EXHIBIT 2.1
-----------
Portions of this Exhibit are omitted and were filed separately with the
Secretary of the Commission pursuant to the Company's application requesting
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
HP Confidential
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
dated
October 9, 1998
by and between
HEWLETT-PACKARD COMPANY
and
POWERWAVE TECHNOLOGIES, INC.
TABLE OF CONTENTS
ARTICLE 1 ASSETS AND LIABILITIES BEING PURCHASED AND ASSUMED 1
1.1 Purchased Assets 1
1.2 Excluded Assets 2
1.3 License Grant to Buyer 2
1.4 Product Supply Agreement 2
1.5 Real Property Purchase Agreement 3
1.6 Transition Services Agreement 3
ARTICLE 2 OBLIGATIONS BEING ASSUMED; LIABILITIES NOT BEING ASSUMED 3
2.1 Assumed Obligations 3
2.2 Liabilities Not Being Assumed 4
2.3 Taxes 4
ARTICLE 3 PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE 4
3.1 Purchase Price; Payment 4
3.2 Allocation of Purchase Price 5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF SELLER 5
4.1 Authority and Binding Effect 5
4.2 Organization and Standing 6
4.3 Business Financial Information 6
4.4 Absence of Certain Changes 6
4.5 The Purchased Assets 7
4.6 Assigned Contracts; All Contracts 7
4.7 Intellectual Property 8
4.8 Conflicts 9
4.9 Customers and Suppliers 10
4.10 Product Warranties and Liabilities 10
4.11 Insurance 10
4.12 Compliance with Laws/Permits 10
4.13 Taxes and Tax Returns 11
4.14 Litigation and Proceedings 11
4.15 Operational Restrictions 12
4.16 No Broker 12
4.17 Representations and Warranties of Seller 12
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER 12
5.1 Authority and Binding Effect 12
5.2 Organization 12
5.3 No Conflicts 13
5.4 Broker 13
5.5 Financial Resources 13
ARTICLE 6 CONDUCT OF BUSINESS PENDING THE CLOSING 13
6.1 Access 13
6.2 Conduct of Seller's Business 13
ARTICLE 7 OBLIGATIONS SURVIVING THE DATE OF THIS AGREEMENT AND
THE CLOSING DATE 15
7.1 Consents to Assignment; Termination of Encumbrances 15
7.2 Further Assurances 16
7.3 Expenses 16
7.4 Taxes 16
7.5 Non-Competition and Non-Solicitation 16
7.6 SEC Financial Statements 17
7.7 Delivery of Purchased Assets 17
7.8 Accounting System 18
7.9 Risk of Loss 18
7.10 Purchased Assets on Leased Property 18
7.11 FTO Transfer 18
7.12 [*] 18
7.13 Inventory and Purchase Price Adjustment 20
ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND WARRANTIES 20
ARTICLE 9 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BUYER 20
9.1 Representations and Warranties 20
9.2 Absence of Material Litigation 20
9.3 Performance of Obligations 20
9.4 No Material Adverse Change 20
9.5 Certificates 20
9.6 Delivery of Additional Instruments 21
9.7 Real Property Purchase 21
9.8 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 21
9.9 Approval of Board of Directors 21
9.10 Continuity of Business 21
9.11 Financing 21
__________
[*] Confidential Treatment Requested.
ARTICLE 10 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER 22
10.1 Representations and Warranties 22
10.2 Absence of Material Litigation 22
10.3 Performance of Obligations 22
10.4 Certificates 22
10.5 Delivery of Additional Instruments 22
10.6 Approval of Executive Committee of the Board of Directors 22
10.7 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 22
iii
ARTICLE 11 THE CLOSING 23
11.1 Closing Deliveries of Seller 23
11.2 Closing Certificates of Buyer 23
ARTICLE 12 TERMINATION 23
12.1 Methods of Termination 23
12.2 Procedure upon Termination 23
ARTICLE 13 INDEMNIFICATION 24
13.1 Indemnification by Seller 24
13.2 Indemnification by Buyer 25
13.3 Notice of Claim 25
13.4 First Party Claims 26
13.5 Third Party Claims 26
13.6 Settlement of Third Party Claims 26
13.7 Cooperation 26
13.8 Monetary Limit on Indemnification 26
13.9 Exclusivity 27
13.10 Taxes and Insurance 27
13.11 No Consequential Damages 27
ARTICLE 14 CONFIDENTIALITY 27
14.1 Confidentiality 27
14.2 Public Announcements 27
ARTICLE 15 MISCELLANEOUS 27
15.1 Assignment 27
15.2 Severability 27
15.3 Governing Law 27
15.4 Entire Agreement; Amendment 27
15.5 Waiver 28
15.6 Interpretation; Headings 28
15.7 Counterparts 28
15.8 Dispute Resolution 28
15.9 Notices 28
15.10 Amendment and Restatement of Original Agreement 29
ARTICLE 16 DEFINITIONS 29
iv
SCHEDULES
1.1(a) Capital Equipment
1.1(b) Expensed Assets
1.1(c) Assigned Contracts
1.1(d) Technical Documentation
1.1(l) Licenses and Permits
1.2 Excluded Assets
2.1 Assumed Obligations
2.2(h) [*]
4 Seller's Disclosure Schedule
5 Buyer's Disclosure Schedule
7.11 FTO Transfer
7.13 Post-Closing Inventory
EXHIBITS
A License Agreement
B Product Supply Agreement
C Purchase and Sale Agreement and Joint Escrow Instructions
D Transition Services Agreement
E Allocation of Purchase Price
F SEC Financial Statements
G Form of ▇▇▇▇ of Sale and Assumption Agreement
H-1 Form of Opinion of Seller's Counsel
H-2 Form of Opinion of Buyer's Counsel
I New Confidential Disclosure Agreement
__________
[*] Confidential Treatment Requested.
v
HP Confidential
AMENDED AND RESTATED
ASSET PURCHASE AGREEMENT
THIS AMENDED AND RESTATED ASSET PURCHASE AGREEMENT (the "Agreement") is
made October 9, 1998, by and between Hewlett-Packard Company, a Delaware
corporation ("Seller"), and Powerwave Technologies, Inc., a Delaware corporation
("Buyer").
RECITALS
WHEREAS, Seller is engaged in the business of designing, manufacturing and
servicing products and systems for measurement, computation and communications;
and
WHEREAS, Seller desires to sell certain assets, operations and business
related to its business of designing, manufacturing and marketing radio
frequency power amplifiers for use in the communications infrastructure market
which includes cellular, personal communications systems ("PCS"), specialty
mobile radio ("SMR") systems, fixed wireless access ("FWA") systems, radio in
the local loop ("RLL") systems and wireless in the local loop ("WLL") systems
(collectively, the "Business"); and
WHEREAS, subject to the terms and conditions of this Agreement, Buyer
desires to purchase and Seller desires to sell and transfer to Buyer the assets,
operations and business that constitute the Business as described herein; and
WHEREAS, Seller and Buyer entered into that certain Asset Purchase
Agreement, dated August 31, 1998 (the "Original Agreement") with respect to the
purchase, sale and transfer of the Business referred to above; and
WHEREAS, Seller and Buyer now desire to amend and restate the Original
Agreement as provided herein;
NOW, THEREFORE, in consideration of the terms, covenants, and conditions
hereinafter set forth, the parties hereto agree as follows:
Article 1 Assets and Liabilities Being Purchased and Assumed.
1.1 Purchased Assets. Subject to the terms and conditions of this
----------------
Agreement, Buyer hereby agrees to purchase from Seller, and Seller hereby agrees
to sell, convey,
1
transfer and assign to Buyer, on the Closing Date, all of the assets, properties
and rights set forth or described in Sections 1.1(a)-(l) inclusive
(collectively, the "Purchased Assets"), which shall consist of the following:
(a) Seller's capital equipment that is listed on Schedule 1.1(a)
---------------
attached hereto (the "Capital Equipment");
(b) Seller's personal property and office equipment that are listed
on Schedule 1.1(b) attached hereto (the "Expensed Assets");
---------------
(c) All of Seller's rights and benefits under the agreements,
contracts, licenses, instruments, commitments and understandings, written or
oral that are listed (or, in the case of oral agreements or understandings,
that are described) under the caption "Assigned Contracts" in Schedule 1.1(c)
---------------
attached hereto;
(d) The technical and descriptive materials, drawings, schematics and
blueprints (other than those materials held as inventory) relating to the
Business as listed on Schedule 1.1(d) attached hereto (the "Technical
---------------
Documentation");
(e) All rights of Seller in and to the customer and client lists,
vendor lists, catalogues, data relating to vendors, promotion lists and
marketing data and other compilations of names and requirements relating to the
Business;
(f) All rights of Seller in and to the computer programs, product
designs, manufacturing processes, Technical Documentation, trade secrets and
know how related to the Business, other than the Licensed Intellectual Property
Rights (the "Proprietary Materials");
(g) All of Seller's right, title and interest in and to the real
property located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, together with
all fixtures and other improvements located thereon or affixed thereto (the
"Folsom Real Property"), pursuant to the terms of the Real Property Purchase
Agreement;
(h) All raw material, work-in-process and finished goods inventories,
materials and supplies of Seller relating to the Business (the "Inventory");
(i) All available ordinary and customary accounting records in
support of the SEC Financial Statements, including order, shipment, material,
standard cost, warranty, department expense and general ledger records necessary
for Buyer to continue to operate the Business after the Closing;
(j) Any cause of action, claim, suit, proceeding, judgment or demand,
of any nature, of or held by Seller against any third parties arising out of the
Business;
2
(k) All goodwill associated with the Business and the Purchased
Assets, including all of the Intangible Property Rights; and
(l) All rights in and to the governmental and private permits,
licenses, certificates of occupancy, franchises and authorizations listed on
Schedule 1.1(l) attached hereto, to the extent assignable, used in or relating
---------------
to the Folsom Real Property, the Business or the Purchased Assets.
The Purchased Assets shall not include, and Seller shall retain, the
Excluded Assets.
1.2 Excluded Assets. Seller shall retain all right, title and interest to
---------------
and in and shall not sell, transfer, assign, convey or deliver to Buyer, and
Buyer shall not purchase from Seller, any Excluded Assets. "Excluded Assets"
shall mean all assets of Seller that are not Purchased Assets, including,
without limitation, the assets and information reflected on Schedule 1.2
------------
attached hereto.
1.3 License Grant to Buyer. On the Closing Date, Seller and Buyer shall
----------------------
enter into the License Agreement in substantially the form of Exhibit A attached
---------
hereto (the "License Agreement").
1.4 Product Supply Agreement. On the Closing Date, Seller and Buyer shall
------------------------
enter into the Product Supply Agreement in substantially the form of Exhibit B
---------
attached hereto (the "Product Supply Agreement").
1.5 Real Property Purchase Agreement. On August 31, 1998, Seller and
--------------------------------
Buyer entered into the Purchase and Sale Agreement and Joint Escrow Instructions
in the form of Exhibit C attached hereto (the "Real Property Purchase
----------
Agreement").
1.6 Transition Services Agreement. On the Closing Date, Seller and Buyer
-----------------------------
shall enter into the Transition Services Agreement in substantially the form of
Exhibit D attached hereto (the "Transition Services Agreement").
---------
Article 2. Obligations Being Assumed; Liabilities Not Being Assumed.
2.1 Assumed Obligations. Buyer hereby agrees to assume only: (a) those
-------------------
liabilities and obligations specifically set forth in Schedule 2.1 hereto; (b)
------------
those executory obligations arising after the Closing Date under the Assigned
Contracts; (c) as set forth in Schedule 7.11, the aggregate amount of FTO
-------------
transferred by Seller employees to Buyer pursuant to Section 7.11; and (d)
subject to Section 2.2(h) below, any claims brought under any Warranties or any
other Claims relating to products sold by the Business that are outstanding as
of the Closing Date or that are brought after the Closing Date, including
3
without limitation any Claims relating to [*] Section [*] below (collectively,
"[*]") that are outstanding as of the Closing Date or that are brought after the
Closing Date (the liabilities, obligations and claims referred to in clauses
2.1(a), (b), (c) and (d) are referred to herein collectively as the "Assumed
Obligations"). The Assumed Obligations shall not include any obligations or
liabilities arising out of any act or omission or default of Seller under any
Assigned Contract, regardless of when such liability or obligation is asserted.
2.2 Liabilities Not Being Assumed. Except for the Assumed Obligations,
-----------------------------
Seller agrees that Buyer shall not be obligated to assume or perform and is not
assuming or performing any liabilities or obligations of Seller, whether known
or unknown, fixed or contingent, certain or uncertain, and regardless of when
such liabilities or obligations may arise or may have arisen or when they are or
were asserted (the "Retained Liabilities"), and Seller shall remain responsible
for all Retained Liabilities, which shall include, without limitation, any and
all of the following obligations or liabilities of Seller:
(a) Any compensation or benefits payable to present or past employees
of Seller, including without limitation, any liabilities arising under any
employee pension or profit sharing plan or other employee benefit plan and any
of Seller's obligations for vacation, holiday or sick pay;
(b) All federal, state, local, foreign or other Taxes (i) that have
arisen prior to the Closing Date or may arise thereafter out of the Business,
and (ii) for which Seller is or, at any time hereafter, may become liable;
provided, however, that the Retained Liabilities shall not include any Taxes
arising out of the conduct by Buyer, after the Closing Date, of the Business.
(c) Any Encumbrances on any of the Purchased Assets and all
obligations and liabilities secured thereby that are not set forth on Schedule
--------
2.1 hereto;
---
(d) All obligations of Seller, either for borrowed money or incurred
in connection with the purchase, lease or acquisition of any assets, that are
not set forth on Schedule 2.1 hereto;
------------
(e) Any accounts or notes payable of Seller;
(f) Any claims, demands, actions, suits or legal proceedings that
have been asserted or threatened prior to the Closing Date against Seller, the
Business or the Purchased Assets or which may be threatened hereafter against
the Purchased Assets, the Business or Buyer that arises in any way from or in
connection with (i) Seller's operation of the Business prior to the Closing
Date, or (ii) any other business or non-business activities of Seller conducted
prior hereto or hereafter, including, without limitation, those
__________
[*] Confidential Treatment Requested.
4
legal actions or other proceedings set forth in Seller's Disclosure Schedule;
----------------------------
(g) Any obligations under any employment, consulting or non-
competition agreement, whether written or oral, that is not listed on Schedule
--------
2.1 and any liabilities or obligations arising out of the termination by Seller
---
of any of its employees in anticipation or as a consequence of, or following,
consummation of the transactions contemplated hereby; and
(h) [*] described in Schedule 2.2(h) attached hereto (collectively,
---------------
[*]).
2.3 Taxes.
-----
(a) Except as set forth in the Real Property Purchase Agreement,
Buyer shall pay all applicable Taxes and all recording and filing fees, whether
levied on Seller or Buyer, that are payable by reason of the sales, transfers,
leases, rentals, licenses, and assignments contemplated hereby, except for
Seller's income and capital gains taxes or franchise or other taxes based on
Seller's 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.
Article 3. Purchase Price and Allocation of Purchase Price.
3.1 Purchase Price.
--------------
(a) The consideration for the sale to Buyer of the Purchased
Assets, the covenant not to compete set forth in Section 7.5 below, the license
granted to Buyer pursuant to the License Agreement and Seller's entering into
the other Principal Agreements shall be the sum of sixty million dollars
($60,000,000), subject to adjustment pursuant to Section 7.13 below (the
"Purchase Price").
(b) At the Closing, Buyer shall pay to Seller, by wire transfer of
immediately available funds to the following account of Seller: Bank of America
ABA #▇▇▇▇▇▇▇▇▇ (domestic transfer to credit to the account of Hewlett-Packard
Company), account number 12336-51354, a cash payment equal to the sum of:
(i) sixty million dollars ($60,000,000),
less
__________
[*] Confidential Treatment Requested.
5
(ii) (A) the amount set forth in Schedule 7.11 equal to the
-------------
aggregate amount of FTO transferred by Seller employees to Buyer pursuant to
Section 7.11;
(B) forty-two thousand two hundred sixty-seven dollars and
twenty-one cents ($42,267.21) equal to the amount of estimated real estate taxes
to be paid by Buyer for the period from July 1, 1998 to the Closing Date with
respect to the Folsom Real Property to be transferred by Seller to Buyer at the
Closing Date pursuant to the Real Property Purchase Agreement; and
(C) two million five hundred thousand dollars ($2,500,000)
(the "Prepayment").
3.2 Allocation of Purchase Price. The Purchase Price shall be allocated
----------------------------
among the Purchased Assets, the covenant not to compete set forth in Section 7.5
below and the Principal Agreements, in the manner set forth in Exhibit E to be
---------
agreed by the parties and attached hereto within sixty (60) days after the
Closing (the "Purchase Price Allocation"). Each of the parties, when reporting
the transactions consummated hereunder in its own Tax Returns, shall allocate
the Purchase Price paid or received, as the case may be, in a manner that is
consistent with the Purchase Price Allocation set forth in Exhibit E hereto.
---------
Additionally, each of the parties will comply with, and furnish the information
required by, Section 1060 of the Internal Revenue Code of 1986, as amended (the
"Code"), and any regulations thereunder.
Article 4. Representations and Warranties of Seller.
Subject to the disclosures and exceptions set forth in the disclosure
schedule delivered by Seller to Buyer attached to the Original Agreement as
Schedule 4, Seller made the representations and warranties set forth hereinafter
----------
in this Section 4 to Buyer as of the date of the Original Agreement, except for
the representations and warranties set forth in Sections 4.1(b) with respect to
the Principal Agreements, 4.5(b), 4.6 and 4.10 and the delivery of certain
Schedules to the disclosure schedule to the Original Agreement (the "Original
Seller's Disclosure Schedule"), which were to be attached to the Original
Agreement after the date thereof. Subject to the disclosures and exceptions set
forth in the disclosure schedule delivered by Seller to Buyer attached hereto as
Schedule 4 ("Seller's Disclosure Schedule"), Seller hereby makes the
----------
representations and warranties set forth hereinafter in this Section 4 to Buyer
as of the date hereof.
4.1 Authority and Binding Effect.
----------------------------
(a) Seller has the full corporate power and authority to execute
and deliver this Agreement and the Principal Agreements. This Agreement and the
Principal Agreements and the consummation by Seller of its obligations contained
herein and
6
therein have been duly authorized by all necessary corporate actions of Seller,
and such agreements have been duly executed and delivered by Seller.
(b) This Agreement is a valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms, and upon execution and
delivery each of the Principal Agreements will be a valid and binding agreement
of Seller, and will be enforceable against it in accordance with its terms, in
each case except as enforceability of the obligations of Seller hereunder and
thereunder may be limited by (i) bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights generally, and (ii) general principles
of equity relating to the availability of equitable remedies (whether such
agreements are sought to be enforced in a proceeding at law or a proceeding in
equity).
(c) Other than Seller's filing under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), it is not necessary for
Seller to take any action or to obtain any approval, consent or release by or
from any third person, governmental or other, to enable Seller to enter into or
perform its obligations under this Agreement or any of the Principal Agreements.
4.2 Organization and Standing.
-------------------------
(a) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and Seller is qualified
to do business in each jurisdiction where it conducts the Business, in which the
character of the properties owned by it in connection with the Business or the
nature of the Business makes such authorization necessary and where the failure
to be so qualified would have a Material Adverse Effect on Seller.
(b) Seller has the requisite corporate power and authority to conduct
the Business as now conducted and to own or lease (as the case may be) the
Purchased Assets, and to use such Purchased Assets in the conduct of the
Business.
When used in this Agreement, the phrases "Material Adverse Effect on
Seller" and "Material Adverse Effect on the Business" shall both mean a
circumstance, state of facts, event, consequence or result that materially and
adversely affects, or could reasonably be expected to affect materially and
adversely the Purchased Assets or the Business, or the financial condition or
operating results of the Business or the ability of Seller to consummate the
transactions which it is required to consummate hereunder; and the phrase
"Material Adverse Effect on Buyer" shall mean a circumstance, state of facts,
event, consequence or result that materially and adversely affects, or could
reasonably be expected to affect materially and adversely the financial
condition or operating results of Buyer or the ability of Buyer to consummate
the transactions which it is required to consummate hereunder.
7
4.3 Business Financial Information. The financial information schedules,
------------------------------
attached to Seller's Disclosure Schedule as Schedule 4.3 (the "Business
---------------------------- ------------
Financial Information") (a) have been compiled from and are in accordance with
Seller's books and records for the Business, and (b) fairly present in all
material respects the directly allocable assets, liabilities, revenues and
expenses of the Business as of the respective dates and for the periods then
ended in accordance with Seller's accounting and financial policies, which
comply with generally accepted accounting principles ("GAAP"). The Business
Financial Information also include certain internal management allocations,
which reflect management's judgment as to the proper apportionment of shared
Seller assets, liabilities and expenses to the Business; provided, however, such
allocations may not be representative of the assets, liabilities and expenses
necessary to operate the Business on a standalone basis.
4.4 Absence of Certain Changes. Since July 31, 1998, there has not been:
--------------------------
(a) Any default or breach, or anticipated default or breach under, or
any amendment, termination or revocation of or, to Seller's Knowledge, any
threatened termination or revocation of, any of the Assigned Contracts;
(b) Any actual or, to Seller's Knowledge, threatened amendment,
termination or revocation of any license, permit or franchise required for the
continued operation by Seller of any material portion of the Business;
(c) Any sale, transfer, or other disposition of, or the incurrence or
imposition of any Encumbrance of any kind on or affecting, any of the Purchased
Assets except (i) licenses, sales or utilization of inventory and obsolete
equipment in the ordinary course of the Business and consistent with past
practices of Seller, and (ii) Encumbrances for current taxes not yet due and
payable;
(d) Any damage, destruction or loss, whether or not covered by
insurance, of any of the Purchased Assets in an amount that exceeds two hundred
thousand dollars ($200,000) or which adversely affects Seller's or Buyer's
ability to continue to conduct the Business in any material respect as the
Business was conducted during the nine-month period ended July 31, 1998;
(e) The entry or violation of any judgment, order, writ or decree
that has had or could reasonably be expected to have a Material Adverse Effect
on Seller or on the Business; or
(f) The occurrence of any other event or circumstance which has had
or could reasonably be expected to have a Material Adverse Effect on Seller or
on the Business.
8
4.5 The Purchased Assets.
--------------------
(a) Capital Equipment. The Capital Equipment are in good working
-----------------
order and condition, ordinary wear and tear excepted, have been properly
maintained, are suitable for the uses for which they are being utilized in the
Business, do not require more than regularly scheduled maintenance in the
ordinary course, consistent with Seller's established maintenance policies, to
keep them in good operating condition and comply with all requirements under
applicable laws, regulations and licenses which govern the use and operation
thereof.
(b) No Leases of Material Tangible Personal Property. Seller does
------------------------------------------------
not lease any material tangible personal property used in the conduct of the
Business.
(c) Inventories. Schedule 4.5(c) to Seller's Disclosure Schedule
----------- -----------------------------------------------
sets forth a list of Inventory relating to the Business as of July 31, 1998,
with a valuation based on Seller's standard practices. All Inventory is of a
quality and quantity usable in the ordinary course of the Business, except for
obsolete items, damaged items and materials at below standard quality, which, in
the aggregate are not material in amount and have been written off or written
down to net realizable value in the Financial Statements.
(d) Title to and Adequacy of Purchased Assets. Seller has, and on
-----------------------------------------
the Closing Date will convey and transfer to Buyer, good, complete and
marketable title to all of the Purchased Assets, free and clear of all
Encumbrances of any nature whatsoever other than the Permitted Encumbrances
described in Section 4.5(d) of Seller's Disclosure Schedule. All of the
----------------------------------------------
Purchased Assets are in the exclusive possession and control of Seller, and
Seller has the unencumbered right to use, and to sell to Buyer in accordance
with the terms and provisions of this Agreement, all of the Purchased Assets
without interference from and free of the rights and claims of others. The
Purchased Assets and the Proprietary Materials constitute all of the assets,
properties, rights, privileges and interests which Seller either owns or
controls, or uses or holds for use exclusively in connection with the Business
and which are necessary for Buyer to own and operate the Business substantially
in the same manner as it has been owned and operated by Seller during the nine-
month period ended July 31, 1998.
4.6 The Assigned Contracts and Other Agreements.
-------------------------------------------
(a) Schedule 1.1(c) contains an accurate and complete list of the
---------------
Assigned Contracts. Seller has furnished to Buyer accurate and complete copies
of all of the Assigned Contracts. Each of the Assigned Contracts is a valid and
binding obligation of Seller and the other parties thereto, enforceable in
accordance with its terms, except as may be affected by bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally and general
principles of equity relating to the availability of equitable remedies. There
have not been any defaults by Seller or, to Seller's Knowledge, defaults
9
or any claims of default or claims of nonenforceability by the other party or
parties under or with respect to any of Assigned Contracts which, individually
or in the aggregate, would have a Material Adverse Effect on the Business, and
there are no facts or conditions to Seller's Knowledge that have occurred or
that are anticipated to occur which, with the passage of time or the giving of
notice, would constitute a default by Seller, or to Seller's Knowledge, by the
other party or parties under any of the Assigned Contracts or would cause a
creation or imposition of any Encumbrance upon any of the Purchased Assets or
otherwise would have a Material Adverse Effect on the Business.
(b) Schedule 4.6(b) to Seller's Disclosure Schedule contains a list
-----------------------------------------------
of all of the contracts, agreements, indentures, notes, leases and other
instruments or commitments, written or oral, which are related to any of the
Purchased Assets, the Assumed Obligations or the Business or the consummation of
the transactions contemplated by this Agreement.
As used in this Agreement, "Seller's Knowledge" shall mean only the
actual knowledge of the following employees of Seller or the knowledge such
employees would reasonably be expected to have: ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
4.7 Intellectual Property.
---------------------
(a) Seller owns all right, title and interest in and to all patents,
patent applications, copyrights, trademarks, trademark applications and trade
secrets, know-how, intellectual property and rights thereto pertaining to the
Business, which consists of the Licensed Intellectual Property Rights and the
Proprietary Materials (collectively, the "Intellectual Property Rights") free
and clear of all Encumbrances (including without limitation any distribution
rights and royalty rights).
(b) Seller has the exclusive right to use, sell, license and dispose
of, and has the right to bring actions for infringement of, all Intellectual
Property Rights.
(c) All of Seller's copyright registrations related to any and all of
Seller's Intellectual Property Rights are valid and in full force and effect.
If the copyright has not been registered, then it is not part of the foregoing
representation. Seller has valid copyrights in all material copyrightable
material used in connection with the Business and included in the Purchased
Assets or the Licensed Intellectual Property Rights whether or not registered
with the U.S. Copyright Office. Consummation of the transactions contemplated
hereby will not alter or impair the validity of any such copyrights or copyright
registrations.
(d) No claims have been asserted against Seller by any person
challenging Seller's use or distribution (including manufacture, marketing
license or sale) of any Intellectual Property Rights or challenging or
questioning the validity or effectiveness of
10
any license or agreement relating thereto. To Seller's Knowledge, there is no
valid basis for any claim of the type specified in this Section 4.7(d).
(e) The execution, delivery and performance of this Agreement and the
transactions contemplated hereby will not (i) breach, violate or conflict with
any instrument, agreement or other right governing any of the Intellectual
Property Rights or portion thereof, (ii) cause the forfeiture or termination, or
give rise to a right of forfeiture or termination, of any Intellectual Property
Rights or portion thereof, (iii) in any way impair the right of Buyer to use
(including distribute, manufacture, marketing, license, sale or other
disposition) any Intellectual Property Rights or portion thereof, or (iv) to
Seller's Knowledge, give rise to any right to bring any action for infringement
of any Intellectual Property Rights or any portion thereof.
(f) To Seller's Knowledge, the operation by Seller of the Business
(including distribution, manufacture, marketing, license or sale) does not
violate, and has not violated, any right of any third party, including, without
limitation, infringement of or misappropriation of intellectual property.
(g) To Seller's Knowledge, no third party is violating, infringing,
or misappropriating any Intellectual Property Right.
(h) To Seller's Knowledge, no party to any contract, commitment or
restriction relating to any Intellectual Property Right intends to cancel,
withdraw, modify or amend such contract.
(i) (i) No third party has any right to manufacture, reproduce,
distribute, sell, sublicense, market or exploit any of the Intellectual Property
Rights or any adaptations, translations, or derivative works based on the
Intellectual Property Rights, or any portion thereof; (ii) Seller has no
agreements, contracts or commitments that provide for the manufacture,
reproduction, distribution, sale, sublicensing, marketing, development,
exploitation or supply by Seller of any Intellectual Property Right or any
adaptation, translation, or derivative work based on the Intellectual Property
Rights, or any portion thereof or otherwise material to the Business; (iii)
Seller has not granted to any third party any exclusive or non-exclusive rights
of any kind with respect to any of the Intellectual Property Rights; and (iv)
Seller has not granted any third party any right to market any product utilizing
any Intellectual Property Right under any "private label" arrangements pursuant
to which Seller is not identified as the source of such goods. Each document or
instrument identified pursuant to this Section 4.7(i) is listed in Schedule 4.7
------------
attached to Seller's Disclosure Schedule and true and correct copies of such
----------------------------------------
documents or instruments have been furnished to Buyer.
(j) Seller has not knowingly altered its data, or any Intellectual
Property Rights, in a manner that may damage data, whether stored in electronic,
optical or
11
magnetic or other form.
(k) Except as set forth herein, Seller makes no representation or
warranty as to the validity or utility of any patents licensed to Buyer under
the License Agreement.
(l) Except as set forth herein, Seller makes no representation or
warranty as to the accuracy or usefulness of the HP Confidential Information (as
defined in the License Agreement) or to the quality of goods to be produced by
Buyer through its operation of the Business after the Closing.
(m) At the Closing Date, Seller hereby gives the representations and
warranties contained in the last sentence of Section 4.7(d) and in Section
4.7(f) after due inquiry. For the purpose of this Section 4.7(m), "due inquiry"
shall mean that Seller, at its expense (i) has conducted an on-line search
within U.S. and foreign patent databases using applicable keyword search
strategies, and (ii) has engaged an independent search firm to conduct an
infringement/freedom to operate search.
4.8 Conflicts. Neither the execution and delivery of nor the consummation
---------
of the transactions contemplated by, this Agreement or the Principal Agreements
will or could result in any of the following:
(a) A default or an event that, with notice or lapse of time, or
both, would be a default, breach or violation of the Certificate of
Incorporation, bylaws or other governing instruments of Seller, or any Assigned
Contract;
(b) The right to terminate any Assigned Contract, or the acceleration
of the maturity of any indebtedness or other obligation of Seller relating to
the Business;
(c) The creation or imposition of any Encumbrance on any of the
Purchased Assets;
(d) The violation or breach of any writ, injunction or decree that
would become or is now applicable to or binding on any of the Purchased Assets
or the Business;
(e) A loss or adverse modification of any license, franchise, permit
or other authorization or right (contractual or other) to operate the Business
or to own any of the Purchased Assets, granted to or otherwise held by Seller or
used in the Business, which would have a Material Adverse Effect on the
Business; or
(f) The right to cease or terminate any other business relationship
or arrangement between Seller and any third party that would have a Material
Adverse Effect on the Business.
4.9 Customers and Suppliers. Schedule 4.9 to Seller's Disclosure Schedule
----------------------- --------------------------------------------
12
contains correct and current lists of (a) Seller's ten (10) largest customers,
in terms of the revenues generated from the conduct of the Business, in the
twelve-month period ended October 31, 1997, and the nine-month period ended
July 31, 1998, showing the approximate aggregate dollar amount of revenues from
each such customer during such periods and the nature of the products licensed
or sold; and (b) the ten (10) largest suppliers of Seller in terms of purchases
made by Seller in connection with the Business during the nine-month period
ended July 31, 1998, showing the approximate aggregate dollar amounts of
purchases by Seller from each such supplier during such periods. To Seller's
Knowledge, none of the customers or suppliers listed in Schedule 4.9 to
---------------
Seller's Disclosure Schedule intends to cease, and there is no event or
----------------------------
circumstance that has occurred during the past twelve (12) months which might
reasonably be expected to cause or lead any such customer or supplier to cease
doing business with Seller, or alter materially the amount of the business that
any of them is presently doing with Seller.
4.10 Product Warranties and Liabilities. Schedule 4.10 to Seller's
---------------------------------- -------------------------
Disclosure Schedule sets forth the current Warranties given or made by Seller
-------------------
relating to the Business. "Warranties" shall mean all obligations to service,
repair, replace, credit or refund based upon or arising out of express and
implied warranties made by Seller in connection with the Business. Schedule
--------
4.10 to Seller's Disclosure Schedule reflects in all material respects all
------------------------------------
Warranties as of the date it is delivered. Seller has not extended or granted
any return rights or given or made any Warranties with respect to the Business
which are currently in effect except for those set forth in Schedule 4.10 to
----------------
Seller's Disclosure Schedule. To Seller's Knowledge, no products relating to the
----------------------------
Business which have been shipped by Seller in a condition that such products
might reasonably be expected to be returned by the customers, or there is no
intention on the part of any customer to return any of Seller's products, except
returns made in the ordinary course of the Business and consistent with the
Warranties and which, in any event, are not, and are not expected to become,
material in amount. To Seller's Knowledge, there is no fact or the occurrence
of any event which might reasonably form the basis of any present or future
claim against Seller, whether or not fully covered by insurance, for liability
on account of negligence or product liability or on account of any Warranties
which would have, individually or in the aggregate, a Material Adverse Effect on
the Business, and adequate reserves will have been set aside in the SEC
Financial Statements for claims relating to Warranties and product returns. Set
forth in Schedule 4.10 to Seller's Disclosure Schedule is a summary of the
---------------------------------------------
average liabilities incurred by Seller with regards to claims made to Seller in
the eighteen-month period ended July 31, 1998 with respect to Warranties or
product returns for all products sold by Seller in the conduct of the Business.
4.11 Insurance. Seller has reasonably self-insured (based on standard
---------
industry practice) or reasonably insured with third party insurers the Purchased
Assets and the Folsom Real Property against loss or damage with all risk
coverage on a replacement cost basis.
13
4.12 Compliance with Law/Permits.
---------------------------
(a) Seller is in compliance with all, and is not in violation of any,
law, ordinance, order, decree, rule or regulation of any governmental agency or
authority, the violation of or noncompliance with which could have a Material
Adverse Effect on the Business. No unresolved (i) charges of violations of laws
or regulations relating to the Business have been made or threatened, (ii)
proceedings or investigations relating to the Business are pending or, to
Seller's Knowledge, have been threatened, and (iii) citations or notices of
deficiency have been issued or have been threatened, against Seller relating to
or arising out of the Business by any governmental authorities, which has had or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, on the Business; and, to Seller's Knowledge, there are
no facts or circumstances upon which any such charges, proceedings,
investigations, or citations or deficiency notices, reasonably may be
instituted, issued or brought hereafter.
(b) Schedule 1.1(l) contains a true, correct and complete list of all
---------------
governmental licenses, permits, authorizations, franchises or certificates or
rights (contractual or other) relating to the Business that are held by Seller
(collectively, "Licenses and Permits"). All of the Licenses and Permits are in
full force and effect at the date hereof. There is no other license, permit,
authorization, franchise, certificate or right to operate the absence of which
has had, or could reasonably be expected to have, a Material Adverse Effect on
the Business. The Business is in compliance with the conditions and
requirements imposed by or in connection with such Licenses and Permits. Seller
has not received any notice, and to Seller's Knowledge there is no reason to
believe, that any governmental authority intends to cancel, terminate or modify
any of such Licenses or Permits or that there are valid grounds for any such
cancellation, termination or modification. Seller has delivered or made
available to Buyer a true, correct and complete copy of the most recent safety
inspection and quality assurance reports prepared by any employees or
consultants of Seller or by any governmental authorities relating to the
Business or the products licensed or sold or the services rendered by Seller in
the Business.
4.13 Taxes and Tax Returns. For purposes of this Agreement (a) the term
---------------------
"Tax" or "Taxes" means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code Section
59A), customs duties, capital stock, franchise, profits, withholding, social
security, unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty
or addition thereto, whether disputed or not; and (b) the term "Tax Return"
means any return, declaration, report, claim for refund, or information return
or statement (including, without limitation , information returns or reports
related to back-up withholding and any payments to third parties) relating to
any Taxes, including any
14
schedule or attachment thereto, and including any amendment thereof. Subject to
the last sentence of Section 7.4, Buyer shall have no liability or obligation
whatsoever, and shall not incur any loss, expense or cost, and none of the
Purchased Assets, or any assets of Buyer, shall be subjected to any Encumbrance,
by reason of any Taxes arising out of (x) the Business as conducted by Seller
prior to the consummation of the sale hereunder of the Purchased Assets to
Buyer, or (y) any other operations or activities of Seller whether conducted
prior to the date hereof or hereafter. Seller further represents and warrants
that it is relying solely on its own accountants and advisors for advice as to
the tax consequences to it of the transactions contemplated hereby.
4.14 Litigation and Proceedings. There is no action, suit, proceeding or
--------------------------
investigation, or any counter or cross-claim in an action brought by or on
behalf of Seller, whether at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind, that is pending or, to Seller's
Knowledge, threatened, against Seller, which (i) could reasonably be expected to
affect adversely Seller's ability to perform its obligations under this
Agreement or the Principal Agreements or complete any of the transactions
contemplated hereby or thereby, or (ii) to Seller's Knowledge, involves the
possibility of any judgment or liability, or which may become a claim, against
Buyer, the Business or the Purchased Assets. Seller is not subject to any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental department, commission, board, bureau, agency or instrumentality
having jurisdiction over Seller, any of the Purchased Assets or the Business
that affects, involves or relates to the Purchased Assets of the Business.
4.15 Operational Restrictions. The Business is not subject to (a) any
------------------------
restrictions under any applicable laws or regulations or (b) any charter or
other corporate or contractual restriction or (c) any judgment, order, writ,
injunction, decree or order, which has had or could reasonably be expected to
have a Material Adverse Effect on the Business. Seller does not know of any
facts, circumstances or events which has had, or with the passage of time may
have, a Material Adverse Effect on any of the Purchased Assets or on the
Business.
4.16 No Broker. Seller has not retained or used the services of an agent,
---------
finder or broker in connection with the transactions contemplated by this
Agreement.
4.17 Representations and Warranties of Seller. The representations and
-----------------------------------------
warranties of Seller contained herein, and the disclosures contained in Seller's
--------
Disclosure Schedule do not contain any statement of a material fact that was
-------------------
untrue when made or omits any information necessary to make any such statement
contained therein, in light of the circumstances under which such statement was
made, not misleading. Seller has not made any representations or warranties to
Buyer with respect to the federal, state or local income or other tax
consequences to Buyer of the consummation by it of the transactions
15
contemplated hereby.
Article 5. Representations and Warranties of Buyer.
Subject to the disclosures and exceptions set forth in the disclosure
schedule delivered by Buyer to Seller in the form attached to the Original
Agreement as Schedule 5, Buyer made the representations and warranties set forth
----------
hereinafter in this Section 5 to Seller as of the date thereof, except for the
representations and warranties set forth in Section 5.1(b) with respect to the
Principal Agreements. Subject to the disclosures and exceptions set forth in
the disclosure schedule delivered by Buyer to Seller in the form attached hereto
as Schedule 5, Buyer hereby makes the representations and warranties set forth
----------
hereinafter in this Section 5 to Seller as of the Closing.
5.1 Authority and Binding Effect.
----------------------------
(a) Buyer has the full corporate power and authority to execute and
deliver this Agreement and the Principal Agreements. This Agreement and the
Principal Agreements and the consummation by Buyer of its obligations contained
herein and therein have been duly authorized by all necessary corporate actions
of Buyer, and such agreements have been duly executed and delivered by Buyer.
(b) This Agreement is a valid and binding agreement of Buyer,
enforceable against Buyer in accordance with its terms, and upon execution and
delivery each of the Principal Agreements will be a valid and binding agreement
of Buyer, and will be enforceable against it in accordance with its terms, in
each case except as enforceability of the obligations of Buyer hereunder and
thereunder may be limited by (i) bankruptcy, insolvency, moratorium or other
similar laws affecting creditors' rights generally, and (ii) general principles
of equity relating to the availability of equitable remedies (whether such
agreements are sought to be enforced in a proceeding at law or a proceeding in
equity).
(c) Other than Buyer's filing under the HSR Act, it is not
necessary for Buyer to take any action or to obtain any approval, consent or
release by or from any third person, governmental or other, to enable Buyer to
enter into or perform its obligations under this Agreement or any of the
Principal Agreements.
5.2 Organization. Buyer is a corporation duly organized, validly
------------
existing and in good standing under the laws of the State of Delaware.
5.3 No Conflicts. Neither the execution and delivery nor the
------------
performance of this Agreement or any of the Principal Agreements by Buyer will
or could result in any of the following:
(a) a default or an event that, with notice or lapse of time, or
both, would
16
constitute a default, breach or violation of the Certificate of Incorporation or
Bylaws of Buyer, any contract, lease, license, franchise, promissory note,
conditional sales contract, commitment, indenture, mortgage, deed of trust,
security or pledge agreement, or other agreement, instrument or arrangement to
which Buyer is a party or is subject and which is material to Buyer (a "Material
Buyer Contract");
(b) the termination of any Material Buyer Contract or the
acceleration of the maturity of any indebtedness or other monetary obligation of
Buyer that is material in amount to Buyer; or
(c) a violation or breach of any writ, injunction or decree of any
court or governmental instrumentality to which Buyer is a party or by which any
of its properties is bound or any laws or regulations applicable to Buyer, where
the violation would have a Material Adverse Effect on Buyer.
5.4 Broker. Buyer has not retained or used the services of an agent,
------
finder or broker in connection with the transactions contemplated by this
Agreement.
5.5 Financial Resources. Subject to Buyer's obtaining bank or other
-------------------
financing, Buyer has the financial resources to enable it to fulfill its
obligations to Seller hereunder and the Principal Agreements, including, without
limitation, the payment of the Purchase Price to Seller on the Closing Date.
5.6 Representations and Warranties. The representations and warranties
------------------------------
of Buyer do not contain any statement of a material fact that was untrue when
made or omits any information necessary to make any statement of material
contained therein, in light of the circumstances under which such statement was
made, not misleading. Buyer has not made any representations or warranties to
Seller with respect to the federal, state or local income or other tax
consequences to Seller of the consummation by it of the transactions
contemplated hereby.
Article 6 Conduct of Business Pending the Closing.
Between the date hereof and the Closing, and except as otherwise consented
to by Buyer in writing, Seller covenants as follows:
6.1 Access. Seller shall give to Buyer and its representatives, from
------
and after the date of execution of this Agreement, on prior reasonable request
therefor from Buyer or such representatives, such access to the premises,
employees, agents and consultants of Seller, and such copies of the Financial
Statements, books and records, and contracts and leases and other documentation,
so as to enable Buyer to inspect and evaluate all aspects of the Business and
operations, assets, operating results, financial condition, capitalization,
ownership and legal affairs relating to the Business. Buyer agrees to conduct
its review,
17
and to cause its representatives to conduct their review, in a manner designed
to minimize any disruption of the Business. Buyer further agrees that, if
requested by Seller, Seller's representatives will enter into confidentiality
agreements in a form reasonably satisfactory to Seller prior to accessing any
such information pursuant to this Section 6.1.
6.2 Conduct of Seller's Business. From the date of this Agreement and
----------------------------
until the Closing or termination of this Agreement, whichever first occurs,
Seller shall operate and conduct the Business diligently and only in the
ordinary course, consistent with past practices. In furtherance thereof, unless
Seller obtains Buyer's prior consent to do otherwise (which consent Buyer shall
not unreasonably withhold or delay), Seller shall:
(a) Organization. Use its commercially reasonable efforts to
------------
preserve intact its organization and use its reasonable efforts to retain the
Selected Employees involved in the Business and the services of all vendors,
suppliers, agents and consultants to Seller, commensurate with the requirements
of the Business;
(b) Insurance. Maintain self-insurance or third party insurance,
---------
including liability and errors and omissions insurance, consistent with past
practices and, unless comparable insurance is substituted therefor or is not
generally available to the Business, not take any action to terminate or modify,
or permit the lapse or termination of, the present self-insurance or third party
insurance policies and coverages of Seller;
(c) Lawsuits, Claims.
----------------
(i) Promptly notify Buyer of any lawsuit or other legal
proceeding that is commenced, or that is threatened, in writing, against Seller
and that (A) relates to or arises out of the Business and, if adversely
determined against Seller, would be expected to have a Material Adverse Effect
on the Business, or (B) relates to any of the Purchased Assets or any of the
transactions contemplated by this Agreement; and
(ii) Not settle any action or proceeding on terms that are
expected to have a Material Adverse Effect on the Business; not release, settle,
compromise or relinquish any claims, causes of action or rights involving more
than two hundred thousand dollars ($200,000) individually or in the aggregate
which Seller may have against any other persons relating to the Business,
including, without limitation, claims or rights to reimbursement or payment for
services rendered by Seller;
(d) Certain Changes. Not encumber or place any liens or security
---------------
interests on any of the Purchased Assets, other than (i) liens or security
interests in existence on the date hereof, (ii) statutory liens to secure taxes
that are not yet due and payable, and (iii) purchase money security interests in
connection with the acquisition of equipment in the ordinary course of the
Business consistent with past practice;
18
(e) Condition of Assets. Maintain in good working order and
-------------------
condition, ordinary wear and tear excepted, all of the Purchased Assets;
(f) Agreements.
----------
(i) Use its commercially reasonable efforts to observe and
perform all of its obligations under the Assigned Contracts;
(ii) Except as required by any existing contracts or agreements,
not enter into any new agreement that would constitute an Assigned Contract or
amend any Assigned Contract, or incur any new monetary obligation involving more
than two hundred thousand dollars ($200,000) individually or in the aggregate,
other than monetary obligations that are incurred in the ordinary course of the
Business consistent with past practices;
(iii) Promptly notify Buyer in writing of the occurrence of any
breach or default of any Assigned Contract;
(iv) Not directly encourage or incent any employee involved in
the Business, who is one of the Selected Employees, to leave his or her current
position or alter his or her responsibilities with Seller; provided, however,
that (i) Seller will have no such obligation in the event any of the Selected
Employees initiates contact with Seller or Buyer regarding leaving his or her
current position with Seller or altering his or her responsibilities with
Seller, and (ii) this obligation shall not apply to general solicitations of
employment; and
(v) With respect to any employee involved in the Business who is
not a Selected Employee, or who initiates contact with Seller regarding leaving
his or her current position with Seller or altering his or her responsibilities
with Seller, use commercially reasonable efforts to ensure that any such
employee is available to Buyer to enable Buyer to contact such employee for
purposes of (A) evaluating the Business and operations, assets, operating
results, financial condition, capitalization, ownership and legal affairs
relating to the Business, and (B) obtaining information from such employees to
enable Buyer to commence conducting the Business following the Closing Date.
(g) Consents; Compliance with Laws to the Extent Related to the
-----------------------------------------------------------
Business.
--------
(i) Use commercially reasonable efforts to obtain and maintain
all consents, assignments or approvals of, and licenses, permits and franchises
and rights to operate the Business granted by, governmental authorities;
(ii) Not take any action which would reasonably be expected to
19
result in a violation of or in the noncompliance with any laws or regulations
applicable to the Business; and
(iii) Cooperate with Buyer and render to Buyer such assistance
as Buyer may reasonably request, at Buyer's sole expense, in obtaining such
governmental approvals; and
(h) Taxes. Pay, when due, and prior to the imposition or assessment
-----
of any interest, penalties or liens by reason of the nonpayment of, all Taxes,
due or assessed against it, except for any Taxes being contested in good faith
and for which reserves have been established by Seller.
Article 7 Obligations Surviving the Date of this Agreement and the Closing.
7.1 Consents to Assignment; Termination of Encumbrances.
---------------------------------------------------
(a) If any of the Purchased Assets or any claim, right or
benefit thereunder, including performance bonds and letters of credit posted by
Seller with respect to the Purchased Assets (collectively, the "Rights"), is not
by its terms assignable or transferable or is not assignable or transferable
without the consent, approval or waiver of any person who is not a party hereto
and such consent, approval or waiver has not been obtained at or prior to the
Closing Date, or the assignment or transfer thereof to Buyer would constitute a
breach of any contract, law, statute, ordinance, regulation, rule, judgment,
decree or order, then, subject to Buyer's prior written consent, Seller shall
hold such Rights and all benefits derived thereunder and therefrom in trust for
Buyer. Seller shall continue to use commercially reasonable efforts to obtain,
where possible, as Buyer may direct, acting reasonably, any necessary consents,
approvals or waivers to the assignment or transfer of the Rights to Buyer
following the Closing Date. Until such consent, approval or waiver has been
obtained or, if it cannot be obtained, Seller shall continue to maintain the
existence of the Rights, comply with the terms and provisions of the Rights as
agent for Buyer at Seller's expense (except that, in the case of performance
bonds and letters of credit, such expense shall be limited to any draw thereon
by the party holding such bond or letter of credit) and for the benefit of
Buyer, take all such actions and do or cause to be done all such things as Buyer
may reasonably direct, at Seller's expense, in order to preserve such Rights and
provide the benefits thereof to Buyer, including collecting and paying promptly
to Buyer all monies payable under or with respect to such Rights, and enforcing
at the request and expense of Buyer, or terminating at the direction of Buyer,
any of such Rights (until, in the case of such performance bonds and letters of
credit, such time as it is possible for Buyer, using its best efforts, to
replace them, whereupon they may be terminated by Seller).
(b) Notwithstanding anything to the contrary contained herein
(i) for up to an aggregate of twenty-five thousand dollars (US$25,000), Seller,
and (ii) for any
20
additional amounts, Buyer shall be responsible for the payment of, and shall
bear any direct costs associated with, obtaining all third party consents
necessary to effect the assignment by Seller to Buyer of the Assigned Contracts
pursuant hereto. In addition, Buyer shall be responsible for the payment of, and
shall bear any costs associated with, maintenance, service and support, upgrade
and other similar costs associated with usage of the Purchased Assets and of
software under the Assigned Contracts after the Closing Date.
(c) If it is determined at any time hereafter that Seller failed to
remove or cause to be removed, without liability or cost or expense to Buyer and
without the disposition or diminution in the value of any of the Purchased
Assets, any Encumbrance on any of the Purchased Assets that was in existence on
or prior to the Closing Date, or if any Encumbrance is imposed or placed on any
of the Purchased Assets (or any replacements thereof) after the Closing Date as
a result of any act or omission of Seller, occurring on, prior to or after the
Closing Date, then, without limiting any other right or remedy Buyer may have,
Seller shall, cause such Encumbrance to be removed at no expense or liability to
Buyer, and without any disposition or diminution in the value of any of the
Purchased Assets.
7.2 Further Assurances. Each party hereto shall execute and deliver after
------------------
the date hereof such instruments and take such other actions as the other party
may reasonably request in order to carry out the intent of this Agreement or to
better evidence or effectuate the transactions contemplated herein.
7.3 Expenses. Each party shall pay all of its respective costs and
--------
expenses incurred or to be incurred by it in negotiating and preparing this
Agreement and in carrying out and closing the transactions contemplated by this
Agreement whether or not this Agreement or the transactions contemplated hereby
are ever consummated. Each party shall pay the costs and expenses of its
independent auditors incurred in connection with the preparation of the SEC
Financial Statements.
7.4 Taxes. Seller shall pay all Taxes of any kind or nature arising from
-----
the conduct or operation of the Business up to the Closing Date and the conduct
or operation by Seller, prior to or after the Closing Date, of any other
business or business activities operations. If any taxes required under this
Section 7.5 to be borne by Seller are assessed against Buyer or any of the
Purchased Assets, Buyer shall notify Seller in writing promptly thereafter and
Seller shall be entitled to contest, in good faith, such assessment or charge as
long as such assessment does not adversely affect Buyer or the Purchased Assets
or the Business. Notwithstanding the foregoing, Buyer may (but shall not be
obligated to) pay any such Taxes assessed against it, the Business or any of the
Purchased Assets, but which are payable by Seller pursuant hereto, if Buyer's
failure to do so, in the judgment of Buyer, could result in the imposition of a
Encumbrance on any of the Purchased Assets or any other assets of Buyer or would
constitute a violation of any agreement to which Buyer is subject, or if Seller
fails to contest such assessment or charge diligently and in good faith.
21
If Buyer pays any Taxes which pursuant hereto are required to be borne by
Seller, Buyer shall be entitled to reimbursement thereof from Seller on demand.
Buyer shall pay all Taxes of any kind or nature arising from the consummation of
the transactions contemplated hereby, including, without limitation, all sales,
use or similar Taxes, if any, that may arise from or be assessed by reason of
the sale of the Purchased Assets by Seller to Buyer.
7.5 Non-Competition and Non-Solicitation.
------------------------------------
(a) For purposes of this Section 7.5:
(i) The term "Competitive Business" shall mean the business
of designing, manufacturing and/or marketing [*]
(ii) The term "Territory" shall mean worldwide.
(b) For a period of [*] from the Closing Date, within the
Territory, Seller shall not, directly, or indirectly through one or more other
persons or entities, engage in any Competitive Business, or acquire or have any
controlling ownership, financial or other interests (whether as a principal,
partner, member, joint venturer, shareholder, consultant, lender or otherwise,
in any case, a "Partner") in, any person, firm, corporation, limited liability
company, partnership or joint venture, or association or other business entity
that engages in any Competitive Business. Notwithstanding the foregoing, this
Section 7.5 shall not prohibit Seller from acquiring or having any ownership,
financial or other interests (whether as a Partner or otherwise) in any
telecommunications, multimedia or telecommunications equipment firm that may own
or have a financial or other interest (whether as a Partner or otherwise) in a
business similar to a Competitive Business for predominantly its own internal
needs.
(c) For a period of [*] after the Closing Date, Seller
shall not solicit or recruit, for its own benefit or for the benefit of any
other person or entity, any officer or employee of Buyer; provided, however,
that the terms "solicit" or "recruit" shall not be deemed to include general
solicitations of employment not specifically directed towards officers or
employees of Buyer.
__________
[*] Confidential Treatment Requested.
22
(d) It is a condition precedent to execution and delivery by Buyer of
this Agreement, and the performance by Buyer of its obligations thereunder, that
Seller agree to comply with this Section 7.5; and Seller understands and
acknowledges that Seller's agreeing to its obligations under this Section 7.5 is
a material inducement to Buyer upon which it is relying in entering into, and
consummating the transactions contemplated by, this Agreement.
(e) Seller agrees that if, in any judicial proceeding, the geographic
coverage or respective periods of time contained in this Section 7.5 should be
adjudged unreasonable, then, such geographic coverage or such period or periods
of time, as the case may be, shall be reduced to the extent necessary to enable
the court to enforce the covenants and restrictions in this Section 7.5 to the
fullest extent permitted under applicable law.
7.6 SEC Financial Statements. Within sixty-five (65) days and seventy-
------------------------
three (73) days following the Closing Date, Seller shall deliver to Buyer, in
draft form and final form, respectively, financial statements of Seller relating
to the Business as at and for the periods ended as required in that certain
letter, dated August 24, 1998, from the Securities and Exchange Commission (the
"SEC") to Buyer in the form attached hereto as Exhibit F (the "SEC Financial
---------
Statements"), all of which shall be prepared in accordance with GAAP,
consistently applied, and fairly present, on an accrual basis, the financial
condition of Seller relating to the Business, and the results of operations of
the Business as at the relevant dates thereof and for the respective periods
covered thereby.
7.7 Delivery of Purchased Assets. Seller will use commercially reasonable
----------------------------
efforts to deliver to Buyer, at Seller's sole expense:
(a) Folsom Assets. Immediately following, but in no event later
-------------
than five (5) days after, the Closing Date, at the facility located on the
Folsom Real Property, or, upon Buyer's written request to Seller at least ten
(10) days prior to the Closing, at Buyer's Irvine, California facility, all
Purchased Assets which are not located at such facility.
(b) Malaysia. To the locations and at the times after the
--------
Closing Date specified by Buyer to Seller in writing, all Purchased Assets
located in Malaysia;
provided, however, that Seller shall not have any responsibility or liability
for delivering to Buyer any Purchased Assets located at Seller's vendors.
7.8 Accounting System. Seller shall provide Buyer such financial and
-----------------
accounting information so as to enable Buyer reasonably to maintain the
financial and accounting system relating to the Business in substantially the
same manner as Seller maintained its system prior to the Closing Date.
23
7.9 Risk of Loss. From the date hereof up to the Closing, the Purchased
------------
Assets shall be and remain at the risk of Seller. If, prior to the Closing, all
or any part of the Purchased Assets which are necessary to carry on the Business
as currently conducted are destroyed or damaged by fire or any other casualty or
shall be appropriated, expropriated or seized by governmental authority or other
lawful authority, Buyer, unless Buyer terminates its obligations under this
Agreement as contemplated by Section 12.1, shall complete the purchase without
reduction of the Purchase Price, in which event all proceeds of insurance or
compensation for expropriation or seizure shall be paid to Buyer at the Closing
and all right and claim of Seller to any such amounts not paid by the Closing
Date shall be assigned at the Closing to Buyer. Without limiting the foregoing,
Seller shall be responsible for the risk of loss of, or damage to, any Purchased
Assets located in Malaysia, until such time as such Purchased Assets are
delivered to Buyer, at which time Buyer shall be responsible for the risk of
loss of, or damage to, the Purchased Assets.
7.10 Purchased Assets on Leased Property. At the Closing, Seller shall
-----------------------------------
transfer title to Buyer to any of the Purchased Assets located at Seller's
warehouse facilities located in West Sacramento, California and Rancho Cordova,
California. Upon Buyer's written request to Seller at least ten (10) days prior
to the Closing, Buyer may request Seller to move such Purchased Assets as
quickly as practicable to the Folsom Real Property or Buyer's facility in,
California.
7.11 FTO Transfer. Buyer shall permit each Seller employee who accepts an
------------
employment offer from Buyer to transfer to Buyer on the commencement of such
employment up to a maximum of two hundred (200) hours of accrued flexible time-
off ("FTO") with Seller. Seller shall deliver to Buyer prior to the Closing a
Schedule 7.11, which shall set forth the individual employee and aggregate
-------------
amounts of FTO to be so transferred.
7.12 [*].
---
(a) Seller will assume responsibility for and sole control over [*],
and Seller will retain sole discretion as to [*]; provided, however, that,
notwithstanding the foregoing, in determining Seller's [*], and in the course of
[*], Seller shall act in good faith, and no less diligently than Seller would,
had [*] of Seller in the Business.
(b) Subject to [*] (as the case may be), Buyer shall [*] requested
by Seller with respect to the [*] promptly and in any event within two (2) years
after the date
__________
[*] Confidential Treatment Requested.
24
hereof.
(c) Buyer shall perform [*]. For the purpose of this Section 7.12(b),
"[*]" shall mean initially (i) [*], and (ii) [*]. Seller and Buyer acknowledge
that such costs consist of the following: [*]. The amounts do not include [*]
incurred in connection with any [*] and any other costs directly attributable to
[*]. In the event that any of the foregoing enumerated costs increases or
decreases, then Seller and Buyer agree to meet periodically to discuss adjusting
upward or downward the amount to be charged by Buyer to Seller for such [*].
(d) Buyer will send Seller a monthly invoice for any [*] performed by
Buyer pursuant to Section 7.12(b) above. Buyer will credit Seller for charges
for the [*] of such [*] against the amount of the Prepayment. When the charges
for such [*] exceed the amount of the Prepayment, Seller will pay the invoice
within thirty (30) calendar days after date of the invoice.
(e) At Seller's expense, Seller or its agent may audit Buyer's costs
of such [*]. Seller or its agent shall conduct such audit in a reasonable manner
and only upon five (5) business days written notice to Buyer, which shall
reasonably cooperate with Seller or its agent in its performance of such audit,
including without limitation making such persons and records available to Seller
or its agent during such audit as are reasonably necessary to permit Seller or
its agent to perform such audit.
(f) In the event that [*], having previously agreed with Seller
that:
(i) [*] from Seller prior to the Closing Date, which [*]
are included in the [*]; and
(ii) [*] would share in [*],
pays to Buyer, at any time after the Closing, any amounts in connection with
such [*], either in the form of;
(x) [*]
__________
[*] Confidential Treatment Requested.
25
[*] pays to Buyer for the [*] on the backlog (i.e, ordered but not delivered);
or
(y) paying Powerwave [*] after the shipment of each of the
first [*], the next [*] and the final [*] of the [*] on the backlog; or
(z) in any other form of cash payment,
then Buyer shall promptly reimburse Seller on a dollar-for-dollar basis for up
to [*].
(g) If, as part of resolving [*], Seller agrees to provide any [*],
then Buyer shall provide, and Seller shall bear the costs of, such [*].
7.13 Inventory and Purchase Price Adjustment. Within twenty-one (21) days
---------------------------------------
after the Closing, Seller shall deliver to Buyer a true and complete list of all
of the Inventory and stock in trade owned by Seller immediately prior to the
Closing to the extent used in, relating to or arising out of the Business, to be
attached hereto as Schedule 7.13. In the event there is a depletion of
-------------
Inventory reflected on Schedule 7.13 (the "Depletion of Inventory") in an
-------------
amount, with a valuation based on Seller's standard practices, greater than [*]
of the Inventory reflected on Schedule 4.5(c) to the Original Seller's
----------------------------------------
Disclosure Schedule, Seller, within seven (7) days after the delivery of
-------------------
Schedule 7.13, shall reimburse to Buyer, by wire transfer in immediately
-------------
available funds to such account as Buyer shall advise Seller in writing, an
amount, without interest, equal to the amount by which the Depletion of
Inventory exceeds [*].
Article 8 Survival of Representations and Warranties.
Except for the representations and warranties of Seller contained in
Section 4.10 that shall not survive the Closing, the representations and
warranties of Buyer and Seller contained in this Agreement shall survive the
Closing for twelve (12) months.
Article 9 Conditions Precedent to the Obligations of Buyer.
The obligation of Buyer to consummate the purchase of the Purchased Assets
from Seller is subject to the fulfillment, or the waiver by Buyer, at or prior
to the Closing, of each of the following conditions precedent:
9.1 Representations and Warranties. The representations and warranties
------------------------------
made
__________
[*] Confidential Treatment Requested.
26
by Seller in the Original Agreement shall have been true and correct, in all
material respects, on the date of the Original Agreement, and the
representations and warranties made by Seller in this Agreement shall be true
and correct, in all material respects, at and as of the Closing Date.
9.2 Absence of Material Litigation. There shall be (a) no pending or
------------------------------
overtly threatened litigation (other than litigation which is determined by the
parties in good faith, after consulting their respective attorneys, to be
without legal or factual substance or merit), whether brought against Seller or
Buyer, that seeks to enjoin the consummation of any of the transactions
contemplated by this Agreement, (b) no order that has been issued by any court
or governmental agency having jurisdiction that restrains or prohibits the
consummation of the purchase and sale of the Purchased Assets hereunder and no
proceedings pending which are reasonably likely to result in the issuance of
such an order; and (c) no pending or overtly threatened litigation, which has
had or is expected to have a Material Adverse Effect on the Business or the
Purchased Assets.
9.3 Performance of Obligations. Seller shall have performed and complied,
--------------------------
in all material respects, with all of the covenants required by this Agreement
to have been performed prior to the Closing.
9.4 No Material Adverse Change. Since July 31, 1998, there shall not have
--------------------------
been any change in or other event affecting the business or the condition
(financial or other) or operating results of Seller that has had or is expected
to have a Material Adverse Effect on the Business or the Purchased Assets.
9.5 Certificates. Buyer shall have received from Seller a certificate
------------
executed by an authorized employee of Seller, dated as of the Closing Date and
reasonably satisfactory in form and substance to Buyer, certifying that (i) each
of the representations and warranties of Seller contained in the Original
Agreement was true and correct, in all material respects, when made, and each of
the representations and warranties of Seller contained in this Agreement is true
and correct, in all material respects, on and as of the Closing Date, (ii)
Seller has performed and complied, in all material respects, with all of their
covenants required to have been performed or complied with by it pursuant hereto
on or prior to the Closing Date, and (iii) all of the conditions precedent to
Buyer's obligations the satisfaction of which was the responsibility of Seller
have been satisfied, except to the extent waived by Buyer.
9.6 Delivery of Additional Instruments. On the Closing Date, Seller shall
----------------------------------
deliver, or cause to be delivered to Buyer, the following documents and
instruments, in form and substance satisfactory to Buyer and its counsel, unless
waived in writing by Buyer:
(a) The ▇▇▇▇ of Sale and Assumption Agreement in substantially the
form of Exhibit G hereto, duly executed by Seller (the "▇▇▇▇ of Sale");
---------
27
(b) Evidence of the receipt of all third party consents necessary to
enable Seller to consummate the transactions contemplated herein and to utilize
the Licenses and Permits referenced in Section 4.12(b) hereof;
(c) UCC Termination Statements, and such instruments and other
documents as Buyer may reasonably request, from all persons holding any security
interests or other Encumbrances or any other adverse interests in or on any of
the Purchased Assets, terminating and discharging all of such security interests
and Encumbrances;
(d) The Principal Agreements, duly executed by Seller;
(e) A legal opinion, in substantially the form attached hereto as
Exhibit H-1, of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, counsel to Seller;
-----------
(f) A good standing certificate, dated as of a date that is not more
than ten (10) days prior to the Closing Date, from the Secretary of State of
Delaware, for Seller; and
(g) Such other documents and instruments as Buyer or Buyer's counsel
may reasonably request so as better to evidence or effectuate the transactions
contemplated hereby.
9.7 Real Property Purchase. All of the conditions precedent to the
----------------------
obligations of Buyer under the Real Property Purchase Agreement, as set forth in
the Real Property Purchase Agreement, shall have been fulfilled.
9.8 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Any waiting period (and any extension thereof)
-----------------
under the HSR Act applicable to the transactions contemplated by this Agreement
shall have expired or shall have been terminated.
9.9 Approval of Board of Directors. This Agreement and the transactions
------------------------------
contemplated hereby shall have been duly approved by the Board of Directors of
Buyer.
9.10 Continuity of Business. Subject to Section 7.1 hereof, upon the
----------------------
consummation of the transactions contemplated by this Agreement (a) to Seller's
Knowledge, Buyer will not be hindered or prevented from continuing to use any of
the assets or property, tangible or intangible, that are the subject of a
Assigned Contract in the manner in which they are currently used; (b) to
Seller's Knowledge, Buyer will not be subject to any additional costs (other
than scheduled fee increases) as a condition to the continued use of such assets
or property which are not currently in effect; (c) to Seller's Knowledge, all
agreements with material customers, distributors, suppliers and those
28
parties who license goods and products used in the conduct of the Business,
including without limitation, those set forth on Schedule 4.9 to Seller's
------------------------
Disclosure Schedule (each a "Business Partner"), shall have been assigned to
-------------------
Buyer as of the Closing Date and shall continue in full force and effect after
the assignment of such agreements to Buyer; and (d) if no binding agreement
exists with a Business Partner, Buyer shall have no reasonable basis to believe
that a Business Partner intends to terminate or diminish its relationship with
the Business as conducted by Buyer after the Closing Date.
9.11 Financing. Buyer shall have obtained financing on terms acceptable
---------
to Buyer, sufficient to permit Buyer to consummate the transactions contemplated
hereby.
Article 10 Conditions Precedent to Obligations of Seller.
The obligation of Seller to consummate the sale of the Purchased Assets to
Buyer is subject to the fulfillment, or the waiver by Seller, at or prior to the
Closing, of each of the following conditions precedent:
10.1 Representations and Warranties. The representations and warranties
------------------------------
made by Buyer in the Original Agreement shall have been true and correct, in all
material respects, on the date of the Original Agreement, and the
representations and warranties made by Buyer in this Agreement shall be true and
correct, in all material respects, at and as of the Closing Date.
10.2 Absence of Material Litigation. There shall be (a) no pending or
------------------------------
overtly threatened litigation (other than litigation which is determined by the
parties in good faith, after consulting their respective attorneys, to be
without legal or factual substance or merit), whether brought against Seller or
Buyer that seeks to enjoin the consummation of any of the transactions
contemplated by this Agreement, (b) no order that has been issued by any court
or governmental agency having jurisdiction that restrains or prohibits the
consummation of the purchase and sale of the Purchased Assets hereunder or any
proceedings pending which are reasonably likely to result in the issuance of
such an order; and (c) no other pending or overtly threatened litigation, which
has had or is expected to materially and adversely affect the ability of the
parties to consummate the transactions contemplated hereby.
10.3 Performance of Obligations. Buyer shall have performed and complied,
--------------------------
in all material respects, with all of its covenants required by this Agreement
to have been performed by it at or prior to the Closing.
10.4 Certificates. Seller shall have received from Buyer a certificate
------------
executed by an executive officer of Buyer, dated as of the Closing Date and
reasonably satisfactory in form and substance to Seller, certifying that (i)
each of the representations and warranties of Buyer contained in the Original
Agreement was true and correct, in all material respects, when made, and each of
the representations and warranties contained
29
herein is true and correct, in all material respects, on and as of the Closing
Date, (ii) Buyer has performed and complied, in all material respects, with all
of its covenants required to have been performed or complied, in all material
respects, with by it pursuant hereto on or prior to the Closing Date, and (iii)
all of the conditions precedent to Seller's obligations the satisfaction of
which was the responsibility of Buyer have been satisfied, except to the extent
waived by Seller.
10.5 Delivery of Additional Instruments. On the Closing Date, Buyer shall
----------------------------------
deliver, or cause to be delivered to Seller, the following documents and
instruments, in form and substance satisfactory to Seller and their counsel,
unless waived in writing by Seller:
(a) The Principal Agreements, duly executed by Buyer;
(b) Good standing certificates, dated not more than ten (10) days
prior to the Closing Date, from the Delaware Secretary of State, for Buyer;
(c) A legal opinion in substantially the form of Exhibit H-2, of
-----------
Stradling, Yocca, ▇▇▇▇▇▇▇ & ▇▇▇▇▇, counsel to Buyer;
(d) Such other documents and instruments as Seller or Seller's
counsel may reasonably request to better evidence or effectuate the transactions
contemplated hereby.
10.6 Approval of Executive Committee of the Board of Directors. This
---------------------------------------------------------
Agreement and the transactions contemplated hereby shall have been duly approved
by the Executive Committee of the Board of Directors of Seller.
10.7 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. Any waiting period (and any extension thereof)
-----------------
under the HSR Act applicable to the transactions contemplated by this Agreement
shall have expired or shall have been terminated.
Article 11 The Closing.
The consummation of the transactions contemplated hereby (the "Closing")
shall take place on October 6, 1998 at the offices of Seller at ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or at such other date and place as the
parties may agree and shall be deemed to occur at 11:59 p.m., local time, on
such date.
11.1 Closing Deliveries of Seller. At the Closing, Seller shall deliver,
----------------------------
or cause to be delivered to Buyer, the documents and instruments set forth in
Section 9 above, in form and substance reasonably satisfactory to Buyer and its
counsel.
30
11.2 Closing Deliveries of Buyer. At the Closing, Buyer shall deliver, or
---------------------------
cause to be delivered, the Purchase Price to Seller and the documents and
instruments set forth in Section 10 above, in form and substance reasonably
satisfactory to Seller and its counsel.
Article 12 Termination.
12.1 Methods of Termination. This Agreement may be terminated and the
----------------------
transactions herein contemplated may be abandoned at any time prior to the
Closing:
(a) By mutual written consent of Buyer and Seller;
(b) By Buyer, if there has been a material breach by Seller of any
of its material representations, warranties, agreements or covenants set forth
herein, or a failure of any material condition to which the obligations of Buyer
are subject;
(c) By Seller, if there has been a material breach by Buyer of any
of its material representations, warranties, agreements or covenants set forth
herein, or a failure of any material condition to which the obligations of
Seller are subject; or
(d) By either Buyer or Seller if the Closing has not occurred prior
to October 31, 1998.
12.2 Procedure upon Termination. In the event of termination of this
--------------------------
Agreement by Buyer or Seller or by both Buyer and Seller pursuant to Section
12.1 hereof, written notice thereof shall forthwith be given to the other party
or parties hereto and the transactions contemplated herein shall be abandoned
without further action by Buyer or Seller. In addition, if this Agreement is
terminated as provided herein:
(a) Each party will either (i) redeliver all documents, workpapers
and other material of any other party relating to the transactions contemplated
hereby, whether so obtained before or after the execution hereof, to the party
furnishing the same, or (ii) destroy such materials and provide written
certification to the furnishing party that such destruction has been completed.
(b) All information of a confidential nature received by any party
hereto with respect to the business of any other party (other than information
which is a matter of public knowledge or which has heretofore been or is
hereafter published in any publication for public distribution or filed as
public information with any governmental authority) shall continue to be subject
to the provisions of Section 14 of this Agreement, which provisions shall
survive any such termination.
(c) Upon any termination of this Agreement pursuant to this Section
12, the respective obligations of the parties hereto under this Agreement shall
terminate and no
31
party shall have any liability whatsoever to any other party hereto by reason of
such termination, irrespective of the cause of such termination, except as set
forth in this Section 12 and Section 14 hereof.
Article 13. Indemnification.
13.1 Indemnification by Seller. Seller shall indemnify and hold buyer
-------------------------
harmless from any and all Losses suffered or incurred by Buyer as a result of or
arising directly or indirectly out of or in connection with:
(a) Any breach by Seller or any inaccuracy of any representation or
warranty of Seller contained in this Agreement or contained in any of the
Principal Agreements (other than the Real Property Purchase Agreement and the
Product Supply Agreement, each of which contains independent indemnities) or in
any agreement, instrument, certificate or other document delivered pursuant
hereto or the Principal Agreements (other than the Real Property Purchase and
the Product Supply Agreement) (provided that Seller shall not be required to
indemnify or hold Buyer harmless in respect of any such breach or inaccuracy of
any representation or warranty unless Buyer shall have provided notice to Seller
in accordance with Section 13.3 on or prior to the expiration of any applicable
time period related to such representation and warranty set out in Article 8);
(b) Any breach or non-performance by Seller of any covenant to be
performed by it which is contained in this Agreement or in any agreement (other
than the Real Property Purchase Agreement and the Product Supply Agreement, each
of which contain independent indemnities), instrument, certificate or other
document delivered pursuant hereto;
(c) Any liabilities, obligations or commitments of Seller (whether
accrued, contingent or otherwise and whether or not determined or determinable)
related to the Purchased Assets, existing at or prior to the Closing Date, other
than the Assumed Obligations;
(d) Any claims by any employees of the Business, including claims
with respect to Seller employee benefit plans other than claims by Selected
Employees relating to their employment with Buyer after the Closing Date;
(e) Any commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who purports to act or have
acted for or on behalf of Seller; and
(f) The existence of any latent defects in any products (i) sold by
Seller in connection with the conduct of the Business prior to the Closing Date,
or (ii) designed by
32
Seller prior to the Closing Date and sold by Buyer within the period ending
[*] after the Closing Date, whether or not the foregoing constitutes a
breach of the representations or warranties of Seller contained in Section 4.10
or is disclosed in this Agreement or Seller's Disclosure Schedule, provided that
----------------------------
the Losses therefor are incurred prior to the date which is [*] from the Closing
Date. Solely for the purpose of this Section 13.1(f), "Losses" shall mean (i) an
adverse final judgment or final, binding arbitration award based upon an
explicit finding of fact that the actual damages were caused, solely or in
substantial part, by (A) a latent defect in the product sold prior to the
Closing Date, or (B) a latent defect in the product designed by Seller prior to
the Closing Date and sold by Buyer within the period ending [*] after the
Closing Date, and shall not mean a settlement voluntarily entered into by Buyer,
unless Seller expressly agrees to the settlement in writing and expressly
acknowledges that the settlement triggers this Section 13.1(f), or (ii) Losses
related to the [*]. For the purpose of this Section 13.1(f), an adverse final
judgment or final, binding arbitration award can include a judgment or
arbitration award against Seller on the Claim by Buyer. Without limiting the
foregoing, in the event that, during the period ending [*] after the Closing
Date, Buyer becomes aware of the existence of a latent defect in any product
designed by Seller prior to the Closing Date, Buyer shall promptly notify Seller
and any customer of Buyer that has purchased such product. Buyer shall use
commercially reasonable efforts to remedy the latent defect in the product
design. [*].
13.2 Indemnification by Buyer. Buyer agrees to indemnify and hold Seller
------------------------
harmless from any and all Losses suffered or incurred by Seller as a result of
or arising directly or indirectly out of or in connection with:
(a) Any breach by Buyer or any inaccuracy of any representation or
warranty of Buyer contained in this Agreement or contained in any of the
Principal Agreements (other than the Real Property Purchase Agreement and the
Product Supply Agreement, each of which contains independent indemnities) or in
any agreement, instrument, certificate or other document delivered pursuant
hereto or the Principal Agreements (other than the Real Property Purchase and
the Product Supply Agreement) (provided that Buyer shall not be required to
indemnify or hold Seller harmless in respect of any such breach or inaccuracy of
any representation or warranty unless Seller shall have provided notice to Buyer
in accordance with Section 13.3 on or prior to the expiration of any applicable
time period related to such representation and warranty set out in Article 8);
(b) Any breach or non-performance by Buyer of any covenant to be
performed by it which is contained in this Agreement or in any agreement (other
than the
__________
[*] Confidential Treatment Requested.
33
Real Property Purchase Agreement and the Product Supply Agreement, each of which
contain independent indemnities), instrument, certificate or other document
delivered pursuant hereto;
(c) The operations of the Business and the use of the Purchased
Assets after the Closing Date, including the manufacturing and sale of products
by the Business after the Closing Date in respect of which product liability
claims, warranty claims and other claims with respect to the quality,
suitability or compliance with specifications or orders of such products may be
made by customers of the Business or other persons or any failure by Buyer to
pay, satisfy, discharge, perform or fulfill any of the Assumed Obligations;
(d) Any claims by Selected Employees and contract employees engaged
by Buyer after the Closing Date, including claims with respect to Buyer employee
benefit plans relating to their employment with Buyer after the Closing Date;
and
(e) Any commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who purports to act or have
acted for or on behalf of Buyer.
13.3 Notice of Claim. In the event that any party (the "Indemnified
---------------
Party") shall assert a First Party Claim or become aware of any Third Party
Claim in respect of which another party (the "Indemnifying Party") agreed to
indemnify the Indemnified Party pursuant to this Agreement, the Indemnified
Party shall promptly give notice thereof to the Indemnifying Party. Such notice
shall specify whether the Claim arises as a result of a claim asserted by a
third person against the Indemnified Party (a "Third Party Claim") or whether
the Claim is asserted by the other party (a "First Party Claim") and shall also
specify with reasonable particularity (to the extent that the information is
available):
(a) The factual basis for the Claim; and
(b) The amount of the Claim, if known.
If, through the fault of the Indemnified Party, the Indemnifying Party does not
receive notice of any Claim in time to contest effectively the determination of
any liability susceptible of being contested, the Indemnifying Party shall be
entitled to set off against the amount claimed by the Indemnified Party the
amount of any Losses incurred by the Indemnifying Party resulting from the
Indemnified Party's failure to give such notice on a timely basis.
13.4 First Party Claims. With respect to any First Party Claim, following
------------------
receipt of notice from the Indemnified Party of the Claim, the Indemnifying
Party shall have sixty (60) days to make such investigation of the Claim as is
considered necessary or
34
desirable. For the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party the information relied upon by the
Indemnified Party to substantiate the Claim, together with all such other
information as the Indemnifying Party may reasonably request. If both parties
agree at or prior to the expiration of such sixty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such Claim, the
Indemnifying Party shall immediately pay to the Indemnified Party the full
agreed upon amount of the Claim, failing which the matter shall be referred to
dispute resolution pursuant to Section 15.8.
13.5 Third Party Claims. With respect to any Third Party Claim, the
------------------
Indemnifying Party shall have the right, at its expense, to participate in or
assume control of the negotiation, settlement or defense of the Claim and, in
such event, the Indemnifying Party shall reimburse the Indemnified Party for all
the Indemnified Party's out-of-pocket expenses as a result of such participation
or assumption. Subject to Section 13.6, if the Indemnifying Party elects to
assume such control, the Indemnified Party shall have the right to participate
in, but not control, the negotiation, settlement or defense of such Third Party
Claim and to retain counsel to act on its behalf, provided that the fees and
disbursements of such counsel shall be paid by the Indemnified Party unless the
Indemnifying Party consents to the retention of such counsel or unless the
representation of both the Indemnifying Party and the Indemnified Party by the
same counsel would be inappropriate due to the actual or potential differing
interests between them (such as the availability of different defenses). If the
Indemnifying Party, having elected to assume such control, thereafter fails to
defend the Third Party Claim within a reasonable time, the Indemnified Party
shall be entitled to assume such control. In such event, the Indemnifying Party
shall be bound by the results obtained by the Indemnified Party with respect to
such Third Party Claim.
13.6 Settlement of Third Party Claims. If the Indemnifying Party fails to
--------------------------------
assume control of the defense of any Third Party Claim in accordance with
Section 13.5, the Indemnified Party shall have the exclusive right to contest,
settle or pay the amount claimed. Whether or not the Indemnifying Party assumes
control of the negotiation, settlement or defense of any Third Party Claim, the
Indemnifying Party shall not settle any Third Party Claim without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld or delayed; provided, however, that the liability of the Indemnifying
Party shall be limited to the proposed settlement amount if any such consent is
not obtained within a reasonable period of time for any reason.
13.7 Co-operation. The Indemnified Party and the Indemnifying Party shall
------------
co-operate fully with each other with respect to Third Party Claims and shall
keep each other fully advised with respect thereto (including supplying copies
of all relevant documentation promptly as it becomes available).
13.8 Monetary Limit on Indemnification. No Claim shall be made pursuant
---------------------------------
to
35
Sections 13.1 or 13.2 until the aggregate Losses suffered or incurred by the
Indemnified Party in respect of all matters which could be the subject of such a
Claim exceed [*] (the "Deductible"), at which time the Indemnifying Party shall
be liable only for the amount of such Losses in excess of [*], subject to the
provisions set forth in the next sentence of this Section 13.8. An Indemnifying
Party shall have no liability to indemnify an Indemnified Party for any Losses
after the aggregate Claims made by such Indemnified Party suffered or incurred
by it exceed [*] dollars ($[*]) (the "Cap"); provided, however, that during the
period beginning on the first anniversary of the Closing Date and ending on the
[*] anniversary of the Closing Date, the Cap shall be decreased by (a) the
amount of any Losses claimed pursuant to Section 13.1(f) during the twelve-month
period after the Closing Date, and (b) the actual costs incurred by Seller for
[*] pursuant to the [*] (other than amounts paid by Seller pursuant to Section
7.12(g) hereof); and, provided further, that the Cap for any Losses claimed
pursuant to Section 13.1(f) after the [*] anniversary of the Closing Date shall
be decreased to zero. The Deductible and the Cap shall not apply with respect to
Claims made by Buyer with respect to Section 7.4 hereof.
13.9 Exclusivity. The provisions of this Article 13 shall apply to any
-----------
Claim for breach of any covenant, representation, warranty or other provision of
this Agreement or any agreement, certificate or other document delivered
pursuant hereto (other than a claim for specific performance or injunctive
relief) with the intent that all such Claims shall be subject to the limitations
and other provisions contained in this Article 13. Notwithstanding the
foregoing, any Claims for fraud or intentional misconduct by either party shall
not be subject to the limitations and other provisions contained in this Article
13.
13.10 Taxes and Insurance. The amount of the Indemnifying Party's
-------------------
liability under this Agreement shall be determined taking into account any
applicable insurance proceeds actually received by, and other savings, other
than a decrease in Taxes due to a deduction for Losses, that actually reduce the
overall impact of the Losses upon, the Indemnified Party.
13.11 No Consequential Damages. Notwithstanding anything contained in this
------------------------
Agreement to the contrary, no party shall be liable to the other party for
indirect, special, punitive or consequential loss or damage (including any loss
of revenue or profit) arising out of this Agreement. Both parties shall mitigate
their damages.
Article 14. Confidentiality.
14.1 Confidentiality. The Confidential Disclosure Agreement, effective
---------------
March 6, 1998, by and between Buyer and Seller shall terminate as of the Closing
and shall be of no further force and effect thereafter. In place thereof and as
a further condition to the
__________
[*] Confidential Treatment Requested.
36
obligations of Seller and Buyer to Closing, Seller and Buyer shall enter into
the New Confidential Disclosure Agreement in substantially the form attached
hereto as Exhibit I (the "New CDA") at the Closing.
---------
14.2 Public Announcements. Neither Seller or Buyer shall make any public
--------------------
announcements concerning matters set forth in this Agreement or the negotiation
thereof without the prior written consent of the other party unless such
disclosure is required by law or rules and regulations of the SEC or any
applicable stock exchange. Any such disclosure shall be provided for review to
the other party in advance of public release to the extent reasonably practical.
Article 15. Miscellaneous.
15.1 Assignment. Neither Seller nor Buyer may assign this Agreement, or
----------
assign its rights or delegate its duties hereunder, without the prior written
consent of the other party hereto.
15.2 Severability. Any provision of this Agreement which is illegal,
------------
invalid or unenforceable shall be ineffective to the extent of such illegality,
invalidity or unenforceability, without affecting in any way the remaining
provisions hereof.
15.3 Governing Law. This Agreement is deemed to have been made in the
-------------
State of Delaware and its interpretation, its construction and the remedies for
its enforcement or breach are to be applied pursuant to, and in accordance with,
the laws of the State of Delaware for contracts made and to be performed in that
state.
15.4 Entire Agreement; Amendment. This Agreement, and the Exhibits (when
---------------------------
executed) and Schedules hereto, and each additional agreement and document to be
executed and delivered pursuant hereto constitute all of the agreements of the
parties with respect to, and supersede all prior agreements and understandings
relating to the subject matter of, this Agreement or the transactions
contemplated by this Agreement. This Agreement may not be modified or amended
except by a written instrument specifically referring to this Agreement signed
by the parties hereto.
15.5 Waiver. No waiver by one party of the other party's obligations, or
------
of any breach or default hereunder by any other party, shall be valid or
effective, unless such waiver is set forth in writing and is signed by the party
giving such waiver; and no such waiver shall be deemed a waiver of any
subsequent breach or default of the same or similar nature or any other breach
or default by such other party.
15.6 Interpretation; Headings. This Agreement is the result of arms-
------------------------
length negotiations between the parties hereto and no provision hereof, because
of any ambiguity found to be contained therein or otherwise, shall be construed
against a party by reason of
37
the fact that such party or its legal counsel was the draftsman of that
provision. The section, subsection and any paragraph headings contained herein
are for the purpose of convenience only and are not intended to define or limit
or affect, and shall not be considered in connection with, the interpretation of
any of the terms or provisions of this Agreement.
15.7 Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15.8 Dispute Resolution. Any dispute arising out of or relating to this
------------------
Agreement shall be resolved in accordance with the procedures specified in this
Section 15.8, which shall be the sole and exclusive procedure for the resolution
of any such disputes. For any dispute or claim arising out of or relating to
this Agreement, or breach hereof, the parties, prior to filing any claims in a
court of law or to seeking binding arbitration, shall in good faith first
negotiate a written resolution of such dispute or claim within a period not to
exceed fifteen (15) days from the date of receipt of a party's request for such
negotiation. Such negotiations shall be conducted by managers of each party who
have authorization to resolve any such dispute or claim. In the event the
parties cannot negotiate a written resolution to such dispute or claim during
this fifteen-day negotiation period, and prior to filing any claims in a court
of law or to binding arbitration, the parties shall then submit such dispute or
claim to non-binding mediation with JAMS/ENDISPUTE or its successor. The
mediation may be initiated by the written request of either party to the other
party, shall commence within fifteen (15) days of the receipt of such notice and
shall be conducted in Orange County, California in accordance with such
mediation procedures established by JAMS/ENDISPUTE or its successor, unless
otherwise agreed by the parties. The mediation shall not exceed a period of
thirty (30) days. In the event the parties do not resolve such dispute or claim
as a result of such mediation or in the event such dispute or claim is not
resolved within thirty (30) days of the commencement of the mediation, either
party may seek to resolve the dispute or claim in a court of competent
jurisdiction or seek other legal or equitable resolution. The judgment or decree
of a court shall be deemed final when the time for appeal, if any, shall have
expired and no appeal shall have been taken or when all appeals taken shall have
been finally determined. Notwithstanding the foregoing, either party at any time
may apply to any court of competent jurisdiction for injunctive relief in the
event of an alleged breach of this Agreement or otherwise to prevent irreparable
harm.
15.9 Notices. All notices, requests, demands or other communications
-------
hereunder shall be in writing and shall be deemed to have been duly given to the
person designated below (i) on the date of delivery if delivered in person; (ii)
on the first business day after being sent by fax, provided that the successful
transmission of the fax has been confirmed through a confirmation function sheet
provided by the fax machine used for such transmission; (iii) on the third
business day following the deposit thereof in the
38
United States Mail, provided it is mailed by certified mail, return-receipt
requested and postage prepaid and properly addressed; or (iv) on the second
business day after being sent by air courier. Any party hereto may from time to
time, by written notice to the other parties, designate a different address,
which shall be substituted for the one specified below:
If to Seller:
Hewlett-Packard Company
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax no.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Manager,
Wireless Infrastructure Division
with a copy to:
Hewlett-Packard Company
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇: 20BQ
Palo ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax no.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to Buyer, to:
Powerwave Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax no.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President and Chief Executive Officer
with a copy to:
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax no.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
15.10 Amendment and Restatement of Original Agreement. The Original
-----------------------------------------------
Agreement is hereby amended and restated as provided herein, and the Original
Agreement is hereby superseded and shall have no further force and effect.
39
Article 16. Definitions.
For the purposes of this Agreement, unless the context otherwise requires,
the following terms shall have the respective meanings set forth below and
grammatical variations of such terms shall have corresponding meanings:
"Agreement" shall have the meaning set forth in the first paragraph
"Application Limitation Period" shall have the meaning set forth in
Section 13.4.
"Assigned Contracts" shall have the meaning set forth in Section
1.1(c)
"Assumed Obligations" shall have the meaning set forth in Section 2.1.
"at cost" shall have the meaning set forth in Section 2.1.
"▇▇▇▇ of Sale" shall have the meaning set forth in Section 9.6(a).
"Business" shall have the meaning set forth in the Recitals.
"Business Financial Information" shall have the meaning set forth in
Section 4.3.
"Business Partner" shall have the meaning set forth in Section 9.10.
"Buyer" shall have the meaning set forth in the first paragraph.
"Buyer's Liabilities" shall have the meaning set forth in Section
13.1(d).
"Cap" shall have the meaning set forth in Section 13.8.
"Capital Equipment" shall have the meaning set forth in Section
1.1(a).
"Claim" shall mean any claim, action, demand, lawsuit or proceeding.
"Closing" shall have the meaning set forth in Article 11.
"Closing Date" shall have the meaning set forth in Article 11.
"Code" shall have the meaning set forth in Section 3.2.
"Competitive Business" shall have the meaning set forth in Section
7.5(a)(i).
40
"Contest Notice" shall have the meaning set forth in Section 13.4.
"Deductible" shall have the meaning set forth in Section 13.8.
"Depletion of Inventory" shall have the meaning set forth in Section
7.13.
"due inquiry" shall have the meaning set forth in Section 4.7(m).
"Encumbrance" means any encumbrance, lien, charge, hypothecation,
pledge, mortgage, title retention agreement, security interest of any nature,
adverse claim, exception, right of set-off, reservation, easement, right of
occupation, any matter capable of registration against title, option, right of
pre-emption, privilege or any contract to create any of the foregoing.
"Excluded Assets" shall have the meaning set forth in Section 1.2.
"Expensed Assets" shall have the meaning set forth in Section 1.1(b).
"First Party Claims" shall have the meaning set forth in Section 13.3.
"Folsom Real Property" shall have the meaning set forth in Section
1.1(g).
"FTO" shall have the meaning set forth in Section 7.11.
"GAAP" shall have the meaning set forth in Section 4.3.
"FWA" shall have the meaning set forth in the Recitals.
"HSR Act" shall have the meaning set forth in Section 4.1(c).
"Indemnified Party" shall mean a person seeking indemnification as set
out in Section 13.3 and each of its directors, officers, stockholders, employees
and agents and the respective successors and assigns of such person and other
persons (each of the foregoing, individually, an "Indemnified Party" and,
collectively, the "Indemnified Parties").
"Indemnifying Party" shall mean a person providing indemnification as
set out in Section 13.3.
"Intellectual Property Rights" shall have the meaning set forth in
Section 4.6(a).
41
"Inventory" shall have the meaning set forth in Section 1.1(h).
"Leased Property" shall have the meaning set forth in Section
4.5(b)(ii).
"License Agreement" shall have the meaning set forth in Section 1.3.
"Licensed Intellectual Property Rights" shall mean the HP Intellectual
Property Rights, as defined in the License Agreement.
"Licenses and Permits" shall have the meaning set forth in Section
4.12(b).
"Losses" in respect of any matter means all claims, demands,
proceedings, losses, damages, obligations, liabilities, deficiencies, costs and
expenses (including all legal and other professional fees and disbursements,
interest, penalties and amounts paid in settlement) arising, directly or
indirectly, as a result of such matter (but excluding any consequential losses).
"[*]" shall have the meaning set forth in Section 2.2(h).
"[*]" shall have the meaning set forth in Section 2.2(h).
"Material Adverse Effect on Business" shall have the meaning set forth
in Section 4.2(b), second paragraph.
"Material Adverse Effect on Buyer" shall have the meaning set forth in
Section 4.2(b).
"Material Adverse Effect on Seller" shall have the meaning set forth
in Section 4.2(b), second paragraph.
"Material Buyer Contract" shall have the meaning set forth in Section
5.3(a).
"New CDA" shall have the meaning set forth in Section 14.2.
"Notice of Claim" shall have the meaning set forth in Section 13.4.
"Original Agreement" shall have the meaning set forth in the Recitals.
"Original Seller's Disclosure Schedule" shall have the meaning set
forth in the introductory paragraph of Article 4.
__________
[*] Confidential Treatment Requested.
42
"Partner" shall have the meaning set forth in the in Section 7.5(b).
"PCS" shall have the meaning set forth in the in the Recitals.
"Permitted Encumbrances" means:
(a) liens for Taxes, assessments and governmental charges due
and being contested in good faith and diligently by appropriate proceedings (and
for the payment of which adequate provision has been made);
(b) servitudes, easements, restrictions, rights-of-way and other
similar rights in real property or any interest therein, provided the same are
not of such a nature as to materially and adversely affect the use of the
property subject thereto or require the payment of any Taxes, assessments or
other amounts in connection therewith;
(c) liens for Taxes either not due and payable or due but for
which notice of assessment has not been given;
(d) assignments of insurance provided to landlords (or their
mortgagees) pursuant to the terms of any lease, and liens or rights reserved in
any lease for rent or for compliance with the terms of such lease;
(e) the reservations in any original grants from the government
of any real property or interest therein and statutory exceptions to title which
do not materially detract from the value of the real property concerned or
materially impair its use in the operation of the Business; and
(f) the Encumbrances described in Section 4.5(d) of Seller's
--------
Disclosure Schedule;
-------------------
"Prepayment" shall have the meaning set forth in Section 3.1(b).
"Principal Agreements" shall mean, collectively, the License
Agreement, the Product Supply Agreement, the Real Property Purchase Agreement,
the Transition Services Agreement, the New CDA and the ▇▇▇▇ of Sale and the
Assignment Agreement.
"Product Supply Agreement" shall have the meaning set forth in Section
1.4.
"Proprietary Materials" shall have the meaning set forth in Section
1.1(f).
43
"Purchase Price Allocation" shall have the meaning set forth in
Section 3.2.
"Purchase Price" shall have the meaning set forth in Section 3.1.
"Purchased Assets" shall have the meaning set forth in Section 1.1.
"Real Property Purchase Agreement" shall have the meaning set forth in
Section 1.5.
"Recruit" shall have the meaning set forth in Section 7.5(c).
"Retained Liabilities" shall have the meaning set forth in Section
2.2.
"Rights" shall have the meaning set forth in Section 7.1(a).
"RLL" shall have the meaning set forth in the Recitals.
"[*]" shall have the meaning set forth in Section 2.2(h).
"SEC" shall have the meaning set forth in Section 7.6.
"SEC Financial Statements" shall have the meaning set forth in Section
7.6.
"Selected Employees" shall mean any employee of Seller employed in the
Business to whom Buyer has made or shall make a formal written employment offer.
"Seller's Disclosure Schedule" shall have the meaning set forth in
Article 4, first paragraph.
"Seller's Knowledge" shall have the meaning set forth in Section 4.6.
"Seller" shall have the meaning set forth in the first paragraph.
"SMR" shall have the meaning set forth in the Recitals.
"Solicit" shall have the meaning set forth in Section 7.5(c).
"Tax" or "Taxes" shall have the meaning set forth in Section 4.13.
"Tax Returns" shall have the meaning set forth in Section 4.13.
"Technical Documentation" shall have the meaning set forth in Section
__________
[*] Confidential Treatment Requested.
44
1.1(d).
"Territory" shall have the meaning set forth in Section 7.5(a)(ii).
"Third Party Claims" shall have the meaning set forth in Section 13.3.
"Transition Services Agreement" shall have the meaning set forth in
Section 1.6.
"Warranties" shall have the meaning set forth in Section 4.10.
"Warranty Claims" shall have the meaning set forth in Section 2.1.
"WLL" shall have the meaning set forth in the Recitals.
45
IN WITNESS WHEREOF, each of Seller and Buyer has caused a duly authorized
representative to execute this Amended and Restated Asset Purchase Agreement on
the date first written above.
HEWLETT-PACKARD COMPANY POWERWAVE TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------- ------------------------------
Print name: ▇▇▇▇▇▇▇▇ ▇▇▇▇ Print name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------- -------------------------
Title: Group Business Development Title: Vice President, Finance and
-------------------------- ------------------------------
Manager Chief Financial Officer
-------------------------- ------------------------------
46