Exhibit 2.1
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
LUCENT TECHNOLOGIES INC.
AS SELLER
AND
TOLLGRADE COMMUNICATIONS, INC.
AS BUYER
DATED AS OF SEPTEMBER 28, 2001
TABLE OF CONTENTS
Page
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1. Definitions...........................................................1
1.1 Defined Terms................................................1
1.2 Other Definitional and Interpretive Matters..................7
2. Purchase and Sale of the Business.....................................8
2.1 Purchase and Sale of Assets..................................8
2.2 Excluded Assets..............................................8
2.3 Purchase Price...............................................9
2.4 Assumed Liabilities.........................................10
2.5 Excluded Liabilities........................................11
2.6 Bulk Sales Law..............................................11
2.7 Taxes.......................................................11
2.8 Leased Equipment............................................11
2.9 No Licenses.................................................12
3. Representations and Warranties of Seller.............................12
3.1 Organization and Qualification..............................12
3.2 Authorization; Binding Effect...............................12
3.3 Non-Contravention; Consents.................................12
3.4 Title to Property; Principal Equipment; Sufficiency
of Assets.................................................13
3.5 Permits,Licenses............................................13
3.6 Compliance With Laws; Litigation............................14
3.7 Business Employees..........................................14
3.8 Contracts...................................................15
3.9 Financial Statements Absence of Changes.....................15
3.10 Intellectual Property.......................................16
3.11 Business Records............................................17
3.12 No Undisclosed Information..................................17
3.13 Brokers.....................................................17
3.14 Customers...................................................17
3.15 No Other Representations or Warranties......................17
4. Representations and Warranties of Buyer..............................18
4.1 Organization and Qualification..............................18
4.2 Authorization; Binding Effect...............................18
4.3 No Violations; Consents.....................................18
4.4 Brokers.....................................................19
4.5 Representations and Warranties; Disclosure Schedule.........19
4.6 Sufficiency of Funds........................................19
5. Certain Covenants....................................................20
5.1 Access and Information......................................20
5.2 Tax Reporting and Allocation of Consideration...............20
5.3 Business Employees..........................................21
5.4 Regulatory Compliance.......................................22
5.5 Use of Lucent's Name........................................22
5.6 Consents of Third Parties...................................23
5.7 Acquisition Financial Statements............................24
5.8 Further Assurances..........................................24
5.9 All Reasonable Efforts......................................24
5.10 Non-Competition; Non-Solicitation...........................25
6. Confidential Nature of Information...................................26
6.1 Confidentiality Agreement...................................26
6.2 Seller's Proprietary Information............................26
7. Closing..............................................................27
7.1 Deliveries by Seller........................................27
7.2 Deliveries by Buyer.........................................28
7.3 Closing Date................................................28
7.4 Contemporaneous Effectiveness...............................28
8. Conditions Precedent to Closing......................................29
8.1 General Conditions..........................................29
8.2 Conditions Precedent to Buyer's Obligations.................29
8.3 Conditions Precedent to Seller's Obligations................29
9. Status of Agreements.................................................30
9.1 Effect of Breach............................................30
9.2 Survival of Representations and Warranties..................30
9.3 General Agreement to Indemnify..............................30
9.4 General Procedures for Indemnification Involving
Third-Parties.............................................32
9.5 Resolution of Claims........................................33
10. Miscellaneous Provisions.............................................34
10.1 Notices.....................................................34
10.2 Expenses....................................................35
10.3 Entire Agreement; Modification..............................35
10.4 Assignment; Binding Effect; Severability....................35
10.5 Governing Law...............................................35
10.6 Execution in Counterparts...................................35
10.7 Public Announcement.........................................35
10.8 No Third-Party Beneficiaries................................36
11. Termination and Waiver...............................................36
11.1 Termination.................................................36
11.2 Effect of Termination.......................................37
11.3 Waiver of Agreement.........................................37
11.4 Amendment of Agreement......................................37
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Schedules
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Schedule 2.1(a) Principal Equipment
Schedule 2.1(e) Contracts
Schedule 2.1(f) Licenses
Schedule 2.1(h) Governmental Permits
Schedule 2.2(f) Excluded Contracts and Nonassignable Licenses
Schedule 2.2(i) Certain Excluded Assets
Schedule 2.8 Leased Equipment
Schedule 3.3(b) Required Consents
Schedule 3.6(a) Compliance with Laws; Litigation
Schedule 3.7(a) Business Employees
Schedule 3.9 Financial Statements
Schedule 3.10(a) Intellectual Property Claims
Schedule 3.14 Customers
Exhibits
Exhibit A Form of Assignment and ▇▇▇▇ of Sale
Exhibit B Form of Assumption Agreement
Exhibit C Form of Intellectual Property Agreement
Exhibit D Form of Transition Services Agreement
Exhibit E Form of Supply Agreement
Exhibit F Form of Subcontracted Services Agreement
AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS
THIS AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS ("Agreement") is
made as of September 28, 2001 by and between LUCENT TECHNOLOGIES INC., a
Delaware corporation, having an office at ▇▇▇-▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Seller" or "Lucent"), and TOLLGRADE COMMUNICATIONS,
INC., a Pennsylvania corporation, having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Buyer").
R E C I T A L S
A. WHEREAS, Seller is, among other things, engaged through its LoopCare
Product Unit of its Networks Operations Software Group in the sales, marketing,
research and development, manufacturing and repair of telecommunications testing
systems under the trade name "LoopCare" (collectively, the "Business");
B. WHEREAS, the Business is composed of certain assets and liabilities
that are currently owned by Seller or used by Seller in connection with the
Business;
C. WHEREAS, Seller desires to sell, transfer and assign to Buyer, and
Buyer desires to purchase from Seller, substantially all of Seller's assets
relating to the Business and Buyer is willing to assume certain liabilities of
Seller relative to the Business subject to the conditions set forth herein; and
D. WHEREAS, Seller and Buyer desire to enter into each of the
Assignment and ▇▇▇▇ of Sale, the Assumption Agreement, the Supply Agreement, the
Intellectual Property Agreement, the Subcontracted Services Agreement and the
Transition Services Agreement (collectively, the "Collateral Agreements").
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. DEFINITIONS
1.1 DEFINED TERMS
For the purposes of this Agreement, in addition to the words and
phrases that are described throughout the body of this Agreement, the following
words and phrases shall have the following meanings:
"Affiliate" of any Person means any Person that controls, is controlled
by, or is under common control with such Person. As used herein, "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such entity, whether through
ownership of voting securities or other interests, by contract or otherwise.
"Agreement" has the meaning assigned in the preamble hereof.
"Asset Acquisition Statement" has the meaning assigned in Section
5.3(b).
"Assignment and ▇▇▇▇ of Sale" means the agreement dated the Closing
Date from Seller to Buyer in substantially the form set forth as Exhibit A.
"Assumed Liabilities" means the liabilities and obligations of Seller
assumed by Buyer pursuant to the Assumption Agreement and Section 2.4.
"Assumption Agreement" means the agreement dated the Closing Date
between Seller and Buyer in substantially the form set forth as Exhibit B.
"Benefit Plan" means, in respect of any Business Employee, each
"employee benefit plan," as defined in Section 3(3) of ERISA (including any
"multiemployer plan" as defined in Section 3(37) of ERISA) and each employment,
severance, retention, consulting, or similar agreement or arrangement,
profit-sharing, bonus, stock option, stock purchase, stock ownership, pension,
retirement, severance, deferred compensation, excess benefit, supplemental
unemployment, post-retirement medical or life insurance, welfare or incentive
plan, or sick leave, long-term disability, medical, hospitalization, life
insurance, other insurance plan, or other employee benefit plan, program or
arrangement, whether written or unwritten, qualified or non-qualified, funded or
unfunded, maintained or contributed to by Seller, providing or which may provide
benefits to such Business Employee in connection with his employment or
termination of his employment by retirement or otherwise.
"Business" has the meaning assigned in Recital A hereof.
"Business Day" means a day that is not a Saturday, a Sunday or a
statutory or civic holiday in the State of New York or any other day on which
the principal offices of Seller or Buyer are closed or become closed prior to
2:00 p.m. local time.
"Business Employees" means the employees of Seller employed in the
Business, including those identified on Schedule 3.7(a).
"Business Records" means all books, records, ledgers and files or other
similar information used primarily in the conduct of the Business, including
price lists, customer lists, vendor lists, mailing lists, warranty information,
catalogs, sales promotion literature, advertising materials, brochures, records
of operation, customer service records, standard forms of documents, manuals of
operations or business procedures, any and all training materials, research
materials and product testing reports required by any national, federal, state,
provincial or local court, administrative body or other Governmental Body of any
country, but excluding any such items to the extent (i) they are primarily
related to any Excluded Assets or Excluded Liabilities, (ii) any applicable Law
prohibits their transfer, or (iii) they are confidential personnel records.
"Buyer" has the meaning assigned in the preamble hereof.
"Buyer's Savings Plan" has the meaning assigned in Section 5.4(d).
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"Closing" means the closing of the transactions described in Article 7.
"Closing Date" has the meaning assigned in Section 7.3.
"Closing Date Financial Statements" has the meaning assigned in Section
2.3(b).
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Collateral Agreements" has the meaning assigned in Recital D hereof.
"Confidentiality Agreement" shall mean the agreement between Seller and
Buyer dated June 7, 2001.
"Contracts" means all contracts, agreements, leases and subleases,
supply contracts, purchase orders, sales orders, commitments, and instruments
used or held for use in each case primarily in the conduct of the Business, to
which Seller is a party, and including items identified on Schedule 2.1(e), (i)
for the lease of furniture and office equipment (or other equipment as
contemplated by Section 2.8(i)(x)), (ii) for the provision of goods or services
by the Business or for the Business, including software maintenance and support
agreements, (iii) for the purchase of goods, procurement or supply of supplies
or other components, (iv) constituting sales agency, marketing or
distributorship agreements, (v) with any Business Employees, or Affiliate of
Seller, and (vi) otherwise of any nature having a material significance to the
Business, or (vii) any such items referred to in items (i) through (vi),
inclusive, entered into between the date hereof and outstanding as of the
Closing Date by Seller, other than Excluded Contracts.
"Counsel for Buyer" means ▇▇▇▇ ▇▇▇▇▇ LLP.
"Counsel for Seller" means a corporate counsel of Seller.
"Encumbrance" means any lien, claim, charge, security interest,
mortgage, pledge, easement, conditional sale or other title retention agreement,
covenant or other similar restrictions or Third-Party rights affecting the
Purchased Assets other than Permitted Encumbrances.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Assets" has the meaning assigned in Section 2.2.
"Excluded Contracts" means those Contracts (i) identified in Schedule
2.2(f), (ii) under which performance by Seller or an Affiliate has been
completed and for which there is no remaining warranty, maintenance, or support
obligation, (iii) relating to any General Purchase Agreement.
"Excluded Leased Equipment" has the meaning assigned in Section 2.8.
"Excluded Liabilities" has the meaning assigned in Section 2.5.
"Financial Statements" has the meaning assigned in Section 3.9(a).
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"Fixtures and Supplies" means all furniture, furnishings and other
tangible personal property owned by Seller and used or held for use primarily in
the conduct of the Business, including desks, workstations, tables, chairs, file
cabinets and other storage devices and office supplies.
"General Purchase Agreements" shall mean Third-Party supply contracts
or other agreements between Seller or an Affiliate and a Third-Party pursuant to
which Seller or an Affiliate purchases products or services from such
Third-Party for any of Seller's or an Affiliate's businesses other than solely
for the Business.
"Governmental Body" means any legislative, executive or judicial unit
of any governmental entity (foreign, federal, state or local) or any department,
commission, board, agency, bureau, official or other regulatory, administrative
or judicial authority thereof.
"Governmental Permits" means all governmental permits and licenses,
certificates of inspection, approvals or other authorizations issued to Seller
with respect to the Business or the Premises and necessary for the operation of
the Business as currently conducted under applicable Laws.
"Hold-back" has the meaning assigned in Section 2.3(a).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"Indemnified Party" has the meaning assigned in Section 9.4(a).
"Indemnifying Party" has the meaning assigned in Section 9.4(a).
"Intellectual Property" means the Proprietary Information of Seller
used or held for use primarily in the Business, assigned to Buyer pursuant to,
and as specifically identified and set forth in, the Intellectual Property
Agreement.
"Intellectual Property Agreement" means the agreement in substantially
the form set forth as Exhibit C.
"IRS" means the U.S. Internal Revenue Service.
"Knowledge" means actual knowledge (conscious awareness), by any Person
or employee of said Person of the facts and circumstances in question.
"Laws" shall mean any national, federal, state, provincial or local
law, statute, ordinance, rule, regulation, code, order, judgment, injunction or
decree of any country.
"Leased Equipment" means the computers, servers, machinery and
equipment and other similar items leased and used by Seller primarily in the
conduct of the Business, including items identified on Schedule 2.8.
"Licenses" means all licenses, agreements and other arrangements,
identified on Schedule 2.1(f), under which Seller has the right to use any
Proprietary Information of a Third-Party
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to the extent used or held for use primarily in the conduct of the Business,
except for Nonassignable Licenses.
"Licensed Intellectual Property" means the Proprietary Information of
Seller licensed to Buyer pursuant to, and as specifically identified and set
forth in, the Intellectual Property Agreement.
"Losses" has the meaning assigned in Section 9.3(a).
"Lucent" has the meaning assigned in the preamble hereof.
"Marked Assets has the meaning assigned in Section 5.8(a)(i).
"Marked Instrumentalities" has the meaning assigned in Section 5.8
(a)(ii).
"Material Adverse Effect" means any condition, event, occurrence or
fact that has a material and adverse effect upon the business, financial
condition, assets, liabilities or results of operations of the Business taken as
a whole, other than any condition or event (i) relating to the economy in
general, (ii) relating to the industries in which the Business operates in
general, or (iii) arising out of or resulting from the transactions contemplated
hereunder.
"Material Contracts" has the meaning assigned in Section 3.8(a).
"Minimum Threshold" has the meaning assigned in Section 9.3(f).
"Nonassignable Licenses" means those licenses of Proprietary
Information to which Seller or an Affiliate is the licensee that are (i) used or
held for use primarily in the conduct of the Business, which are not by their
terms assignable to Buyer and identified on Schedule 2.2(f), or (ii) primarily
related to other businesses of Seller or an Affiliate and not the Business, or
(iii) licenses under any patent of any Third-Party.
"Other Marked Assets" has the meaning assigned in Section 5.8(a)(v).
"Pension Plan" has the meaning assigned in Section 3.7(b).
"Permitted Encumbrances" means any (i) liens for Taxes, assessments and
other governmental charges or of landlords, liens of carriers, warehouseman,
mechanics and material men incurred in the ordinary course of business, in each
case for sums not yet due and payable or due but not delinquent or being
contested in good faith by appropriate proceedings, (ii) liens incurred or
deposits made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security or to
secure the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return of money bonds
and similar obligations, (iii) purchase money liens, (iv) licenses granted by
Seller or an Affiliate in connection with sales of products in the ordinary
course of business, and (v) any Encumbrance or minor imperfection in title and
minor encroachments, if any; provided, however, that any encumbrances in clauses
(i), (ii), (iii), (iv), or (v) do not individually or in the aggregate,
materially adversely interfere with the conduct of the Business or with the use
of the Purchased Assets and do not materially adversely affect the value of the
Purchased Assets.
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"Person" means any individual, corporation, partnership, firm,
association, joint venture, joint stock company, trust, unincorporated
organization or other entity, or any government or regulatory, administrative or
political subdivision or agency, department or instrumentality thereof.
"Principal Equipment" means all computers, computer hardware, servers,
communications networking equipment, information management systems, machinery
and equipment and other similar items used by Seller primarily in the conduct of
the Business (but not the Leased Equipment), including items identified on
Schedule 2.1(a). Principal Equipment includes rights to the warranties received
from the manufacturers and distributors of said items and to any related claims,
credits, rights of recovery and setoff with respect to said items, but only to
the extent such rights are assignable.
"Proprietary Information" means all information (whether or not
protectable by patent, copyright, mask works or trade secret rights) not
generally known to the public including, but not limited to, works of
authorship, inventions, discoveries, patentable subject matter, patents, patent
applications, industrial models, industrial designs, trade secrets, trade secret
rights, software, source code, object code works, copyrightable subject matters,
copyright rights and registrations, dies, molds, tools and tooling, mask works,
know-how and show-how, trademarks, trade names, service marks, emblems, logos,
insignia and related marks and registrations, specifications, technical manuals
and data, other user and project documentation, libraries, blueprints, drawings,
proprietary processes, product information, development work-in-process, website
and web pages.
"Purchase Price" has the meaning assigned in Section 2.3.
"Purchased Assets" has the meaning assigned in Section 2.1.
"Purchased Leased Equipment" has the meaning assigned in Section 2.8.
"reasonable commercial efforts" means that the obligated party is
required to make a diligent, reasonable and good faith effort to accomplish the
applicable objective. Such obligation, however, does not require an expenditure
of funds or the incurrence of a liability on the part of the obligated party,
nor does it require that the obligated party act in a manner that would be
contrary to normal commercial practices in order to accomplish the objective.
The fact that the objective is or is not actually accomplished is no indication
that the obligated party did or did not in fact utilize its reasonable
commercial efforts in attempting to accomplish the objective.
"Required Consent" has the meaning assigned in Section 3.3(b).
"Seller" has the meaning assigned in the preamble hereof.
"Seller Marks" has the meaning assigned in Section 5.8(a)(i).
"Subsidiary" means (i) any corporation in an unbroken chain of
corporations beginning with Seller, if each of the Corporations other than the
last corporation in the unbroken chain then owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the other
corporation in such chain, (ii) any partnership in which Seller is a general
partner or (iii) any
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partnership, corporation, limited liability company or similar entity that
Seller controls, through the ownership of interests or otherwise.
"Subcontracted Services Agreement" means the agreement in substantially
the form set forth as Exhibit F.
"Taxes" means all taxes of any kind, charges, fees, customs, levies,
duties, imposts, required deposits or other assessments, including, without
limitation, all net income, capital gains, gross income, gross receipt,
property, franchise, sales, use, excise, withholding, payroll, employment,
social security, worker's compensation, unemployment, occupation, capital stock,
ad valorem, value added, transfer, gains, profits, net worth, asset, transaction
taxes, and other taxes and interest, penalties, or additions to tax with respect
thereto imposed upon any Person by any Governmental Body under applicable Law.
"Third-Party" means any Person not an Affiliate of the other referenced
Person or Persons.
"Third-Party Claim" has the meaning assigned in Section 9.4(a).
"Transferred Employees" has the meaning assigned in Section 5.4(a).
"Transition Services Agreement" means the agreement in substantially
the form set forth as Exhibit E.
1.2 OTHER DEFINITIONAL AND INTERPRETIVE MATTERS
Unless otherwise expressly provided, for purposes of this Agreement,
the following rules of interpretation shall apply:
Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.
Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
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Including. The word "including" or any variation thereof means
"including, without limitation" and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
Schedules and Exhibits. The Schedules and Exhibits attached to this
Agreement shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein.
2. PURCHASE AND SALE OF THE BUSINESS
2.1 PURCHASE AND SALE OF ASSETS
Upon the terms and subject to the conditions of this Agreement and in
reliance on the representations and warranties contained herein, on the Closing
Date, Seller shall grant, bargain, sell, transfer, assign, convey and deliver to
Buyer, and Buyer shall purchase, acquire and accept from Seller, all right,
title and interest of Seller in, to and under the Purchased Assets as the same
shall exist on the Closing Date. For purposes of this Agreement, "Purchased
Assets" shall mean all the assets, properties and rights used by Seller, whether
tangible or intangible, real, personal or mixed, set forth or described in
Sections 2.1(a) through 2.1(h), inclusive (except in each case for the Excluded
Assets), whether or not any of such assets, properties or rights have any value
for accounting purposes or are carried or reflected on or specifically referred
to in Seller's financial statements:
(a) the Principal Equipment and the Purchased Leased Equipment;
(b) the Fixtures and Supplies;
(c) the Intellectual Property;
(d) the license grant to the Licensed Intellectual Property (but only
to the extent specifically set forth in the Intellectual Property Agreement);
(e) the Contracts;
(f) the Licenses;
(g) the Business Records; and
(h) the Governmental Permits that are identified on Schedule 2.1(h),
but only to the extent assignable or transferable to Buyer.
2.2 EXCLUDED ASSETS
Notwithstanding the provisions of Section 2.1, it is hereby expressly
acknowledged and agreed that the Purchased Assets shall not include, and Seller
is not selling, transferring, assigning, conveying or delivering to Buyer, and
Buyer is not purchasing, acquiring or accepting from Seller, the following (the
rights, properties and assets expressly excluded by this Section 2.2 or
otherwise
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excluded by the terms of Section 2.1 from the Purchased Assets being referred to
herein as the "Excluded Assets"):
(a) any of Seller's or its Affiliate's receivables, cash, bank deposits
or similar cash items or employee receivables;
(b) any Proprietary Information of Seller or any Affiliate other than
(i) the Intellectual Property and (ii) certain specified rights in the Licensed
Intellectual Property; as expressly provided under the Intellectual Property
Agreement;
(c) any (i) confidential personnel records, subject to Section 5.1(c)
below, pertaining to any Business Employee; (ii) other books and records that
Seller or any Affiliate is required by Law to retain; provided, however, that
Buyer shall have the right to make copies of any portions of such books and
records that relate to the Business or any of the Purchased Assets; and (iii)
any information management system of Seller or any Affiliate other than those
used primarily in the conduct of the Business and contained within Principal
Equipment included as a Purchased Asset pursuant to Section 2.1;
(d) any claim, right or interest of Seller or any Affiliate in or to
any refund, rebate, abatement or other recovery for Taxes, together with any
interest due thereon or penalty rebate arising therefrom, for any periods prior
to the Closing Date;
(e) all "Lucent Technologies" marked sales and marketing or packaging
materials, samples, prototypes, and other similar Lucent Technologies identified
sales and marketing or packaging materials and any marketing studies;
(f) the Excluded Contracts and the Nonassignable Licenses;
(g) any insurance policies or rights of proceeds thereof;
(h) the Excluded Leased Equipment;
(i) the property or assets specifically identified on Schedule 2.2(i);
(j) any of Seller's or any Affiliate's rights, claims or causes of
action against Third-Parties relating to the assets, properties, business or
operations of Seller or any Affiliate arising out of transactions occurring
prior to, and including, the Closing Date; and
(k) any Governmental Permits that are not assignable or transferable.
(l) all other assets, properties, interests and rights of Seller or any
Affiliate not substantially related to the Business and not necessary for the
conduct of the Business as presently conducted.
2.3 PURCHASE PRICE
(a) In consideration of the sale, transfer, assignment, conveyance and
delivery by Seller of the Purchased Assets to Buyer, Buyer shall pay to Seller
at the Closing, Sixty Million Dollars
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($60,000,000) (the "Purchase Price") to be delivered to Seller in accordance
with the provisions of Section 2.3(b), in cash by wire transfer of immediately
available funds to an account designated by Seller's written instructions to
Buyer at least two (2) Business Days prior to Closing.
(b) Between sixty (60) and seventy (70) days following the Closing
Date, Seller will deliver audited statements of Assets Acquired and Liabilities
to be Assumed, and Net Sales, Cost of Sales, and Direct Operating Expenses of
the Business, as of June 30, 2001 and September 30, 2000 and for the nine and
twelve month periods then ended as well as unaudited Net Sales, Cost of Sales,
and Direct Operating Expenses of the Business as of June 30, 2000 and for the
nine months then ended (the "June 30 Financial Statements"). No later than
ninety (90) days following the Closing Date, Seller will deliver unaudited
statements of Assets Acquired and Liabilities to be Assumed, and Net Sales, Cost
of Sales, and Direct Operating Expenses of the Business, as of September 30,
2001 and for the twelve month period then ended. No later than one hundred
twenty (120) days following the Closing Date, Seller will deliver audited
statements of Assets Acquired and Liabilities to be Assumed, and Net Sales, Cost
of Sales, and Direct Operating Expenses of the Business, as of September 30,
2001 and for the twelve month period then ended (the "Closing Date Financial
Statements"). The cost of the audits of the June 30 Financial Statements and the
Closing Date Financial Statements shall be paid by Buyer. The cost of
consultant's engaged by Seller to assist in the preparation of the June 30
Financial Statements and the Closing Date Financial Statements shall be paid by
Seller. The aggregate amount, of liabilities on such Closing Date Financial
Statements, which will include deferred revenue, any warranty obligations to be
serviced by Buyer, and any other liabilities as determined under generally
accepted accounting principles, will be paid over to Buyer on a dollar for
dollar basis, so long as such net adjustment is in excess of $10,000. Buyer
agrees to reduce such aggregate by the amount of certain prepaid Third-Party
license fees whose benefit is given over to Buyer from Seller and which amount
to $140,000.
2.4 ASSUMED LIABILITIES
On the Closing Date, Buyer shall execute and deliver to Seller one or
more Assumption Agreements pursuant to which Buyer shall accept, assume and
agree to pay, perform or otherwise discharge, in accordance with the respective
terms and subject to the respective conditions thereof, the liabilities and
obligations of Seller pursuant to and under the Assumed Liabilities. "Assumed
Liabilities" shall mean all liabilities and obligations set forth in this
Section 2.4, whether or not any such obligation has a value for accounting
purposes or is carried or reflected on or specifically referred to in either
Seller's books or financial statements:
(a) the liabilities and obligations arising on or after the Closing
Date under the Contracts (excluding the Excluded Contracts), Licenses (excluding
the Nonassignable Licenses) and Government Permits (excluding those that are not
assignable or transferable ; provided, however, that the obligations related to
the Material Contracts shall be those as expressly provided in the Subcontracted
Services Agreement until such time as the Material Contracts are assumed.
(b) the obligations and liabilities with respect to Transferred
Employees arising on or after the Closing Date;
(c) the Permitted Encumbrances related to the Purchase Assets; and
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(d) any liability, know or unknown, absolute or contingent, arising on
or after the Closing Date arising out of, resulting from or in any way related
to the Purchased Assets or the operation of the Business by Buyer, in each case
after the Closing Date.
2.5 EXCLUDED LIABILITIES
Buyer shall not assume or be obligated to pay, perform or otherwise
assume or discharge any liabilities or obligations of Seller or any of its
Affiliates, whether direct or indirect, known or unknown, absolute or
contingent, except for the Assumed Liabilities including without limitation, the
following: (a) any liability incurred on or prior to the Closing Date arising
out of, resulting from or in any way related to the Purchased Assets or the
operation of the Business by Seller; and (b) any liability related to the
Purchased Assets or the Business arising out of any event, act, condition or
occurrence which took place or occurred on or prior to the Closing Date; (all of
such liabilities and obligations not so assumed being referred to herein as the
"Excluded Liabilities").
2.6 BULK SALES LAW
Buyer hereby waives compliance by Seller with the requirements and
provisions of any "bulk-transfer" Laws of any jurisdiction, including Article 6
of the New York Commercial Code, that may otherwise be applicable with respect
to the sale of any or all of the Purchased Assets to Buyer.
2.7 TAXES
(a) Buyer shall pay all applicable Taxes and all recording and filing
fees that may be imposed, assessed or payable by reason of the operation or as a
result of this Agreement including the sales, transfers, leases, rentals,
licenses, and assignments contemplated hereby, except for Seller's net income
and capital gains taxes or franchise or other taxes based on Seller's net
income.
(b) Buyer shall be responsible for all Taxes attributable to, levied
upon or incurred in connection with the Purchased Assets pertaining to the
period (or that portion of the period) immediately beginning after the Closing
Date. Seller shall be responsible for all Taxes attributable to, levied upon or
incurred in connection with the Purchased Assets pertaining to the period (or
that portion of the period) prior to or on the Closing Date.
2.8 LEASED EQUIPMENT
On or prior to the Closing Date, Seller shall provide Buyer with the
costs and other terms applicable to the Leased Equipment identified on Schedule
2.8 and Buyer shall decide whether such Leased Equipment will (i) (x) transfer
to Buyer as of the Closing Date by Buyer assuming the leases for such equipment
in which case such lease agreements shall be deemed Contracts hereunder and
added to Schedule 2.1(e), or (y) be acquired by Buyer as of the Closing Date by
Buyer paying for the costs of purchasing such equipment pursuant to the leases
(the "Purchased Leased Equipment"), or (ii) remain the property of the Seller as
of the Closing Date (the "Excluded Leased Equipment").
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2.9 NO LICENSES
As all title, right and license to the Intellectual Property and
Licensed Intellectual Property furnished to Buyer in connection with this
transaction are specified exclusively in the Intellectual Property Agreement, no
title, right or license of any kind is granted to Buyer pursuant to this
Agreement with respect to Seller's or any of its Affiliates', Proprietary
Information, either directly or indirectly, by implication, by estoppel or
otherwise.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer that:
3.1 ORGANIZATION AND QUALIFICATION
Seller is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware and has all requisite corporate
power and authority to carry on the Business as currently conducted and to own
or lease and operate the Purchased Assets. Seller is duly qualified to do
business and is in good standing as a foreign corporation (in any jurisdiction
that recognizes such concept) in each jurisdiction where the ownership or
operation of the Purchased Assets or the conduct of the Business requires such
qualification, except for failures to be so qualified or in good standing, as
the case may be, that could not reasonably be expected to have a Material
Adverse Effect.
3.2 AUTHORIZATION; BINDING EFFECT
(a) Seller has all requisite corporate power and authority to execute
and deliver this Agreement and the Collateral Agreements to which it will be a
party, to perform fully its obligations hereunder and thereunder and to effect
the transactions contemplated hereby and thereby and has duly authorized the
execution, delivery and performance of this Agreement and the Collateral
Agreements to which it will be a party by all requisite corporate action.
(b) This Agreement has been duly executed and delivered by Seller. This
Agreement is, and when duly executed and delivered by Seller the Collateral
Agreements will be, valid and legally binding obligations of Seller, enforceable
against it, in accordance with their respective terms, except to the extent that
enforcement of the rights and remedies created hereby and thereby may be
affected by bankruptcy, reorganization, moratorium, insolvency and similar Laws
of general application affecting the rights and remedies of creditors and by
general equity principles.
3.3 NON-CONTRAVENTION; CONSENTS
(a) Assuming that all Required Consents listed in Schedule 3.3(b) have
been obtained, the execution, delivery and performance of this Agreement by
Seller and the Collateral Agreements by Seller and the consummation of the
transactions contemplated hereby and thereby do not and will not: (i) result in
a breach or violation of any provision of Seller's charter or by-laws (ii)
violate or result in a breach of or constitute an occurrence of default under
any provision of, result in the acceleration or cancellation of any obligation
under, or give rise to a right by any party to terminate or amend its
obligations under, any mortgage, deed of trust, conveyance to secure debt, note,
loan, indenture, lien, lease, agreement, instrument, order, judgment, decree or
other arrangement or commitment to which Seller is a party or by which it or its
assets or properties are bound and which
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relates to the Business or Purchased Assets, which violation breach or default
could reasonably be expected to have a Material Adverse Effect or (iii) violate
any order, judgment, decree, rule or regulation of any court or any Governmental
Body having jurisdiction over Seller or any of its properties, including the
Purchased Assets which violation could reasonably be expected to have a Material
Adverse Effect.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Seller in
connection with the execution and delivery of this Agreement and the Collateral
Agreements to which Seller will be a party or for the consummation of the
transactions contemplated hereby or thereby by Seller, except for (i) any
filings required to be made under the HSR Act, (ii) consents or approvals of
Third-Parties that are required to transfer or assign to Buyer any Purchased
Assets or assign the benefits of or delegate performance with regard thereto as
set forth in Schedule 3.3(b) (items (i) and (ii) being referred to herein as the
("Required Consents") and (iii) such consents, approvals, authorizations,
orders, registrations, declarations or filings where failure of compliance could
not reasonably be expected to have a Material Adverse Effect.
3.4 TITLE TO PROPERTY; PRINCIPAL EQUIPMENT; SUFFICIENCY OF ASSETS
(a) Seller has and at the Closing will have good and valid title to, or
a valid and binding leasehold interest or license in, all Purchased Assets free
and clear of any Encumbrances except for Permitted Encumbrances.
(b) Each item of Principal Equipment is in reasonable operating
condition, in light of its respective age, is adequate for the purposes for
which it is currently being used and is not in need of maintenance or repairs,
except for ordinary, routine maintenance and repairs. The Purchased Leased
Equipment is in reasonable operating condition in light of its age.
(c) Except for (i) the assets that will be used in connection with
providing services under the Transition Service Agreement and (ii) the Excluded
Assets, the Purchased Assets and the Business Employees and the rights to be
acquired under this Agreement and the Collateral Agreements (including the
services to be provided pursuant to the Transition Services Agreement) include
all assets, personnel and rights that are necessary to conduct the Business as
currently conducted by Seller. Seller has disclosed to Buyer the extent to which
the Excluded Assets are necessary to conduct the Business as currently conducted
by Seller. In the event this Section 3.4(c) is breached because Seller has
failed to identify and transfer any assets or properties or provide any services
used in the Business, such breach shall be deemed cured if Seller promptly
transfers such properties or assets or provide such services to Buyer, and Buyer
shall have no further remedy with respect thereto other than with respect to
losses resulting from events occurring prior to such transfer or provision of
services.
3.5 PERMITS, LICENSES
(a) Except as set forth on Schedule 2.1(h), there are no material
Governmental Permits necessary for or used by Seller to operate the Business as
now being operated, which Governmental Permits are required by currently
effective Laws.
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(b) Each Governmental Permit is valid and in full force and effect, and
Seller is not in default or breach thereof other than any such default or breach
which could not reasonably be expected to have a Material Adverse Effect. No
proceeding is pending or to Seller's Knowledge threatened to revoke or limit any
such Governmental Permit. Seller has provided to Buyer a true and complete copy
of each such Governmental Permit, including all amendments thereto.
3.6 COMPLIANCE WITH LAWS; LITIGATION
(a) Except as set forth on Schedule 3.6(a), with respect to the
Business conducted by it, Seller is in compliance with all applicable Laws and
all decrees, orders, judgments, permits and licenses of or from Governmental
Bodies except for failures to comply that could not reasonably be expected to
have a Material Adverse Effect.
(b) Except as set forth on Schedule 3.6(b), with respect to the
Business conducted by Seller, there are no actions, suits, proceedings or
governmental investigations pending or, to Seller's Knowledge, threatened
against it that could be reasonably expected to have a Material Adverse Effect.
3.7 BUSINESS EMPLOYEES
(a) Schedule 3.7(a) contains a complete and accurate list of all the
Business Employees as of the date specified on such list, showing for each
Business Employee the position held, aggregate annual compensation for Seller's
last fiscal year, most recent bonus or incentive compensation payment, date of
birth, date of hire, social security number, adjusted service date for purposes
of determining Benefit Plan eligibility, vesting and accruals and such other
information as Buyer may reasonably request. Except as set forth on Schedule
3.7(a), none of Business Employees is covered by any union, collective
bargaining or other similar labor agreements.
(b) With respect to each of the Benefit Plans of Seller with respect to
all Business Employees, Seller has made available to the Buyer true and complete
copies of the most recent summary plan or other written description. Such plans
and their administration are the sole responsibility of Seller. Each Benefit
Plan of Seller with respect to all Business Employees has been operated in
material compliance with applicable law, including ERISA, and in accordance with
its terms. There is no pending or threatened legal action, suit or claim
relating to any Business Employee under any Benefit Plan (other than ordinary
course claims for benefits). Each Benefit Plan which is an "employee pension
benefit plan" within the meaning of Section 3(2) of ERISA ("Pension Plan") and
which is intended to be qualified under Section 401(a) of the Code, has received
a favorable determination letter from the Internal Revenue Service and Seller is
not aware of any circumstances likely to result in revocation of any such
favorable determination letter. No liability to the Pension Benefit Guaranty
Corporation has been incurred with respect to the Pension Plans. All premiums
due and payable to the Pension Benefit Guaranty Corporation with respect to the
Pension Plans have been paid. The Pension Benefit Guaranty Corporation has not
instituted any proceeding to terminate any of the Pension Plans. No event has
occurred, and there exists no condition or set of circumstances, that presents a
risk that any part or future termination of any of the Pension Plans could
result in liability on the part of the Business or Buyer to the Pension Benefit
Guaranty Corporation. No notice of a reportable event (within the meaning of
Section 4043(b) of ERISA) has been filed with the Pension Benefit Guaranty
Corporation by the plan administrator of any of the
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Pension Plans, nor has any such reportable event occurred. No Pension Plan has
an accumulated funding deficiency, as defined in Section 302(a)(2) of ERISA.
Neither Seller nor any predecessor in interest thereto, nor any trade or
business under common control with Seller or any predecessor in interest thereto
(within in the meaning of Section 414(i) of the Internal Revenue Code), has ever
contributed to any Pension Plan that is a multi-employer plan for the benefit of
Seller's employees. Except as disclosed on Schedule 3.7(b), Seller does not have
any obligations for retiree health and life benefits under any Benefit Plan or
has ever represented, promised or contracted (whether in oral or written form)
to any employee(s) that such employee(s) would be provided with retiree health
or life benefits.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will: (i) result in any
material payment (including severance, golden parachute or otherwise) becoming
due under any Benefit Plan to any Business Employee; or (iii) result in the
acceleration of the time of payment or vesting of any benefits to any benefits
to any material extent to any Business Employee.
(d) As relates to the Business, there is not presently pending or
existing, and to Seller's Knowledge there is not threatened, (i) any strike,
slowdown, picketing, or work stoppage, (ii) any application for certification of
a collective bargaining agent, or (iii) any proceeding asserting Seller has
committed an unfair labor practice or seeking to compel it to bargain with any
collective bargaining agent.
3.8 CONTRACTS
(a) Schedule 2.1(e) contains a complete and accurate list of all
outstanding Contracts that would require over the full term thereof payments by
or to Seller of more than $175,000 (the "Material Contracts"). Each of such
Material Contracts are valid, binding and enforceable against Seller and to
Seller's Knowledge, the other parties thereto in accordance with its terms and
is in full force and effect. Except as set forth on Schedule 2.1(e), Seller is
not in default or breach of or is otherwise delinquent in performance under any
such Material Contract, and, to Seller's Knowledge, each of the other parties
thereto has performed in all material respects all obligations required to be
performed by it under, and is not in default in any material respect under, any
of such Material Contracts and no event has occurred that, whether with or
without notice, lapse of time, or both, would constitute such a default. Seller
has provided to Buyer a true and complete copy of all Material Contracts as in
effect on the date hereof, including all amendments thereto, except where Seller
is prohibited from doing so under the terms of the Material Contract. Seller has
no contracts for design, or development of computer program code primarily
related to the Business.
3.9 FINANCIAL STATEMENTS; ABSENCE OF CHANGES
(a) Seller has furnished to Buyer an unaudited statement of Assets to
be Acquired and Liabilities to be Assumed as of June 30, 2001, attached hereto
as Schedule 3.9 (the "Financial Statements").
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(b) Except as set forth on Schedule 3.9, since June 30, 2001 Seller has
conducted and operated the Business in the ordinary course and (i) the Business
has not suffered any Material Adverse Effect or any event, condition or change
that could reasonably be expected to have a Material Adverse Affect, and (ii)
Seller has not taken any action prohibited by Section 5.2.
3.10 INTELLECTUAL PROPERTY
(a) Lucent owns or has valid licenses to the Assigned Marks (except
common law marks listed in Schedule A of Exhibit C attached to the Intellectual
Property Agreement), Assigned Software, Licensed Software and Licensed Patents
sufficient to grant the rights and licenses that are granted to Purchaser under
the Intellectual Property Agreement, and (b) to the knowledge of the senior
management of the Business and Lucent's intellectual property business
litigation group, there are no written claims nor pending legal proceedings of
any Third-Party pertaining to the Assigned Marks, Assigned Software, Licensed
Software and Licensed Patents which would materially impact the rights and
licenses granted under the Intellectual Property Agreement.
(b) The rights and licenses granted to Buyer under the Assigned Marks,
Assigned Software, Licensed Software and Licensed Patents as set forth in the
Intellectual Property Agreement include all such rights (which Lucent owns or
has the right to license without the payment of fees, except for those relating
to the NMAKE and SABLIME software development tools) necessary to conduct the
Business as currently conducted as of the Closing Date without a Material
Adverse Affect on the Business, and Purchaser's sole remedy for breach of this
Section 3.10(b) shall be the assignment or licensing by Seller or one of
Seller's Subsidiaries to Purchaser, in accordance with the terms provided in the
Intellectual Property Agreement, of those components of the Assigned Marks,
Assigned Software, Licensed Software, and Licensed Patents which are required to
so conduct the Business.
(c) No material copper-loop network measurement or analysis functions
are performed by the BASE Software specified in Exhibit B to the Intellectual
Property Agreement.
(d) To the actual knowledge of the senior management of the Business as
of the Closing Date, there are no copy protection or similar mechanisms within
the Assigned Software or Licensed Software, as defined in the Intellectual
Property Agreement, which will, either now or in the future, interfere with the
grants made in this Agreement or the Intellectual Property Agreement.
(e) To the actual knowledge of the senior management of the Business as
of the Closing Date, the Assigned Software or Licensed Software, as defined in
the Intellectual Property Agreement, does not contain any malicious code,
program, or other internal component (e.g., computer virus, computer worm,
computer time bomb, or similar component), which could damage, destroy or alter
the Assigned Software or Licensed Software, as defined in the Intellectual
Property Agreement, or which could, in any manner, reveal, damage, destroy or
alter any data or other information accessed through or processed by the
Assigned Software or Licensed Software, as defined in the Intellectual Property
Agreement, in any manner. Seller shall immediately advise Buyer, in writing,
upon reasonable suspicion or actual knowledge that the Assigned Software or
Licensed Software, as defined in the Intellectual Property Agreement, provided
under this Agreement or the Intellectual Property Agreement may result in the
harm described above.
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(f) To the actual knowledge of the senior management of the Business as
of the Closing Date, there is no technology or software of a Third-Party
incorporated into the Assigned Software.
3.11 BUSINESS RECORDS
The Business Records of the Business have been maintained in the
ordinary course of business and are complete and correct in all material
respects.
3.12 NO UNDISCLOSED INFORMATION
Except as disclosed herein, Seller has no Knowledge of any matter
involving Seller which would have a reasonable likelihood of having a Material
Adverse Effect on the Business. Neither this Agreement nor any document,
certificate or statement furnished or to be furnished to Buyer by or on behalf
of Seller in connection with the transactions provided for herein contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained herein
or therein not misleading.
3.13 BROKERS
No broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisors' or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based on arrangements made by or on behalf of Seller or an Affiliate.
3.14 CUSTOMERS
Schedule 3.14 sets forth the eleven largest customers' of the Business
for the fiscal year ending September 30, 2000. To the Knowledge of Seller,
Seller has received no notice that any such customer (i) has ceased or will
cease, to do business with the Business, (ii) has sought or is seeking material
reductions to the price it pays to the Business or (iii) has asserted a claim
related to the product or services supplied by the Business which could
materially adversely affect the future relationship with that customer,
including in each case after the consummation of the transaction contemplated
hereby.
3.15 NO OTHER REPRESENTATIONS OR WARRANTIES
Except for the representations and warranties contained in this ▇▇▇▇▇▇▇
▇, ▇▇▇▇ of Seller, any Affiliate or any other Person makes any representations
or warranties, and Seller hereby disclaims any other representations or
warranties, whether made by Seller or any Affiliate, or any of their officers,
directors, employees, agents or representatives, with respect to the execution
and delivery of this Agreement or any Collateral Agreement, the transactions
contemplated hereby or the Business, notwithstanding the delivery or disclosure
to Purchaser or its representatives of any documentation or other information
with respect to any one or more of the foregoing.
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4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
4.1 ORGANIZATION AND QUALIFICATION
Buyer is a corporation duly organized, validly existing and presently
subsisting under the laws of the Commonwealth of Pennsylvania, and Buyer has all
requisite corporate power and authority to carry on its business as currently
conducted and to own or lease and operate its properties. Buyer is duly
qualified to do business and is in good standing as a foreign corporation (in
any jurisdiction that recognizes such concept) in each jurisdiction where the
ownership or operation of its assets or the conduct of its business requires
such qualification, except for failures to be so qualified or in good standing,
as the case may be, that could not reasonably be expected to have a material
adverse effect on the Buyer's business taken as a whole.
4.2 AUTHORIZATION; BINDING EFFECT
(a) Buyer has all requisite corporate power and authority to execute
and deliver this Agreement and the Collateral Agreements, to perform fully its
obligations hereunder and thereunder and to effect the transactions contemplated
hereby and thereby and has duly authorized the execution, delivery and
performance of this Agreement and the Collateral Agreements by all requisite
corporate action.
(b) This Agreement has been duly executed and delivered by Buyer. This
Agreement is, and when duly executed and delivered by Buyer the Collateral
Agreement will be, valid and legally binding obligations of Buyer, enforceable
against it in accordance with their terms, except to the extent that enforcement
of the rights and remedies created hereby and thereby may be affected by
bankruptcy, reorganization, moratorium, insolvency and similar Laws of general
application affecting the rights and remedies of creditors and by general equity
principles.
4.3 NO VIOLATIONS; CONSENTS
(a) The execution, delivery and performance of this Agreement and the
Collateral Agreements by Buyer and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) result in a breach or
violation of any provision of Buyer's charter or by-laws, (ii) violate or result
in a breach of or constitute an occurrence of default under any provision of,
result in the acceleration or cancellation of any obligation under, or give rise
to a right by any party to terminate or amend its obligations under, any
mortgage, deed of trust, conveyance to secure debt, note, loan, indenture, lien,
lease, agreement, instrument, order, judgment, decree or other material
arrangement or commitment to which Buyer is a party or by which it or its assets
or properties are bound, or (iii) violate any order, judgment, decree, rule or
regulation of any court or any Governmental Body having jurisdiction over Buyer
or any of its properties.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Buyer in
connection with the execution and delivery of this Agreement and the Collateral
Agreements or the consummation of the transactions contemplated hereby or
thereby except for any filings required to be made under the HSR Act.
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4.4 BROKERS
Other than ▇▇▇▇▇▇/▇▇▇▇▇▇ Incorporated, the fees and expenses of which
will be paid by Buyer, no broker, investment banker, financial advisor or other
Person is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based on arrangements made by or on behalf of Buyer or an
Affiliate.
4.5 REPRESENTATIONS AND WARRANTIES; DISCLOSURE SCHEDULE
(a) With respect to the Purchased Assets, the Business, or any other
rights or obligations to be transferred hereunder or under the Collateral
Agreements or pursuant hereto or thereto, Buyer has not been induced by and has
not relied upon any representations, warranties or statements, whether express
or implied, made by Seller, any Affiliate, or any agent, employee, attorney or
other representative of Seller or by any Person representing or purporting to
represent Seller that are not expressly set forth in this Agreement or in the
Collateral Agreements (including the Schedules and Exhibits hereto and thereto),
whether or not any such representations, warranties or statements were made in
writing or orally.
(b) Buyer acknowledges that it has made its own assessment of the
future of the Business and is sufficiently experienced to make an informed
judgment with respect thereto. Buyer further acknowledges that neither Seller
nor any Affiliate has made any warranty, express or implied, as to the future of
the Business or its profitability for Buyer, or with respect to any forecasts,
projections or business plans prepared by or on behalf of Seller and delivered
to Buyer in connection with the Business and the negotiation and the execution
of this Agreement.
(c) To the extent reasonably apparent from its context, disclosure by
Seller on any one Schedule delivered pursuant to this Agreement at or prior to
the Closing shall be disclosure as to all such Schedules;.
(d) Buyer acknowledges that any information disclosed by Seller in the
attached Schedules under any section number shall be deemed to be disclosed and
incorporated into any other section number under this Agreement where such
disclosure is reasonably apparent by from the context of the disclosure
exception to such other section numbers.
4.6 SUFFICIENCY OF FUNDS
Buyer (i) has funds available to pay the Purchase Price and any
expenses incurred by Buyer in connection with the transactions contemplated by
this Agreement; and (ii) has the resources and capabilities (financial or
otherwise) to perform hereunder and under the Collateral Agreements.
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5. CERTAIN COVENANTS
5.1 ACCESS AND INFORMATION
(a) After the Closing Date, Seller and Buyer will provide, and will
cause their respective Affiliates to provide, to each other and to their
respective officers, employees, counsel and other representatives, upon request
(subject to any limitations that are reasonably required to preserve any
applicable attorney-client privilege or Third-Party confidentiality obligation),
reasonable access for inspection and copying of all Business Records,
Governmental Permits, Licenses, Contracts and any other information existing as
of the Closing Date and relating to the Business or the Purchased Assets, and
will make their respective personnel reasonably available for interviews,
depositions and testimony in any legal matter concerning transactions,
operations or activities relating to the Business or the Purchased Assets, and
as otherwise may be necessary or desirable to enable the party requesting such
assistance to: (i) comply with reporting, filing or other requirements imposed
by any foreign, local, state or federal court, agency or regulatory body; (ii)
assert or defend any claims or allegations in any litigation or arbitration or
in any administrative or legal proceeding other than claims or allegations that
one party to this Agreement has asserted against the other; or (iii) subject to
clause (ii) above, perform its obligations under this Agreement. The party
requesting such information or assistance shall reimburse the other party for
all out-of-pocket costs and expenses incurred by such party in providing such
information and in rendering such assistance. The access to files, books and
records contemplated by this Section 5.1(b) shall be during normal business
hours and upon not less than two (2) Business Days' prior written request and
shall be subject to such reasonable limitations as the party having custody or
control thereof may impose to preserve the confidentiality of information
contained therein.
(b) From time to time following the Closing, Seller hereby agrees to
make available, or to cause its Affiliates to make available, to Buyer
non-confidential data in personnel records of Transferred Employees as is
reasonably necessary for Buyer to transition such employees into Buyer's
records.
(c) Buyer agrees to preserve all Business Records, Licenses and
Governmental Permits for at least seven (7) years after the Closing Date. After
this seven-year period and at least ninety (90) days prior to the planned
destruction of any Business Records, Licenses or Governmental Permits, Buyer
shall notify Seller in writing and shall make available to Seller, upon its
request, such Business Records, Licenses and Governmental Permits.
5.2 TAX REPORTING AND ALLOCATION OF CONSIDERATION
(a) Seller and Buyer acknowledge and agree that (i) Seller will be
responsible for and will perform all Tax withholding, payment and reporting
duties with respect to any wages and other compensation paid by Seller to any
Business Employee in connection with operating the Business prior to or on the
Closing Date, and (ii) Buyer will be responsible for and will perform all Tax
withholding, payment and reporting duties with respect to any wages and other
compensation paid by Buyer to any Transferred Employee in connection with
operating the Business after the Closing Date.
(b) Seller and Buyer recognize their mutual obligations pursuant to
Section 1060 of the Code to timely file IRS Form 8594 (the "Asset Acquisition
Statement") with each of their respective federal income tax returns.
Accordingly, Seller and Buyer shall, no later than thirty (30) days after
Closing attempt in good faith to (i) enter into a Purchase Price allocation
agreement providing for the allocation of the Purchase Price among the Purchased
Assets consistent with the provisions of
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Section 1060 of the Code and the Treasury Regulations thereunder and (ii)
cooperate in the preparation of the Asset Acquisition Statement in accordance
with clause (i) of this paragraph for timely filing with each of their
respective federal income tax returns. If Seller and Buyer shall have agreed on
a Purchase Price allocation and an Asset Acquisition Statement, Seller and Buyer
shall file the Asset Acquisition Statement in the form so agreed and neither
Seller nor Buyer shall take a Tax position which is inconsistent with such
Purchase Price allocation.
5.3 BUSINESS EMPLOYEES
(a) On the day following the Closing, Buyer shall make offers of
employment to all Business Employees listed on Schedule 3.7(a) (including those
absent due to vacation, holiday, illness, leave of absence or disability)
providing for salary and benefits comparable to those provided to similarly
situated employees of Buyer. The base salary offered to each of the Business
Employees will be at least as much as that currently earned by such Business
Employee for his or her employment by Seller. All Business Employees who accept
employment with Buyer shall be referred to as "Transferred Employees." All
Business listed on Schedule 3.7(a) shall be terminated by Seller effective as of
the Closing Date and Seller shall provide no severance benefits to such Business
Employees.
(b) The offers of employment by Buyer to the Business Employees are to
be made effective as of the Closing Date. Employment with Buyer of Transferred
Employees shall be effective as of the Business Day following the close of
business on the Closing Date, except that the employment of (i) individuals
receiving disability benefits or on approved leave of absence on the Closing
Date will become effective as of the date they present themselves for work with
the Buyer within 90 days after the Closing Date, and (ii) individuals who are in
the process of applying for visas will become effective as of the date that
their visas are transferred to Buyer. The Transferred Employees described in (i)
and (ii) in the interim will continue to be employed by Seller and made
available pursuant to the Transition Services Agreement to Buyer who shall
reimburse Seller for all direct costs of such employment. As of the effective
date of employment by Buyer, all Transferred Employees shall be eligible to
participate in the Benefit Plans and other fringe benefits of Buyer on the same
basis as such plans and benefits are offered to similarly situated employees of
Buyer. Buyer will recognize any prior service of any Transferred Employees
recognized by Seller as if it had been services with Buyer for purposes of (i)
eligibility for participation and vesting under its 401(k) plan, (ii)
eligibility to participate in Buyer's medical, dental insurance and other
welfare benefits currently offered by Buyer, and (iii) accruing annual vacation
and sick leave under Buyer's appropriate schedule applicable to Transferred
Employees. Buyer agrees that any pre-existing condition clause in any of Buyer's
health or disability insurance policies shall not be applicable to Transferred
Employees; provided any such Transferred Employee is enrolled in the health and
disability plans of Seller and its Affiliates immediately prior to Closing.
Seller shall permit Transferred Employees to make claims against Seller's
health/medical flexible spending arrangement through Closing, if applicable.
Buyer will continue to provide relocation assistance to those Business Employees
receiving it as of the Closing Date and tuition assistance to those Business
Employees who are receiving such benefits as of the Closing Date for the current
academic session. The employment be by Buyer of the Transferred Employees shall
not be construed to limit the ability of Buyer to terminate any such Transferred
Employees at any time following the Closing Date.
(c) Seller shall remain responsible for all employment and employee
benefit related claims, liabilities or obligations of whatever nature with
respect to (i) all Business Employees (and
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for this purpose all former, temporary and other employees) who do not become
Transferred Employees, whether arising from or relating to claims incurred or
based on events, acts, omissions or conduct or course of conduct occurring
before or after the Closing Date and (ii) all Transferred Employees with respect
to claims incurred or based on events, acts, omissions, conduct or course of
conduct, all or some part of which occurred prior to Closing. Buyer shall not at
any time assume any liability for benefits of any active, terminated, vested or
retired participants in Seller's Benefit Plans. Buyer shall be responsible only
for employment and employee benefit related liabilities or obligations with
respect to any Transferred Employee with respect only to claims incurred or
based on events, acts, omissions, conduct in course of conduct occurring
entirely after Closing.
(d) Seller shall cause all Transferred Employees to become fully vested
in their account balances under the Lucent Savings Plan ("LSP") and the Lucent
Technologies, Inc. Long Term Savings and Security Plan ("LTSSP") on or before
each Transferred Employee's date of hire with Buyer. Buyer shall permit
Transferred Employees to make a direct rollover of their account balances from
the LSP and LTSSP, as applicable, to Buyer's defined contribution plan intended
to qualify under Code Sections 401(a) and 401(k) ("Buyer's Savings Plan") in the
form of cash. Rollovers of securities, promissory notes or other property, in
kind, will not be accepted.
(e) Except as approved in advance by buyer in writing, Seller shall not
make any promises or commitments to any Business Employee with regard to his or
her employment status with Buyer or the terms and conditions upon which such
employment might occur to be continued nor make any changes in the terms or
conditions of such Business Employees employment prior to the Closing.
5.4 REGULATORY COMPLIANCE
Buyer and Seller shall cooperate, and shall cause their respective
Affiliates to cooperate, with the other in making filings under the HSR Act, and
each party shall use its reasonable commercial efforts to resolve such
objections, if any, as the Antitrust Division of the Department of Justice or
the Federal Trade Commission or state antitrust enforcement or other
Governmental Body may assert under the antitrust Laws with respect to the
transactions contemplated hereby. In the event an action is instituted by any
Person challenging the transactions contemplated hereby as violative of the
antitrust Laws, Buyer and Seller shall use, and shall cause their respective
Subsidiaries to use, their respective reasonable commercial efforts to resist or
resolve such action.
5.5 USE OF LUCENT'S NAME
(a) Buyer and Seller agree as follows:
(i) Within three (3) months after the Closing Date, Buyer
shall remove "Lucent" or "Lucent Technologies" or other similar marks (other
than those assigned to Buyer in Schedule A of Exhibit C of the Intellectual
Property Agreement) (the "Seller Marks") from all signs of the Business.
(ii) Immediately after the Closing Date, Buyer shall cease
using the Seller Marks in all invoices, letterhead, advertising and promotional
materials, office forms or business cards.
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(iii) Within three (3) months after the Closing Date, Buyer
shall cease using the Seller Marks in electronic databases, web sites, product
instructions, and other materials, printed or otherwise (all such materials of
the Business together with the signs described in clauses (i) and (ii) above,
the "Marked Assets");
(iv) Buyer shall not be required at any time to remove any
previously authorized use of the Seller Marks from schematics, plans, manuals,
drawings, equipment, and the like of the Business in existence as of the Closing
Date to the extent that such instrumentalities are used in the ordinary internal
conduct of the Business and are not generally observed by the public or are
intended for use as means to effectuate or enhance sales (such items, "Marked
Instrumentalities").
Buyer shall use Reasonable Efforts to remove the Seller Marks
from those assets of the Business that are not Marked Instrumentalities
including those assets reasonably used in the conduct of the Business after the
Closing Date (such assets, "Other Marked Assets"). For the purposes of this
Section 5.9 "Reasonable Efforts" means Buyer shall remove the Seller's Marks
from such Other Marked Assets but only at such time when such asset is not
operated or otherwise is taken out of service in the normal course of business
due to regular maintenance or repair (but only for such repairs or maintenance
where such removal could normally be undertaken) whichever occurs first;
provided that, in no event shall Buyer use the Seller Marks after the date which
is six (6) months from the Closing Date. Buyer shall not be required to perform
such removal on such Other Marked Assets that are not or no longer used, or if
discontinuance of use of such Other Marked Assets is reasonably anticipated
during such time period; provided, such Other Marked Assets is reasonably
anticipated during such time period; provided, such Other Marked Assets are not
sold or otherwise transferred to Third Party absent Lucent's prior written
approval.
(v) Seller hereby grants to Buyer a limited right to use
Seller Marks with regard to the Marked Assets, Other Marked Assets and Marked
Instrumentalities during the periods, if any, specified in clauses (i) - (iv)
above.
(vi) Buyer acknowledges and agrees that Lucent is the owner of
the Seller Marks and all goodwill attached thereto. This Agreement does not give
the Buyer any interest in the Seller Marks except the right to use the Seller
Marks in accordance with this Agreement and the Intellectual Property Agreement.
Buyer agrees not to attempt to register the Seller Marks nor to register
anywhere in the world a ▇▇▇▇ same as or confusingly similar to the Seller Marks.
(b) In no event shall Buyer or any Affiliate of Buyer advertise or hold
itself out as Lucent or an Affiliate of Lucent after the Closing Date.
5.6 CONSENTS OF THIRD PARTIES
(a) Nothing in this Agreement nor the consummation of the transactions
contemplated hereby shall be construed as an attempt or agreement to assign any
Purchased Asset, including any Contract, License, Governmental Permit,
certificate, approval, authorization or other right, which by its terms or by
Law is nonassignable without the consent of a Third Party or a Governmental Body
or is cancelable by a Third-Party in the event of an assignment ("Nonassignable
Assets") unless and until such consents shall be given. Seller and Buyer shall,
or Seller shall cause its Affiliates to, cooperate to take all necessary action
and use all reasonable commercial efforts to obtain all such consents, approvals
and authorizations necessary to convey the Nonassignable Assets in accordance
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with this Agreement and the Collateral Agreements; provided, however, that such
cooperation shall not require Seller or any of its Affiliates to remain
secondarily liable or require Seller or Buyer to make any payment to obtain any
such consent with respect to any Nonassignable Asset.
(b) To the extent permitted by applicable Law, in the event consents to
the assignment thereof cannot be obtained, such Nonassignable Assets shall be
held, as and from the Closing Date, by Seller or is Affiliates in trust for
Buyer and the covenants and obligations thereunder shall be performed by Buyer
in Seller's or one of its Affiliate's name and all benefits and obligations
existing thereunder shall be for Buyer's account. Seller shall take or cause to
be taken such action in its name or otherwise as Buyer may reasonably request so
as to provide Buyer with the benefits of the Nonassignable Assets and to effect
collection of money or other consideration to become due and payable under the
Nonassignable Assets, and Seller or its Affiliates shall promptly pay over to
Buyer all money or other consideration received by it in respect to all
Nonassignable Assets pursuant to the terms and conditions of the Subcontracted
Services Agreement.
(c) As of and from the Closing Date, Seller on behalf of itself and its
Affiliates authorizes Buyer, to the extent permitted by applicable Law and the
terms of the Nonassignable Assets, at Buyer's expense, to perform all the
obligations and receive all the benefits of Seller or its Affiliates under the
Nonassignable Assets and appoints Buyer its attorney-in-fact to act in its name
on its behalf or in the name of the applicable Affiliate of Seller and on such
Affiliate's behalf with respect thereto.
5.7 ACQUISITION FINANCIAL STATEMENTS
Seller will use reasonable efforts to coordinate and cooperate with
Buyer in supplying the audited statements of Assets to be Acquired and
Liabilities to be Assumed, and Net Sales, Cost of Sales and Direct Operating
Expenses of the Business as of June 30, 2001 in accordance with Section 2.3(b),
to enable Buyer to comply with its reporting obligations to the Securities and
Exchange Commission.
5.8 FURTHER ASSURANCES
From time to time following the Closing, Seller and Buyer shall, and
shall cause their respective Affiliates to, execute, acknowledge and deliver all
such further conveyances, notices, assumptions, releases and acquittances and
such other instruments, and shall take such further actions, as may be necessary
or appropriate to assure fully to Buyer and its respective successors or
assigns, all of the properties, rights, titles, interests, estates, remedies,
powers and privileges intended to be conveyed to Buyer under this Agreement and
the Collateral Agreements and to assure fully to Seller and its Affiliates and
their successors and assigns, the assumption of the liabilities and obligations
intended to be assumed by Buyer under this Agreement and the Collateral
Agreements, and to otherwise make effective the transactions contemplated hereby
and thereby.
5.9 ALL REASONABLE EFFORTS
Seller and Buyer shall use all reasonable commercial efforts to cause
all the conditions precedent to the consummation of the transactions
contemplated hereby applicable to it to be met as promptly as practicable.
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5.10 NON COMPETITION; NON SOLICITATION
(a) Seller covenants and agrees that, unless the prior written consent
of the Buyer is obtained, for a period of five (5) years after the Closing,
Seller will not, directly or indirectly, individually, in association or in
combination with any other Person, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing or control of, be
employed by, associated with or lend Seller's name or any similar name to, or
lend Seller's credit to, any business whose products, services or activities
compete in whole or in part with the products, services or activities of the
Business anywhere in the world except in relation to the activities of Seller
permitted under the Supply Agreement.
(b) Seller covenants and agrees, unless the prior written consent of
the Buyer is obtained, for a period of five (5) years after the Closing, Seller
will not directly or indirectly, either for itself or any other Person (i)
induce or attempt to induce any of the Transferred Employees to leave the employ
of the Buyer, or (ii) employ, or otherwise engage as an employee, independent
contractor, or otherwise, any of the Transferred Employees.
(c) Seller covenants and agrees, unless the prior written consent of
the Buyer is obtained, for a period of five (5) years after the Closing, Seller
will not directly or indirectly, either for itself or any other Person, (i)
solicit the business of any Person known to Seller to be a customer of the
Business, whether or not Seller had personal contact with such Person, with
respect to the sale of such Person of products or services which compete in
whole or in part with the products, services or activities of the Business,
except in relation to the activities of Seller permitted under the Supply
Agreement or (ii) induce or attempt to induce any customer or supplier of the
Business, or other Third-Party with whom the Business has a relationship to
cease doing business with the Business.
(d) Seller acknowledges that the covenants set forth in this Section
5.10 are an essential element of this Agreement and that, but for its agreement
to comply with these covenants, Buyer would not have entered into this Agreement
and that such covenants are necessary in order to protect and maintain the
proprietary and other business interests of the Buyer and are reasonable and
proper.
(e) Nothing in this Section 5.10 shall prevent Seller from (i) being
engaged in the activities of Seller permitted under the Supply Agreement (ii)
owning directly or indirectly not more than 5% of the issued shares voted on a
recognized stock exchange of a company engaged in a business that competes in
whole or in part with the products, services or activities of the Business
anywhere in the world.
(f) It is the intention of the parties that the provisions of Section
5.10 hereof shall be enforceable to the fullest extent permissible under
applicable Law. Seller acknowledges that a breach or default in the full
performance of any covenants, agreements or obligations of Seller set forth in
this Section 5.10 will cause substantial and irreparable injury to Buyer and
that such injury would not be readily susceptible to measurement and
compensation in monetary damages. Accordingly, Seller covenants and agrees that
if Seller breaches or defaults in the full performance of any of the covenants,
agreements or obligations of Seller set forth in this Section 5.10, Buyer will
have, in addition to all other rights and remedies available to it, at law or in
equity, the right to seek appropriate injunctive relief.
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(g) If Buyer prevails in a proceeding for damages or injunctive relief,
Seller agrees that Buyer, in addition to other relief, shall be entitled to
reasonable attorney's fees, costs and the expenses of litigation incurred by
Buyer in securing the relief granted by the court.
6. CONFIDENTIAL NATURE OF INFORMATION
6.1 CONFIDENTIALITY AGREEMENT
Unless and until the transactions contemplated hereby are consummated,
Buyer and its officers, employees, representatives and agents will hold in
strict confidence, and not use in any way except in connection with the
transactions contemplated by this Agreement (a) all documents, materials and
other information that it shall have obtained regarding Seller or its Affiliates
during the course of the negotiations leading to the consummation of the
transactions contemplated hereby (whether obtained before or after the date of
this Agreement), any investigations made in connection therewith and the
preparation of this Agreement and related documents and (b) all analyses,
reports, compilations, evaluations and other materials prepared by Buyer or its
counsel, accountants or financial advisors that contain or otherwise reflect or
are based upon, in whole or in part, any of the provided information.
6.2 SELLER'S PROPRIETARY INFORMATION
(a) Except for Proprietary Information conveyed to Buyer as part of the
Purchased Assets, and except as provided in Section 6.2(b) and 6.2(d), after the
Closing and for a period of five (5) years following the Closing Date, Buyer
agrees that it will keep confidential all of Seller's and its Affiliates'
Proprietary Information that is received from, or made available by, Seller in
the course of the transactions contemplated hereby, including, for purposes of
this Section 6.2, information about Seller's and its Affiliates' business plans
and strategies, marketing ideas and concepts, especially with respect to
unannounced products and services, present and future product plans, pricing,
volume estimates, financial data, product enhancement information, business
plans, marketing plans, sales strategies, customer information (including
customers' applications and environments), market testing information,
development plans, specifications, customer requirements, configurations,
designs, plans, drawings, apparatus, sketches, software, hard, data, prototypes,
connecting requirements or other technical and business information.
(b) Notwithstanding the foregoing, such Proprietary Information shall
not be deemed confidential and Buyer shall have no obligation with respect to
any such Proprietary Information that:
(i) at the time of disclosure was already known to Buyer other
than through this transaction, free of restriction as evidenced by documentation
in Buyer's possession;
(ii) is or becomes publicly known through publication,
inspection of a product, or otherwise, and through no negligence or other
wrongful act of Buyer;
(iii) is received by Buyer from a Third Party without similar
restriction and without breach of any agreement;
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(iv) to the extent it is independently developed by Buyer; or
(v) is, subject to Section 6.2(c), required to be disclosed
under applicable Law or judicial process.
(c) If Buyer (or any of its Affiliates) is requested or required (by
oral question, interrogatory, request for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Proprietary
Information, Buyer will promptly notify Seller of such request or requirement
and will cooperate with Seller such that Seller may seek an appropriate
protective order or other appropriate remedy. If, in the absence of a protective
order or the receipt of a waiver hereunder, Buyer (or any of its Affiliates) is
in the written opinion of Buyer's counsel compelled to disclose the Proprietary
Information or else stand liable for contempt or suffer other censure or
significant penalty, Buyer (or its Affiliate) may disclose only so much of the
Proprietary Information to the party compelling disclosure as is required by
Law. Buyer will exercise its (and will cause its Affiliates to exercise their)
reasonable commercial efforts to obtain a protective order or other reliable
assurance that confidential treatment will be accorded to such Proprietary
Information.
(d) Except to the extent that disclosure thereof is required under
accounting, stock exchange or Federal Securities Laws disclosure obligations,
the terms and conditions of this Agreement, and all attachments and amendments
hereto and thereto shall be considered Proprietary Information protected under
this Article 6; provided, however, that such may be disclosed to the extent
agreed upon pursuant to Section 10.7. Notwithstanding anything in this Article 6
to the contrary, in the event that any such Proprietary Information is also
subject to a limitation on disclosure or use contained in another written
agreement between Buyer and Seller (including but not limited to, the
Intellectual Property Agreement) that is more restrictive than the limitation
contained in this Article 6, then the limitation in such agreement shall
supersede this Article 6.
7. CLOSING
At the Closing, the following transactions shall take place:
7.1 DELIVERIES BY SELLER
On the Closing Date, in addition to the Purchased Assets, Seller shall
deliver to Buyer the following:
(a) the Collateral Agreements together with each document to be
delivered thereunder;
(b) Required Consents theretofore obtained by Seller;
(c) an opinion or opinions of Counsel for Seller, dated the Closing
Date, with respect the matters described in Sections 3.1, 3.2, and 3.3(a) in a
form and subject to such exceptions as are customary for Transactions similar to
those contemplated hereby, which form shall be reasonably acceptable to Buyer;
(d) a certificate of an appropriate officer of Seller, dated the
Closing Date, certifying to the best of his or her Knowledge the fulfillment of
the conditions set forth in Sections 8.2(a) and (b);
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(e) bills of sale, assignments and such other instruments of
assignment, transfer or conveyance as Buyer may reasonably request or as may be
otherwise necessary to evidence and effect the sale, transfer, assignment,
conveyance and delivery of the Purchased Assets to Buyer and to put Buyer in
actual possession or control of the Purchased Assets.
7.2 DELIVERIES BY BUYER
On the Closing Date, Buyer shall deliver to Seller the following:
(a) the Purchase Price as provided in Section 2.3;
(b) the Collateral Agreements together with each document to be
delivered thereunder;
(c) an opinion or opinions of Counsel for Buyer, dated the Closing
Date, with respect to the materials described in Sections 4.1, 4.2, and 4.3(a)
in a form and subject to such exceptions as are customary for transactions
similar to those contemplated hereby which form shall be reasonably acceptable
to Seller;
(d) a certificate of an appropriate officer of Buyer, dated the Closing
Date, certifying to the best of his or her Knowledge the fulfillment of the
conditions set forth in Sections 8.3(a) and (b);
(e) all such other documents and instruments as Seller may reasonably
request or as may be otherwise necessary or desirable to evidence and effect the
assumption by Buyer of the Assumed Liabilities; and
(f) a certificate of the Secretary certifying that this Agreement, the
Collateral Agreements and the consummation of the transactions contemplated
hereby and thereby have been authorized pursuant to resolutions duly and validly
adopted by the Board of Directors of Seller.
7.3 CLOSING DATE
Subject to the terms and conditions set forth herein, the Closing shall
take place upon the execution and delivery of this Agreement and all acts and
deliveries prescribed by this Article 7 (such date and time being referred to
herein as the "Closing Date").
7.4 CONTEMPORANEOUS EFFECTIVENESS
All acts and deliveries prescribed by this Article 7, regardless of
chronological sequence, will be deemed to occur contemporaneously and
simultaneously on the occurrence of the last act or delivery, and none of such
acts or deliveries will be effective until the last of the same has occurred.
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8. CONDITIONS PRECEDENT TO CLOSING
8.1 GENERAL CONDITIONS
The respective obligations of Buyer and Seller to effect the Closing of
the transactions contemplated hereby are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:
(a) No Injunctions. No order of any court or administrative agency
shall be in effect that enjoins, restrains, conditions or prohibits consummation
of this Agreement or the Collateral Agreements.
(b) Antitrust Laws. Any applicable waiting period under the HSR Act or
other applicable antitrust Laws relating to the transactions contemplated by
this Agreement or the Collateral Agreements shall have expired or been
terminated.
8.2 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Buyer:
(a) Representations and Warranties of Seller True at Closing. The
representations and warranties of Seller contained in this Agreement or in any
schedule, certificate or document delivered pursuant to the provisions hereof or
in connection with the transactions contemplated hereby shall be true and
correct when made and at and as of the Closing Date, with the same force and
effort as though such representations and warranties were made at and as of such
time, except that, to the extent that such representations and warranties are
made as of a specified date, in which case such representations and warranties
shall be true as of the specified date, except in each case where the failure of
any such representations and warranties, not already qualified as to materiality
or "Material Adverse Effect", to be true and correct, individually or in the
aggregate, on any such date would not be reasonably likely to have a Material
Adverse Effect.
(b) Performance by Seller. Seller shall have performed in all material
respects all obligations and agreements and complied in all material respects
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing, including executing the
Collateral Agreements.
(c) Seller shall have delivered to Buyer, each of the documents and
instruments required to be delivered under Section 7.1.
8.3 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of Seller to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Seller:
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(a) Representations and Warranties of Buyer True at Closing. The
representations and warranties of Buyer contained in this Agreement or in any
certificate or document delivered pursuant to the provisions hereof or in
connection with the transactions contemplated hereby shall be true and correct
when made and at and as of the Closing Date with the same force and effect as
though such representations and warranties were made at and as of such time,
except to the extent that such representations and warranties are made as of a
specified date, in which case such representations and warranties shall be true
as of the specified date except in each case where the failure of any such
representations and warranties to be true and correct, individually or in the
aggregate, in any such date would not reasonably likely have a Material Adverse
Effect.
(b) Performance by Buyer. Buyer shall have performed in all material
respects all obligations and agreements and complied in all material respects
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing, including executing the
Collateral Agreements.
(c) Buyer shall have delivered to Seller, each of the documents and
instruments required to the delivered under Section 7.2.
9. STATUS OF AGREEMENTS
The rights and obligations of Buyer and Seller under this Agreement
shall be subject to the following terms and conditions:
9.1 EFFECT OF BREACH
In the event of a failure to satisfy the conditions specified in
Sections 8.2(a) and (b) that is known by the Buyer prior to Closing and that
cannot be or is not cured by Seller upon prior notice and the passage of a
reasonable period of time, the Buyer may elect not to proceed with the Closing
hereunder, which, except as provided in Section 11.2, shall be the Buyer's sole
remedy in such case.
9.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties of Buyer and Seller contained in
this Agreement shall survive the Closing for a period of two (2) years following
the Closing Date. An Indemnified Party shall have no right to bring a claim for
Indemnification pursuant to Section 9.3(a) unless the Indemnified party shall
have given to the Indemnifying Party a notice of such claim prior to the
expiration of this survival period.
9.3 GENERAL AGREEMENT TO INDEMNIFY
(a) Seller and Buyer shall indemnify, defend and hold harmless the
other party hereto, any Affiliate thereof, and any director, officer or employee
of such party or Affiliate thereof from and against any and all claims, actions,
suits, proceedings, liabilities, obligations, losses, and damages, amounts paid
in settlement, interest, costs and expenses (including reasonable attorney's
fees, court costs and other out-of-pocket expenses incurred in investigating,
preparing or defending the foregoing) (collectively, "Losses") incurred or
suffered by any Indemnified Party to the extent that the Losses arise by reason
of, or result from (i) a breach of any representation or warranty of
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such party contained in this Agreement, or (ii) a breach by or any failure to
perform by such party of any covenant or agreement of such party contained in
this Agreement to the extent not waived by the other party.
(b) Seller further agrees to indemnify and hold harmless Buyer from and
against any Losses incurred by Buyer arising out of, resulting from, or relating
to: (i) the Excluded Liabilities; (ii) Buyer's waiver of any applicable Bulk
Sales Laws; (iii) any claim, demand or liability for Taxes imposed on the Buyer
for which Seller is responsible pursuant to Section 2.7; (iv) any claims of any
Business Employee employed by Buyer in connection with any Benefit Plan of
Seller or such Business Employee's employment with Seller accruing prior to and
including the Closing Date.
(c) Buyer further agrees to indemnify and hold harmless Seller with
respect to: (i) any failure of Buyer to discharge any of the Assumed
Liabilities; and (ii) any claim, demand or liability for Taxes imposed on Seller
for which Buyer is responsible pursuant to Section 2.7;
(d) Amounts payable in respect of the parties' indemnification
obligations shall be treated as an adjustment to the Purchase Price. Buyer and
Seller agree to cooperate in the preparation of a supplemental Asset Acquisition
Statement as required by Section 5.3 and Treasury Reg. Section 1.1060-1T(e) as a
result of any adjustment to the Purchase Price pursuant to the preceding
sentence. Whether or not the Indemnifying Party (as defined below) chooses to
defend or prosecute any Third-Party Claim (as defined in Section 9.4(a)) both
parties hereto shall cooperate in the defense or prosecution thereof and shall
furnish such records, information and testimony, and attend such conferences,
discovery proceedings, hearings, trials and appeals, as may be reasonably
requested in connection therewith or as provided in Section 5.1.
(e) The amount of the Indemnifying Party's liability under this
Agreement shall be determined taking into account any applicable insurance
proceeds actually received by the Indemnified Party. The Indemnified Party shall
use its reasonable efforts to make insurance claims relating to any claim for
which it is seeking indemnification pursuant to this Section 9.3, provided that
the Indemnified Party shall not be obligated to make such an insurance claim if
the Indemnified Party in its reasonable judgement believes that the cost of
pursuing such an insurance claim together with any corresponding increase in
insurance premiums or other charge backs to the Indemnified Party, as the case
may be, would exceed the value of the claim for which the Indemnified Party is
seeking indemnification. The indemnification obligations of each party hereto
under this Article 9 shall inure to the benefit of the directors, officers and
Affiliates of the other party hereto on the same terms as are applicable to such
other party.
(f) The Indemnifying Party's liability for all losses in respect of
claims made under Section 9.3(a) shall be subject to the following limitations.
No claim under Section 9.3(a) may be made against the Indemnifying Party until
the aggregate amount of the Losses incurred by the Indemnified Party shall
exceed 0.5% of Purchase Price (the "Minimum Threshold"). Once the Minimum
Threshold has been reached, claims under Section 9.3(a) may be made against the
Indemnifying Party, on a dollar for dollar basis, for payment of the amount of
any and all such Losses above the Minimum Threshold up to the limitation
provided in the next sentence of this Section 9.3(f). The Indemnifying Party's
aggregate liability for Losses attributable to all claims under Section 9.3(a)
shall not exceed 15% of Purchase Price. The Indemnified Party may not make a
claim for indemnification under Section 9.3(a) for breach by the Indemnifying
Party of a particular
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representation or warranty after the expiration of the survival period specified
in Section 9.2. The foregoing limitations shall not apply to any claims based on
knowing intentional conduct that would constitute fraud.
(g) The indemnification provided in this Article 9 shall be the sole
and exclusive remedy after the Closing Date for damages available to the parties
to this Agreement for breach of any of the terms, conditions, representations or
warranties contained herein or any right, claim or action arising from the
transactions contemplated by this Agreement; provided, however, this exclusive
remedy for damages does not preclude a party from bringing an action for
specific performance or other equitable remedy to require a party to perform its
obligations under this Agreement or any Collateral Agreement.
(h) Notwithstanding anything contained in this Agreement to the
contrary, no party shall be liable to the other party for indirect, special,
punitive, exemplary or consequential loss or damage arising out of this
Agreement, provided, however, the foregoing shall not be construed to preclude
recovery by the Indemnified Party in respect of Losses directly incurred from
Third-Party Claims. Notwithstanding anything in this Agreement to the contrary,
any liability of the Indemnified Party under this Agreement shall be reduced to
the extent that the Loss suffered by the Indemnified Party in respect of which a
claim is made is the result of any failure by the Indemnified Party, after
Closing, to take responsible steps to mitigate the effect of the Loss concerned,
so long as the Indemnified Party is not obligated to take any action materially
detrimental to the business interests of the Indemnified Party.
(i) The rights to indemnification under Section 9.3 shall not be
subject to set-off for any claim by the Indemnifying Party against any
Indemnified Party, whether or not arising from the same event giving rise to
such Indemnified Party's claim for indemnification.
9.4 GENERAL PROCEDURES FOR INDEMNIFICATION INVOLVING THIRD-PARTIES
(a) In the case of any claim asserted by a Third-Party against a party
entitled to indemnification under this Agreement (the "Indemnified Party") the
Indemnified Party shall promptly notify the party against whom indemnification
is sought (the "Indemnifying Party") of the assertion of any claim, or the
commencement of any action, suit or proceeding by any Third-Party, in respect of
which indemnity may be sought hereunder (a "Third-Party Claim"), and will give
the Indemnifying Party such information with respect thereto as the Indemnifying
Party may reasonably request, but failure to give such notice shall not relieve
the Indemnifying Party of any liability hereunder (unless the Indemnifying Party
has suffered material prejudice by such failure). The Indemnifying Party shall
have the right, but not the obligation, exercisable by written notice to the
Indemnified Party within thirty (30) days of receipt of notice from the
Indemnified Party of the commencement of or assertion of a Third-Party Claim, to
assume the defense and control the settlement of such Third-Party Claim that (i)
involves (and continues to involve) solely money damages, or (ii) involves (and
continues to involve) claims for both money damages and equitable relief against
the Indemnified Party that cannot be severed, where the claims for money damages
are the primary claims asserted by the Third-Party and the claims for equitable
relief are incidental to the claims for money damages.
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(b) The Indemnifying Party or the Indemnified Party, as the case may
be, shall have the right to participate in (but not control), at its own
expense, the defense of any Third-Party Claim that the other is defending, as
provided in this Agreement.
(c) The Indemnifying Party, if it has assumed the defense of any
Third-Party Claim as provided in this Agreement, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third-Party
Claim without the Indemnified Party's prior written consent (which consent shall
not be unreasonably withheld) unless such settlement or judgment relates solely
to monetary damages. The Indemnifying Party shall not, without the Indemnified
Party's prior written consent, enter into any compromise or settlement that (i)
commits the Indemnified Party to take, or to forbear to take, any action, or
(ii) does not provide for a complete release by such Third-Party of the
Indemnified Party. The Indemnified Party shall have the sole and exclusive right
to settle any Third-Party Claim, on such terms and conditions as it deems
reasonably appropriate, to the extent such Third-Party Claim involves equitable
or other non-monetary relief against the Indemnified Party, and shall have the
right to settle any Third-Party Claim involving money damages for which the
Indemnifying Party has not assumed the defense pursuant to this Section 9.4 with
the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
(d) In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written notice of
such claim to the Indemnifying Party. Such notice shall specify the basis for
such claim. As promptly as possible after the Indemnified Party has given such
notice, and subject to the limitations set forth in Section 9.3, the Indemnified
Party and the Indemnifying Party shall establish the merits and amount of such
claim in accordance with the procedures in Section 9.5.
9.5 RESOLUTION OF CLAIMS
The parties shall undertake, in good faith, to resolve any dispute
between the parties with respect to any claim. If informal procedures prove to
be ineffective, the parties shall refer the dispute to non-binding mediation in
accordance with the applicable rules of the American Arbitration Association. If
the parties are unable to agree on a resolution of the dispute either through
mediation or other channels within a reasonable time period, the respective
rights of the parties shall be determined in accordance with the rules of the
American Arbitration Association via binding arbitration, unless the issue of
Seller's or Buyer's indemnification obligation hereunder has been or will be
decided in litigation involving a Third-Party Claim in which Seller and Buyer
are each parties. The arbitration shall be conducted in New York by three
arbitrators, each of whom shall have experience reasonably related to the
software field. Buyer and Seller each shall have the right to designate one of
the arbitrators. The third arbitrator shall be designated by mutual agreement of
the parties or, if they cannot agree, by mutual agreement of the two
arbitrators. The decision of the arbitrators in any arbitration pursuant hereto
will be final and binding upon the parties, and the judgment of a court of
competent jurisdiction may be entered thereon. Fees of the arbitrators and costs
of arbitration shall be borne by the parties in such manner as shall be
determined by the arbitrators.
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10. MISCELLANEOUS PROVISIONS
10.1 NOTICES
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given upon receipt if (i) mailed by certified
or registered mail, return receipt requested, (ii) sent by Federal Express or
other express carrier, fee prepaid, (iii) sent via facsimile with receipt
confirmed, or (iv) delivered personally, addressed as follows or to such other
address or addresses of which the respective party shall have notified the
other.
(a) If to Seller, to: Lucent Technologies Inc.
Attn: President, Networking Operations Systems
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: To be provided separately
With a copy to:
Lucent Technologies Inc.
Attn: Senior Vice President and General Counsel
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: To be provided separately
(b) If to Buyer, to:
Tollgrade Communication, Inc.
Attn: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ of America
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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10.2 EXPENSES
Except as otherwise provided in this Agreement, each party to this
Agreement will bear all the fees, costs and expenses that are incurred by it in
connection with the transactions contemplated hereby, whether or not such
transactions are consummated.
10.3 ENTIRE AGREEMENT; MODIFICATION
The agreement of the parties, which is comprised of this Agreement, the
Schedules and Exhibits hereto and the Collateral Agreements, sets forth the
entire agreement and understanding between the parties and supersedes any prior
agreement or understanding, written or oral, relating to the subject matter of
this Agreement. With respect to Purchased Assets, the Business, or any other
rights or obligations to be transferred hereunder or pursuant hereto, no party
has been induced by or has relied upon any representations, warranties, or
statements, whether express or implied, made by any other party, its agents,
employees, attorneys or other representatives or by any Person representing or
purporting to represent the other party that are not expressly set forth in this
agreement or the Collateral Agreements (including the Schedules and exhibits
hereto and thereto), whether or not any such representations, warranties or
statements where made in writing or orally. No amendment, supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby, and in accordance with Section 11.4.
10.4 ASSIGNMENT; BINDING EFFECT; SEVERABILITY
This Agreement may not be assigned by any party hereto without the
other party's written consent, except that Buyer may assign the Purchased Assets
to its wholly-owned subsidiary Tollgrade Acquisition Company, a Delaware
corporation. This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of each party hereto. The provisions of
this Agreement are severable, and in the event that any one or more provisions
are deemed illegal or unenforceable the remaining provisions shall remain in
full force and effect.
10.5 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK IRRESPECTIVE OF THE CHOICE OF
LAWS PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS
OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.
10.6 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.7 PUBLIC ANNOUNCEMENT
Upon signing of this Agreement, Seller and Buyer shall prepare a
mutually agreeable release announcing the transaction contemplated hereby.
Except for such press release, neither Seller nor
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Buyer shall, without the approval of the other, make any press release or other
announcement concerning the existence of this Agreement or the terms of the
transactions contemplated by this Agreement, except as and to the extent that
any such party shall be so obligated by Law, in which case the other party shall
be advised and the parties shall use their reasonable commercial efforts to
cause a mutually agreeable release or announcement to be issued; provided,
however, that the foregoing shall not preclude communications or disclosures
necessary to comply with accounting, stock exchange or Federal securities law
disclosure obligations.
10.8 NO THIRD-PARTY BENEFICIARIES
Nothing in this Agreement, express or implied, is intended to or shall
(a) confer on any Person other than the parties hereto and their respective
successors and permitted assigns any rights (including Third-Party beneficiary
rights), remedies, obligations or liabilities under or by reason of this
Agreement, or (b) constitute the parties hereto as partners or as participants
in a joint venture. This Agreement shall not provide Third-Parties with any
remedy, claim, liability, reimbursement, cause of action or other right in
excess of those existing without reference to the terms of this Agreement.
Nothing in this Agreement shall be construed as giving to any Business Employee,
or any other individual, any right or entitlement under any Benefit Plan, policy
or procedure maintained by Seller, except as expressly provided in such Benefit
Plan, policy or procedure. No Third-Party shall have any rights under Section
502, 503 or 504 of ERISA or any regulations thereunder because of this Agreement
that would not otherwise exist without reference to this Agreement. No
Third-Party shall have any right, independent of any right that exist
irrespective of this Agreement, under or granted by this Agreement, to bring any
suit at law or equity for any matter governed by or subject to the provisions of
this Agreement.
11. TERMINATION AND WAIVER
11.1 TERMINATION
This Agreement may be terminated at any time prior to the Closing Date
by:
(a) Mutual Consent. The mutual written consent of Buyer and Seller;
(b) Court or Administrative Order. Buyer or Seller if there shall be in
effect a non-appealable order of a court or government administrative agency of
competent jurisdiction prohibiting the consummation of the transactions
contemplated hereby.
(c) Delay. The Buyer or Seller if the Closing shall not have occurred
by January 31, 2002, provided that the terminating party is not otherwise in
material default or breach of this Agreement.
(d) Buyer Conditions to Close. By Buyer on the Closing Date if any of
the conditions in Section 7.1 have not been met or waived.
(e) Seller Conditions to Close. By Seller on the closing Date if any of
the conditions in Sections 7.2 have not been met or waived.
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11.2 EFFECT OF TERMINATION
In the event of the termination of this Agreement in accordance with
Section 11.1, this Agreement shall become void and have no effect, without any
liability on the part of any party or its directors, officers or stockholders,
except for the obligations of the parties hereto as provided in Article 6,
Sections 10.2 and 10.7 and this Section 11.2.
11.3 WAIVER OF AGREEMENT
Any term or condition hereof may be waived at any time prior to the
Closing Date by the party hereto which is entitled to the benefits thereof by
action taken by its Board of Directors or its duly authorized officer or
employee, whether before or after the action of such party; provided, however,
that such action shall be evidenced by a written instrument duly executed on
behalf of such party by its duly authorized officer or employee. The failure of
either party to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision nor shall it in any way affect the
validity of this Agreement or the right of such party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement shall be
held to constitute a waiver of any other or subsequent breach.
11.4 AMENDMENT OF AGREEMENT
This Agreement may be amended with respect to any provision contained
herein at any time prior to the Closing Date by action of the parties hereto
taken by their Boards of Directors or by their duly authorized officers or
employees, whether before or after such party's action; provided, however, that
such amendment shall be evidenced by a written instrument duly executed on
behalf of each party by its duly authorized officer or employee.
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IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed on its behalf by its duly authorized officer as of the date first
written above.
LUCENT TECHNOLOGIES INC.
By:
-------------------------------------
Name:
Title:
TOLLGRADE COMMUNICATIONS, INC.
By:
-------------------------------------
Name:
Title:
Exhibit A Form of Assignment and ▇▇▇▇ of Sale
ASSIGNMENT AND ▇▇▇▇ OF SALE
FOR GOOD AND SUFFICIENT CONSIDERATION, the receipt of which is hereby
acknowledged, LUCENT TECHNOLOGIES INC., a Delaware corporation ("Seller"), by
these presents GRANTS, BARGAINS, SELLS, TRANSFERS, ASSIGNS, CONVEYS AND DELIVERS
to TOLLGRADE COMMUNICATIONS, INC., a Pennsylvania corporation ("Buyer"), all
right, title and interest in and to all of the Purchased Assets, as that term is
defined in the Asset Purchase Agreement by and between Seller and Buyer, dated
as of _________ ___, 2001 (the "Agreement") but excluding the Excluded Assets,
in accordance with, and subject to, the terms and conditions of the Agreement,
which are incorporated herein by reference. Capitalized terms used but not
defined herein shall have the meanings provided in the Agreement.
Seller, for itself, its Affiliates, and its successors and assigns,
hereby covenants and agrees that, at any time and from time to time forthwith
upon the written request of Buyer, Seller will do, or cause its Affiliates to,
execute, acknowledge and deliver or cause to be done, executed, acknowledged and
delivered, each and all of such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may reasonably be required by
Buyer or as required pursuant to the Agreement in order to assign, transfer, set
over, convey, assure and confirm unto and vest in Buyer, its successors and
assigns, title to the Purchased Assets sold, assigned, conveyed, transferred and
delivered by this Assignment and ▇▇▇▇ of Sale.
This Assignment and ▇▇▇▇ of Sale is subject to the terms and conditions
of the Agreement, which are incorporated herein by reference, and shall be
binding upon Seller and Buyer, and their respective successors and assigns.
THIS ASSIGNMENT AND ▇▇▇▇ OF SALE SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK IRRESPECTIVE OF
THE CHOICE OF LAWS PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS,
INCLUDING MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE
AND REMEDIES.
Date: __________ __, 2001 LUCENT TECHNOLOGIES INC.
By:
-------------------------------------
Name:
Title:
Exhibit B Form of Assumption Agreement
ASSUMPTION AGREEMENT
Pursuant to that certain Asset Purchase Agreement dated as of _______
__, 2001 (the "Agreement"), by and between LUCENT TECHNOLOGIES INC., a Delaware
corporation ("Seller"), and TOLLGRADE COMMUNICATIONS, INC., a Pennsylvania
corporation ("Buyer"), FOR GOOD AND SUFFICIENT CONSIDERATION, the receipt of
which is hereby acknowledged, Buyer hereby ACCEPTS, ASSUMES AND AGREES TO PAY,
PERFORM OR OTHERWISE DISCHARGE the Assumed Liabilities, but excluding the
Excluded Liabilities, in accordance with, and subject to, the terms and
conditions of the Agreement, which are incorporated herein by reference.
Capitalized terms used but not defined herein shall have the meanings provided
in the Agreement.
This Assumption Agreement is subject to the terms and conditions of the
Agreement, which are incorporated herein by reference, and shall be binding upon
Seller and Buyer, and their respective successors and assigns.
THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK IRRESPECTIVE OF
THE CHOICE OF LAWS PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS,
INCLUDING MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE
AND REMEDIES.
Date: __________ __, 2001 TOLLGRADE COMMUNICATIONS, INC.
By:
-------------------------------------
Name:
Title:
Exhibit C Form of Intellectual Property Agreement
Exhibit D Form of Transition Services Agreement
Exhibit E Form of Supply Agreement
Exhibit F Form of Subcontracted Services Agreement