Exhibit 2.1
ASSET ACQUISITION AGREEMENT
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ASSET ACQUISITION AGREEMENT
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DATED AS OF MARCH 21, 2001
AMONG
Phoenix Technologies Ltd.,
and
RAVISENT Technologies Inc.
Ravisent Technologies Internet Appliance Group, Inc.
Ravisent I.P., Inc.
Ravisent Operating Company, Inc.
TABLE OF CONTENTS
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ARTICLE I CERTAIN DEFINITIONS............................................. 2
SECTION 1.1. CERTAIN DEFINED TERMS................................... 2
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ARTICLE II ACQUISITION OF ASSETS........................................... 4
SECTION 2.1. ASSETS TO BE ACQUIRED................................... 4
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SECTION 2.2. LIABILITIES ASSUMED AND EXCLUDED........................ 5
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SECTION 2.3. PURCHASE PRICE; ALLOCATION.............................. 5
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SECTION 2.4. CLOSING................................................. 6
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SECTION 2.5. CLOSING DELIVERIES BY SELLER............................ 6
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SECTION 2.6. CLOSING DELIVERIES BY PURCHASER......................... 6
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SECTION 2.7. DELIVERY OF THE PURCHASED ASSETS........................ 7
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SECTION 2.8. UNASSIGNABLE ASSETS..................................... 7
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SECTION 2.9. POST CLOSING ACTION..................................... 7
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER........................ 7
SECTION 3.1. ORGANIZATION AND GOOD STANDING OF SELLER................ 7
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SECTION 3.2. AUTHORIZATION AND VALIDITY.............................. 8
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SECTION 3.3. NO CONFLICT............................................. 8
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SECTION 3.4. CONSENTS................................................ 8
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SECTION 3.5. TITLE TO PURCHASED ASSETS............................... 8
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SECTION 3.6. SELLER CONTRACTS........................................ 9
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SECTION 3.7. LITIGATION.............................................. 9
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SECTION 3.8. INTELLECTUAL PROPERTY RIGHTS............................ 9
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SECTION 3.9. COMPLIANCE WITH LAWS.................................... 9
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SECTION 3.10. TAX MATTERS............................................. 10
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SECTION 3.11. EMPLOYEES............................................... 10
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SECTION 3.12. PENSION AND EMPLOYEE BENEFIT MATTERS.................... 11
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SECTION 3.13. YEAR 2000 MATTERS....................................... 11
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SECTION 3.14. BROKERS................................................. 11
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SECTION 3.15. INSURANCE............................................... 11
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SECTION 3.16. EMPLOYEE CONFIDENTIALITY AGREEMENTS..................... 12
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SECTION 3.17. DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES...... 12
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..................... 12
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TABLE OF CONTENTS
(continued)
Page
SECTION 4.1. ORGANIZATION AND GOOD STANDING OF PURCHASER.................. 12
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SECTION 4.2. AUTHORIZATION AND VALIDITY................................... 12
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SECTION 4.3. NO CONFLICT.................................................. 13
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SECTION 4.4. CONSENTS..................................................... 13
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SECTION 4.5. LITIGATION................................................... 13
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SECTION 4.6. BROKERS...................................................... 13
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SECTION 4.7. DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES........... 13
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SECTION 4.8. INVESTIGATION BY PURCHASER................................... 13
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ARTICLE V COVENANTS........................................................... 14
SECTION 5.1. CONDUCT OF BUSINESS PRIOR TO THE CLOSING..................... 14
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SECTION 5.2. CONSENT OF THIRD PARTIES..................................... 14
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SECTION 5.3. ACCESS TO INFORMATION........................................ 14
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SECTION 5.4. FURTHER ACTIONS.............................................. 14
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SECTION 5.5. CONFIDENTIALITY.............................................. 14
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SECTION 5.6. PUBLIC ANNOUNCEMENTS......................................... 15
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SECTION 5.7. BOOKS AND RECORDS............................................ 15
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SECTION 5.8. REGULATORY AND OTHER AUTHORIZATIONS; CONSENTS................ 15
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SECTION 5.9. MAINTENANCE OF INSURANCE..................................... 15
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SECTION 5.10. BULK SALES................................................... 16
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SECTION 5.11. SUPPORT...................................................... 16
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SECTION 5.12. SURVIVAL..................................................... 16
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ARTICLE VI EMPLOYEE MATTERS.................................................... 16
SECTION 6.1. OFFERS TO EMPLOYEES.......................................... 16
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SECTION 6.2. EMPLOYEE OBLIGATIONS OF SELLER............................... 16
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SECTION 6.3. SURVIVAL..................................................... 17
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ARTICLE VII TAX MATTERS......................................................... 17
SECTION 7.1. TRANSACTION TAXES............................................ 17
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SECTION 7.2. OTHER TAXES.................................................. 17
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SECTION 7.3. TAX LIABILITY................................................ 18
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ARTICLE VIII CONDITIONS TO THE CLOSING........................................... 18
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TABLE OF CONTENTS
(continued)
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SECTION 8.1. CONDITIONS TO OBLIGATIONS OF SELLER.......................... 18
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SECTION 8.2. CONDITIONS TO OBLIGATIONS OF PURCHASER....................... 19
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ARTICLE IX TERMINATION, AMENDMENT AND WAIVER.................................... 20
SECTION 9.1. TERMINATION.................................................. 20
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SECTION 9.2. EFFECT OF TERMINATION........................................ 20
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SECTION 9.3. WAIVER....................................................... 20
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ARTICLE X INDEMNIFICATION...................................................... 21
SECTION 10.1. LOSS DEFINED; INDEMNITEES.................................... 21
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SECTION 10.2. INDEMNIFICATION BY SELLER.................................... 21
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SECTION 10.3. INDEMNIFICATION BY PURCHASER................................. 21
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SECTION 10.4. THIRD PARTY CLAIMS........................................... 22
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SECTION 10.5. LIMITATIONS ON INDEMNIFICATION............................... 22
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SECTION 10.6. ESCROW FUND.................................................. 23
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SECTION 10.7. ESCROW PERIOD................................................ 23
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SECTION 10.8. CLAIMS UPON ESCROW FUND...................................... 23
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SECTION 10.9. RESOLUTION OF CONFLICTS; ARBITRATION......................... 23
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ARTICLE XI GENERAL PROVISIONS................................................... 24
SECTION 11.1. EXPENSES..................................................... 24
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SECTION 11.2. NOTICES...................................................... 24
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SECTION 11.3. HEADINGS; DISCLOSURE......................................... 25
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SECTION 11.4. SEVERABILITY................................................. 25
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SECTION 11.5. SURVIVAL..................................................... 26
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SECTION 11.6. ENTIRE AGREEMENT............................................. 26
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SECTION 11.7. ASSIGNMENT................................................... 26
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SECTION 11.8. NO THIRD-PARTY BENEFICIARIES................................. 26
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SECTION 11.9. AMENDMENT; WAIVER............................................ 26
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SECTION 11.10. GOVERNING LAW; JURISDICTION AND VENUE........................ 26
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SECTION 11.11. COUNTERPARTS................................................. 26
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SECTION 11.12. NO JOINT VENTURE............................................. 26
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Exhibits and Schedules
Exhibits
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A Assignment and Assumption Agreement and ▇▇▇▇ of Sale
B Escrow Agreement
C CEO Non-Competition Agreement
D Intellectual Property Assignment
E Form of Opinion from Counsel to Ravisent
F Legal Opinion of Seller's Special Delaware Counsel
G Secretary's Certificate of Seller
Schedules
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1 Intangible Assets
2 Tangible Assets
3 Seller Disclosure Letter
4 Excluded Assets
This ASSET ACQUISITION AGREEMENT (this "Agreement") is made and entered
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into as of March 21, 2001 (the "Effective Date"), by and among Phoenix
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Technologies Ltd., a Delaware corporation ("Purchaser"), RAVISENT Technologies
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Inc., a Delaware corporation ("Ravisent"), Ravisent Technologies Internet
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Appliance Group, a Delaware corporation ("Appliance Group"), Ravisent I.P., Inc.
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a Nevada corporation ("RIP") and Ravisent Operating Company, Inc. a Delaware
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corporation ("ROCI"), (Ravisent, Appliance Group, RIP, and ROCI referred to
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collectively herein as "Seller").
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W I T N E S S E T H:
WHEREAS, Seller desires to sell and assign to Purchaser, and Purchaser
desires to purchase and acquire from Seller, certain assets related to its
Internet Appliance Business (as defined below), all upon the terms and subject
to the conditions set forth in this Agreement; and
WHEREAS, in connection with the sale of assets described above, Seller will
permit Purchaser to make offers of employment and hire employees of Seller who
have worked in the Internet Appliance Business;
NOW, THEREFORE, in consideration of the facts stated in the above recitals
and of the mutual agreements and covenants hereinafter set forth, and for good
and valuable consideration, the receipt, sufficiency and adequacy of which is
hereby acknowledged, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
SECTION 1.1. Certain Defined Terms As used in this Agreement, the
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following terms shall have the following meanings:
"Affiliate" shall have those meanings ascribed to such terms by Rule 405
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promulgated under the U.S. Securities Act of 1933, as amended.
"Ancillary Agreements" means, collectively, the Assignment, ▇▇▇▇ of Sale
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and Assumption Agreement and the Escrow Agreement.
"Assignment, ▇▇▇▇ of Sale and Assumption Agreement" means the Assignment
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and Assumption Agreement and ▇▇▇▇ of Sale substantially in the form of Exhibit
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A.
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"Assumed Liabilities" means any and all liabilities of Seller under the
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Seller Contracts to the extent that such liabilities arise, are incurred or
require performance of an action on or subsequent to the Closing Date.
"Encumbrance" means any pledge, lien, collateral assignment, security
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interest, mortgage, deed of trust, title retention, conditional sale or other
security arrangement, or adverse claim of title or ownership, other than those,
which do not materially detract from or interfere with the ownership of the
properties subject thereto.
"ERISA" means the U.S. Employee Retirement Income Security Act of 1974, as
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amended, and the rulings and regulations promulgated thereunder.
"Escrow Agreement" means an Escrow Agreement substantially in the form of
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Exhibit B hereto.
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"Excluded Assets" means all assets of Seller other than the Purchased
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Assets, including, without limitation, (i) all Seller's cash, bank accounts and
securities; (ii) all insurance policies of Seller and all rights of Seller of
every nature and description under or arising out of such insurance policies
(except those insurance policies set forth in Section 3.6 of the Seller
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Disclosure Letter); (iii) all assets of, or held by or with respect to, any
employee benefit plan (whether or not governed by ERISA) or any trust, fund or
account that is related to any such employee benefit plan or that is similar in
purpose or function thereto; (iv) except as otherwise provided herein, Seller's
right, title and interest in the name "Ravisent" or any variation or combination
thereof, or Seller's other trademarks trade dress, monograms or logos and the
goodwill associated therewith (iv) all monies owed to Seller, accrued or
unaccrued, under the Seller Contracts as of the Closing Date, and (v) the assets
listed on Schedule 4 hereto.
"Employees" means those employees and consultants listed on Section 3.11(a)
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of the Seller Disclosure Letter hereto.
"Intangible Assets" means, collectively, the Intellectual Property Rights
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and intangible assets, properties and rights of Seller listed on Schedule 1
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hereto.
"Intellectual Property Rights" means any and all existing or future patent
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rights (including patent applications and disclosures), rights of priority,
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industrial design rights, copyrights, moral rights, rights of Seller in trade
secrets, know-how and any other intellectual property rights recognized in any
country or jurisdiction of the world, including licensed rights derived from
agreements with third parties.
"Internal Revenue Code" means the U.S. Internal Revenue Code of 1986, as
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amended, and the Treasury regulations (final and temporary) promulgated
thereunder and the administrative pronouncements issued by the Internal Revenue
Service relating thereto.
"Internet Appliance Business" means the business of designing, developing,
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manufacturing, testing, marketing, licensing, distributing, using, modifying,
operating, installing, servicing, supporting, maintaining, or otherwise using or
commercially exploiting one or more of the Internet Appliance Products.
"Internet Appliance Market" means the market for wired and wireless
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electronic products that are (i) capable of browsing the Internet and (ii) may
be capable of decompressing streaming video standards (e.g. Real Networks, Apple
Quicktime, Windows Media Formats, MPEG-1, MPEG-4, etc.) only on the Internet and
(iii) otherwise incapable of decompressing MPEG digital signals.
"Internet Appliance Products" means the services, hardware products,
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software products, development tools and any other products directed towards or
suitable to be offered in the Internet Appliance Market.
"Person" means any individual, partnership, limited liability company,
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firm, corporation, association, trust, unincorporated organization or other
entity, as well as any syndicate or group that would be deemed to be a person
under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Purchased Assets" shall have the meaning given such term in Section
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2.1(a).
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"Purchaser's Disclosure Letter" means Purchaser's Disclosure Letter dated
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as of the Effective Date, which is being delivered to Seller concurrently with
the execution of this Agreement.
"Seller Contracts" means those leases, licenses, agreements, contracts,
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understandings, arrangements, commitments and purchase orders listed on Section
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3.6 of the Seller Disclosure Letter hereto.
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"Seller's Disclosure Letter" means Seller's Disclosure Letter dated as of
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the Effective Date, which is being delivered to Purchaser concurrently with the
execution of this Agreement, and set forth in Schedule 3.
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"Seller's or Purchaser's knowledge" or "Knowledge of Purchaser or Seller":
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A particular fact or other matter shall be deemed to be within "Seller's
knowledge" or "Purchaser's knowledge," or similar phrases, as the case may be,
if any officer, or technical division head or manager of Seller or Purchaser (as
applicable) is aware of such fact or other matter.
"Tangible Assets" means, the tangible personal property assets of Seller
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listed on Schedule 2 hereto.
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"Tax" or "Taxes" means all taxes or similar governmental charge or levy of
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any kind whatsoever (whether payable directly or by withholding), including
without limitation, income taxes, gross receipts taxes, franchise taxes,
transfer taxes or fees, stamp taxes, sales taxes, use taxes, excise taxes, ad
valorem taxes, value added taxes, documentary taxes, intangible personal
property taxes, withholding taxes, real or personal property taxes, employee
withholding taxes, worker's compensation, payroll taxes, unemployment insurance,
social security, minimum taxes or windfall profits taxes, together with any
related liabilities, penalties, fines, additions to tax or interest imposed by
any governmental agency, and whether disputed or not.
ARTICLE II
ACQUISITION OF ASSETS
SECTION 2.1. Assets to Be Acquired.
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(a) Purchased Assets. Subject to the terms and conditions of this
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Agreement, at the Closing, Seller shall sell, assign, transfer, convey and
deliver (or cause to be sold, assigned, transferred, conveyed and delivered) to
Purchaser and Purchaser shall purchase and accept from Seller, free and clear of
all Encumbrances, all right, title and interest in and to all of the following
(collectively, the "Purchased Assets"):
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(i) the Intangible Assets (including all Intellectual Property
Rights therein and thereto);
(ii) the Tangible Assets;
(iii) the right to enforce confidentiality, non-disclosure, employee
invention assignment and other proprietary rights agreements between Seller and
Seller Employees related to
the Internet Appliance Business; provided that Seller may redact portions of
such documents which do not relate to the Internet Appliance Business;
(iv) the right to enforce confidentiality, non-disclosure or
similar agreements not assigned to Purchaser pursuant to the terms of this
Agreement, between Seller and third parties, related to the Internet Appliance
Business; provided that Seller may redact portions of such documents which do
not relate to the Internet Appliance Business;
(v) all of Seller's rights under the Seller Contracts, to the
extent that such rights arise on or subsequent to the Closing Date
(vi) all copies of Seller's marketing and sales information,
pricing, marketing plans, business plans, financial and business projections and
other files and records which pertain exclusively to the Internet Appliance
Business;
(vii) all rights, claims or causes of action against any third
party relating to the Internet Appliance Business or the Purchased Assets,
except for claims with regard to Excluded Assets; and
(viii) the goodwill associated with the foregoing.
(b) Excluded Assets. Notwithstanding any provision to the contrary set
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forth herein, the parties agree that Seller is not selling or assigning to
Purchaser, and the Purchased Assets do not include, any of the Excluded Assets.
SECTION 2.2. Liabilities Assumed and Excluded.
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(a) At the Closing, Purchaser shall assume and be responsible for the
payment, performance, and discharge of the Assumed Liabilities.
(b) Except for the Assumed Liabilities, Purchaser shall not assume or
otherwise become obligated to pay, perform or discharge any liabilities, debts
or obligations of Seller and Seller shall retain, and shall be solely
responsible and liable for paying, performing and discharging when due, all of
Seller's liabilities other than the Assumed Liabilities.
SECTION 2.3. Purchase Price; Allocation.
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(a) Purchase Price. Subject to the performance by Seller of all of its
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obligations under this Agreement (including delivering all documents required to
be delivered) at the Closing, in consideration of the acquisition of the
Purchased Assets under Section 2.1, Purchaser agrees (i) to deliver to Seller
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the sum of Sixteen Million Two Hundred Thousand Dollars ($16,200,000) in
immediately available funds and (ii) to deliver to a mutually acceptable escrow
agent (the "Escrow Agent") the sum of One Million Eight Hundred Thousand Dollars
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($1,800,000) (the "Escrow Cash") in immediately available funds to be held by
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such Escrow Agent for a period of twelve (12) months ("Escrow Period") in
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accordance with the terms and conditions of an Escrow Agreement to be executed
at Closing (together, the "Purchase Price").
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(b) Allocation. As soon as practicable following the Effective Date,
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Purchaser and Seller shall use best efforts to agree upon an allocation of the
Purchase Price among the Purchased Assets,
in accordance with the allocation requirements of Section 1060 of the Internal
Revenue Code and the regulations thereunder. The allocation of the Purchase
Price agreed upon by the parties pursuant to this Section shall be reduced to a
writing executed and delivered by Seller and Purchaser to each other (the
"Purchase Price Allocation Agreement"). Any subsequent adjustments to the
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allocable Purchase Price shall be reflected in the Purchase Price Allocation
Agreement in a manner consistent with Treasury Regulation (S)1.1060-IT(e).
(i) Consistent Treatment and Characterization of Amounts. For all
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Tax purposes, Purchaser and Seller agree to report the transactions contemplated
in this Agreement in a manner consistent with the Purchase Price Allocation
Agreement, and will not take any position inconsistent therewith in any Tax
return, in any refund claim, in any litigation or otherwise, unless required to
do so by a governmental authority. Seller and Purchaser shall each be
responsible for the preparation of their own Section 1060 statements and forms
in accordance with applicable Tax laws, and each shall execute and deliver to
each other such statements and forms as are reasonably requested by the other
party to accomplish the foregoing.
SECTION 2.4. Closing. Subject to the terms and conditions of this
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Agreement, the sale, purchase and transfer of the Purchased Assets and the
assumption of the Assumed Liabilities shall take place at a closing (the
"Closing"). The Closing shall occur as soon as reasonably practicable upon
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fulfillment or waiver of the closing conditions set forth in Article VIII (the
"Closing Date") at the offices of Phoenix Techologies Ltd., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ at 10:00 a.m. local time.
SECTION 2.5. Closing Deliveries by Seller. At the Closing, Seller shall
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deliver or cause to be delivered to Purchaser:
(a) duly executed counterparts of each Ancillary Agreement to which Seller
is a party;
(b) Seller shall deliver to Purchaser any assignments, and any required
consents to assignment, that it has obtained in respect of the Seller Contracts,
duly executed by parties having the authority to so assign or consent to assign.
(c) assignments substantially in the forms of Exhibit D (the "Intellectual
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Property Assignment"), by which Seller shall assign to Purchaser the
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Intellectual Property Rights included in the Purchased Assets, duly executed on
Seller's behalf by an officer of Seller with his or her execution notarized; and
(d) all other items required to be delivered by Seller at the Closing
pursuant to Section 8.2 of this Agreement, any other provision hereof or any
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Ancillary Agreement.
SECTION 2.6. Closing Deliveries by Purchaser. At the Closing, Purchaser
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shall deliver or cause to be delivered to Seller:
(a) payment of the Purchase Price by wire transfer of immediately
available funds to Seller and Escrow Agent in accordance with Section 2.3(a)
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hereof;
(b) executed counterparts of the Escrow Agreement and each Ancillary
Agreement to which Purchaser is a party; and
(c) all other items required to be delivered by Purchaser at the Closing
pursuant to Section 8.1 of this Agreement or any other provision hereof or any
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Ancillary Agreement.
SECTION 2.7. Delivery of the Purchased Assets. Seller shall make
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available the Purchased Assets to Purchaser on the Closing Date at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
SECTION 2.8. Unassignable Assets. Notwithstanding any other provision of
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this Agreement or any of the Ancillary Agreements, to the extent that any of the
Seller Contracts or any other assets constituting part of the Purchased Assets
are not assignable or otherwise transferable to Purchaser without the consent,
approval or waiver of another party thereto or any third party (including any
governmental agency), or if such assignment or transfer would constitute a
breach thereof or a violation of any applicable law or agreement with any third
party, then neither this Agreement nor such Ancillary Agreements shall
constitute an assignment or transfer (or an attempted assignment or transfer)
thereof until such consent, approval or waiver of such party or parties has been
duly obtained. With respect to each Seller Contract whose assignment or transfer
to Purchaser requires the consent, approval or waiver of another party thereto
or any third party, Seller shall use its best reasonable efforts to obtain such
consent, approval or waiver of such other party or parties or such third party
to such assignment or transfer as promptly as practicable. Purchaser agrees to
cooperate with Seller and supply relevant information to such party or parties
or such third party in order to assist Seller in its obligations under this
Section.
SECTION 2.9. Post Closing Action. Subsequent to the Closing Date, Seller
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shall, and shall cause any subsidiary of Seller to, from time to time execute
and deliver, upon the request of Purchaser, all such other and further materials
and documents and instruments of conveyance, transfer or assignment as may
reasonably be requested by Purchaser to effect, record or verify the transfer to
and vesting in Purchaser of full right, title and interest in and to the
Purchased Assets, free and clear of all Encumbrances, (except as specified in
Section 3.5(a) of the Seller Disclosure Letter) in accordance with the terms of
this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser that, except as
expressly set forth in the Seller's Disclosure Letter, all of the following
statements, representations and warranties are true and correct as of the
Effective Date:
SECTION 3.1. Organization and Good Standing of Seller. Seller is a
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corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes qualification necessary, except for such failures to be so
qualified and in good standing would not, individually or in the aggregate,
prevent or materially delay the consummation of the transactions contemplated in
this Agreement or the Ancillary Agreements, or otherwise prevent or materially
delay Seller from performing its obligations under this Agreement or the
Ancillary Agreements. Seller has all requisite corporate power and authority to
carry on the Internet Appliance Business as now conducted and to enter into this
Agreement and the Ancillary Agreements and the transactions contemplated hereby
and thereby.
SECTION 3.2. Authorization and Validity. The execution and delivery of
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this Agreement and the Ancillary Agreements and the performance of all
obligations of Seller hereunder and thereunder, has been duly and validly
authorized by all necessary corporate action on the part of Seller and no other
act or proceeding on the part of or on behalf of Seller by or on behalf of its
stockholders is necessary to approve the execution and delivery of this
Agreement, the Ancillary Agreements and such other agreements and instruments,
the performance by Seller of its obligations hereunder or thereunder and the
consummation of the transactions contemplated hereby and thereby. This Agreement
has been, and at the Closing the other Ancillary Agreements will be, duly
executed and delivered by Seller. This Agreement constitutes, and, upon Seller's
execution of each of the other Ancillary Agreements, each of the other Ancillary
Agreements will constitute, assuming the due authorization, execution and
delivery by Purchaser, a legal, valid and binding obligation of Seller
enforceable against Seller in accordance with its terms, except (a) as limited
by applicable bankruptcy, insolvency, reorganization, moratorium, and other laws
of general application, now or hereafter in effect, affecting enforcement of
creditors' rights generally; and (b) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
SECTION 3.3. No Conflict. The execution, delivery and performance of this
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Agreement and the Ancillary Agreements by Seller and the consummation of the
transactions contemplated hereby and thereby, subject to compliance with the
consents required in Section 3.4 of the Seller Disclosure Letter, do not and
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will not (a) result in a violation or default in any material respect of any
provision of Seller's charter documents or any judgment, order, writ or decree
applicable to Seller, (b) constitute a default (or event which with the giving
of notice or lapse of time, or both, would become a breach, violation or
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any of the Seller Contracts or (c) result in
the creation of any Encumbrance on any of the Purchased Assets.
SECTION 3.4. Consents. No consent, approval, order or authorization of or
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registration, qualification, designation, declaration or filing with, any
governmental entity on the part of Seller is required in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except for where the failure to obtain such consents,
approvals, orders or authorizations or to make such registrations,
qualifications, designations, declarations or filings would not prevent or
materially delay consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements. Section 3.4 of the Seller Disclosure Letter sets
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forth a true and complete list of each and every instrument pursuant to which
the consent or approval of any third party or governmental authority is required
in order for Seller to assign or transfer to Purchaser any of the Purchased
Assets or any rights or obligations under Seller Contracts.
SECTION 3.5. Title to Purchased Assets.
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(a) Purchased Assets. Seller and its wholly owned subsidiaries own all of
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the Purchased Assets and has good and marketable title in and to all of the
Purchased Assets, free and clear of all Encumbrances whatsoever. Title to all of
the Purchased Assets is freely transferable from Seller and its Affiliates to
Purchaser free and clear of all Encumbrances.
(b) Sufficiency of Assets. The Purchased Assets include all the assets and
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rights that are necessary and sufficient to conduct the Internet Appliance
Business as conducted by the Seller as of the Effective Date.
SECTION 3.6. Seller Contracts. Section 3.6 of the Seller Disclosure
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Letter a comprehensive list of all Seller Contracts, all of which are valid, in
full force and effect, and enforceable in accordance with their respective terms
(except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally and as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies). Neither
Seller nor, to Seller's knowledge, any other party to any Seller Contract, is in
breach or default in performance of any of their respective obligations
thereunder, and no event exists which, with the giving of notice or lapse of
time or both, would constitute a breach, default or event of default on the part
of Seller or, to Seller's knowledge, on the part of any other party. As of the
Effective Date, no party has made a payment to Seller under the Seller Contracts
in consideration of performance to be done by Purchaser after the Closing Date.
SECTION 3.7. Litigation. There is no claim, action, suit, arbitration,
----------
mediation, investigation or other proceeding of any nature pending or, of
Seller's knowledge, threatened, at law or in equity, by way of arbitration or
before any court, governmental department, commission, board or agency that
could adversely affect the Purchased Assets, or contests or challenges Seller's
authority, right or ability to sell or convey, as the case may be, any of the
Purchased Assets to Purchaser hereunder or otherwise perform Seller's
obligations under this Agreement or any of the Ancillary Agreements. There are
no judgments, decrees, injunctions or orders of any court, governmental
department, commission, agency, instrumentality or arbitrator pending or binding
against Seller, which adversely affect any of the Purchased Assets.
SECTION 3.8. Intellectual Property Rights.
----------------------------
(a) Ownership. Seller and its Affiliates are the sole owner of all
---------
Intellectual Property Rights in the Intangible Assets, to be transferred to
Purchaser as set forth herein. Seller has taken reasonable steps to maintain
and protect all Intellectual Property Rights in the Intangible Assets.
(b) Non-Infringement. To Seller's knowledge, the Purchased Assets have not
----------------
infringed or violated and currently do not infringe, violate, or misappropriate
any Intellectual Property Rights of any third party, and, to Seller's knowledge,
no third party has asserted or threatened to assert against Seller any claim of
infringement or misappropriation of any such rights. To Seller's knowledge, no
third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with any of the Intellectual Property Rights in and to the
Purchased Assets.
(c) Licenses. Section 3.8 of the Seller Disclosure Letter sets forth each
-------- -----------
material license Seller has granted to any third party with respect to any
Purchased Asset. Section 3.8 of the Seller's Disclosure Letter sets forth each
-----------
Intellectual Property Right in connection with the development, use or sale of
the Internet Appliance Products that a third party owns and that Seller uses
pursuant to a license, sublicense, agreement or other permission.
SECTION 3.9. Compliance with Laws. Seller has complied in all respects
--------------------
with and has not received any notices of violation with respect to, any federal,
state or local statute, law or regulation applicable to any of the Purchased
Assets, except for such violations and failures to comply that would not prevent
or materially delay the consummation of the transactions contemplated in this
Agreement or the Ancillary Agreements, or otherwise prevent or materially delay
Seller from performing its obligations under this Agreement or the Ancillary
Agreements.
SECTION 3.10. Tax Matters.
-----------
(a) Tax Assessments. There is no claim or assessment pending or, to
---------------
Seller's knowledge, threatened for any alleged deficiency in Tax attributable to
Seller or the affiliated, combined consolidated or unitary group of which Seller
is or had been a member (the "Seller Group"), relating to the Purchased Assets,
------------
and to Seller's knowledge, there is no audit or investigation with respect to
any liability of Seller or the Seller Group for Taxes.
(b) No Tax Liens. There are (and as of immediately following the Closing
------------
there will be) no Encumbrances on any of the Purchased Assets relating to or
attributable to Taxes, other than liens for Taxes not yet due and payable.
(c) Filings and Tax Liability. (i) Seller has duly filed all federal,
-------------------------
state, local and foreign Tax returns required to be filed by it (in material
compliance with applicable Tax laws and regulations); (ii) no extensions with
respect to such Tax returns has been requested or granted; and (iii) all Taxes
required to be paid by Seller as set forth in such Tax returns have been paid.
SECTION 3.11. Employees.
---------
(a) Section 3.11(a) of the Seller Disclosure Letter sets forth a
---------------
comprehensive list of all employees and consultants working in the Internet
Appliance Business (each, an "Employee" and collectively, the "Employees") and,
-------- ---------
for each Employee, the annual base salary of such Employee effective as of the
Effective Date, their current status as exempt or non-exempt, all bonuses,
profit sharing, or commissions accrued or payable, any special compensatory or
reimbursement arrangements, comp time or other arrangements with such Employees
and any other compensatory agreements between such Employee and Seller.
(b) No collective bargaining agent or employee association represents
Employees with respect to Seller's employment of Employee.
(c) There has not been for a period of twelve (12) consecutive months
prior to the Effective Date, nor is there existing or threatened, any strike,
slowdown, picketing, or work stoppage with respect to the Internet Appliance
Business.
(d) Seller is in material compliance with all laws relating to employment
that are applicable to the Employees;
(e) Set forth in Section 3.11(e) of the Seller Disclosure Letter is a
---------------
complete and accurate list of all Employees currently on leave and in receipt of
short-term disability ("STD") benefits along with their STD commencement date
---
and expected date of return to work;
(f) Set forth in Section 3.11(f) of the Seller Disclosure Letter is a
---------------
complete and accurate list of all Employees currently on leave and in receipt of
long-term disability ("LTD") benefits along with their LTD commencement date and
---
expected date of return to work;
(g) Set forth in Section 3.11(g) of the Seller Disclosure Letter is a
---------------
complete and accurate list of all Employees currently on leave and in receipt of
applicable workers' compensation legislation benefits along with, if applicable,
their leave commencement date and expected date of return to work; and
(h) There are no outstanding assessments, penalties, fines, levies,
charges, surcharges or other amounts due or owing pursuant to any applicable
workers' safety and insurance laws in respect of the Internet Appliance Business
or Employees and no audit is currently being performed pursuant to any
applicable workers' safety and insurance law.
SECTION 3.12. Pension and Employee Benefit Matters.
------------------------------------
(a) Neither Seller nor any entity which, within the last 5 years, has been
under common control of or affiliated with Seller (an "ERISA Affiliate") within
---------------
the meaning of Section 414(b), (c) or (m) of the Internal Revenue Code, has ever
been obligated to contribute to any "multi-employer plan" as such term is
defined in Section 3(37) of ERISA. No liability to the Pension Benefit Guaranty
Corporation is expected to be incurred in connection with the transactions
contemplated hereby. Neither Seller nor any ERISA Affiliate has any liability
with respect to a pension plan that is subject to Section 412 of the Internal
Revenue Code or Title IV of ERISA.
(b) With respect to the employee plans maintained, sponsored, or
contributed to by Seller which are intended to be qualified under Section 401(a)
of the Internal Revenue Code ("Seller Employee Plans"), no event has occurred
-----------------------
and, to Seller's knowledge, there exists no condition or set of circumstances in
connection with which Seller could be subject to any liability under the terms
of or with respect to, such Seller Employee Plans, ERISA, the Internal Revenue
Code or any other applicable law. Each Seller Employee Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code has (i) received a
favorable determination letter from the Internal Revenue Service regarding such
qualified status or (ii) been established under a standardized prototype plan
for which an Internal Revenue Service opinion letter has been obtained by the
plan sponsor and is valid as to the adopting employer. Set forth on Section
-------
3.12 of the Seller Disclosure Letter is a list of the most recent Internal
----
Revenue Service determination letters with respect to any such Plans, accurate
and complete copies of which letters have been delivered to Parent. Each Seller
Employee Plan has been maintained in material compliance with its terms and with
the requirements prescribed by all applicable laws, including but not limited to
ERISA and the Internal Revenue Code, which are applicable to such Seller
Employee Plans.
SECTION 3.13. Year 2000 Matters. None of the Purchased Assets or Internet
-----------------
Appliance Products are date or time sensitive.
SECTION 3.14. Brokers. Other than Bear, ▇▇▇▇▇▇▇ & Co., Inc., the fees and
-------
expenses of whom shall be paid by Seller, neither Seller, nor any of its
affiliates, has employed any broker, finder, investment banker or agent,
incurred or agreed to pay any brokerage fee, finder's fee or commission with
respect to the transactions contemplated by this Agreement, or dealt with anyone
purporting to act in the capacity of a broker, finder, investment banker or
agent with respect thereto.
SECTION 3.15. Insurance. Section 3.15 of the Seller Disclosure Letter
--------- ------------
contains a list of all insurance policies maintained by the Seller for the
benefit of or in connection with the Purchased Assets and each such policy will
be maintained in full force and effect up to the Closing Date. The Seller is not
in default of any material obligation pursuant to any of these insurance
policies. All premiums payable under all such policies and bonds have been paid
and the Seller is otherwise in full compliance with the material terms of such
policies and bonds (or other policies and bonds providing substantially similar
insurance coverage).
SECTION 3.16. Employee Confidentiality Agreements. Any and all employees
-----------------------------------
and consultants, including all prior employees, of Seller who have or who have
had reasonable access to, or knowledge of, any secret, confidential, or
proprietary information and to inventions relating to the Internet Appliance
Business have executed written confidentiality agreements with Seller pursuant
to which such employees and consultants have agreed to maintain in confidence
secret, confidential or proprietary information learned or acquired in the scope
of their employment, and any and all such employees, including all such prior
employees and consultants, have executed a specific assignment of any title,
shop right or license to Seller and that all Purchased Assets created by any
employee or consultant have been by employees or contractors under work-for-
hire, as understood under common law.
SECTION 3.17. Disclaimer of Other Representations and Warranties. Neither
--------------------------------------------------
Seller, the stockholders of Seller nor any Affiliates of Seller make, and they
have not made, any representations or warranties relating to either Seller or
any of its Affiliates in connection with the transactions contemplated hereby
other than those expressly set forth by Seller in this Article III.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Seller that, except as set
forth in the Purchaser's Disclosure Letter, all of the following statements,
representations and warranties are true, accurate and correct:
SECTION 4.1. Organization and Good Standing of Purchaser. Purchaser is a
-------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation and in each jurisdiction where the
character of the properties owned, leased or operated by it or the nature of its
business makes qualification necessary, except for such failures to be so
qualified and in good standing would not prevent or materially delay the
consummation of the transactions contemplated in this Agreement or the Ancillary
Agreements, or otherwise prevent or materially delay Purchaser from performing
its obligations under this Agreement or the Ancillary Agreements. Purchaser has
all requisite corporate power and authority to enter into this Agreement and the
Ancillary Agreements and the transactions contemplated hereby and thereby.
SECTION 4.2. Authorization and Validity. The execution and delivery of
--------------------------
this Agreement and the Ancillary Agreements and the performance of all
obligations of Purchaser hereunder and thereunder, has been duly and validly
authorized by all necessary corporate action on the part of Purchaser and no
other act or proceeding on the part of or on behalf of Purchaser by or on behalf
of its shareholders is necessary to approve the execution and delivery of this
Agreement, the Ancillary Agreements and such other agreements and instruments,
the performance by Purchaser of its obligations hereunder or thereunder and the
consummation of the transactions contemplated hereby and thereby. This Agreement
has been, and at the Closing the other Ancillary Agreements will be, duly
executed and delivered by Purchaser. This Agreement constitutes, and, upon
Purchaser's execution of each of the other Ancillary Agreements, each of the
other Ancillary Agreements will constitute, assuming the due authorization,
execution and delivery by Seller, a legal, valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms, except (a)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, and
other laws of general application, now or hereafter in effect, affecting
enforcement of creditors'
rights generally; and (b) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies.
SECTION 4.3. No Conflict. The execution, delivery and performance of
-----------
this Agreement and the Ancillary Agreements by Purchaser and the consummation of
the transactions contemplated hereby and thereby do not and will not (a) result
in a violation or default in any material respect of any provision of
Purchaser's charter documents or any judgment, order, writ or decree applicable
to Purchaser, or (b) constitute a default (or event which with the giving of
notice or lapse of time, or both, would become a breach, violation or default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any material contract of Purchaser.
SECTION 4.4. Consents. No consent, approval, order or authorization of or
--------
registration, qualification, designation, declaration or filing with, any
governmental entity on the part of Purchaser is required in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except for where the failure to obtain such consents,
approvals, orders or authorizations or to make such registrations,
qualifications, designations, declarations or filings would not prevent or
materially delay consummation of the transactions contemplated by this Agreement
and the Ancillary Agreements.
SECTION 4.5. Litigation. There is no claim, action, suit, arbitration,
----------
mediation, investigation or other proceeding of any nature pending or, to
Purchaser's knowledge, threatened, at law or in equity, by way of arbitration or
before any court, governmental department, commission, board or agency that
could adversely affect, contest or challenge Purchaser's authority, right or
ability to purchase or receive any of the Purchased Assets from Seller hereunder
or otherwise perform Purchaser's obligations under this Agreement or any of the
Ancillary Agreements.
SECTION 4.6. Brokers. Neither Purchaser nor any of its affiliates has
-------
employed any broker, finder or agent, incurred or agreed to pay any brokerage
fee, finder's fee or commission with respect to the transactions contemplated by
this Agreement, or dealt with anyone purporting to act in the capacity of a
broker, finder or agent with respect thereto.
SECTION 4.7. Disclaimer of Other Representations and Warranties. Neither
--------------------------------------------------
the stockholders of Purchaser nor any affiliate of Purchaser make, and they have
not made, any representations or warranties other than those set forth in this
Article IV.
SECTION 4.8. Investigation by Purchaser. Purchaser has conducted an
--------------------------
investigation, review and analysis of the operations, assets, liabilities,
results of operations, financial condition, software and prospects of the
Internet Appliance Business and the Purchased Assets, which investigation,
review and analysis was performed by Purchaser and its Affiliates, and, to the
extent Purchaser deemed appropriate, by Purchaser's advisors and
representatives. Purchaser acknowledges that it and its representatives have
been provided adequate access to the personnel, properties, premises and records
of Seller it has deemed necessary to enter into this Agreement and, at Closing,
to consummate the transactions contemplated hereby.
ARTICLE V
COVENANTS
SECTION 5.1. Conduct of Business Prior to the Closing. Seller agrees
----------------------------------------
that, from the Effective Date and continuing until the earlier of the Closing
Date or the termination of this Agreement according to its terms, Seller will
carry on the Internet Appliance Business in the ordinary course and consistent
with Seller's past practice (taking into account the sale of the Purchased
Assets contemplated hereby and Seller's other agreements hereunder) except for
such actions of Seller as may be contemplated by this Agreement or agreed to by
Purchaser. Without limiting the foregoing, during the period described in the
preceding sentence, except in the ordinary course and consistent with Seller's
past practice or as agreed to by Purchaser, Seller agrees not to: (i) sell,
transfer, assign, convey, license, move, relocate, encumber or otherwise dispose
of any of the Purchased Assets; (ii) transfer any Employee to any other division
or position of employment within Seller; (iii) terminate the employment of any
Employee; or (iv) materially change the base salary or bonus of any Employee or
establish a bonus plan or any new employee benefits for any Employee without
Purchaser's prior written approval.
SECTION 5.2. Consent of Third Parties. Seller shall use its commercially
------------------------
reasonable efforts to obtain the consent in writing of all persons, if any,
necessary to permit Seller to assign and transfer all of the Purchased Assets
free and clear of all Encumbrances.
SECTION 5.3. Access to Information. From the Effective Date until the
---------------------
earlier of the Closing Date or the termination of this Agreement according to
its terms, Seller will afford to the representatives of Purchaser, including its
counsel and auditors, during normal business hours, access to any and all of the
Purchased Assets such that Purchaser may have a reasonable opportunity to make a
full investigation of the Purchased Assets in advance of the Closing Date as it
shall reasonably desire, and the Seller will confer with representatives of
Purchaser and will furnish to Purchaser, either orally or by means of such
records, documents, and memoranda as are available or reasonably capable of
preparation, such information as Purchaser may reasonably request, and Seller
will furnish to Purchaser's auditors all consents and authority that they may
reasonably request in connection with any such examination.
SECTION 5.4. Further Actions. Each of the parties hereto shall, at its
---------------
own expense, execute and deliver such documents and other papers and take such
further actions as may be required to carry out the provisions of this
Agreement, the Escrow Agreement and the Ancillary Agreements, to cause the
conditions to Closing set forth in Article VIII to be fulfilled as promptly as
possible, and to give effect to the transactions contemplated by this Agreement
and the Ancillary Agreements.
SECTION 5.5. Confidentiality. All copies of financial information,
---------------
marketing and sales information, pricing, marketing plans, business plans,
financial and business projections, manufacturing processes and procedures,
formulae, methodologies, inventions, product designs, product specifications and
drawings, and other confidential and/or proprietary information of a party (the
"Disclosing Party") disclosed to the other party (the "Non-Disclosing Party") in
---------------- --------------------
the course of negotiating the transactions contemplated by this Agreement
("Confidential Information") will be held in strict confidence and not used or
------------------------
disclosed by the Non-Disclosing Party or any of its employees, affiliates or
stockholders and, upon termination of this Agreement in accordance with its
terms and upon the Disclosing Party's written request to the Non-Disclosing
Party, will be promptly
destroyed by the Non-Disclosing Party or returned to the Disclosing Party. The
Non-Disclosing Party's employees, affiliates and stockholders will not be given
access to Confidential Information except on a "need to know" basis. It is
agreed that Confidential Information will not include information that: (a) is
proven to have been known to the Non-Disclosing Party prior to receipt of such
information from the Disclosing Party; (b) is disclosed by a third party having
the legal right to disclose such information and who owes no obligation of
confidence to the Disclosing Party; (c) is now, or later becomes part of the
general public knowledge or literature in the art, other than as a result of a
breach of this Agreement by the Non-Disclosing Party; or (d) is proven to be
independently developed by the Disclosing Party without the use of any
Confidential Information. The provisions of this Section 5.5 shall supersede the
-----------
provisions of the letter agreement, dated as of October 25, 2000, between
Purchaser and Seller (the "Confidentiality Agreement").
-------------------------
SECTION 5.6. Public Announcements. On and prior to the Closing Date,
--------------------
Purchaser and Seller shall advise and confer with each other prior to the
issuance of any reports, statements or releases concerning this Agreement
(including the exhibits hereto) and the transactions contemplated hereby.
Neither Purchaser nor Seller will make any public disclosure prior to the
Closing or with respect to such matters unless both parties agree on the text
and timing of such public disclosure, except as may be required by law, court
process, securities exchange listing agreement or the rules of the National
Association of Securities Dealers. Promptly following the execution of this
Agreement, the parties shall issue a joint press release approved by both
parties announcing the transactions contemplated hereby.
SECTION 5.7. Books and Records. If, in order to properly prepare
-----------------
documents required to be filed with governmental authorities (including Tax
authorities) or its financial statements, it is necessary that any party hereto
or any successors be furnished with additional information relating to the
Purchased Assets, and such information is in the possession of any other party
hereto, such party agrees to use its good faith efforts to promptly furnish such
information to the party needing such information, at the cost and expense of
the party being furnished such information. From and after the Effective Date
and continuing after the Closing, each party shall cooperate with the other
party and provide at the expense of the requesting party, all information that
may be required to enable such party to comply with all applicable laws, rules
and regulations, and any governmental filing requirements, with respect to
reporting and reflecting the transactions contemplated by this Agreement and the
Ancillary Agreements.
SECTION 5.8. Regulatory and Other Authorizations; Consents.
---------------------------------------------
(a) Efforts. Each party hereto will use all commercially reasonable
-------
efforts to obtain all authorizations, consents, orders and approvals of all
federal, state and local regulatory bodies and officials that may be or become
necessary for the execution and delivery of, and the performance of its
obligations pursuant to, this Agreement and the Ancillary Agreements and will
cooperate fully with the other party in promptly seeking to obtain all such
authorizations, consents, orders and approvals. The parties hereto will not take
any action that will have the effect of delaying, impairing or impeding the
receipt of any required approvals.
SECTION 5.9. Maintenance of Insurance. Seller shall continue to maintain
------------------------
in full force and effect until the Closing Date all policies of insurance in
effect with respect to the Purchased Assets or duly renew the same upon similar
terms and conditions.
SECTION 5.10. Bulk Sales. Seller and Purchaser expressly waive compliance
----------
with any and all applicable bulk sales laws in connection with the transactions
contemplated in this Agreement and the Ancillary Agreements; provided, however,
that Seller agrees to indemnify Purchaser for any liabilities and costs
associated with such noncompliance, including, but not limited to Taxes
associated therewith.
SECTION 5.11. Support. As of the Closing Date, for a period of up to six
-------
months thereafter, Purchaser shall be entitled to occupy and use the space
currently occupied and used by the Employees at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (the "Leased Premises") solely for the purpose of conducting the
---------------
Internet Appliance Business. In consideration for the occupancy and use of the
Leased Premises by Purchaser, Purchaser shall pay its pro rata share of the
costs incurred by Seller for the lease and occupancy of the Leased Premises,
including but not limited to, lease payments, electricity and heating expenses,
telecommunications expenses and all similar costs associated with the occupancy
and use of the Leased Premises.
SECTION 5.12. Survival. Each of the agreements and covenants set forth in
--------
this Article V shall survive the Closing.
ARTICLE VI
EMPLOYEE MATTERS
SECTION 6.1. Offers to Employees.
-------------------
(a) Purchaser shall have the right to solicit and make written offers of
employment or services as a consultant to any Employee. Seller agrees that,
from the Effective Date and continuing until the earlier of the Closing Date or
the termination of this Agreement according to its terms, Seller will provide
Purchaser with reasonable access to and the opportunity to meet and interview
each Employee.
(b) Purchaser agrees that for a period of one (1) year commencing on the
Effective Date, Purchaser will not, without Seller's written consent or except
as provided in this Agreement, directly or indirectly engage or participate in
any effort or act to solicit employees of Seller (or any subsidiary of Seller)
to cease their employment with Seller (or such subsidiary) or to breach any
employment obligation with Seller (or any subsidiary of Seller), or to hire any
person who was an employee of Seller (or any subsidiary of Seller) on the
Effective Date.
SECTION 6.2. Employee Obligations of Seller.
------------------------------
(a) Seller and any subsidiaries thereof shall be liable for and shall hold
Purchaser and its affiliates harmless from, any and all liabilities with respect
to: (i) the employment by Seller or termination of employment by Seller of any
past, current or future employee or consultant of Seller or any of its
affiliates (collectively, "Seller Employees"); (ii) any claims of discrimination
----------------
under state or federal law arising from a Seller Employee's employment or
service with or termination by Seller; (iii) any withholding or employment and
or wage Taxes with respect to any Seller Employees which accrue or become
payable during the period of such Seller Employee's employment or service with
Seller or any affiliate of Seller or arise out of the termination of such
person's employment with Seller or any affiliate of Seller; (iv) any other
claims or obligations arising out of the terms and
conditions of employment by Seller or any of its affiliates of any Seller
Employee, whether for salary, wages, bonuses, profit sharing, commissions,
severance, vacation pay, sick pay or otherwise; or (v) any duties or obligations
of Seller or administrators under any existing or future employee benefit plans
or arrangements, including stock incentive plans, maintained by Seller with
respect to Seller Employees. Seller shall be responsible for filing all
employment Tax returns with respect to Seller Employees attributable to periods
of employment or service with Seller or any affiliate of Seller.
(b) Seller shall pay to all Seller Employees, any liability for accrued
vacation, sick leave or similar accrued benefits with respect to such Employees
attributable to periods of employment or service with Seller, consistent with
Seller's policies and applicable law, and shall make such payment within the
statutory time period therefore.
(c) Seller agrees to comply with the provisions of any statute or regulation
regarding termination of employment, plant closing or layoffs and to perform all
obligations required by Seller with respect to the cessation of any operations
of the Internet Appliance Business or the termination, re-assignment, re-
location or change in position of any Employee in connection with the
transactions contemplated hereby.
(d) For a period of two (2) years after the Closing Date, Seller shall not
solicit for employment or service as a consultant nor hire nor engage the
services of any Employee without the prior written consent of Purchaser.
SECTION 6.3. Survival. Each of the agreements and covenants set forth in
--------
this Article VI shall survive the Closing.
ARTICLE VII
TAX MATTERS
SECTION 7.1. Transaction Taxes. Seller shall be responsible for, and
-----------------
shall defend, indemnify and hold harmless Purchaser from and against any and all
excise, value added, registration, stamp, property, documentary, transfer,
sales, use and similar Taxes, levies, charges and fees incurred, or that may be
payable to any taxing authority, in connection with, the transactions
contemplated by this Agreement or the Ancillary Agreements (collectively,
"Transaction Taxes"). Seller and Purchaser shall use all commercially reasonable
-----------------
efforts to cooperate in order to minimize the Transaction Taxes and any Taxes to
be paid or withheld in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements.
SECTION 7.2. Other Taxes. Seller is and shall remain solely responsible
-----------
for all Tax matters arising from or relating to the Purchased Assets and related
businesses on or prior to the Closing Date ("Pre-Closing Period"). Seller shall
------------------
indemnify and hold harmless Purchaser from any liability for, or arising out of
or based upon, or relating to any Tax matter arising from the Purchased Assets
and related businesses during the Pre-Closing Period. Purchaser shall be solely
responsible for all Tax matters arising from or relating to the Purchased Assets
and Purchaser's related businesses beginning after the Closing Date ("Post-
----
Closing Period"). Purchaser shall indemnify and hold harmless Seller from any
--------------
liability for, or arising out of or based upon, or relating to any Tax matter
arising from the Purchased Assets and related businesses during the Post-Closing
Period. Seller and Purchaser shall cooperate concerning all Tax matters relating
to this division of responsibility,
including, but not limited to, the filing of Tax returns and other governmental
filings associated therewith.
SECTION 7.3. Tax Liability. In the case of Taxes that are payable with
-------------
respect to a taxable period that begins before the Closing Date and ends after
the Closing Date, the portion of any such Tax that is allocable to the portion
of the period ending on the Closing Date shall be:
(a) in the case of Taxes that are either (x) based upon or related to
income or receipts, or (y) imposed in connection with any sale or other transfer
or assignment of property (other than the Transaction Taxes), deemed equal to
the amount which would be payable if the taxable year ended with the Closing
Date; and
(b) in the case of Taxes imposed on a periodic basis with respect to the
assets of Seller, any Purchased Assets or otherwise measured by the level of any
item, deemed to be the amount of such Taxes for the entire period (or, in the
case of such Taxes determined on an arrears basis, the amount of such Taxes for
the immediately preceding period) multiplied by a fraction the numerator of
which is the number of calendar days in the period ending on the Closing Date
and the denominator of which is the number of calendar days in the entire
period.
ARTICLE VIII
CONDITIONS TO THE CLOSING
SECTION 8.1. Conditions to Obligations of Seller. The obligations of
-----------------------------------
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Accuracy of Representations and Warranties; Covenants. The
-----------------------------------------------------
representations and warranties of Purchaser contained in Article IV of this
Agreement (as qualified by Purchaser's Disclosure Letter) shall be true and
correct in all material respects as of the Closing, with the same force and
effect as if made as of the Closing, and all the covenants, conditions and other
obligations contained in this Agreement and the Ancillary Agreements to be
complied with by Purchaser on or before the Closing shall have been complied
with in all material respects, and Seller shall have received a certificate of
Purchaser, dated as of the Closing Date, to such effect signed by an officer
thereof.
(b) Closing Deliveries. Seller shall have received the Closing Deliveries
------------------
of Purchaser set forth in Section 2.6 hereof.
-----------
(c) Proceedings. No judgment or order shall have been issued by any
-----------
government entity and no action, suit or proceeding shall have been threatened
or taken by any person:
(i) that could reasonably be expected to have the effect of
enjoining or prohibiting the consummation of any transaction pursuant to this
Agreement and/or any of the Ancillary Agreements; and
(ii) that could reasonably be expected to adversely affect the
Seller's performance of obligations pursuant to this Agreement or any of the
Ancillary Agreements.
(iii) all approvals and consents from third parties or
governmental agencies for the consummation of the transactions contemplated by
this Agreement and the Ancillary Agreements shall have been obtained.
(d) Purchaser, Seller and the Escrow Agent shall have entered into the
Escrow Agreement.
(e) Opinion. Seller shall have received an acceptable form of opinion from
-------
Seller's special Delaware counsel, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, substantially in
the form set forth on Exhibit F hereto.
---------
SECTION 8.2. Conditions to Obligations of Purchaser. The obligations of
--------------------------------------
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions:
(a) Accuracy of Representations and Warranties; Covenants. The
-----------------------------------------------------
representations and warranties of Seller contained in Article III of this
Agreement (as qualified by Seller's Disclosure Letter) shall be true and correct
in all material respects as of the Closing, with the same force and effect as if
made as of the Closing, and all the covenants, conditions and other obligations
contained in this Agreement, and the Ancillary Agreements to be complied with by
Seller on or before the Closing shall have been complied with in all material
respects, and Purchaser shall have received a certificate of Seller, dated as of
the Closing Date, to such effect signed by an officer thereof.
(b) Closing Deliveries. Purchaser shall have received the Closing
------------------
Deliveries of Seller set forth in Section 2.5 hereof.
-----------
(c) Opinion. Purchaser shall have received an acceptable form of opinion
-------
from Seller's special Delaware counsel, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, substantially
in the form set forth on Exhibit F hereto.
---------
(d) Opinion. Purchaser shall have received a form of opinion from
-------
Ravisent's counsel substantially in the form set forth on Exhibit E hereto.
---------
(e) Proceedings. No judgment or order shall have been issued by any
-----------
government entity and no action, suit or proceeding shall have been threatened
or taken by any person:
(i) that could reasonably be expected to have the effect of
enjoining or prohibiting the consummation of any transaction pursuant to this
Agreement or any of the Ancillary Agreements; or
(ii) that could reasonably be expected to adversely affect the
Purchaser's right to conduct the Internet Appliance Business or to own the
Purchased Assets or the Seller's performance of its obligations pursuant to this
Agreement and any of the Ancillary Agreements.
(f) Purchaser, Seller and the Escrow Agent shall have entered into the
Escrow Agreement.
(g) All approvals and consents from third parties or governmental agencies
for the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, including consents to assign the Seller Contracts, shall
have been obtained.
(h) 80% of the Employees (other than those Employees identified as
Consultants and "Tata" Consultants on the Attachment to Section 3.11 of Seller's
Disclosure Letter) shall have accepted Purchaser's offer of employment and have
executed employment agreements (including non-competition provisions) in form
and substance satisfactory to Purchaser.
(i) Purchaser shall have received from the Chief Executive Officer of
Ravisent, an executed non-competition agreement substantially in the form
attached hereto as Exhibit C.
---------
(j) Purchaser shall have received copies of the resolutions of the board
of directors and stockholders of Ravisent approving the restructuring of assets
and liabilities of Ravisent in the form attached hereto as Exhibit G.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1. Termination. This Agreement may be terminated at any time
-----------
prior to the Closing:
(a) by the mutual written consent of Seller and Purchaser; or
(b) by either Seller or Purchaser at any time prior to Closing, if the
other commits a material breach of this Agreement that is not cured within
thirty (30) days after written notice thereof; or
(c) by either Seller or Purchaser, if the Closing shall not have occurred
prior to May 15, 2001; provided, however, that the right to terminate this
Agreement under this Section 9.1(c) shall not be available to any party whose
--------------
failure to fulfill any obligation under this Agreement shall have been the cause
of, or shall have resulted in, the failure of the Closing to occur prior to such
date; or
(d) by either Seller or Purchaser if a permanent injunction or other order
by any federal, state or foreign court of competent jurisdiction which would
make illegal or otherwise restrain or prohibit the consummation of the
transactions contemplated by this Agreement and the Ancillary Agreements shall
have been issued and shall have become final and non-appealable.
SECTION 9.2. Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in Section 9.1, this Agreement shall forthwith become void
-----------
and there shall be no liability on the part of any party hereto; provided that
nothing herein shall relieve either party from liability for any willful breach
hereof.
SECTION 9.3. Waiver. At any time prior to the Closing, any Party hereto
------
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant to this Agreement by the other party or (c) waive compliance by the
other party of any of the agreements or conditions contained herein: Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party to be bound thereby.
ARTICLE X
INDEMNIFICATION
SECTION 10.1. Loss Defined; Indemnitees. For purposes of this Article X,
-------------------------
the term "Loss" will mean and include any and all liability, loss, damage,
claim, expense, cost, fine, fee, penalty, obligation, injury or amounts paid in
settlement, together with reasonable costs and expenses, including the
reasonable attorneys' and experts' fees, court costs, arbitration costs, filing
fees and other legal costs and expenses relating thereto. As used in this
Article X, the term "Purchaser Indemnitees" means and includes Purchaser and
---------------------
any present or future officer, director, employee, affiliate, stockholder or
agent of Purchaser and its successors and assigns. As used in this Article X,
the term "Seller Indemnities" means and includes Seller and any present or
------------------
future officer, director, employee, affiliate, stockholder or agent of Seller
and its successors and assigns.
SECTION 10.2. Indemnification by Seller. Seller agrees, subject to the
-------------------------
other terms, conditions and limitations of this Agreement, to indemnify the
Purchaser Indemnitees against, and to hold the Purchaser Indemnitees harmless
from, all Loss arising out of, resulting from, caused by or attributable to:
(a) the failure of any representation or warranty of Seller contained in
this Agreement (including any Schedule or Exhibit hereto), to be true and
correct as of the Effective Date or the failure of any representation or
warranty contained in the Ancillary Agreements or the Officer's Certificate to
be delivered pursuant to Section 8.1(a) hereof, to be true and correct as of the
Closing Date;
(b) the breach or violation by Seller of any covenant or agreement of
Seller contained in this Agreement (including any Schedule or Exhibit hereto) or
the Ancillary Agreements; and
(c) except for the Assumed Liabilities, the operation or management of the
Internet Appliance Business or the Purchased Assets at any time or times on or
prior to the Closing Date, and except as otherwise provided in Article VI
hereof, any charges or actions brought by employees, agents or representatives
of Seller arising out of or based upon actions of the Seller taken on or prior
to the Closing Date; or
(d) any Encumbrances upon the Purchased Assets existing at the Closing.
SECTION 10.3. Indemnification by Purchaser. Purchaser agrees, subject to
----------------------------
the other terms, conditions and limitations of this Agreement, to indemnify the
Seller Indemnitees against, and to hold the Seller Indemnitees harmless from,
all Loss arising out of, resulting from, caused by or attributable to:
(a) the failure of any representation or warranty of Purchaser contained
in this Agreement (including any Schedule or Exhibit hereto), to be true and
correct as of the Effective Date or the failure of any representation or
warranty contained in the Ancillary Agreements or the Officer's Certificate to
be delivered pursuant to Section 8.2(a) hereof, to be true and correct as of the
Closing Date;
(b) the breach or violation by Purchaser of any covenant or agreement of
Purchaser contained in this Agreement (including any Schedule or Exhibit hereto)
or the Ancillary Agreements;
(c) the Assumed Liabilities or claims made for obligations arising after the
Closing Date that have been assumed by Purchaser hereunder; or
(d) the operation of the Purchased Assets and the sale and license of Internet
Appliance Products by Purchaser after the Closing Date.
SECTION 10.4. Third Party Claims.
------------------
(a) As used herein, an "Indemnified Party" means a Purchaser Indemnitee
-----------------
seeking indemnification pursuant to Section 10.2 hereof or a Seller Indemnitee
------------
seeking indemnification pursuant to Section 10.3 hereof. The Indemnified Party
------------
agrees to give the other party ("Indemnitor") prompt written notice of any
----------
event, or any claim, action, suit, demand, assessment, investigation,
arbitration or other proceeding by or in respect of a third party (a "Third
-----
Party Claim") of which it has knowledge, for which such Indemnified Party is
-----------
entitled to indemnification under this Article X (including in any case copies
of any summons, complaint or other pleading which may have been served on it and
any written claim, demand, invoice, billing or other document evidencing or
asserting the same). No delay on the part of an Indemnified Party in giving the
Indemnitor notice of a Third Party Claim shall relieve the Indemnitor from any
obligation hereunder unless the Indemnitor is prejudiced thereby.
(b) Within twenty days of delivery of such written notice, the Indemnitor may,
at the expense of the Indemnitor, elect to take all necessary steps properly to
contest any Third Party Claim or to prosecute such Third Party Claim to
conclusion or settlement satisfactory to the Indemnitor. If the Indemnitor
makes the foregoing election, an Indemnified Party will have the right to
participate at its own expense in all proceedings. If the Indemnitor does not
make such election, an Indemnified Party shall be free to handle the prosecution
or defense of any such Third Party Claim, will take all necessary steps to
contest the Third Party Claim or to prosecute such Third Party Claim to
conclusion or settlement satisfactory to such Indemnified Party, and will notify
the Indemnitor of the progress of any such Third Party Claim, will permit the
Indemnitor, at the sole cost of the Indemnitor, to participate in such
prosecution or defense and will provide the Indemnitor with reasonable access to
all relevant information and documentation relating to the Third Party Claim and
the prosecution or defense thereof. In any case, the party not in control of
the Third Party Claim will cooperate with the other party in the conduct of the
prosecution or defense of such Third Party Claim. Notwithstanding the
foregoing, if an Indemnified Party is offered a written settlement proposal by a
third party that has as its sole component the payment of money by the
Indemnified Party and the Indemnitor recommends to the Indemnified Party in
writing that it accept such settlement proposal (the "Sanctioned Settlement")
---------------------
and the Indemnified Party refuses to accept such settlement proposal, in such
event if the ultimate settlement terms agreed to by the Indemnified Party with
such third party or the final monetary damages award against the Indemnified
Party (either, a "Final Settlement Amount"), is greater than the amount of the
-----------------------
Sanctioned Settlement, the Indemnified Party shall be responsible for the
differential between the Final Settlement Amount and the Sanctioned Settlement
and the Indemnitor's liability shall be limited to the amount specified in the
Sanctioned Settlement.
SECTION 10.5. Limitations on Indemnification.
------------------------------
(a) Limits on Seller Indemnification.
--------------------------------
(i) Seller shall not be required to provide indemnification under
Section 10.2 unless and until the aggregate Loss for which one or more Purchaser
Indemnitees seeks indemnification thereunder exceeds an aggregate of Seventy-
Five Thousand Dollars ($75,000) (the "Deductible Amount"), in which event Seller
shall be liable to indemnify the Purchaser Indemnitees for aggregate Loss which
exceeds the Deductible Amount.
(ii) The maximum aggregate Loss recoverable by Purchaser Indemnitees
(considered together as a group) against Seller under Section 10.2 shall not
exceed One Hundred Percent (100%) of the Purchase Price (the "Indemnity Cap").
(b) Limits on Purchaser Indemnification.
-----------------------------------
(i) Purchaser shall not be required to provide indemnification under
Section 10.3 unless and until the aggregate Loss for which one or more Seller
Indemnitees seeks indemnification thereunder exceeds an aggregate of the
Deductible Amount, in which event Purchaser shall be liable to indemnify the
Seller Indemnitees for aggregate Loss, which exceeds the Deductible Amount.
(ii) The maximum aggregate Loss recoverable by Seller Indemnitees
(considered together as a group) against Purchaser under Section 10.3 shall not
exceed the Indemnity Cap.
(c) Time Limits. Notwithstanding anything herein to the contrary, no claim
-----------
for indemnification under Sections 10.2 or 10.3 may be brought after the date
that is eighteen (18) months after the Closing Date.
SECTION 10.6. Escrow Fund. At the Closing, the Escrow Amount shall be
-----------
deposited with the Escrow Agent, such deposit (together with interest and other
income thereon) to constitute an escrow fund (the "Escrow Fund") and to be
governed by the terms set forth herein and in the Escrow Agreement substantially
in the form attached hereto as Exhibit B. The Escrow Fund shall be available to
---------
satisfy, and to compensate Purchaser for amounts recoverable by Purchaser
pursuant to, the indemnification obligations of Seller set forth in Section 10.2
hereof, subject to the limitations set forth in this Article X.
SECTION 10.7. Escrow Period. The Escrow Fund shall be maintained by the
-------------
Escrow Agent and be available to satisfy the indemnification obligations of
Seller hereunder until the date that is twelve (12) months after the Closing
Date (the "Escrow Termination Date").
-----------------------
SECTION 10.8. Claims upon Escrow Fund. Purchaser shall make a claim upon the
-----------------------
Escrow Fund by delivering to the Escrow Agent on or before the Escrow
Termination Date a certificate signed by any officer of Purchaser (an "Officer's
---------
Certificate") specifying in reasonable detail the individual items of
-----------
indemnifiable Loss included in the amount so stated, the date each such item was
paid, or properly accrued or arose, and the basis for indemnification. At the
time of delivery of any Officer's Certificate to the Escrow Agent, a duplicate
copy of such certificate shall be delivered to Seller. No payments shall be made
out of the Escrow Fund except as set forth in the Escrow Agreement.
SECTION 10.9. Resolution of Conflicts; Arbitration. In case Seller shall
------------------------------------
object in writing to any claim or claims made in any Officer's Certificate,
Seller and Purchaser shall attempt in good faith to agree upon the rights of the
respective parties with respect to each of such claims. If
Seller and Purchaser should so agree, a memorandum setting forth such agreement
shall be prepared and signed by both parties and shall be furnished to the
Escrow Agent. The Escrow Agent shall be entitled to rely on any such memorandum
and distribute cash from the Escrow Fund in accordance with the terms thereof.
If no such agreement can be reached after good faith negotiation, either
Purchaser or Seller may demand arbitration of the dispute unless the amount of
the damage or loss is at issue in a pending action or proceeding involving a
Third Party Claim, in which event arbitration shall not be commenced until such
amount is ascertained or both parties agree to arbitration; and in either event
the matter shall be settled by arbitration conducted by one (1) arbitrator
mutually agreeable to Purchaser and Seller. The arbitrator shall set a limited
time period and establish procedures designed to reduce the cost and time for
discovery of information relating to any dispute while allowing the parties an
opportunity, adequate as determined in the sole judgment of the arbitrator, to
discover relevant information from the opposing parties about the subject matter
of the dispute. The arbitrator shall rule upon motions to compel, limit or allow
discovery as they shall deem appropriate given the nature and extent of the
disputed claim. The arbitrator shall also have the authority to impose
sanctions, including attorneys' fees and other costs incurred by the parties, to
the same extent as a court of law or equity, should the arbitrator determines
that discovery was sought without substantial justification or that discovery
was refused or objected to by a party without substantial justification. The
decision of the arbitrator as to the validity and amount of any claim in such
Officer's Certificate shall be binding and conclusive upon the parties to this
Agreement, and notwithstanding anything in this Article X, the Escrow Agent
---------
shall be entitled to act in accordance with such decision and make or withhold
payments out of the Escrow Fund in accordance therewith. Such decision shall be
written and shall be supported by written findings of fact and conclusions
regarding the dispute which shall set forth the award, judgment, decree or order
awarded by the arbitrator. Judgment upon any award rendered by the arbitrator
may be entered in any court having competent jurisdiction. Any such arbitration
shall be held in San Jose, California under the commercial rules of arbitration
then in effect of the International Chamber of Commerce. In any arbitration
pursuant to this Section 10.9 to resolve a claim for indemnification, each party
------------
shall pay its own expenses. Seller shall pay a fraction of the fees of the (i)
arbitrators and the administrative costs of the arbitration equal to the
quotient obtained by dividing the amount awarded by the arbitrators with respect
to such claim (or agreed in settlement of such claim) by (ii) the portion of the
indemnification claim disputed by Seller; and the balance of such fees and
administrative costs shall be paid by Purchaser.
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1. Expenses. All costs and expenses, including, without
--------
limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs and
expenses, whether or not the Closing shall have occurred.
SECTION 11.2. Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given or made by
delivery in person, by courier service, by telecopy (confirmed in writing), or
by registered or certified mail (postage prepaid, return receipt requested), and
shall be deemed to have been duly given or made upon actual
delivery, or if mailed by registered or certified mail, on the third business
day following deposit in the mails, to the parties at the following addresses
(or at such other address for a party as shall be specified by like notice):
(a) if to Seller:
Ravisent Technologies Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
Two Embarcadero Place
▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(b) if to Purchaser:
Phoenix Technologies, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 11.3. Headings; Disclosure. The headings contained in this Agreement
--------------------
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. A disclosure made in any section of
Purchaser's Disclosure Letter or Seller's Disclosure Letter, respectively, with
respect to a representation made in this Agreement may apply to or qualify any
other representation made by such party in this Agreement.
SECTION 11.4. Severability. If any term or other provision of this Agreement
------------
is invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.
SECTION 11.5. Survival. Unless otherwise expressly set forth herein, all
--------
covenants to be performed prior to the Closing Date, and all representations and
warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the consummation of the transactions contemplated hereby
until the date that is eighteen (18) months after the Closing Date.
SECTION 11.6. Entire Agreement. This Agreement and the Ancillary Agreements
----------------
constitute the entire agreement and understanding of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
undertakings with respect to the subject matter hereof, both written and oral.
SECTION 11.7. Assignment. This Agreement shall not be assigned by Purchaser
----------
or Seller without the prior written consent of the non-assigning party;
provided, however, that Purchaser may assign all or a portion of its rights and
obligations hereunder to one or more affiliates that control or are under common
control with Purchaser. Any purported assignment not permitted by this Section
shall be void.
SECTION 11.8. No Third-Party Beneficiaries. This Agreement is for the sole
----------------------------
benefit of the parties hereto and their permitted assigns and nothing herein,
express or implied, is intended to or shall confer upon any other person or
entity, including but not limited to any Employee, any legal or equitable right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
No statement, reference or disclosure set forth in this Agreement, the Ancillary
Agreements or the exhibits or schedules thereto constitutes an admission
(express or implied) of any liability or obligation of the parties hereto to any
third party, nor an admission (express or implied) against any such party's
interests.
SECTION 11.9. Amendment; Waiver. This Agreement may not be amended or
-----------------
modified except by an instrument in writing signed by Seller and Purchaser.
Waiver of any term or condition of this Agreement shall only be effective if in
writing and shall not be construed as a waiver of any subsequent breach or
waiver of the same term or condition, or a waiver of any other term or condition
of this Agreement.
SECTION 11.10. Governing Law; Jurisdiction and Venue. This Agreement shall be
-------------------------------------
governed by, and construed in accordance with, the internal laws of the State of
California. Each party irrevocably consents to submit to the exclusive
jurisdiction of any federal or state court located in the State of California,
County of Santa ▇▇▇▇▇, for any lawsuits, actions or proceedings with respect to
this Agreement or the transactions contemplated hereby.
SECTION 11.11. Counterparts. This Agreement may be executed in one or more
------------
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 11.12. No Joint Venture. Nothing contained in this Agreement will be
----------------
deemed or construed as creating a joint venture or partnership between the
parties hereto. No party is by
virtue of this Agreement authorized as an agent, employee or legal
representative of any other party. No party will have the power to control the
activities and operations of any other, and the parties' status is, and at all
times, will continue to be, that of independent contractors with respect to each
other. No party will have any power or authority to bind or commit any other. No
party will hold itself out as having any authority or relationship in
contravention of this Section.
IN WITNESS WHEREOF, Seller and Purchaser have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
Phoenix Technologies, Ltd.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman, CEO, and President
Ravisent Technologies Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
Ravisent Technologies Internet
Appliance Group, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
Ravisent I.P, Inc.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
Ravisent Operating Company, Inc.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President and CEO
[SIGNATURE PAGE TO ASSET ACQUISITION AGREEMENT]
EXHIBIT A
Assignment, ▇▇▇▇ of Sale and Assumption Agreement
-------------------------------------------------
EXHIBIT B
---------
Escrow Agreement
----------------
EXHIBIT C
---------
CEO Non-Competition Agreement
-----------------------------
EXHIBIT D
---------
Intellectual Property Assignment
--------------------------------
EXHIBIT E
---------
Form of Opinion from Ravisent's Counsel
---------------------------------------
EXHIBIT F
---------
Legal Opinion of Seller's Special Delaware Counsel
--------------------------------------------------
SCHEDULE 1
----------
Intangible Assets
-----------------
SCHEDULE 2
----------
Tangible Assets
---------------
SCHEDULE 3
----------
Seller Disclosure Letter
------------------------
SCHEDULE 4
----------
Excluded Assets
---------------