clauses
(i) or (ii) of this Section 2(a) ("Contingent Liabilities") to the
extent the amount of Contingent Liabilities does not in the aggregate
exceed the sum of $500,000 plus the amount of any tax benefits
(computed in accordance with the principles set forth in Section 15(d))
inuring to Buyer as a result of its payment of Contingent Liabilities;
provided, however, that (i) in the event Buyer shall recover or become
entitled to recover any amounts in respect of the Assumed Liabilities,
the maximum aggregate amount of Contingent Liabilities assumed by Buyer
hereunder shall be increased on a dollar for dollar basis by an amount
equal to the amount so recovered or recoverable by Buyer and (ii) in
the event Buyer incurs any
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costs or expenses in respect of Contingent Liabilities which arise from
or relate to acts or omissions of any member of the Buyer Group (as
defined in Section 13) or other person after the Closing Date, the
maximum aggregate amount of Contingent Liabilities assumed by Buyer
hereunder shall be increased on a dollar for dollar basis by the amount
thereof.
The liabilities to be assumed by Buyer pursuant to this Agreement are
hereinafter collectively referred to as the "Assumed Liabilities". Seller shall
retain all liabilities relating to the operation of the Business prior to the
Closing Date which do not constitute Assumed Liabilities ("Retained
Liabilities").
Buyer shall provide Seller with prompt notice describing in reasonable
detail any condition or claim in respect of which Contingent Liabilities are or
may be incurred. Buyer shall keep Seller apprised of the status of and any
action by or on behalf of Buyer or any of its subsidiaries or affiliates with
respect to all such conditions or claims. At such time as Buyer anticipates that
the maximum aggregate amount of Contingent Liabilities assumed by Buyer
hereunder may be exceeded (and in any event if and when such threshold is
exceeded), Buyer shall provide Seller with prompt notice thereof, and Seller
shall control, at its own expense, the resolution of any such conditions or
claims.
(b) Buyer shall execute and deliver to Seller at the Closing such
written instruments of assumption as shall
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reasonably be requested by Seller to effect or evidence the assumption by Buyer
of the Assumed Liabilities.
SECTION 3. Purchase Price; Post-Closing Adjustment.
(a) Closing Payment. In consideration for the sale, conveyance,
assignment, transfer and delivery of the Assets, (i) Buyer shall, at the Closing
(A) pay to Seller, by wire transfer of immediately available U.S. Dollars to
Seller's bank account at Mellon Bank N.A., Pittsburgh, Pennsylvania, account no.
102-3474, the amount of U.S. $5,000,000.00, (B) deliver to Seller a note in the
amount of $6,000,000.00 payable to Seller six months after the Closing Date with
interest in the form attached hereto as Exhibit A (the "Note"), the cash and
Note together which represent a purchase price of U.S. $11,000,000.00 (the
"Purchase Price"), and (C) assume the Assumed Liabilities; and (ii) Guarantor
shall, at the Closing deliver to Seller an executed Guaranty substantially in
the form attached hereto as Exhibit B (the "Guaranty").
(b) Closing Balance Sheet.
(i) Within 60 days after the Closing Date, Seller will
prepare and deliver to Buyer a balance sheet of the Business as of the
close of business on the day preceding the Closing Date (the "Closing
Balance Sheet"). The date on which the Closing Balance Sheet is
delivered to Buyer is referred to herein as the "Delivery Date". Buyer
will cause its employees to assist Seller in the preparation of the
Closing Balance Sheet. Buyer will cause Seller to be
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provided access at all reasonable times to the personnel, properties,
books and records of Buyer for such purposes.
(ii) The Closing Balance Sheet will be prepared utilizing
the same accounting methods, policies, practices, procedures,
classifications, judgments and estimation methodologies as those
described in Exhibit C (which the parties acknowledge were utilized in
the preparation of the balance sheet dated December 31, 1995 of the
Business attached hereto as Schedule 3(c)(ii) (the "Baseline Balance
Sheet")) (including, but not limited to, asset and liability
valuations, cut-off procedures, accounting for long-term contracts and
materiality standards), except that (A) the Closing Balance Sheet shall
not reflect any adjustments which result from management decisions made
on or subsequent to the Closing Date which change the operations or the
manner in which the Business is conducted (including, but not limited
to, the cessation of any activities at any facility or similar events),
(B) no amounts in respect of liabilities (including, without
limitation, amounts with respect to Taxes) shall be included in the
Closing Balance Sheet to the extent that Seller has paid such amounts
on or after the Closing Date or has an obligation of payment,
reimbursement or indemnification on or after the Closing Date in
respect thereof, (C) the Closing Balance Sheet shall not reflect any
provision for loss contracts and (D) the Closing Balance Sheet shall be
prepared based solely on
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information available three days prior to the Delivery Date with regard
to conditions that existed on the day immediately preceding the Closing
Date.
(iii) The Closing Balance Sheet will be deemed to be the
final, binding and conclusive Closing Balance Sheet (the "Final Closing
Balance Sheet") for all purposes on the Delivery Date.
(c) Post-Closing Adjustment.
Upon the Delivery Date, the Purchase Price will be
adjusted as follows:
(i) if the Net Investment in Rockwell Network Systems
line item in the Final Closing Balance Sheet is greater than or equal
to $5,794,000, the Purchase Price shall remain unchanged; and
(ii) if the Net Investment in Rockwell Network Systems
line item in the Final Closing Balance Sheet is less than $5,794,000,
the Purchase Price will be reduced by the amount of such difference;
specifically, the amount of the final principal payment owed by Buyer
to Seller in July 1996 under the terms of the Note shall be reduced by
such amount.
SECTION 4. Closing.
The Closing of the purchase and sale of the Assets and the assumption
of the Assumed Liabilities (the "Closing") will
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take place at the offices of Rockwell International Corporation, 2201 Seal Beach
Boulevard, Seal Beach, California 90740-8250, at 10:00 a.m. California time on
January 31, 1996, or at such other place, date and time as the parties hereto
may agree (such time and date of the Closing being herein called the "Closing
Date"). The Closing shall be deemed to be effective at 12:01 a.m. on the Closing
Date.
SECTION 5. Representations and Warranties of Seller.
Seller hereby represents and warrants to Buyer as follows:
(a) Corporate Organization. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Seller has all requisite corporate power and authority to own,
lease and operate the Assets where such Assets are now owned, leased or
operated.
(b) Corporate Authorization. Seller has all requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement and all instruments of transfer to be
delivered by Seller pursuant hereto have been or will be duly authorized by all
necessary corporate action on behalf of Seller. This Agreement constitutes a
legal, valid and binding obligation of Seller, and all instruments of transfer
to be delivered pursuant hereto, when executed and delivered, will constitute,
legal, valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, except as such
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enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights in general and by general principles of equity.
(c) No Violation or Conflict. None of the execution, delivery or
performance of this Agreement by Seller will (i) conflict with the Restated
Certificate of Incorporation or By-Laws of Seller or (ii) violate, conflict with
or result in a breach of any material Contract (other than with respect to
consents to the transactions contemplated hereby under Contracts) or any
judgment, decree or order to which Seller (with respect to the Business) is
subject, except for such violations, conflicts and breaches subject to this
clause (ii) which individually or in the aggregate would not have a material
adverse effect on the business, operations or condition (financial or otherwise)
of the Business or the Assets (a "Material Adverse Effect"). Except as set forth
on Schedule 5(c), no consent of any person, partnership, corporation or other
entity is required under any lease relating to the Transferred Leased Properties
(as defined in Section 5(e)(i)) set forth on Schedule 5(e)(i) or Contract set
forth on Schedule 5(g) in connection with the sale of the Assets as contemplated
hereby, other than any such consent which if not obtained would not have a
Material Adverse Effect and any such consent that is applicable as a result of
the specific legal or regulatory status of Buyer or as a result of any other
facts that
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specifically relate to the business or activities in which Buyer is or proposes
to be engaged, other than the Business.
(d) Governmental Authorizations. Except as set forth on Schedule
5(d), no material consent, approval or authorization of, filing or registration
with, or notification to, any governmental or regulatory authority or agency,
domestic or foreign (a "Governmental Authority") is required by or with respect
to Seller in connection with the execution and delivery of this Agreement by
Seller or the consummation by Seller of the transactions contemplated hereby
(other than with respect to consents to the transactions contemplated hereby
under Contracts), other than any such requirement that is applicable to Buyer as
a result of the specific legal or regulatory status of Buyer or as a result of
any other facts that specifically relate to the business or activities in which
Buyer is or proposes to be engaged, other than the Business.
(e) Real Property.
(i) Schedule 5(e)(i) set forth a list of all leases
(other than those constituting Retained Assets) to which Seller on the
date hereof is a party pursuant to which Seller is a lessee of any
material real property primarily used in or relating primarily to the
Business ("Transferred Leased Properties").
(ii) Except as set forth on Schedule 5(e)(i), Seller (with
respect to the Business) has valid and subsisting leasehold interests
in the Transferred Leased
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Properties, in each case free and clear of any mortgage, lien, charge,
security interest, pledge, imperfection of title or encumbrance, except
for (A) Permitted Liens (as defined in Section 5(f)(i)) and (B)
easements, covenants, rights-of-way and other matters of record.
(iii) Except as set forth on Schedule 5(e)(i), on the date
hereof, to Seller's knowledge, there are no (A) defaults on the part of
Seller under the provisions of any leases of Transferred Leased
Properties set forth on Schedule 5(e)(i) or (B) defaults on the part of
the lessor under the provisions of any of such leases of Transferred
Leased Properties, except in either case (I) for defaults which
individually or in the aggregate would not have a Material Adverse
Effect and (II) that in order to avoid a default under such leases the
consent of the lessor thereto may be required in connection with the
transactions contemplated hereby.
(iv) Seller (with respect to the Business) does not own
any real property in fee on the date hereof.
(f) Personal Property.
(i) Seller (with respect to the Business) owns all
personal property reflected as owned on the Baseline Balance Sheet or
which it thereafter acquired ownership of (except as set forth on the
Schedules hereto and except for such property as has since been sold or
otherwise disposed of in the ordinary course of business), free and
clear of
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any mortgage, lien, charge, security interest, pledge, imperfection of
title or encumbrance, except for those (A) referred to in the Baseline
Balance Sheet or the notes thereto, (B) which have arisen in the
ordinary course of business since September 30, 1995, (C) referred to
in the Schedules hereto, (D) for Taxes not yet due or payable or being
contested in good faith, (E) that constitute mechanics', carriers',
workers' or other like liens or (F) that individually or in the
aggregate are not material to the Business or the Assets in character,
amount or extent (the mortgages, liens, charges, security interests,
pledges, imperfections of title and encumbrances described in clauses
(A), (B), (C), (D), (E) and (F) above are collectively referred to
herein as "Permitted Liens").
(ii) The trade accounts receivable included on the
Baseline Balance Sheet are based upon shipments of product, the
performance of services or binding contracts.
(iii) The inventories reflected on the Baseline Balance
Sheet are stated at the lower of cost or estimated market value,
determined utilizing the accounting practices and procedures of Seller
(with respect to the Business).
(iv) It is expressly understood that all of the Assets are
being acquired by Buyer AS IS.
(g) Contracts.
(i) Schedule 5(g) sets forth all (A) executory written
Contracts to which Seller (with respect to the
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Business) is a party (other than leases with respect to real property
and binding open bids and proposals) which are in effect on the date
hereof and expressly provide for future payments (other than warranty
and other contingent payments) to or from Seller (with respect to the
Business) of more than $250,000 and (B) executory written binding open
bids and proposals by Seller (with respect to the Business) which are
in effect on the date hereof and expressly contemplate future payments
(other than warranty and other contingent payments) to Seller (with
respect to the Business) of more than $500,000, except those Contracts
described in clause (A) or (B) above that may be cancelled by Seller
without material penalty upon not more than 90 days' notice.
Notwithstanding the foregoing, Schedule 5(g) does not contain
any Contracts otherwise required to be set forth thereon which are
subject to confidentiality obligations not to disclose the existence of
the same on the part of Seller.
(ii) Except as set forth on Schedule 5(g), on the date
hereof, to Seller's knowledge, there are no (A) defaults on the part of
Seller under the provisions of any Contracts set forth on Schedule 5(g)
or (B) defaults on the part of the other party or parties under the
provisions of any Contracts set forth on Schedule 5(g), except in
either case (I) for defaults which individually or in the aggregate
would not have a Material Adverse Effect and (II) that in order to
avoid a default under such Contracts
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the consent of the other party or parties thereto may be required in
connection with the transactions contemplated hereby.
(h) Compliance With Laws.
(i) To Seller's knowledge, except as set forth on
Schedule 5(h), Seller (with respect to the Business) is in compliance
with all laws, statutes and regulations (other than those pertaining to
pollution or protection of the environment or exposure of persons to
toxic or hazardous substances, raw materials or chemicals) of
Governmental Authorities applicable to it, except where the failure to
so comply would not have a Material Adverse Effect.
(ii) To Seller's knowledge, except as set forth on
Schedule 5(h), as of the date hereof there are no claims pending of any
regulatory authority that Seller (with respect to the Business) is in
violation of or non-compliance with any laws, statutes or regulations
pertaining to pollution or protection of the environment or exposure of
persons to toxic or hazardous substances, raw materials or chemicals,
other than claims which individually or in the aggregate would not have
a Material Adverse Effect.
(i) Permits. As of the date hereof, Seller possesses all
governmental franchises, licenses, permits, authorizations and approvals
necessary to enable it to own, lease or otherwise hold the Assets and to carry
on the Business as presently conducted, other than any such franchises,
licenses, permits,
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authorizations or approvals which if not obtained would not have a Material
Adverse Effect.
(j) Litigation. Except as set forth on Schedule 5(j), on the date
hereof Seller is not a party to any legal action, suit or other proceeding by or
before any court, arbitrator or administrative agency (i) with respect to which
there is a reasonable likelihood of an adverse determination which would have a
Material Adverse Effect or (ii) which challenges or otherwise relates to the
transactions contemplated by this Agreement, and on the date hereof Seller is
not aware that any such legal action, suit or other proceeding has been
threatened. Except as set forth on Schedule 5(j), on the date hereof there are
no outstanding orders, rulings, decrees or judgments to which Seller (with
respect to the Business) is a party, or by which it is bound, by or with any
court, arbitrator or administrative agency (i) which could reasonably be
expected to have a Material Adverse Effect or (ii) challenge or otherwise relate
to the transactions contemplated by this Agreement.
(k) Intellectual Property. Except as set forth on Schedule 5(j) or
5(k), on the date hereof, to Seller's knowledge, there are no material written
claims or demands of any person pertaining to, or any proceedings which are
pending or threatened which allege that the use of any Assets by Seller
infringes the intellectual property rights of others.
(l) Conduct of Business Since December 31, 1995. Except as set
forth on Schedule 5(l), since December 31, 1995 to
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the date hereof (i) the Business has been conducted in the ordinary course and
(ii) there has not been any change in the business, operations or condition
(financial or otherwise) of Seller (with respect to the Business) which has had
or could reasonably be expected to have a Material Adverse Effect, other than
changes relating to the economy in general or changes resulting from
industry-wide developments affecting other companies in similar businesses.
Except as set forth on Schedule 5(l) or as contemplated by this Agreement, since
December 31, 1995 to the date hereof there has not been:
(A) any general increase in the rate or terms of
compensation, commissions, bonuses, pension or other employee benefit
plans, payments or arrangements payable to or for or with employees of
Seller (with respect to the Business), except (I) pursuant to periodic
performance reviews and related compensation and benefit increases or
(II) otherwise in accordance with past practice;
(B) sold or transferred any material Assets, other than
inventories and other assets in the ordinary course of business;
(C) incurred or guaranteed by Seller (with respect to the
Business) any material loan or other indebtedness, other than in the
ordinary course of business; or
(D) any agreement or commitment (other than this
Agreement or any arrangement provided for in or contemplated by this
Agreement) entered into by Seller (with respect to
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the Business) to take any of the types of action described in clauses
(A) through (C) of this Section 5(l).
(m) Employees. On the date hereof there is no labor
strike or work stoppage pending or, to Seller's knowledge, threatened against
Seller (with respect to the Business) which would have a Material Adverse
Effect. Seller is not a party to any collective bargaining agreement or other
labor union contract relating to the Business.
(n) Insurance. Schedule 5(n) hereto sets forth a list of all
material policies of insurance in force as of the date hereof relating to the
Business.
(o) Employee Benefit Plans. Schedule 5(o) hereto sets forth each
material pension, retirement, profit-sharing, deferred compensation, stock bonus
or other similar plan; each material medical, vision, dental or other health
plan; each material vacation, severance or life insurance plan and any other
material employee benefit plan to which Seller on the date hereof is required to
contribute in respect of the Business, or which Seller on the date hereof
sponsors for the benefit of any employees of Seller engaged in the Business or
under which current employees (or their beneficiaries) of Seller engaged in the
Business are on the date hereof eligible to receive benefits. Seller does not
participate in a "multiemployer plan" in respect of the Business as defined in
Section 4001(a)(3) of the Employee Retirement Income Security Act of 1974, as
amended.
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SECTION 6. Representations and Warranties of Buyer.
Buyer hereby represents and warrants to Seller as follows:
(a) Corporate Organization. Buyer is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of California.
(b) Corporate Authorization. Buyer has all requisite corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement and all instruments of assumption to be
delivered by Buyer pursuant hereto have been or will be duly authorized by all
necessary corporate action on behalf of Buyer. This Agreement constitutes a
legal, valid and binding obligation of Buyer, and all instruments of assumption
to be delivered pursuant hereto, when executed and delivered, will constitute,
legal, valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting the enforcement of creditors' rights in general and by
general principles of equity.
(c) No Violation or Conflict. None of the execution, delivery or
performance of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby will (i) conflict with the [Certificate of
Incorporation] or By-Laws of Buyer or (ii) violate, conflict with or result in a
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breach of any material mortgage, indenture, deed of trust, license, lease,
contract, commitment or agreement to which Buyer is a party or any material
order, ruling, decree, judgment or arbitration award to which Buyer is subject.
(d) Consents, Approvals or Authorizations. Except as set forth on
Schedule 6(d), no material consent, approval or authorization of, filing or
registration with, or notification to, any Governmental Authority is required by
or with respect to Buyer in connection with the execution and delivery of this
Agreement by Buyer or the consummation by Buyer of the transactions contemplated
hereby. No material consent, approval or authorization of any person,
partnership, corporation or entity is required in connection with the execution
and delivery of this Agreement by Buyer or the consummation by Buyer of the
transactions contemplated hereby.
(e) Litigation. Except as set forth on Schedule 6(e), on the date
hereof none of Buyer or its subsidiaries or affiliates is a party to any legal
action, suit or other proceeding by or before any court, arbitrator or
administrative agency (i) with respect to which there is a reasonable likelihood
of an adverse determination which would have a material adverse effect on the
ability of Buyer to consummate the transactions contemplated hereby or (ii)
which challenges or otherwise relates to the transactions contemplated by this
Agreement, and on the date hereof Buyer is not aware that any such legal action,
suit or other proceeding has been threatened. Except as set forth on
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Schedule 6(e), on the date hereof there are no outstanding orders, rulings,
decrees or judgments to which Buyer or any of its subsidiaries or affiliates is
a party or by which any of them is bound by or with any court, arbitrator or
administrative agency which (i) could reasonably be expected to have a material
adverse effect on the ability of Buyer to consummate the transactions
contemplated hereby or (ii) challenge or otherwise relate to the transactions
contemplated by this Agreement.
(f) Information. Seller has provided Buyer with such access to the
facilities, books, records and personnel of the Business as Buyer has deemed
necessary and appropriate in order for Buyer to investigate to its satisfaction
the Business sufficiently to make an informed investment decision to purchase
the Assets, to assume the Assumed Liabilities and to enter into this Agreement.
Buyer has such knowledge and experience in financial and business matters that
Buyer is capable of evaluating the merits and risks of the purchase of the
Assets and the assumption of the Assumed Liabilities.
(g) Funds. Buyer has available to it, or Buyer has available to it
and a firm commitment from a lending institution for, and shall have at the
Closing, sufficient funds available to it to pay the Purchase Price and to
consummate the other transactions contemplated by this Agreement to be
consummated by Buyer. Buyer has provided a true and correct copy of any such
written commitment from lending institutions to Seller. Any such commitment from
lending institutions has been duly accepted on
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behalf of Buyer and is in full force and effect. All fees required to be paid in
respect of any such commitment have been paid when due.
SECTION 7. Investigation by Buyer; Confidentiality.
Prior to the Closing, or, if earlier, the date this Agreement is
terminated pursuant to Section 16(a) or otherwise, Seller will provide Buyer and
its representatives, employees, counsel and accountants with reasonable access,
during normal business hours and upon reasonable notice, to the facilities,
books, records and personnel of Seller which relate to the Business and will
provide to Buyer such other information with respect to the Business as Buyer
shall reasonably request; provided, however, that such access shall not
unreasonably interfere with the normal operations of Seller or the Business.
Buyer acknowledges that all such information being provided is subject to the
terms of a confidentiality agreement dated as of November 3, 1995 between Buyer
and Guarantor "Confidentiality Agreement"), the terms of which are incorporated
herein by reference.
SECTION 8. Covenants.
(a) Conduct of Business Prior to the Closing Date. Between the
date hereof and the Closing, except as set forth on Schedule 8(a) or as
otherwise contemplated by this Agreement, Seller will use reasonable efforts to
cause the Business to be conducted only in the ordinary course. Between the date
hereof
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and the Closing, except as set forth on Schedule 8(a) or as otherwise
contemplated by this Agreement, Seller will not engage in, without the consent
of Buyer, any transaction which, if engaged in since December 31, 1995 but on or
before the date hereof, would constitute a breach of the representations and
warranties of Seller contained in Section 5(l).
(b) Transfer Taxes. Seller shall be responsible for and pay all
applicable sales and transfer taxes (including taxes, if any, imposed upon the
transfer of personal property) and filing, recording, registration and other
taxes and fees payable in connection with the transactions contemplated by this
Agreement ("Transfer Taxes") to the extent the same do not exceed an aggregate
amount of $150,000 and Seller and Buyer shall each be responsible for and pay
one-half of the amount of Transfer Taxes in excess of $150,000. Buyer shall
provide Seller prior to the Closing with all necessary certifications as to its
qualification for any exemptions from such Transfer Taxes.
(c) Further Assurances. From time to time after the Closing, at
Buyer's request and without further consideration, Seller shall execute and
deliver or cause to be executed and delivered such other and further instruments
of conveyance, assignment and transfer, and take or cause to be taken such other
action, as Buyer may reasonably request for the more effective conveyance and
transfer of the Assets to Buyer. From time to time after the Closing, at
Seller's request and
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without further consideration, Buyer will execute and deliver such other and
further instruments of assumption and take such other action as Seller may
reasonably request for the more effective assumption by Buyer of the Assumed
Liabilities.
(d) Post Closing Access; Preservation of Records.
(i) From and after the Closing, Buyer shall make or cause
to be made available to Seller and its agents and employees all books,
records and documents of Buyer and its subsidiaries and affiliates
relating to the Business (and the assistance of Buyer's and its
subsidiaries' and affiliates' employees responsible for such books,
records and documents) during regular business hours as may be
reasonably necessary for (A) preparing tax returns and financial
statements and responding to tax audits covering operations and
transactions at or prior to the Closing Date, (B) investigating,
settling, preparing for the defense or prosecution of, defending or
prosecuting any legal action, suit, investigation or other proceeding
pending, threatened or anticipated by or against Seller or any of its
subsidiaries or affiliates or any of their properties, officers,
directors or employees (or for which Seller or any of its subsidiaries
or affiliates has any obligations) before any court, arbitrator,
governmental department, commission, board, bureau or agency, domestic
or foreign, (C) preparing reports to stockholders and Governmental
Authorities or (D) such other purposes for which access to such
documents is believed by Seller to be reasonably
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<PAGE> 35
necessary; provided, however, that access to such books, records,
documents and employees shall not unreasonably interfere with the
normal operations of Buyer and its subsidiaries and affiliates and the
reasonable out-of-pocket expenses of Buyer incurred in connection
therewith shall be paid by Seller. Buyer shall maintain and preserve
all such books, records and other documents for the greater of (aa)
seven years after the Closing Date or (bb) any applicable statutory or
regulatory retention period, as the same may be extended.
(ii) From and after the Closing, Seller shall make or
cause to be made available to Buyer and its agents and employees all
books, records and documents of Seller relating to the Business during
regular business hours for the same purposes, to the extent applicable,
as set forth in Section 8(d)(i) above; provided, however, that access
to such books, records and documents shall not unreasonably interfere
with the normal operations of Seller and the reasonable out-of-pocket
expenses of Seller incurred in connection therewith shall be paid by
Buyer.
(e) Reasonable Best Efforts. Each of Seller and Buyer shall use
its reasonable best efforts to cause to be fulfilled the conditions to their
respective obligations and the respective obligations of the other party set
forth in Section 10 and Section 11.
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(f) Allocation of Consideration.
(i) The Purchase Price (as adjusted pursuant to Section
3(d)) and the Assumed Liabilities shall be allocated among the various
assets comprising the Assets pursuant to Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code") and in accordance with
the procedures set forth in Schedule 8(f) (the "Consideration
Allocation"). Seller and Buyer each hereby affirm that the
Consideration Allocation is fair and equitable. Seller and Buyer each
agree that they will report and cause to be reported all Federal,
state, provincial, local, foreign and other Tax consequences of the
transactions contemplated hereby in a manner consistent with the
Consideration Allocation and that they will not, except to the extent
required by law, take any position inconsistent therewith in connection
with any Tax return, refund claim, litigation or otherwise. Each party
shall promptly notify the other if the Internal Revenue Service or any
other taxing authority proposes to reallocate the Consideration
Allocation. In the event of a determination (as defined in Section 1313
of the Code) relating to the reallocation of the Consideration
Allocation, the parties shall be free to file amended returns or claims
for refund based on such reallocation.
(ii) For the purpose of this Agreement, "Tax" or "Taxes"
shall mean all taxes, charges, duties, fees, levies or other
assessments, including, but not limited to, income,
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excise, property, sales, value added, profits, license, withholding,
payroll, employment, net worth, capital gains, transfer, stamp, social
security, environmental, occupation and franchise taxes, imposed by any
Governmental Authority, and including any interest, penalties and
additions attributable thereto.
(g) Interim Use of Seller's Trademark, Trade Name and
Corporate Symbol.
(i) Following the Closing, none of Buyer or any of its
subsidiaries or affiliates shall have any rights to use any trademarks,
trade names or logos of Seller or any of its subsidiaries or
affiliates, or any contraction, abbreviation or simulation thereof, and
will not hold itself out as having any affiliation with Seller or its
subsidiaries or affiliates. However, Buyer may utilize without
obligation to pay royalties to Seller the trademark or trade name
"Rockwell" or "Rockwell International" or Seller's corporate symbol or
any thereof in connection with stationery, supplies, labels, catalogs,
vehicles, signs and finished goods inventory constituting Assets as of
the Closing Date, subject to the terms and conditions of this Section
8(g).
(ii) All documents constituting Assets as of the Closing
Date within the following categories may be used for the duration of
the periods following the Closing indicated
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below or until the supply is exhausted, whichever is the first to occur:
Maximum Period
of Permitted
Use Following
Category of Documents the Closing
- - ----------------------------- --------------
A. Stationery 3 months
B. Invoices, purchase orders, debit and
credit memos and other similar
documents of a transactional nature 3 months
C. Business cards 3 months
D. Other outside forms such as packing
lists, labels, packing materials and
cartons, etc. 3 months
E. Forms for internal use only 12 months
F. Product literature 12 months
G. Finished goods (in European markets only) 12 months; provided, however,
that no document within any of the above categories A, B or F may be used by
Buyer for any purpose within the stated period unless such document clearly and
prominently displays a statement, the form of which is approved by Seller, to
the effect that the Business was formerly owned by Seller.
(iii) All vehicles constituting Assets as of the Closing Date may
continue to be used without re-marking (except as to legally required permit
numbers, license numbers, etc.) for a period not to exceed six months following
the Closing or the date of disposition of the vehicle, whichever is the first to
occur. Buyer shall cause all such vehicles to be de-marked prior to their
disposition.
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(iv) Within three months following the Closing, Buyer shall cause
to be removed from display at all facilities constituting Assets as of the
Closing Date all demountable displays which contain the trademark or trade name
"Rockwell", "Rockwell International" or Seller's corporate symbol or any thereof
and Buyer shall remove all signs displaying any such trademark, trade name or
corporate symbol at all such facilities no later than six months following the
Closing.
(v) Products in finished goods inventory constituting Assets as of
the Closing Date may be disposed of by Buyer following the Closing without
re-marking.
(vi) Except as permitted in subsections (i) through (v) of this
Section 8(g), Buyer shall not use and shall cause its subsidiaries and
affiliates not to use the trademark or trade name "Rockwell" or "Rockwell
International" or Seller's corporate symbol or any thereof or any name or mark
which includes the words "Rockwell", "Rockwell International" or any name or
mark confusingly similar thereto or any special script, type font, form, style,
logo, design, device or symbol used or possessed by Seller or its subsidiaries
or affiliates before or after the Closing which contains the trademark or trade
name "Rockwell" or "Rockwell International" or any name or mark confusingly
similar thereto.
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(h) Assumption of Obligations.
(i) Buyer will assume as of the close of business on the
day preceding the Closing Date and pay or perform in a timely manner,
in accordance with their terms, any and all obligations under, and
shall use its best efforts to secure the release of Seller and its
subsidiaries and affiliates as of the close of business on the day
preceding the Closing Date from, all letters of credit, surety bonds,
guaranties, comfort letters, indemnities, assurances, contracts,
commitments and agreements (other than Shared Agreements (as
hereinafter defined)) the obligations under which constitute or relate
to Assumed Liabilities and which by their terms will be outstanding or
in effect as of or at any time following the close of business on the
day preceding the Closing Date, including, without limitation, those
set forth on Schedule 8(h)(i).
(ii) For purposes of this Agreement, "Shared Agreements"
shall mean all letters of credit, surety bonds, guaranties, comfort
letters, indemnities, assurances, contracts, commitments and agreements
under which Seller or any of its subsidiaries or affiliates has any
obligations which constitute or relate to Assumed Liabilities, as well
as obligations which relate to other businesses of Seller or any of its
subsidiaries or affiliates (other than the Business) which by their
terms will be outstanding or in effect as of or at any time following
the close of business on the day preceding the Closing Date, including,
without limitation, those set forth on Schedule 8(h)(ii). Buyer will
assume as of the close of business
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on the day preceding the Closing Date and pay or perform in a timely
manner, in accordance with their terms, and shall use its best efforts
to enter into replacement agreements covering (and releasing Seller and
its subsidiaries and affiliates from), all obligations relating to the
Business under the Shared Agreements which constitute or relate to
Assumed Liabilities. None of Buyer or its subsidiaries or affiliates
will incur any obligation under any Shared Agreement not existing as of
the close of business on the day preceding the Closing Date or extend
or otherwise amend any Shared Agreement.
(iii) Buyer will provide to Seller at the Closing
appropriate documentation in form and substance satisfactory to Seller
confirming the assumptions and releases provided for in this Section
8(h).
(i) Insurance.
(i) Seller shall keep, or cause to be kept, all insurance
policies set forth on Schedule 5(n), or suitable replacements therefor
(which may include policies containing terms less or more favorable
than those set forth on Schedule 5(n)), in full force and effect up to
the Closing Date. Buyer hereby acknowledges that it shall be Buyer's
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responsibility as of and after the Closing Date to provide for adequate
insurance for the Business and the Assets.
(ii) With respect to any loss, liability or damage with
respect to the Assets arising out of events occurring prior to the
Closing Date for which Seller or any of its subsidiaries would be
entitled to assert a claim for recovery under any third-party
"occurrence basis" policy of insurance maintained prior to the Closing
Date ("Occurrence Basis Insurance") in accordance with the terms
thereof, at the request of Buyer, Seller will use reasonable efforts in
asserting, or to assist Buyer in asserting, claims under such
Occurrence Basis Insurance with respect to such loss, liability or
damage, provided that all of Seller's out-of-pocket costs and expenses
incurred in connection with the foregoing are promptly reimbursed by
Buyer and, provided further that such claims shall be subject to (and
recovery thereon shall be reduced by the amount of) any applicable
deductibles, retentions, self-insurance provisions or any payment or
reimbursement obligation of Seller or any of its subsidiaries or
affiliates in respect thereof.
(j) Cash Management.
(i) Seller will, and will cause its subsidiaries and
affiliates to, forward promptly by check to Buyer any customer payments
in respect of accounts receivable constituting Assets received by
Seller or any of its subsidiaries or affiliates after the close of
business on
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the day preceding the Closing Date, whether received in lock boxes, via
wire transfer or otherwise.
(ii) Buyer will, and will cause its subsidiaries and
affiliates to, forward promptly by check to Seller any customer
payments in respect of accounts receivable owed to Seller or any of its
subsidiaries or affiliates (other than those constituting Assets)
received by Buyer or any of its subsidiaries or affiliates after the
close of business on the day preceding the Closing Date, whether
received in lock boxes, via wire transfer or otherwise.
(k) Intellectual Property.
(i) Buyer's Additional Rights. To the extent that the
design, manufacture, use or sale of products manufactured by Seller
(with respect to the Business) as of the date hereof, may subsequent to
the Closing Date require the use of any intellectual property rights
(including, without limitation, patents, patent applications, trade
secrets, copyrights or other similar industrial property rights, but
excluding trademarks or tradenames) which are owned by Seller or its
subsidiaries as of the Closing Date, under which Seller or its
subsidiaries has a right to license or grant immunity from suit as of
the Closing Date, Seller hereby covenants not to (and to cause its
subsidiaries not to) assert any claims or rights, bring any suit or
institute any other action against (i) Buyer or its subsidiaries, (ii)
any of their respective customers or any
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other person or entity in the chain of title from any of their
respective customers and (iii) any entity purchasing substantially all
of the capital stock or assets of Buyer or its subsidiaries (with
respect to the Business), in each case, based upon such intellectual
property rights which might be infringed by any design, manufacture,
use or sale of such products subsequent to the Closing Date. This
covenant not to sue shall extend in perpetuity to Buyer and its legal
successors in connection with the design, manufacture, use or sale of
products manufactured by Seller (with respect to the Business) as of
the date hereof. Seller will, at no cost to Buyer, properly execute
such further documents as Buyer may reasonably request to carry out the
terms of this Section 8(k)(i).
(ii) Seller's Retained Rights. (A) To the extent that the
design, manufacture, use or sale of products manufactured by any of
Seller or its subsidiaries (other than with respect to the Business) as
of the date hereof, may subsequent to the Closing Date require the use
of any intellectual property rights (including, without limitation,
patents, patent applications, trade secrets, copyrights or other
similar industrial property rights, but excluding trademarks or
tradenames), which are owned by Seller (with respect to the Business)
immediately prior to the Closing Date, under which Buyer has a right to
license or grant immunity from suit as of the Closing Date, Buyer
hereby
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covenants not to (and to cause its subsidiaries not to) assert any
claim or rights, bring any suit or institute any other action against
(i) Seller or any of its subsidiaries, (ii) any of their respective
customers or any person or entity in the chain of title from any of
their respective customers and (iii) any entity purchasing
substantially all of the capital stock or assets of Seller or any of
its subsidiaries (with respect to any business of Seller or its
subsidiaries), in each case, based upon such intellectual property
rights which might be infringed by any design, manufacture, use or sale
of such products subsequent to the Closing Date. This covenant not to
sue shall extend in perpetuity to Seller and its subsidiaries and their
legal successors in connection with design, manufacture, use or sale of
products manufactured by any of Seller or its subsidiaries (other than
with respect to the Business) as of the date hereof. Buyer will, at no
cost to Seller, promptly execute such further documents as seller may
reasonably request to carry out the terms of this Section 8(k)(ii)(A).
(B) With respect to the following Assets transferred to
Buyer pursuant to Section 1(a)(iv): (I) network protocol software and
firmware modules, (II) network protocol integrated circuit design
modules and (III) system and hardware reference design descriptions for
utilizing (I) and (II) of this Section 8(k)(ii)(B) (collectively, the
"Technology"), Seller retains the right
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and Buyer hereby grants to Seller a worldwide, nonexclusive,
nontransferable license in the Technology (and any intellectual
property rights pertaining thereto) to design, make, have made, use and
sell new products introduced by Seller after the Closing Date, and to
permit Seller's customers to use the Technology in connection with the
design, manufacture, use or sale of customer products that incorporate
such new Seller products; provided, however, that (1) Seller shall not
use the Technology as it exists on the Closing Date to produce or sell
products of the Business or substantially the same products (including
but not limited to FDDI, ethernet and remote access products) as they
exist on the Closing Date, or make any disclosure and transfer of the
Technology for others to do so, (2) for a period of 18 months following
the Closing Date, Seller will not sell to any customer any FDDI
products incorporating FDDI Technology in any form or fashion and (3)
for an initial six-month period following the Closing Date, Seller will
not sell any remote access new products incorporating remote access
Technology in any form or fashion and for a period of six months
following the initial six-month period, Seller will sell remote access
new products incorporating remote access Technology only in conjunction
with Seller's modem chip sets. Upon Seller's commercial sales of any
new product as permitted in this Section 8(k)(ii)(B), Seller shall pay
to Buyer $500,000 within thirty days after the end
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<PAGE> 47
of the calendar quarter in which the first sale occurs. If after twelve
months following such first sale Seller continues to sell such new
product, Seller shall pay to Buyer an additional $500,000 within thirty
days of the anniversary date of the first sale. After the two
aforementioned $500,000 payments have been made by Seller, the licenses
granted under this Section 8(k)(ii)(B) shall be fully paid and Seller
shall have no obligation to Buyer or any other person in respect
thereof. Seller may retain copies of any information or materials
relating to the Technology for the purpose of exercising Seller's
license rights hereunder. After the Closing Date, Buyer shall provide
Seller with reasonable access and assistance to enable Seller to make
copies of such information or materials, and Seller shall pay Buyer's
reasonable out-of-pocket expenses for such assistance.
(l) Certain Intercompany Indebtedness. At the Closing,
Seller shall cause all intercompany indebtedness between Seller or its
subsidiaries or affiliates (other than with respect to the Business),
on the one hand, and Seller (with respect to the Business), on the
other hand, to be cancelled or otherwise eliminated.
SECTION 9. Employment Arrangements, Benefits and Pension Plans.
(a) Employment. Buyer shall offer employment, commencing
as of the Closing Date, to each of the employees of Seller listed on Schedule
9(a); provided, however, that nothing
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contained in this Section 9(a) is intended to confer upon any Continued Employee
(as defined below) any right to continued employment after evaluation by Buyer
of its employment needs after the Closing Date. The employees who accept such an
offer of employment by Buyer are herein referred to as "Continued Employees".
(b) Severance Benefits. Buyer shall be solely responsible for and
shall pay when due all direct and indirect liabilities, claims, losses, damages,
costs and expenses in respect of any claim of (i) any Continued Employee that
such employee's employment has been terminated, either voluntarily or
involuntarily, in conjunction with or at any time after the transactions
contemplated hereby or (ii) any employee to whom Buyer is required to offer
employment pursuant to Section 9(a) and who does not accept such employment,
that such employee's employment has been terminated, either voluntarily or
involuntarily, in conjunction with the transactions contemplated hereby,
including, without limitation, any claim for severance pay, unemployment
benefits or any other liabilities, claims, losses, damages, costs and expenses
(including interest, penalties and fees of legal counsel), asserted against,
imposed upon or incurred by Buyer or any of its subsidiaries or affiliates or
Seller or any of its subsidiaries or affiliates arising from or relating in any
way to such claims (whether or not such claim is based on any severance policy,
agreement, arrangement or program which may exist or arise under any
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contract, employment agreement or under any Federal, state, local, provincial or
foreign law).
(c) Welfare Plans. Buyer shall be responsible for payment of, and
to indemnify and hold Seller and each of its subsidiaries and affiliates
harmless from and against, all amounts which constitute Assumed Liabilities
payable on or after the Closing Date in respect of employee welfare and fringe
benefits paid or payable to Continued Employees under Seller's welfare benefit
plans, Buyer's welfare benefit plans or otherwise (including, without
limitation, claims for medical, workers' compensation and disability benefits),
whether arising in connection with (i) incidents occurring on or after the
Closing Date or (ii) claims made by Continued Employees or any such former
employees on or after the Closing Date.
(d) Indemnification. Buyer shall be responsible for, and
indemnify, defend and hold Seller and each of its subsidiaries and affiliates
and each of their employees, directors, officers and stockholders (collectively,
the "Seller Group") harmless from and against any and all loss, liability,
damage or expense, including, without limitation, reasonable fees and
disbursements of legal counsel (collectively, "Damages"), based upon, arising
out of or otherwise in respect of (i) termination by Buyer or any of its
subsidiaries or affiliates of any Continued Employee or (ii) failure of Buyer to
comply with any provision of this Section 9.
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SECTION 10. Conditions Precedent to the Obligation of Buyer.
The obligation of Buyer to consummate the transactions contemplated
hereby shall be subject to the satisfaction, or waiver by Buyer, on or prior to
the Closing Date, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller set forth in this Agreement shall be true and correct in
all material respects on and as of the Closing Date with the same force and
effect as though all such representations and warranties had been made on and as
of such date, except (i) to the extent such representations and warranties are
by their express provisions made as of the date of this Agreement or another
specific date and (ii) for the effect of any activities or transactions which
are contemplated by this Agreement, and there shall have been delivered to Buyer
a certificate to that effect, dated the Closing Date, signed by a Vice President
of Seller.
(b) Covenants and Agreements. Each and all of the covenants and
agreements of Seller to be performed or complied with prior to the Closing
pursuant to this Agreement shall have been duly performed and complied with in
all material respects or duly waived and there shall have been delivered to
Buyer a certificate to that effect, dated the Closing Date, signed by a Vice
President of Seller.
(c) Opinion of Counsel. Buyer shall have been furnished an opinion
of the Senior Vice President, General
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<PAGE> 51
Counsel and Secretary of Seller, dated the Closing Date and substantially in the
form of Exhibit D.
(d) No Adverse Order of Injunction. There shall not be in effect
on the Closing Date any judgment, decree or order issued by any court of
competent jurisdiction which prohibits the consummation by Buyer of the
transactions contemplated hereby.
SECTION 11. Conditions Precedent to the Obligation of Seller.
The obligation of Seller to consummate the transactions contemplated
hereby shall be subject to the satisfaction, or waiver by Seller, on or prior to
the Closing Date, of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Buyer set forth in this Agreement shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though all such representations and warranties had been made on and as of
such date, except (i) to the extent such representations and warranties are by
their express provisions made as of the date of this Agreement or another
specific date and (ii) for the effect of any activities or transactions which
are contemplated by this Agreement, and there shall have been delivered to
Seller a certificate to that effect, dated the Closing Date, signed by the
President or a Vice President of Buyer.
(b) Covenants and Agreements. Each and all of the covenants and
agreements of Buyer to be performed or complied
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<PAGE> 52
with prior to the Closing pursuant to this Agreement shall have been duly
performed and complied with in all material respects or duly waived and there
shall have been delivered to Seller a certificate to that effect, dated the
Closing Date, signed by the President or a Vice President of Buyer.
(c) Opinion of Counsel. Seller shall have been furnished an
opinion of Raymond Felton, Esq. of Greenbaum Rowe & Davis, counsel for Buyer and
Guarantor, dated the Closing Date and substantially in the form of Exhibit E.
(d) No Adverse Order of Injunction. There shall not be in effect
on the Closing Date any judgment, decree or order issued by any court of
competent jurisdiction which prohibits the consummation by Seller of the
transactions contemplated hereby.
(e) Delivery of the Note. Buyer shall have executed and delivered
to Seller the Note, dated the Closing Date, substantially in the form of Exhibit
A.
(f) Delivery of the Guaranty. Guarantor shall have executed and
delivered to Seller the Guaranty, dated the Closing Date, substantially in the
form of Exhibit B.
SECTION 12. Finder's Fees; Brokers.
Seller represents and warrants to Buyer that it has not authorized any
person to act as broker, finder or in any other similar capacity in connection
with the transactions contemplated by this Agreement and the negotiations
leading to it. Buyer represents and warrants to Seller that it has not
authorized any person other than Chrysalis Capital Group ("CCG") to act as
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broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement and the negotiations leading to it.
Further, Buyer shall be solely responsible for all fees, expenses, commissions
and costs incurred by or payable to CCG in connection with the transaction
contemplated by this agreement.
SECTION 13. Waiver of Compliance with Bulk Transfer Laws.
Buyer hereby waives compliance by Seller with the provisions of any
bulk transfer laws which may be applicable to the transactions contemplated by
this Agreement. Seller shall indemnify, defend and hold Buyer and each of its
subsidiaries and affiliates and each of their employees, directors, officers and
stockholders (collectively, the "Buyer Group") harmless from and against any and
all Damages incurred by any member of the Buyer Group based upon, arising out of
or otherwise in respect of such noncompliance.
SECTION 14. No Survival of Representations and Warranties.
Each and every representation and warranty of Seller or Buyer contained
in this Agreement (other than Seller's and Buyer's representations and
warranties with respect to finder's fees and brokers contained in Section 12 and
Buyer's and Guarantor's representations, warranties, covenants and agreements in
the Note and the Guaranty) in any Schedule or in any certificate or instrument
delivered pursuant hereto or in connection herewith shall expire with, and be
terminated and
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extinguished by (i) the consummation of the transactions contemplated hereby and
shall not survive the Closing Date, or (ii) the termination of this Agreement
pursuant to Section 16(a) or otherwise; and in either event neither Seller nor
Buyer shall have any liability whatsoever with respect to any such
representation or warranty. Seller's and Buyer's representations and warranties
with respect to finder's fees and brokers contained in Section 12 shall survive
the Closing Date solely for purposes of Sections 15(a) and 15(b) until, and
shall expire when, all applicable statutes of limitation (including any
extension thereof) have expired, whereupon neither Seller nor Buyer shall have
any liability whatsoever with respect to such representations or warranties.
Buyer's and Guarantor's representations, warranties, covenants and agreements
contained in the Note and the Guaranty and in this Agreement, insofar as they
relate to the Note and the Guaranty, shall survive the Closing Date until, and
shall expire when, all applicable statutes of limitation (including any
extension thereof) have expired.
SECTION 15. Indemnification.
(a) Indemnification by Seller. Seller shall indemnify, defend and
hold the Buyer Group harmless from and against any and all Damages actually
incurred by any member of the Buyer Group based upon, arising out of or
otherwise in respect of (i) any breach of any covenant or agreement of Seller
contained in this Agreement, (ii) the breach of Seller's
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representation and warranty with respect to finder's fees and brokers contained
in Section 12 and (iii) Retained Liabilities.
Buyer acknowledges and agrees that its sole and exclusive remedy with
respect to any and all claims relating to the subject matter of this Agreement
shall be pursuant to the indemnification provisions set forth in this Section
15. In furtherance of the foregoing, Buyer hereby waives, to the fullest
extent permitted under applicable law, any and all rights, claims and causes of
action it or any of its subsidiaries or affiliates may have against Seller or
any of its subsidiaries or affiliates arising under or based upon any Federal,
state, provincial, local or foreign statute, law, ordinance, rule, regulation
or common law.
(b) Indemnification by Buyer. Buyer shall indemnify, defend and
hold the Seller Group harmless from and against any and all Damages actually
incurred by any member of the Seller Group based upon, arising out of or
otherwise in respect of (i) any breach of any covenant or agreement of Buyer
contained in this Agreement, (ii) the breach of Buyer's representation and
warranty with respect to finder's fees and brokers contained in Section 12,
(iii) the breach of Buyer's or Guarantor's representations, warranties,
covenants or agreements contained in the Note or the Guaranty, (iv) the Assumed
liabilities, (v) any obligations or liabilities arising out of the operation of
the Business on or after the Closing Date and (vi) any obligations of Seller or
any of its subsidiaries or affiliates which constitute
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or relate to Assumed Liabilities under (A) letters of credit, surety bonds,
guaranties, comfort letters, indemnities, assurances, contracts, commitments and
agreements relating to the Business from which Seller or such subsidiaries or
affiliates have not been released and (B) Shared Agreements relating to the
Business.
(c) Notice of Circumstance. Promptly after receipt by any member
of the Buyer Group or the Seller Group of notice of any action, proceeding,
claim or potential claim or discovery by any member of the Buyer Group or the
Seller Group of any facts (any of which is hereinafter individually referred to
as a "Circumstance"), which could give rise to a right to indemnification
pursuant to any provision of this Agreement, such person (the "Indemnified
Party") shall give the party who may become obligated to provide indemnification
hereunder (the "Indemnifying Party") written notice describing the Circumstance
in reasonable detail. If notice of a Circumstance is not given to the
Indemnifying Party within a sufficient period of time or in sufficient detail to
apprise the Indemnifying Party of the nature of the Circumstance (in each
instance taking into account the facts and circumstances with respect to such
Circumstance), the Indemnifying Party shall not be liable to the Indemnified
Party to the extent that the Indemnifying Party's position is actually
prejudiced as a result thereof. The Indemnifying Party shall have the right, at
its option, to compromise or defend, at its own expense and by its own counsel,
any Circumstance
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involving the asserted liability of the Indemnified Party. If any Indemnifying
Party shall undertake to settle, compromise or defend any such asserted
liability, it shall promptly notify the Indemnified Party of its intention to do
so, and Indemnified Party agrees to cooperate fully with the Indemnifying Party
and its counsel in the settlement or compromise of, or defense against, any such
asserted liability. All costs and expenses incurred in connection with such
cooperation shall be borne by the Indemnifying Party. In any event, the
Indemnified Party shall have the right at its own expense to participate in the
defense of such asserted liability. Under no circumstances shall the Indemnified
Party settle or compromise any such asserted liability without the written
consent of the Indemnifying Party.
(d) Certain Limitations.
(i) The amount of any Damages or other liability for
which indemnification is provided under this Agreement shall be net of
any amounts recovered or recoverable by the Indemnified Party from
third parties (including, without limitation, amounts recovered or
recoverable under insurance policies) with respect to such Damages or
other liability. Seller and Buyer, as appropriate, shall, or shall
cause each Indemnified Party to, use its reasonable best efforts to
pursue promptly any claims or rights it may have against all third
parties which would reduce the amount of Damages or other liability for
which indemnification is provided under this Agreement.
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(ii) The amount of Damages or other liability for which
indemnification is provided under this Agreement shall be (A) increased
to take account of any Tax cost incurred (grossed up for such increase)
by the Indemnified Party arising from the receipt of indemnity payments
hereunder (unless such indemnity payment is treated as an adjustment to
the Purchase Price for tax purposes) and (B) reduced to take account of
any Tax benefit realized by the Indemnified Party arising from the
incurrence or payment of any such Damages or other liability. In
computing the amount of any such Tax cost or Tax benefit, the
Indemnified Party shall be deemed to be subject (x) to Federal and
local country income taxes at the maximum statutory rate then in effect
and (y) to state and local taxes at a combined state and local tax rate
of 9.3 percent, which shall be tax effected at such maximum federal
rate. Any indemnity payment made pursuant to this Agreement will be
treated as an adjustment to the Purchase Price for Tax purposes unless
a determination (as defined in Section 1313 of the Code) with respect
to the Indemnified Party causes any such payment not to constitute an
adjustment to the Purchase Price for United States Federal income tax
purposes.
(iii) Anything contained in this Agreement to the contrary
notwithstanding, Seller shall have no obligation to indemnify any
member of the Buyer Group with respect to any matter to the extent that
the value of an asset has been
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decreased or a liability has been recorded with respect to such matter
on the Closing Balance Sheet.
(iv) Neither Seller nor Buyer shall have any obligation to
indemnify the other or any other persons under this Agreement against,
or otherwise have any liability under this Agreement with respect to,
lost profits or consequential damages.
(e) Termination of Indemnification Obligations. The obligations of
each party to indemnify, defend and hold harmless the other party and other
persons, (x) pursuant to Sections 15(a)(i), 15(a)(ii), 15(b)(i), 15(b)(ii), and
15(b)(iii), shall terminate upon the expiration of all applicable statutes of
limitations (giving effect to any extension thereof) and (y) pursuant to the
other clauses of Sections 15(a) and 15(b) and other indemnification obligations
under this Agreement, shall not terminate at any time; provided, however, that
as to clauses (x) and (y) above such obligations to indemnify, defend and hold
harmless shall not terminate with respect to any individual item as to which the
person to be indemnified shall have, before the expiration of the applicable
period, previously made a claim by delivering a notice (stating in reasonable
detail the basis of such claim) to the party to be providing the
indemnification. Upon and following termination of any obligation to indemnify,
defend and hold harmless with respect to any matter hereunder, no claim,
arbitration, lawsuit, action or proceeding for indemnification may be brought
with respect to such matter and
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the party who formerly had such obligation shall no longer have any liability
whatsoever with respect to such matter.
SECTION 16. Termination; Effect of Termination.
(a) Termination. This Agreement may be terminated at any time
prior to the Closing:
(i) by mutual written consent of Seller and Buyer;
(ii) by Buyer if, as of the time of the Closing, the
conditions specified in Section 10 have not been satisfied and shall
not have been waived by Buyer;
(iii) by Seller if, as of the time of the Closing, the
conditions specified in Section 11 have not been satisfied and shall
not have been waived by Seller; or
(iv) by either party hereto if the Closing does not occur
on or prior to January 31, 1996;
provided, however, that the party seeking termination pursuant to clause (ii),
(iii) and (iv) is not in breach of its representations, warranties, covenants or
agreements contained in this Agreement.
(b) Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 16(a), this Agreement, other than with respect to
Sections 7, 12, 17(a) and 17(m), which shall continue in effect, shall
thereafter become void and have no effect, and without any liability on the part
of either party or its subsidiaries or affiliates in respect
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thereof, except that nothing herein will relieve either party from liability for
any breach of this Agreement.
SECTION 17. Miscellaneous.
(a) Costs Incident to Preparation of Agreement. Seller, Buyer and
Guarantor shall each pay, without right of reimbursement from the other, all
costs incurred by it incident to the preparation, execution and delivery of this
Agreement and the performance of its obligations hereunder, whether or not the
transactions contemplated by this Agreement are consummated, including, without
limitation, fees and disbursements of legal counsel, accountants and consultants
employed by the respective parties hereto in connection with the transactions
contemplated by this Agreement.
(b) Parties in Interest. This Agreement is binding upon and is for
the benefit of the parties hereto and their respective successors and permitted
assigns. This Agreement is not made for the benefit of any person, firm,
corporation or other entity not a party hereto, and no person, firm, corporation
or other entity other than the parties hereto or their respective successors and
permitted assigns shall acquire or have any right, remedy or claim under or by
virtue of this Agreement, except that members of the Buyer Group and the Seller
Group shall be entitled to the rights to indemnification provided to the Buyer
Group and the Seller Group, respectively, hereunder.
(c) Eminent Domain or Casualty. If, prior to the Closing, any
Asset or a portion thereof is taken by eminent
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domain (or is the subject of a pending or completed taking which has not been
consummated) or damaged or destroyed by fire or other casualty, Buyer shall not
have the option to cancel and rescind this Agreement but shall be obligated to
consummate the transactions contemplated hereby without adjustment in the
Purchase Price except that Buyer shall be entitled to all of Seller's right,
title and interest in and to any award from the taking by eminent domain or any
insurance proceeds with respect thereto. The parties expressly waive the
provisions of Section 5-1311 of the New York General Obligations Law to the
extent, if any, that such Section may be applicable hereto and agree to be bound
by the foregoing provision in lieu thereof.
(d) Assignment; Successors and Assigns. None of the parties to
this Agreement shall convey, assign or otherwise transfer any of its rights or
obligations under this Agreement without the express written consent of the
other party hereto in its sole and absolute discretion. Any such conveyance,
assignment or transfer without the express written consent of the other parties
shall be void ab initio. No assignment of this Agreement shall relieve the
assigning party of its obligations hereunder.
(e) Notices. All notices or other communications required or
permitted to be given hereunder shall be in writing and shall be delivered by
hand, telecopied or sent, postage prepaid, by registered, certified or express
mail or reputable overnight courier service (and shall be deemed given when so
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delivered by hand or telecopied, or if mailed, three days after mailing (one
business day in the case of express mail or overnight courier service))
addressed as follows:
If to Seller:
Rockwell International Corporation
2201 Seal Beach Boulevard
Seal Beach, California 90740-8250
Attention: William J. Calise, Jr., Esq.
Senior Vice President,
General Counsel and Secretary
with a copy to:
Chadbourne & Parke LLP
30 Rockefeller Plaza
New York, New York 10112
Attention: Peter R. Kolyer, Esq.
If to Buyer or Guarantor:
Meret Optical Communications, Inc.
1800 Stewart Street
Santa Monica, CA 90404
Attention: Dr. Xin Cheng
with a copy to:
Raymond Felton, Esq.
Greenbaum Rowe & Davis
99 Wood Avenue S.
Iselin, NJ 08830
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or in any case to such other address or addresses as hereafter shall be
furnished as provided in this Section 17(e) by any party hereto to the other
party hereto.
(f) Waiver; Remedies. No delay on the part of either Buyer or
Seller in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of either Buyer or Seller of
any right, power or privilege hereunder operate as a waiver of any other right,
power or privilege hereunder, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder. Unless
otherwise provided, the rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies which the parties hereto may
otherwise have at law or in equity.
(g) Entire Agreement. This Agreement, including the Note and the
Guaranty, and the Confidentiality Agreement, constitute the entire agreement
among the parties with respect to the subject matter hereof and this Agreement,
including the Note and Guaranty, and such Confidentiality Agreement supersede
all prior agreements or understandings of the parties relating thereto.
(h) Amendment. This Agreement may be modified or amended only by
written agreement of the parties hereto.
(i) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an
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original but all of which together shall constitute a single instrument.
(j) Governing Law. This Agreement shall be governed and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed entirely within such State, without regard to the
conflicts of law principles of such State.
(k) Exhibits and Schedules. All Exhibits and Schedules attached
hereto or referred to herein are hereby incorporated in and made a part of this
Agreement as if set forth in full herein. Matters reflected in any Schedule to
this Agreement are not necessarily limited to matters required by this Agreement
to be reflected in such Schedules. Such additional matters are set forth for
informational purposes and do not necessarily include other matters of a similar
nature. Matters disclosed by Seller to Buyer pursuant to any Section of or
Schedule to this Agreement (or any section of any Schedule to this Agreement)
shall be deemed to be disclosed with respect to all Sections of and Schedules to
this Agreement (and all sections of all Schedules to this Agreement) to the
extent this Agreement requires such disclosure. Capitalized terms used in any
Schedule to this Agreement but not otherwise defined therein shall have the
respective meanings assigned to such terms in this Agreement.
(l) Captions, Currency. All section titles or captions contained
in this Agreement or in any Exhibit or Schedule referred to herein, and the
table of contents to this
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Agreement are for convenience only and shall not be deemed a part of this
Agreement or affect the meaning or interpretation of this Agreement. Unless
otherwise specified, all references herein to numbered sections are to sections
of this Agreement and all references herein to Schedules or Exhibits are to
Schedules and Exhibits to this Agreement. Unless otherwise specified, all
references contained in this Agreement, in any Exhibit or Schedule referred to
herein or in any instrument or document delivered pursuant hereto to dollars
shall mean United States Dollars.
(m) Publicity. No press release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of the other party, except as such release or announcement may be
required by law, rule or regulation in which case the party required to make the
release or announcement shall allow the other party reasonable time to comment
on such release or announcement in advance of such issuance.
(n) No Representations or Warranties. Each of Buyer and Guarantor
acknowledges that none of Seller or any of its subsidiaries or affiliates or any
other person has made any representation or warranty, expressed or implied, as
to the accuracy or completeness of any information regarding Seller, the
Business, the Assets or the Assumed Liabilities not included in this Agreement,
and none of Seller, any of its subsidiaries or affiliates or any other person
will have or be subject to any
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liability to Buyer or Guarantor, any of its subsidiaries or affiliates or any
other person resulting from the distribution to Buyer or Guarantor, or Buyer's
or Guarantor's use of, any such information. Buyer and Guarantor further
acknowledges that, except as expressly set forth in this Agreement, there are no
representations or warranties of any kind, expressed or implied, with respect to
Seller, the Business, the Assets or the Assumed Liabilities.
(o) Severability. If any provision of this Agreement or the
application of any such provision to any person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.
(p) Consent to Jurisdiction. Each of Seller, Buyer and Guarantor
irrevocably submits to the exclusive jurisdiction of (i) the Supreme Court of
the State of New York, New York County and (ii) the United States District Court
for the Southern District of New York for the purposes of any suit, action or
other proceeding arising out of this Agreement or any transaction contemplated
hereby (and agrees not to commence any action, suit or proceeding relating
hereto except in such courts). Each of Seller, Buyer, and Guarantor further
agrees that service of any process, summons, notice or document hand delivered
or sent by U.S. registered mail to such party's respective address set forth in
Section 17(e) shall be effective service of process for any
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action, suit or proceeding in New York with respect to any matters to which it
has submitted to jurisdiction as set forth in the immediately preceding
sentence. Each of Seller, Buyer, and Guarantor irrevocably and unconditionally
waives any objection to the laying of venue of any action, suit or proceeding
arising out of this Agreement or the transactions contemplated hereby in (i) the
Supreme Court of the State of New York, New York County or (ii) the United
States District Court for the Southern District of New York, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
(q) Definition of 'Knowledge'. For the purposes of this Agreement,
"knowledge" or "aware of" or a similar phrase with respect to Seller shall mean
the actual knowledge of the Senior Vice President, Finance and Planning and
Chief Financial Officer and the Senior Vice President, General Counsel and
Secretary of Seller, in each case as of the date of this Agreement and not any
constructive or imputed knowledge of Seller or any of its subsidiaries or
affiliates or any of their directors, officers or employees.
62
<PAGE> 69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
ROCKWELL INTERNATIONAL CORPORATION
By: /s/Robert R. Lind
-------------------------------
Title: Vice President
OSICOM TECHNOLOGIES, INC.
By: /s/Sharon Gill Chadha
-------------------------------
Title: Chief Executive Officer
MERET OPTICAL COMMUNICATIONS, INC.
By: /s/Sharon Gill Chadha
-------------------------------
Title: Director
63
<PAGE> 1
Exhibit 2.2 Guaranty
<PAGE> 2
GUARANTY
IN CONSIDERATION of the execution and delivery of (i) the Asset Sale
Agreement (the "Agreement"), dated as of January 18, 1996, by and among
Rockwell International Corporation, a Delaware corporation ("Note Holder"),
Meret Optical Communications, Inc., a California corporation ("Meret") and a
wholly-owned subsidiary of Osicom Technologies, Inc., a New Jersey corporation
("Guarantor"), and (ii) the Promissory Note of Meret payable to Note Holder
dated the date hereof in the principal amount of $6,000,000 (the "Note"), and
as an inducement to Note Holder to enter into the Agreement, Guarantor, for
itself and its successors in interests and assigns, hereby guarantees the full
and faithful performance and observation by Meret under the Agreement and the
Note of all of the representations, warranties, covenants, conditions and
agreements in the Agreement and the Note provided to be performed and observed
by Meret, including, without limitation, the payment of all principal and
interest on the Note, and all costs, attorneys' fees and other expenses
incurred by Note Holder in enforcing such performance and observance, without
requiring any notice of non-payment, non-performance or non-observance or proof
of notice or demand whereby to charge Guarantor therefor, all of which
Guarantor hereby expressly waives.
Guarantor expressly agrees that Note Holder may, without notice to
Guarantor, modify the Agreement or the Note with Meret and grant extensions and
concessions to Meret in respect thereof without in any manner effecting the
liability of Guarantor hereunder.
Guarantor expressly agrees that the validity of this Guaranty and the
obligations of Guarantor hereunder shall in no way be terminated, affected or
impaired by reason of assertion by Note Holder against Meret of any of the
rights or remedies reserved to Note Holder pursuant to the Agreement or the
Note.
The liability of Guarantor hereunder is primary and may be enforced by
Note Holder before, concurrently, or after proceeding against Meret or any
other guarantor of Meret.
This Guaranty shall remain in effect notwithstanding any bankruptcy,
reorganization or insolvency of Meret, or any successor or assignee thereof, or
any disaffirmance or abandonment by a trustee thereof.
This Guaranty shall be interpreted in accordance with the laws of the
State of New York, and Guarantor agrees to submit itself to the personal
jurisdiction of that State's courts.
Guarantor hereby waives notice of acceptance of this Guaranty.
Dated: January 31, 1996
OSICOM TECHNOLOGIES, INC.
By: /s/ Sharon Gill Chadha
-------------------------------------
Name: Sharon Gill Chadha
Title: Chief Executive Officer
