Attached files
| file | filename |
|---|---|
| 10-K - FORM 10-K - AWARE INC /MA/ | t67114_10k.htm |
| EX-32.1 - EXHIBIT 32.1 - AWARE INC /MA/ | ex32-1.htm |
| EX-23.1 - EXHIBIT 23.1 - AWARE INC /MA/ | ex23-1.htm |
| EX-21.1 - EXHIBIT 21.1 - AWARE INC /MA/ | ex21-1.htm |
| EX-31.2 - EXHIBIT 31.2 - AWARE INC /MA/ | ex31-2.htm |
| EX-31.1 - EXHIBIT 31.1 - AWARE INC /MA/ | ex31-1.htm |
Exhibit 10.8
ASSET
PURCHASE AGREEMENT
This
ASSET PURCHASE AGREEMENT (the “Agreement”) is dated as of this 14th day of
October, 2009, by and between Aware, Inc., a Massachusetts corporation (“Seller”), Lantiq
Broadband Holdco Inc., a Delaware corporation (‘Lantiq US”), and
Lantiq Deutschland GmbH, a company organized and existing under the laws of
Germany (“Lantiq
Germany,” and together with Lantiq US, “Purchasers”). Capitalized
terms used and not otherwise defined herein have the meanings set forth in
Article
11.
RECITALS
WHEREAS,
Seller is engaged in the business of designing, developing and licensing DSL
Technology and Home Networking Technology (the “Business”);
and
WHEREAS,
Seller desires to sell to Purchasers and Purchasers desire to purchase and
assume from Seller certain of the assets and liabilities of the Business, as
more particularly set forth herein.
NOW
THEREFORE, in consideration of the premises and the mutual covenants contained
herein, the parties hereto agree as follows:
Article
1
PURCHASE & SALE OF
PURCHASED ASSETS
1.1 Purchased
Assets.
(a) Subject
to the terms and conditions of this Agreement, at the Closing, Seller shall
sell, convey, transfer, assign and deliver to Lantiq Germany, and Seller shall
cause Lantiq Germany to purchase and acquire
from Seller, all of Seller’s right, title and interest in, to and under the
following assets, in each case free and clear of all Liens except the Outbound
IP Licenses (collectively, the “Lantiq Germany Purchased
Assets”):
(i) the
Seller Technology;
(ii) the
patents and patent applications identified in the Patent Assignment Agreement
attached hereto as Schedule
1.1(a)(i), as
well as any foreign or multinational counterparts thereof (collectively, the
“Purchased
Patents”); and
(iii) the
Intellectual Property Rights (other than patent rights) related to or used in
connection with the Seller Technology (the “Purchased Non-Patent
IP”).
(b) Subject
to the terms and conditions of this Agreement, at the Closing, Seller shall
sell, convey, transfer, assign and deliver to Lantiq US, and Seller shall
cause Lantiq
US to purchase and
acquire from Seller, all of Seller’s right, title and interest in, to and under
the following assets, in each case free and clear of all Liens except the
Outbound IP Licenses (collectively, the “Lantiq US Purchased
Assets,” and together with the Lantiq Germany Purchased Assets, the
“Purchased
Assets”):
(i) the
tangible machinery, equipment and other tangible assets used by or for the
Business, including without limitation the assets set forth on Schedule
1.1(b)(i) (the “Purchased Fixed
Assets”);
(ii) the
Licenses or other Contracts, including without limitation the Licenses and
Contracts set forth on Schedule
1.1(b)(ii), under
which Seller has acquired from another Person any right to use or other rights
or interest in any software, technology, or other tangible or intangible assets
constituting a component of, related to or used in the Purchased Assets or the
Business to the extent such agreements are assignable without the prior written
consent of another Person (the “Purchased Inbound License
Agreements”);
(iii) all
rights, causes of action, claims, demands and privileges of Seller, whether now
existing or hereafter arising, liquidated or unliquidated,
fixed or contingent, against manufacturers, vendors, subcontractors or other
third parties that relate to any of the Purchased Assets transferred hereunder,
including, without limitation, all product warranties thereon and any causes of
action, claims and rights Seller may have under any insurance contracts or
policies insuring the Purchased Assets but excluding any causes of action, claims and rights of
Seller, whether now existing or hereafter arising, under any Outbound IP License
(collectively, the “Transferred Assets
Rights”);
(iv) all
rights to offer employment to the Specified Employees; and
(v) all
documentation, specifications and other technical data necessary for the
development, manufacture, distribution or sale of the Purchased Assets
(including the Seller Proprietary Rights) and all written documentation,
specifications and other technical data useful for the development, manufacture,
distribution or sale of the Purchased Assets (including the Seller Proprietary
Rights) which are in Seller’s possession or control.
1.2 Excluded Assets.
Purchased Assets include only what is specifically identified in Section
1.1 hereof, and
all of Seller’s other assets are expressly excluded from the purchase and sale
contemplated hereby and thus the Seller shall retain, and Purchasers shall not
purchase, such assets including, without limitation, the following
(collectively, the “Excluded
Assets”):
(a) any cash,
bank accounts, accounts receivable, deposits, prepaid expenses, unearned
insurance premiums, furniture or leaseholds of real property of Seller, or
sales, marketing, accounting, finance, legal, office administration and other
similar functions which may have been supplied to Seller;
(b) all
guarantees, warranties, indemnities and similar rights in favor of Seller with
respect to products to the extent sold prior to the Closing Date;
(c) any and
all Contracts listed on Schedule
1.2(c) entered
into prior to the Closing Date pursuant to which Seller has granted to any
Person any express right to use, exercise, or otherwise practice any right under
any Purchased Asset (the “Outbound IP
Licenses”);
(d) the
License Seller receives from ARC Cores International (“ARC”) to the ARC
processor cores pursuant to a Design License Agreement and Design-User
Sublicense Agreement entered into between Seller and ARC (it being agreed that
Purchaser shall continue to receive the License to the ARC Materials delineated
in Section
4.1.4 of the DSL License Agreement);
(e) any patents and patent applications relating to
the Seller Technology and not specifically identified in the Patent Assignment
Agreement attached hereto as Schedule
1.1(b), as well
as any foreign or multinational counterparts of such non-listed patents and
patent applications (collectively, the “Non-Purchased
Patents”);
(f) any
right, title or interest in and to the Overlapping Technology except as provided
pursuant to the DSL License Agreement; and
(g) any
right, title or interest in and to any asset other than those specifically
identified as Purchased Assets pursuant to Section
1.1
hereof.
1.3 Assumed
Liabilities. From and after the Closing, Purchasers shall
assume and agree to defend, pay, discharge and perform as and when due only
those Liabilities of Seller arising out of, or related to, the ownership, use or
operation of the Purchased Assets to the extent arising out of facts, events or
circumstances occurring after the Closing, including any Liabilities related to
any Specified Employees for services performed by such employees after the
Closing on behalf of Purchasers (collectively, the “Assumed
Liabilities”).
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1.4 Excluded
Liabilities. Except for those Liabilities assumed by
Purchasers pursuant to Section
1.3 hereof,
Purchasers shall not assume and shall not be liable for any Liabilities of any
kind or nature whatsoever of Seller, and Seller shall retain and be solely
responsible for the defense, payment, discharge and performance as and when due
of all Liabilities of Seller that are not Assumed Liabilities, including,
without limitation, Liabilities resulting from, arising out of or related to any
(a) Excluded Asset, (b) Taxes, (c) indebtedness for borrowed money or deferred
purchase price for property, (d) inter-company payables, loans or other
inter-company Liabilities of any kind or nature, (e) breach of contract, breach
of warranty, tort, infringement, violation of law or environmental, health or
safety matter of any kind or nature arising, in whole or in part, out of facts,
events, circumstances, actions or inactions occurring prior to the Closing, (f)
litigation, claim, assessment, action, suit, proceeding, order, judgment, decree
or investigation of any kind or nature arising out of facts, events,
circumstances, actions or inactions occurring prior to the Closing, (g) Employee
Plan, (h) employment and employee benefits-related claims, obligations and
Liabilities of current or former employees, officers, directors or consultants
arising at any time and relating to their employment with Seller, (i) employment
and employee benefits-related claims, obligations and Liabilities of the
Specified Employees incurred in relation to the employee’s period of employment
with Seller prior to and including the Closing Date, and (j) fees, costs or
expenses incurred by Seller in connection with the preparation, negotiation,
execution, delivery and performance of this Agreement and the other transactions
contemplated hereby (collectively, the “Excluded
Liabilities”).
1.5 Amendment and Restatement of
DSL License Agreement. Notwithstanding the purchase and sale
of the Purchased Assets hereunder, Seller and Purchasers agree that the License
Agreement entered into between Infineon Technologies AG and Seller with an
effective date of October 1, 2007 shall be amended and re-stated as of the
Closing Date in accordance with the form attached hereto as Schedule
1.5. In
particular and for the avoidance of doubt, Seller and Purchasers agree that no
term or condition set forth in this Agreement shall excuse Infineon Technologies
AG (or its assignee) from complying with its obligations under the DSL License
Agreement to pay Seller royalties for its sales of ADSL Products and VDSL
Products pursuant to the royalty provisions of Appendix B of the DSL License
Agreement. If there is a conflict between this Agreement and the DSL
License Agreement with respect to Infineon Technologies AG’s (or its assignee’s)
obligations to pay Seller royalties for its sales of ADSL Products and VDSL
Products, the terms of the DSL License Agreement shall govern.
1.6 Existing Support
Agreements. Seller and Infineon Technologies AG are parties to
Amendment No. 3, Amendment No. 6, Amendment No. 7 and Amendment No. 8 to the DSL
License Agreement which cover development work and additional engineering
support and technical support Seller provides to Purchaser. On the Closing
Date, Seller and Purchasers agree that Amendment No. 3, Amendment No. 6,
Amendment No. 7 and Amendment No. 8 shall immediately terminate. Seller
and Purchasers agree that Purchasers shall pay to Seller within thirty (30) days
following the Closing Date a pro rata amount for development work and additional
engineering and technical support provided by Seller for which Purchasers have
not yet paid Seller. On the Closing Date, Seller shall provide Purchasers
with an invoice detailing the pro rata amount due.
1.7 Seller and Purchaser Test
& Diagnostic Cooperation. Seller and Purchasers agree to
cooperate with respect to Seller’s development of test and diagnostic products
as specified in Schedule
1.7.
1.8 Purchaser Lease of Seller
Real Property. Beginning immediately after the Closing Date,
Seller agrees to lease to Lantiq US office and lab space at Seller’s facilities
at 40 Middlesex Turnpike, Bedford, Massachusetts 01730 subject to the terms of
form of Lease Agreement attached hereto as Schedule
1.8.
1.9 Purchase
Price. At the Closing, upon the terms and subject to the
conditions set forth herein, Purchasers shall pay to Seller, in consideration
for the purchase of the Purchased Assets and the assumption of the Assumed
Liabilities, an aggregate amount equal to $6,750,000.00 (the “Purchase Price”) by
wire transfer of immediately available funds to an account designated in writing
by Seller not less than two (2) business days prior to the Closing.
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1.10 Closing. Subject
to the satisfaction or waiver of the conditions contained in this Agreement, the
closing of the purchase and sale of the Purchased Assets and assignment and
assumption of the Assumed Liabilities (the “Closing”) will take
place on the date that is five (5) business days following the satisfaction or
waiver of each of the conditions set forth in
Article 5 (other
than those that by their terms are to be satisfied or waived at the Closing), or
at such other time as may be mutually agreeable to Seller and
Purchasers. The date of the Closing is herein referred to as the
“Closing
Date.” At the Closing, (a) Seller shall deliver to Purchasers
the Purchased Assets, (b) Purchasers shall deliver to Seller the Purchase Price
and shall assume the Assumed Liabilities, and (c) Seller and Purchasers and
their respective Affiliates shall deliver the documents, certificates and other
instruments that are required to be delivered by or on behalf of such Person
under Article 2
hereof and as may reasonably be required to effect the transfer by Seller to
Purchasers of the Purchased Assets and the assumption by Purchasers of the
Assumed Liabilities pursuant to and as contemplated by this
Agreement. All events which shall occur at the Closing shall be
deemed to occur simultaneously.
1.11 Transfer
Taxes. Purchasers and Seller shall each be responsible
for and pay, as and when due, one-half of the payment of any transfer taxes
arising out of or in connection with the Closing; provided that Seller
shall remain responsible for any other Taxes (including any Taxes based on
income, sales Taxes, use Taxes or VAT) incurred in connection with Seller’s
conduct of the Business and use or ownership of the Purchased Assets prior to
the Closing Date.
Article
2
CLOSING
DELIVERIES
2.1 Conditions to Purchasers’
Obligations. The obligations of Purchasers to consummate the
transactions contemplated by this Agreement are subject to the fulfillment of
the following conditions as of the Closing Date:
(a) The
representations and warranties set forth in Article 4 hereof
shall be true and correct in all material respects and the representations and
warranties set forth in Article 4 which are
qualified by materiality shall be true and correct in all respects, in each case
at and as of the Closing Date as though then made and as though the Closing Date
were substituted for the date of this Agreement throughout such representations
and warranties.
(b) Seller
shall have performed and complied in all material respects with all of the
covenants and agreements required to be performed by it under this Agreement on
or prior to the Closing.
(c) No
action, suit, or proceeding shall be pending or threatened before any
Governmental Entity wherein an unfavorable judgment or ruling would prevent the
performance of this Agreement or any of the transactions contemplated hereby,
declare unlawful the transactions contemplated by this Agreement, cause such
transactions to be rescinded or materially and adversely affect the right of
Seller to own or operate the Business, and no judgment, decree, injunction,
order or ruling shall have been entered which has any of the foregoing
effects.
(d) On or
prior to the Closing Date, Seller shall have delivered or caused to be delivered
to Purchasers or Purchasers’ counsel all of the following:
(i) a
certificate from Seller, in form and substance reasonably satisfactory to
Purchasers, dated as of the Closing Date, stating that the preconditions
specified in Sections
2.1(a) and
2.1(b) have been
satisfied;
(ii) the Bill
of Sale and Assumption of Liabilities Agreement attached hereto as Schedule 2.1(d)(ii)
executed by Seller;
(iii) the
Patent Assignment Agreement attached hereto as Schedule
1.1(a)(i)
executed by Seller;
(iv) the
Amended and Restated DSL License Agreement attached hereto as Schedule
1.5 executed by
Seller;
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(v) the Lease
Agreement attached hereto as Schedule
1.8 executed by
Seller;
(vi) copies of
all third party, governmental and regulatory consents, approvals, filings,
releases, terminations, payoff letters, etc. required in connection with the
consummation of the transactions contemplated by this Agreement, provided, however, with respect
to Purchased Inbound License Agreements, only to the extent such agreements are
assignable without the prior written consent of another Person;
(vii) a
non-foreign affidavit, dated as of the Closing Date, sworn under penalty of
perjury and in form and substance required under the Treasury Regulations issued
pursuant to Code §1445 stating that Seller is not a “Foreign Person” as defined
in Code §1445; and
(viii) such
other documents or instruments as Purchasers may reasonably request to effect
the transactions contemplated hereby.
(e) All
proceedings to be taken by Seller in connection with the consummation of the
Closing and the other transactions contemplated hereby and all certificates,
instruments and other documents required to be delivered by Seller to effect the
transactions contemplated hereby shall be reasonably satisfactory in form and
substance to Buyer.
(f) The
closing of the transactions contemplated by that certain Asset Purchase
Agreement, dated as of July 7, 2009, by and between Infineon Technologies AG, a
stock corporation (Aktiengesellschaft) under the laws of the Federal Republic of
Germany, and Wireline Holding S.á.r.l., a company incorporated as a société á
responsibilité limitée and existing under the laws of the Grand Duchy of
Luxembourg, shall have occurred.
Any
condition specified in this Section
2.1 may be waived
by Purchasers; provided that no such
waiver shall be effective unless it is set forth in a writing executed by each
Purchaser or unless each Purchaser agrees in writing to consummate the
transactions contemplated by this Agreement without fulfillment of such
condition.
2.2 Conditions to Seller’s
Obligations. The obligations of Seller to consummate the
transactions contemplated by this Agreement is subject to the fulfillment of the
following conditions as of the Closing Date:
(a) The
representations and warranties set forth in Article 5 shall be
true and correct in all material respects and the representations and warranties
set forth in Article
5 which are qualified by materiality shall be true and correct in all
respects, in each case at and as of the Closing Date as though then made and as
though the Closing Date were substituted for the date of this Agreement
throughout such representations and warranties.
(b) Each
Purchaser shall have performed and complied in all material respects with all of
the covenants and agreements required to be performed by it under this Agreement
on or prior to the Closing, including, but not limited to, delivering the
Purchase Price in accordance with Section
1.9
above.
(c) On or
prior to the Closing Date, Purchasers shall have delivered to Seller or Seller’s
counsel all of the following:
(i) a
certificate from each Buyer, in form and substance reasonably satisfactory to
Seller, dated as of the Closing Date, stating that the preconditions specified
in Sections
2.2(a) and
2.2(b) have been
satisfied;
(ii) the Bill
of Sale and Assumption of Liabilities Agreement attached hereto as Schedule 2.1(d)(ii)
executed by each Purchaser;
(iii) the
Patent Assignment Agreement attached hereto as Schedule
1.1(a)(i) executed by
Lantiq Germany;
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(iv) the
Amended and Restated DSL License Agreement attached hereto as Schedule
1.5 executed by
Lantiq Germany;
(v) the Lease
Agreement attached hereto as Schedule
1.8 executed by
Lantiq US; and
(vi) such
other documents or instruments as Seller may reasonably request to effect the
transactions contemplated hereby
(d) All
proceedings to be taken by each Purchaser in connection with the consummation of
the Closing and the other transactions contemplated hereby and all certificates,
instruments and other documents required to be delivered by each Purchaser to
effect the transactions contemplated hereby shall be reasonably satisfactory in
form and substance to Seller.
Any
condition specified in this Section
2.2 may be waived
by Seller; provided that no such
waiver shall be effective against Seller unless it is set forth in writing
executed by Seller or unless Seller agrees in writing to consummate the
transactions contemplated by this Agreement without the fulfillment of such
condition.
Article
3
COVENANTS PRIOR TO
CLOSING
3.1 Covenants of
Seller. Prior to the Closing, unless Purchasers otherwise
agree in writing, Seller shall:
(a) carry on
the Business in substantially the same manner as presently conducted and use
commercially reasonable efforts to keep the organization and properties of the
Business intact and in good operating condition and repair, including its
present business operations, physical facilities, Seller Technology, Seller
Proprietary Rights, working conditions and employees;
(b) not
transfer, license or encumber any of the Purchased Assets;
(c) use
commercially reasonable efforts to keep available the services of the Specified
Employees and to preserve the present business relationships with all customers,
suppliers and others having business dealings with Seller;
(d) not
increase or otherwise change the rate or nature of the compensation (including
wages, salaries, bonuses and benefits under pension, profit sharing, deferred
compensation and similar plans or programs) which is paid or payable to any
Specified Employee, except in the ordinary course of business consistent with
past practice or as specified in Schedule
4.20(i);
(e) not
change, amend, terminate or otherwise modify any material Contract in any
respect that would result in a material adverse change in the
Business;
(f) promptly
(once Seller obtains knowledge thereof) inform Purchasers in writing of any
breach of the representations and warranties contained in Article 4 hereof or
any breach of any covenant hereunder by Seller;
(g) comply
with all material legal requirements and contractual liabilities applicable to
the operations of the Business and pay all applicable Taxes when due and
payable;
(h) not make
or change any election, change an annual accounting period, adopt or change any
accounting method, file any amended Tax return, enter into any closing
agreement, settlement or other agreement or arrangement with respect to Tax
claims, returns, refunds or limitation periods;
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(i) cooperate
with Purchasers and use commercially reasonable efforts and take such actions to
cause the conditions to Purchasers’ obligation to close to be satisfied
(including, without limitation, the execution and delivery of all agreements
contemplated hereunder to be so executed and delivered);
(j) confer on
a regular and reasonable basis with representatives of each Purchaser to report
on operational matters and the general status of ongoing operations of the
Business;
(k) provide,
and cause its Affiliates and their respective officers, directors, employees,
attorneys, accountants and other agents to provide, Purchasers and their
accounting, legal, funding sources and other representatives full and complete
access at all reasonable times to Seller’s officers, personnel, suppliers and
distributors, consultants, attorneys, accountants and facilities and to
business, financial, legal, accounting, regulatory, tax, compensation and other
data and information concerning the Purchased Assets and Assumed Liabilities,
subject to any confidentiality obligations Seller (and its Affiliates) may owe
to third parties; and
(l) not agree
to undertake any of the foregoing.
3.2 Covenants of
Purchasers. Prior to the Closing, each Purchaser
shall:
(a) promptly
(once it obtains knowledge thereof) inform Seller in writing of any breaches of
the representations and warranties contained in Article 5 or any breach of any
covenant hereunder by Purchasers;
(b) cooperate
with Seller and use its commercially reasonable efforts to cause the conditions
to Seller’s obligation to close to be satisfied (including, without limitation,
the execution and delivery of all agreements contemplated hereunder to be so
executed and delivered); and
(c) confer on
a regular and reasonable basis with representatives of Seller to
report on the general status of the transactions contemplated in Section
2.1(f).
Article
4
SELLER’S REPRESENTATIONS AND
WARRANTIES
Seller’s Representations and
Warranties. Seller represents and warrants to Purchasers that
as of the date of hereof and as of the Closing:
4.1 Formation; Good
Standing. Seller is a corporation duly formed, validly
existing, and in good standing under the laws of Massachusetts and is qualified
to do business in the jurisdiction of organization.
4.2 Subsidiaries. Seller
has one subsidiary, Aware Security Corporation, which does not own or use, and
has not owned or used, any assets or properties related in any way to the
Purchased Assets or the Non-Purchased Patents, Overlapping Technology or any of
the technology related thereto or any other rights in the Business.
4.3 Authorization. Seller
has the full legal right, power and authority to enter into and perform the
transactions contemplated by this Agreement and the agreements and other
documents contemplated hereby, without need for any approval, license, or notice
to any court, Governmental Entity or other Person or entity. The
execution, delivery and performance of this Agreement and the documents
contemplated hereby by Seller and the consummation by Seller of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action of Seller, and no vote of the shareholders of Seller is
necessary to approve this Agreement or the transactions contemplated by this
Agreement. This Agreement and the agreements and other documents
contemplated hereby evidence the legal, valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms.
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4.4 No Default or
Violation. The execution, delivery and performance of this
Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby do not and will not: conflict with Seller’s Articles of
Organization or By-laws; violate any law, regulation, order, judgment or decree;
or result in a default or acceleration of any material obligation under, or give
rise to any material obligation under, any agreement or instrument. No waiver,
consent, approval or authorization of any person is required to be made or
obtained by Seller in connection with the execution, delivery and performance of
this Agreement, the consummation of the transactions contemplated hereby and the
assignment by Seller to Purchasers of the Purchased Assets.
4.5 Title to Properties; Absence
of Liens and Encumbrances. Seller has the full right to sell,
transfer, and assign all of the Purchased Assets to Purchasers, and has good
title thereto (and will, at the Closing, sell, transfer and assign to Purchasers
good title to all of such Purchased Assets) and to all such assets and
properties and rights contemplated to be licensed to (or the subject of any
license to) Purchasers in connection with the transactions contemplated by this
Agreement, in each case free and clear of all Liens, except the Outbound IP
Licenses. All of the Purchased Assets and all of the assets,
properties and rights contemplated to be licensed to (or the subject of any
license to) Purchasers in connection with the transactions contemplated by this
Agreement constitute in all material respects all of the assets, properties and
rights of Seller or any of its Affiliates used or held for use with respect to
the Business.
4.6 Litigation. Except
as set forth in Schedule
4.6, there are no
actions, suits, proceedings or investigations relating to the Purchased Assets,
the Business or any of the assets, properties and rights contemplated to be
licensed to (or the subject of any license to) Purchasers in connection with the
transactions contemplated by this Agreement pending or, to knowledge of Seller,
threatened against Seller, Seller’s Affiliates or Seller’s customers or
licensees or any of their properties, at law or in equity, before any court or
governmental agency, and Seller does not know of any circumstances that would
give rise to any such action, suit, proceeding or investigation. Neither Seller
nor any of its properties is subject to any order, writ, injunction, decree or
judgment of any court or governmental agency relating to the Purchased
Assets.
4.7 Product
Warranty. There have been no material warranty or product
liability claims asserted by any customer or other person against Seller with
respect to the Seller Technology, any of the other Purchased Assets or any of
the assets, properties and rights contemplated to be licensed to Purchasers
under the DSL License Agreement. Each product sold, leased, licensed
or delivered by Seller included in the Purchased Assets has been in material
conformity with all applicable material contractual commitments and express and
implied warranties.
4.8 Taxes. Seller
(a) has duly and timely filed all federal, state and other Tax returns and
reports required to be filed by the laws of any jurisdiction to which it or any
of the Purchased Assets is or has been subject, (b) has paid in full to the
proper governmental agencies all federal, state and other Taxes (including,
without limitation, all sales, use, withholding and payroll taxes), interest,
assessments, fees, and other governmental charges due or claimed to be due on
account of its assets, properties, income or operations, and (c) has withheld,
collected and paid to the proper governmental agencies all amounts that it has
been required by law to withhold or collect.
4.9 Legal Compliance.
Seller has obtained all material governmental or other consents, licenses,
permits or approvals (federal, state, foreign or local) required for the lawful
conduct of Seller’s business and the ownership of Seller’s assets and
properties, including the Purchased Assets, and all such consents, licenses,
permits and approvals are in full force and effect in all material respects, and
Seller has conducted its business and the ownership of its assets and properties
in compliance with all applicable law in all material respects.
4.10 Customers. Schedule
4.10 contains a
true and complete list of all current customers, users and licensees of the
Seller Technology.
4.11 Condition. All
material machinery, equipment and other tangible assets included in the
Purchased Assets are in good operating condition and repair, ordinary wear and
tear excepted.
4.12 Suppliers. Schedule
4.12 contains a
true and complete list of all vendors from or through whom Seller has purchased
material goods (for sale or lease) or services related to the Purchased Assets
and summarizes all contractual arrangements for continued supply from each such
firm. Seller has no currently existing material open purchase orders or
contracts with vendors or other suppliers of materials or services related to
the Purchased Assets.
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4.13 Patents, Trademarks and
Other Intangible Personal Property.
(a) Seller
owns, or otherwise possesses, legally enforceable rights to use all Purchased
Patents, copyrights, and any applications therefor, domain names, maskworks, net
lists, schematics, technology, know-how, trade secrets, algorithms, computer
software programs or applications (in both source code and object code form),
and all trademarks, trade names and service marks and all other Intellectual
Property Rights included in the Purchased Assets (the “Seller Proprietary
Rights”), including those set forth on Schedule
4.13(b) free and
clear of any and all liens, charges, security interests and other encumbrances
whatsoever. With the exception of any Contract listed on the
Schedules hereto, Seller is not a party to any Contract related to any Purchased
Asset, including any such agreement whereby any such Purchased Asset is licensed
to any third party on an exclusive basis or whereby the manufacture, sale,
distribution or other use of any Purchased Asset, or the enforcement of any
right relating to any Purchased Asset is restricted. Except as set
forth in this Section
4.13 and on Schedule
4.13(b) hereto,
all of Seller’s rights in and to Seller Proprietary Rights, including (if
applicable) the right to create derivatives, are freely assignable in its own
name and Seller is under no obligation to obtain any approval or consent for use
of any of Seller Proprietary Rights. The Seller Proprietary Rights,
together with all Intellectual Property Rights licensed pursuant to the DSL
License Agreement, represent all of Seller’s Intellectual Property Rights
related to the operation of the Business and the consummation of the
transactions contemplated by this Agreement will not alter, impair or extinguish
any Seller Proprietary Rights and any rights therein or thereto. To
Seller’s knowledge, Seller has, where applicable, complied with its obligations
with regard to the Purchased Patents to any technical standards organizations in
all material respects.
(b) Set forth
on Schedule
4.13(b) is a
complete list of all registrations (and applications for registration) for
Intellectual Property Rights (including domain names and computer software
programs or applications) included in the Seller Proprietary Rights, specifying,
where applicable, the jurisdictions in which each such Seller Proprietary Right
has been issued or registered or in which an application for such issuance and
registration has been filed, including the respective registration or
application numbers and the names of all registered owners.
(c) Seller is
not obligated to pay any royalties or other compensation to any third party in
respect of its ownership, use or license of any of the Seller Proprietary
Rights, except to the parties listed in Schedule
4.13(c).
(d) Set forth
on Schedule
4.13(d) is a
complete list of all Contracts as to which Seller is a party and pursuant to
which Seller or any other person is authorized to use any Seller Proprietary
Right. Seller is not in breach, default or other violation of any
Contract described on such list. The Contracts are in full force and
effect and are binding and enforceable against each of the parties thereto in
accordance with their respective terms. The execution and delivery of
this Agreement by Seller, and the consummation of the transactions contemplated
hereby, will not cause Seller to be in violation or default under any Contract,
nor entitle any other party to any Contract to terminate or modify such
Contract.
(e) All of
the registrations (and applications for registration) for Seller Proprietary
Rights set forth on Schedule
4.13(b)
as issued by, or filed with the United States Patent and
Trademark Office or Register of Copyrights or the corresponding offices of other
countries listed on Schedule
4.13(b), have
been duly issued or filed, as the case may be, and have
been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States and each
such other country. Seller has used commercially reasonable efforts
to protect its rights in the Seller Proprietary Rights and has reasonably
maintained the confidentiality of its trade secrets, pending patent
applications, know-how and other confidential Seller Proprietary Rights, and
there have been no acts or omissions by Seller, the result of which would be to
materially compromise the rights of Seller to apply for or enforce appropriate
legal protection of such Seller Proprietary Rights.
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(f) Except
for any Patents that may be necessary to comply with a Standard, the use of the
Seller Proprietary Rights in the manner used by the Seller prior to the Closing
Date does not infringe, misappropriate or otherwise violate any copyright,
patent, trademark, service mark, trade secret or other third party Intellectual
Property Right, and no claims with respect to the Purchased Assets (including
the Seller Proprietary Rights and any of the assets, properties and rights
contemplated to be licensed to (or the subject of any license to) Purchasers in
connection with the transactions contemplated by this Agreement) have been
asserted or are threatened by any person nor is Seller aware of any valid
grounds for any claims (i) that the manufacture, development, sale, licensing or
use of the Purchased Assets as developed, sold or licensed or used by Seller,
infringes, misappropriates or otherwise violates on any copyright, patent,
trademark, service mark, trade secret or other third party Intellectual Property
Right, (ii) against the use by Seller of any trademarks, service marks,
trade names, trade secrets, copyrights, Patents, technology, know-how or
computer software programs and applications included in or used in connection
with the Purchased Assets (including the Seller Proprietary Rights) or (iii)
challenging the ownership by Seller, validity or effectiveness of any of the
Purchased Assets (including the Seller Proprietary Rights). No
Purchased Assets (including the Seller Proprietary Rights) are subject to any
outstanding decree, order, judgment, or stipulation restricting in any manner
the licensing thereof by Seller.
(g) Each
former and current employee, officer and consultant of Seller working or who has
worked with the Purchased Assets has executed an employment agreement which
covers items, including confidentiality, non-competition, trade secrets,
invention disclosures and intellectual property ownership in substantially the
form attached hereto as Schedule
4.13(g) providing
Seller with title and ownership to Seller Proprietary Rights developed or used
by Seller and agreeing to maintain the confidentiality of Seller Proprietary
Rights and Seller’s other confidential information. To the knowledge
of Seller, no employee, officer or consultant of Seller is in violation of any
term of any employment or consulting contract, proprietary information and
inventions agreement, non-competition agreement, or any other contract or
agreement relating to the relationship of any such employee, officer or
consultant with Seller or any previous employer.
(h) All
documentation, specifications and other technical data necessary for the
development, manufacture, distribution or sale of the Purchased Assets
(including the Seller Proprietary Rights) and all written documentation,
specifications and other technical data useful for the development, manufacture,
distribution or sale of the Purchased Assets (including the Seller Proprietary
Rights) which are in Seller’s possession or control will be delivered to
Purchasers as part of the Purchased Assets (including the Seller Proprietary
Rights).
(i) The use
of any software that constitutes part of the Seller Proprietary Rights by the
Seller has been in compliance with the terms of any open source license for any
open source code included in the Seller Proprietary Rights.
(j) The
Purchased Assets do not contain open source software.
4.14 Outbound IP
License. Schedule
1.2(c) lists each
Outbound IP License. None of such instruments or documents has been
modified or amended, whether in writing, by custom or usage or otherwise and all
of such instruments and documents are in full force and effect in accordance
with their respective terms.
4.15 Purchased Inbound License
Agreements. Seller is in compliance with all of its
obligations arising under the Purchased Inbound License Agreements in all
material respects, and there is no amount due under the Purchased Inbound
License Agreements for goods and services provided to Seller prior to the
Closing. Neither Seller nor, to Seller’s knowledge, any other party
to any of the Purchased Inbound License Agreements is in breach, default or
other violation thereunder. There has been no claim that there has
been any such default, breach or failure to comply and there are no existing
facts or conditions known to Seller that, with or without the passage of time,
notice or both, will result in a default under, breach of, or failure to comply
with any term or provision of a Purchased Inbound License
Agreement.
4.16 Brokers’
Fees. Seller has no liability to pay any fees or commissions
to any broker, finder, or agent with respect to the Purchased Assets, the
execution of this Agreement or the transactions contemplated hereunder for which
Purchasers could become liable or obligated.
4.17 Solvency. Seller
is not now insolvent and will not be rendered insolvent by the transactions
contemplated hereunder. As used in this section, “insolvent” means
that the sum of the debts and other probable Liens of Seller exceeds the present
fair saleable value of Seller’s assets.
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4.18 Foreign Corrupt
Practices. Except as described in Schedule
4.18, neither the
Seller nor any of its directors, officers or employees have, with respect to the
Business, the Purchased Assets or any government bid, (i) used any funds to
offer or provide any unlawful contributions, payments, gifts, gratuities or
entertainment, (ii) made any unlawful expenditures relating to political
activity to government officials or others, (iii) received notice of any payment
identified in (i) or (ii) above, or (iv) made or offered or solicited or
accepted any contributions, payments, gifts, gratuities, entertainment or any
other item or service or any value as a kickback, bribe or for any other reason
in violation of the laws, regulations or requirements of any Governmental
Entity, including but not limited to the Anti Kickback Act of 1986, as amended,
the Foreign Corrupt Practices Act of 1977, as amended, the Truth in Negotiations
Act of 1962, as amended, the Anti Kickback Act of 1986, as amended, or the
Office of Federal Procurement Policy Act, as amended, or any FAR provision
implementing such laws, or other similar United States or foreign law, (v)
violated any requirements of the Defense Industrial Security Manual or the
Defense Industrial Security Regulation or any related security regulations, (vi)
made any material false statement to any official of a Governmental Body; nor
(vii) violated any other law applicable to a government bid.
4.19 Certain Business
Relationships Involving the Purchased
Assets. None of Seller’s directors, officers, employees or
shareholders has been a party to, or otherwise involved in, any business
arrangement or relationship involving the Purchased Assets within the past
twelve (12) months, and none of Seller’s directors, officers or employees own
any asset, tangible or intangible, that is used in the Business.
4.20 Specified
Employees.
(a) Schedule
6.6 contains a list of all
the Specified Employees, showing for each Specified Employee the name, title,
function, location, and the annual fixed salary or wages as of July 31,
2009 and aggregate annual target compensation for the fiscal year ending
December 31, 2009. Except as set forth on Schedule
6.6, none of the
Specified Employees has entered into an early retirement arrangement with
Seller. None of the Specified Employees has given notice or otherwise
indicated in writing (or to the knowledge of Seller given any other indication)
that he or she intends to terminate his or her employment.
(b) Except as
set forth on Schedule
4.20(b), with
respect to the Specified Employees, Seller is not a party to any collective
bargaining agreement, similar written or material unwritten agreement or other
relationship with a union or other employee representative.
(c) Schedule
4.20(c) contains
a complete and accurate list of all Employee Plans in which any of the Specified
Employees participate or are entitled to participate.
(d) Except as
set forth on Schedule
4.20(d), with
respect to the Specified Employees, there is not presently pending or
existing, and to Seller’s knowledge there is not threatened, (i) any strike,
slowdown, picketing, work stoppage or other material labor dispute, or (ii) any
controversies between Seller and any of the Specified
Employees. Schedule
4.20(d) contains
a complete and accurate list of (i) all labor disputes of the kind mentioned
under Section
4.20(d)(i) above which have
happened in the last five (5) years prior to the date hereof, and (ii) all
actions, suits or other proceedings, including but not limited to lawsuits or
formally initiated conciliation/arbitration proceedings pending against Seller
by any Specified Employee or vice versa, involving works
councils or other employee representatives.
(e) Except as
set forth on Schedule
4.20(e), with
respect to the Specified Employees, Seller has no current or potential
obligation to provide post-employment health, life or other welfare benefits to
such employees other than as required under section 4980B of the U.S. Tax Code
or any similar applicable Law. With respect to the Specified
Employees or the Business, neither Seller nor any other entity that, together
with Seller, is or was (at a relevant time) treated as a single employer under
Section 414 of the U.S. Tax Code, has contributed to or has any liability with
respect to any plan subject to Title IV of ERISA or “multiemployer plan” (as
such term is defined under Section 3(37) of ERISA).
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(f) Seller
has complied in all material respects with all laws applicable to the employment
of each of the Specified Employees and has violated no such law in any material
respect in connection with the operation of the Business. There do
not exist any pending or, to Seller’s knowledge, threatened claims (other than
routine undisputed claims for benefits), suits, actions or disputes relating to
any Specified Employee with respect to any Employee Plan.
(g) Except as
set forth on Schedule
4.20(g), Seller
has no Liabilities arising out of the employment, remuneration or hiring of any
of the Specified Employees prior to the Closing (and there is no basis for any
of the foregoing), other than ordinary payroll and benefit obligations that have
been fully accrued for in the ordinary course of business.
(h) With
respect to the transactions contemplated hereby, any notice required under any
law or collective bargaining agreement has been, or prior to the Closing will
be, given, and all bargaining obligations with any employee representative have
been, or prior to the Closing will be, satisfied.
(i) Except as
set forth on Schedule
4.20(i), the consummation of the
transactions contemplated by this Agreement will not accelerate the time of the
payment or vesting of, or increase the amount of, or result in the forfeiture of
compensation or benefits for any Specified Employee under any Employee
Plan.
Article
5
PURCHASERS’ REPRESENTATIONS
AND WARRANTIES
Purchasers’ Representations
and Warranties. Each Purchaser hereby represents and warrants
to Seller as of the date hereof and as of the Closing that:
5.1 Due
Organization. Lantiq is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware. Lantiq Germany is a corporation duly incorporated, validly
existing and in good standing under the laws of Germany.
5.2 Authority. Such
Purchaser has the full legal right, power and authority to enter into and
perform the transactions contemplated by this Agreement, without need for any
consent, approval, authorization, license or order of, or notice to, any court,
Governmental Entity or other Person or entity. The execution,
delivery and performance of this Agreement and the documents contemplated hereby
by such Purchaser and the consummation by such Purchaser of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate action of such Purchaser. This Agreement evidences the
legal, valid and binding obligation of such Purchaser, enforceable against
Purchaser in accordance with its terms.
5.3 No Default or
Violation. The execution, delivery and performance of this
Agreement by such Purchaser and the consummation by such Purchaser of the
transactions contemplated hereby do not, and will not conflict with such
Purchaser’s Articles of Incorporation or By-Laws, violate any law, regulation,
order, judgment or decree by which such Purchaser is bound or violate any
Contract to which such Purchaser is a party.
5.4 Availability of
Funds. Such Purchaser currently has access to sufficient
immediately available funds in cash or cash equivalents, and shall at the
Closing have sufficient immediately available funds, in cash, to pay the
Purchase Price.
Article
6
CERTAIN OBLIGATIONS OF THE
PARTIES
Certain Obligations of the
Parties. The parties covenant and agree as
follows:
6.1 Covenant of Further
Assurances. Seller shall, at any time and from time to time
after the Closing, at its expense, execute, acknowledge, seal and deliver all
such instruments and documents, and do all such further things, as Purchasers
may reasonably request to perfect and effect the transfer and delivery to
Purchasers of any and all of the Purchased Assets or to transfer to or otherwise
obtain for Purchasers any consent, license, permit, registration or approval
necessary or desirable to accomplish the purchase of the Purchased Assets or to
enable Purchasers fully and without restriction to manufacture, distribute and
sell the Seller Technology.
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6.2 Access to Information /
Interoperability Lab. From and after the Closing, Seller shall
give Purchasers and its representatives access at all reasonable times to the
facilities, properties, books, records, officers, employees and agents of Seller
as the same relate to the Purchased Assets. In addition, from and
after the Closing, Seller shall ensure that employees, contractors, agents and
other representatives of Purchasers shall continue to have physical access to
Seller’s interoperability lab (currently located in the Stewart lab on the
second floor of Seller’s facility in Bedford, Massachusetts ) and be permitted
to use the equipment located therein, as well as remote access to Seller’s data
and information used in connection therewith, on terms and conditions (including
hours and methods of access) no less favorable than Seller’s
employees.
6.3 Payment of Taxes;
Cooperation on Tax Matters.
(a) Seller
shall pay, promptly and when due, whether at the original time fixed therefor or
pursuant to any extension of time to pay or any agreement with tax authorities,
any and all taxes, fees and other charges that shall become due or shall have
accrued on account of the operation and conduct of Seller’s Technology on or
before the Closing or on account of any of the transactions contemplated by this
Agreement, provided, however,
that Seller shall not be required to pay any such tax, fee or charge if it is
contesting the validity or amount thereof through proper proceedings, in good
faith and with reasonable diligence if such contest does not, and will not, have
any adverse impact on Purchasers.
(b) Seller
and Purchasers shall cooperate fully, as and to the extent reasonably requested
by the other, in connection with the filing of Tax Returns of each of Seller and
each Purchaser or in connection with any audit, litigation or other proceeding
with respect to Taxes of the Business. Such cooperation shall include
the retention and (upon the other party’s request) the provision of records and
information which are reasonably relevant to any such audit, litigation or other
proceeding and making representatives available on a mutually convenient basis
to provide additional information and explanation of any material provided
hereunder.
6.4 Non-Competition;
Non-Solicitation; Non-Disclosure.
(a) During
the period beginning on the Closing Date and ending on the third anniversary of the
Closing Date (the “Non-Compete Period”),
Seller shall not, and shall not allow its Affiliates to, either directly or
indirectly, Participate in any Competitive Business. “Participate” includes
any direct or indirect ownership interest in any enterprise or participation in
the management of such enterprise, whether as an officer, director, employee,
partner, sole proprietor, agent, representative, executive, franchisor,
franchisee, creditor, owner or otherwise; provided that
ownership of less than 2% of the outstanding stock of any publicly-traded
corporation shall not be deemed to be Participating solely by the reason thereof
in any of its business. “Competitive Business” means any business
anywhere in the world engaged in any business that the Business conducts or
proposes to conduct as of the Closing Date (other than (i) pursuant to
relationships with Purchasers or any of its Affiliates, (ii) Seller’s continued
business with respect to the Outbound IP Licenses listed in Schedule
1.2, and
(iii) Seller’s continued business with respect to the licensing and/or sale of
Non-Purchased Patents).
(b) Seller
agrees, on behalf of itself and each of its Affiliates, that during the
Non-Compete Period, Seller shall not, directly or indirectly:
(i) induce or
attempt to induce any employee of either Purchaser, including the Specified
Employees, to leave the employ of such Purchaser; or
(ii) hire any
employee of either Purchaser without the prior written consent of such
Purchaser.
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(c) Seller
agrees, on behalf of itself and each of its Affiliates, that during the period
beginning on the Closing Date and ending on the first anniversary of the Closing
Date, Seller shall not, directly or indirectly, employ or otherwise retain the
services of any Specified Employee (it being agreed that if a Specified Employee
accepts an employment position with a Purchaser or a third party and such
Purchaser or third party terminates the employment of such Specified Employee
prior to the first anniversary of the Closing Date, then, subject in all
circumstances to Section 6.4(b), this
Section 6.4(c)
shall not restrict Seller’s right to hire such Specified Employee following such
termination).
(d) Each
Purchaser agrees, on behalf of itself, that during the Non-Compete Period, it
shall not, directly or indirectly:
(i) induce or
attempt to induce any employee of Seller (other than the Specified Employees) to
leave the employ of Seller; or
(ii) hire any
employee of Seller (other than the Specified Employees) without the prior
written consent of Seller.
(e) Seller
shall keep confidential, and shall not disclose to any third party or use any
confidential or proprietary information or trade secret relating to the Seller
Technology or any other Purchased Asset, including, by way of example and
without limitation, vendor lists, customer lists, source code, know-how and
trade secrets, except to the extent such information is published for
dissemination to the general public by, or with the written consent of,
Purchasers. For avoidance of doubt, notwithstanding anything of the
foregoing, Seller may use any information retained in the unaided memories of
Seller’s employees who have had access to the Seller Technology or any other
Purchased Asset. An employee’s memory is unaided if the employee has
not intentionally memorized the information for the purpose of retaining and
subsequently using or disclosing it to a third party. It is
understood that no license or right of use under any Patent or patentable right,
copyright or trademark is granted or conveyed by this right under this
Agreement.
(f) Seller
acknowledges and agrees that (i) the restrictions contained in this Section
6.4 for the
benefit of Purchasers are reasonable in all respects (including with respect to
the subject matter, time period and geographical area) and are necessary to
protect the value of the Purchased Assets, (ii) Seller is primarily responsible
for the creation of such value and (ii) Purchasers would not have
consummated the transactions contemplated hereby without the restrictions
contained in this Section
6.4.
6.5 DSL License Agreement;
Assignment of Intellectual Property. Seller shall have
executed and delivered (i) the DSL License Agreement and (ii) assignments of all
necessary Seller Proprietary Rights including the Patent Assignment Agreement
attached hereto as Schedule
1.1(a)(i).
6.6 Employee
Matters.
(a) Employment
Offers. The employees of Seller as set forth in Schedule
6.6 (the “Specified Employee”)
shall continue to be employed by Seller at the Closing. At the
Closing, each Specified Employee shall be offered employment by Lantiq US, with
terms and conditions of employment, including base compensation, bonus
opportunity and benefits, that are substantially comparable in the aggregate to
those provided by Seller to such Specified Employee immediately prior to the
Closing (but not including any equity-based compensation); provided that nothing
in this Agreement shall limit the ability of Lantiq US (or one of its
Affiliates) to reduce the rate of compensation or benefits, or terminate the
employment, of any Specified Employee following acceptance of such
offer. Effective on the Closing Date, Seller shall terminate
and Lantiq US shall hire each Specified Employee who accepts such
offer of employment from Lantiq US or one of its Affiliates. Seller
hereby consents to Lantiq US (or one of its Affiliates) contacting each
Specified Employee with respect to the desire of such employee to enter the
employ of Lantiq US (or one of its Affiliates) and Seller shall cooperate in
good faith with and use its commercially reasonable efforts to assist Lantiq US
to cause such Specified Employees to accept such offer of
employment. Specified Employees will receive credit for such
employees’ period of employment with Seller for purposes of calculating future
accruals under any vacation program and for purposes of determining severance
pay under any applicable severance plan of Lantiq US; provided that Lantiq
US shall not assume any Liability for any retention, severance,
change-of-control or similar agreements between Seller or any of its Affiliates
and any of the Specified Employees in effect as of the Closing Date, and Seller
shall retain Liability for all obligations under any such retention, severance,
change-of-control or similar agreements. Notwithstanding anything to
the contrary set forth herein, and for the avoidance of doubt, Seller shall also
remain solely liable and shall pay to each Specified Employee any and all wages,
salaries, vacation pay and compensation of any kind payable to any Specified
Employee for any period ending on or prior to the Closing
Date. Furthermore, Seller shall process final payroll payments to
Specified Employees with respect to the payroll period in which the Closing Date
occurs and such payments shall include all compensation and vacation pay that is
earned but unpaid as of the Closing Date and during the entire payroll period in
which the Closing Date occurs and shall be made on or as soon as reasonably
practicable following the Closing Date; provided that
Purchaser shall reimburse Seller within five (5) business days of receipt of an
invoice from Seller for the portion of such payments relating solely to
compensation earned during post-Closing periods, the employer’s portion of
payroll taxes on such post-Closing compensation (e.g., FICA) and employer
matching contributions on the portion of such post-Closing compensation that is
deferred under Seller’s 401(k) plan. Seller shall deliver to Lantiq
US as soon as reasonably practicable after the Closing Date all personnel files
and employment records relating to the Specified Employees who accept employment
offers from Lantiq US, provided that Seller
may retain one copy of such files and records for applicable legally-required
document retention purposes.
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(b) COBRA. Seller
is wholly responsible for complying with all applicable health care continuation
coverage requirements under Section 4980B of the U.S. Tax Code or similar
applicable laws (“COBRA”) under
Seller’s group health plans with respect to Specified Employees (and covered
dependents) whose qualifying events occur while such Specified Employees (and
covered dependents) participate under Seller’s group health plan and Purchaser
is wholly responsible for complying with such coverage requirements under COBRA
under Purchaser’s group health plan with respect to employees (and covered
dependents) employed by Lantiq US or one of its Affiliates from and after the
Closing whose qualifying events occur while such employees (and covered
dependents) participate under Purchaser’s group health plan.
(c) Employee
Benefits. As of the day
immediately following the Closing Date and for six months following the Closing
Date, Lantiq US or one of its Affiliates
shall permit Specified Employees to be eligible to participate in employee plans
and benefit arrangements of Lantiq US (or such Affiliate) that provide benefits that
are substantially comparable in the aggregate to those provided by Seller to
such Specified Employees immediately prior to the Closing (but not including any
equity-based compensation) in accordance with the then prevailing terms of such
employee plans and benefit arrangements, provided that (i)
nothing herein shall prevent Lantiq US (or such Affiliate) from terminating the employment of any
such Specified Employee or modifying or terminating such plans from time to
time, (ii) for eligibility and vesting purposes under any such plan for which a
Specified Employee may be eligible after the Closing Date, Lantiq US (or such
Affiliate) shall ensure that service by
such Specified Employee with Seller shall be deemed to have been service with
Lantiq US (or such Affiliate), provided
such crediting of service does not result in a duplication of benefits, (iii)
all Specified Employees and their spouses and dependents who are covered under
Seller’s respective health plans at the time of the Closing shall be covered
immediately after the Closing Date, without any gap in coverage (and shall not
be excluded from coverage on account of any pre-existing condition) under a
group health plan of Lantiq US (or such
Affiliate), and (iv) Purchaser shall not be required to have a
replacement 401(k) plan in place immediately following the Closing Date as long
as Purchaser uses commercially reasonable efforts to adopt such plan as soon as
reasonably practicable following the Closing Date. Effective as of
the Closing Date, Seller shall take all such actions as are necessary to fully
vest Specified Employees in all of their account balances under Seller’s 401(k)
plan. Lantiq US and Seller shall use commercially reasonable efforts
to permit Specified Employees to rollover their account balances under the
Seller’s 401(k) plan (in the form of cash and notes associated with plan loans)
to a 401(k) plan sponsored by Purchaser (or one of its Affiliates) as soon as
reasonably practicable on or after the Closing Date. Seller shall not
place any Specified Employees’ plan loans into default prior to the date of such
rollovers as long as such rollovers occur prior to the last day of the calendar
quarter following the calendar quarter in which the Closing Date
occurs. Notwithstanding anything in this Section
6.6 to the
contrary, if Lantiq US’s welfare benefit plans providing medical and dental
coverages have not been adopted and are not available to provide benefits to
Specified Employees on the day immediately following the Closing Date, Seller
shall take such actions as are necessary to permit Specified Employees (and
their covered dependents) to continue to participate under Seller’s group
medical and dental plans through December 31, 2009; provided that
Purchaser reimburses Seller for the cost of premiums for such coverage for each
full calendar month of coverage occurring during the period beginning on the
Closing Date and ending on December 31, 2009. As soon as reasonably
practicable after the date of this Agreement, Seller shall inform the Specified
Employees of the effect of the transaction contemplated under this Agreement on
such employees’ health-care and dependent-care flexible spending accounts,
including the fact that such employees may forfeit unused amounts under such
accounts if they do not incur sufficient reimbursable expenses prior to the
Closing Date.
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(d) Certain Foreign National
Employees. The parties recognize that the Specified Employees
listed on Schedule
6.6(d) are in
nonimmigrant visa status or have applications for lawful permanent residence
pending with the relevant Governmental Entities (the “Affected
Foreign National Employees”). The
parties further recognize that new or amended petitions with respect to such
Affected Foreign National Employees may be required in certain of these cases
identified on Schedule
6.6(d), unless
Lantiq US (or any of its Affiliates, as the case may be) is deemed the
“successor-in- interest” to Seller (as such term is used in pronouncements by
the U.S. Citizenship and Immigration Service (“USCIS”)) with respect
to such Affected Foreign National Employees. Accordingly, Lantiq US
hereby agrees to assume Seller’s obligations to the USCIS as
“successor-in-interest” under such pending applications with respect to the
related Affected Foreign National Employees (including any obligations arising
from or under attestations made in each certified and still effective Labor
Condition Application (“LCA”) filed by Seller
with respect to any such Affected Foreign National Employees); provided that such
assumption shall not grant to any such Affected Foreign National Employee any
rights enforceable by such employee against Lantiq US. Each party agrees to use
commercially reasonable efforts to take such actions as may reasonably be
requested at and following the Closing Date to document to the USCIS or such
other Governmental Entity, as the case may be, as may be necessary to
memorialize the “successor-in-interest” relationship with respect to any
Affected Foreign National Employees. Seller shall provide Purchaser with true
and complete copies of all applications, petitions and other documentation
related to the Affected Foreign National Employees’ immigration status on or
before the Closing Date.
6.7 Transitional IT
Assistance. Seller shall provide the IT Services, including
the following: (i) Separation Services to implement the Transitional Environment
and complete the Logical IT Carve-out pursuant to the High Level IT Carve-out
Project Plan attached hereto as Schedule 6.7(i); (ii)
Operational IT Services; and (iii) Separation Services pursuant to the Physical
IT Carve-out Project Plan which when completed will be attached hereto as Schedule
6.7(ii). The purpose of the IT Services is to allow Purchasers
to establish their own IT for the Business in due time, allowing Purchasers to
continue the uninterrupted operation of the Business during the IT Transition
Period until completion of the Physical IT Carve-out. The Operational
IT Services shall be provided for a period of eight (8) months
following the Closing, provided that
Purchasers shall have the right, in their sole discretion, to extend such period
no more than twice for up to eight (8) months per extension upon written notice
to Seller provided that Purchasers remain tenants in Seller’s premises pursuant
to the Lease in Schedule 1.8 (the
aforesaid period and any extension shall hereinafter be referred to as the
“IT Transition
Period”). Notwithstanding the foregoing, Purchasers shall have
the right to terminate any or all of the IT Services on thirty (30) days written
notice to Seller. All Operational IT Services shall be based on the
“services as before” concept, meaning that with regard to quality and service
levels, and subject to the terms of this Agreement, the IT Services provided to
Purchasers hereunder shall be substantially the same as the corresponding IT
services provided to the Business by Seller prior to Closing. Seller will
collaborate and cooperate with Purchasers to facilitate timely completion of the
Physical IT Carve-out (e.g., providing migration of electronic data files in
mutually agreed formats). All IT Services shall be provided in a
professional and workmanlike manner and follow generally accepted best practices
for IT services. Seller and Purchasers shall each designate in
writing an individual to serve as its primary point of contact for all IT
Services, which individual shall be responsible for all communication between
the Parties related to the same and shall promptly discuss and attempt to
resolve technical issues as well as disputes arising out of or relating to this
Section 6.7;
provided that
any dispute that cannot be resolved within five (5) business days shall be
referred in writing to the respective higher ranking management of each
Party. In the event Seller experiences (or expects to experience) any
system downtime (including system maintenance activities), or otherwise changes
it systems in such a way that affects or may affect any IT Services, Seller
shall (a) notify Purchasers in advance in sufficient time to prepare for such
activities, (b) minimize the amount of time spent on such activities to the
extent possible and (c) treat Purchasers identically with respect to Seller with
respect to such downtime. Seller shall maintain a disaster recovery
program for the IT Services pertinent to Purchasers consistent with the disaster
recovery program in place for such services within Seller’s IT, and, in the
event of an emergency situation and the disaster recovery policy is placed into
effect, Seller will keep Purchasers informed of the status of recovery
plans. Seller shall not subcontract any IT Services without the prior
written consent of Purchasers. Purchasers shall not be required to
pay for any IT Services other than the Operational IT Services. For
the Operational IT Services, Lantiq Germany shall compensate Seller as further
described in Schedule
6.7.
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Article
7
INDEMNIFICATION AND SURVIVAL
OF PROVISIONS
Indemnification and Survival
of Provisions.
7.1 Indemnification by
Seller. Seller hereby agrees that from and after the Closing
it shall indemnify, defend and hold harmless each Purchaser, their respective
Affiliates, and their respective directors, officers, stockholders, partners,
members, attorneys, accountants, agents, representatives and employees and their
heirs, successors and permitted assigns, each in their capacity as such (the
“Purchaser Indemnified
Parties”) from, against and in respect of any Damages imposed on,
sustained, incurred or suffered by, or asserted against, any of the Purchaser
Indemnified Parties, whether in respect of Third-Party claims, claims between
the parties hereto, or otherwise, directly or indirectly relating to, arising
out of or resulting from, (i) any breach of any representation or warranty
(ignoring, for purposes of this Section 7.1, any
qualification as to materiality contained therein) made by Seller contained in
this Agreement or any document delivered pursuant to this Agreement so long as
notice thereof is delivered to Seller during the period such representation or
warranty survives, (ii) any Excluded Liability or any failure to timely
discharge or fulfill any of the Excluded Liabilities, and (iii) any breach
of a covenant or agreement of Seller contained in this Agreement or any document
delivered pursuant to this Agreement. Damages include any and all
claims, costs, losses, expenses, liabilities or other damages, including
interest, penalties and reasonable attorneys’ fees and disbursements by reason
of or otherwise arising out of any Excluded Liability or any breach by the other
party of a representation, warranty or covenant contained in this Agreement
(collectively “Damages”).
7.2 Indemnification by
Purchasers. Purchasers hereby agree that from and after the
Closing they shall jointly and severally indemnify, defend and hold harmless
Seller, its Affiliates, and their respective directors, officers, stockholders,
partners, members, attorneys, accountants, agents, representatives and employees
and their heirs, successors and permitted assigns, each in their capacity as
such (the “ Seller
Indemnified Parties” ) from, against and in respect of any Damages
imposed on, sustained, incurred or suffered by, or asserted against, any of the
Seller Indemnified Parties, whether in respect of Third-Party claims, claims
between the parties hereto, or otherwise, directly or indirectly relating to,
arising out of or resulting from, (i) any breach of any representation or
warranty made by any Purchaser contained in this Agreement or any document
delivered pursuant to this Agreement so long as notice thereof is delivered to
Seller during the period such representation or warranty survives, (ii) any
Assumed Liability or any failure to timely discharge or fulfill any of the
Assumed Liabilities, and (iii) any breach of a covenant or agreement of
any Purchaser contained in this Agreement or any document delivered pursuant to
this Agreement.
7.3 Third Party
Claims. Each party (the “Indemnified Party”)
agrees to notify the other party (the “Indemnifying Party”)
of any Damages asserted by third parties that, in the opinion of Indemnified
Party, are reasonably likely to give rise to indemnification hereunder (“Third-Party
Claims”). The Indemnifying Party may (a) participate in the
defense of any Third-Party Claim or (b) upon written notice thereof, and written
acknowledgement without reservation of rights that the Indemnifying Party shall
be solely responsible for such Third Party Claim and all Damages relating
thereto (notwithstanding any limitations set forth in this Section 7 that would
otherwise apply with respect thereto, which shall not thereafter be applicable)
to the Indemnified Party, assume the defense of any Third-Party Claim, with
counsel reasonably satisfactory to the Indemnified Party; provided that the
party assuming the defense may not assume such defense if there exists a
conflict of interest between the positions of the Indemnified Party and such
Party with respect to such Third-Party Claim or if such Third-Party Claim seeks
equitable relief against the Indemnified Party. The Indemnified Party
agrees that it will not settle any Third-Party Claims without the consent of the
Indemnifying Party, which consent shall not be unreasonably withheld or
delayed. The Indemnified Party further agrees that if the
Indemnifying Party wishes to enter into a settlement with respect to a
Third-Party Claim on terms reasonably acceptable to the Indemnified Party, the
Indemnified Party will cooperate in such settlement, provided that such
settlement includes, as an unconditional term thereof, the giving by the third
party to the Indemnified Party and its Affiliates of a release from all
liability in respect of such Third-Party Claim.
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7.4 Claims
Procedure. If an Indemnified Party wishes to make a claim for
indemnification hereunder for Damages that do not result from a Third Party
Claim (a “ Direct
Claim” ), the Indemnified Party shall notify the Indemnifying Party in
writing in general terms of such Direct Claim, the amount or the Indemnified
Party’s good faith estimated amount of damages sought thereunder to the extent
then ascertainable (which estimate shall not be conclusive of the final amount
of such Direct Claim), any other remedy sought thereunder, any relevant time
constraints relating thereto, the nature of the misrepresentation, breach of
warranty, covenant or obligation to which such item is related, and to the
extent known a reasonable summary of the facts underlying the claim. The
Indemnifying Party shall have a period of 30 days within which to respond
to any Direct Claim. If the Indemnifying Party does not respond within such
30-day period, the Indemnifying Party will be deemed to have accepted such
Claim. If the Indemnifying Party rejects all or any part of such Claim, Seller
and Purchasers shall attempt in good faith for 30 days to resolve such
claim. If no such agreement can be reached through good faith negotiation within
30 days, either Purchasers or Seller may thereafter commence an
action.
7.5 Survival of
Provisions. The representations and warranties of the parties
contained in this Agreement (other than those representations and warranties set
forth in Sections
4.1 through
4.5, inclusive,
Section
4.8, Sections
4.13(a) and
(c), and Sections
5.1 through
5.4, inclusive
(collectively, the “Fundamental
Representations”), which shall survive indefinitely without limitation)
and the right to make a claim for indemnification with respect to any
representation or warranty contained in this Agreement (other than any
Fundamental Representation) shall survive for a period of eighteen
(18) months following the Closing. All covenants and agreements of
the parties contained in this Agreement shall survive indefinitely without
limitation.
7.6 Limitation of
Liability. Each of Seller’s and Purchasers’ aggregate
liability with respect to the breach of a representation or warranty contained
in this Agreement (other than any Fundamental Representation) shall be strictly
limited to an amount equal to twenty-five percent (25%) of the Purchase Price
and each of Seller’s and Purchasers’ aggregate liability with respect to the
breach of a Fundamental Representation shall be strictly limited to an amount
equal to the Purchase Price (as applicable, the “Cap”); provided that,
notwithstanding anything herein to the contrary, no Indemnifying Party shall
have any liability to an Indemnified Party with respect to the breach of a
representation or warranty contained in this Agreement unless the
aggregate amount of all losses, damages, penalties, Taxes, costs, expenses or
other liabilities of any kind or nature, whether or not arising out of a
Third-Party Claim (collectively, “Losses”), incurred by
such Indemnified Party as a result of all such breaches cumulatively exceeds
$50,000, in which case the Indemnifying Party shall, subject to the Cap, be
liable for all such Losses in excess of $50,000.
Article
8
AMENDMENT AND
WAIVER
8.1 Amendment. This
Agreement may be amended by the parties hereto at any time by execution of an
instrument in writing signed on behalf of each of the parties
hereto.
8.2 Extension;
Waiver. At any time prior to the Closing Date, Purchasers and
Seller may, to the extent legally allowed and in writing, (a) extend the
time for the performance of any of the obligations of the other party hereto,
(b) waive any inaccuracies in the representations and warranties made to
such party contained herein or in any document delivered pursuant hereto, and
(c) waive compliance with any of the agreements, covenants or conditions
for the benefit of such party contained herein. Any agreement on the part of a
party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such party.
-18-
Article
9
TERMINATION
9.1 Termination. This
Agreement may be terminated at any time prior to the Closing:
(a) by mutual
written consent of Seller, on the one hand, and Purchasers, on the other
hand;
(b) by either
Seller or Purchasers if the Closing shall not have occurred on or before January
31, 2009; provided, however,
that neither Seller nor Purchasers shall be entitled to terminate this Agreement
pursuant to this Section
9.1(b) if such
party’s or parties’ breach of this Agreement has prevented the consummation of
the transactions contemplated hereby at or prior to such time;
(c) by
Seller, upon written notice to Purchasers, if there has been a material
misrepresentation or material breach on the part of a Purchaser of any of its
representations, warranties or covenants set forth in this Agreement (and, if
capable of cure, such misrepresentation or breach is not cured to the reasonable
satisfaction of Seller within five (5) business days after Seller gives
Purchasers written notice thereof) or if events have occurred which
have made it impossible to satisfy a condition precedent to Seller’s obligations
to consummate the transactions contemplated hereby unless Seller’s breach of
this Agreement has caused the condition to be unsatisfied; or
(d) by
Purchasers, upon written notice to Seller, if there has been a material
misrepresentation or material breach on the part of Seller of any of their
representations, warranties or covenants set forth in this Agreement (and, if
capable of cure, such misrepresentation or breach is not cured to the reasonable
satisfaction of Purchasers within five (5) business days after Purchasers give
Seller written notice thereof) or if events have occurred which have made it
impossible to satisfy a condition precedent to Purchasers’ obligations to
consummate the transactions contemplated hereby unless a Purchaser’s breach of
this Agreement has caused the condition to be unsatisfied.
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 to any other party or its stockholders, members, Affiliates,
directors or officers under this Agreement, except for the provisions of Section 6.4(d) and
Article 10
shall continue in full force and effect and except that nothing herein shall
relieve any party from liability for any breach of this Agreement prior to such
termination.
9.3 Delay in
Closing. In the event that this Agreement has not been
terminated and the Closing shall not have occurred by the later of (i) December
1, 2009 and (ii) the fifth (5th) business day following the satisfaction or
waiver of all of the conditions set forth in Section 2.1 (other
than those that by their terms are to be satisfied or waived at the Closing and
the condition set forth in Section 2.1(f)), and
the failure to so close is not caused in whole or in part by Seller, Purchasers
agree to reimburse Seller for Seller’s costs to carry on Seller’s G.hn
engineering portion of the Business in substantially the same manner as
presently conducted from such date until such time that the Closing shall occur
or this Agreement is terminated. Seller and Purchasers agree that
Purchasers shall pay to Seller a monthly amount equal to $306,243 based on
twenty one (21) full-time Specified Employees at an established man rate per
month of $14,583. Upon the earlier of the Closing or the termination
of this Agreement, Seller shall provide an invoice to Purchasers setting forth
the aggregate amount of the fees due to Seller through such date under this
Section 9.3,
with the monthly amount for the month in which the Closing occurs or this
Agreement is terminated being pro rated based upon the number of days that have
elapsed during such month from the commencement of Purchasers’ reimbursement
obligation under this Section 9.3 until the
Closing Date or the date of the termination of this Agreement, and Purchasers
shall pay the invoice upon receipt.
-19-
Article
10
MISCELLANEOUS
Miscellaneous.
10.1 Successors and
Assigns. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the legal representatives, agents, successors
and assigns of the parties.
10.2 Expenses. Each
party will be responsible for its own fees, costs and expenses, including
consultant, financial advisor, broker, account, counsel and other advisory fees,
costs and expenses incurred in connection with the preparation, negotiation,
execution, delivery or performance of this Agreement and the closing of the
transactions contemplated hereby, whether or not the transactions contemplated
hereby shall be consummated.
10.3 Notices. All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered by hand, sent by facsimile transmission with
confirmation of receipt, sent via a reputable overnight courier service, or
mailed by registered or certified mail (postage prepaid and return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice), and shall be deemed given on
the date on which delivered by hand or otherwise on the date of receipt as
confirmed:
To Seller:
Aware, Inc.
40 Middlesex Turnpike
Bedford, Massachusetts
01730
Attn: General
Counsel
Facsimile No.: (781)
276-4001
To Purchasers:
Lantiq Broadband Holdco
Inc.
640 N. McCarthy Blvd.
Milpitas,
CA 95035
Attn: Imran
Hajimusa
Facsimile No.: (408)
503-1528
and
Lantiq Deutschland GmbH
Am Campeon 3
85579 Neubiberg, Germany
Attn: Guenther
Stang
Facsimile No.: 49 89 234
9552411
with copies to:
Golden Gate Capital
One Embarcadero Center, 39th
Floor
San Francisco,
CA 94111
Attn: John Knoll and Felix
Lo
Facsimile No.: (415)
983-2701
and
Kirkland & Ellis LLP
555 California Street, 27th
Floor
San Francisco,
CA 94104
Attn: Stephen D.
Oetgen
Facsimile No.: (415)
439-1500
-20-
10.4 Entire
Agreement. This Agreement and the other documents referred to
herein or delivered pursuant hereto embody the entire agreement and
understanding among the parties hereto with respect to the subject matter hereof
and supersede all prior agreements and understandings relating to such subject
matter.
10.5 Counterparts. This
Agreement may be executed in several counterparts (including by means of
telecopied, facsimile or portable data format (PDF) signature pages), each of
which shall be deemed an original, and all of which together shall constitute
one and the same agreement.
10.6 Severability. If
any clause or provision of this Agreement is illegal, invalid or unenforceable
under present or future laws, then and in that event, it is the intention of the
parties hereto that the remainder of this Agreement shall not be affected
thereby.
10.7 Governing
Law. This Agreement shall be governed, interpreted, and
enforced in accordance with the laws of the State of New York, without regard to
its principles of conflicts of laws.
10.8 Binding Effect;
Assignability. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
assigns. This Agreement is not intended to confer upon any person
other than the parties hereto (and such parties’ respective successors and
assigns) any rights or remedies hereunder, except as otherwise expressly
provided herein. Neither this Agreement nor any of the rights and
obligations of the parties hereunder shall be assigned or delegated, whether by
operation of law or otherwise, without the written consent of both parties
hereto; provided, however, that (i)
each party hereto may assign this Agreement in
whole or in part without the prior written consent of the other but upon written
notice in connection with an acquisition of all or substantially all of the
assets of the such party and (ii) Seller may assign this Agreement in whole
or in part without the prior written consent of Purchasers but upon written
notice in connection with an acquisition of Seller’s test and diagnostic
business (it being agreed and acknowledged that no such assignment shall relieve
Seller of any of its obligations or any other liability hereunder); provided, further, in no event may Seller assign the test and diagnostic
rights received from Purchasers under this Agreement or the DSL License
Agreement to a Person who is a competitor of Purchaser.
10.9 Confidentiality Regarding
Agreement. The parties agree that any disclosure of the
existence of or any terms of this Agreement or the relationship between the
parties shall be made only with the prior written agreement of both
parties. An exception to the above is allowed if either party is
required under United States Securities and Exchange Commission regulations or
other applicable law to disclose this Agreement; provided that the
party so required to disclose this Agreement must first consult with the other
parties hereto with respect to the form and substance of such
disclosure.
10.10 Specific
Performance. Seller and Purchasers acknowledge and agree that
in the event of a breach by the other party (or any of its Affiliates) of any of
this Agreement, monetary damages shall not constitute a sufficient
remedy. Accordingly, Seller and Purchasers agree that Seller and
Purchasers shall have the right, in addition to any other rights and remedies
existing in its favor, to enforce its rights and Seller’s and/or Purchasers’
obligations hereunder not only be an action or actions for damages but also by
an action or actions for specific performance, injunctive and/or other equitable
relief.
-21-
Article
11
CERTAIN
DEFINITIONS
11.1 Certain
Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
“ADSL2” shall mean the
high speed asymmetric DMT based DSL technology standardized by the International
Telecommunications Union and referred to as G.dmt.bis (which is the successor to
G.dmt, also known as G.992.1) including G.handshake (also known as ITU-T
G.994.1), and G.lite.bis (also know as “ITU-T G.992.4).
“ADSL2+” shall mean
the higher data rate ADSL standard standardized by the International
Telecommunications Union as a 3rd
member of the ADSL2 family.
“ADSL 128” shall mean
the asymmetric DSL technology which is designed to work with Purchasers’ (or
Purchasers’ Affiliates’) 128 kHz analog components.
“ADSL Products” shall
have the meaning as set forth in Section 1.41 of the
DSL License Agreement.
“Affected Foreign National
Employees”
shall have the meaning set forth in Section
6.6(d).
“Affiliate” shall mean, with respect to any Person, any other
Person that as of the date of the Agreement or as of any subsequent date,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, such specified Person. For the
purposes of this definition, “control” (including with correlative meanings, the
terms “controlling,” “controlled by,” and “under common control with”) as
applied to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of that
Person, whether through ownership of voting securities or by contract or
otherwise. With respect to Purchasers, the term “Affiliate” shall not
include Qimonda AG or any entity controlled by Qimonda AG. With
respect to Seller, the term “Affiliate”, solely when used in Sections 6.4(a),
6.4(b) and
6.4(c), shall
not include any non-employee director or any owner of ten percent (10%) or more
of Seller’s capital stock.
“Agreement” shall mean
this Asset Purchase Agreement, including (unless the context otherwise requires)
the Schedules and the certificates and instruments delivered in connection
herewith, or incorporated by reference, as the same may be amended or
supplemented from time to time in accordance with the terms hereof.
“Assumed Liabilities”
shall have the meaning set forth in Section
1.3.
“Business” shall have
the meaning set forth in the Recitals.
“Cap” shall have the meaning set forth in Section
7.6.
“Closing” shall have
the meaning set forth in Section
1.10.
“Closing Date” shall
have the meaning set forth in Section
1.10.
“COBRA” shall have the
meaning set forth in Section
6.6(b).
“Competitive Business”
shall have the meaning set forth in Section
6.4(a).
“Contract” shall mean
any legally binding agreement, lease, sublease, evidence of indebtedness,
mortgage, indenture, license, sublicense, purchase order, security agreement or
other contract, agreement, instrument or business arrangement (whether written
or oral).
“Damages” shall have
the meaning set forth in Section
7.1.
-22-
“Derivatives/Extensions”
shall mean any modification or enhancement of an xDSL Standard.
“Digital Subscriber
Line” (“DSL”) shall mean the technology that enables discrete multitone
(DMT) broadband communications over twisted pair telephone lines.
“Direct Claim” shall
have the meaning set forth in Section
7.4.
“DSL License
Agreement” shall mean that certain License Agreement entered into between
Infineon Technologies AG and Seller with an effective date of October 1, 2007,
as amended and restated in connection with the transactions hereby in the form
attached hereto in Schedule
1.5.
“DSL Lite” shall mean
medium speed symmetric and asymmetric DMT based DSL technologies according to
the Standard known as “ADSL Lite” developed by the International
Telecommunications Union.
“DSL Technology” shall
have the meaning set forth in Section 1.21 of the
DSL License Agreement.
“Employee Plan” shall
mean each written plan, program or policy providing for compensation, severance,
termination pay, pension benefits, retirement benefits, deferred compensation,
performance awards, stock or stock-related awards, fringe benefits (including
health, dental, vision, life, disability, sabbatical, accidental death and
dismemberment or other insurance benefits), or other employee benefits or
remuneration of any kind, whether funded or unfunded, including each “employee
benefit plan,” within the meaning of Section 3(3) of ERISA, which is or has been
maintained by Seller for the benefit of any of its employees.
“ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended.
“Excluded Assets”
shall have the meaning set forth in Section
1.2.
“Excluded Liabilities”
shall have the meaning set forth in Section
1.4.
“Full Rate ADSL” shall
mean high speed symmetric and asymmetric DMT based DSL technologies according to
the ANSI Standard T1E1, 4 T 413 or ITU G.992.1.
“G.hn” shall mean the
Home Networking currently being standardized at the ITU.
“Governmental Entity”
shall mean any domestic or foreign government (federal, state, provincial,
municipal, local or otherwise), any governmental body, agency, authority,
instrumentality, subdivision, court, or commission, or any other governmental
authority or instrumentality, or any quasi-government or private body exercising
an regulatory, taxing, importing or other governmental or quasi-governmental
authority.
“Home Networking”
shall mean the connection of multiple communication devices in the
home.
“Home Networking
Technology” shall mean the Home Networking technology based on Seller’s
Technology and modified to be standard compliant and work with G.hn and possible
predecessor and successor standards.
“Indemnified Party”
shall have the meaning set forth in Section
7.3.
“Indemnifying Party”
shall have the meaning set forth in Section
7.3.
“Intellectual Property
Rights” shall mean all intellectual property and proprietary rights
throughout the world, including the following: (a) Patents; (b) all
trade secrets and other rights in know-how and confidential or proprietary
information; (c) all copyrights, copyrights registrations and applications
therefor and all other rights corresponding thereto throughout the world;
(d) all mask works, mask work registrations and applications therefor, and
any equivalent or similar rights in semiconductor masks, layouts, architectures
or topology; (e) all industrial designs and any registrations and
applications therefor throughout the world; [(f) all rights in World Wide
Web addresses and domain names and applications and registrations therefor; and
(g) all trade names, logos, common law trademarks and service marks,
trademark and service mark registrations and applications therefor.
-23-
“Lantiq Germany” shall
have the meaning set forth in the first paragraph of this
Agreement.
“Lantiq Germany Purchased
Assets” shall have the meaning set forth in Section
1.1.
“Lantiq US” shall have
the meaning set forth in the first paragraph of this Agreement.
“Lantiq US Purchased
Assets” shall have the meaning set forth in Section
1.1.
“Liabilities” shall
mean any and all costs, expenses, charges, indebtedness, obligations, claims,
demands, assessments or other liabilities of a Person of any kind or nature,
whether absolute, accrued, asserted or unasserted, contingent (or based upon any
contingency), known or unknown, fixed or otherwise, direct or indirect, or
whether due or to become due.
“Liens” shall mean any
mortgage, pledge, security interest, encumbrance, lien or charge of any kind
(including any conditional sale or other title retention agreement or lease in
the nature thereof) or any agreement to file any of the foregoing, any sale of
receivables with recourse against a Person, and any filing or agreement to file
a financing statement as debtor under the Uniform Commercial Code or any similar
statute.
“License” shall mean
any Contract that grants a Person the right to use or otherwise enjoy the
benefits of any Intellectual Property Right.
“Losses” shall have
the meaning set forth in Section
7.6.
“Non-Compete Period”
shall have the meaning set forth in Section
6.4(a).
“Non-Purchased
Patents” shall have the meaning set forth in Section
1.2(f).
“Outbound IP Licenses”
shall have the meaning set forth in Section
1.2(c).
“Overlapping
Technology” shall mean certain Intellectual Property Rights (excluding
Patents licensed pursuant to the License Agreement) of Seller which are
currently, or have been in the past utilized by Seller in connection with the
development of both Seller’s DSL and/or Home Networking activities as well as in
Seller’s test and diagnostics products and are not primarily related to the
Seller Technology, including, without limitation, the Intellectual Property
Rights set for on Appendix H of the DSL License Agreement.
“Participate” shall
have the meaning set forth in Section
6.4(a).
“Patents”(when used
alone and not in defined terms “Purchased Patents” and “Non-Purchased Patents”)
shall mean all United States and foreign patents and utility models and
applications therefor (including the patents issued therefrom) filed prior to
Closing and all reissues, divisions, re-examinations, renewals, extensions,
provisionals, continuations and continuations-in-part thereof, and equivalent or
similar rights anywhere in the world.
“Person” shall mean
any natural person, corporation, general partnership, limited partnership,
limited liability company or partnership, proprietorship, other business
organization, trust, union, association or Governmental Entity.
“Product” shall mean
an integrated circuit which implements one or more xDSL and/or Home Networking
Standard(s) and is sold or distributed by Purchasers and/or their
Affiliates.
“Purchase Price” shall
have the meaning set forth in Section
1.9.
-24-
“Purchased Assets”
shall have the meaning set forth in Section
1.1.
“Purchased Fixed
Assets” shall have the meaning set forth in Section
1.1(b)(i).
“Purchaser Indemnified
Parties” shall have the meaning set forth in Section
7.1.
“Purchased Inbound License
Agreements” shall have the meaning set
forth in Section
1.1(b)(ii).
“Purchased Non-Patent
IP” shall have the meaning set forth in Section
1.1(a)(iii).
“Purchased Patents”
shall have the meaning set forth in Section
1.1(a)(ii).
“Purchasers” shall
have the meaning set forth in the first paragraph of this
Agreement.
“Seller” shall have
the meaning set forth in the first paragraph of this Agreement.
“Seller Indemnified
Parties” shall have the meaning set forth in Section
7.2.
“Seller Proprietary
Rights” shall have the meaning set forth in Section
4.13(a).
“Seller
Technology” shall mean all Technology
related to or used in connection with the Business as said Seller
Technology exists on the date of this Agreement or the Closing Date other than
Overlapping Technology and includes (i) with respect to the DSL Technology (all
of which, other than Overlapping Technology, shall be deemed, for the avoidance
of doubt, to be Seller Technology): (x) all Technology related to the following
digital chips: Cocomo, Geminax, Geminax CR, Aware Stratiphy2Plus test chip,
Amazon, Danube, Amazon S, Aware Hercules Test Chip, Aware Leto ATM-bonded
ADSL2Plus CPE Test Chip, Aware A0.2 Analog Front End, Aware Hercules2
Single-port VDSL2 CO/CPE, Vinax Rev1 CO/CPE, Vinax Rev2, Aware Hercules3
Multiport VDSL2 CO (2-2-4-4 configuration), and VR9 (including the Cocomo C
models) and (y) technology for the existing Aware AFE (50 Mhz) (including the
RTL source code, specifications, RTL verification environment, GDS, board
reference design and test characterization thereof, and any derivatives and
future versions thereof), and (ii) with respect to Home Networking Technology:
RTL source code, specifications, RTL verification environment, source code for
the microsequencer, C-models, Matlab models, and the laboratory test
environment.
“Specified Employees”
shall have the meaning set in Section
6.6(a).
“Standard” shall mean
a communication standard defined and announced by ANSI, ATIS, ETSI, the ITU or
any other standardization body which defined DSL and Home Networking standards
and/or possible successor standards.
“StratiPHY” shall mean
Seller’s family of DSL silicon intellectual property solutions.
“Subsidiary” shall
mean any Person in which Seller, directly or indirectly through subsidiaries or
otherwise, beneficially owns at least twenty percent (20%) of either the
equity interest in, or the voting control of, such Person, whether or not
existing on the date hereof.
“Taxes” shall mean all
taxes, however denominated, including any interest, penalties or other additions
to tax that may become payable in respect thereof, (a) imposed by any federal,
territorial, state, local or foreign government or any agency or political
subdivision of any such government, which taxes shall include, without limiting
the generality of the foregoing, all income or profits taxes (including but not
limited to, federal, state and foreign income taxes), payroll and employee
withholding taxes, unemployment insurance contributions, social security taxes,
sales and use taxes, ad valorem taxes, excise taxes, franchise taxes, gross
receipts taxes, withholding taxes, business license taxes, occupation taxes,
real and personal property taxes, escheat liability or other similar property
rights (whether in connection with abandoned or unclaimed property or otherwise)
asserted by a Governmental Entity, stamp taxes, environmental taxes, transfer
taxes, workers’ compensation, Pension Benefit Guaranty Corporation premiums and
other governmental charges, and other obligations of the same or of a similar
nature to any of the foregoing, which are required to be paid, withheld or
collected, (b) any liability for the payment of amounts referred to in (a) as a
result of being a member of any affiliated, consolidated, combined or unitary
group, or (c) any liability for amounts referred to in (a) or (b) as a result of
any obligations to indemnify another person or as a result of being a successor
in interest or transferee of another person.
-25-
“Tax Return” shall
mean any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
“Technology” shall
mean any or all of the following (but not the Intellectual Property Rights
therein or associated therewith): (a) works of authorship including computer
programs, source code and executable code, whether embodied in software,
firmware or otherwise, documentation, designs, files, verilog files, RTL files,
HDL, VHDL, netlists, records, data and mask works; (b) inventions (whether or
not patentable), improvements, and technology; (c) proprietary and confidential
information, including technical data and customer and supplier lists, trade
secrets and know how; (d) databases, data compilations and collections and
technical data; (e) logos, trade names, trade dress, trademarks, service marks,
World Wide Web addresses and domain names, tools, methods and processes; and all
instantiations of the foregoing in any form and embodied in any
media.
“Third Party Claim”
shall have the meaning set forth in Section
7.3.
“Transferred Assets
Rights” shall have the meaning set forth
in Section
1.1(b)(iii).
“U.S. Tax Code” shall
mean the United States Internal Revenue Code of 1986, as amended.
“VAT” shall mean value
added Taxes.
“VDSL1” shall mean the
International Telecommunications DMT VDSL 1 Standard and the ITU VDSL1 Standard
and any and all Derivatives/Extensions thereof.
“VDSL2” shall mean the
International Telecommunications DMT VDSL 2 Standard and the ITU VDSL2 Standard
and any and all Derivatives/Extensions thereof.
“VDSL Products” shall
have the meaning set forth in Section 1.42 of the
DSL License Agreement.
[Signature
Page Follows]
-26-
IN
WITNESS WHEREOF, the undersigned have duly executed and delivered this Asset
Purchase Agreement under seal on the date first above written.
|
AWARE,
INC.
|
|||
|
By:
|
/s/
Edmund C. Reiter
|
||
|
Name:
|
Edmund
C. Reiter
|
||
|
Title:
|
President
|
||
|
LANTIQ
BROADBAND HOLDCO INC.
|
|||
|
By:
|
/s/
John Knoll
|
||
|
Name:
|
John
Knoll
|
||
|
Title:
|
President
|
||
|
LANTIQ
DEUTSCHLAND GmbH
|
|||
|
By:
|
/s/
John Knoll
|
||
|
Name:
|
John
Knoll
|
||
|
Title:
|
Managing
Director
|
||
Index of
Schedules
Schedule
1.1(a)(i)
- Patent Assignment
Schedule
1.1(b)(i) –
Purchased Fixed Assets
Schedule
1.1(b)(ii) -
Purchased Inbound License Agreements
Schedule
1.2(c) - Outbound
IP Licenses/Customers/Customer Contracts
Schedule
1.5 - Amended and
Restated DSL License Agreement
Schedule
1.7 - Seller
and Purchasers Test & Diagnostic Cooperation
Schedule
1.8 - Lease
Agreement
Schedule 2.1(d)(ii) –
Bill of Sale and Assumption of Liabilities Agreement
Schedule
4.6 -
Litigation
Schedule
4.10 -
Customers
Schedule
4.12 -
Suppliers
Schedule
4.13(b) -
Patents/Trademarks/Copyrights and Any Applications
Schedule
4.13(c) -
Payments for Seller Proprietary Rights
Schedule
4.13(d) -
Contracts
Schedule
4.13(g) -
Employee Confidentiality Agreements
Schedule
4.18 - Foreign Corrupt Practices
Schedule
4.20(b) - Collective Bargaining Agreements
Schedule
4.20(c) - Employee Plans
Schedule
4.20(d) - Job Actions
Schedule
4.20(e) - Post-Employment Benefits to Specified
Employees
Schedule
4.20(g) - Liabilities to Specified Employees
Schedule
4.20(i) - Effect of Transaction on Specified Employee
Benefits
Schedule
6.6 - Specified
Employees
Schedule
6.6(d) - Affected
Foreign National Employees
Schedule 6.7 - Transitional
IT Assistance
The
Schedules referred to above have been omitted in reliance on Item 601(b)(2)
of Regulation S-K. Aware will furnish supplementally a copy of any omitted
Schedule to the Securities and Exchange Commission upon
request.