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Exhibit 2.17
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
between
AGILENT TECHNOLOGIES, INC.
and
KONINKLIJKE PHILIPS ELECTRONICS N.V.
Dated as of November 17, 2000
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ASSET PURCHASE AGREEMENT.............................................. 1
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION...................... 1
1.1. Definitions and Rules of Construction................... 1
ARTICLE II SALE OF ASSETS AND ASSUMPTION OF LIABILITIES............... 1
2.1. Asset Purchase.......................................... 1
2.2. Assumption by Purchaser of Certain Liabilities;
Retention by Seller of Remaining Liabilities.......... 2
2.3. Transfer of Purchased Assets and Assumed Liabilities.... 5
2.4. Approvals and Consents.................................. 5
2.5. Novation and Assignment................................. 7
ARTICLE III. PURCHASE PRICE AND ADJUSTMENTS........................... 7
3.1. Purchase Price.......................................... 7
3.2. Payment of Purchase Price............................... 8
3.3. Net Asset Adjustment.................................... 8
3.4. Allocation of Purchase Price............................ 10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER................... 11
4.1. Corporate Existence..................................... 11
4.2. Corporate Authority..................................... 11
4.3. Equity Interests........................................ 12
4.4. Governmental Approvals and Consents..................... 12
4.5. Financial Information................................... 13
4.6. Absence of Certain Changes.............................. 13
4.7. Properties.............................................. 14
4.8. Contracts............................................... 15
4.9. Litigation.............................................. 17
4.10. Intellectual Property Rights.......................... 17
4.11. Finders; Brokers...................................... 19
4.12. Tax Matters........................................... 19
4.13. Employment and Benefits............................... 19
4.13A Non-U.S. Benefit Plans............................... 21
4.14. Compliance with Laws.................................. 22
4.15. Labor Matters......................................... 22
4.16. Environmental Matters................................. 23
4.17. Transfer of Purchased Assets.......................... 23
4.18. Undisclosed Liabilities............................... 24
4.19. Products.............................................. 24
4.20. Customers............................................. 24
4.21. Suppliers............................................. 25
4.22. No Other Representations or Warranties................ 25
ARTICLE V REPRESENTATIONS OF PURCHASER................................ 25
5.1. Corporate Existence..................................... 25
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5.2. Corporate Authority........................................ 26
5.3. Governmental Approvals and Consents........................ 26
5.4. Financial Capacity......................................... 27
5.5. Finders; Brokers........................................... 27
5.6. Purchase for Investment.................................... 27
5.7. No Other Representations or Warranties..................... 27
ARTICLE VI AGREEMENTS OF PURCHASER AND SELLER............................. 28
6.1. Operation of the Business.................................. 28
6.2. Investigation of Business; Confidentiality................. 30
6.3. Commercially Reasonable Efforts; No Inconsistent Action.... 32
6.4. Public Disclosures......................................... 34
6.5. Access to Records and Personnel............................ 34
6.6. Employee Relations and Benefits............................ 36
6.7. Non-U.S. Employees......................................... 40
6.8. Post-Closing Arrangements.................................. 41
6.9. Certain Performance Obligations............................ 42
6.10. Non-Competition............................................ 42
6.11. Non-Solicitation........................................... 43
6.12. Jointly Developed Intellectual Property.................... 44
6.13. Use of Name and Marks...................................... 44
6.14. Intellectual Property License Agreement.................... 44
6.15. Insurance Matters.......................................... 45
6.16. Tax Matters................................................ 45
ARTICLE VII CONDITIONS TO CLOSING......................................... 48
7.1. Conditions Precedent to Obligations of Purchaser and
Seller................................................... 48
7.2. Conditions Precedent to Obligation of Seller............... 49
7.3. Conditions Precedent to Obligation of Purchaser............ 50
ARTICLE VIII CLOSING...................................................... 51
8.1. Closing Date............................................... 51
8.2. Purchaser Obligations...................................... 51
8.3. Seller Obligations......................................... 51
ARTICLE IX INDEMNIFICATION................................................ 52
9.1. Indemnification............................................ 52
9.2. Certain Limitations........................................ 53
9.3. Procedures for Third-Party Claims and Excluded
Liabilities.............................................. 54
9.4. Certain Procedures......................................... 55
9.5. Remedies Exclusive......................................... 57
9.6. Mitigation................................................. 57
9.7. Certain Environmental Matters.............................. 57
ARTICLE X TERMINATION..................................................... 59
10.1. Termination Events......................................... 59
10.2. Effect of Termination...................................... 60
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10.3. Termination Fee............................................ 60
ARTICLE XI MISCELLANEOUS AGREEMENTS OF THE PARTIES........................ 61
11.1. Dispute Resolution......................................... 61
11.2. Notices.................................................... 62
11.3. Bulk Transfers............................................. 63
11.4. Severability............................................... 63
11.5. Further Assurances; Further Cooperation.................... 63
11.6. Counterparts............................................... 63
11.7. Expenses................................................... 63
11.8. Non Assignability.......................................... 63
11.9 Amendment; Waiver.......................................... 64
11.10. Specific Performance....................................... 64
11.11. Third Parties.............................................. 64
11.12. Governing Law.............................................. 64
11.13. Consent to Jurisdiction; Waiver of July Trial.............. 64
11.14. Schedules.................................................. 65
11.15. Entire Agreement........................................... 65
11.16. Section Headings; Table of Contents........................ 65
EXHIBIT A 1
EXHIBIT B 1
EXHIBIT C 1
EXHIBIT D 1
EXHIBIT E 1
EXHIBIT F 1
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement, dated as of November 17, 2000
(hereinafter, the "Agreement"), between AGILENT TECHNOLOGIES, INC., a Delaware
corporation ("Seller"), and KONINKLIJKE PHILIPS ELECTRONICS N.V., a company
incorporated under the laws of the Netherlands ("Purchaser").
W I T N E S S E T H:
WHEREAS, Seller and certain direct and indirect Subsidiaries of Seller
are engaged in, among other things, the Business (as defined herein); and
WHEREAS, Purchaser, through one or more of its direct or indirect
Subsidiaries, desires to purchase and assume, and Seller, through itself and one
or more of its direct or indirect Subsidiaries, desires to sell, transfer and
assign, substantially all of the assets and liabilities of the Business to
Purchaser, on the terms and subject to the conditions specified in this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1.1. Definitions and Rules of Construction
(a) Defined terms used in this Agreement have the meanings
ascribed to them by definition in this Agreement or in Annex A.
(b) This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the
party drafting or causing any instrument to be drafted.
(c) Whenever the words "include", "including", or "includes" appear
in this Agreement, they shall be read to be followed by the words
"without limitation" or words having similar import.
ARTICLE II
SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
2.1. Asset Purchase
Upon the terms and subject to the conditions set forth in this
Agreement, at the Closing, Seller shall or shall cause one or more of its
Subsidiaries to sell, assign, transfer, convey and deliver to Purchaser and/or
its Designees and Purchaser shall or shall cause one or more of its Designees to
purchase, acquire and accept from Seller or its Subsidiaries, as appropriate,
all of Seller's and its Subsidiaries' respective right, title and interest in
and to the Purchased Assets.
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As of and at the Closing, risk of loss as to the Purchased Assets
shall pass from Seller and its Subsidiaries to Purchaser and its Designees
except as may otherwise be provided herein.
2.2. Assumption by Purchaser of Certain Liabilities; Retention by Seller
of Remaining Liabilities
(a) Any other provision of this Agreement notwithstanding, on the
terms and subject to the conditions set forth in this Agreement, as of
and following the second anniversary of the Closing Date, Purchaser or
one of its Designees shall assume, pay, perform and discharge when due
any and all liabilities, obligations, damages, losses, debts, claims,
demands, judgments or settlements of any nature or kind, whether known
or unknown, fixed, accrued, absolute or contingent, liquidated or
unliquidated, matured or unmatured, including all costs and expenses
(legal, accounting or otherwise) relating thereto (collectively,
"Liabilities") of Seller and its Subsidiaries arising out of or relating
to the Business and the Purchased Assets other than the Excluded
Liabilities (as defined below). Any other provision of this Agreement
notwithstanding, and without in any way limiting the foregoing, as of
and following the Closing Date, Purchaser or one of its Designees shall
assume, pay, perform and discharge when due the following Liabilities of
Seller and its Subsidiaries (collectively with the Liabilities referred
to in the immediately preceding sentence, the "Assumed Liabilities"):
(i) all Liabilities arising out of or related to the assets
and liabilities reflected on the Final Closing Statement of
Purchased Net Assets;
(ii) all Liabilities of Seller or its Subsidiaries arising
after the Closing Date under the Assumed Contracts;
(iii) all Liabilities of Seller or its Subsidiaries arising
on or prior to or after the Closing Date under or relating to
Customer Contracts, Supplier Contracts and, to the extent of
Seller's ability to transfer or assign such Contracts, Contracts
relating to Business Intellectual Property;
(iv) any Liabilities arising on or prior to or after the
Closing Date for any infringement or alleged infringement by the
Business of (i) the rights of any other Person relating to
Intellectual Property, or (ii) any right of any other Person
relating to Intellectual Property pursuant to any license,
sublicense or agreement;
(v) all Liabilities in respect of Medical Products sold by
the Business at any time, including Liabilities for refunds,
adjustments, allowances, repairs, exchanges, returns and
warranty, merchantability and other claims, other than the
Excluded Liabilities described in Section 2.2(b)(xii);
(vi) except for any Liabilities of Seller or its Subsidiaries
under Section 6.6 of this Agreement, all Liabilities relating to
any Transferred Employee or Business Employee and work-related
claims;
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(vii) all Liabilities of Seller or its Subsidiaries to the
extent arising in connection with the conduct of the Business on
or prior to or after the Closing Date relating to personal injury
or property damage other than the Excluded Liabilities described
in Section 2.2(b)(xii);
(viii) all Liabilities to the extent arising out of or
relating to any activity undertaken by, or any failure to act by,
Purchaser or the Business after the Closing Date;
(ix) all Liabilities under or relating to Environmental Law
to the extent such Liabilities arise from events or conditions
first occurring or existing after the Closing Date that are not
related to any Release of any Hazardous Materials or violation of
Environmental Law occurring or existing prior to the Closing
Date;
(x) all other Liabilities arising out of or relating to or
incurred in connection with the Business, including the operation
of the Business, after the Closing Date (including the use of any
of the Business Intellectual Property by Purchaser, its Designees
or permissible licensees and any condition arising after the
Closing Date with respect to the Purchased Assets), other than
the Excluded Liabilities;
(xi) Liabilities of the Seller or its Subsidiaries arising
out of modifications to the Restructuring made at the written
request of Purchaser; and
(xii) after the second anniversary of the Closing Date, all
Liabilities of Seller and its Subsidiaries arising out of or
relating to the Business, whether arising prior to, on or after
the Closing Date, other than the Excluded Liabilities.
(b) Any other provision of this Agreement notwithstanding,
neither Purchaser nor any Designee shall be obligated to assume, pay,
perform, discharge or be responsible for any Liabilities of Seller or
any of its Subsidiaries other than the Assumed Liabilities. Seller and
its Subsidiaries shall retain and shall be responsible for the payment,
performance and/or discharge of all Liabilities of Seller and its
Subsidiaries, whether arising before or after the Closing Date, other
than the Assumed Liabilities (such Liabilities, collectively, the
"Excluded Liabilities"), including the following:
(i) any Liability of Seller or its Subsidiaries to the extent
arising out of or relating to the operation or conduct by Seller
or any of its Subsidiaries or Affiliates of any business other
than the Business;
(ii) any Liability or obligation of Seller or its
Subsidiaries to the extent arising out of or relating to any
Excluded Asset;
(iii) any Liability in respect of Taxes that are to be borne
by Seller pursuant to Sections 6.16(a) and (b);
(iv) any Environmental Liability;
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(v) except for any Liabilities of Purchaser under Sections
6.6 and 6.7, all Liabilities to or in respect of any employees of
Seller or its Subsidiaries other than Transferred Employees;
(vi) except for any Liabilities of Purchaser under Sections
6.6 and 6.7, all Liabilities under any Seller Plans, including
any medical, life insurance, disability or other welfare plan,
expenses and benefits incurred or claimed in respect of any
Transferred Employee or other employee of Seller or its
Subsidiaries, and any claims by such Transferred Employees, their
covered dependents, or any other employees of Seller or its
Subsidiaries, for benefits or claims arising or incurred prior to
the Closing Date other than the Assumed Liabilities described in
Section 2.2(a)(vi);
(vii) any interest expense and indebtedness (whether as
obligor, guarantor or otherwise) of Seller or its Subsidiaries to
third parties for borrowed money (other than accounts payable and
amounts due in the ordinary course of business consistent with
past practice under any Assumed Contract or amounts set forth on
the Final Closing Statement of Purchased Net Assets);
(viii) any direct cost or expense or any Liability, in each
case of Seller or its Subsidiaries, incurred before or after the
Closing Date to the extent arising out of, resulting from or
incurred in accordance with the Restructuring except for direct
costs or expenses or Liabilities arising out of modifications to
the Restructuring made at the written request of Purchaser;
(ix) any Liability for checks drawn on bank accounts of
Seller or its Subsidiaries that have been issued but not cleared
as of the Closing Date;
(x) (i) all accounts payable of Seller or its Subsidiaries
incurred in connection with the operation of the Business prior
to the Closing Date and (ii) any other Liability of Seller or any
of its Subsidiaries for payment with respect to services
performed or goods acquired in connection with the operation of
the Business prior to the Closing Date that is not reflected on
the Final Closing Statement of Purchased Net Assets;
(xi) any Liability of Seller or its Subsidiaries to any
broker, finder or agent for any investment banking or brokerage
fees, finder's fees or commission with respect to the
transactions contemplated by this Agreement;
(xii) any Liability of Seller or its Subsidiaries in respect
of any claim, legal action, suit, arbitration, governmental
investigation, action or other legal or administrative proceeding
in the nature of products liability made on or prior to the
second anniversary of the Closing Date and relating to (i)
Medical Products manufactured by Seller or Hewlett-Packard
Company or their respective Subsidiaries prior to the Closing
Date or (ii) relating to Medical Products manufactured by
Purchaser or its Subsidiaries (A) on or prior to the six month
anniversary of the Closing Date and (B) in all respects according
to Seller's
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design, manufacturing and quality control specifications,
practices and controls, as actually applied and implemented by
the Business immediately prior to the Closing (it being
understood that (1) Purchaser shall promptly notify Seller as
soon as it becomes aware of any flaw or alleged flaw in such
design, manufacturing and quality control specifications,
practices and controls and (2) Purchaser and Seller shall work
together in good faith to minimize any Losses that could result
from such flaw or alleged flaw) without any alteration or
deviation therefrom by Purchaser or its Subsidiaries, or other
tort or wrongful act by Purchaser or its Subsidiaries, other than
liabilities described in Sections 2.2(a)(iii), (iv) and (vii);
and
(xiii) to the extent any claim, legal action, suit,
arbitration, governmental investigation, action or other legal or
administrative proceeding is or has been made by a third party on
or prior to the second anniversary of the Closing Date in respect
of Medical Products, the Purchased Assets or the operation or
conduct by Hewlett-Packard Company or any of its Subsidiaries or
Seller or any of its Subsidiaries of the Business prior to the
Closing Date, including as a result of any violations of Law, all
Liabilities of Seller or its Subsidiaries in respect of any such
claim, legal action, suit, arbitration, governmental
investigation, action or other legal or administrative proceeding
other than claims, legal actions, suits, arbitrations,
governmental investigations, actions or other legal or
administrative proceedings relating to the Assumed Liabilities
referred to in Sections 2.2(a)(i) through (xii).
2.3. Transfer of Purchased Assets and Assumed Liabilities
The Purchased Assets shall be sold, conveyed, transferred, assigned
and delivered, and the Assumed Liabilities shall be assumed, pursuant to
transfer and assumption agreements and such other instruments in such form as
may be necessary to effect a conveyance of the Purchased Assets and an
assumption of the Assumed Liabilities in the jurisdictions in which such
transfers are to be made. Such transfer and assumption agreements shall be
prepared by Seller and shall be in substantially the form attached hereto as
Exhibit C (the "Local Asset Transfer Agreement"), with only such deviations
therefrom as are required by local law, and shall be executed no later than at
or as of the Closing by Seller and/or one or more of its Subsidiaries, as
appropriate and Purchaser and/or one or more of its Designees, as appropriate.
2.4. Approvals and Consents
Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the sale, conveyance, transfer, assignment or
delivery or attempted sale, conveyance, transfer, assignment or delivery to
Purchaser or any Designee of any Purchased Asset (including any Assumed Contract
or any other asset that would be a Purchased Asset pursuant to clauses (e), (f),
(i), (n) and (p) of Exhibit A if it were transferable) would result in a
violation of any applicable law or would require any governmental or third-party
authorizations, approvals, consents or waivers of any Governmental Authority or
third party and such authorizations, approvals, consents or waivers shall not
have been obtained prior to the Closing, this Agreement shall not constitute a
sale, conveyance, transfer, assignment or delivery, or an attempted sale,
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conveyance, transfer, assignment or delivery thereof if any of the foregoing
would constitute a breach of applicable law or the rights of any third party;
provided, however, that the Closing shall occur notwithstanding the foregoing
without any adjustment to the Purchase Price on account of such required
authorization. Following the Closing, the parties shall use commercially
reasonable efforts, and shall cooperate with each other, to obtain promptly such
authorizations, approvals, consents or waivers; provided, further, however, that
neither Seller nor Purchaser nor any of their respective Affiliates shall be
required to pay any consideration therefor, other than Transfer Taxes payable to
any Governmental Authority in accordance with Section 6.16(a)(ii). Pending or in
the absence of such authorization, approval, consent or waiver, Seller shall,
and shall cause its Subsidiaries to, hold such Purchased Asset for the use and
benefit, insofar as reasonably possible, of Purchaser and its Designees. The
parties shall cooperate with each other to enter into mutually agreeable and
lawful arrangements designed to provide to Purchaser the costs and benefits of
use of such Purchased Asset and to Seller or its Subsidiaries the benefits,
including any indemnities, that they would have obtained had the Purchased Asset
been conveyed to Purchaser at the Closing. Once such authorization, approval,
consent or waiver is obtained, Seller shall or shall cause its Subsidiaries to
sell, assign, transfer, convey and license such Purchased Asset to Purchaser for
no additional consideration. Purchaser and Seller shall be required to pay any
applicable Transfer Taxes in connection with such sale, assignment, transfer,
conveyance or license in accordance with Section 6.16(a)(ii). To the extent that
any Purchased Asset cannot be provided to Purchaser following the Closing
pursuant to this Section 2.4, Purchaser and Seller shall use commercially
reasonable efforts to enter into such arrangements (including subleasing,
sublicensing or subcontracting) to provide to the parties the economic (taking
into account Tax costs and benefits) and, to the extent permitted, operational
equivalent of obtaining such authorization, approval, consent or waiver and the
performance by Purchaser of its obligations thereunder. Seller and its
Subsidiaries shall hold in trust for and pay to Purchaser promptly upon receipt
thereof such Purchased Assets and all income, proceeds and other monies received
by Seller or any of its Subsidiaries in connection with its use of any such
Purchased Asset in connection with the arrangements under this Section 2.4.
Seller and its Subsidiaries shall be permitted to set off against such amounts
any direct costs (it being understood that Seller does not waive any claim for
indirect costs) associated with the retention and maintenance of such Purchased
Assets. Notwithstanding the foregoing, Seller shall have no obligation
whatsoever to retain any portion of the Business, other than any individual
asset or Contract (but only until such time as the transfer thereof may be
effected in accordance with this Agreement), in order to obtain any such
authorizations, approvals, consents or waivers referred to in this Section 2.4
or elsewhere in this Agreement. Seller and Purchaser acknowledge that the
Consent of certain Governmental Authorities that are parties to Assumed
Contracts may be required to assign such Assumed Contracts to Purchaser or that
such Assumed Contracts may be required to be rebid; in connection therewith
Purchaser acknowledges that such rebids may not be won and that such Consents
may not be obtained prior to the Closing and that the failure to obtain any such
Consents or win any such re-bids shall not delay the Closing or provide
Purchaser with any recourse against Seller following the Closing (it being
understood that this Section 2.4 shall apply, to the extent feasible, to such
Assumed Contracts with Governmental Authorities).
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2.5. Novation and Assignment
(a) Each party hereto, at the request of the other, shall, and
shall cause its respective Subsidiaries to, use commercially reasonable
efforts to obtain, or to cause to be obtained, any consent,
substitution, approval or amendment required to novate (including with
respect to any federal governmental contract) or assign all rights and
obligations under agreements, leases, licenses and other obligations or
liabilities of any nature whatsoever that constitute the Purchased
Assets and the Assumed Liabilities or to obtain in writing the
unconditional release of all parties to such arrangements, so that, in
any case, Purchaser and its Subsidiaries will be solely responsible for
such assets and liabilities, provided, however, that neither party nor
its respective Subsidiaries shall be obligated to pay any consideration
therefor to any third party from whom such consents, approvals,
substitutions and amendments are requested.
(b) If either party or any of its respective Subsidiaries is
unable to obtain, or to cause to be obtained, any such required consent,
approval, release, substitution or amendment, Seller or the applicable
Other Seller shall continue to be bound by such agreements, leases,
licenses and other obligations and, unless not permitted by applicable
Law or the terms thereof (except to the extent expressly set forth in
this Agreement or any other Transaction Document), Purchaser shall, as
agent or subcontractor for Seller or such Other Seller, as the case may
be, pay, perform and discharge fully, or cause to be paid, transferred
or discharged all the obligations or other Liabilities of Seller or such
Other Seller, as the case may be, thereunder from and after the Closing
Date. Seller shall, without further consideration, pay and remit, or
cause to be paid or remitted, to Purchaser or its appropriate Designee
promptly all money, rights and other consideration received by it in
respect of such performance (unless any such consideration is an
Excluded Asset). If and when any such consent, approval, release,
substitution or amendment shall be obtained or such agreement, lease,
license or other rights or obligations shall otherwise become assignable
or able to be novated, Seller shall thereafter assign, or cause to be
assigned, all its rights, obligations and other liabilities thereunder
to Purchaser or its Designee without payment of further consideration
and Purchaser or its Designee shall, without the payment of any further
consideration, assume such rights and obligations.
ARTICLE III
PURCHASE PRICE AND ADJUSTMENTS
3.1. Purchase Price
The purchase price in respect of the Purchased Assets and Assumed
Liabilities shall be an amount in cash equal to One Billion, Seven Hundred
Million Dollars and no cents ($1,700,000,000) (the "Purchase Price"), as such
amount may be adjusted pursuant to Section 3.3.
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3.2. Payment of Purchase Price
On the Closing Date, Purchaser shall pay for itself (where it is
acting as Purchaser) and otherwise as agent for and on behalf of each of the
relevant Designees to Seller for its own account (where it is acting as Seller)
and otherwise as agent for each of the relevant Other Sellers the Purchase
Price. Such amount shall be payable in United States dollars in immediately
available federal funds to such bank account or accounts as shall be designated
by Seller no later than the second Business Day prior to the Closing.
3.3. Net Asset Adjustment
(a) Calculation of Net Asset Adjustment. In accordance with the
provisions of this Section 3.3(a), Purchaser and Seller agree that to
the extent that the Final Closing Purchased Net Assets exceed $400
million, Purchaser for itself (where it is acting as Purchaser) and
otherwise as agent for and on behalf of each of the relevant Designees
shall pay to Seller for itself (where it is acting as Seller) and
otherwise as agent for and on behalf of each of the relevant Other
Sellers such excess (the "Excess Amount"), and to the extent that the
Final Closing Purchased Net Assets are less than $400 million, Seller
for itself (where it is acting as Seller) and otherwise as agent for
each of the relevant Other Sellers shall pay to Purchaser for itself
(where it is acting as Purchaser) and otherwise as agent for and on
behalf of each of the relevant Designees such shortfall (the "Deficiency
Amount"). For purposes of this Agreement, "Final Closing Purchased Net
Assets" shall mean the excess of the Purchased Assets over the Assumed
Liabilities, as of the close of business on the Closing Date, calculated
in accordance with the accounting principles and procedures set forth in
Schedule 3.3.
(b) Final Closing Statement of Purchased Net Assets. As promptly
as practicable following the Closing, but in no event later than 120
days following the Closing Date, Seller shall: (i) prepare and deliver
to Purchaser (A) a Final Closing Statement of Purchased Net Assets,
prepared in accordance with the accounting principles and procedures set
forth in Schedule 3.3 showing the Purchased Assets and Assumed
Liabilities on a consolidated basis as of the close of business on the
Closing Date (the "Final Closing Statement of Purchased Net Assets"),
(B) a calculation of the Excess Amount or the Deficiency Amount, if any,
as the case may be, (C) a certificate of the Chief Financial Officer of
Seller stating that the Final Closing Statement of Purchased Net Assets
has been calculated in accordance with the accounting principles and
procedures set forth in Schedule 3.3 and that the Excess Amount or
Deficiency Amount, if any, as the case may be, has been calculated in
accordance with Section 3.3(a) and (D) a report from
PricewaterhouseCoopers LLP ("PWC") substantially in the form set forth
in Schedule 3.3 and a separate report from PWC stating that the Excess
Amount or Deficiency Amount, if any, as the case may be, has been
calculated in accordance with Section 3.3(a); and (ii) make available to
Purchaser all relevant books and records relating to the Final Closing
Statement of Purchased Net Assets and the calculation of the Excess
Amount or the Deficiency Amount, if any, as the case may be. Purchaser
shall cooperate with Seller in the preparation of the Final Closing
Statement of Purchased Net Assets and the calculation of the Excess
Amount or the Deficiency Amount, if any, as the case may be. Without
limiting the generality of the foregoing, Purchaser shall provide
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Seller and its representatives with reasonable access, during normal
business hours, to the facilities, personnel and accounting records of
the Business acquired by Purchaser or its Designee, to the extent
reasonably necessary to permit Seller to prepare the Final Closing
Statement of Purchased Net Assets and the calculation of the Excess
Amount or Deficiency Amount, if any, as the case may be.
(c) Review of the Final Closing Statement of Purchased Net
Assets. During the 45-day period following Purchaser's receipt of the
Final Closing Statement of Purchased Net Assets and the calculation of
the Excess Amount or Deficiency Amount, if any, as the case may be (the
"Review Period"), Purchaser and its representatives, including its
independent auditors, shall be afforded the opportunity to review the
Final Closing Statement of Purchased Net Assets and the calculation of
the Excess Amount or Deficiency Amount, if any, as the case may be, and
the relevant supporting documentation and accountants' workpapers
relating thereto. To the extent Seller retains any information of the
Business, Seller shall provide reasonable assistance to Purchaser and
its representatives, including its independent auditors, in connection
with such review.
(d) Proposed Adjustment Notice. If Purchaser believes that the
Final Closing Statement of Purchased Net Assets was not calculated in
accordance with the accounting principles and procedures set forth in
Schedule 3.3 or the Excess Amount or Deficiency Amount, if any, as the
case may be, was not prepared in accordance with Section 3.3(a),
Purchaser shall deliver to Seller, prior to the expiration of the Review
Period, a proposed adjustment notice ("Proposed Adjustment Notice"). If
Purchaser does not deliver a Proposed Adjustment Notice to Seller prior
to the expiration of the Review Period, the Final Closing Statement of
Purchased Net Assets and the Excess Amount or Deficiency Amount, if any,
as the case may be, shall become final, binding and conclusive on both
Purchaser and Seller.
(e) Dispute Resolution. If a Proposed Adjustment Notice is
delivered within the period set forth in Section 3.3(d), Purchaser and
Seller shall negotiate in good faith for a 30 day period commencing on
the date of delivery of the Proposed Adjustment Notice to resolve such
dispute. If Purchaser and Seller cannot resolve such dispute within such
30 day period, Purchaser and Seller shall retain Arthur Andersen LLP to
act as the arbitrator (the "Arbitrator") of such dispute; provided,
however, that if either party shall reasonably discover a conflict of
interest associated with the Arbitrator, the parties shall promptly
select another mutually acceptable accounting firm of internationally
recognized reputation to act as the Arbitrator of such dispute.
Purchaser and Seller agree to execute an engagement letter retaining the
Arbitrator, which engagement letter shall contain customary terms. Any
such arbitration shall be conducted in New York, New York, and such
proceedings shall be in English. The Arbitrator shall be requested to
act promptly to resolve any dispute in accordance with the terms of this
Agreement, it being understood that the sole issues for the Arbitrator
shall be whether the Final Closing Statement of Purchased Net Assets was
prepared in accordance with the accounting principles and procedures set
forth in Schedule 3.3, and whether the Excess Amount or Deficiency
Amount, if any, as the case may be, was calculated in accordance with
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Section 3.3(a). The agreement with the Arbitrator shall provide that the
Arbitrator shall issue its written decision within thirty days after the
appointment of such Arbitrator, which decision shall be final, binding
and conclusive on both Purchaser and Seller. Purchaser and Seller shall
cooperate with the Arbitrator in connection with this Section 3.3(e).
Without limiting the generality of the foregoing, Purchaser and Seller
shall each provide, or cause to be provided, to the Arbitrator all
information, and to make available at the arbitration proceeding all
personnel, as are reasonably necessary to permit the Arbitrator to
resolve any disputes pursuant to this Section 3.3(e). The expenses of
the Arbitrator in resolving any disputes under this Section 3.3(e) shall
be borne equally by Purchaser and Seller.
(f) Payment of Excess Amount or Deficiency Amount. If the Final
Closing Statement of Purchased Net Assets results in a Deficiency
Amount, then Seller shall pay to an account designated by Purchaser in
immediately available funds an amount equal to the Deficiency Amount
plus interest for the number of days from and including the thirtieth
day following the Closing Date to but excluding the payment date, at a
rate equal to the Prime Rate, compounded on the basis of actual days
elapsed over a 365-day year, or if the Final Closing Statement of
Purchased Net Assets results in an Excess Amount, then Purchaser shall
pay to an account designated by Seller in immediately available funds an
amount equal to the Excess Amount plus interest for the number of days
from and including the thirtieth day following the Closing Date to but
excluding the payment date, at a rate equal to the Prime Rate,
compounded on the basis of actual days elapsed over a 365-day year, in
each case within three Business Days of the Final Closing Statement of
Purchased Net Assets becoming final and binding in accordance with
Section 3.3(d) or Section 3.3(e). The payment of any Excess Amount or
Deficiency Amount, including any interest accrued pursuant to this
Section 3.3(f), shall not be subject to any hold-backs, escrows or other
reductions or restrictions.
3.4. Allocation of Purchase Price
(a) Seller and Purchaser agree to allocate the Purchase Price
(and all other capitalizable costs) for all tax purposes as shown on an
allocation schedule (the "Allocation Schedule") prepared by an
internationally recognized accounting firm selected by Purchaser with
Seller's consent, which consent shall not be unreasonably withheld.
Seller and Purchaser agree to cooperate with each other and such
accounting firm in the preparation of the Allocation Schedule. Any
adjustment to the Purchase Price pursuant to Section 3.3 shall be
allocated according to the Allocation Schedule by Seller or Purchaser,
as appropriate.
3.5. Adjustment for Purchased Subsidiaries
If, pursuant to a valuation to be performed within 45 days of the
date of this Agreement by the accounting firm selected pursuant to Section 3.4
(the "Preliminary Valuation"), the Purchased Subsidiaries are valued at an
amount greater than $40,500,000, then Seller will, within ten Business Days
after receipt of the Preliminary Valuation, at its option, either (i) pay to
Purchaser an amount equal to 23% of the excess of (x) the amount determined
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pursuant to the Preliminary Valuation over (y) $40,500,000 or (ii) transfer to
Purchaser the assets of the Purchased Subsidiaries in lieu of the capital stock
thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller (on behalf of itself and the Other Sellers) represents and
warrants to Purchaser as of the date hereof and as of the Closing Date as
follows:
4.1. Corporate Existence
Seller and each Other Seller (as defined in Section 4.2) (a) is duly
organized and validly existing and, where applicable, in good standing under the
laws of the jurisdiction of its organization. Each of Seller and each Other
Seller has the requisite corporate, partnership or similar power and authority
to own, lease and operate its properties and assets, including the properties
and assets included in the Purchased Assets, and to carry on the Business as the
same is now being conducted, and (b) is duly authorized, qualified or licensed
to do business in every jurisdiction wherein, by reason of the nature of the
Business, the same is required, except where the failure of the foregoing to be
true and correct would not have a Seller Material Adverse Effect.
4.2. Corporate Authority
(a) This Agreement and the other agreements, instruments and
documents to be executed, delivered and/or filed in connection herewith
(collectively with this Agreement, the "Transaction Documents") to which
Seller and the Subsidiaries of Seller entering into the Transaction
Documents (such Subsidiaries being referred to herein collectively as
the "Other Sellers" and each individually as an "Other Seller") is a
party and the consummation of the transactions contemplated hereby and
thereby involving such Persons have been or, in the case of the other
Transaction Documents will be prior to the Closing, duly authorized by
the Board of Directors (or a duly authorized committee or representative
thereof) of Seller and such Other Seller, and will be duly authorized by
each applicable Other Seller by all requisite corporate, shareholder,
partnership or other action prior to the Closing, and Seller and each
Other Seller has or, in the case of the Other Sellers, will have at or
prior to the Closing full power and authority to execute, deliver and/or
file the Transaction Documents to which it is a party and to perform its
obligations hereunder or thereunder. This Agreement has been duly
executed and delivered by Seller, and the other Transaction Documents
will be duly executed, delivered and/or filed by Seller and any Other
Seller party thereto, and this Agreement constitutes, and the other
Transaction Documents when so executed, delivered and/or filed will
constitute, a valid and legally binding obligation of Seller and/or any
Other Seller, enforceable against it or them, as the case may be, in
accordance with its terms except as enforceability may be affected by
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors'
rights generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing.
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(b) Except (a) for required filings under the HSR Act (as defined
in Section 6.3(b)), and any other applicable laws or regulations
relating to antitrust or competition (collectively, "Antitrust
Regulations"), (b) if determined to be necessary by Seller, the filing
of this Agreement with the Securities and Exchange Commission (the
"SEC") and (c) as set forth in Schedule 4.2, the execution, delivery
and/or filing of this Agreement and the other Transaction Documents by
Seller and/or each of the Other Sellers and the consummation by Seller
and each of the Other Sellers of the transactions contemplated hereby
and thereby do not and will not (A) violate or conflict with any
provision of the respective certificate of incorporation or by-laws or
similar organizational documents of Seller and/or any Other Seller, (B)
result in any violation or breach or constitute any default (with or
without notice or lapse of time, or both) under, or give rise to a right
of termination, cancellation or acceleration of any obligation or a loss
of a benefit under, or result in the creation of any mortgage, easement,
lease, sublease, right of way, trust or title retention agreement,
pledge, lien (including any lien for unpaid Taxes), claim, charge,
security interest, option or any restriction or other encumbrance of any
kind (collectively, "Liens") under, any Contract set forth in Schedule
4.8(a), or (C) violate, conflict with or result in any breach under any
provision of any judgment, order, decree, statute, law, ordinance, rule
or regulation applicable to Seller and/or any Other Seller or any of
their respective properties or assets, except, in the case of clauses
(B) and (C), to the extent that any such breach, default, termination,
cancellation, acceleration, loss, Lien, violation, conflict, breach or
loss would not have a Seller Material Adverse Effect.
4.3. Equity Interests
Schedule 4.3 sets forth the capital stock of or other equity
interests in any corporation, partnership or other entity that are included in
the Purchased Assets (the "Purchased Subsidiaries"). Except for the equity
securities specified in Schedule 4.3, Zymed, Inc. and Anesthesia Recording Inc.
(collectively, the "Wholly Owned Subsidiaries") have no equity securities
reserved for issuance. Except as set forth in Schedule 4.3, there are no
preemptive or other outstanding rights, options, warrants, conversion rights,
stock appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or sell any shares of capital stock or
other securities of the Wholly Owned Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Wholly Owned
Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. The Wholly Owned Subsidiaries do not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or convertible into or exercisable for securities
having the right to vote) with the stockholders of such Wholly Owned
Subsidiaries on any matter. Except as set forth in Schedule 4.3, at the time of
the Closing, Seller or one of its Subsidiaries will have good and marketable
title to all such capital stock or other equity interests described in Schedule
4.3, free and clear of all Liens.
4.4. Governmental Approvals and Consents
Except as set forth in Schedule 4.4 hereto and except for any
consents required under any Antitrust Regulations, no consent, approval, order
or authorization of, license or
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permit from, notice to or registration, declaration or filing with, any United
States or foreign, federal, state, provincial, municipal or local government
agency, court of competent jurisdiction, administrative agency or commission or
other governmental or regulatory authority or instrumentality ("Governmental
Authority"), is required on the part of Seller or any Other Seller in connection
with the execution, delivery, performance and/or filing of this Agreement or any
of the other Transaction Documents or the consummation of the transactions
contemplated hereby and thereby, except for such consents, approvals, orders or
authorizations, licenses or permits, filings or notices which have been or will
as of the Closing Date be obtained and remain in full force and effect and those
with respect to which the failure to have obtained or to remain in full force
and effect would not have a Seller Material Adverse Effect.
4.5. Financial Information
Schedule 4.5 contains a statement setting forth the Purchased Assets
and the Assumed Liabilities as of July 31, 2000 (the "Statement of Purchased Net
Assets"), and a statement of operating revenues and expenses of the Business for
the nine months ended July 31, 2000 (the "Statement of Operating Revenues and
Expenses" and, together with the Statement of Purchased Net Assets, the
"Business Financial Statements"). The Business Financial Statements (i) have
been prepared in accordance with the accounting principles and procedures set
forth in the notes to the Business Financial Statements, (ii) are derived from
the unaudited consolidated financial statements of Seller and its Subsidiaries
as of and for the nine months ended July 31, 2000 (the "Seller Financial
Statements") and (iii) fairly present in all material respects the Purchased
Assets and Assumed Liabilities as of the date of such Business Financial
Statements and the results of operations of the Business for the period covered
by the Business Financial Statements in accordance with the accounting
principles and procedures set forth in the notes to the Business Financial
Statements.
4.6. Absence of Certain Changes
Except (a) for the Restructuring, (b) as set forth in Schedule 4.6,
(c) to the extent disclosed in the Seller SEC Reports with respect to the
Business or (d) as otherwise permitted pursuant to this Agreement, since October
31, 1999, (i) the Business has been conducted in all material respects in the
ordinary course and in substantially the same manner as previously conducted and
(ii) there has been no fact or occurrence that has had or is reasonably likely
to have, individually or in the aggregate, a Seller Material Adverse Effect,
other than as a result of (A) changes in Sellers' customers (including dealers
and distributors), suppliers, licensors that are parties to the Business
Intellectual Property Licenses or employees (or in Sellers' relationships with
any such Persons) to the extent arising in connection with the announcement of
the transactions contemplated by this Agreement, (B) changes in prevailing
interest rates, in general economic conditions, in applicable Law or the
official interpretations thereof or in United States generally accepted
accounting principles in effect from time to time ("GAAP") or (C) changes
affecting the Medical Products industry generally, which shall include the
design, development, research, manufacture, supply, distribution, sale and
maintenance of Medical Products.
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4.7. Properties
(a) Seller or one or more of the Other Sellers has, or at the
Closing will have, good title to the personal property owned by Seller
and the Other Sellers in respect of the Business and to be transferred
to Purchaser in accordance with Article II hereof, free and clear of all
Liens, except (i) as disclosed in the Business Financial Statements,
(ii) as disclosed in Schedule 4.7(a), (iii) Liens for taxes, assessments
and other governmental charges not yet due and payable or, if due, (A)
not delinquent or (B) being contested in good faith by appropriate
proceedings, (iv) mechanics', workmen's, repairmen's, warehousemen's,
carriers' or other similar Liens, including all statutory Liens, arising
or incurred in the ordinary course of business, (v) original purchase
price conditional sales contracts and equipment leases with third
parties entered into in the ordinary course of business and (vi) Liens
that do not materially affect the value or use of the underlying asset.
(b) Schedule 4.7(b) contains a list of all real property to be
transferred to Purchaser or its Designees in accordance with Article II
("Owned Real Property"). Seller or one or more of the Other Sellers has
good, marketable and insurable fee simple title to the Owned Real
Property, free and clear in all material respects of all Liens,
excluding all matters shown as exceptions to title in the Title Policy.
A true and complete copy of the Title Policy has been delivered to
Purchaser. Seller or the Other Sellers have not disposed of, or taken
any steps to dispose of, the Owned Real Property and are not under any
commitment to dispose of it in whole or in part. All certificates of
occupancy, permits, licenses, approval and authorizations (collectively,
"Real Property Permits") of all Governmental Authorities having
jurisdiction over the Owned Real Property or any portion thereof have
been obtained and are in full force in effect to operate and occupy such
Owned Real Property, except to the extent the absence or invalidity of
any Real Property Permit does not materially and adversely affect the
value or operation and occupancy of such Owned Real Property. None of
Seller or the Other Sellers has received any written notice from any
Governmental Authority having jurisdiction over any of the Owned Real
Property suspending, revoking or canceling any Real Property Permit, or
modifying any Real Property Permit in a manner which materially and
adversely effects the operation of the Business or the occupancy of the
Owned Real Property. There are no actions or orders pending, or to the
knowledge of Seller or any of the Other Sellers, threatened against or
relating to the condemnation of the Owned Real Property, or any portion
thereof. Schedule 4.7(b) describes certain transactions related to the
Owned Real Property (the "Entrance Project"). Prior to the Closing,
Seller shall use commercially reasonable efforts to procure in the
ordinary course the permits and licenses necessary to complete the
Entrance Project and to obtain the property contemplated to be obtained
at no cost in connection therewith, but shall not be required to
commence construction of the Entrance Project. In the event Purchaser
elects to continue the Entrance Project and the construction thereof
following the Closing, Seller shall have no liability for any costs or
other expenses in connection therewith.
(c) Schedule 4.7(c) contains a list of all leases or subleases of
real property to be assigned to Purchaser in accordance with Article II
("Leased Real Property" and,
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together with the Owned Real Property, "Real Property"). True and
complete copies of each lease or sublease relating to each Leased Real
Property have been delivered to Purchaser. Seller or one of the Other
Sellers has a good, valid and subsisting leasehold or subleasehold
estate in each Leased Real Property for the full term of the lease
thereof. None of Seller or the Other Sellers has received a written
notice from any landlord or sublandlord of any default (or condition or
event which, after notice or lapse of time or both, would constitute a
default) under any such lease.
4.8. Contracts
(a) Except as set forth in Schedule 4.8(a), no Contract that constitutes
an Assumed Contract is:
(i) a written employment agreement or employment contract
that provides for an annual salary in excess of $200,000 and is
not terminable by Seller or its Subsidiaries by notice of not
more than 60 days for a cost of less than $200,000;
(ii) [reserved];
(iii) contains a covenant not to compete (other than pursuant
to any radius restriction contained in any lease, reciprocal
easement or development, construction, operating or similar
agreement) that materially limits the conduct of the Business as
presently conducted or that would be applicable following the
Closing to the conduct or operation of the business of Purchaser
and its Subsidiaries (other than the Business), other than
covenants or other agreements entered into in the ordinary course
of business in connection with (A) third party licenses or other
agreements concerning rights to the Business Intellectual
Property to which Seller or any Other Seller is a party, (B)
distribution or supply arrangements and (C) joint development or
product development agreements;
(iv) a lease, sublease or similar Contract with any Person
under which (A) Seller or any of its Subsidiaries is lessee of,
or holds or uses, any machinery, equipment, vehicle or other
tangible personal property owned by any Person or (B) Seller or
any of its Subsidiaries is a lessor or sublessor of, or makes
available for use by any Person, any machinery, equipment,
vehicle or other tangible personal property owned or leased by
Seller or its Subsidiaries in any such case that has an aggregate
future liability or receivable, as the case may be, in any fiscal
year in excess of $2,000,000 and is not terminable by Seller or
any of its Subsidiaries by notice of not more than 60 days for a
cost of less than $2,000,000;
(v) (A) a continuing Contract for the future purchase by
Seller or its Subsidiaries of materials, supplies, equipment or
services (other than purchase orders for inventory (i.e., raw
materials, work in process and finished goods) in the ordinary
course of business consistent with past practice), (B) a
management, consulting or other similar Contract for services to
be provided to Seller or any of its Subsidiaries or (C) an
advertising agreement or arrangement, in any such case
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that has an aggregate future liability in any fiscal year to any
Person in excess of $2,000,000 and is not terminable by Seller or
any of its Subsidiaries by notice of not more than 60 days for a
cost of less than $2,000,000;
(vi) a Contract under which Seller or any of its Subsidiaries
has borrowed any money from, incurred any indebtedness to, or
issued any note, bond, debenture or other evidence of
indebtedness to, any Person, other than Contracts relating to
trade payables, in excess of $2,000,000 individually or
$10,000,000 in the aggregate;
(vii) a Contract (including any take-or-pay or keepwell
agreement) under which (A) any Person has guaranteed
indebtedness, liabilities or obligations of Seller or its
Subsidiaries or (B) Seller or any of its Subsidiaries has
guaranteed indebtedness, liabilities or obligations of any other
Person (in each case other than endorsements for the purpose of
collection in the ordinary course of the Business consistent with
past practice), in each case in excess of $2,000,000 individually
or $10,000,000 in the aggregate;
(viii) a Contract under which Seller or any of its
Subsidiaries has, directly or indirectly, made any advance, loan,
extension of credit or capital contribution to, or other
investment in, any Person (other than Seller or any of its
Subsidiaries or the equity investments discussed in Section 4.3,
other than extensions of trade credit in the ordinary course of
the Business consistent with past practice and loans to employees
in the ordinary course of business consistent with past practice
not in excess of $200,000 per employee) in excess of $2,000,000
individually or $10,000,000 in the aggregate;
(ix) a Contract granting a Lien upon any property used in
connection with the Business or any other Purchased Asset which
Lien secures an obligation in excess of $2,000,000, other than
conditional sales agreements, title retention agreements or
similar installment contracts;
(x) a Contract with (A) Seller, Hewlett-Packard Company or
any of their respective Subsidiaries or Affiliates or (B) any
officer, director or employee of Seller or Hewlett-Packard
Company or any of their respective Affiliates (other than
employment agreements covered by clause (i) above);
(xi) a Contract for any joint venture or partnership;
(xii) a Contract providing for the services of any dealer,
distributor, sales representative, franchise or similar
representative that are reasonably likely to involve the payment
or receipt in any fiscal year in excess of $2,000,000 by Seller
or any of its Subsidiaries, other than such contracts (including
with original equipment manufacturers) entered into in the
ordinary course of the Business consistent with past practice;
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(xiii) a Contract providing for or relating to any exchange
or hedge of risks relating to the prices or level of currencies,
commodities or interest rates; or
(xiv) a Contract providing for any financing arrangement,
agreement or undertaking with any customer of the Business or any
financial institution, leasing company or similar business that
would provide for recourse to Purchaser or any of its
Subsidiaries following the Closing.
(b) Except as set forth in Schedule 4.8(b), all Assumed Contracts are
valid, binding and in full force and effect with respect to Seller or its
Subsidiary party thereto, except as would not, individually or in the aggregate,
have a Seller Material Adverse Effect, and have not been amended or modified in
any material respect except as set forth therein. Except as set forth in
Schedule 4.8(b), Seller and its Subsidiaries have performed all material
obligations required to be performed by them to date under the Assumed
Contracts, and they are not (with or without the lapse of time or the giving of
notice, or both) in breach or default thereunder and, to the knowledge of
Seller, no other party to any Assumed Contract is (with or without the lapse of
time or the giving of notice, or both) in breach or default thereunder, except
in either of the foregoing cases for any breach or default that would not,
individually or in the aggregate, have a Seller Material Adverse Effect.
(c) Notwithstanding the foregoing, this Section 4.8 shall not apply to
Business Intellectual Property (which is covered by Section 4.10), real property
(which is covered by Section 4.7) and Employee Plans (which are covered by
Section 4.13).
4.9. Litigation
Neither Seller nor any Other Seller is subject to any order,
judgment, stipulation, injunction, decree or agreement with any Governmental
Authority, which would prevent or materially interfere with or delay the
consummation of the Purchase or has or is reasonably likely to have a Seller
Material Adverse Effect. No claim, action, suit, proceeding or investigation is
pending or, to the knowledge of Seller, threatened against Seller or any Other
Seller which would prevent or materially interfere with or delay the
consummation of the Purchase. Except to the extent disclosed in the Seller SEC
Reports with respect to the Business or Schedule 4.9 there are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
Seller, threatened against Seller or any Other Sellers in respect of the
Business which are reasonably likely to have a Seller Material Adverse Effect.
4.10. Intellectual Property Rights
(a) Schedule 4.10(a) sets forth a list of all of the Intellectual
Property (as defined below) owned by Seller and each Other Seller that
relates to or is used or has been developed in connection with the
Business as currently conducted by any of them and that Seller or the
Other Sellers have determined in the ordinary course of their business
relates primarily to the Business. Except as set forth in Schedule
4.10(a) and except as would not reasonably be expected to result in a
Seller Material Adverse Effect, to the respective knowledge of Seller
and each Other Seller, (i) Seller or an Other Seller owns or has rights
to all patents, inventions, discoveries, copyrights, trademarks, service
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marks, trade dress, trade secrets and other rights in and to
intellectual property (collectively, "Intellectual Property") necessary
for the conduct of the Business as currently conducted by Seller or the
Other Sellers (such Intellectual Property, including the items listed on
Schedule 4.10(a), together with the rights granted by Seller to
Purchaser under the license agreements to be entered into pursuant to
Sections 6.13 and 6.14 below, the "Business Intellectual Property");
(ii) Seller and each Other Seller have taken commercially reasonable
measures to preserve and maintain the Business Intellectual Property;
(iii) neither Seller nor any Other Seller has received any definitive
notice alleging that Seller or the Other Seller's use of the Business
Intellectual Property violates any right in or to any valid Intellectual
Property owned by any third party; and (iv) except as set forth in
Schedule 4.10(a) (Part 5) or Schedule 4.10(b), Seller or an Other Seller
owns the Intellectual Property listed on Schedule 4.10(a) free and clear
of any Liens.
(b) Schedule 4.10(b) sets forth a list of those third party
licenses or other agreements concerning rights to the Business
Intellectual Property to which Seller or any Other Seller is a party
that are material to the Business (the "Business Intellectual Property
Licenses"). Except as set forth in Schedule 4.10(b), to the knowledge of
Seller, (i) such Business Intellectual Property Licenses are valid and
in full force and effect and (ii) neither Seller nor such Other Seller
is in default or breach thereunder, except (x) as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws relating to or affecting the enforcement of creditors'
rights generally, by general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at law) or by
an implied covenant of good faith and fair dealing or (y) where the
failure of such Business Intellectual Property Licenses to be valid or
in full force and effect or where such default or breach would not have
a Seller Material Adverse Effect.
(c) Except as disclosed in Schedule 4.10(c), no proceedings have
been instituted or are pending or, to the knowledge of Seller,
threatened, which challenge the rights of Seller, Purchaser or any of
their respective Subsidiaries with respect to the Business Intellectual
Property, and none of the Business Intellectual Property is subject to
any outstanding judgment, decree, order, writ, award, injunction or
determination of an arbitrator or court or other Governmental Authority
affecting the rights of Seller, Purchaser or any of their respective
Subsidiaries with respect thereto.
(d) Except as disclosed in Schedule 4.10(d), to the knowledge of
Seller, neither Seller nor any of its Subsidiaries has, in connection
with the Business or in connection with the research, development,
manufacture, sale and maintenance of Medical Products, infringed or
violated the Intellectual Property of any third party, except for any
such infringements or violations which would not, individually or in the
aggregate, have a Seller Material Adverse Effect.
(e) Except as disclosed by Seller to Purchaser in writing prior
to the Closing Date, Seller or its Subsidiaries have paid all filing,
maintenance and renewal fees necessary to preserve its rights with
respect to any registered Business Intellectual Property owned by Seller
or any Other Seller. Seller and its Subsidiaries have used
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commercially reasonable efforts to prosecute those applications for
registrations of the Business Intellectual Property that are pending.
(f) The Business Intellectual Property conveyed to Purchaser
pursuant to Section 2.1, together with the Business Intellectual
Property licensed to Purchaser under the license agreements to be
executed pursuant to Sections 6.13 and 6.14, comprise all the
Intellectual Property necessary to conduct the Business in all material
respects as it is currently conducted.
4.11. Finders; Brokers
With the exception of fees and expenses payable to Goldman, Sachs &
Co., which shall be Seller's sole responsibility, none of Seller or any Other
Seller has employed any finder or broker in connection with the Purchase who
would have a valid claim for a fee or commission from Purchaser or any Designee
in connection with the Purchase.
4.12. Tax Matters
(a) Except as set forth in Schedule 4.12(a), Seller has not made
any material elections with respect to Taxes regarding the Purchased
Assets or the Purchased Subsidiaries that Purchaser (i) cannot revoke or
(ii) can revoke only by incurring, as the result of such revocation, a
penalty or liability for a payment of any amount in addition to any
Taxes it would otherwise incur in the ordinary course of the Business
consistent with past practice.
(b) Except as set forth in Schedule 4.12(b), to Seller's
knowledge none of the Purchased Assets or the Purchased Subsidiaries is
the beneficiary of any material state, local or foreign tax holiday or
government subsidy that is not available to corporate taxpayers
generally.
(c) Except as set forth in Schedule 4.12(c), (i) Seller is not
currently engaged and has not been engaged during the five year period
ending on the Closing Date, in any material disputes with any Taxing
Authority with respect to Taxes attributable to the Purchased Assets or
the Purchased Subsidiaries, and (ii) no Taxing Authority has proposed to
make or has made any material adjustment with respect to Taxes
attributable to the Purchased Assets or the Purchased Subsidiaries.
(d) There is no material liability for any unpaid Taxes in
respect of the Purchased Assets or the Purchased Subsidiaries.
4.13. Employment and Benefits
(a) Schedule 4.13 sets forth a list of each material Seller Plan;
provided, however, that, as soon as practicable following the execution
of this Agreement (but no later than 30 days prior to the Closing Date),
Seller shall provide Purchaser a supplemental Schedule 4.13 (the
"Supplemental Schedule") that sets forth a list of all the Seller Plans
not previously listed on Schedule 4.13; provided, further that, to the
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knowledge of Seller, the benefits under the Seller Plans listed on the
Supplemental Schedule shall not consist of a material portion of the
benefits provided to the Business Employees.
(b) With respect to each material Seller Plan, Seller has
provided or made available to Purchaser a current, accurate and complete
copy thereof and any summary plan description; provided, that Seller
shall provide or make available each Seller Plan on the Supplemental
Schedule as soon as practicable following the execution of this
Agreement but no later than 30 days prior to the Closing Date.
(c) The Seller Plans are in compliance in all material respects
with all applicable requirements of ERISA, the Code, and other
applicable U.S. laws and have been administered in accordance with their
terms and such laws, except where the failure to so comply could not
have a Seller Material Adverse Effect.
(d) Except as set forth in Schedule 4.13(d), there are no pending
or, to the knowledge of Seller, threatened claims and no pending or, to
the knowledge of Seller, threatened litigation with respect to any
Seller Plans, other than ordinary and usual claims for benefits by
participants and beneficiaries, that could reasonably be expected to
have a Seller Material Adverse Effect.
(e) Except as set forth in Schedule 4.13(e), each Seller Plan
which is an "employee pension benefit plan" within the meaning of
Section 3(2) of ERISA ("Pension Plan") and which is intended to be
qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), has received a favorable determination letter from
the Internal Revenue Service with respect to "TRA" (as defined in
Section 1 of Rev. Proc. 93-39), and Seller is not aware of any
circumstances likely to result in revocation of any such favorable
determination letter.
(f) No unsatisfied liability under Subtitle C or D of Title IV of
ERISA has been or is expected to be incurred by Seller or any of its
Subsidiaries with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of
ERISA, related to the Business and currently or formerly maintained by
either Seller or any of its Subsidiaries, or the single-employer plan of
any entity related to the Business which is considered one employer with
Seller under Section 4001 of ERISA or Section 414 of the Code (an "ERISA
Affiliate"). Seller and the Subsidiaries have not incurred and do not
expect to incur any unsatisfied withdrawal liability with respect to a
multiemployer plan under Subtitle E of Title IV of ERISA (regardless of
whether based on contributions of an ERISA Affiliate).
(g) Except as set forth in Schedule 4.13(g), the consummation of
the transactions contemplated by this Agreement will not (x) other than
as provided in Section 6.6 of this Agreement, accelerate the time of
payment or vesting or trigger any payment or funding (through a grantor
trust or otherwise) of compensation or benefits under, increase the
amount payable or trigger any other material obligation pursuant to, any
of the Seller Plans or (y) result in payments under any of the Seller
Plans which would not be deductible under Section 280G of the Code.
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(h) Neither Seller nor any of its Subsidiaries has any
obligations for retiree health and life benefits under any Seller Plan,
except as set forth in Schedule 4.13(h) or required by COBRA.
4.13A Non-U.S. Benefit Plans
(a) This Section 4.13A shall apply to the Non-U.S. Benefit Plans,
as defined in Schedule 6.7(d). Terms used in this clause shall be as
defined in Schedule 6.7(d).
(b) To Seller's knowledge, there are no material intentions or
commitments, which are not already described in Schedule 6.7(a)(ii),
whether legally binding or not, to create any additional plan or modify
or change any existing Non-U.S. Benefit Plan, that would affect any Plan
Beneficiary.
(c) Seller has delivered to Purchaser copies of all documents
currently governing the Material Plans and copies of all material
documents currently governing the Non-Material Plans, including any
documentation relating to the commitments referred to in Section
4.13A(b) above and any financing vehicles underlying the Non-U.S.
Benefit Plans. As soon as practicable following the date hereof, but
prior to the Closing Date, Seller will provide to Purchaser a list of
each material insurance policy maintained by Seller with respect to any
of the Non-U.S. Benefit Plans used in or otherwise related to the
Business as presently conducted.
(d) To Seller's knowledge, all the Non-U.S. Benefit Plans which
are intended, to the extent allowable under Applicable Local Law, to
obtain tax exemption on contributions, benefits and/or invested assets
under Applicable Local Law now meet, and since their inception have met,
the requirements for such tax exemption under Applicable Local Law. To
Seller's knowledge, the tax exemption of no Non-U.S. Benefit Plan is the
subject of examination or pending cancellation.
(e) To Seller's knowledge, no event has occurred that would
subject any party to the imposition of any penalty with respect to the
administration of any Non-U.S. Benefit Plan so far as it relates to
Transferred Employees. Seller has not (and to the best of its knowledge,
no Non-U.S. Benefit Plan, fiduciary or mandated custodian of any
Non-U.S. Benefit Plan has) acted in a manner that would subject any
party to the imposition of a financial penalty (which for this purpose
shall mean any tax, penalty or other liability, whether by the way of
indemnity or otherwise).
(f) To Seller's knowledge, there are no actions, suits or claims
pending, threatened or anticipated (other than routine claims for
benefits) against any Non-U.S. Benefit Plan or against the assets or
custodians of any Non-U.S. Benefit Plan in connection with any
Transferring Employee.
(g) With respect to each Non-U.S. Benefit Plan, the benefits to
be provided under such plan to or in respect of Transferring Employees
which have accrued in accordance with Applicable Local Law on or prior
to Closing Date have been paid and/or properly reflected on the books
and records and other financial reports of Seller.
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(h) To Seller's knowledge, the value of the pension liabilities
in respect of Non-U.S. Business Employees under the Material Plans as at
the Closing Date, valued in accordance with the FAS assumptions applied
to each plan as at April 2000, is equal to or greater than approximately
80% of the value of the total pension liabilities in respect of all
Transferring Employees under all of Seller's defined benefit Non-U.S.
Benefit Plans as at the Closing Date, valued in accordance with the FAS
assumptions applied to each such plan as at April 2000, or, in respect
of plans to which U.S. Financial Accounting Standard ("FAS") assumptions
were not applied, in accordance with the local actuarial or accounting
assumptions applied to each such plan for its most recent valuation.
4.14. Compliance with Laws
Except as may be indicated in Schedule 4.14, the Business is, and
since October 31, 1997 has been, conducted by Seller and the Other Sellers (and,
to the knowledge of Seller, by Hewlett-Packard Company) in all material respects
in compliance with all statutes, laws, regulations, ordinances, rules,
judgments, orders or decrees applicable thereto, including the United States
Foreign Corrupt Practices Act of 1977 and the rules and regulations promulgated
thereunder, except for such violations or failures so to comply, if any, that
would not have a Seller Material Adverse Effect. Except as set forth in Schedule
4.14, no investigation or review by any Governmental Authority with respect to
the Business is pending or, to the knowledge of Seller, threatened, nor has any
Governmental Authority indicated an intention to conduct the same. To the
knowledge of Seller, except as set forth in Schedule 4.14, no material change is
required in the Business processes, properties or procedures in connection with
any such Laws, and Seller and its Subsidiaries have not received any notice or
communication of any material noncompliance with any such Laws that has not been
cured. Except as set forth in Schedule 4.14, Seller and its Subsidiaries each
have all permits, licenses, registrations, certificates, franchises, variances,
exemptions, orders and other governmental authorizations, consents and approvals
necessary to conduct the Business in all material respects as presently
conducted.
4.15. Labor Matters
Except as described in Schedule 4.15, neither Seller nor any Other
Seller is presently (a) a party to any collective bargaining agreement in
respect of the Business in any of the United States, Germany, the United
Kingdom, France, Italy and China (the "Key Jurisdictions"), (b) subject to a
legal duty to bargain with any trade union on behalf of employees in the Key
Jurisdictions or (c) to the knowledge of Seller, the object of any attempt to
organize employees for collective bargaining purposes or presently operating
under an expired collective bargaining agreement in the Key Jurisdictions, in
each case that could reasonably be expected to have a Seller Material Adverse
Effect. Since October 31, 1999, neither Seller nor any Other Seller in respect
of the Business is or has been a party to or subject to any material pending
strike, work stoppage, organizing attempt, picketing, boycott or similar
activity. To Seller's knowledge, since October 31, 1999, Seller and each Other
Seller in respect of the Business have complied in all material respects with
all applicable federal, state and local laws, ordinances, rules and regulations
and requirements relating to the employment, payment and termination of labor,
including the provisions thereof relative to wages, hours, severance, vacation,
collective bargaining, employee benefits, and employee benefit plans,
contributions, unemployment,
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withholding taxes and occupational health and safety and equal opportunity and
non-discrimination laws (including the Americans with Disabilities Act), except
as would not have a Seller Material Adverse Effect.
4.16. Environmental Matters
Except as provided in Schedule 4.16 and except as would not
reasonably be expected to result in a Seller Material Adverse Effect, as
relating to the Business or the Purchased Assets: (a) Seller and each Other
Seller in respect of the Business or the Purchased Assets are and have been in
compliance with all Environmental Laws, including the possession of, and the
compliance with, all permits required under Environmental Laws; (b) there has
not been any Release of Hazardous Materials at or from any of the Purchased
Assets in violation of Environmental Laws or in a manner that would reasonably
be expected to give rise to liability under any Environmental Laws; (c) Seller
has not received any Environmental Claim; (d) Purchased Assets are not subject
to any order, decree, injunction or other similar agreement with any
Governmental Authority or any indemnity or other similar agreement with any
third party relating to liability or obligations under any Environmental Law;
(e) there are no other circumstances or conditions involving the Business or the
Purchased Assets that constitute violations of Law or Releases of Hazardous
Materials that could reasonably be expected to result in any Environmental
Claim, liability, investigation, cost or restriction on the ownership, use or
transfer of any Purchased Asset in connection with any Environmental Law; and
(f) Seller has, to its knowledge, delivered to Purchaser, or has otherwise made
available to Purchaser, copies of all material environmental reports, studies,
assessments, audits, sampling data, correspondence alleging any violation of
Environmental Laws and other environmental claims in their possession relating
to the Purchased Assets and the Business.
"Environmental Laws" shall mean any applicable federal, state or
local laws, statutes, regulations, codes, ordinances, permits, decrees, orders
or common law relating to, or imposing standards regarding, the protection,
health or safety (in either case as relating to the environment) or the
protection of the environment.
"Environmental Claim" shall mean any written claim, proceeding,
suit, complaint, or notice of violation alleging violation of, or liability
under, any Environmental Laws.
"Hazardous Materials" shall mean any hazardous or toxic substance or
any material or waste defined, listed, or classified as such or otherwise
regulated under any Environmental Law, including friable asbestos, lead,
petroleum, and polychlorinated biphenyls.
"Release" shall be defined as that term is defined in 42 U.S.C.
Section 9601 (22).
4.17. Transfer of Purchased Assets
Except as set forth in Schedule 4.17 or as specifically provided or
disclosed elsewhere in this Agreement (including the Schedules hereto) or any
Local Asset Transfer Agreement, the transfer of the Purchased Assets (together
with the rights and services made available in any arrangements entered into in
accordance with Section 2.4 and the rights to be granted pursuant to Section
6.13 and 6.14) will constitute a conveyance of Sellers' and the Other
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Sellers' entire right, title and interest to the assets, properties and rights
owned by Seller and its Subsidiaries comprising the Business and necessary to
conduct the Business in all material respects as it is currently conducted and
all the assets, properties and rights used to conduct the Business in all
material respects as currently conducted in each case, other than the assets,
properties and rights used to perform the services that are the subject of the
Transition Services Agreement.
4.18. Undisclosed Liabilities
The Business does not have any liabilities or obligations of any
nature or kind whatsoever (whether absolute, accrued, contingent or otherwise)
that would be Assumed Liabilities, except (i) as are set forth or reflected in
the Final Closing Statement of Purchased Net Assets or the notes thereto, (ii)
Liabilities incurred in the ordinary course of business since the date of the
Business Financial Statements, (iii) Liabilities disclosed in Schedule 4.18 or
any other Schedule hereto, (iv) Liabilities under the Assumed Contracts, (v)
Liabilities in respect of warranty obligations and general liability claims,
(vi) Liabilities not actually known as of the date hereof which would be Assumed
Liabilities in accordance with Section 2.2(a), (vii) the Excluded Liabilities,
(viii) to the extent disclosed in the Seller SEC Reports with respect to the
Business and (ix) such other Liabilities which would not, in the aggregate, have
a Seller Material Adverse Effect. This representation shall not be deemed
breached as a result of a change in law or in GAAP after the date hereof.
4.19. Products
Except as set forth in Schedule 4.19, since October 31, 1997, each
Medical Product manufactured, marketed, supplied, installed or serviced by
Seller, any Other Seller or any of their respective Subsidiaries or, to the
knowledge of Seller, Hewlett-Packard Company or any of its Subsidiaries prior to
the Closing and in connection with the Business (each, a "Product") has been
manufactured, marketed and serviced under an established and maintained "quality
system" which meets the requirements of all applicable standards promulgated by
each applicable Governmental Authority and in accordance with the specifications
and standards contained in the applicable licenses and approvals granted by or
pending with each such Governmental Authority. Except as set forth in Schedule
4.19: (i) there are no pending or, to Seller's knowledge, threatened citations,
warning letters, FDA Forms 483 or decisions by any Governmental Authority that
any Product is defective, is unsafe or fails to meet any applicable standards
promulgated by any Governmental Authority, (ii) there is no proceeding by the
FDA or any other Governmental Authority, including a grand jury investigation, a
305 hearing or a civil penalty proceeding, pending or, to Seller's knowledge,
threatened relating to the safety or efficacy of any Product, (iii) there have
been no recalls ordered within the five years preceding the Closing with respect
to any Product, and (iv) there are no material pending or, to Seller's
knowledge, threatened product liability claims involving any Product.
4.20. Customers
Schedule 4.20 sets forth the 10 largest end-user customers of the
Business by revenue for the fiscal year ended October 31, 1999. As of the date
of this Agreement, neither
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Seller nor any of its Subsidiaries has received written notification that any
such customer of the Business intends to terminate or materially adversely
change its relationship with Seller.
4.21. Suppliers
Schedule 4.21 sets forth the 10 largest suppliers of goods and
services to the Business by purchase amount for the fiscal year ended October
31, 1999. As of the date of this Agreement, neither Seller nor any of its
Subsidiaries has received written notification that any such supplier intends to
terminate or materially adversely change its relationship with Seller.
4.22. No Other Representations or Warranties.
Except for the representations and warranties contained in Article
IV, Purchaser acknowledges that neither Seller, the Other Sellers, the other
Subsidiaries and Affiliates of Seller nor any other Person makes any other
express or implied representation or warranty with respect to the Purchased
Assets, the Assumed Liabilities or otherwise or with respect to any other
information provided to Purchaser, whether on behalf of Seller or such other
Persons, including as to (a) the physical condition or usefulness for a
particular purpose of the real or tangible personal property included in the
Purchased Assets (b) the use of the Purchased Assets and the operation of the
Business by Purchaser after the Closing in any manner other than as used and
operated by Seller or (c) the probable success or profitability of the
ownership, use or operation of the Business by Purchaser after the Closing.
Neither Seller nor any other Person will have or be subject to any liability or
indemnification obligation to Purchaser or any other Person resulting from the
distribution to Purchaser, or Purchaser's use of, any such information,
including the Confidential Memorandum prepared by Goldman, Sachs & Co. related
to the Business and any information, document, or material made available to
Purchaser in certain "data rooms" or management presentations in expectation of
the transactions contemplated by this Agreement other than circumstances
involving intentional misrepresentation.
ARTICLE V
REPRESENTATIONS OF PURCHASER
Purchaser represents and warrants to Seller as follows:
5.1. Corporate Existence.
Purchaser and each Designee is duly organized and validly existing
and, where applicable, in good standing, under the laws of the jurisdiction of
its organization and has the requisite power and authority to execute and
deliver this Agreement (in the case of Purchaser) and the other Transaction
Documents to which it is a party and to perform its obligations hereunder and
thereunder. As of the Closing Date, Purchaser and each of its relevant Designees
will have the requisite corporate, partnership or similar power and authority to
own, lease and operate the Purchased Assets, and to carry on the Business in
substantially the same manner as the same is now being conducted by Seller and
its Subsidiaries.
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5.2. Corporate Authority.
This Agreement and the other Transaction Documents to which
Purchaser and/or any Designee is a party and the consummation of the
transactions contemplated hereby and thereby involving such Persons have been
or, in the case of the other Transaction Documents, will be prior to the
Closing, duly authorized by the Board of Directors (or a duly authorized
committee or representative thereof) of Purchaser and such Designee, and will be
duly authorized by each Designee by all requisite corporate, shareholder,
partnership or other action prior to the Closing, and Purchaser and each
Designee has or, in the case of the Designees, will have at or prior to the
Closing full power and authority to execute, deliver and/or file the Transaction
Documents to which it is a party and to perform its obligations hereunder or
thereunder. This Agreement has been duly executed and delivered by Purchaser,
and the other Transaction Documents will be duly executed, delivered and/or
filed by Purchaser and any Designee party thereto, and this Agreement
constitutes, and the other Transaction Documents when so executed, delivered
and/or filed will constitute, a valid and legally binding obligation of
Purchaser and/or any Designee party thereto, enforceable against it or them, as
the case may be, in accordance with its terms except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing. The
execution, delivery and/or filing of this Agreement and the other Transaction
Documents by Purchaser and/or any Designee party thereto and the consummation by
Purchaser and/or any Designee of the transactions contemplated hereby and
thereby do not and will not (A) violate or conflict with any provision of the
respective certificate of incorporation or by-laws or similar organizational
documents of Purchaser and/or any Designee, (B) result in any violation or
breach or constitute any default (with or without notice or lapse of time, or
both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to the loss of a material benefit under, or
result in the creation of any Lien under any contract, indenture, mortgage,
lease, note or other agreement or instrument to which Purchaser and/or any
Designee is subject or is a party, or (C) violate, conflict with or result in
any breach under any provision of any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Purchaser and/or any Designee or any
of their respective properties or assets, except, in the case of clauses (B) and
(C), to the extent that any such default, violation, conflict, breach or loss
would not have a Purchaser Material Adverse Effect.
5.3. Governmental Approvals and Consents.
Neither Purchaser nor any of its Designees is subject to any order,
judgment, decree, stipulation, injunction or agreement with any Governmental
Authority which would prevent or materially interfere with or delay the
consummation of the Purchase or would be reasonably likely to have a Purchaser
Material Adverse Effect. No claim, legal action, suit, arbitration, governmental
investigation, action or other legal or administrative proceeding is pending or,
to the knowledge of Purchaser, threatened against Purchaser or any of its
Designees which would prevent or materially interfere with or delay the
consummation of the Purchase. Except for any consents required under any
applicable Antitrust Regulations, no consent, approval, order or authorization
of, license or permit from, notice to or registration, declaration
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or filing with, any Governmental Authority, is required on the part of Purchaser
or any Designee in connection with the execution, delivery, performance and/or
filing of this Agreement or any of the other Transaction Documents or the
consummation of the transactions contemplated hereby and thereby except for such
consents, approvals, orders or authorizations of, licenses or permits, filings
or notices which have been obtained and remain in full force and effect and
those with respect to which the failure to have obtained or to remain in full
force and effect would not have a Purchaser Material Adverse Effect. To
Purchaser's knowledge, there are no filings of the nature contemplated by
Sections 4.2 and 4.4 required to be made by Seller or any of its Subsidiaries in
connection with the Purchase or the other transactions contemplated hereby on
account of the business or operations of Purchaser, other than the filings
expressly contemplated by Sections 4.2 and 4.4 read together with the Schedules
thereto.
5.4. Financial Capacity.
Purchaser has available and will have available on the Closing Date
sufficient funds to enable it to consummate the transactions contemplated
hereby.
5.5. Finders; Brokers.
With the exception of fees and expenses payable to Morgan Stanley &
Co. Incorporated, which shall be Purchaser's sole responsibility, none of
Purchaser or any of its Subsidiaries has employed any finder or broker in
connection with the Purchase who would have a valid claim for a fee or
commission from Seller in connection with the Purchase.
5.6. Purchase for Investment.
With respect to any equity interests listed on Schedule 4.3 or
otherwise comprising any portion of the Purchased Assets, Purchaser is aware
that no such equity interests are registered under the Securities Act of 1933,
as amended (the "Securities Act"), or under any state securities laws. Purchaser
is purchasing such equity interests solely for investment, with no present
intention to distribute any such equity interests to any Person, and Purchaser
will not sell or otherwise dispose of such equity interests except in compliance
with the registration requirements or exemption provisions under the Securities
Act and the rules and regulations promulgated thereunder, or any other
applicable securities laws.
5.7. No Other Representations or Warranties
Except for the representations and warranties contained in this
Article V, neither Purchaser nor any other Person makes any other express or
implied representation or warranty on behalf of Purchaser.
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ARTICLE VI
AGREEMENTS OF PURCHASER AND SELLER
6.1. Operation of the Business.
Except as otherwise contemplated by this Agreement or as disclosed
in Schedule 6.1, Seller covenants that, in respect of the Business, until the
Closing it will, and it will cause the Other Sellers to, use commercially
reasonable efforts to continue, in a manner consistent with the past practice of
the Business, to keep available the services of their employees, to maintain and
preserve intact the Business in all material respects and to maintain in all
material respects the ordinary and customary relationships of the Business with
its suppliers, customers (including dealers and distributors) and others having
business relationships with it with a view toward preserving for Purchaser to
and after the Closing Date the Business, the Purchased Assets and the goodwill
associated therewith. Except as otherwise provided in this Agreement or as
disclosed in Schedule 6.1, until the Closing, Seller shall, and it shall cause
the Other Sellers in respect of the Business to, continue to operate and conduct
the Business in the ordinary course consistent with past practice. Except as
otherwise contemplated by this Agreement or as disclosed in Schedule 6.1,
without limiting the generality of the foregoing, Seller shall not and shall
cause the Other Sellers not to, without the prior written approval of Purchaser
(which approval shall not be unreasonably withheld), take any of the following
actions with respect to the Purchased Assets or the Business:
(a) transfer, sell, lease, license or otherwise convey or dispose
of, or subject to any Lien, any of the Purchased Assets (other than
Business Intellectual Property, which is covered by Sections 6.1(j), (k)
and (l)) other than (i) sales of inventory in the ordinary course of
business or (ii) other transfers, leases, licenses and dispositions made
in the ordinary course of business consistent with past practice;
(b) directly or indirectly, through any officer, director, agent
or otherwise, solicit, initiate or encourage the initiation of inquiries
or proposals that constitute, or could lead to a proposal or offer from,
provide any confidential information to, or participate in any
discussions or negotiations or cooperate with, any corporation,
partnership, Person or other entity or group (other than Purchaser and
its Subsidiaries and their respective officers, employees,
representatives and agents) that involves, directly or indirectly, any
sale or other disposition of the Purchased Assets (other than in
connection with transactions that would be permitted pursuant to this
Agreement and other than any transaction relating to the equity or debt
of Seller that would not materially and adversely affect Seller's
ability to consummate the Purchase and the other transactions
contemplated hereby) or otherwise knowingly facilitate or encourage any
effort or attempt to do or seek any of the foregoing. Seller will cease
and cause to be terminated any existing activities or negotiations with
any parties conducted heretofore with respect to any of the foregoing;
(c) make any acquisition of assets having a purchase price of $5
million or more in the aggregate and which would become part of the
Purchased Assets, except (i) in the ordinary course of business
consistent with past practice or (ii) in connection
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with any merger, acquisition or business combination by or involving
Seller or its Subsidiaries;
(d) grant or sell any option or right to purchase any of the
Purchased Assets that are material to the Business as a whole, except in
the ordinary course of business consistent with past practice;
(e) other than in the ordinary course of business consistent with
past practice, enter into any arrangement, agreement or undertaking
(including any consulting or employment agreement not terminable by
Seller on 30 days' notice or less without cost or liability in excess of
$200,000) relating to any Benefit Arrangements, or pay or promise to
pay, any bonus, profit-sharing or special compensation to its employees
referred to in Section 6.6 with respect to the business or operations of
the Business or make any increase in the compensation payable or to
become payable to any of such employees except for increases in
compensation that are required to be paid pursuant to the current terms
of any agreement that is in effect on the date hereof;
(f) incur or pay any debt, liability or obligation, direct or
indirect, whether accrued, absolute, contingent or otherwise, other than
(i) in the ordinary course of business consistent with past practice,
(ii) as required by the terms of any Contract, (iii) pursuant to loans
and advances among Seller and its Subsidiaries or (iv) incurrence or
repayment of debt, liabilities or obligations by Seller that would not
constitute an Assumed Liability;
(g) assume, guarantee, endorse or otherwise become responsible
for the obligations of, or make any loans or advances to, any other
Person, other than in the ordinary course of business consistent with
past practice or any such obligation, loan or advance that would not
constitute an Assumed Liability or Purchased Asset;
(h) waive or release any rights of material value, or cancel,
compromise, release or assign any indebtedness owed to it or any claims
held by it, other than in the ordinary course of business consistent
with past practice;
(i) enter into, terminate or amend or modify in any material
respect the terms of any Contracts other than in the ordinary course of
business consistent with past practice;
(j) sell, transfer, license or otherwise convey or dispose of any
Business Intellectual Property set forth in Schedule 4.10(a), Parts 1,
2, 3 and 5, or any Purchaser Technology (as defined in the Technology
License Agreement);
(k) license or otherwise convey rights in Seller's Intellectual
Property not described in Section 6.1(j) in the field of Medical
Products, other than in the ordinary course of business consistent with
past practice and following consultations with Purchaser;
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(l) except as provided in Section 6.1(k), sell, transfer, or
otherwise dispose of any Business Intellectual Property not described in
Section 6.1(j), or any Seller Technology (as defined in the Technology
License Agreement) that is used in connection with the Business, the
sale, transfer or disposal of which would materially diminish
Purchaser's rights to the Business Intellectual Property, other than in
the ordinary course of business consistent with past practice and
following consultations with Purchaser that are reasonable in light of
the degree to which such Business Intellectual Property is significant
to the Business and in light of the scope and type of transaction
pursuant to which such sale, transfer, or disposal is effected, it being
understood that transactions with respect to Intellectual Property that
are unrelated or insignificant to the Business shall not require any
such consultation whatsoever;
(m) enter into any collective bargaining agreements other than
those that may be imposed by statute;
(n) change any of its accounting policies or procedures other
than as may be required by a change in applicable law or in GAAP;
(o) enter into any financing arrangement, agreement or
undertaking with any customer of the Business or any financial
institution, leasing company or similar business that permits recourse
to Purchaser or any of its Subsidiaries which would constitute an
Assumed Liability, other than in the ordinary course of business
consistent with past practice; or
(p) enter into any agreement to take any of the foregoing
actions.
6.2. Investigation of Business; Confidentiality.
(a) Seller shall, and shall cause its Subsidiaries to, permit
Purchaser and its authorized agents or representatives, including its
independent accountants and environmental consultants, to have
reasonable access to the properties, books, records and employees of the
Business at reasonable hours to review information and documentation and
ask questions relative to the properties, books, contracts, commitments
and other records of the Business and to conduct any other reasonable
investigations including ASTM 1527 Phase I environmental site
assessments (but not including any invasive or destructive environmental
sampling, testing or analysis); provided, that such investigation shall
only be upon reasonable notice and shall not unreasonably disrupt
personnel and operations of Seller and its Subsidiaries and shall be at
Purchaser's sole risk and expense. Notwithstanding the foregoing, Seller
and its Subsidiaries shall have no obligation to disclose any
information the disclosure of which is subject to a confidentiality
obligation in favor of any third party. All requests for access to the
offices, properties, books and records of Seller and its Subsidiaries
shall be made to such representatives of Seller as Seller shall
designate, who shall be solely responsible for coordinating all such
requests and all access permitted hereunder. It is further agreed that
neither Purchaser nor its Affiliates or representatives shall contact
any of the employees, customers (including dealers and distributors),
suppliers, joint venture partners or other Subsidiaries or Affiliates of
Seller in connection with the transactions
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contemplated hereby, whether in person or by telephone, electronic or
other mail or other means of communication, without the specific prior
authorization of such representatives of Seller.
(b) The parties hereto expressly acknowledge and agree that this
Agreement and its terms and all information, whether written or oral,
furnished by either party to the other party or any Affiliate of such
other party in connection with the negotiation of this Agreement
("Confidential Information") shall be deemed to be confidential and
shall be maintained by each party and their respective Affiliates in
confidence. Except as authorized in writing by the other party, neither
party shall at any time disclose or permit to be disclosed any such
Confidential Information to any Person, firm, corporation or entity, (i)
except as may reasonably be required in connection with the performance
of this Agreement by Purchaser, Seller or its respective Subsidiaries,
as the case may be, and (ii) except as may reasonably be required after
the Closing in connection with the operation by Purchaser or its
Affiliates of the Purchased Assets and the Business or the operation by
Seller or its Affiliates of the Retained Businesses and (iii) except to
the parties' agents or representatives who are informed by the parties
of the confidential nature of the information and are bound to maintain
its confidentiality. The obligation not to disclose information under
this Section 6.2(b) shall not apply to information that (i) is or
becomes generally available to the public other than as a result of
disclosure by the recipient or any of its Affiliates or representatives
thereof, (ii) was readily available to the recipient or any of its
Affiliates or representatives thereof on a non-confidential basis prior
to its disclosure to such party by the other party, (iii) was in the
recipient's or its Affiliates' lawful possession as evidenced by records
kept in the ordinary course of business or by proof of actual prior
possession; (iv) becomes available to the recipient or any of its
Affiliates or representatives thereof on a non-confidential basis from a
source other than the other party, provided that such source is not
known by the recipient to be bound by confidentiality agreements with
the other party or its Affiliates or by legal, fiduciary or ethical
constraints on disclosure of such information, (v) is required to be
disclosed pursuant to a governmental order or decree or other legal
requirement (including the requirements of the Securities and Exchange
Commission and the listing rules of any applicable securities exchange),
provided that the party required to disclose such information shall give
the other party prompt notice thereof prior to such disclosure and, at
the request of the other party, shall cooperate in all reasonable
respects in maintaining the confidentiality of such information,
including obtaining a protective order or other similar order, or (vi)
for purposes of disclosure following the Closing only, constitutes a
Purchased Asset other than trade secrets. Nothing in this Section 6.2(b)
shall limit in any respect either party's ability to disclose
information in connection with the enforcement by such party of its
rights under this Agreement; provided that the proviso of clause (v) in
the immediately preceding sentence shall apply to the party desiring to
disclose such information. The non-disclosure agreement, dated July 18,
2000, between Seller and Purchaser shall not survive the Closing, except
with respect to Sections 7 and 15 of such agreement, which shall survive
in accordance with their terms.
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6.3. Commercially Reasonable Efforts; No Inconsistent Action.
(a) Subject to Section 6.3(b) and the terms and conditions
hereof, Seller and Purchaser agree to use commercially reasonable
efforts to take, or cause to be taken, all actions and to do, or cause
to be done, all things necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement and the
Transaction Documents and to cause the conditions to each party's
obligation to close the transactions contemplated hereby as set forth in
Article VII to be satisfied, including using commercially reasonable
efforts to obtain (i) all licenses, certificates, permits, approvals,
clearances, expirations or terminations of applicable waiting periods,
authorizations, qualifications and orders (each a "Consent") of any
Governmental Authority required for the satisfaction of the conditions
set forth in Sections 7.1(b) and (c), and (ii) all other Consents (it
being understood that the failure to obtain any such Consents shall not
cause the condition set forth in Section 7.3(b) to be deemed not to be
satisfied and it being further understood that Seller shall not be
required to expend any money or agree to any restrictions in order to
obtain any Consents) necessary in connection with the consummation of
the transactions contemplated by this Agreement and the Transaction
Documents; provided, however, that in no event shall Seller be required
or expected to retain any of the Purchased Assets (including assets that
would be Purchased Assets but for any inability to receive a Consent) in
order to comply with its obligations in respect of the foregoing. Each
of Seller and Purchaser agree that (i) no contact will be initiated
with, or consent sought from, any Governmental Authority (other than in
respect of antitrust or merger control approval) prior to the Closing
Date without the prior written consent of the other party, such consent
not to be unreasonably withheld or delayed, and (ii) each party will be
given prior notice of and a reasonable opportunity to consult with the
other party regarding contacts with Governmental Authorities regarding
antitrust or merger control matters. Seller and Purchaser shall
cooperate fully with each other to the extent reasonable in connection
with the foregoing.
(b) Purchaser and Seller shall timely and promptly make all
filings which may be required for the satisfaction of the condition set
forth in Sections 7.1(b) and 7.1(c) by each of them in connection with
the consummation of the transactions contemplated hereby. In furtherance
and not in limitation of the foregoing, each of Seller and Purchaser
shall file Notification and Report Forms under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") or the
statutes, rules, regulations, administrative and judicial doctrines and
any other antitrust or competition laws of the United States, any state
thereof, any foreign country or the European Union as promptly as
practicable following the date of this Agreement and in any event no
later than (i) twenty Business Days following the date of this
Agreement, in the case of Notification and Report Forms under the HSR
Act, (ii) twenty Business Days following the date of this Agreement, in
the case of initial filings pursuant to the Regulation, and (iii) the
time prescribed by applicable Law, in the case of other filings. In
addition, Purchaser and Seller agree, and shall cause each of their
respective Subsidiaries, to cooperate and to use commercially reasonable
efforts to: obtain any government Consents required for the Closing
(including through compliance with the HSR Act and any applicable
foreign governmental reporting requirements), to respond to any
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governmental requests for information, and to avoid and/or overcome any
action, including any legislative, administrative or judicial action,
and to have vacated, lifted, reversed or overturned any judgment,
injunction or other order (whether temporary, preliminary or permanent)
that restricts, prevents or prohibits the consummation of the
transactions contemplated by this Agreement; provided, however, that in
no event shall Seller be required or expected to retain any of the
Purchased Assets (including assets that would be Purchased Assets but
for any inability to receive a Consent) in order to comply with its
obligations in respect of the foregoing. Each party shall furnish to the
other such necessary information and assistance as the other party may
reasonably request in connection with the preparation of any necessary
filings or submissions by it to any Governmental Authority. Except as
required by law or regulation, each party or its attorneys shall provide
the other party or its attorneys the opportunity to make copies of all
correspondence, filings or communications (or memoranda setting forth
the substance thereof) between such party or its representatives, on the
one hand, and any Governmental Authority, on the other hand, with
respect to this Agreement, the Transaction Documents or the transactions
contemplated hereby or thereby. Without in any way limiting the
foregoing, the parties hereto will consult and cooperate with one
another, and consider in good faith the views of one another, in
connection with any analyses, appearances, presentations, memoranda,
briefs, arguments, opinions and proposals made or submitted by or on
behalf of any party hereto in connection with proceedings under or
relating to the HSR Act or any other Antitrust Regulation.
(c) Each of Purchaser and Seller shall notify and keep the other
advised as to (i) any material communication from the Federal Trade
Commission, the United States Department of Justice or any other
Governmental Authority regarding any of the transactions contemplated
hereby, (ii) any litigation or administrative proceeding pending and
known to such party, or to its knowledge threatened, which challenges
the transactions contemplated hereby and (iii) any event or circumstance
which, to its best knowledge, would constitute a breach of its
respective representations and warranties in this Agreement; provided,
however, that the failure of Seller or Purchaser to comply with this
Section 6.3(c) shall not subject Seller or Purchaser to any liability
hereunder in respect of any claim asserted after the relevant expiration
date for the relevant representation or warranty; and provided, further,
that Purchaser may not separately recover pursuant to Article IX or
otherwise for both a breach of this Section 6.3(c) and any related
breach of the relevant representation or warranty. Subject to the
provisions of Article X hereof, Seller and Purchaser shall not take any
action inconsistent with their obligations under this Agreement or,
without prejudice to Purchaser's rights under this Agreement, which
would materially hinder or delay the consummation of the transactions
contemplated by this Agreement. Notwithstanding any other provisions of
this Agreement, Purchaser will have primary responsibility for
determining the strategy for dealing with antitrust regulators with
respect to the Purchase and the other transactions contemplated by this
Agreement, and will consult with Seller and will consider in good faith
the views of Seller and its counsel in determining and pursuing such
strategy and in dealing with antitrust regulators, and Seller and
Purchaser shall fully cooperate in this regard.
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6.4. Public Disclosures.
Unless otherwise required by law, prior to the Closing Date, no news
release or other public announcement pertaining to the transactions contemplated
by this Agreement will be made by or on behalf of any party without the prior
approval of the other party. If in the judgment of either party such a news
release or public announcement is required by law, the party intending to make
such release or announcement shall provide prior notice to the other party of
the contents of such release or announcement and shall consult with the other
party with respect thereto.
6.5. Access to Records and Personnel.
(a) Exchange of Information. Each party agrees to provide, or
cause to be provided, to each other, as soon as reasonably practicable
after written request therefore, any information in the possession or
under the control of such party that the requesting party reasonably
needs (i) to comply with reporting, disclosure, filing or other
requirements imposed on the requesting party (including under applicable
securities laws) by a Governmental Authority having jurisdiction over
the requesting party, (ii) for use in any other judicial, regulatory,
administrative or other proceeding or in order to satisfy audit,
accounting, claims, regulatory, litigation or other similar requirements
or (iii) to comply with its obligation under this Agreement; provided,
however, that in the event that any party determines that any such
provision of information could be commercially detrimental, violate any
law or agreement, or waive any attorney-client privilege, the parties
shall take all reasonable measures to permit the compliance with such
obligations in a manner that avoids any such harm or consequence.
(b) Financial and Other Information. Except with respect to
information to be provided in accordance with the Transition Services
Agreement, each party shall provide, or cause to be provided, to the
other party and its Subsidiaries in such form as such requesting party
shall reasonably request, at no charge to the requesting party, all
financial and other data and information as the requesting party
reasonably determines to be necessary or advisable in order to prepare
its financial statements and reports or filings, including Tax Returns,
with any Governmental Authority.
(c) Ownership of Information. Any information owned by a party
that is provided to a requesting party pursuant to this Section 6.5
shall be deemed to remain the property of the providing party. Unless
specifically set forth herein, nothing contained in this Agreement shall
be construed as granting or conferring rights of license or otherwise in
any such information.
(d) Record Retention. Except as otherwise provided herein, each
party agrees to use its reasonable commercial efforts to retain the
books, records, documents, instruments, accounts, correspondence,
writings, evidences of title and other papers relating to the Business
and the Purchased Assets (the "Books and Records") in their respective
possession or control for a commercially reasonable period of time,
consistent with their regular document retention policies, following the
Closing Date or for such longer period as may be required by law or any
applicable court order or until the
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expiration of the relevant representation or warranty under any of the
Transaction Documents. No party will destroy, or permit any of its
Subsidiaries to destroy, any information that exists on the date of this
Agreement (other than information that is permitted to be destroyed
under the current record retention policy of such party) without first
using its reasonable commercial efforts to notify the other party of the
proposed destructions and giving the other party the opportunity to take
possession of such information prior to such destruction.
(e) Limitation of Liability. No party shall have any liability to
any other party in the event that any information exchanged or provided
pursuant to this Section 6.5 is found to be inaccurate, in the absence
of willful misconduct by the party providing such information. No party
shall have any liability to any other party if any information is
destroyed or lost after reasonable commercial efforts by such party to
comply with the provisions of Section 6.5(d).
(f) Other Agreements Providing For Exchange of Information. The
rights and obligations granted under this Section 6.5 are subject to any
specific limitations, qualifications or additional provisions on the
sharing, exchange or confidential treatment of information set forth in
this Agreement.
(g) Production of Witnesses; Records; Cooperation. In the case of
a legal or other proceeding (including a claim for indemnification)
between the parties or between one party and a third party relating to
the Business, the Purchased Assets, the Assumed Liabilities, the
Excluded Liabilities, this Agreement (including any matters subject to
indemnification hereunder) or the transactions contemplated hereby, each
party hereto shall use its reasonable commercial efforts to make
available to each other party, upon written request, the former (to the
extent practicable), current (to the extent practicable) and future
directors, officers, employees, other personnel and agents of such party
as witnesses and any books, records or other documents within its
control or which it otherwise has the ability to make available (other
than materials covered by the attorney-client privilege), to the extent
that any such Person (giving consideration to business demands of such
directors, officers, employees, other personnel and agents) or books,
records or other documents may reasonably be required in connection with
any legal, administrative or other proceeding in which the requesting
party may from time to time be involved, regardless of whether such
legal, administrative or other proceeding is a matter with respect to
which indemnification may be sought hereunder. The requesting party
shall bear all out-of-pocket costs and expenses in connection with the
foregoing. The foregoing shall not limit any of Seller's rights in
respect of the foregoing under Section 9.4
(h) Confidential Information. Nothing in this Section 6.5 shall
require either party to violate any agreement with any third parties
regarding the confidentiality of confidential and proprietary
information; provided, however, that in the event that either party is
required under this Section 6.5 to disclose any such information, that
party shall use all commercially reasonable efforts to seek to obtain
such third party's consent to the disclosure of such information.
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6.6. Employee Relations and Benefits
(a) The parties hereto intend that there shall be continuity of
employment with respect to all Business Employees as follows; (i) where
local employment laws provide for an automatic transfer of employees
upon the transfer of a business as a going concern, the employment of
the employees shall not be terminated upon Closing and the rights,
powers, duties, liabilities and obligations of Seller (or the relevant
Subsidiary of Seller) to or in respect of the employees in respect of
any contract of employment with the employees in force immediately
before Closing shall be transferred to Purchaser and/or one of its
Subsidiaries in accordance with those local employment laws, and (ii)
where the local employment laws do not provide for the automatic
transfer of employees upon the transfer of a business or part of a
business as a going concern (or in any jurisdiction where the local
employment laws do provide for the automatic transfer of employees upon
the transfer of a business or part of a business as a going concern but
for any reason any employee does not transfer by operation of law),
Purchaser and/or one of its Subsidiaries shall offer employment to the
Business Employees commencing on the Closing Date or upon the return of
any such Business Employee to active employment with the same aggregate
salary and bonus opportunity and location and the same or similar
position as those provided such employees by Seller or its Subsidiaries
immediately prior to the Closing Date (the "Current Employment Terms").
Seller shall provide within five Business Days of Purchaser's request an
electronic roster of all Business Employees categorized as reasonably
requested by Purchaser to the extent permitted by local law; provided,
that Purchaser may not request such information prior to the tenth
Business Day following the date of this Agreement. Seller shall not
engage in any activity intended to discourage any Business Employee from
accepting an offer of employment from Purchaser and/or one of its
Subsidiaries and shall use commercially reasonable efforts to provide
that Business Employees (other than Business Employees who have applied
for a position outside the Business prior to the date hereof) will not
be offered employment by businesses of Seller (other than the Business)
after the date hereof and prior to the Closing Date; provided, however,
that Seller and its Subsidiaries shall be permitted to take any action
they are legally required to take in order to comply with local
employment laws. Those employees who are transferred to Purchaser and/or
one of its Subsidiaries in accordance with clause (i) above and those
who accept the offer of employment from Purchaser and/or one of its
Subsidiaries in accordance with clause (ii) above and, in each case, who
commence active employment with Purchaser and/or one of its Subsidiaries
shall be referred to herein as "Transferred Employees." Starting on the
Closing Date and ending on the date two years after the Closing Date or
any longer period as required under local employment laws, each
Transferred Employee shall be employed by Purchaser on terms no less
favorable than the Current Employment Terms (other than with respect to
location) and participate in employee benefit plans, agreements,
programs, policies and arrangements of Purchaser and/or one of its
Subsidiaries (the "Purchaser Plans") that are no less favorable in the
aggregate than the employee benefit plans, programs and arrangements in
effect immediately prior to the Closing Date with respect to such
Transferred Employee, and shall be offered any other additional terms
and conditions of employment by Purchaser and/or one of its Subsidiaries
required by local employment laws; provided, however, that nothing
herein
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shall obligate Purchaser and/or one of its Subsidiaries to provide the
Transferred Employees with retiree medical benefits unless required to
do so by local laws. Notwithstanding anything to the contrary in this
Agreement, starting on the Closing Date, Purchaser shall, for a period
ending on the date two years after the Closing Date, maintain (or cause
its Subsidiaries to maintain) a severance pay practice for the benefit
of each Transferred Employee that is no less favorable than the
severance pay practice provided in Schedule 6.6(a). Purchaser shall
assume and shall indemnify Seller and its Subsidiaries against all
liabilities and obligations to provide any severance to (i) any Business
Employee who is not offered employment by Purchaser and/or one of its
Subsidiaries pursuant to this Section 6.6(a), (ii) any Business
Employees who are entitled to severance due to Purchaser's noncompliance
with Sections 6.6 or 6.7, and (iii) except as otherwise provided in
Section 6.6(h)(ii), any Transferred Employee whose employment is
terminated by Purchaser or its Subsidiaries following the Closing Date.
(b) Seller shall retain responsibility for and continue to pay
all medical, life insurance, disability and other welfare plan expenses
and benefits for each Transferred Employee with respect to claims
incurred by such Transferred Employees or their covered dependents prior
to the Closing Date. Expenses and benefits with respect to claims
incurred by Transferred Employees or their covered dependents on or
after the Closing Date shall be the responsibility of Purchaser. For
purposes of this paragraph, a claim is deemed incurred: in the case of
medical or dental benefits, when the services that are the subject of
the claim are performed; in the case of life insurance, when the death
occurs; in the case of long-term disability benefits, when the
disability occurs; and in the case of workers compensation benefits,
when the event giving rise to the benefits occurs.
(c) With respect to any plan that is a "welfare benefit plan" (as
defined in Section 3(1) of ERISA), or any plan that would be a "welfare
benefit plan" (as defined in Section 3(1) of ERISA) if it were subject
to ERISA, maintained by Purchaser, Purchaser shall (i) cause there to be
waived any pre-existing condition and waiting periods and (ii) give
effect, in determining any deductible and maximum out-of-pocket
limitations, to claims incurred and amounts paid by, and amounts
reimbursed to, such employees with respect to similar plans maintained
by Seller and its Affiliates immediately prior to the Closing Date.
(d) Transferred Employees shall be given credit for all service
with Seller or any of its Subsidiaries, to the same extent as such
service was credited for such purpose by Seller, under each Purchaser
Plan in which such Transferred Employees are eligible to participate for
purposes of eligibility vesting and benefits accrual (other than under a
defined benefit pension plan in which no assets are transferred pursuant
to this Agreement).
(e) Except as required by applicable law or as may be agreed to
by Seller and Purchaser, as of the Closing Date the Transferred
Employees shall cease to accrue further benefits under the employee
benefit plans and arrangements maintained by Seller and its Subsidiaries
and shall commence participation in the Purchaser Plans. Seller shall
take all necessary actions to fully vest the Transferred Employees in
their account balances under the Seller 401(k) plan or any other
qualified profit-sharing plan maintained by
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Seller and allow such Transferred Employees to rollover any associated
loan notes to the extent permitted under the applicable Seller Plan.
Purchaser shall take all steps necessary to permit each such Transferred
Employee who has received an eligible rollover distribution (as defined
in Section 402(c)(4) of the Code) from the Seller 401(k) Plan, if any,
to roll such eligible rollover distribution, including any associated
loans, as part of any lump sum distribution to the extent permitted by
the Seller 401(k) Plan into an account under the Philips Electronics
North America Corporation Employee Savings Plan (the "Purchaser's 401(k)
Plan"). Notwithstanding the foregoing, Seller and Purchaser may mutually
agree following the date hereof, but prior to the Closing Date, to
provide for a trust to trust transfer of the account balances of
Transferred Employees under the Seller 401(k) Plan to the Purchaser's
401(k) Plan.
(f) With respect to any accrued but unused vacation time
(including flexible time-off and sick pay) to which any Transferred
Employee is entitled pursuant to the vacation policy applicable to such
Transferred Employee immediately prior to the Closing Date (the
"Vacation Policy"), Purchaser shall assume the liability for such
accrued vacation and allow such Transferred Employee to use such accrued
vacation to the extent reflected on the Final Closing Statement of
Purchased Net Assets; provided, however, that Purchaser shall be liable
for and pay in cash an amount equal to such accrued vacation time to any
Transferred Employee whose employment terminates for any reason
subsequent to the Closing Date.
(g) Seller agrees to provide any required notice under the Worker
Adjustment and Retraining Notification Act ("WARN") and any other
applicable U.S. law and to otherwise comply with any such statute with
respect to any "plant closing" or "mass layoff" (as defined in WARN) or
similar event affecting Business Employees and occurring on or prior to
Closing (other than employment terminations and other events resulting
from the affirmative action of Purchaser or its Subsidiaries). Purchaser
shall indemnify and hold harmless Seller and its Subsidiaries with
respect to any liability under WARN or other applicable law arising from
the actions (or inactions) of Purchaser or its Affiliates after the
Closing Date.
(h) (i) Purchaser shall indemnify and hold harmless Seller and
its Subsidiaries with respect to any liability under COBRA or other
applicable U.S. law arising from the actions (or inactions) of Purchaser
or its Subsidiaries after the Closing Date. Seller shall retain all
liabilities, including with respect to any Qualifying Event, under COBRA
incurred on or prior to the Closing Date or arising as a result of the
transactions contemplated hereby.
(ii) Except for employees listed in Schedule 6.6(h)(ii),
Purchaser shall have no liabilities associated with any current
retention or severance plans entered into by Seller or its
Subsidiaries, including Aurora, Global and Dragon plans, with
regard to any Designated Employee. Designated Employees are
employees who have been chosen by Seller and/or its Subsidiaries
for retention or dismissal under any current retention or
severance plan prior to the Closing Date, but whose retention or
dismissal has not been carried out prior to the Closing Date;
provided, however, that Designated Employees shall not include
any employee chosen by
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Seller, after consultation with Purchaser, as a result of the
transactions contemplated by this Agreement. Seller's liability
with regard to Designated Employees is subject to the rules of
the retention and severance plans as in force prior to or on the
Closing Date. Seller has provided to Purchaser true and correct
copies of all letters received by participants in the Aurora
retention program.
(iii) Prior to the Closing Date, Seller shall take all
necessary actions to fully vest the Transferred Employees in
their accrued benefits or account balances under any Seller Plan
maintained in the U.S. which is a non-qualified pension plan or
nonqualified deferred compensation plan.
(iv) Prior to the Closing Date, Seller shall pay any and all
accruals owed under the terms of any Seller Plan maintained in
the U.S. (including any such Seller Plan with a "last day of the
quarter" requirement) for any plan year that commenced prior to
the Closing Date. Prior to the Closing Date, Seller shall pay to
the Transferred Employees a pro-rata portion of any [target]
annual cash bonuses or cash profit-sharing awards owed to such
Transferred Employees under the terms of any such nonqualified
Seller Plan for any plan year that commenced prior to the Closing
Date.
(i) Prior to the Closing Date, Seller shall take all necessary
actions to fully vest the Transferred Employees in their accrued
benefits under the Seller Retirement Plan and, to the extent permitted
by the Seller Retirement Plan, allow such Transferred Employees, if they
choose, to rollover any such accrued benefits to the Purchaser's 401(k)
Plan. From and after the Closing Date, Purchaser shall allow the
Transferred Employees to participate in its Philips Electronics North
America Corporation Pension Plan for Salaried Employees (the "Purchaser
Retirement Plan"), and shall grant the Transferred Employees credit for
service with Hewlett-Packard Company, Seller or any of their affiliates
for purposes of eligibility to participate, eligibility for any
early-retirement subsidy and vesting (but not for purposes of benefit
accrual) under such Purchaser Retirement Plan.
(j) Seller shall provide that each share of restricted stock
including restricted stock held by a Transferred Employee pursuant to
any of the Seller Plans (including Seller's employee stock purchase
plan) immediately prior to the Closing Date shall, as of the Closing
Date, vest and become free of restrictions.
(k) Seller shall take all action necessary to provide that,
immediately prior to the Closing Date, each option to purchase shares of
common stock of Seller (a "Seller Option") held by each Transferred
Employee shall become exercisable with respect to all shares subject to
such Seller Option and that each Seller Option shall be exercisable for
a period ending on the earlier of (i) the date that is three months
following the Closing Date or (ii) the date of expiration of the Seller
Option in accordance with the terms of such Seller Option.
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6.7. Non-U.S. Employees
This Section 6.7 applies only to Non-U.S. Employees and certain
former non-U.S. Employees ("Non-U.S. Former Employees").
(a) This Section 6.7 contains covenants and agreements of the
parties on and as of the Closing Date with respect to:
(i) the Non-U.S. Employees; and
(ii) Non-U.S. Benefit Plans listed in Schedule 6.7(a)(ii)
provided or covering such Non-U.S. Employees and Non-U.S. Former
Employees.
(b) Seller and Purchaser shall comply with all obligations either
under the Transfer Regulations or other national laws to provide
information to the other party for onward transmission to Non-U.S.
Employees or employee representatives and/or to provide such information
directly to Non-U.S. Employees or employee representatives. Seller and
Purchaser shall indemnify each other against all Losses resulting from
any failure to provide such information in a timely manner.
(c) (i) Seller shall procure that any of its Subsidiaries will
not, without Purchaser's consent, make any material changes in the
working conditions of the Non-U.S. Employees between the signing of this
Agreement and the Closing Date.
(i) Seller shall indemnify and keep indemnified Purchaser
against all Purchaser Losses, arising out of or in connection
with any claim by a Non-U.S. Employee (whether in contract or in
tort or under statute for any remedy including for breach of
contract, unfair dismissal, redundancy, statutory redundancy,
equal pay, sex, race or disability discrimination, unlawful
deductions from wages or for breach of statutory duty or of any
nature) as a result of anything done or omitted to be done by the
Sellers prior to the Closing Date.
(ii) Purchaser shall indemnify and keep indemnified Seller
against all Seller Losses, arising out of or in connection with
any claim by a Non-U.S. Employee (whether in contract or in tort
or under statute for any remedy including for breach of contract,
unfair dismissal, redundancy, statutory redundancy, equal pay,
sex, race or disability discrimination, unlawful deductions from
wages or for breach of statutory duty or of any nature) as a
result of anything done or omitted to be done by Purchaser and
its Subsidiaries arising prior to or following the Closing Date.
(d) Schedule 6.7(d) shall apply in respect of Non-U.S. Benefit
Plans.
(e) Purchaser shall indemnify Seller from and against all Seller
Losses which arise from the employment by Purchaser or its Subsidiaries
of Non-U.S. Employees on or after the Closing Date or are attributable
to any act, omission, breach or default by Purchaser or its Subsidiaries
in relation to any of the Non-U.S. Employees. This shall
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include, but shall not be limited to Seller Losses arising out of the
termination or dismissal of any Non-U.S. Employee, any failure by
Purchaser or its Subsidiaries to offer any Non-U.S. Employee terms and
conditions of employment and working conditions which are no less
favorable than those which applied to the relevant Non-U.S. Employee
immediately prior to the Closing Date and any failure by Purchaser or
its Subsidiaries to comply with its or their obligations under any local
employment laws.
(f) Seller shall pay awards to inventors for patents that issue
on Intellectual Property pursuant to the Seller's Inventor Awards
Program prior to the Closing Date. Purchaser shall pay awards to
inventors pursuant to Purchaser's inventor awards program for patents
that issue on Intellectual Property after the Closing Date.
(g) Seller shall provide Purchaser with a supplemental schedule
of collective bargaining agreements in those countries that are not
covered by Schedule 4.15 no later than 30 days prior to the Closing
Date.
6.8. Post-Closing Arrangements
(a) At Closing, Purchaser and Seller shall execute and deliver a
transition services agreement (the "Transition Services Agreement")
substantially in the form attached hereto as Exhibit D.
(b) Purchaser and Seller shall work together in good faith to
develop a global transition plan in order to facilitate an orderly and
successive termination of the Services (as defined in the Transition
Services Agreement) on the Termination Date (as defined in the
Transition Services Agreement) or at such earlier time as Purchaser
assumes performance of the Services in accordance with the Transition
Services Agreement. In connection with the development of a global
transition plan, Seller and Purchaser will use commercially reasonable
efforts to establish specific metrics which will drive a reduction in
payments due pursuant to Section 3 of the Transition Services Agreement
as Services diminish.
(c) Between the date of this Agreement and the Closing Date,
Seller and Purchaser shall negotiate in good faith to prepare individual
service level agreements describing in detail the Services to be
performed in accordance with the Transition Services Agreement (the
"Service Level Agreements"), which shall become effective as of the
Closing Date. Seller shall notify Purchaser of any significant, clearly
identifiable cost savings to Seller realized as a result of the terms
set forth in any individual Service Level Agreement, and such savings
shall be applied to reduce the related transition services fee payable
pursuant to Section 3 of the Transition Services Agreement unless
otherwise agreed by Seller and Purchaser.
(d) The parties hereto shall work together to identify and make
provision for those premises (other than sales offices) that are not
Real Property where Seller and its Subsidiaries operate the Business in
space shared by other Seller lines of business and where Purchaser
wishes to sublease or otherwise make arrangements to occupy such space
for a reasonable period of time. With respect to such premises, Seller
and
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Purchaser shall work together to enter into subleases and such other
transition agreements and arrangements as may be necessary to permit
Purchaser to conduct the Business on such premises. Notwithstanding the
foregoing, Seller shall have no obligation in respect of any leased
premises where the lease in effect does not permit subletting or similar
arrangements.
(e) Between the date of this Agreement and the Closing Date,
Seller shall cooperate with Purchaser in all reasonable respects to
facilitate Purchaser's payroll data testing prior to the Closing Date
and shall provide file and tape version employee data for such purpose,
subject to Seller's obligation to keep such information private,
including under applicable local Law. Seller shall provide to Purchaser
at Closing all payroll and benefits records and information relating to
the Transferred Employees, subject to applicable local Law.
(f) Seller agrees to use commercially reasonable efforts to work
together with Purchaser to facilitate on or prior to the Closing Date or
as soon as reasonably practicable thereafter the operation of the
Andover SAP system independently of Seller's information technology
infrastructure.
6.9. Certain Performance Obligations.
After the Closing, Purchaser shall perform any outstanding
maintenance, warranty, support and other performance obligations of Seller and
its Subsidiaries under any equipment lease relating to the Business held by
third parties, including CIT Group/Equipment Financing, Inc. ("CIT") and
Hewlett-Packard Company, on terms and conditions to be mutually agreed upon. In
addition, Purchaser agrees to negotiate in good faith with Seller and CIT to the
extent necessary for Seller to fulfill any of its other obligations to CIT
relating to the Business.
6.10. Non-Competition.
In order that Purchaser may have and enjoy the full benefit of the
Business, Seller agrees that for a period of five years from the Closing Date,
Seller and its Subsidiaries will not, without the express written approval of
Purchaser, engage in or otherwise have a material direct or indirect interest in
any Competing Business (other than the Retained Businesses). For purposes of
this Section 6.10, a business shall be deemed to be a "Competing Business" if it
is principally or primarily engaged in developing, manufacturing, selling or
servicing Medical Products to third parties. Notwithstanding the foregoing,
neither Seller nor its Subsidiaries shall be precluded from (i) engaging in
those businesses that are engaged in as of the date of this Agreement by Seller
through its Test and Measurement Group, Semiconductor Products Group, and
Chemical Analysis Group, as each are described in the Seller SEC Reports and
reasonably expected extensions of those businesses and the products manufactured
or sold in connection therewith, (ii) having a passive investment representing
less than 5% of the equity of any entity that is engaged in a Competing Business
or (iii) acquiring, merging with or entering into any other business combination
with a company the primary business of which is not a Competing Business.
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6.11. Non-Solicitation
(a) Seller agrees that for a period of one year from and after
the Closing Date it shall not, and it shall cause its Subsidiaries not
to, without the prior written consent of Purchaser, directly or
indirectly, solicit to hire or hire (or cause or seek to cause to leave
the employ of Purchaser) (i) any Transferred Employee (other than (A)
any manufacturing employee employed by Seller in Germany and (B) any
Person involved in the provision of Services pursuant to the Transition
Services Agreement, in each case for whom the restriction set forth in
this Section 6.11(a) shall apply for a period of 18 months following the
Closing) or (ii) any Person employed by Purchaser or any of its
Subsidiaries who became known to or was identified to Seller in
connection with the transactions contemplated by this Agreement, unless,
in the case of clause (i) or (ii) above, such Person ceased to be an
employee of Purchaser or its Subsidiaries prior to such action by Seller
or any of its Subsidiaries, or, in the case of such Person's voluntary
termination of employment with Purchaser, at least three months prior to
such action by Seller or any of its Subsidiaries.
(b) Purchaser agrees that for a period of one year from and after
the Closing Date it shall not, and it shall cause its Subsidiaries not
to, without the prior written consent of Seller, directly or indirectly,
solicit to hire or hire (or cause or seek to cause to leave the employ
of Purchaser) (i) any Person that it or they know to be employed by
Seller or any of its Subsidiaries, in connection with the Life Science
business (as defined in the definition of Retained Business), including
any portion of Agilent Labs associated with such business, of Seller and
its Subsidiaries immediately following the Closing or (ii) any Person
employed by Seller or any of its Subsidiaries who became known to or who
was identified to Purchaser in connection with the transactions
contemplated by this Agreement (including any Person involved in the
provision of services pursuant to the Transition Services Agreement,
with respect to whom the restriction set forth in this Section 6.11(b)
shall apply for a period of 18 months following the Closing), unless, in
the case of clause (i) or (ii) above, such Person ceased to be an
employee of Seller or its Subsidiaries prior to such action by Purchaser
or any of its Subsidiaries, or, in the case of such Person's voluntary
termination of employment with Seller, at least three months prior to
such action by Purchaser or any of its Subsidiaries.
(c) Notwithstanding the foregoing, the restrictions set forth in
Sections 6.11(a) and (b) shall not apply to (i) bona fide public
advertisements for employment placed by any party and not specifically
targeted at the employees of any other party or (ii) an employee's
contact of any party on his or her own initiative without any direct or
indirect solicitation by or encouragement from such party. Section
6.11(a) shall not apply to any Person who is hired by Seller or any of
its Subsidiaries (i) pursuant to any existing agreement with employee
representatives (such as a works council agreement) by which Seller or
any of its Subsidiaries are bound or (ii) as a result of actions
required to be taken by Seller or its Subsidiaries in order to comply
with local employment laws.
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6.12. Jointly Developed Intellectual Property.
It is understood that with respect to Intellectual Property based on
inventions, discoveries, designs or writings made jointly by an employee or
employees of the Business and an employee or employees of another business owned
by Seller, Seller has determined, in the ordinary course of business, whether or
not such Intellectual Property relates primarily to the Business or to another
business owned by Seller. Schedule 4.10(a) includes all Business Intellectual
Property that may reflect such jointly developed Intellectual Property that
Seller has determined relates primarily to the Business. Except for any rights
granted to Purchaser and its Designees pursuant to the license described in
Section 6.14, Purchaser and its Designees shall have no rights to Intellectual
Property that is not primarily related to the Business.
6.13. Use of Name and Marks
All trademarks, service marks, trade names and corporate names that
are used in the Business as currently conducted by Seller or any Other Seller
that are not listed in Schedule 6.13, shall be retained by Seller or the Other
Sellers. At the Closing, Seller shall execute and deliver an agreement granting
(and shall cause the appropriate Other Seller to execute and deliver an
agreement granting) a worldwide, royalty-free, exclusive license to Purchaser
and its Designees to use the trademarks, service marks, trade names and
corporate names listed in Schedule 6.13 (the "Licensed Trademarks") in the
conduct of the Business in the form of the agreements attached hereto as Exhibit
E.
6.14. Intellectual Property License Agreement
At the Closing, Seller shall execute and deliver an agreement
granting (and cause each Other Seller to execute and deliver an agreement
granting) a worldwide, royalty-free, non-exclusive license to Purchaser and its
Designees to use all Business Intellectual Property not listed in Schedule
4.10(a)) in the field of Medical Products in the form of the agreements attached
hereto as Exhibit F and subject to the terms of any preexisting third party
license concerning such Business Intellectual Property, which license agreements
shall also include a grant back by Purchaser and its Designees of a worldwide,
royalty-free, non-exclusive license to Seller and each Other Seller to use all
Business Intellectual Property listed in Schedule 4.10(a) in any field other
than Medical Products.
6.15. Insurance Matters
Purchaser acknowledges that the policies and insurance coverage
maintained on behalf of the entities comprising the Business are part of the
corporate insurance program maintained by Seller and Hewlett-Packard Company
(the "Seller Corporate Policies"), and such coverage will not be available or
transferred to Purchaser or any of its Designees. In furtherance and not in
limitation of the foregoing, Purchaser agrees not to and to cause each Designee
and each Affiliate of the foregoing not to bring any claim for recovery under
any of the Seller Corporate Policies, whether or not such Person may be so
entitled in accordance with the terms of such Seller Corporate Policies.
Furthermore, Purchaser agrees that if at any time in the future it shall sell,
directly or indirectly, the shares of capital stock of any Designee, it shall
use
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reasonable efforts to obtain the express agreement of the direct or indirect
purchaser of such entity to the matters set forth in this Section 6.15.
6.16. Tax Matters
(a) Transfer Taxes.
(i) Any Tax Returns that must be filed in connection with any
transfer, filing, recordation (including the cost of recording
the assignment or transfer of Intellectual Property) or similar
fees or taxes (collectively, "Transfer Taxes") shall be prepared
by the party that customarily has primary responsibility for
filing such Tax Returns pursuant to the applicable Laws under and
according to which the respective Tax Returns are due to be
filed. Such party shall use its reasonable best efforts to
provide such Tax Returns to the other party at least ten days
before such Tax Returns are due to be filed. Such Tax Returns
shall be consistent with the allocation of the Purchase Price as
determined pursuant to Section 3.4.
(ii) All Transfer Taxes shall be borne equally by Seller and
Purchaser and each of Seller and Purchaser shall remit or cause
to be remitted its allocable share of such Transfer Taxes. Seller
and Purchaser shall cooperate with each other in the provision of
any information or preparation of any documentation that may be
necessary or useful for obtaining any available mitigation,
reduction or exemption from any Transfer Taxes.
(b) Tax Returns and Payment of Taxes.
(i) Seller shall remit when due or cause to be remitted when
due any amount of Taxes due in connection with the Purchased
Assets and the Purchased Subsidiaries for any taxable period
ending on or before the Closing Date. Seller shall duly file or
cause to be duly filed, any Tax Return required to be filed in
respect of any Tax which it is required to pay pursuant to the
immediately preceding sentence.
(ii) Purchaser shall remit when due or cause to be remitted
when due any amount of Taxes due in connection with the Purchased
Assets and the Purchased Subsidiaries for any taxable period
beginning after the Closing Date. Purchaser shall duly file or
cause to be duly filed, any Tax Return required to be filed in
respect of any Tax which it is required to pay pursuant to the
immediately preceding sentence.
(iii) Purchaser shall prepare or cause to be prepared and
file or cause to be filed any Tax Returns of the Purchased
Subsidiaries or with respect to the Purchased Assets for taxable
periods which begin before the Closing Date and end after the
Closing Date (a "Straddle Period"). Seller shall pay to Purchaser
within five days after the date on which Taxes are paid with
respect to a Straddle Period an amount equal to the portion of
such Taxes which relates to the portion
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of such Straddle Period ending on the Closing Date. For purposes
of this Section 6.16(b)(iii), in the case of any Taxes that are
imposed on a periodic basis and are payable for a Straddle
Period, the portion of such Tax that relates to the portion of
such taxable period ending on the Closing Date shall (x) in the
case of any Taxes other than Taxes based upon or related to
income or receipts, be deemed to be the amount of such Tax for
the entire taxable period multiplied by a fraction the numerator
of which is the number of days in the taxable period ending on
and including the Closing Date and the denominator of which is
the number of days in the entire taxable period, and (y) in the
case of any Tax based upon or related to income or receipts be
deemed to be equal to the amount which would be payable if the
relevant taxable period ended on and included the Closing Date.
Any credits relating to a Straddle Period shall be taken into
account as though the relevant taxable period ended on the
Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with
the prior practice of Seller.
(c) Actions that Affect Tax Liability. Except to the extent required
by Law, Purchaser or its Affiliates shall not, without the prior written consent
of Seller, which consent shall not be unreasonably withheld, amend any Tax
Return filed by, or with respect to, any Purchased Subsidiary for any taxable
period, or portion thereof, ending on or before the Closing Date. Except to the
extent required by Law, Seller or its Affiliates shall not, without the prior
written consent of Purchaser, which consent shall not be unreasonably withheld,
amend any Tax Return filed by, or with respect to, any Purchased Subsidiary for
any taxable period ending on or before the Closing Date.
(d) Pre-Closing Settlement Payments. If, after the Closing,
Purchaser or any of its Affiliates receives any refund that is an Excluded Asset
or utilizes the benefit of any overpayment or prepayment of Taxes that are
Excluded Assets, Purchaser shall promptly remit or cause to be remitted to
Seller the entire amount of the refund or overpayment (including any interest
paid by the Taxing Authority paying the refund or the overpayment, but net of
any Taxes that may be due on such refund or interest amount after giving effect
to any deductions in respect of the payment of such amounts to Seller) received
or utilized by Purchaser or its Affiliates. If any such refund or benefit is
subsequently reduced as a result of an adjustment required by any Taxing
Authority, this Section 6.16(d) shall take such adjusted refund or benefit into
account. If Purchaser pays any amount to Seller pursuant to this Section 6.16(d)
prior to such adjustment, Seller shall repay the difference between the amount
paid and the adjusted amount of the refund or benefit, as the case may be, to
Purchaser, if the adjusted amount is less than the amount paid by Purchaser to
Seller pursuant to this Section 6.16(d), and Purchaser shall pay the difference
between the adjusted amount of the refund or benefit and the amount paid by
Purchaser to Seller, if the amount paid by Purchaser to Seller is less than the
adjusted amount.
(e) Cooperation and Assistance.
(i) Seller and Purchaser shall cooperate with each other in
the filing of any Tax Returns and the conduct of any audit or
other proceeding. They each shall execute and deliver such powers
of attorney and make available such other documents as are
reasonably necessary to carry out the intent of this Section
6.16.
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(ii) If either party is liable under this Section 6.16,
including any amounts due pursuant to Section 6.16(d), for any
portion of a Tax shown due on any Tax Return required to be filed
by the other party pursuant to this Section 6.16, the party
obligated to file such Tax Return pursuant to this Section 6.16
shall deliver a copy of the relevant portions of such Tax Return
(taking into account any extensions, if applicable) to the liable
party. If the parties disagree as to the treatment of any item
shown on such Tax Return or with respect to any calculation with
respect to any Tax Return to be filed pursuant to this Section
6.16, an independent public accounting firm acceptable to both
Seller and Purchaser shall determine, consistent with Seller's
past practice, how the disputed item is to be treated on such Tax
Return.
(iii) Upon request or upon payment, each party shall deliver
to the tax director of the other party certified copies of all
receipts for any foreign Tax with respect to which such other
party or any of its Affiliates could claim a foreign tax credit
and any supporting documents required in connection with claiming
or supporting a claim for such a foreign tax credit.
(iv) Seller and Purchaser shall retain records, documents,
accounting data and other information in whatever form that are
necessary for the preparation and filing, or for any tax audit,
of any and all Tax Returns with respect to any taxes that relate
to taxable periods that do not begin after the Closing Date. Such
retention shall be in accordance with the record retention policy
of the respective party. Each party shall give any other party
reasonable access to all such records, documents, accounting data
and other information as well as to its Personnel and premises to
the extent necessary for a reasonable review or a tax audit of
such tax Returns and relevant to an obligation under this Section
6.16.
(f) Tax Controversies. Each of Seller and Purchaser shall
promptly notify the other in writing promptly (but in no event later than 30
days) (a "Notification") upon receipt of notice of any pending or threatened
audits or assessments with respect to Taxes for which such other party (or any
of its Affiliates) is liable under Section 6.16. Each party shall be entitled to
take control of the complete defense of any tax audit or administrative or court
proceeding (a "Tax Claim") relating to Taxes for which it may be liable, and to
employ counsel of its choice at its expense; provided, that Seller and Purchaser
shall jointly control the defense of any tax audit or administrative or court
proceeding relating to Taxes with respect to a Straddle Period. Notwithstanding
the immediately preceding sentence, each party shall be entitled to take control
of the complete defense of any Tax Claim relating to Taxes for which it is
obligated to file a Tax Return (but does not have any indemnification obligation
hereunder) under this Section 6.16 (or by Law), and to employ counsel of its
choice at its expense; provided, that such party unconditionally releases in
writing the other party from its indemnification obligation hereunder with
respect to such Tax Claim; provided further, that such party shall take control
of such Tax Claim within sixty (60) days of the earlier of (x) the date on which
such Notification is provided or (y) the date such Notification is due pursuant
to the first sentence of this Section 6.16(f). If one party takes control of any
such audit or proceeding, the other party shall be entitled to participate, at
its expense, in the defense of such audit or proceeding, and the party
controlling
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such audit or proceeding shall consider in good faith any suggestions made or
points raised by the other party. Neither party may agree to settle any claim
for Taxes for which the other may be liable without the prior written consent of
such other party, which consent shall not be unreasonably withheld. This Section
6.16(f) shall govern to the extent it would otherwise be inconsistent with
Section 9.3(a).
ARTICLE VII
CONDITIONS TO CLOSING
7.1. Conditions Precedent to Obligations of Purchaser and Seller
The respective obligations of Purchaser and Seller to consummate and
cause the consummation of the transactions contemplated by this Agreement shall
be subject to the satisfaction (or waiver by the party for whose benefit such
condition exists) at or prior to the Closing Date of each of the following
conditions:
(a) No Injunction, etc. No Governmental Authority shall have
enacted, issued, promulgated, enforced or entered any Law which is in
effect on the Closing Date which has the effect of prohibiting the
Purchase or making the Purchase illegal;
(b) Regulatory Authorizations. (i) All Consents of any
Governmental Authorities listed in Schedule 7.1(b) shall have been
obtained, and (ii) the applicable waiting period under the HSR Act shall
have expired or been terminated; and
(c) European Union Approval. Insofar as the transactions
contemplated hereunder constitute a concentration with a Community
dimension within the scope of Council Regulation (EEC) No. 4064/89 (as
amended) (the "Regulation"), in relation to such transactions either:
(i) the European Commission shall have issued a decision
under Article 6(1)(a) that the concentration is not within the
scope of the Regulation; or
(ii) the European Commission shall have issued a decision
under Article 6(1)(b) of the Regulation (or shall have been
deemed to have made a decision under Article 10(1) of the
Regulation) declaring the concentration compatible with the
Common Market; or
(iii) following the initiation of proceedings under Article
6(1)(c) of the Regulation, the European Commission shall have
issued a decision pursuant to Article 8(2) of the Regulation
declaring the concentration compatible with the Common Market; or
(iv) the transactions shall have been deemed compatible with
the Common Market in accordance with Article 10(6) of the
Regulation.
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7.2. Conditions Precedent to Obligation of Seller
The obligation of Seller to consummate and cause the consummation of
the transactions contemplated by this Agreement shall be subject to the
satisfaction (or waiver by Seller) at or prior to the Closing Date of each of
the following conditions:
(a) Accuracy of Purchaser's Representations and Warranties. The
representations and warranties of Purchaser contained in this Agreement
that are qualified as to materiality shall be true and correct and the
representations and warranties of Purchaser set forth in this Agreement
that are not so qualified shall be true and correct in all material
respects, in each case on the date of this Agreement and on the Closing
Date as though made on the Closing Date, except to the extent such
representations and warranties by their terms speak as of an earlier
date, in which case they shall be true and correct, or true and correct
in all material respects, as the case may be, as of such date, except
for such failures to be true and correct (other than such failures
relating to Assumed Liabilities) (considered for this purpose only, and
not for purposes of determining whether they are true and correct in the
first instance, without regard to any materiality qualifiers (other than
dollar thresholds), such as "material" or "Purchaser Material Adverse
Effect" contained therein) which would not, individually or in the
aggregate, have a Purchaser Material Adverse Effect; and Seller shall
have received a certificate signed by an authorized officer of Purchaser
to such effect.
(b) Covenants of Purchaser. Purchaser shall have complied in all
material respects with all covenants contained in this Agreement to be
performed by it prior to the Closing; and Seller shall have received a
certificate signed by an officer of Purchaser to such effect.
(c) Local Asset Transfer Agreements. Purchaser shall have
executed and delivered or caused its relevant Subsidiaries to execute
and deliver, any local asset transfer agreements that Seller and
Purchaser have agreed to execute and deliver pursuant to Section 2.3 of
this Agreement.
(d) Transition Services Agreement. Purchaser shall have executed
and delivered the Transition Services Agreement.
(e) Intellectual Property Agreements. Purchaser shall have
executed and delivered a Patent Ownership and License Agreement and the
Technology Ownership and License Agreement, each in the form of the
agreements attached hereto as Exhibit F.
(f) Trademark License Agreement. Purchaser shall have executed
and delivered a Trademark Ownership and License Agreement in the form of
the agreement attached hereto as Exhibit E.
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7.3. Conditions Precedent to Obligation of Purchaser
The obligation of Purchaser to consummate and cause the consummation
of the transactions contemplated by this Agreement shall be subject to the
satisfaction (or waiver by Purchaser) at or prior to the Closing Date of each of
the following conditions:
(a) Accuracy of Representations and Warranties of Seller. The
representations and warranties of Seller contained in this Agreement
that are qualified as to materiality shall be true and correct and the
representations and warranties of Seller that are not so qualified shall
be true and correct in all material respects, in each case as though
made on the Closing Date, except to the extent such representations and
warranties by their terms speak as of an earlier date, in which case
they shall be true and correct, or true and correct in all material
respects, as of such date, except for such failures to be true and
correct (other than such failures relating to Excluded Liabilities)
(considered for this purpose only, and not for purposes of determining
whether they are true and correct in the first instance, without regard
to any materiality qualifiers (other than dollar thresholds), such as
"material" or "Seller Material Adverse Effect" contained therein) which
(i) would not, individually or in the aggregate, have a Seller Material
Adverse Effect or (ii) arose through the conduct and operation of the
Business in the ordinary course consistent with past practice; and
Purchaser shall have received a certificate signed by an authorized
officer of Seller to such effect.
(b) Covenants of Seller. Seller shall have complied in all
material respects with all covenants contained in this Agreement to be
performed by it prior to the Closing; and Purchaser shall have received
a certificate signed by an officer of Seller to such effect.
(c) Local Asset Transfer Agreements. Seller shall have executed
and delivered or caused its relevant Subsidiaries to execute and
deliver, the local asset transfer agreements that Seller and Purchaser
have agreed to execute and deliver pursuant to Section 2.3 of this
Agreement.
(d) Transition Services Agreement. Seller shall have executed and
delivered the Transition Services Agreement.
(e) Intellectual Property Agreement. Seller shall have executed
and delivered a Patent Ownership and License Agreement and the
Technology Ownership and License Agreement, each in the form of the
agreements attached hereto as Exhibit E.
(f) Trademark License Agreement. Seller shall have executed and
delivered Trademark Ownership and License Agreement in the form of the
agreement attached hereto as Exhibit F.
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ARTICLE VIII
CLOSING
8.1. Closing Date
Unless this Agreement shall have been terminated and the
transactions herein shall have been abandoned pursuant to Article X hereof, the
closing of the transactions contemplated by this Agreement (the "Closing") shall
take place at the offices of Simpson Thacher & Bartlett in New York at 10:00
a.m., New York City time, and in such other places as are necessary to effect
the transactions to be consummated at the Closing, on the last Business Day (but
in no event earlier than the third Business Day after such satisfaction or
waiver) of the calendar month in which all of the conditions to Closing set
forth in Article VII hereof are satisfied or waived, or such other date, time
and place as shall be agreed upon by Seller and Purchaser (the actual date and
time being herein called the "Closing Date"). Notwithstanding the foregoing, the
Closing shall for all purposes be deemed to occur at 11:59 p.m., New York City
time, on the Closing Date.
8.2. Purchaser Obligations
At the Closing, Purchaser shall execute, deliver to Seller and/or
file, or shall cause one or more of its Designees to execute, deliver to Seller
and/or file the following in such form and substance (except for clause (a)) as
may be indicated in any applicable Schedule hereto, or as are reasonably
acceptable to Seller:
(a) the Purchase Price as provided in Section 3.2 hereof;
(b) the documents described in Section 7.2 hereof;
(c) the assignment and conveyance instruments referred to in
Section 2.3 and such other assignment and conveyance documents as shall
be necessary to convey the Purchased Assets and consummate the other
transactions contemplated hereby in each jurisdiction; and
(d) such other documents and instruments as counsel for Purchaser
and Seller mutually agree to be reasonably necessary to consummate the
transactions described herein.
8.3. Seller Obligations
At the Closing, Seller shall execute, deliver to Purchaser and/or
file, or Seller shall cause one or more of the Other Sellers to execute and
deliver to Purchaser and/or to file, the following in such form and substance as
may be indicated in any applicable Schedule hereto, or as are reasonably
acceptable to Purchaser:
(a) the documents described in Section 7.3 hereof;
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(b) such instruments of conveyance with respect to the Purchased
Assets and Assumed Liabilities as are referred to in Section 2.3 and
such other assignment and conveyance documents as shall be necessary to
convey the Purchased Assets and consummate the other transactions
contemplated hereby in each jurisdiction; and
(c) such other documents and instruments as counsel for Purchaser
and Seller mutually agree to be reasonably necessary to consummate the
transactions described herein.
ARTICLE IX
INDEMNIFICATION
9.1. Indemnification
(a) Following the Closing and subject to the terms and conditions
of this Article IX, Seller shall for itself (where it is acting as
Seller) and otherwise as agent for the Other Sellers indemnify, defend
and hold harmless Purchaser and its Subsidiaries and their respective
officers, directors, employees, stockholders, assigns and successors
(each, a "Purchaser Indemnified Party") from and against, and shall
reimburse each Purchaser Indemnified Party for, all actual losses (but
not lost profits or consequential, punitive, special or indirect
damages, except to the extent awarded by a court of competent
jurisdiction in respect of a third party claim), damages, liabilities,
costs and expenses, including interest, penalties, court costs and
reasonable attorneys' fees and expenses, imposed upon or incurred by
such Purchaser Indemnified Party ("Purchaser Losses"), with respect to
(i) any failure of any representation or warranty of Seller set forth in
this Agreement to be true and correct as of the Closing Date (without
regard to any materiality qualifiers (other than dollar thresholds)),
such as "material" or "Seller Material Adverse Effect" contained
therein) other than with respect to Excluded Liabilities, (ii) any
breach by Seller of any covenant or agreement made by Seller herein or
(iii) any Excluded Liabilities, it being understood that each Purchaser
Loss shall be calculated net of any Tax benefit realized by such
Purchaser Indemnified Party, as set forth more fully in Section 9.3(b).
Purchaser shall not be entitled to recover twice for the same Purchaser
Loss.
(b) Following the Closing and subject to the terms and conditions
provided in this Article IX, Purchaser (on behalf of itself and as agent
for the Designees) shall indemnify, defend and hold harmless Seller and
its Subsidiaries and their respective officers, directors, employees,
stockholders, assigns and successors (each, a "Seller Indemnified
Party") from and against, and shall reimburse each Seller Indemnified
Party for, all actual losses (but not lost profits or consequential,
punitive, special or indirect damages, except to the extent awarded by a
court of competent jurisdiction in respect of a third party claim),
damages, liabilities, costs and expenses, including interest, penalties,
court costs and reasonable attorneys' fees and expenses, imposed upon or
incurred by such Seller Indemnified Party ("Seller Losses"), with
respect to (i) the failure of any representation or warranty of
Purchaser set forth in this Agreement to be true and correct as of the
Closing Date (without regard to any materiality qualifiers (other than
dollar
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thresholds), such as "material" or "Purchaser Material Adverse Effect"
contained therein) other than with respect to Assumed Liabilities, (ii)
any breach of any covenant or agreement made by Purchaser herein and
(iii) any of the Assumed Liabilities, it being understood that such
Seller Losses shall be calculated net of any Tax benefit realized by any
Seller Indemnified Party, as set forth more fully in Section 9.3(b).
Seller shall not be entitled to recover twice for the same Seller Loss.
9.2. Certain Limitations
(a) Notwithstanding anything contained herein to the contrary,
the maximum aggregate liability of Seller (on behalf of itself and as
agent for the Other Sellers) to all Purchaser Indemnified Parties taken
together for all Purchaser Losses under Section 9.1(a)(i) (other than
Purchaser Losses arising out of breaches of the representations set
forth in Section 4.12 or the obligations set forth in Section 6.16 of
this Agreement) by Purchaser Indemnified Parties shall be limited to a
maximum of $340 million.
(b) Notwithstanding anything contained herein to the contrary,
Seller shall not be obligated to make any indemnification payment under
Section 9.1(a)(i) unless and until the aggregate Purchaser Losses (other
than Purchaser Losses arising out of breaches of the representations set
forth in Section 4.12 or the obligations set forth in Section 6.16 of
this Agreement) sustained by Purchaser Indemnified Parties collectively
(calculated as specified in Section 9.1(a)) exceed $34 million and then
any indemnification with respect to Purchaser Losses (other than
Purchaser Losses arising out of breaches of the representations set
forth in Section 4.12 or the obligations set forth in Section 6.16 of
this Agreement) shall be made by Seller only to the extent of such
excess over such $34 million.
(c) The representations and warranties of Seller contained in (i)
Article IV (other than Sections 4.3, 4.12, 4.13 and 4.13A) and Article V
of this Agreement shall survive the Closing until the eighteen month
anniversary of the Closing Date, (ii) Sections 4.12, 4.13 and 4.13A of
this Agreement shall survive the Closing until 60 days following the
expiration of the applicable statute of limitations in respect of such
matters and (iii) Section 4.3 shall survive the Closing until the
twenty-fifth anniversary of the Closing Date. The covenants and
agreements contained in this Agreement shall survive the Closing until
the date or dates specified therein or, if not so specified, until the
expiration of the applicable statute of limitations with respect to the
matters contained therein.
(d) The obligations to indemnify and hold harmless a party hereto
pursuant to Section 9.1(a)(i) or 9.1(b)(i) shall terminate when the
applicable representation or warranty terminates pursuant to Section
9.2(c); provided, however, that such obligations to indemnify and hold
harmless shall not terminate with respect to any item as to which the
Person to be indemnified shall have, before the expiration of the
applicable survival period, previously made a claim by delivering a
written notice (stating in reasonable detail the basis of such claim) to
the indemnifying Person.
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9.3. Procedures for Third-Party Claims and Excluded Liabilities
(a) General Procedures. Promptly (but in no event later than 30
days) after the receipt by any Indemnified Party of a notice of any
claim, action, suit or proceeding by any third party that may be subject
to indemnification hereunder, including any claim relating to any
Excluded Liability, such Indemnified Party shall give written notice of
such claim to the indemnifying party hereunder (the "Indemnifying
Party"), stating the nature and basis of the claim and the amount
thereof, to the extent known, along with copies of the relevant
documents evidencing the claim and the basis for indemnification sought.
Failure of the Indemnified Party to give such notice shall not relieve
the Indemnifying Party from liability on account of this
indemnification, except if and to the extent that the Indemnifying Party
is actually prejudiced thereby. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, promptly after the Indemnified
Party's receipt thereof, copies of all notices and documents (including
court papers) received by the Indemnified Party relating to the claim.
The Indemnifying Party shall have the right to assume the defense of the
Indemnified Party against the third party claim with counsel reasonably
acceptable to the Indemnified Party. So long as the Indemnifying Party
has assumed the defense of the third party claim in accordance herewith
and notified the Indemnified Party in writing thereof, (i) the
Indemnified Party may retain separate co-counsel at its sole cost and
expense and participate in the defense of the third party claim, it
being understood the Indemnifying Party shall pay all costs and expenses
of counsel for the Indemnified Party for all periods prior to such time
as the Indemnifying Party has notified the Indemnified Party that it has
assumed the defense of such third party claim and after such time as the
Indemnified Party has notified the Indemnifying Party of such third
party claim, (ii) the Indemnified Party shall not file any papers or
consent to the entry of any judgment or enter into any settlement with
respect to the third party claim without prior written consent of the
Indemnifying Party (not to be unreasonably withheld or delayed) and
(iii) the Indemnifying Party will not consent to the entry of any
judgment or enter into any settlement with respect to the third party
claim (other than a judgment or settlement that is solely for money
damages and is accompanied by a release of all indemnified claims
against the Indemnified Party) without the prior written consent of the
Indemnified Party (not to be unreasonably withheld or delayed). Whether
or not the Indemnifying Party shall have assumed the defense, such party
shall not be obligated to indemnify the Indemnified Party hereunder for
any settlement entered into without the Indemnifying Party's prior
written consent, which consent shall not be unreasonably withheld or
delayed.
(b) Equitable Remedies. In the case of (i) any third party claims
where the Indemnifying Party reasonably believes, and (ii) any Excluded
Liabilities where Seller is engaged in litigation or dispute resolution
or settlement negotiations and Seller reasonably believes, that it would
be appropriate to settle such claim using equitable remedies (i.e.
remedies involving the future activity and conduct of the Business), the
Indemnifying Party and the Indemnified Party shall work together in good
faith to agree to a settlement that would have been reasonable for
Seller to agree to if Seller continued to own the Business, including
any settlement that involves the licensing of Business Intellectual
Property, accommodations on pricing terms and similar matters affecting
the
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future activity and conduct of the business. No party shall be under any
obligation to agree to any such settlement.
(c) Treatment of Indemnification Payments. Any payment made
pursuant to the indemnification obligations arising under this Agreement
shall be treated as an adjustment to the Purchase Price. Any indemnity
payment under this Agreement shall be decreased by any amounts actually
recovered by the Indemnified Party under third party insurance policies
with respect to such Loss. If the amount of any Loss for which
indemnification is provided under this Agreement (an "Indemnity Claim")
gives rise to a current deduction to the party making the claim, the
indemnity payment shall be reduced by the amount of the Tax Benefit of
such current deduction available to the party making the claim;
provided, however that the foregoing shall not apply until such time as
the aggregate Losses for which Purchaser or Seller, as the case may be,
is entitled to indemnification hereunder shall exceed $10 million, at
which time all such Losses shall be so reduced. "Tax Benefit" means,
with respect to any indemnity payment, the excess, if any, of (i) the
Indemnified Party's pro forma tax Liability for the taxable year in
which it accrues the indemnity payment, calculated on the basis of the
facts and circumstances actually pertaining to the Indemnified Party,
but assuming for purposes of this calculation that the Indemnified Party
had neither suffered the loss giving rise to the Indemnification Claim
nor accrued the indemnity payment, over (ii) the Indemnified Party's
Adjusted Actual Tax Liability for such taxable year in each case as
calculated in good faith by the Indemnified Party. The "Adjusted Actual
Tax Liability" is the actual Tax Liability of the Indemnified Party,
taking into account the items excluded from the calculation in clause
(i).
9.4. Certain Procedures
(a) The Indemnified Party shall notify the Indemnifying Party
promptly of its discovery of any matter giving rise to a claim for
indemnification pursuant hereto. The Indemnified Party shall cooperate
and assist the Indemnifying Party in determining the validity of any
claim for indemnity by the Indemnified Party and in otherwise resolving
such matters, including by providing the assistance referred to in
Section 6.5(g). In connection with any actual or threatened claims by,
or actual or threatened litigation or other disputes with, third parties
relating to Excluded Liabilities (including the matters set forth in
Schedule 9.4(a)), any such claims, litigation and disputes being
referred to as "claims" for purposes of this Section 9.4), Purchaser
shall cooperate in the defense by Seller of such claim (and Purchaser
and Seller agree with respect to all Excluded Liabilities that a common
interest privilege agreement exists between them), including, (i)
permitting Seller to discuss the claim with such officers, employees,
consultants and representatives of Purchaser as Seller reasonably
requests, (ii) permitting Seller to have reasonable access to the
properties, books, records, papers, documents, plans, drawings,
electronic mail, databases and computers of Purchaser at reasonable
hours to review information and documentation relative to the
properties, books, records, papers, documents, plans, drawings,
electronic mail, databases and computers, contracts, commitments and
other records of Purchaser, (iii) providing to Seller copies of
documents and samples of products as Seller reasonably requests, (iv)
permitting Seller
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to conduct privileged interviews and witness preparation of officers,
employees and representatives of the Business as Seller reasonably
requests, (v) preserving all properties, books, records, papers,
documents, plans, drawings, electronic mail and databases of the
Business relating to matters relating to Excluded Liabilities, until
notified in writing by Seller that such preservation is no longer
required, and preserving all other such information of the Business
until the earlier of (A) five years from the Closing Date and (B) the
time when Purchaser or any of its Designees is notified in writing by
Seller that such preservation is no longer required (vi) promptly
collecting documents and extracting information from documents for
Seller's review and use, as Seller reasonably requests, or allowing
Seller's representatives to do the same, (vii) notifying Seller promptly
of receipt by Purchaser of any subpoena or other third party request for
documents or interviews and testimony, (viii) providing to Seller copies
of any documents produced by Purchaser in response to or compliance with
any subpoena or other third party request for documents, and (ix)
permitting Seller to conduct such other reasonable investigations and
studies, and take such other actions, as are reasonably necessary in
connection with Seller's defense or investigation of such claim;
provided that any such investigation shall only be upon reasonable
notice, shall not unreasonably disrupt personnel and operations of the
Business and shall be at Seller's sole expense, including with respect
to all reasonable out-of-pocket costs and expenses of Purchaser's
Subsidiaries, officers, employees, agents and representatives. In
connection with any claims, except to the extent inconsistent with
Purchaser's obligations under applicable law and except to the extent
that to do so would subject Purchaser or its employees, agents or
representatives to criminal or civil sanctions, (i) unless ordered by a
court to do otherwise, Purchaser shall not produce documents to a third
party until Seller has been provided a reasonable opportunity to review,
copy and assert privileges covering such documents, (ii) the transfer to
Purchaser by Seller of documents covered by Seller's attorney/client or
work product privileges shall not constitute a waiver of such
privileges, (iii) unless otherwise ordered by a court, Purchaser shall
withhold from production to any third party any documents as to which
Seller asserts a privilege, (iv) Purchaser shall defend in court any
such privilege asserted by Seller and (v) Purchaser shall permit Seller
to prepare any employees of Purchaser required or requested to testify
or otherwise be deposed or interviewed in connection with any claim and
to be present during any such testimony or interviews. The foregoing
provisions shall apply to any claims pursuant to this Article IX by any
Indemnified Party against any Indemnifying Party, mutatis mutandis. The
requesting party shall bear all reasonable out-of-pocket costs and
expenses of Purchaser's Subsidiaries, officers, employees, agents and
representatives in connection with the foregoing.
(b) It is agreed and acknowledged by Seller and Purchaser that
Seller as principal and on behalf of itself and the other Sellers will
give the representations and warranties set out in Article IV to
Purchaser as principal and on behalf of the Designees. Seller (on its
own behalf and as agent for each Other Seller) and Purchaser (on its own
behalf and as agent for each Designee) have agreed that any claim in
respect thereof shall be conducted by Purchaser and Seller in their
capacities as agent and that such claims shall only be enforceable by
Purchaser either for itself (where it is
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acting as purchaser) or as agent for the relevant Designee, as the case
may be, against Seller for itself (where it is acting as seller) or as
agent for the relevant Other Seller, as the case may be, under the terms
of this Agreement. Notwithstanding anything in this Agreement or in any
Local Asset Purchase Agreement to the contrary, no Designee shall make,
and Purchaser shall procure that no Designee shall make, any claim for
indemnification or otherwise in any circumstances whatsoever against any
Other Seller other than through the agency of Purchaser against Seller
as agent for such Other Seller pursuant to the terms of this Agreement,
and Purchaser shall indemnify Seller for itself and as agent for the
Other Sellers against any claim for indemnification made against any
Other Seller contrary to this Section 9.4(b). No Other Seller shall
make, and Seller shall procure that no Other Seller shall make, any
claim for indemnification or otherwise in any circumstances whatsoever
against any Designee other than through the agency of Seller against
Purchaser as agent for such Designee pursuant to the terms of this
Agreement, and Seller shall indemnify Purchaser for itself and as agent
for each Designee against any claim for indemnification or otherwise
made against any Designee contrary to this Section 9.4(b).
9.5. Remedies Exclusive
Following the Closing, the remedies set forth in this Article IX
shall constitute the sole and exclusive remedy and shall be in lieu of any other
remedies that may be available to the Indemnified Parties under any other
agreement or pursuant to any statutory or common law (including Environmental
Law) with respect to any Losses of any kind or nature incurred directly or
indirectly resulting from or arising out of any of this Agreement, the
transactions contemplated hereby, the Business, the Purchased Assets, the
Assumed Liabilities or the Excluded Liabilities (except in the case of fraud).
Without limiting the foregoing it is understood and agreed that, following the
Closing, neither Purchaser nor its Subsidiaries or Affiliates shall have any
claim in connection with this Agreement or the transactions contemplated hereby
against any Subsidiary or Affiliate of Seller, and neither Seller nor its
Subsidiaries or Affiliates shall have any claim in connection with this
Agreement or the transactions contemplated hereby against any Subsidiary or
Affiliate of Purchaser. Seller and Purchaser each hereby waive any provision of
any applicable law to the extent that it would limit or restrict the agreement
contained in this Section 9.5.
9.6. Mitigation
Purchaser and Seller shall cooperate with each other with respect to
resolving any claim or liability with respect to which one party is obligated to
indemnify the other party hereunder, including by making commercially reasonable
efforts to mitigate or resolve any such claim or liability. In the event that
Purchaser and Seller shall fail to make such commercially reasonable efforts to
mitigate or resolve any claim or liability, then notwithstanding anything else
to the contrary contained herein, the other party shall not be required to
indemnify any Person for any loss, liability, claim, damage or expense that
could reasonably be expected to have been avoided if Purchaser or Seller, as the
case may be, had made such efforts.
9.7. Certain Environmental Matters
(a) Regarding any Environmental Liability, any Losses relating to
any breach of any representation or warranty included in Section 4.16
hereof, or any Losses
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otherwise relating to Environmental Laws that in each case would
otherwise be subject to indemnification by Seller under this Article IX
("Indemnified Environmental Losses"), notwithstanding any provision of
this Agreement to the contrary, such Indemnified Environmental Losses
shall be subject to indemnification hereunder only to the extent
consistent with the Indemnified Party's compliance with its obligations
under this Section 9.7. With respect to any Indemnified Environmental
Losses, Purchaser and its controlled Affiliates shall at all times act
in a commercially reasonable manner (without taking into account the
benefit of this indemnity) to minimize such Indemnified Environmental
Losses, including those Indemnified Environmental Losses relating to any
environmental correction, investigation, monitoring or remediation
("Remedial Action"). Provided they do not materially impair the current
operations or use of the affected facility, such reasonable actions to
minimize Indemnified Environmental Losses shall include (i) not
undertaking any environmental correction, monitoring or remediation in
excess of that reasonably required by any applicable Law or by a
relevant Governmental Authority, (ii) making commercially reasonable
efforts to implement the least costly Remedial Action permitted by
Environmental Laws and acceptable to the Governmental Authorities with
jurisdiction over the Remedial Action, (iii) performing Remedial Actions
to non-residential standards when permitted by Environmental Laws and
acceptable to the Governmental Authorities with jurisdiction over the
Remedial Action, and (iv) using deed restrictions or institutional
controls provided, however, that in the event Purchaser elects to
undertake any Remedial Actions to a higher standard than those outlined
in (i) through (iv) above, the Indemnified Environmental Losses in such
case shall be limited to amounts that would have been incurred had the
Remedial Action been conducted to the standards outlined in (i) through
(iv) above. Notwithstanding the foregoing, to the extent that a Remedial
Action which is an Indemnified Environmental Loss cannot be performed to
non-residential standards by reason of an actual or proposed change to
residential use of the Purchased Assets following the Closing Date,
Seller's indemnity obligations under this Article IX shall be limited to
Indemnified Environmental Losses that would have been incurred to
achieve non-residential remedial standards. Notwithstanding the
foregoing, following the Closing, without any prejudice to any right to
indemnification under this Article IX, Purchaser and its Subsidiaries
may undertake environmental investigations including invasive or
destructive environmental sampling, testing or analysis.
(b) Seller shall have the right to review and comment in advance
on any proposed plan or scope of work for any Remedial Action for any
Indemnified Environmental Losses and Purchaser shall incorporate any
reasonable comments that will not materially impair the operation or use
of the affected facility or materially delay the Remedial Action. Seller
shall also have the right to approve Purchaser's choice of consultants,
such approval not to be unreasonably delayed or withheld. Purchaser's
conduct of any Remedial Action is subject to the duty of Purchaser to
consult in good faith with Seller and to provide copies to Seller of all
relevant documentation generated in connection with the management of
any Remedial Action. Purchaser and Seller shall cooperate with each
other in any Remedial Action for any Indemnified Environmental Losses
and they shall provide each other with copies of all reports, studies,
maps, site plans and other information in their possession relating to
site conditions or Remedial
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Action reasonably requested by the other. In the event of a dispute
between Seller and Purchaser over the design of any Remedial Action,
their respective environmental consultants shall attempt to promptly
reach agreement within sixty (60) days of the start of discussions to
reach agreement on remedial or corrective methods and in the event that
they cannot reach agreement, the consultants shall agree within thirty
(30) days on the appointment of a third environmental consultant whose
decision shall be binding upon the parties. The cost of such third
environmental consultant shall be shared equally by Seller and
Purchaser.
ARTICLE X
TERMINATION
10.1. Termination Events
Without prejudice to other remedies which may be available to the
parties by law or this Agreement, this Agreement may be terminated and the
transactions contemplated herein may be abandoned:
(a) by mutual consent of the parties hereto;
(b) after August 15, 2001 (the "Outer Date"), by any party by
notice to the other party if the Closing shall not have been consummated
on or prior to the Outer Date other than for a reason specified in
Section 10.1(e); provided, however, that the right to terminate this
Agreement under this Section 10.1(b) shall not be available (i) to any
party whose breach of any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing to occur on or
before such date or (ii) in the event that the Closing shall not have
occurred as a result of a failure of any representation to be true and
correct, (A) if the terminating party knew of such failure prior to the
date of this Agreement on the basis of written information from the
other party or (B) to the party who made such representation; or
(c) after May 31, 2001, (the "Inner Date"), by Seller by notice
to Purchaser if, as of the Inner Date, (i) the condition set forth in
Section 7.1(b)(ii) shall not have been satisfied, or (ii) the United
States Federal Trade Commission (the "FTC") or the Antitrust Division of
the United States Department of Justice (the "DOJ"), on the one hand,
and Purchaser, on the other hand, shall not have entered into an
agreement with respect to a negotiated settlement of the FTC's or the
DOJ's objections, if any, to the Purchase and the other transactions
contemplated by this Agreement; provided, however, that Seller shall not
be entitled to terminate this Agreement or abandon the transactions
contemplated herein pursuant to this Section 10.1(c) if Seller is not in
substantial compliance with any formal request for additional
information or documentary material under the HSR Act; or
(d) after the Inner Date, by Seller by notice to Purchaser if, as
of the Inner Date, the conditions set forth in Section 7.1(c) shall not
have been satisfied.
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(e) after the Outer Date, by any party by notice to the other
party if the condition set forth in Section 7.1(b)(ii) or the condition
set forth in Section 7.1(c) shall not have theretofore been satisfied or
the FTC or the DOJ, on the one hand, and Purchaser, on the other hand,
shall not have entered into an agreement with respect to a negotiated
settlement of the FTC's or the DOJ's objections, if any, to the Purchase
and the other transactions contemplated by this Agreement; provided,
however, that no party shall be entitled to terminate this Agreement or
abandon the transactions contemplated herein pursuant to this Section
10.1(e) in the case of a termination other than on account of the
failure of the condition set forth in Section 7.1(c) to be satisfied if
such party is not in substantial compliance with any formal request for
additional information or documentary material under the HSR Act.
(f) by any party, if a final order, decree or ruling enjoining or
otherwise prohibiting any of the transactions contemplated by this
Agreement has been issued by (i) any federal or state court in the
United States having jurisdiction or (ii) any similar court or
Governmental Authority in the European Union (unless such order, decree
or ruling has been withdrawn, reversed or otherwise made inapplicable).
10.2. Effect of Termination
In the event of any termination of the Agreement as provided in
Section 10.1 above, this Agreement shall forthwith become wholly void and of no
further force and effect and there shall be no liability on the part of
Purchaser or Seller, except that (a) the obligations of Purchaser and Seller
under Sections 6.2(b), 6.4, 10.3 and Article XI of this Agreement shall remain
in full force and effect and (b) except as set forth in Section 10.3(b), such
termination shall not relieve either party of any liability for any breach of
any representation, warranty, covenant or agreement contained in this Agreement.
10.3. Termination Fee
(a) In the event that this Agreement is terminated by any party
pursuant to Section 10.1(c) or Section 10.1(d) or Section 10.1(e) or, if
applicable, on the basis of antitrust or competition objections, Section
10.1(f), Purchaser shall pay to Seller a fee equal to $40,000,000 (forty
million dollars) (the "Termination Fee"). The Termination Fee shall be
due and payable, without set-off, in immediately available funds within
five Business Days following the termination of this Agreement and, if
not paid at such time, shall bear interest at the Prime Rate on the date
of the termination of this Agreement.
(b) Notwithstanding any other provision of this Agreement,
neither party shall have any right to sue or any remedy (other than
Seller's right as specified in Section 10.3(a)) for breach or default or
alleged breach or default by the other party of its obligations under
Section 6.3. Seller and Purchaser each hereby waive any provision of any
applicable Law to the extent that it would limit or restrict the
agreement contained in this Section 10.3(b).
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ARTICLE XI
MISCELLANEOUS AGREEMENTS OF THE PARTIES
11.1. Dispute Resolution
Except as otherwise set forth herein, resolution of any and all
disputes arising from or in connection with this Agreement, whether based on
contract, tort, or otherwise (collectively, "Disputes"), shall be exclusively
governed by and settled in accordance with the provisions of this Section 11.1.
(a) Negotiation. The parties shall make a good faith attempt to
resolve any Dispute arising out of or relating to this Agreement through
negotiation. Within thirty (30) days after notice of a Dispute is given
by either party to the other party, each party shall select a first tier
negotiating team comprised of director or general manager level
employees of such party and shall meet and make a good faith attempt to
resolve such Dispute and shall continue to negotiate in good faith in an
effort to resolve the Dispute or renegotiate the applicable section or
provision without the necessity of any formal proceedings. If the first
tier negotiating teams are unable to agree within thirty (30) days of
their first meeting, then each party shall select a second tier
negotiating team comprised of vice president level employees of such
party and shall meet within thirty (30) days after the end of the first
thirty (30) day negotiating period to attempt to resolve the matter.
During the course of negotiations under this Section 11.1, all
reasonable requests made by one party to the other for information,
including requests for copies of relevant documents, will be honored.
The specific format for such negotiations will be left to the discretion
of the designated negotiating teams but may include the preparation of
agreed upon statements of fact or written statements of position
furnished to the other party. All negotiations between the parties
pursuant to this Section 11.1(a) shall be treated as compromise and
settlement negotiations. Nothing said or disclosed, nor any document
produced, in the course of such negotiations that is not otherwise
independently discoverable shall be offered or received as evidence or
used for impeachment or for any other purpose in any current or future
litigation.
(b) Failure to Resolve Disputes. In the event that any Dispute
arising out of or related to this Agreement is not settled by the
parties within fifteen (15) days after the first meeting of the second
tier negotiating teams under Section 11.1(a), the parties may seek any
remedies to which they may be entitled in accordance with the terms of
this Agreement.
(c) Proceedings. Nothing herein, however, shall prohibit either
party from initiating litigation or other judicial or administrative
proceedings if such party would be substantially harmed by a failure to
act during the time that such good faith efforts are being made to
resolve the Dispute through negotiation. In the event that litigation is
commenced under this Section 11.1(c), the parties agree to continue to
attempt to resolve any Dispute according to the terms of Sections
11.1(a) during the course of such litigation proceedings under this
Section 11.1(c).
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(d) Pay and Dispute. Except as provided herein, in the event of
any dispute regarding payment of a third-party invoice (subject to
standard verification of receipt of products or services), the party
named in a third party's invoice must make timely payment to such third
party, even if the party named in the invoice desires to pursue the
dispute resolution procedures outlined in this Section 11.1. If the
party that paid the invoice is found pursuant to this Section 11.1 to
not be responsible for such payment, such paying party shall be entitled
to reimbursement, with interest accrued at a compound annual rate of the
Prime Rate plus 2%, from the party found responsible for such payment.
11.2. Notices
All communications provided for hereunder shall be in writing and
shall be deemed to be given when delivered in person or by private courier with
receipt, when telefaxed and received, or seven days after being deposited in the
United States mail, first-class, registered or certified, return receipt
requested, with postage paid and,
If to Purchaser: c/o Philips Medical Systems Nederland B.V.
P.O. Box 10.000
5680DA BEST
The Netherlands
Attention: General Counsel
Fax: +31-40-2762651
with a copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Matthew G. Hurd
Fax: (212) 558-3588
If to Seller: Agilent Technologies, Inc.
395 Page Mill Road
Palo Alto, CA 94306
Attention: General Counsel
Fax: (650) 752-5082
with a copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Caroline B. Gottschalk
Fax: (212) 455-2502
or to such other address as any such party shall designate by written notice to
the other parties hereto.
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11.3. Bulk Transfers
Purchaser waives compliance with the provisions of all applicable
Laws relating to bulk transfers in connection with the transfer of the Purchased
Assets.
11.4. Severability
If any provision of this Agreement shall be declared by any court of
competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement shall not be affected and shall remain in full
force and effect, and Seller and Purchaser shall negotiate in good faith to
replace such illegal, void or unenforceable provision with a provision that
corresponds as closely as possible to the intentions of the parties as expressed
by such illegal, void or unenforceable provision.
11.5. Further Assurances; Further Cooperation
Subject to the terms and conditions hereof (including Section
6.3(b)), each of the parties hereto agrees to use commercially reasonable
efforts to execute and deliver, or cause to be executed and delivered, all
documents and to take, or cause to be taken, all actions that may be reasonably
necessary or appropriate, in the reasonable opinion of counsel for Seller and
Purchaser, to effectuate the provisions of this Agreement. From time to time,
whether at or after the Closing, Seller or its Subsidiaries (as appropriate)
will execute and deliver such further instruments of conveyance, transfer and
assignment and take such other action as Purchaser and/or its Designees may
reasonably require to more effectively convey and transfer to Purchaser and/or
its Designees any of the Purchased Assets and Purchaser and/or its Designees
will execute and deliver such further instruments and take such other action as
Seller or its Subsidiaries may reasonably require to more effectively assume the
Assumed Liabilities.
11.6. Counterparts
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument. Copies of executed counterparts
transmitted by telecopy, telefax or other electronic transmission service shall
be considered original executed counterparts for purposes of this Section 11.6,
provided that receipt of copies of such counterparts is confirmed.
11.7. Expenses
Whether or not the Closing occurs, Seller and Purchaser shall each
pay their respective expenses (such as legal, investment banker and accounting
fees) incurred in connection with this Agreement and the transactions
contemplated hereby.
11.8. Non Assignability
This Agreement shall not be assigned by either party hereto without
the prior written consent of the other party, and any attempted assignment,
without such consent, shall be null and void, except that Purchaser shall have
the right to assign any or all of its rights and obligations under this
Agreement to one or more direct or indirect wholly-owned subsidiaries
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(other than directors' qualifying shares) of Purchaser (each, a "Designee");
provided, however, that no such assignment shall release Purchaser from any of
its liabilities or obligations hereunder.
11.9. Amendment; Waiver
This Agreement may be amended, supplemented or otherwise modified
only by a written instrument executed by the parties hereto. No waiver by either
party of any of the provisions hereof shall be effective unless explicitly set
forth in writing and executed by the party so waiving. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including any
investigation by or on behalf of any party, or a failure or delay by any party
in exercising any power, right or privilege under this Agreement shall be deemed
to constitute a waiver by the party taking such action of compliance with any
representations, warranties, covenants, or agreements contained herein, and in
any documents delivered or to be delivered pursuant to this Agreement and in
connection with the Closing hereunder. The waiver by any party hereto of a
breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
11.10. Specific Performance
The parties hereto agree that irreparable damage would occur in the
event any provision of this Agreement and the Exhibits hereto was not performed
in accordance with the terms hereof and that, subject to Section 10.3(b), the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in addition to any other remedy to which they are entitled at law or
in equity.
11.11. Third Parties
This Agreement does not create any rights, claims or benefits
inuring to any Person that is not a party hereto nor create or establish any
third party beneficiary hereto.
11.12. Governing Law
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, except for the internal matters of any
corporation, partnership or similar entity which shall be governed by the laws
of the jurisdictions of incorporation of such corporation, partnership or
similar entity.
11.13. Consent to Jurisdiction; Waiver of Jury Trial
Each party hereto irrevocably submits to the exclusive jurisdiction
of the United States District Court for the Southern District of New York
located in the borough of Manhattan in the City of New York, or if such court
does not have jurisdiction, the Supreme Court of the State of New York, New York
County, for the purposes of any suit, action or other proceeding arising out of
this Agreement or any transaction contemplated hereby. Each of the parties
hereto, further agrees that service of any process, summons, notice or document
by U.S. registered mail
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to such party's respective address set forth in Section 11.2 shall be effective
service of process for any action, suit or proceeding in New York with respect
to any matters to which it has submitted to jurisdiction as set forth above in
the immediately preceding sentence. Each of the parties hereto, irrevocably and
unconditionally waives any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in (a) the United States District Court for the Southern District of New
York or (b) the Supreme Court of the State of New York, New York County, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum. The parties hereto hereby
irrevocably and unconditionally waive trial by jury in any legal action or
proceeding relating to this Agreement or any other agreement entered into in
connection therewith and for any counterclaim with respect thereto.
11.14. Schedules
Disclosures included in any Schedule to this Agreement shall be
considered to be made for purposes of all other Schedules to this Agreement to
the extent that the relevance of any disclosure to any other Schedule is
reasonably apparent from the text of such disclosure. Inclusion of any matter or
item in any schedule to this Agreement does not imply that such matter or item
would, under the provisions of this Agreement, have to be included in any
Schedule to this Agreement or that such matter or item is otherwise material.
11.15. Entire Agreement
The Transaction Documents, Annex A, the Schedules and the Exhibits
hereto and any other agreements between Purchaser and Seller entered into on the
date hereof set forth the entire understanding of the parties hereto with
respect to the subject matter hereof and there are no agreements,
understandings, representations or warranties between the parties or their
respective Subsidiaries other than those set forth or referred to herein.
11.16. Section Headings; Table of Contents
The section headings contained in this Agreement and the Table of
Contents to this Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Asset Purchase
Agreement to be duly executed as of the date first above written.
AGILENT TECHNOLOGIES, INC.
By: /s/ EDWARD W. BARNHOLT
--------------------------------------------
Name: Edward W. Barnholt
Title: President and Chief Executive Officer
KONINKLIJKE PHILIPS ELECTRONICS N.V.
By: /s/ JOHN WHYBROW
--------------------------------------------
Name: John Whybrow
Title: Executive Vice President
By: /s/ JAN HOMMEN
--------------------------------------------
Name: Jan Hommen
Title: Executive Vice President
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Disclosure Schedule to Representations and Warranties.
Agilent agrees to furnish supplementally a copy of any omitted schedule to the
Commission upon request.
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EXHIBIT 2.17
ANNEX A
"Accountant" shall have the meaning set forth in Section 3.4.
"Affiliate" of a Person means a Person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned Person.
"Agreement" shall have the meaning set forth in the Recitals to the
Agreement.
"Antitrust Regulations" shall have the meaning set forth in Section 4.2.
"Arbitrator" shall have the meaning set forth in Section 3.3(e).
"Assumed Contracts" shall have the meaning set forth in Exhibit A.
"Assumed Liabilities" shall have the meaning set forth in Section 2.2.
"Aurora" shall mean the program of Seller in which designated employees
received a retention bonus associated with the transactions contemplated by this
Agreement.
"Books and Records" shall have the meaning set forth in Section 6.5(a).
"Business" means the portion of Seller's business conducted by Seller
and its Subsidiaries in the design, development, research, manufacture, supply,
distribution, sale and maintenance of Medical Products, as well as training in
the use and repair of Medical Products and services related to the planning,
implementation and operation of Medical Products. The Business does not include
Seller's central research laboratory, called Agilent Labs, nor the current
research and development being conducted by Agilent Labs.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which banks in New York City are permitted or required by law to close.
"Business Employee" shall mean (i) except for employees of Seller
retained by Seller pursuant to mutual agreement between Seller and Purchaser,
all direct employees of the Business and each employee of Seller or any of its
Subsidiaries who is 100% dedicated to the infrastructure of the Business
including, (A) employees on temporary leave for purposes of jury or annual
two-week national service/military duty, employees on vacation and employees on
a regularly scheduled day off from work and (B) employees who on the Closing
Date are on maternity or paternity leave, education leave, military leave with
veteran's re-employment rights under federal law, leave under the Family Medical
Leave Act of 1993 or equivalent provisions in other jurisdictions, approved
personal leave, short-term disability leave or medical leave but, unless
otherwise required under local employment laws, excluding those employees on
long-term disability, and (ii) each other employee of Seller or any of its
Subsidiaries that Seller and Purchaser have mutually agreed to prior to the
Closing Date or whose transfer to Purchaser and its Subsidiaries is required
under local law.
"Business Intellectual Property" shall have the meaning set forth in
Section 4.10(a).
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"Business Intellectual Property Licenses" shall have the meaning set
forth in Section 4.10(b).
"Claimant" shall have the meaning set forth in Section 9.6(a).
"Closing" shall have the meaning set forth in Section 8.1.
"Closing Date" shall have the meaning set forth in Section 8.1.
"COBRA" means the Consolidated Omnibus Budget Reconciliation Act of
1986, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Business" shall have the meaning set forth in Section 6.10.
"Confidential Information" shall have the meaning set forth in Section
6.2(b).
"Consent" shall have the meaning set forth in Section 6.3(a).
"Contracts" means all commitments, contracts or groups of related
contracts, indentures and agreements, evidenced in writing, to which Seller or
any Other Seller in respect of the Business is a party or by which Seller or any
Other Seller in respect of the Business is bound that relates to the Business,
excluding any licenses relating to the use of Intellectual Property.
"Control" means the ownership of more than 50% of the securities
entitling the Person holding such securities to vote on the election of
directors.
"Costs" means all Losses, liabilities, penalties, claims, fines,
damages, disbursements or expenses of any kind and nature whatsoever (including,
without limitation, reasonable attorneys', accountants', consultants' or
experts' fees and disbursements (in each case, including, without limitation,
any such amounts that are incurred either as a result of third party claims or
in connection with proceedings to enforce this Agreement)).
"Covered Schedules" shall have the meaning set forth in Section 4.8(a).
"Customer Contract" means any written agreement or arrangement between
Seller or any of its Subsidiaries on the one hand and a customer, distributor or
dealer of Seller or any of its Subsidiaries on the other hand for the purchase,
sale, distribution, marketing, servicing, support or manufacturing (or similar
matters) of Medical Products to the extent relating to the Business.
"Deficiency Amount" shall have the meaning set forth in Section 3.3(a).
"Designee" shall have the meaning set forth in Section 11.8.
"Disputes" shall have the meaning set forth in Section 11.1.
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"Dollars" or "$", when used in this Agreement or any other Transaction
Document, shall mean United States dollars unless otherwise stated.
"Dragon" shall mean the global manufacturing simplification program to
be undertaken by Seller, including the transfer of manufactured products to
Singapore.
"Environmental Claims" shall have the meaning set forth in Section 4.16.
"Environmental Costs" means any and all Costs which may be imposed upon,
incurred by or asserted or awarded against any Seller Indemnified Party or any
Purchaser Indemnified Party, as applicable, in connection with or arising from
(i) any failure or (to the extent such allegation is made in any Environmental
Claim by a third party) alleged failure of the Purchased Assets to comply with
any Environmental Law at or prior to Closing, (ii) the presence or (to the
extent such allegation is made in an Environmental Claim by a third party)
alleged presence of any Hazardous Materials on, in, under, emitted from or (to
the extent such allegation is made in an Environmental Claim by a third party)
alleged exposure are affecting all or any portion of the Purchased Assets at or
prior to Closing (or any condition resulting therefrom) or (iii) the
transportation or presence at any other location of Hazardous Materials relating
to the business at or prior to the Closing (or any condition resulting
therefrom), including any such Costs incurred as a result of any natural
resource damages, or any violation of Environmental Laws or any investigation,
site monitoring, containment, clean-up, removal, restoration or other remedial
work. Notwithstanding the foregoing, Environmental Costs shall not include lost
profits or special, punitive, indirect or consequential damages except to the
extent an indemnified party is held liable to a third-party regarding such
damages.
"Environmental Laws" shall have the meaning set forth in Section 4.16.
"Environmental Liability" means any Environmental Costs arising out of
any claim, legal action, suit, arbitration, governmental investigation, action
or other legal or administrative proceeding related to the ownership or
operation of any Purchased Asset prior to the Closing under any Environmental
Law and arising from an event or condition constituting a violation of
Environmental Law or a Release or (to the extent such allegation is made in an
Environmental Claim by a third party) alleged Release of a Hazardous Material in
either case prior to the Closing.
"ERISA" shall have the meaning set forth in Section 4.13(a)
"Excess Amount" shall have the meaning set forth in Section 3.3(a).
"Excluded Assets" shall mean the assets set forth in Exhibit B.
"Excluded Liabilities" shall have the meaning set forth in Section 2.2.
"Final Closing Purchased Net Assets" shall have the meaning set forth in
Section 3.3(a).
"Final Closing Statement of Purchased Net Assets" shall have the meaning
set forth in Section 3.3(b).
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"Financial Statements" shall have the meaning set forth in Section 4.5.
"GAAP" shall have the meaning set forth in Section 4.6.
"Global" shall mean Seller's worldwide reduction in workforce announced
on August 14, 2000.
"Governmental Authority" shall have the meaning set forth in Section
4.4.
"Guarantor" shall have the meaning set forth in the Recitals to the
Agreement.
"Hazardous Materials" shall have the meaning set forth in Section 4.16.
"HSR Act" shall have the meaning set forth in Section 6.3(b).
"Indemnified Environmental Losses" shall have the meaning set forth in
Section 9.7.
"Indemnified Party" means a Purchaser Indemnified Party or a Seller
Indemnified Party, as the case may be.
"Indemnifying Party" shall have the meaning set forth in Section 9.3.
"Indemnity Claim" shall have the meaning set forth in Section 9.3(b).
"Intellectual Property" shall have the meaning set forth in Section
4.10(a).
"IRS" shall mean the United States Internal Revenue Service.
"Key Jurisdictions" shall have the meaning set forth in Section 4.15.
To "the knowledge of" or "the best knowledge of" a party hereto shall
mean, with respect to Seller, the actual knowledge of John Eaton, Taia Ergueta,
Marie Oh Huber, Tom Pierson, Pat Barrett, Kent Wanzek, Greg Petras, Tony Ecock,
Sandy Feman, Steve Rusckowski, Brad Rubinstein, Edward Barnholt, Robert Walker
and Roxanne Rapson, and with respect to Purchaser, the actual knowledge of Bill
Curran, Tim Mickelson, Pamela Dunlap, Max Neves, Wim Punte, Ivo Lurvink, James
Nolan, Hans Barella and Carlo van den Akker.
"Law" means any law, treaty, statute, ordinance, rule, code or
regulation of a Governmental Authority or judgment, decree, order, writ, award,
injunction or determination of an arbitrator or court or other Governmental
Authority.
"Leased Real Property" shall have the meaning set forth in Section
4.7(c).
"Liabilities" shall have the meaning set forth in Section 2.2(a).
"Licensed Trademarks" shall have the meaning set forth in Section 6.13.
"Liens" shall have the meaning set forth in Section 4.2.
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"Local Asset Transfer Agreement" shall have the meaning set forth in
Section 2.3.
"Losses" shall mean Purchaser Losses or Seller Losses, as the case may
be.
"Medical Products" means electrocardiographs; defibrillators; ultrasound
imaging systems; patient monitoring devices and systems, including point of care
blood analysis and blood monitoring products connected to patient monitors;
clinical information management systems; hospital information management
systems; Holter monitors; interactive homecare services for congestive heart
failure; stethoscopes; replacement parts; and medical supplies for use with the
foregoing, including any reasonably foreseeable successor products and services
to the foregoing and reasonably foreseeable product line or service line
extensions of the foregoing. Medical Products do not include biological sample
analysis products such as those that sample, analyze or utilize nucleic acids,
DNA, RNA, and blood, body fluid or tissue samples, nor do Medical Products
include Retained Business products that may also be used in medical or
healthcare environments.
"Non-U.S. Benefit Plans" means each plan, scheme, fund or arrangement of
Seller and its Subsidiaries within the Business operated outside the United
States which provides Retirement Benefit Rights (as defined in Schedule 6.7(d))
to or in respect of Non-U.S. Employees, including any such plan, scheme, fund or
arrangement which has not been disclosed in the Data Room, but not including
Seller's Plans or any other plans, Plans, funds or arrangements operated within
the United States.
"Non-U.S. Employees" means each Business Employee employed other than in
the United States by Seller or any of its Subsidiaries.
"Other Sellers" shall have the meaning set forth in Section 4.2.
"Owned Real Property" shall have the meaning set forth in Section
4.7(b).
"Pension Plan" shall have the meaning set forth in Section 6.6(d).
"Person" means an individual, corporation, partnership, association,
trust, incorporated organization, other entity or group (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934).
"Personal Property" shall have the meaning set forth in Exhibit A.
"Prime Rate" shall mean the rate of interest as announced from time to
time by The Chase Manhattan Bank at its principal office in New York City as its
prime lending rate, the Prime Rate to change when and if such prime lending rate
changes.
"Proposed Adjustment Notice" shall have the meaning set forth in Section
3.3(d).
"Purchase" means the purchase by Purchaser and/or one or more of its
Designees of the Purchased Assets upon the terms and subject to the conditions
of this Agreement.
"Purchase Price" shall have the meaning set forth in Section 3.1.
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"Purchased Assets" shall mean the assets set forth in Exhibit A.
"Purchaser" shall have the meaning set forth in the Recitals to the
Agreement.
"Purchaser Indemnified Party" shall have the meaning set forth in
Section 9.1(a).
"Purchaser Losses" shall have the meaning set forth in Section 9.1(a).
"Purchased Subsidiaries" shall have the meaning set forth in Section
4.3.
"Purchaser Material Adverse Effect" means a material adverse effect on
the ability of Purchaser and/or any Designee to consummate the transactions
contemplated hereby and by any documents delivered or entered into in connection
herewith.
"Purchaser Plans" shall have the meaning set forth in Section 6.6(a).
"Real Property" shall have the meaning set forth in Section 4.7(c).
"Regulation" shall have the meaning set forth in Section 7.1(c).
"Release" shall have the meaning set forth in Section 4.16.
"Remedial Action" shall have the meaning set forth in Section 9.7.
"Restructuring" shall mean the global restructuring program to be
undertaken by Seller and referred to in Seller's press release dated August 14,
2000 and related actions that have been described by Seller to Purchaser prior
to the date hereof.
"Retained Business" means the Communications, Electronics, Life Science
and Chemical Analysis businesses owned by Seller and to be retained by Seller,
together with the products, employees and services of those businesses. The
Communications business includes components and test and measurement solutions
to assist in designing, manufacturing, and deploying communication appliances,
networks, services, and other communications infrastructure in the telecom,
enterprise, IP, wireless, and cable environments. The Electronics business
includes test, measurement and related solutions for the aerospace, defense,
component manufacturing, computers and peripherals, consumer electronics,
electronics manufacturing, factory automation, research and development and
semiconductor test businesses. The Life Science business includes products,
supplies, services and information that enable and use the understanding of
biological information to discover and develop more effective therapeutics and
diagnostics, and to improve the quality and yield of animal and agricultural
products and to test, analyze, measure or modify biological substances. The
Chemical Analysis business includes analytical instrument systems that enable
customers to identify, quantify, analyze and test the atomic, molecular,
physical and biological properties of substances and products. Retained Business
does not include the design, development, research, manufacture, supply,
distribution or sale of Medical Products or the training in the use and repair
of Medical Products or services related to the planning, implementation or
operation of Medical Products.
"Review Period" shall have the meaning set forth in Section 3.3(c).
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"Securities Act" shall have the meaning set forth in Section 5.4.
"Seller" shall have the meaning set forth in the Recitals to the
Agreement.
"Seller Corporate Policies" shall have the meaning set forth in Section
6.16.
"Seller 401(k)" shall have the meaning set forth in Section 6.6(d).
"Seller Indemnified Party" shall have the meaning set forth in Section
9.1(b).
"Seller Losses" shall have the meaning set forth in Section 9.1(b).
"Seller Material Adverse Effect" means a material adverse effect on the
business, operations, financial condition or results of operations of the
Purchased Assets or Business, in each case taken as a whole.
"Seller Plans" shall mean each "employee benefit plan" (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), and all severance, change in control or employment plan,
program or agreement, and vacation, incentive, bonus, stock option, stock
purchase, and restricted stock plan, program or policy under which any employee
or former employee or director or former director of the Business has any
present or future right to benefits and under which Seller has had or has any
present or future liability, and for the avoidance of doubt, shall not include
any Non-U.S. Benefit Plan.
"Seller SEC Reports" means all registration statements, prospectuses,
reports, schedules, forms, statements and other documents filed by Seller with
the SEC prior to the date of this Agreement, including all exhibits thereto.
"Subsidiary" or "Subsidiaries" of Purchaser, Seller or any other Person
means any corporation, partnership or other legal entity of which Purchaser,
Seller or such other Person, as the case may be (either alone or through or
together with any other Subsidiary), owns, directly or indirectly, more than 50%
of the stock or other equity interests the holder of which is generally entitled
to vote for the election of the board of directors or other governing body of
such corporation or other legal entity.
"Supplier Contract" means any written agreement or arrangement between
Seller or any of its Affiliates on the one hand and a supplier of Seller or any
of its Affiliates on the other hand for the purchase or sale of components,
subsystems, complete systems or other materials used in the manufacture of
Medical Products or to the extent relating to the Business.
"Tax" or "Taxes" shall mean all federal, state, local and foreign
income, profits, franchise, sales, use, occupation, property, excise, payroll,
withholding, employment, estimated and other taxes of any nature, including
interest, penalties and other additions to such taxes.
"Tax Return" shall mean any return, declaration, report and information
statement relating to Taxes, including any schedule or attachment thereto, and
including any amendment thereof.
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"Title Policy" shall mean that certain policy no. 9951-25230 in the
amount of $92 million issued by Chicago Title Insurance to Seller and dated
November 4, 1999.
"Transaction Documents" shall have the meaning set forth in Section 4.2.
"Transferred Employees" shall have the meaning set forth in Section
6.6(a).
"Transfer Taxes" shall have the meaning set forth in Section
6.16(a)(ii).
"Transition Services Agreement" shall have the meaning set forth in
Section 6.8.
"Vacation Policy" shall have the meaning set forth in Section 6.6(f).
"WARN" shall have the meaning set forth in Section 6.6(g).
"Wholly Owned Subsidiaries" shall have the meaning set forth in Section
4.3.
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EXHIBIT A
Purchased Assets
Purchased Assets include all of the assets, properties, goodwill and rights of
Seller and its Subsidiaries of whatever kind and nature, real, personal, or
mixed, tangible or intangible, that are owned, leased or licensed by Seller
and/or its Subsidiaries on the Closing Date in each case (i) only to the extent
of Seller's rights therein and (ii) to the extent used in or arising from the
Business, subject in all cases to the limitations set forth in clauses (a)
through (i) below, other than Excluded Assets, and shall include all of Seller's
and its Subsidiaries' entire right, title and interest in and to the following:
(a) the Owned Real Property and any fixtures, machinery,
equipment and tangible personal property attached to or located on the
Owned Real Property that relate principally to or are used or held for
use principally in connection with the Business (taking like items into
consideration on an aggregate basis) including land and land
improvements and building and building improvements referred to in
Schedule 4.7(b);
(b) the Leased Real Property and any fixtures, machinery,
equipment and tangible personal property attached to or located on the
Leased Real Property that relate principally to or are used or held for
use principally in connection with the Business;
(c) all inventories to the extent used or held for use in the
Business (including raw materials, purchased goods, parts, containers,
recycled materials, work in process, supplies, finished goods and demo
and consignment inventory) and located on the Real Property, in transit
to or from the Real Property, on the books of Seller or any Other
Seller, held by vendors or which otherwise are used or held for use to
any extent in the Business;
(d) all machinery, equipment, vehicles, furniture, fixtures,
tools, instruments, spare parts, supplies (including storeroom
supplies), pallets, office and laboratory equipment, testing facilities,
materials, fuel and other personal property, owned or leased, not
normally included in inventory, that are used or held for use
principally in connection with the Business (taking like items into
consideration on an aggregate basis) (the "Personal Property") other
than Personal Property that is part of Seller's centralized services for
information technology or other matters;
(e) to the extent transferable, all warranties, guarantees or
claims against third parties to the extent relating to or arising from
any of the Purchased Assets;
(f) to the extent transferable, all permits, certificates,
licenses, orders, franchises, registrations, variances, tax abatements,
approvals and other similar rights or authorizations of any Governmental
Authority to the extent necessary for the ownership, maintenance and
operation of the Business;
(g) all customers' files, credit information, supplier lists,
parts lists, vendor lists, business correspondence, business lists,
sales literature, promotional literature, other selling and advertising
materials and all other assets and rights to the extent relating to or
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arising from or used in connection with the distribution, sale or
marketing of the products produced by the Business; provided, however,
that to the extent any such information is commingled with information
used in the Retained Business, the original version of such information
shall not be a Purchased Asset (and both parties shall have equal rights
to sue such information) and shall be retained by Seller with accurate
and reasonable copies thereof to be provided to Purchaser at Closing;
(h) all security devices or systems, lock boxes and the contents
thereof that are maintained for use exclusively in the conduct of the
Business (or, in the case of lock boxes, which contain assets
exclusively of the Business);
(i) to the extent transferable, all right, title or interest in
or to the sales contracts, Customer Contracts, Supplier Contracts,
maintenance or service agreements, purchase orders for materials and
other services, dealer and distributorship agreements, advertising and
promotional agreements, leases (including for Leased Real Property),
licenses, joint ventures, partnership agreement or other agreements
(including but not limited to any agreements of Seller or any other
Seller with suppliers, sales representatives, distributors, agents,
lessees of Personal Property, licensors, licensees, consignors and
consignees specified therein) to the extent relating to or arising from
the Business, whether or not entered into in the ordinary course of the
Business consistent with past practice, except for those contracts,
agreements and commitments set out in Exhibit B and except for licenses
or other agreements relating to the use of Intellectual Property, which
are addressed in clause (k) and except for contracts, agreements and
commitments primarily relating to or arising from the Retained Business
(collectively, the "Assumed Contracts");
(j) all accounts and notes receivable to the extent relating to
the Business or arising in the ordinary course of the Business
consistent with past practice;
(k) the Intellectual Property listed in Schedule 4.10(a), subject
to any grant of rights to any third party with respect thereto granted
prior to the Closing Date, and all licenses or other agreements relating
exclusively to the use of the Business Intellectual Property, to the
extent of Seller's ability to transfer or assign such licenses or
agreements;
(l) all specifications, inventory, marketing, personnel,
financial and other books and all other documents, microfilm and
business records and correspondence wherever located, to the extent
relating to or arising from or used in connection with the Business;
provided, however, that to the extent any such information is commingled
with information used in the Retained Business, the original version of
such information shall not be a Purchased Asset (and both parties shall
have equal rights to sue such information) and shall be retained by
Seller with accurate and reasonable copies thereof to be provided to
Purchaser at Closing;
(m) the shares of capital stock and other equity interests
specified in Schedule 4.3;
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(n) all servers, software licenses and desktops used, employed
and developed exclusively (or in the case of servers, principally) by
the Business, including, to the extent transferable, the SAP license for
the Andover facility;
(o) all equipment and items comprising the desktop environment
of, and used exclusively by, the Transferred Employees (including field
employees); and
(p) all automobiles owned by Seller and used by Transferred
Employees, and, to the extent transferable, leasehold interests in all
leases of automobiles leased by Seller or Hewlett Packard Company and
used by Transferred Employees.
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EXHIBIT B
Excluded Assets
(a) Cash (excluding petty cash), bank accounts, certificates of
deposit and other cash equivalents;
(b) Accounts receivable from Seller or Subsidiaries of Seller in
respect of the Business (other than trade receivables);
(c) All insurance policies and any rights, claims or chooses in
action under such insurance policies;
(d) All rights to refunds of any Tax payments with respect to
periods prior to the Closing;
(e) Subject to the Technology Licensing Agreement, all
Intellectual Property other than that listed in Schedule 4.10(a) and all
licenses or other agreements not relating exclusively to the use of the
Business Intellectual Property;
(f) Subject to paragraph (n) of Exhibit A, enterprise-deployed,
centrally managed computer software and hardware used by Seller prior to
the Closing, including any such computer software or hardware that is
used by or for the Business prior to or as of the Closing, and all
licenses or other agreements with third parties concerning the use
thereof;
(g) All of Seller's enterprise-wide procurement Contracts and
Contracts relating to employee benefit matters;
(h) The assets being sold to CIT Group/Equipment Financing, Inc.
("CIT") pursuant to the agreement between Seller and CIT announced on
October 13, 2000, and any assets to be sold to CIT (including entities
related to CIT) under similar agreements entered into between the date
hereof and the Closing Date;
(i) Equipment and/or fixed assets of Celestica and other lessees
located on seller-owned property in Andover, Massachusetts, and
elsewhere;
(j) Assets referred to in Schedule 4.17;
(k) Contracts relating to the Qingdao joint venture;
(l) Contracts between Seller and Hewlett-Packard Company,
including all service level agreements, except as set forth in Schedule
4.8(a);
(m) Office furniture and shared office equipment, fixtures and
leasehold improvements at all locations where the Business is conducted
with the Retained Business;
(n) Real property associated with the Qingdao joint venture; and
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(o) Assets relating to any Seller Plan or Non-U.S. Benefits Plan,
except as expressly provided in Sections 6.6 and 6.7.
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EXHIBIT C
Form of Local Asset Transfer Agreement
FORM OF LOCAL ASSET TRANSFER AGREEMENT
THIS SALE AND PURCHASE AGREEMENT is made on [ , 2000]
BETWEEN:
[-] a company incorporated under the laws of [-] whose registered office is at
[-] (the Other Seller); and
[-], a company incorporated under the law of [-] whose registered office is at
[-] (the Purchaser Designee).
WHEREAS
(A) This Agreement is entered into pursuant to and in connection with the Asset
Purchase Agreement (the PRINCIPAL AGREEMENT) entered into on [-] between [-]
(SELLER) as Seller on its own behalf and, to the extent therein provided, as
agent for the Other Seller, and [-] (PURCHASER) as Purchaser on its own behalf
and, to the extent therein provided, as agent for the Purchaser Designee for the
sale and purchase of the Business (as defined in the Principal Agreement);
(B) In the Principal Agreement Seller and Purchaser have agreed, inter alia, to
procure that the Other Seller shall sell and the Purchaser Designee shall
purchase the Local Business (as defined below);
(C) The Other Seller has agreed to sell and the Purchaser Designee has agreed to
purchase the Local Business for the consideration and upon the terms and subject
to the conditions of this Agreement.
IT IS AGREED as follows:
APPLICATION OF TERMS OF PRINCIPAL AGREEMENT AND INTERPRETATION
1.1 This Agreement is being entered into pursuant to and in connection with the
Principal Agreement and references in this Agreement to the Principal Agreement
are to the Principal Agreement as amended, modified, waived or extended from
time to time in accordance with the terms thereof.
1.2 Unless expressly provided otherwise in this Agreement, words and expressions
defined in the Principal Agreement shall have the same meanings when used in
this Agreement. In this Agreement, the following terms shall have the following
meanings:
LOCAL ASSETS mean the assets as listed in Schedule 1.
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LOCAL CLOSING means closing under this Agreement;
LOCAL BUSINESS has the meaning given in clause 3.1.
1.3 In the event of any conflict between the terms of this Agreement and the
Principal Agreement, the terms of the Principal Agreement shall prevail.
COMPLIANCE
2.1 The Other Seller agrees to comply with, perform and observe the obligations
and undertakings with which or which under the Principal Agreement Seller has
agreed to procure that it shall comply, perform and observe for as long as and
to the extent that Seller has agreed under the Principal Agreement to procure
such compliance, performance or observance.
2.2 The Purchaser Designee agrees to comply with, perform and observe the
obligations and undertakings with which or which under the Principal Agreement
Purchaser has agreed to procure that it shall comply, perform and observe for as
long as and to the extent that Purchaser has agreed under the Principal
Agreement to procure such compliance, performance or observance.
SALE OF THE BUSINESS AND CONSIDERATION
3.1 Subject to and in accordance with the terms of this Agreement, the Other
Seller shall sell, transfer, convey, assign and deliver and the Purchaser
Designee shall purchase as a going concern as at and with effect from Local
Closing all of its rights, title and interest in and to the portion of the
Business carried on by the Other Seller from the site at [-] as at the date of
Local Closing (the LOCAL BUSINESS) and including, without limitation, the assets
and other rights referred to in Schedule 1 of this Agreement (the LOCAL ASSETS).
3.2 The Purchaser Designee shall assume as of and following Local Closing, or as
of such other date as provided in Section 2.2(a) of the Principal Agreement,
such of the Assumed Liabilities as relate to the Local Business other than the
liabilities of the Other Seller which are Excluded Liabilities (as defined in
the Principal Agreement) and the Purchaser Designee shall on and from the
relevant date be solely responsible for and will keep the Other Seller
indemnified from and against the same.
3.3 The consideration payable by the Purchaser Designee to the Other Seller for
the Local Business (the LOCAL PURCHASE PRICE) shall be [the portion of the
Purchase Price with respect to the Local Business] [which does not, for the
avoidance of doubt, include any applicable Goods and Services Tax or VAT],
calculated and adjusted pro rata in accordance with Article III of the Principal
Agreement (on the basis of the ratio by which the Local Purchase Price relates
to the Purchase Price), and paid by Purchaser as agent of the Purchaser Designee
to Seller as agent of the Other Seller in accordance with Sections 3.2 and 3.3
of the Principal Agreement. The Local Purchase Price shall be
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apportioned between the assets of the Local Business as agreed between Seller
and Purchaser pursuant to Section 3.4. of the Principal Agreement.
3.4 In relation to itself, the Local Business and the sale of the Local Business
pursuant to this Agreement, the Other Seller does not give any representations
and warranties other than those given by Seller as agent on its behalf in
Article IV of the Principal Agreement on the terms set out therein.
APPOINTMENT OF AGENTS
4.1 The Other Seller hereby irrevocably appoints and instructs Seller as its
sole agent (to the exclusion of itself) to do such acts and things, make such
representations, warranties and indemnities, give such undertakings and
covenants, undertake such obligations, make or be subject to any such claims as
the Principal Agreement expressly provides are done, given, undertaken, received
or made by or to be conducted through Seller as agent for the Other Seller and,
without prejudice to the generality of the foregoing, the Other Seller hereby
irrevocably appoints and instructs Seller as its sole agent to receive or pay,
as the case may be, any amounts owed to or by the Other Seller pursuant to any
of the provisions of the Principal Agreement, and the Other Seller hereby
acknowledges and confirms to the Purchaser Designee that any payment made by
Purchaser on behalf of the Purchaser Designee to Seller as agent for the Other
Seller shall be deemed to be and considered by the Other Seller to satisfy the
Purchaser Designee's obligation(s) to pay any of the same to the Other Seller
and any such obligations shall be discharged thereby.
4.2. The Purchaser Designee hereby irrevocably appoints and instructs Purchaser
as its sole agent (to the exclusion of itself) to do such acts and things, make
such representations, warranties and indemnities, give such undertakings and
covenants, undertake such obligations, make or be subject to any such claims as
the Principal Agreement expressly provides are done, given, undertaken, received
or made by or to be conducted through Purchaser as agent for the Purchaser
Designee and, without prejudice to the generality of the foregoing, the
Purchaser Designee hereby irrevocably appoints and instructs Purchaser as its
sole agent to receive or pay, as the case may be, any amounts owed to or by the
Purchaser Designee pursuant to any of the provisions of the Principal Agreement,
and the Purchaser Designee hereby acknowledges and confirms to the Other Seller
that any payment made by Seller on behalf of the Other Seller to Purchaser as
agent for the Purchaser Designee shall be deemed to be and considered by the
Purchaser Designee to satisfy the Other Seller's obligation(s) to pay any of the
same to the Purchaser Designee and any such obligations shall be discharged
thereby.
LOCAL CLOSING
5.1 Local Closing is subject to the satisfaction or waiver of the Conditions to
Closing pursuant to the Principal Agreement and is interdependent with the
Closing as provided in the Principal Agreement and the steps taken at Local
Closing shall have no effect unless Closing as provided for in the Principal
Agreement (except insofar as it includes Local Closing) shall have taken place
in accordance with the Principal Agreement.
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5.2 Subject to clause 5.1, Local Closing shall take place on the Closing Date at
[_____] ([-] time) at the offices of [-] in [-], or at such other time and such
other venue as may be agreed pursuant to Section 8.1 of the Principal Agreement.
5.3 At Local Closing, the Other Seller shall deliver or make available (or cause
to be delivered or made available) to the Purchaser Designee:
- - such transfer documents as are necessary to complete the sale
and purchase of the Local Business;
- - possession of the Real Property;
- - any accounting records relating exclusively to the Local
Business;
- - details of all current engagements, orders, software and
databases and lists of customers and suppliers to the extent relating
to the Local Business;
- - all other documents or documents of title exclusively relating
to the Local Business or the assets comprised therein;
- - all other assets of the Local Business title to which is
capable of passing by delivery;
- - a certified copy of the resolutions of the Directors of the
Other Seller authorising entry into and execution of this Agreement; and
- - [others],
and in addition the Other Seller shall execute and do and procure to be executed
and done all such deeds, documents and things as the Purchaser Designee may
reasonably require for vesting in the Purchaser Designee the Local Business.
5.4 At Local Closing the Purchaser Designee shall deliver to the Other Seller a
certified copy of the resolutions of the Directors of the Purchaser Designee
authorizing the entry into and execution of this Agreement.
5.5 As of and at the Local Closing, risk of loss as to the Local Assets shall
pass to the Purchaser Designee, except as may otherwise be provided in the
Principal Agreement.
APPROVALS AND CONSENTS - NOVATION AND ASSIGNMENT
6. The provisions of Sections 2.4. and 2.5. of the Principal
Agreement shall apply to the parties to this Agreement.
OTHER MATTERS
7. [ADD SUCH OTHER PROVISIONS AS MAY BE NECESSARY IN LIGHT OF THE
NATURE OF THE LOCAL ASSETS AND REQUIREMENTS OF LOCAL LAW]
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EMPLOYEE RELATIONS AND BENEFITS
8. [SUCH PROVISIONS OF SECTIONS 6.6. AND/OR 6.7. OF THE PRINCIPAL
AGREEMENT TO BE REPEATED AS SHALL APPLY TO THE PARTIES TO THIS AGREEMENT.]
PENSIONS
9. Schedule 2 to this Agreement sets out the agreement of the Other Seller and
the Purchaser Designee (agreed by Seller and Purchaser as their respective
agents) in respect of pension arrangements for the relevant Business Employees
of the Local Business to take effect on and after Local Closing and each of the
Other Seller and the Purchaser Designee agrees to comply with and perform its
respective obligations set out therein to the extent they are expressed to apply
to the Business Employees of the Local Business, with which or which in such
Schedule Seller and Purchaser respectively have agreed to procure that they
shall comply or perform, for as long as and to the extent that Seller and
Purchaser respectively have agreed under the Principal Agreement to procure such
compliance or performance.
GOODS AND SERVICES TAX/VAT
10.1 [EXPLICIT WORDING AS TO THE INTENDED TAX TREATMENT OF THE LOCAL TRANSFER TO
BE INCLUDED IF NECESSARY OR CUSTOMARY IN THE RELEVANT JURISDICTION]
10.2 [WORDING TO ENSURE THAT ANY TRANSFER TAXES ARE MITIGATED TO BE INCLUDED
HERE OR THROUGHOUT THIS AGREEMENT IF NECESSARY OR CUSTOMARY (AND TO THE EXTENT
POSSIBLE) IN THE RELEVANT JURISDICTION.]
FURTHER ASSURANCE
11.1 After Local Closing, the Other Seller and the Purchaser Designee shall do,
execute and deliver, at the reasonable request of the other party, all such
further acts, deeds, documents, instruments of assignment and transfer as may be
necessary to complete the sale and purchase of the Local Business in accordance
with the terms of the Principal Agreement and this Agreement and otherwise to
give effect to the terms of this Agreement.
11.2 The Other Seller will forward to the Purchaser Designee any documents,
information, communications or correspondence which the Other Seller may receive
from time to time in relation to the Local Business and will use its reasonable
endeavours to pass on to the Purchaser Designee all enquiries relating to the
Local Business in accordance with the terms of the Principal Agreement and this
Agreement.
VARIATION
12. No variation of this Agreement shall be valid unless it is in writing and
signed by both Purchaser and Seller as agent on behalf of the Purchaser Designee
and the Other Seller, as appropriate. The expression "variation" shall include
any amendment, modification, variation, supplement, deletion or replacement
however effected.
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ENTIRE AGREEMENT
13. This Agreement and the Schedules hereto and the Principal Agreement and the
Transaction Documents listed in Section 11.15 of the Principal Agreement set
forth the entire understanding of the parties hereto with respect to the subject
matter hereof and there are no agreements, understandings, representations or
warranties between the parties other than those set forth or referred to herein.
ANNOUNCEMENTS
14. News releases or other public announcements pertaining to the transaction
contemplated in this Agreement or the Principal Agreement shall not be made by
the Other Seller or the Designee and shall only be made by Purchaser and Seller
in accordance with the provisions of Section 6.4. of the Principal Agreement.
NOTICES
15. The Provisions of Section 11.2 of the Principal Agreement shall apply to the
parties to this Agreement. A copy of all communications will be sent to the
other party to this Agreement in accordance with the procedures set forth in
Section 11.2 of the Principal Agreement to:
If to the Purchaser Designee: [-]
If to the Other Seller: [-]
or to such other address as any such party shall designate by written notice to
the other party hereto.
SEVERABILITY
16. If any provision of this Agreement shall be declared by any court of
competent jurisdiction to be illegal, void or unenforceable, all other
provisions of this Agreement shall not be affected and shall remain in full
force and effect, and parties shall negotiate in good faith to replace such
illegal, void or unenforceable provision with a provision that corresponds as
closely as possible to the intentions of the parties as expressed in such
illegal, void or unenforceable provision.
COUNTERPARTS
17. This Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original and all of which together shall be deemed to
be one and the same instrument. Copies of executed counterparts transmitted by
telecopy, telefax or other electronic transmission service shall be considered
original executed counterparts for purposes of this Section 17, provided that
receipt of copies of such counterparts is confirmed.
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GOVERNING LAW, JURISDICTION AND CLAIMS
18.1 This Agreement and the relationship between the parties shall be governed
by, and interpreted in accordance with, [LOCAL] law.
18.2 In the event of any dispute arising out of or relating to this Agreement
the provisions of Sections 11.1 and 11.13 of the Principal Agreement shall
apply.
18.3 Any claim of whatsoever nature arising out of or in connection with this
Agreement or the Principal Agreement shall only be enforceable by the parties to
this Agreement through the agency of Seller and Purchaser respectively upon the
terms of the Principal Agreement. The Purchaser Designee shall not make any
claim for indemnification arising out of or in connection with this Agreement or
the Principal Agreement in any circumstances whatsoever against the Other Seller
other than through the agency of Purchaser against Seller as agent for the Other
Seller pursuant to the terms of the Principal Agreement. The Other Seller shall
not make any claim for indemnification arising out of or in connection with this
Agreement or the Principal Agreement in any circumstances whatsoever against the
Purchaser Designee other than through the agency of Seller against Purchaser as
agent for the Purchaser Designee pursuant to the terms of the Principal
Agreement. Liability in respect of any claim for indemnification arising out of
or in connection with this Agreement or the Principal Agreement shall be
determined solely in accordance with the terms of the Principal Agreement.
AS WITNESS this Agreement has been signed on behalf of the parties the day and
year first before written.
SIGNED BY
SIGNED BY
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EXHIBIT 2.17
SCHEDULE 1 - LOCAL ASSETS
[Schedule 1 to mirror Exhibit A to the Principal Agreement to the
extent relevant]
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EXHIBIT 2.17
SCHEDULE 2- PENSION SCHEDULE
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EXHIBIT D
FORM OF TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (together with Annex A hereto,
this "Agreement") is entered into as of the ___ day of __________, 200_, by and
between AGILENT TECHNOLOGIES, INC., a Delaware corporation ("Seller"), and
KONINKLIJKE PHILIPS ELECTRONICS NV, a company organized under the laws of the
Netherlands ("Purchaser").
W I T N E S S E T H :
WHEREAS, Seller and Purchaser have entered into an Asset Purchase
Agreement dated as of November 17, 2000 (the "Purchase Agreement"), pursuant to
which, among other things, Purchaser will acquire all of the Purchased Assets
(as defined in the Purchase Agreement) and assume certain liabilities, all on
the terms and conditions set forth in the Purchase Agreement; capitalized terms
used in this Agreement but not defined herein shall have the meanings given to
them in the Purchase Agreement;
WHEREAS, pursuant to Section 6.8 of the Purchase Agreement, Seller
has agreed to continue to provide to Purchaser and/or its Subsidiaries certain
transition services which are necessary on a temporary basis for the
continuation of the Business by Purchaser and are, in all material respects, of
a quality and type provided by Seller in respect of the Business and Purchased
Assets during the year preceding the date of this Agreement, at costs consistent
with past practices or the terms of this Agreement, as the case may be; and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements of the parties contained herein, the parties agree as follows:
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ARTICLE XII SERVICES PROVIDED
12.1. During the twelve month period (or such other period set forth in
Annex A to this Agreement) commencing on the Closing Date (the "Transition
Period"), Seller shall provide to Purchaser, or at Seller's option shall cause
one or more of its Affiliates or a third party to provide to Purchaser and/or
its Subsidiaries, the services and functions currently provided by or on behalf
of Seller to the Business other than (i) general management oversight and (ii)
payroll functions (the "Services"), including but not limited to the services
and functions set forth in Annex A to this Agreement. Seller and Purchaser each
agree to (i) designate an appropriate point of contact for all questions and
issues relating to the Services during the term of this Agreement, (ii) make
available the services of appropriate qualified employees and resources to allow
for the provision of the Services and to allow each party to perform its duties,
responsibilities and obligations related to the Services, and (iii) as soon as
practicable after the date hereof, create a joint management committee
responsible for reviewing the strategy and assumptions related to this
Agreement.
12.2. Purchaser and Seller shall work together in good faith to develop
a global transition plan in order to facilitate an orderly and successive
termination of the Services on the Termination Date or at such earlier time as
Purchaser assumes performance of the Services in accordance with this Section 1.
In connection with the development of a global transition plan, Seller and
Purchaser will use their reasonable best efforts to establish specific metrics
which will drive a reduction in payments due pursuant to Section 3 hereof as
Services diminish.
12.3. Purchaser shall make a commercially reasonable and good faith
effort to assume performance of the Services within shorter time periods than
those specified. In furtherance of the foregoing, Purchaser shall use
commercially reasonable efforts to make or obtain any approvals, permits and
licenses and implement any systems as may be necessary for it to provide the
Services independently in each country as soon as practicable following the
Closing.
12.4. It is assumed that all Services provided hereunder will be
terminated on or before the one year anniversary of the Closing Date. Seller
shall be under no obligation to provide any Services to Purchaser after the one
year anniversary of the Closing Date, except to the extent agreed in writing by
Seller and Purchaser, it being understood that Seller shall not unreasonably
refuse to agree to any such lengthier period in the case of customer support
systems implementation. If Purchaser requires Services for customer support
beyond the Transition Period, and Seller cannot provide such Services, Seller
and Purchaser shall negotiate in good faith arrangements pursuant to which
Seller shall provide Purchaser with access to the necessary customer support
software and hardware environment to support the Business themselves for an
agreed upon duration.
ARTICLE XIII Service Level Agreements. Between the date of the Purchase
Agreement and the Closing Date, Seller and Purchaser shall negotiate in good
faith to prepare individual service level agreements describing in detail the
Services to be performed in accordance with this Agreement (the "Service Level
Agreements"), which shall become effective as of the Closing Date. Seller shall
notify Purchaser of any significant, clearly identifiable cost savings to Seller
realized as a result of the terms set forth in any individual Service Level
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Agreement, and such savings shall be applied to reduce the related transition
services fee payable pursuant to Section 3 unless otherwise agreed by Seller and
Purchaser.
ARTICLE XIV CONSIDERATION
14.1. Costs and Fees
(i) Purchaser shall pay to Seller all direct and indirect
costs (as set forth in the Service Level Agreements) incurred by
Seller and associated with the provision of Services and the
transition services activities performed by or on behalf of
Seller.
(ii) Any costs in excess of $106,000,000 incurred by Seller
in its centrally managed, enterprise-wide functions as a result
of (A) a request from the Purchaser for the material expansion of
the Services provided, or (B) significant changes in the current
transition services strategy or assumptions will be borne by
Seller and Purchaser according to a set of predetermined metrics;
provided that Workplace Services (as described in Annex A to this
Agreement) shall be excluded from this calculation and Purchaser
shall reimburse Seller for such Workplace Services in accordance
with the metrics set forth in the Workplace Services Service
Level Agreement. If there are no relevant predetermined metrics,
Purchaser and Seller shall make a good faith effort to agree to a
set of relevant metrics that are consistent with the
predetermined metrics. In addition, Seller and Purchaser shall
work together in good faith to establish milestones that, upon
completion, would reduce the adjusted threshold of $106,000,000
set forth in this Section 3(a)(ii).
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14.2. Invoices and Payment. Seller shall invoice Purchaser for the
Services provided hereunder in arrears on a monthly basis, and shall provide
reasonable documentation supporting the amounts owed pursuant to Section 3(a).
Purchaser shall pay the amount of such invoice by electronic transfer of
immediately available funds not later than the fifteenth Business Day of each
month. In the event Purchaser does not pay Seller in accordance with the
preceding sentence or within 30 days of the receipt of any invoices for Services
hereunder, (i) all amounts so payable and past due shall accrue interest from
the 30th day after the receipt of the invoice to the receipt of payment at a
floating rate per annum equal to the per annum interest rate announced from time
to time by Morgan Guaranty Trust Company of New York as its prime rate in
effect, plus 2%, and (ii) Purchaser shall pay, as additional fees, all
reasonable costs and expenses incurred by Seller in attempting to collect and
collecting amounts due under this Section 3, including all reasonable attorneys
fees and expenses.
ARTICLE XV OBLIGATIONS OF PURCHASER. Purchaser shall: (a) provide Seller with
such information and documentation as is reasonably necessary for Seller to
perform the Services; and (b) perform such other duties and tasks as may be
reasonably required to permit Seller to perform the Services.
ARTICLE XVI PERFORMANCE STANDARD; CONFIDENTIALITY.
16.1. Nothing in this Agreement shall require or be interpreted to
require Seller to provide a Service to Purchaser beyond the scope and content of
such Service as provided by Seller to the Business immediately prior to November
17, 2000. In performing the Services, Seller and each of its Affiliates shall
provide, or ensure that any third party will provide, substantially the same
level of service and use substantially the same degree of care as its personnel
provided and used in providing the Services prior to November 17, 2000, unless
Seller and Purchaser mutually agree to a different level of service. Each party
will handle and protect from disclosure all proprietary and confidential
information disclosed to it by the other party, or accessible within Seller's
shared systems environment, in the same general manner as it handles and
protects its own information that it considers proprietary and confidential,
including but not limited to any information received with respect to the
products of Seller, Purchaser or Hewlett-Packard Company. All Services shall be
performed in substantial compliance with applicable Law.
16.2. In performing the Services, Seller shall prepare and furnish to
Purchaser reports concerning the Business containing substantially the same
data, in substantially the same format, and prepared and delivered on
substantially the same timetable, as reports prepared in connection with the
Business prior to November 17, 2000. Upon Purchaser's written request for
modifications to the reporting and data transfer practices, Seller shall
cooperate and consult in good faith with Purchaser to make such modifications;
provided that Seller shall have no obligation to make any such modifications to
the reporting and data transfer practices.
ARTICLE XVII NEW SERVICES. Purchaser may from time to time during the
term of this Agreement request that Seller perform a new service ("New Service")
in addition to the Services being provided hereunder. Upon receipt of such a
request from Purchaser, Seller, if it determines to provide the New Service to
Purchaser, shall provide Purchaser with, and enter good faith negotiations with
Purchaser regarding, (1) a written description of the work Seller anticipates
98
performing in connection with such New Service, (2) a schedule for commencing
and completing the New Service and (3) Seller's prospective fees (to be
negotiated on a time and materials basis) for such New Service. Seller shall not
begin performing any New Service until agreement thereon has been reached in
writing and Purchaser has entered into a Service Level Agreement or otherwise
provided Seller with written authorization to perform the New Service from a
duly authorized representative of Purchaser. Each New Service shall be provided
to Purchaser at the same level and in substantially the same manner (except as
may be required for security) as Seller provides the same or similar services to
its business units or Subsidiaries during the term of such New Service.
ARTICLE XVIII SECURITY. During the Transition Period, Purchaser's access
to Seller's information technology infrastructure for applications shall be
through secured controlled processes determined by Seller in consultation with
Purchaser. Those employees of Purchaser and Seller having access to such
infrastructure and applications and other shared systems may be required by
Seller or Purchaser, as the case may be, to enter into a customary
non-disclosure agreement in connection with, and as a condition to, such access.
Seller shall not transfer to Purchaser, and Purchaser shall have no rights in or
access to, application software/systems source code associated with shared
systems through which Seller is providing services to Purchaser hereunder.
Purchaser shall not, through reverse engineering or any other technique or
means, attempt to access such source code and will use the application
software/systems only for their intended use.
ARTICLE XIX RECORDS. SELLER SHALL PROVIDE TO PURCHASER ALL INFORMATION
AND RECORDS REASONABLY REQUIRED TO MAINTAIN FULL AND ACCURATE BOOKS RELATING TO
THE PROVISION OF SERVICES AND ALL OTHER RECORDS RELEVANT TO THE TRANSITION
AGREEMENTS. UPON REASONABLE NOTICE FROM THE OTHER PARTY EACH PARTY SHALL MAKE
AVAILABLE FOR INSPECTION AND COPY BY SUCH OTHER PARTY'S AGENTS SUCH INFORMATION,
BOOKS AND RECORDS DURING REASONABLE BUSINESS HOURS.
ARTICLE XX FORCE MAJEURE; REDUCTION OF SERVICES. Neither party shall be
liable for any loss or damage whatsoever arising out of any delay or failure in
the performance of its obligations pursuant to this Agreement to the extent such
delay or failure results from events beyond the control of that party, including
but not limited to acts of God, acts or regulations of any Governmental Entity,
war, riots, insurrection or other hostilities, accident, fire, flood, strikes,
lockouts, industrial disputes or shortages of fuel. Neither party shall be
entitled to terminate this Agreement in respect of any such delay or failure
resulting from any such event.
ARTICLE XXI DISPUTE RESOLUTION. In the event of any dispute between
Seller and Purchaser with respect to the provision of any Service pursuant to
this Agreement, each of Seller and Purchaser shall designate an employee as its
representative to attempt to resolve the dispute
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and each such representative will use reasonable commercial efforts to resolve
the dispute promptly. If the individuals designated by Seller and Purchaser are
unable to resolve the dispute promptly, the dispute will be submitted to a
member of senior management of each party. Such members of senior management
will meet in person or by telephone conference at least once in the 10-day
period following the submission of the dispute to them and will use commercially
reasonable efforts to resolve the dispute promptly. If such members of senior
management are unable to resolve the dispute within 15 days of the submission of
the dispute to them, the parties may exercise any rights or remedies available
to them in the Purchase Agreement.
ARTICLE XXII DISCLAIMER: LIMITED LIABILITY; INDEMNIFICATION.
(a) Seller makes no express or implied representations,
warranties or guarantees relating to the Services to be performed under
this Agreement, including, without limitation, any warranty of
merchantability or fitness for a particular purpose. However, upon
Purchaser's written request, Seller shall pass through benefits of any
express warranties received from third parties relating to the Services,
and shall (at Purchaser's expense) assist Purchaser with any warranty
claims related thereto.
(b) Seller and its Affiliates shall not be liable, whether in
negligence, breach of contract or otherwise, for any damages suffered or
incurred by Purchaser or any other Person arising out of or in
connection with the rendering of a Service or any failure to provide a
Service, except to the extent that such damages are caused by the
willful misconduct or gross negligence of Seller or any of its
Affiliates. In no event shall Seller or any of its Affiliates be liable
for any lost profits or consequential, punitive, special or indirect
damages, except to the extent awarded by a court of competent
jurisdiction in respect of a third party claim. Seller's maximum
liability for any action, regardless of the form of action, whether in
tort or contract, arising under this Agreement, shall be limited to the
amount of fees paid by Purchaser hereunder. Purchaser shall indemnify
and hold harmless Seller and any landlord of property with respect to
which Seller is lessee for any claims in the nature of personal injury,
occupational health and similar matters brought by any employee,
visitor, invitee or similar person of Purchaser for any incident which
occurs on the premises for which space is being made available by Seller
to Purchaser or any of its Designees pursuant to this Agreement.
ARTICLE XXIII TERM AND TERMINATION.
(a) This Agreement shall become effective on the Closing Date
and, unless sooner terminated or extended in accordance with the terms
hereof, shall continue in effect until the one year anniversary of the
Closing Date (the "Termination Date").
(b) Purchaser may terminate any Service (provided that related
Services may not be terminated in part) prior to the expiration of the
term thereof by providing to Seller written notice of termination not
less than 60 days before the date of such earlier termination and the
provision of such Service shall terminate at the end of the period of
notice.
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(c) This Agreement may be terminated in whole or in part
(provided that related Services may not be terminated in part) by either
party if:
(i) the other party is unable to pay the Service fees as they
become due;
(ii) the other party is in material breach of any provision
of this Agreement, including its obligation to pay the fees due
pursuant to Section 3, provided that the party seeking to
terminate this Agreement for breach shall notify the other party
of such breach and provide such other party with 30 days to cure
such breach; or
(iii) the provision or receipt of any such Service is
prohibited by applicable Law, subjects Seller or any of its
Affiliates, or Purchaser or any of its Affiliates (as the case
may be), to increased regulation by any Governmental Entity or
requires Seller to obtain any license or permit that would
materially impact Seller's businesses.
(d) Specific termination or exit plans will be determined
pursuant to good faith negotiations and reflected in individual Service
Level Agreements, but in general will reflect the most expedient means
of exiting each particular Service, whether it be country or process
oriented.
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ARTICLE XXIV INDEPENDENT CONTRACTOR. The parties hereto understand and agree
that this Agreement does not make either of them an agent or legal
representative of the other for any purpose whatsoever. No party is granted, by
this Agreement or otherwise, any right or authority to assume or create any
obligation or responsibilities, express or implied, on behalf of or in the name
of any other party, or to bind any other party in any manner whatsoever. The
parties expressly acknowledge (i) that Seller is an independent contractor with
respect to Purchaser in all respects, including, without limitation, the
provision of the Services, and (ii) that the parties are not partners, joint
venturers, employees or agents of or with each other.
ARTICLE XXV CONFIDENTIALITY. SELLER AND PURCHASER SHALL KEEP
CONFIDENTIAL IN ACCORDANCE WITH THE PURCHASE AGREEMENT ALL THE PROPRIETARY OR
CONFIDENTIAL INFORMATION RECEIVED FROM EACH OTHER PARTY REGARDING THE SERVICES,
INCLUDING ANY INFORMATION RECEIVED WITH RESPECT TO PRODUCTS OF PURCHASER, SELLER
OR HEWLETT PACKARD COMPANY AND TO USE SUCH INFORMATION ONLY FOR PURPOSES OF
PROVIDING THE SERVICES.
ARTICLE XXVI BENEFICIARY OF SERVICES; NO THIRD PARTY BENEFICIARIES. This
Agreement is for the sole benefit of the parties hereto, and nothing expressed
or implied shall give or be construed to give any person any legal or equitable
rights hereunder, whether as a third party beneficiary or otherwise. Seller and
Purchaser agree, and Purchaser represents and warrants, that the Services will
be provided solely to, and will be used solely by, Purchaser, its subsidiaries
and, to the extent reasonably necessary and appropriate with respect to
particular Services, its suppliers, in each case only in connection with the
Purchased Assets and the Assumed Liabilities. Purchaser shall not resell or
provide the Services to any other Person, or permit the use of the Services by
any Person other than Purchaser and its Subsidiaries.
ARTICLE XXVII ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof, and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter hereof.
ARTICLE XXVIII AMENDMENT; WAIVER. This Agreement may be amended, and any
provision of this Agreement may be waived, if but only if such amendment or
waiver is in writing and signed, in the case of an amendment, by Seller and
Purchaser, or in the case of a waiver, by the party against whom the waiver is
effective. No failure or delay by any party in exercising any right, power or
privilege under this Agreement shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
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ARTICLE XXIX NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including telecopy or similar writing)
and shall be given as follows:
if to Seller:
Agilent Technologies, Inc.
395 Page Mill Road Palo Alto, California 94306
Attention: General Counsel
Fax: (650) 752-5082
with a copy (which shall not constitute notice) to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Caroline B. Gottschalk
Fax: (212) 455-2502
if to Purchaser:
c/o Philips Medical Systems Nederland B.V.
P.O. Box 10,000
5680DA BEST
The Netherlands
Attention: General Counsel
Fax: +31-40-27-62651
with a copy (which shall not constitute notice) to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Matthew G. Hurd
Fax: (212) 558-3588
or to such other address or telecopy number and with such other copies, as such
party may hereafter specify for the purpose of notice to the other parties. Each
such notice, request or other communication shall be effective (i) if given by
fax, when such fax is transmitted to the fax number specified in this Section 18
and evidence of receipt is received or (ii) if given by any other means, upon
delivery or refusal of delivery at the address specified in this Section 18.
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ARTICLE XXX NON ASSIGNABILITY. This Agreement shall not be assigned by either
party hereto without the prior written consent of the other party, and any
attempted assignment, without such consent, shall be null and void, except that
Purchaser shall have the right to assign any or all of its rights and
obligations under this Agreement to one or more direct or indirect Subsidiaries
(other than directors' qualifying shares) of Purchaser (each, a "Designee");
provided, however, that no such assignment shall release Purchaser from any of
its liabilities or obligations hereunder.
ARTICLE XXXI DEFINITIONS AND RULES OF CONSTRUCTION
(A) DEFINED TERMS USED IN THIS AGREEMENT HAVE THE MEANINGS
ASCRIBED TO THEM BY DEFINITION IN THIS AGREEMENT OR IN
ANNEX A TO THE PURCHASE AGREEMENT.
(B) THIS AGREEMENT SHALL BE CONSTRUED WITHOUT REGARD TO ANY
PRESUMPTION OR RULE REQUIRING CONSTRUCTION OR
INTERPRETATION AGAINST THE PARTY DRAFTING OR CAUSING ANY
INSTRUMENT TO BE DRAFTED.
(C) WHENEVER THE WORDS "INCLUDE", "INCLUDING", OR "INCLUDES"
APPEAR IN THIS AGREEMENT, THEY SHALL BE READ TO BE
FOLLOWED BY THE WORDS "WITHOUT LIMITATION" OR WORDS HAVING
SIMILAR IMPORT.
(D) AS USED IN THIS AGREEMENT, THE PLURAL SHALL INCLUDE THE
SINGULAR AND THE SINGULAR SHALL INCLUDE THE PLURAL.
ARTICLE XXXII COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument. Copies of
executed counterparts transmitted by telecopy, telefax or other electronic
transmission service shall be considered original executed counterparts for
purposes of this Section 21, provided that receipt of copies of such
counterparts is confirmed. This Agreement shall become effective when each party
has received a counterpart hereof signed by the other party hereto.
ARTICLE XXXIII SECTION HEADINGS. The section headings contained in this
Agreement are for reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
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ARTICLE XXXIV SEVERABILITY. If any provision of this Agreement shall be declared
by any court of competent jurisdiction to be illegal, void or unenforceable, all
other provisions of this Agreement shall not be affected and shall remain in
full force and effect, and Seller and Purchaser shall negotiate in good faith to
replace such illegal, void or unenforceable provision with a provision that
corresponds as closely as possible to the intentions of the parties as expressed
by such illegal, void, or unenforceable provision.
ARTICLE XXXV GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, except for the internal
matters of any corporation, partnership or similar entity which shall be
governed by the laws of the jurisdictions of incorporation of such corporation,
partnership or similar entity.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
AGILENT TECHNOLOGIES, INC.
By:
---------------------------------
Printed Name:
-----------------------
Title:
------------------------------
KONINKLIJKE PHILIPS ELECTRONICS NV
By:
---------------------------------
Printed Name:
-----------------------
Title:
------------------------------
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ANNEX A
SERVICES
Seller will continue to provide, or cause its Affiliates or any
third party to continue to provide, as the case may be, the following services
and functions set forth below in accordance with the terms of the Transition
Services Agreement to which this Annex A is attached. The descriptions set forth
in this Annex A are intended to be general in nature. Specific services and
functions will be described in detail in the individual Service Level
Agreements.
1. Information Technology
Network Continued access to and use of the current
wide-area network, including data circuits, network
hubs and routers, modem pools, and the continued
support of any local area network ("LAN") that is
managed and supported by Seller in respect of the
Business.
Data Center Continued access to and use of running data
services, including the operation of computers,
servers and applications of systems used by Seller
in respect of the Business, and those hosted at
data centers around the world that are run and
managed by Seller, including Colorado Springs,
Germany and Singapore. The provision of running
data services shall also include disaster recovery,
and the e-commerce initiatives and web-based
infrastructure relating to the Business.
Help Desk Continued access to and use of the service
arms of Seller responsible for end-user phone
support for network, desktop and application
support for the Seller environment outside of the
US. All US support will be provided by the Business
from its US factory site.
E-Mail/Desktop Continued support and use of common
operating environment e-mail services and
desktop/laptop support currently provided by Seller
in respect of the Business. These services will
include any account administration and break/fix
activities provided by Seller. End-user upgrades
and new equipment related to this Service shall be
provided at Purchaser's sole expense.
Voice Continued support and access in respect of
the current phone and phone switch usage and voice
mail services provided by Seller in respect of the
Business. These services include moves, additions,
changes and break/fix services consistent with the
past practice of the Business.
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Application Services Continued support and access to the
business applications and web-based applications
(supplies sales) used by Seller in respect of the
Business.
2. Customer Services
Business Applications Continued use and access to all business
application and data access in respect of customer
support and medical supplies business.
Service Parts and Supplies Continued use and access to the
infrastructure, people and systems required to
provide services in respect of the supply of
service parts and supplies, including, but not
limited to, distribution, logistics, warehousing,
planning, purchasing and inventory control.
Front & Back Office Support Continued use and access to the
infrastructure, people and systems required to
provide "front office & back office" support for
sales and service. This will include, but is not
limited to, order management, which includes order
processing, contract administration, quotation,
billing, collections, credit, order fulfillment,
response center activities and delivery
coordination.
3. Finance - Accounting and Reporting Systems
Accounting Information Provision of accurate, detailed accounting
and reporting information associated with the
Business, substantially similar to the information
currently prepared for Seller. These activities
include transaction processing, including, but not
limited to, revenue, gross margin, expense,
accounts receivable, intracompany, inventory, fixed
assets, cash, accounts payable, warranty reserves,
as well as general ledger maintenance, posting and
reconciling. In no event shall the reporting
include activities not currently reported in
respect of the Business as of the Closing Date. The
final structure of reporting for accounting
information will be defined prior to closing in the
relevant service level agreements.
Such detailed accounting and reporting
information shall be provided on a monthly basis,
and shall comply with Seller's policies and
procedures which materially comply with US GAAP
practices, consistent with Seller closing cycles
and month end cutoffs. Unless Purchaser and Seller
mutually agree otherwise, Seller shall provide
Purchaser with customary IT generated reports on
substantially the same time schedule as currently
provided, which
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108
will include detail for worldwide Seller bookings,
product and service revenue, product gross margin
and cash activity for the month associated with the
business.
4. OPERATIONS
Products Database Continued support from and access to
Seller's product/parts logistics support and parts
numbering system, including the provision of
services and information relating to numbering
system linkages, the establishment or development
of a link into the Purchaser systems
infrastructure, and the down-loading of all related
part information.
Global Trade Continued support and assistance from
Seller's Global Trade Group in respect of
International materials distribution, including
Inter-company cross-border transport, freight
forwarding, customs compliance, reporting,
logistics, and Seller's materials distribution
services.
5. WORKPLACE SERVICES
General Continued support in respect of workplace
services provided to employees in shared offices,
including the provision of occupancy, maintenance
of workplace building, program delivery for
environmental, health and safety services including
janitorial services, reception, security utilities
and call management services.
6. COLLECTION OF RECEIVABLES
Remittance of Receivables Seller shall provide to Purchaser a
schedule of outstanding receivables related to the
Business ("Receivables"). Separate bank accounts
will be set up in order to collect all Purchaser
receivables after the closing. Both Seller and
Purchaser shall transfer any misdirected payments
with respect to the receivables to the appropriate
company within seven days of receipt thereof.
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EXHIBIT E
TRADEMARK OWNERSHIP AND LICENSE AGREEMENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS........................................................ 1
1.1. AUTHORIZED DEALERS............................................ 2
1.2. BUSINESS...................................................... 2
1.3. COLLATERAL MATERIALS.......................................... 2
1.4. CORPORATE IDENTITY MATERIALS.................................. 2
1.5. CLOSING DATE.................................................. 2
1.6. HP MARKS...................................................... 2
1.7. LICENSED MARKS................................................ 2
1.8. MARK.......................................................... 2
1.9. PURCHASER PRODUCTS............................................ 2
1.10. PERSON....................................................... 2
1.11. PURCHASER BUSINESS MARKS..................................... 2
1.12. QUALITY STANDARDS............................................ 2
1.13. SELL......................................................... 2
1.14. SELLER MARKS................................................. 2
1.15. SUBSIDIARY................................................... 3
1.16. THIRD PARTY.................................................. 3
1.17. TRADEMARK USAGE GUIDELINES................................... 3
ARTICLE II ASSIGNMENT........................................................ 3
2.1. ASSIGNMENT OF PURCHASER BUSINESS MARKS........................ 3
2.2. PRIOR GRANTS.................................................. 3
ARTICLE III LICENSES......................................................... 4
3.1. LICENSE GRANT................................................. 4
3.2. LICENSE RESTRICTIONS.......................................... 4
3.3. LICENSEE UNDERTAKINGS......................................... 5
ARTICLE IV PERMITTED SUBLICENSES............................................. 6
4.1. SUBLICENSES TO SUBSIDIARIES................................... 6
4.2. AUTHORIZED DEALERS' USE OF MARKS.............................. 6
4.3. ENFORCEMENT OF AGREEMENTS..................................... 6
ARTICLE V TRADEMARK USAGE GUIDELINES......................................... 6
5.1. TRADEMARK USAGE GUIDELINES.................................... 6
5.2. TRADEMARK REVIEWS............................................. 7
ARTICLE VI TRADEMARK USAGE GUIDELINES ENFORCEMENT............................ 7
6.1. INITIAL CURE PERIOD........................................... 7
6.2. SECOND CURE PERIOD............................................ 7
6.3. FINAL CURE PERIOD............................................. 8
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110
ARTICLE VII QUALITY STANDARDS................................................ 8
7.1. GENERAL....................................................... 8
7.2. QUALITY STANDARDS............................................. 8
7.3. QUALITY CONTROL REVIEWS....................................... 8
ARTICLE VIII QUALITY STANDARD ENFORCEMENT.................................... 8
8.1. INITIAL CURE PERIOD........................................... 8
8.2. SECOND CURE PERIOD............................................ 9
8.3. FINAL CURE PERIOD............................................. 9
ARTICLE IX PROTECTION OF LICENSED MARKS...................................... 9
9.1. OWNERSHIP AND RIGHTS.......................................... 9
9.2. PROTECTION OF MARKS........................................... 9
9.3. SIMILAR MARKS................................................. 10
9.4. INFRINGEMENT PROCEEDINGS...................................... 10
ARTICLE X CONFIDENTIALITY.................................................... 10
10.1. CONFIDENTIAL INFORMATION..................................... 11
10.2. EXCEPTIONS................................................... 11
10.3. DURATION..................................................... 11
ARTICLE XI TERM OF LICENSE................................................... 12
ARTICLE XII TERMINATION...................................................... 13
12.1. VOLUNTARY TERMINATION........................................ 13
12.2. SURVIVAL..................................................... 13
ARTICLE XIII DISPUTE RESOLUTION.............................................. 13
13.1. NEGOTIATION.................................................. 13
13.2. NONBINDING MEDIATION......................................... 14
13.3. PROCEEDINGS.................................................. 14
ARTICLE XIV LIMITATION OF LIABILITY.......................................... 14
ARTICLE XV MISCELLANEOUS PROVISIONS.......................................... 15
15.1. DISCLAIMER................................................... 15
15.2. NO IMPLIED LICENSES.......................................... 15
15.3. INFRINGEMENT SUITS........................................... 15
15.4. NO OBLIGATION TO OBTAIN OR MAINTAIN MARKS.................... 15
15.5. ENTIRE AGREEMENT............................................. 15
15.6. GOVERNING LAW................................................ 16
15.7. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL................ 16
15.8. SECTION HEADINGS; TABLE OF CONTENTS.......................... 16
15.9. NOTICES...................................................... 16
15.10. NONASSIGNABILITY............................................ 18
15.11. SEVERABILITY................................................ 18
15.12. AMENDMENT; WAIVER; REMEDIES CUMULATIVE...................... 18
15.13. COUNTERPARTS................................................ 18
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TRADEMARK OWNERSHIP AND
LICENSE AGREEMENT
BETWEEN
AGILENT TECHNOLOGIES, INC.
AND
KONINKLIJKE PHILIPS ELECTRONICS N.V.
EFFECTIVE AS OF ____________ ___, 2000
112
TRADEMARK OWNERSHIP AND LICENSE AGREEMENT
This Trademark Ownership and License Agreement (the "Agreement") is
effective as of the Closing Date (as defined herein), between Agilent
Technologies, Inc., a Delaware corporation ("Seller"), and Koninklijke Philips
Electronics N.V., a company incorporated under the laws of The Netherlands.
WHEREAS, Seller and certain direct and indirect Subsidiaries of Seller
are engaged in, among other things, supplying Medical Products (as defined in
the Asset Purchase Agreement);
WHEREAS, Seller and Purchaser have entered into an Asset Purchase
Agreement, dated as of November 16, 2000 ("Asset Purchase Agreement"), pursuant
to which Purchaser, through one or more of its direct or indirect Subsidiaries,
shall purchase and assume, and Seller, through itself and one or more of its
direct or indirect Subsidiaries, shall sell, transfer and assign substantially
all of the assets and liabilities of the Business (as defined in the Asset
Purchase Agreement) to Purchaser;
WHEREAS, in connection with the foregoing, Seller desires to assign to
Purchaser ownership of certain marks and grant to Purchaser a license to use
certain other marks; and
NOW, THEREFORE, in consideration of the mutual promises of the parties,
and of good and valuable consideration, it is agreed by and between the parties
as follows:
ARTICLE XXXVI
DEFINITIONS
For the purpose of this Agreement, the following capitalized terms are
defined in this Article I and shall have the meaning specified herein:
113
36.1. AUTHORIZED DEALERS. "Authorized Dealers" means any distributor,
dealer, OEM customer, VAR customer, VAD customer, systems integrator or other
agent that on or after the Closing Date is authorized by Purchaser or any of its
Subsidiaries to market, advertise, sell, lease, rent, service or otherwise offer
Purchaser Products.
36.2. BUSINESS. "Business" shall have the meaning set forth in the Asset
Purchase Agreement.
36.3. COLLATERAL MATERIALS. "Collateral Materials" means all packaging,
tags, labels, advertising, promotions, display fixtures, instructions,
warranties and other materials of any and all types associated with the
Purchaser Products that are marked with at least one of the Licensed Marks.
36.4. CORPORATE IDENTITY MATERIALS. "Corporate Identity Materials" means
materials that are not products or product-related and that Purchaser may now or
hereafter use to communicate its identity, including, by way of example and
without limitation, business cards, letterhead, stationery, paper stock and
other supplies, signage on real property, buildings, fleet and uniforms.
36.5. CLOSING DATE. "Closing Date" means the Closing Date as defined in
the Asset Purchase Agreement.
36.6. HP MARKS. "HP Marks" means those Marks that are owned by the
Hewlett-Packard Company ("HP"), which Seller has certain rights to license under
a Master Trademark Ownership and Licensing Agreement, dated November 1, 1999,
between HP and Seller, and that are identified on Schedule A to this Agreement
as "HP Marks".
36.7. LICENSED MARKS. "Licensed Marks" means the Seller Marks and the HP
Marks listed on Schedule A to this Agreement.
36.8. MARK. "Mark" means any trademark, service mark, trade name, domain
name and the like, or other word, name, symbol or device or any combination
thereof, used or intended to be used by a Person to identify and distinguish the
products or services of that Person from the products or services of others and
to indicate the source of such goods or services, including without limitation
all registrations and applications therefor throughout the world and all common
law and other rights therein throughout the world.
36.9. PURCHASER PRODUCTS. "Purchaser Products" means Medical Products as
defined in the Asset Purchase Agreement.
36.10. PERSON. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
36.11. PURCHASER BUSINESS MARKS. "Purchaser Business Marks" means the
Marks listed on Schedule B to this Agreement.
36.12. QUALITY STANDARDS. "Quality Standards" means written standards of
quality applicable to the Purchaser Products, as in use immediately prior to the
Closing Date, unless otherwise communicated in writing by Seller or HP (as the
case may be) from time to time during the Term; such standards as may be
communicated in writing by Seller after the Closing Date to be reasonably
acceptable to Purchaser.
36.13. SELL. To "Sell" a product means to sell, transfer, lease or
otherwise dispose of a product. "Sale" and "Sold" have the corollary meanings
ascribed thereto.
36.14. SELLER MARKS. "Seller Marks" means the Marks that are owned by
Seller as of the Closing Date and that are identified on Schedule A to this
Agreement as "Seller Marks".
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36.15. SUBSIDIARY. "Subsidiary" means with respect to any specified
Person, any corporation, any limited liability company, any partnership or other
legal entity of which such Person owns, directly or indirectly, more than 50% of
the stock or other equity interest entitled to vote on the election of the
members of the board of directors or similar governing body. For example, if
Seller owns 70% of the stock of another corporation, and that corporation owns
60% of the equity interest of a limited liability company, then that corporation
is a Subsidiary of Seller but that limited liability company is not. However, if
such corporation owns 90% of the equity interest of a limited liability company,
then that limited liability company is a Subsidiary of Seller.
36.16. THIRD PARTY. "Third Party" means a Person other than Seller and
its Subsidiaries or Purchaser and its Subsidiaries.
36.17. TRADEMARK USAGE GUIDELINES. "Trademark Usage Guidelines" means
the written guidelines for proper usage of the Licensed Marks, as in use
immediately prior to the Closing Date, and as such guidelines may be revised and
updated in writing by Seller or HP (as the case may be) from time to time during
the Term.
ARTICLE XXXVII
ASSIGNMENT
37.1. ASSIGNMENT OF PURCHASER BUSINESS MARKS. Subject to Sections 2.2
and 2.3 below, Seller hereby grants, conveys and assigns (and agrees to cause
its appropriate Subsidiaries to grant, convey and assign) to Purchaser, by
execution hereof (or, where appropriate or required, by execution of separate
instruments of assignment), all its (and their) right, title and interest in and
to the Purchaser Business Marks, including all goodwill of the Business
appurtenant to such Purchaser Business Marks, as well as all renewals and
extensions of the registrations that are or may be secured in the United States,
its territories and possessions and throughout the world, now or hereinafter in
effect, to be held and enjoyed by Purchaser and its Subsidiaries, its successors
and assigns. Seller further grants, conveys and assigns (and agrees to cause its
appropriate Subsidiaries to grant, convey and assign) to Purchaser all its (and
their) right, title and interest in and to any and all rights to the proceeds,
causes of action and rights of recovery for past infringement of the Purchaser
Business Marks. Seller will, without demanding any further consideration
therefor, at the request and 50% of the expense of Purchaser (except for the
costs of the time of Seller employees and 50% of the recordation and filing
fees), do (and cause its Subsidiaries to do) all lawful and just acts that may
be or become reasonably necessary for assigning, transferring, conveying,
evidencing, maintaining, recording and perfecting Purchaser's rights to such
Purchaser Business Marks, including but not limited to execution and
acknowledgement of (and causing its Subsidiaries to execute and acknowledge)
assignments and other instruments in a form reasonably required by Purchaser or
the relevant governmental or other authorities for each Mark in all
jurisdictions in which Seller or its appropriate Subsidiary owns rights thereto.
37.2. PRIOR GRANTS. Purchaser acknowledges and agrees that the foregoing
assignment is subject to any and all licenses or other rights that may have been
granted by Seller or its Subsidiaries (or their predecessors in interest) with
respect to the Purchaser Business Marks prior to the Closing Date. Seller shall
respond to reasonable inquiries from Purchaser regarding any such prior grants.
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ARTICLE XXXVIII
LICENSES
38.1. LICENSE GRANT.
(a) Seller grants (and agrees to cause its appropriate
Subsidiaries to grant) to Purchaser a personal, non-exclusive,
worldwide, fully-paid and non-transferable (except as set forth in
Section 15.10 hereof) license during the Term (as set forth in Article
XI hereof) to use the Licensed Marks that are Seller Marks on the
Purchaser Products and in connection with the Sale and offer for Sale,
promotion and maintenance of such Purchaser Products (or, in the case of
Purchaser Products in the form of software, in connection with licensing
of such Purchaser Products) and to use the Licensed Marks that are
Seller Marks in the advertisement and promotion of such Purchaser
Products. Seller covenants not to grant any other licenses under the
Licensed Marks that are Seller Marks in Purchaser's Field of Use during
the Term.
(b) Seller grants to Purchaser a sublicense to use the HP Marks
to the extent permitted under Section 4.1(b) of the Master Trademark
Ownership and License Agreement between Hewlett-Packard and Seller,
dated as of November 1, 1999, in connection with the Sale or licensing
of Purchaser Products.
38.2. LICENSE RESTRICTIONS
(a) Once Purchaser abandons the use of all of the Licensed Marks
on a particular Purchaser Product, then Purchaser agrees that its
license granted hereunder with respect to that Purchaser Product shall
thereupon terminate.
(b) Purchaser may not make any use whatsoever, in whole or in
part, of the Licensed Marks, or any other Mark owned by Seller, in
connection with Purchaser's corporate, doing business as, or fictitious
name, or on Corporate Identity Materials.
(c) Purchaser may not use any Licensed Mark in direct association
with another Mark such that the two Marks appear to be a single Mark or
in any other composite manner with any Marks of Purchaser or any Third
Party (other than the Purchaser Business Marks as permitted herein).
(d) In all respects, Purchaser's usage of the Licensed Marks
during the Term pursuant to the license granted hereunder shall be in a
manner consistent with the high standards, reputation and prestige of
the Seller or HP (as the case may be) as represented by its use of the
Licensed Marks, and any usage by Purchaser that is inconsistent with the
foregoing shall be deemed to be outside the scope of the license granted
hereunder. As a condition to the license granted hereunder, Purchaser
shall at all times present, position and promote the Purchaser Products
marked with one or more of the Licensed Marks in a manner consistent
with the high standards and prestige of the Seller or HP (as the case
may be).
(e) The license hereunder to the HP Marks is subject to the
provisions of the Master Trademark Ownership and License Agreement
between HP and Agilent dated
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November 1, 1999, which supersedes any inconsistent provisions of this
Agreement with respect to the HP Marks.
38.3. LICENSEE UNDERTAKINGS. As a condition to the licenses granted
hereunder, Purchaser undertakes to Seller that:
(a) Purchaser shall not use the Licensed Marks (or any other Mark
of Seller) in any manner contrary to public morals, in any manner which
is deceptive or misleading, which ridicules or is derogatory to the
Licensed Marks, or which compromises or reflects unfavorably upon the
goodwill, good name, reputation or image of Seller or the Licensed
Marks, or which might jeopardize or limit Seller's proprietary interest
therein.
(b) Purchaser shall not use the Licensed Marks in connection with
any products or services other than the Purchaser Products, including
without limitation any other products sold by Purchaser.
(c) Purchaser shall not (i) misrepresent to any Person the scope
of its authority under this Agreement, (ii) incur or authorize any
expenses or liabilities chargeable to Seller, or (iii) take any actions
that would impose upon Seller any obligation or liability to a Third
Party other than obligations under this Agreement, or other obligations
which Seller expressly approves in writing for Purchaser to incur on its
behalf.
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ARTICLE XXXIX
PERMITTED SUBLICENSES
39.1. SUBLICENSES TO SUBSIDIARIES. Subject to the terms and conditions
of this Agreement, including all applicable Quality Standards and Trademark
Usage Guidelines and other restrictions in this Agreement, Purchaser may grant
sublicenses to its Subsidiaries to use the Licensed Marks in accordance with the
license grant in Section 3.1 above; provided, that (i) Purchaser enters into a
written sublicense agreement with each such Subsidiary sublicensee, and (ii)
such agreement does not include the right to grant further sublicenses. If
Purchaser grants any sublicense rights pursuant to this Section 4.1(a) and any
such sublicensed Subsidiary ceases to be a Subsidiary, then the sublicense
granted to such Subsidiary pursuant to this Section 4.1(a) shall terminate
immediately upon the date of such cessation.
39.2. AUTHORIZED DEALERS' USE OF MARKS. Subject to the terms and
conditions of this Agreement, including all applicable Quality Standards and
Trademark Usage Guidelines and other restrictions in this Agreement, Purchaser
(and those Subsidiaries sublicensed to use the Licensed Marks pursuant to
Section 4.1) may allow Authorized Dealers to, and may allow such Authorized
Dealers to allow other Authorized Dealers to, use the Licensed Marks in the
advertisement and promotion of Purchased Products Sold and/or maintained by such
Authorized Dealers, provided that such Authorized Dealers execute written
agreements with Purchaser (or its Subsidiaries) that impose upon such Authorized
Dealers an obligation of full compliance with all relevant provisions of this
Agreement.
39.3. ENFORCEMENT OF AGREEMENTS. Purchaser shall take all reasonably
appropriate measures at Purchaser's expense promptly and diligently to enforce
the terms of any sublicense agreement or other agreement with any Subsidiary or
Authorized Dealer and shall restrain any such Subsidiary or Authorized Dealer
from violating such terms, including without limitation (i) monitoring the
Subsidiaries', and Authorized Dealers' compliance with the relevant Trademark
Usage Guidelines and Quality Standards and causing any noncomplying Subsidiary
or Authorized Dealer promptly to remedy any failure, (ii) if need be,
terminating such agreement and/or (iii) if need be, commencing legal action, in
each case, using a standard of care consistent with Seller's practices as of the
Closing Date. In the event that Seller reasonably determines that Purchaser has
failed promptly and diligently to enforce the terms of any such agreement using
such standard of care, Seller reserves the right to enforce such terms, and
Purchaser shall reimburse Seller for its fully allocated direct costs and
expenses incurred and evidenced in enforcing such agreement.
ARTICLE XL
TRADEMARK USAGE GUIDELINES
40.1. TRADEMARK USAGE GUIDELINES. Purchaser, its Subsidiaries and
Authorized Dealers shall use the Licensed Marks during the Term only in a manner
that is consistent with the Trademark Usage Guidelines.
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40.2. TRADEMARK REVIEWS. At Seller's reasonable request, Purchaser
agrees to furnish or make available for inspection to Seller samples of all
Purchaser Products and Collateral Materials of Purchaser and its Subsidiaries
that are marked with one or more of the Licensed Marks. Purchaser further agrees
to take reasonably appropriate measures to require its Authorized Dealers to
furnish or make available for inspection to Purchaser samples of all Collateral
Materials of its Authorized Dealers that are marked with one or more of the
Licensed Marks (to the extent that Purchaser has the right to obtain such
samples). If Purchaser is notified or reasonably determines that it or any of
its Subsidiaries or Authorized Dealers is not complying with any Trademark Usage
Guidelines, it shall notify Seller and the provisions of Article VI and Section
3.3 hereof shall apply to such noncompliance.
ARTICLE XLI
TRADEMARK USAGE GUIDELINES ENFORCEMENT
41.1. INITIAL CURE PERIOD. If Seller becomes aware that Purchaser or any
Subsidiary is not complying with any Trademark Usage Guidelines, Seller shall
notify Purchaser in writing, setting forth in reasonable detail a written
description of the noncompliance and any requested action for curing such
noncompliance. Purchaser shall then have thirty (30) days after receipt of such
notice ("Guideline Initial Cure Period") to correct such noncompliance or submit
to Seller a written plan to correct such noncompliance, which written plan is
reasonably acceptable to Seller, unless Seller previously affirmatively concurs
in writing, in its sole discretion, that Purchaser or its Subsidiary is not in
noncompliance. If Seller or Purchaser becomes aware that an Authorized Dealer is
not complying with any Trademark Usage Guidelines, Purchaser (but not Seller)
shall promptly notify such Authorized Dealer in writing, setting forth in
reasonable detail a written description of the noncompliance and any requested
action for curing such noncompliance. Such Authorized Dealer shall then have the
Guideline Initial Cure Period to correct such noncompliance or submit to
Purchaser a written plan to correct such noncompliance, which written plan is
reasonably acceptable to Purchaser and Seller.
41.2. SECOND CURE PERIOD. If the noncompliance with the Trademark Usage
Guidelines continues beyond the Guideline Initial Cure Period, Purchaser and
Seller shall each promptly appoint a representative to negotiate in good faith
actions that may be necessary to correct such noncompliance. The parties shall
have fifteen (15) days following the expiration of the Guideline Initial Cure
Period to agree on corrective actions, and Purchaser shall have fifteen (15)
days from the date of an agreement of corrective actions to implement such
corrective actions and cure or cause the cure of such noncompliance ("Second
Guideline Cure Period").
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41.3. FINAL CURE PERIOD. If the noncompliance with the Trademark Usage
Guidelines by Purchaser or any Subsidiary (as the case may be) remains uncured
after the expiration of the Second Guideline Cure Period, then at Seller's
election, Purchaser or the noncomplying Subsidiary (as the case may be) promptly
shall cease using the noncomplying Collateral Materials until Seller reasonably
determines that Purchaser or the noncomplying Subsidiary (as the case may be)
has demonstrated its ability and commitment to comply with the Trademark Usage
Guidelines. If the noncompliance with the Trademark Usage Guidelines by an
Authorized Dealer remains uncured after the expiration of the Second Guideline
Cure Period, then at Purchaser's election, such Authorized Dealer promptly shall
cease using the noncomplying Collateral Materials until Purchaser determines
that such Authorized Dealer has demonstrated its ability and commitment to
comply with the Trademark Usage Guidelines. Nothing in this Article VI shall be
deemed to limit Purchaser's obligations under Section 4.3 above or to preclude
Seller from exercising any rights or remedies under Section 4.3 above.
ARTICLE XLII
QUALITY STANDARDS
42.1. GENERAL. Purchaser acknowledges that the Purchaser Products
permitted by this Agreement to be marked with one or more of the Licensed Marks
must continue to be of sufficiently high quality as to provide protection of the
Licensed Marks and the goodwill they symbolize.
42.2. QUALITY STANDARDS. Purchaser and its Subsidiaries shall use the
Licensed Marks only on and in connection with Purchaser Products that meet or
exceed in all respects the Quality Standards.
42.3. QUALITY CONTROL REVIEWS. At Seller's reasonable request, Purchaser
agrees to furnish or make available to Seller for inspection sample Purchaser
Products marked with one or more of the Licensed Marks. If Purchaser is notified
or reasonably determines that it or any of its Subsidiaries is not complying
with any Quality Standards, it shall notify Seller and the provisions of Article
VIII and Section 3.3 shall apply to such noncompliance.
ARTICLE XLIII
QUALITY STANDARD ENFORCEMENT
43.1. INITIAL CURE PERIOD. If Seller becomes aware that Purchaser or any
Subsidiary is not complying with any Quality Standard, Seller shall notify
Purchaser in writing, setting forth in reasonable detail a written description
of the noncompliance and any requested action for curing such noncompliance.
Following receipt of such notice, Purchaser shall make an inquiry promptly and
in good faith concerning each instance of noncompliance described in the notice.
Unless Purchaser reasonably determines that the noncompliance described in the
notice is not, in fact, a material deviation from the applicable Quality
Standards, and so notifies Seller in writing within fourteen (14) days of
receipt of such notice, Purchaser shall then have thirty (30) days after receipt
of such notice ("Initial Cure Period") to correct such noncompliance or submit
to Seller a written plan to correct such noncompliance, which written plan is
reasonably acceptable to Seller, unless Seller previously affirmatively concurs
in writing, in its sole discretion, that Purchaser or its Subsidiaries is not in
noncompliance.
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43.2. SECOND CURE PERIOD. If the said noncompliance with the Quality
Standards continues beyond the Initial Cure Period, Purchaser and Seller shall
each promptly appoint a representative to negotiate in good faith actions that
may be necessary to correct such noncompliance. The parties shall have fifteen
(15) days following the expiration of the Initial Cure Period to agree on
corrective actions, and Purchaser shall have fifteen (15) days from the date of
an agreement of corrective actions to implement such corrective actions and cure
or cause the cure of such noncompliance ("Second Cure Period").
43.3. FINAL CURE PERIOD. If the said noncompliance with the Quality
Standards by Purchaser or any Subsidiary (as the case may be) remains uncured
after the expiration of the Second Cure Period, then at Seller's election,
Purchaser or the noncomplying Subsidiary (as the case may be) promptly shall
cease offering the noncomplying Purchaser Products under the Licensed Marks
until Seller reasonably determines that Purchaser, or the noncomplying
Subsidiary (as the case may be) has reasonably demonstrated its ability and
commitment to comply with the Quality Standards. Nothing in this Article VIII
shall be deemed to limit Purchaser's obligations under Section 4.3 above or to
preclude Seller from exercising any rights or remedies under Section 4.3 above.
ARTICLE XLIV
PROTECTION OF LICENSED MARKS
44.1. OWNERSHIP AND RIGHTS. Purchaser agrees not to challenge the
ownership or validity of the Licensed Marks. Purchaser shall not disparage,
dilute or adversely affect the validity of the Licensed Marks. Purchaser's use
of the Licensed Marks shall inure exclusively to the benefit of Seller or, in
the case of the HP Marks, to the benefit of HP, and Purchaser shall not acquire
or assert any rights therein. Purchaser recognizes the value of the goodwill
associated with the Licensed Marks, and that the Licensed Marks may have
acquired secondary meaning in the minds of the public.
44.2. PROTECTION OF MARKS. Purchaser shall assist Seller, at Seller's or
HP's request and expense, in the procurement and maintenance of Seller's or HP's
respective intellectual property rights in the Licensed Marks. Purchaser will
not grant or attempt to grant a security interest in the Licensed Marks or
record any such security interest in the United States Patent and Trademark
Office or elsewhere against any trademark application or registration belonging
to Seller. Purchaser agrees to, and to cause its Subsidiaries to, execute all
documents reasonably requested by Seller or HP (as the case may be) to effect
further registration of, maintenance and renewal of the Licensed Marks,
recordation of the license relationship between Seller and Purchaser, and
recordation of Purchaser as a registered user. Seller makes no warranty or
representation that trademark registrations have been or will be applied for,
secured or maintained in the Licensed Marks throughout, or anywhere within, the
world. Purchaser shall cause to appear on all Purchaser Products, and all
Collateral Materials, such legends, markings and notices as may be required by
applicable law or reasonably requested by Seller or HP (as the case may be).
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44.3. SIMILAR MARKS. Purchaser agrees not to use or register in any
country any Mark that infringes on the rights of Seller or HP (as the case may
be) in the Licensed Marks, or any element thereof. If any application for
registration is, or has been, filed in any country by Purchaser which relates to
any Mark that infringes the rights of Seller or HP in the Licensed Marks,
Purchaser shall immediately abandon any such application or registration or
assign it to Seller or HP. Purchaser shall not challenge Seller's or HP's
ownership of or the validity of the Licensed Marks or any application for
registration thereof throughout the world. Purchaser shall not use or register
in any country any copyright, domain name, telephone number or any other
intellectual property right, whether recognized currently or in the future, or
other designation which would affect the ownership or rights of Seller or HP in
and to the Licensed Marks, or otherwise to take any action which would adversely
affect any of such ownership rights, or assist anyone else in doing so.
Purchaser shall cause its Subsidiaries and Authorized Dealers to comply with the
provisions of this Section 9.3.
44.4. INFRINGEMENT PROCEEDINGS. In the event that the Purchaser learns,
during the Term of this Agreement, of any infringement or threatened
infringement of the Licensed Marks, or any unfair competition, passing-off or
dilution with respect to the Licensed Marks, Purchaser shall immediately notify
Seller or its authorized representative giving particulars thereof, and
Purchaser shall provide necessary information and assistance to Seller or its
authorized representatives at Seller's expense in the event that Seller decides
that proceedings should be commenced. Notwithstanding the foregoing, Purchaser
is not obligated to monitor or police use of the Licensed Marks by Third Parties
other than as specifically set forth in Section 4.3 hereof. Except for those
actions initiated by Purchaser pursuant to Section 4.3 hereof to enforce any
sublicense or other agreement with any Subsidiary or Authorized Dealer, Seller
shall have exclusive control of any litigation, opposition, cancellation or
related legal proceedings. The decision whether to bring, maintain or settle any
such proceedings shall be at the exclusive option and expense of Seller, and all
recoveries shall belong exclusively to Seller. Purchaser shall not and shall
have no right to initiate any litigation, opposition, cancellation or related
legal proceedings with respect to the Licensed Marks in its own name (except for
those actions initiated by Purchaser pursuant to Section 4.3 hereof), but, at
Seller's request, agrees to cooperate with Seller at Seller's expense to enforce
its rights in the Licensed Marks, including to join or be joined as a party in
any action taken by Seller against a third party for infringement or threatened
infringement of the Licensed Marks, to the extent such joinder is required under
mandatory local law for the prosecution of such an action. Seller shall incur no
liability to Purchaser or any other Person under any legal theory by reason of
Seller's failure or refusal to prosecute or by Seller's refusal to permit
Purchaser to prosecute, any alleged infringement by Third Parties, nor by reason
of any settlement to which Seller may agree.
ARTICLE XLV
CONFIDENTIALITY
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45.1. CONFIDENTIAL INFORMATION. The parties hereto expressly acknowledge
and agree that all information, whether written or oral, furnished by either
party to the other party or any Subsidiary of such other party pursuant to this
Agreement ("Confidential Information") shall be deemed to be confidential and
shall be maintained by each party and their respective Subsidiaries in
confidence, using the same degree of care to preserve the confidentiality of
such Confidential Information that the party to whom such Confidential
Information is disclosed would use to preserve the confidentiality of its own
information of a similar nature and in no event less than a reasonable degree of
care. Except as authorized in writing by the other party, neither party shall at
any time disclose or permit to be disclosed any such Confidential Information to
any person, firm, corporation or entity, (i) except as may reasonably be
required in connection with the performance of this Agreement by Purchaser,
Seller or its respective Subsidiaries, as the case may be, and (ii) except as
may reasonably be required after the Closing by Purchaser or its Subsidiaries in
connection with the use of the Licensed Marks or operation of the Business, and
(iii) except to the parties' agents or representatives who are informed by the
parties of the confidential nature of the information and are bound to maintain
its confidentiality, and (iv) in the course of due diligence in connection with
the sale of all or a portion of either party's business provided the disclosure
is pursuant to a nondisclosure agreement having terms comparable to Sections
10.1 and 10.2 hereof.
45.2. EXCEPTIONS. The obligation not to disclose information under
Section 10.1 hereof shall not apply to information that, as of the Closing Date
or thereafter, (i) is or becomes generally available to the public other than as
a result of disclosure made after the execution of the Asset Purchase Agreement
by the party desiring to treat such information as non-confidential or any of
its Subsidiaries or representatives thereof, (ii) was or becomes readily
available to the party desiring to treat such information as non-confidential or
any of its Subsidiaries or representatives thereof on a non-confidential basis,
(iii) is or becomes available to the party desiring to treat such information as
non-confidential or any of its Subsidiaries or representatives thereof on a
non-confidential basis from a source other than its own files or personnel or
the other party or its Subsidiaries, provided that such source is not known by
the party desiring to treat such information as non-confidential to be bound by
confidentiality agreements with the other party or its Subsidiaries or by legal,
fiduciary or ethical constraints on disclosure of such information, or (iv) is
required to be disclosed pursuant to a governmental order or decree or other
legal requirement (including the requirements of the U.S. Securities and
Exchange Commission and the listing rules of any applicable securities
exchange), provided that the party required to disclose such information shall
give the other party prompt notice thereof prior to such disclosure and, at the
request of the other party, shall cooperate in all reasonable respects in
maintaining the confidentiality of such information, including obtaining a
protective order or other similar order. Nothing in this Section 10.2 shall
limit in any respect either party's ability to disclose information in
connection with the enforcement by such party of its rights under this
Agreement; provided that the proviso of clause (v) in the immediately preceding
sentence shall apply to the party desiring to disclose such information.
45.3. DURATION. The obligations of the parties set forth in this Article
X, with respect to the protection of Confidential Information, shall remain in
effect until five years after (i) the Closing Date, with respect to Confidential
Information of one party that is known to or in the possession of the other
party as of the Closing Date, or (ii) the date of disclosure, with respect to
Confidential Information that is disclosed by the one party to the other party
after the Closing Date.
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ARTICLE XLVI
TERM OF LICENSE
The term of the license and sublicense granted by Seller to Purchaser
pursuant to Section 3.1 hereof shall begin on the Closing Date and, unless
terminated sooner pursuant to the provisions of Article XII hereof, shall last
for a period of one (1) year following the Closing Date; and (with respect only
to the license granted by Seller to Purchaser pursuant to Section 3.1(a) hereof)
may last for such additional period as may be strictly necessary to permit
Purchaser, its Subsidiaries and Authorized Dealers to dispose of inventory of
Purchaser Products marked with any of the Licensed Marks that are Seller Marks
that was on hand or on order as of the Closing Date, or that was ordered by
Purchaser or its Subsidiaries after the Closing Date but before Purchaser,
acting with reasonable expedition, is able to commence manufacture of Purchaser
Products in a form that is not marked with any of the Licensed Marks that are
Seller Marks, provided that Purchaser shall order only such quantities of
Purchaser Products marked with Seller Marks as are reasonably necessary to meet
anticipated demand during the period after the Closing Date and before Purchaser
is able to commence such manufacture, and further provided that Purchaser shall
commence no new uses of the Licensed Marks that are Seller Marks following the
expiration of the period of one (1) year, and that all use of such Licensed
Marks by Purchaser, its Subsidiaries and Authorized Dealers shall cease in all
events within a period of eighteen (18) months following the Closing Date (all
such periods of permissible use, collectively, the "Term"). Notwithstanding the
foregoing, it is understood and agreed that it shall not be a violation of this
Agreement for Purchaser, its Subsidiaries or Authorized Dealers, at any time
after the Term, to make accurate references to the fact that Purchaser has
succeeded to the business of Seller with respect to the Purchaser Products, or
to advertise or promote its or their provision of maintenance services or supply
of spare parts for Purchaser Products previously sold under any of the Licensed
Marks that are Seller Marks, provided that Purchaser, its Subsidiaries and
Authorized Dealers do not in connection therewith suggest any affiliation with
Seller, do not claim to be authorized by Seller in any manner with respect to
such activities, and do not brand any spare parts Sold after the Term with any
of the Licensed Marks.
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ARTICLE XLVII
TERMINATION
47.1. VOLUNTARY TERMINATION. By written notice to Seller, Purchaser may
voluntarily terminate all or a specified portion of the licenses and rights
granted to it hereunder by Seller. Such notice shall specify the effective date
of such termination and shall clearly specify any affected Licensed Marks,
Purchaser Products or services.
47.2. SURVIVAL. Any voluntary termination of licenses and rights of
Purchaser under Section 12.1 hereof shall not affect Purchaser's licenses and
rights with respect to any Purchaser Products made or furnished prior to such
termination.
ARTICLE XLVIII
DISPUTE RESOLUTION
48.1. NEGOTIATION. The parties shall make a good faith attempt to
resolve any dispute or claim arising out of or related to this Agreement through
negotiation. Within thirty (30) days after notice of a dispute or claim is given
by either party to the other party, the parties' first tier negotiating teams
(as determined by each party's Director of Intellectual Property (or person
holding a similar position or title) or his or her delegate) shall meet and make
a good faith attempt to resolve such dispute or claim and shall continue to
negotiate in good faith in an effort to resolve the dispute or claim or
renegotiate the applicable section or provision without the necessity of any
formal proceedings. If the first tier negotiating teams are unable to agree
within thirty (30) days of their first meeting, then the parties' second tier
negotiating teams (as determined by each party's Director of Intellectual
Property or his or her delegate) shall meet within thirty (30) days after the
end of the first thirty (30) day negotiating period to attempt to resolve the
matter. During the course of negotiations under this Section 13.1, all
reasonable requests made by one party to the other for information, including
requests for copies of relevant documents, will be honored. The specific format
for such negotiations will be left to the discretion of the designated
negotiating teams but may include the preparation of agreed upon statements of
fact or written statements of position furnished to the other party. All
negotiations between the parties pursuant to this Section 13.1 shall be treated
as compromise and settlement negotiations. Nothing said or disclosed, nor any
document produced, in the course of such negotiations that is not otherwise
independently discoverable shall be offered or received as evidence or used for
impeachment or for any other purpose in any current or future litigation.
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48.2. NONBINDING MEDIATION. In the event that any dispute or claim
arising out of or related to this Agreement is not settled by the parties within
fifteen (15) days after the first meeting of the second tier negotiating teams
under Section 13.1 hereof, the parties will attempt in good faith to resolve
such dispute or claim by nonbinding mediation in accordance with the American
Arbitration Association Commercial Mediation Rules. The mediation shall be held
within thirty (30) days of the end of such fifteen (15) day negotiation period
of the second tier negotiating teams. Except as provided below in Section 13.3,
no litigation for the resolution of such dispute may be commenced until the
parties try in good faith to settle the dispute by such mediation in accordance
with such rules, and either party has concluded in good faith that amicable
resolution through continued mediation of the matter does not appear likely. The
costs of mediation shall be shared equally by the parties to the mediation. Any
settlement reached by mediation shall be recorded in writing, signed by the
parties, and shall be binding on them.
48.3. PROCEEDINGS. Nothing herein, however, shall prohibit either party
from initiating litigation or other judicial or administrative proceedings if
such party would be substantially harmed by a failure to act during the time
that such good faith efforts are being made to resolve the dispute or claim
through negotiation or mediation. In the event that litigation is commenced
under this Section 13.3, the parties agree to continue to attempt to resolve any
dispute or claim according to the terms of Sections 13.1 and 13.2 hereof during
the course of such litigation proceedings under this Section 13.3.
ARTICLE XLIX
LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY OR ITS SUBSIDIARIES BE LIABLE TO THE
OTHER PARTY OR ITS SUBSIDIARIES FOR ANY DAMAGES, INCLUDING WITHOUT LIMITATION
SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS
OR ANY OTHER DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
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ARTICLE L
MISCELLANEOUS PROVISIONS
50.1. DISCLAIMER. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN THE ASSET
PURCHASE AGREEMENT, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL (A) PURCHASER
BUSINESS MARKS ASSIGNED PURSUANT TO THIS AGREEMENT AND (B) LICENSED MARKS AND
ANY OTHER INFORMATION OR MATERIALS LICENSED OR FURNISHED HEREUNDER ARE ASSIGNED,
LICENSED OR FURNISHED WITHOUT ANY WARRANTIES WHATSOEVER, WHETHER EXPRESS,
IMPLIED OR STATUTORY, WITH RESPECT THERETO INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF TITLE, ENFORCEABILITY OR NON-INFRINGEMENT. Except as
otherwise set forth herein or in the Asset Purchase Agreement, neither Seller
nor any of its Subsidiaries makes any warranty or representation as to the
validity of any Mark licensed by it to Purchaser or any warranty or
representation that any use of any Mark with respect to any product or service
will be free from infringement of any rights of any Third Party.
50.2. NO IMPLIED LICENSES. Nothing contained in this Agreement shall be
construed as conferring any rights by implication, estoppel or otherwise, under
any intellectual property right, other than the rights expressly granted in this
Agreement with respect to the Licensed Marks. Neither party is required
hereunder to furnish or disclose to the other any information (including copies
of registrations of the Marks), except as specifically provided herein or in the
Asset Purchase Agreement.
50.3. INFRINGEMENT SUITS. Neither party shall have any obligation
hereunder to institute any action or suit against Third Parties for infringement
of any of the Licensed Marks or to defend any action or suit brought by a Third
Party which challenges or concerns the validity of any of the Licensed Marks.
Purchaser shall not have any right to institute any action or suit against Third
Parties for infringement of any of the Licensed Marks.
50.4. NO OBLIGATION TO OBTAIN OR MAINTAIN MARKS. Neither party, nor any
of its Subsidiaries, is obligated to (i) file any application for registration
of any Mark, or to secure any rights in any Marks, (ii) to maintain any Mark
registration, or (iii) provide any assistance, except for the obligations
expressly assumed in this Agreement.
50.5. ENTIRE AGREEMENT. This Agreement and the Asset Purchase Agreement
constitute the entire understanding between the parties with respect to the
subject matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof. To the extent there is a conflict between this Agreement and the
Asset Purchase Agreement between the parties, the terms of the Asset Purchase
Agreement shall govern, provided, however, that the terms of this Agreement
shall govern with respect to (a) Article X with respect to Confidential
Information transferred or disclosed pursuant to this Agreement, (b) Article XII
with respect to termination of the licenses granted hereunder, (c) Article XIII
concerning dispute resolution, (d) Article XIV solely with respect to
intellectual property that is licensed by one party to another party pursuant to
this Agreement, (e) Section 15.9 concerning notice, and (f) Section 15.10
concerning assignment or transfer of rights or obligations arising under this
Agreement.
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50.6. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
made and to be performed wholly within the state, except for the internal
matters or any corporation, partnership or similar entity, which shall be
governed by the laws of the jurisdictions of incorporation or organization of
such corporation, partnership or similar entity.
50.7. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. Each party hereto
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Southern District of New York located in the borough of Manhattan
in the City of New York, or if such court does not have jurisdiction, the
Supreme Court of the State of New York, New York County, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each of the parties hereto further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth in Section 15.9 hereof shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction as set forth
above in the immediately preceding sentence. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (a) the United States District Court for the Southern
District of New York or (b) the Supreme Court of the State of New York, New York
County, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. The parties
hereto hereby irrevocably and unconditionally waive trial by jury in any legal
action or proceeding relating to this Agreement or any other agreement entered
into in connection therewith and for any counterclaim with respect thereto.
50.8. SECTION HEADINGS; TABLE OF CONTENTS. The section headings
contained in this Agreement and the Table of Contents to this Agreement are
inserted for reference purposes only and are not intended to be a part, nor
should they affect the meaning or interpretation, of this Agreement.
50.9. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by telecopy with answer back, by express or overnight mail delivered by an
internationally recognized air courier (delivery charges prepaid), by registered
or certified mail (postage prepaid, return receipt requested) or by e-mail with
receipt confirmed by return e-mail to the respective parties as follows:
if to Seller:
c/o Agilent Technologies, Inc.
395 Page Mill Road, MS A3-10
P.O. Box 10395
Palo Alto, California 94303-0870
Attention: Vice President, Associate General Counsel and
Director of Intellectual Property
Telecopy: +1 (650) 752-5742
with a copy to:
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Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Kerry L. Konrad
Telecopy: +1 (212) 455-2502
if to Purchaser:
c/o Philips Medical Systems B.V.
P.O. Box 10.000
5680 DA Best, The Netherlands
Attention: General Counsel
Telecopy: +31 40 2762651
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: Matthew G. Hurd
Telecopy: +1 (212) 558-3588
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by e-mail, telecopy or by air courier
shall be deemed effective on the first Business Day following the day on which
such notice or communication was sent. Any notice or communication sent by
registered or certified mail shall be deemed effective on the third Business Day
following the day on which such notice or communication was mailed. As used in
this Section 15.9, "Business Day" means day other than a Saturday, a Sunday or a
day on which banking institutions located in the jurisdiction in which the
person to whom notice is to be provided is located are authorized or obligated
by law or executive order to close.
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50.10. NONASSIGNABILITY. Neither party may, directly or indirectly, in
whole or in part, whether by operation of law or otherwise, assign or transfer
this Agreement, without the other party's prior written consent, and any
attempted assignment, transfer or delegation without such prior written consent
shall be voidable at the sole option of such other party. Notwithstanding the
foregoing, each party (or its permitted successive assignees or transferees
hereunder) may assign or transfer any or all of its rights or obligations under
this Agreement to one or more Subsidiaries of such party; provided, however,
that no such assignment or transfer shall release the assigning party from any
of its liabilities or obligations hereunder. Without limiting the foregoing,
this Agreement will be binding upon and inure to the benefit of the parties and
their permitted successors and assigns.
50.11. SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect, and Seller and Purchaser shall negotiate
in good faith to replace such illegal, void or unenforceable provision with a
provision that corresponds as closely as possible to the intentions of the
parties as expressed by such illegal, void or unenforceable provision.
50.12. AMENDMENT; WAIVER; REMEDIES CUMULATIVE. This Agreement, including
this provision of this Agreement, may be amended, supplemented or otherwise
modified only by a written instrument executed by the parties hereto. No waiver
by either party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any party or a failure or delay
by any party in exercising any power, right or privilege under this Agreement,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants, or agreements
contained herein, and in any documents delivered or to be delivered pursuant to
this Agreement and in connection with the Closing hereunder. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
50.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 15.13, provided that receipt of copies of such counterparts is
confirmed.
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WHEREFORE, the parties have signed this Trademark Ownership and License
Agreement effective as of the Closing Date first set forth above.
AGILENT TECHNOLOGIES, INC. KONINKLIJKE PHILIPS
ELECTRONICS N.V.
By: By:
------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title: Title:
---------------------------- ---------------------------------
[SIGNATURE PAGE TO TRADEMARK OWNERSHIP AND LICENSE AGREEMENT]
131
SCHEDULE A
TO TRADEMARK OWNERSHIP AND LICENSE AGREEMENT
LICENSED MARKS
Agilent Technologies, Inc. and Hewlett-Packard Company logos
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SCHEDULE B TO TRADEMARK OWNERSHIP AND LICENSE AGREEMENT
PURCHASER BUSINESS MARKS
Table of Registered and Pending Applications as of 8/9/00
Agilent agrees to furnish supplementally a copy of any omitted schedule to the
Commission upon request.
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EXHIBIT F
PATENT OWNERSHIP AND LICENSE AGREEMENT
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS 1
1.1 ASSIGNED PATENTS............................................. 1
1.2 CLOSING DATE................................................. 2
1.3 FIRST EFFECTIVE FILING DATE.................................. 2
1.4 INVENTION DISCLOSURE......................................... 2
1.5 NON-DESIGN PATENTS........................................... 2
1.6 PATENTS...................................................... 2
1.7 PERSON....................................................... 2
1.8 PURCHASER'S FIELD OF USE..................................... 2
1.9 PURCHASER PRODUCTS........................................... 2
1.10 LICENSED SELLER PATENTS...................................... 2
1.11 SELLER PRODUCTS.............................................. 3
1.12 SELLER FIELD OF USE.......................................... 3
1.13 SUBSIDIARY................................................... 3
1.14 THIRD PARTY.................................................. 3
ARTICLE II ASSIGNMENTS....................................................... 3
2.1 ASSIGNED PATENTS............................................. 4
2.2 PRIOR GRANTS................................................. 4
ARTICLE III LICENSES AND RIGHTS.............................................. 4
3.1 LICENSE GRANTS TO PURCHASER.................................. 5
3.2 LICENSE GRANTS TO SELLER..................................... 5
3.3 SUBLICENSE RIGHTS............................................ 5
3.4 HAVE MADE RIGHTS............................................. 6
3.5 DURATION..................................................... 6
3.6 SALE OF PART OF A BUSINESS................................... 6
3.7 SALE OF A PARTY OR SUBSTANTIALLY ALL THE ASSETS OF A
PARTY...................................................... 7
3.8 PATENT APPLICATIONS AND INVENTION DISCLOSURES................ 8
ARTICLE IV ADDITIONAL OBLIGATIONS............................................ 8
4.1 ADDITIONAL OBLIGATIONS WITH REGARD TO ASSIGNED PATENTS....... 9
4.2 ADDITIONAL OBLIGATIONS WITH REGARD TO SELLER PATENTS......... 10
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4.3 ASSIGNMENT OF PATENTS........................................ 10
4.4 RESPONSE TO REQUESTS......................................... 10
4.5 PRESERVATION OF THIRD PARTY LICENSES......................... 10
4.6 JOINT INVENTIONS; RECORDATION OF LICENSES.................... 10
ARTICLE V CONFIDENTIALITY.................................................... 12
5.1 CONFIDENTIAL INFORMATION..................................... 12
5.2 EXCEPTIONS................................................... 12
5.3 DURATION..................................................... 13
ARTICLE VI TERMINATION....................................................... 13
6.1 VOLUNTARY TERMINATION........................................ 13
6.2 SURVIVAL..................................................... 13
6.3 NO OTHER TERMINATION......................................... 13
ARTICLE VII DISPUTE RESOLUTION............................................... 13
7.1 NEGOTIATION.................................................. 14
7.2 NONBINDING MEDIATION......................................... 14
7.3 PROCEEDINGS.................................................. 14
ARTICLE VIII LIMITATION OF LIABILITY......................................... 14
ARTICLE IX MISCELLANEOUS PROVISIONS.......................................... 15
9.1 DISCLAIMER................................................... 16
9.2 NO IMPLIED LICENSES.......................................... 16
9.3 INFRINGEMENT SUITS........................................... 16
9.4 NO OBLIGATION TO OBTAIN OR MAINTAIN PATENTS.................. 16
9.5 ENTIRE AGREEMENT............................................. 17
9.6 GOVERNING LAW................................................ 17
9.7 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL................ 17
9.8 SECTION HEADINGS; TABLE OF CONTENTS.......................... 17
9.9 NOTICES...................................................... 17
9.10 NONASSIGNABILITY............................................. 19
9.11 SEVERABILITY................................................. 19
9.12 AMENDMENT; WAIVER; REMEDIES CUMULATIVE....................... 19
9.13 COUNTERPARTS................................................. 19
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ST&B DRAFT
NOVEMBER 16, 2000
PATENT OWNERSHIP AND LICENSE AGREEMENT
BETWEEN
AGILENT TECHNOLOGIES, INC.
AND
KONINKLIJKE PHILIPS ELECTRONICS N.V.
EFFECTIVE AS OF ____________ ___, 2000
136
PATENT OWNERSHIP AND LICENSE AGREEMENT
This Patent Ownership and License Agreement (the "Agreement") is effective as of
the Closing Date (as defined herein), between Agilent Technologies, Inc., a
Delaware corporation ("Seller") and Koninklijke Philips Electronics N.V., a
company incorporated under the laws of The Netherlands ("Purchaser").
WHEREAS, Seller and certain direct and indirect Subsidiaries of Seller are
engaged in, among other things, supplying Medical Products (as defined in the
Asset Purchase Agreement);
WHEREAS, Seller and Purchaser have entered into an Asset Purchase Agreement,
dated as of November 16, 2000 ("Asset Purchase Agreement"), pursuant to which
Purchaser, through one or more of its direct or indirect Subsidiaries, shall
purchase and assume, and Seller, through itself and one or more of its direct or
indirect Subsidiaries, shall sell, transfer and assign substantially all of the
assets and liabilities of the Business (as defined in the Asset Purchase
Agreement) to Purchaser; and
WHEREAS, as part of the foregoing, Seller desires to assign to Purchaser
ownership of certain patents and each party desires to license to the other
party certain of its patents;
NOW, THEREFORE, in consideration of the mutual promises of the parties, and of
good and valuable consideration, it is agreed by and between the parties as
follows:
ARTICLE LI
DEFINITIONS
For the purpose of this Agreement the following capitalized terms are defined in
this Article I and shall have the meaning specified herein:
51.1. ASSIGNED PATENTS. "Assigned Patents" means those
(a) (i) Patents, Patent applications and Invention Disclosures
listed on Schedule 4.10(a) to the Asset Purchase Agreement; and (ii)
Patents granted, Patent applications filed, and Invention Disclosures
recorded with a control number in the Seller's records subsequent to
execution of the Asset Purchase Agreement but prior to the Closing Date;
(b) Patent applications filed on the foregoing Invention
Disclosures described in Section 1.1(a) hereinabove;
(c) continuations, continuations-in-part, divisions and
substitutions of any of the foregoing Patent applications described in
Sections 1.1(a) and (b) hereinabove;
(d) Patents which may issue on any of the foregoing Patent
applications described in Sections 1.1(a)-(c) hereinabove;
(e) renewals, reissues, reexaminations and extensions of the
foregoing Patents described in Sections 1.1(a) and (d) hereinabove; and
(f) foreign Patent applications and Patents that are counterparts
of any of the foregoing Patent applications or Patents described in
Sections 1.1(a)-(e), including any Patent application or Patent to the
extent that it claims priority from any of the foregoing Patent
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applications or Patents described in Sections 1.1(a)-(e) hereinabove,
including all priority rights under the Paris Convention.
51.2. CLOSING DATE. "Closing Date" means the closing date defined in the
Asset Purchase Agreement.
51.3. FIRST EFFECTIVE FILING DATE. "First Effective Filing Date" means
the earliest effective filing date in the particular country for any Patent or
any application for any Patent by claiming the priority of one or more earlier
applications, filed in or for any country which is a party to the Paris
Convention for the Protection of Industrial Property or a similar provision in
the national law of the particular country. By way of example, it is understood
that the First Effective Filing Date for a United States Patent is the earlier
of (i) the actual filing date of the United States Patent application which
issued into such Patent, (ii) the priority date under 35 U.S.C. Section 119 for
such Patent, or (iii) the priority date under 35 U.S.C. Section 120 for such
Patent.
51.4. INVENTION DISCLOSURE. "Invention Disclosure" means a disclosure of
an invention (i) written for the purpose of allowing legal and business people
to determine whether to file a Patent application with respect to such invention
and (ii) recorded with a control number in the Seller's records prior to the
Closing Date.
51.5. NON-DESIGN PATENTS. "Non-Design Patents" means Patents except for
design patents (other than typeface design patents and typeface design
registrations) with a First Effective Filing Date after the Closing Date.
51.6. PATENTS. "Patents" means patents, utility models, design patents,
design registrations, certificates of invention and other governmental grants
for the protection of inventions or industrial designs anywhere in the world and
all reissues, renewals, re-examinations, continuations, continuations-in-part,
divisionals, substitutions and extensions of any of the foregoing.
51.7. PERSON. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.
51.8. PURCHASER'S FIELD OF USE. "Purchaser's Field of Use" means the
Business (as defined in the Asset Purchase Agreement).
51.9. PURCHASER PRODUCTS. "Purchaser Products" means Medical Products
(as defined in the Asset Purchase Agreement).
51.10. LICENSED SELLER PATENTS. "Licensed Seller Patents" means:
(a) every Non-Design Patent to the extent entitled to a First
Effective Filing Date prior to the Closing Date, provided that Seller
(or any Subsidiary of Seller):
(i) has ownership or control of any such Non-Design Patent,
or
(ii) otherwise has the right under such Non-Design Patent to
grant any licenses of the type and on the terms herein granted by
Seller without the obligation to pay royalties or other
consideration to Third Parties; or
(iii) is not restricted from granting a license under such
Non-Design Patents by any other agreements;
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(b) applications for the foregoing Non-Design Patents described
in Section 1.9(a), including without limitation any continuations,
continuations-in-part, divisions and substitutions; and
(c) Patents jointly owned by Seller and Hewlett-Packard as set
forth on Schedule 4.10(a), but
(d) notwithstanding the foregoing, the term "Licensed Seller
Patents" does not include Assigned Patents.
51.11. SELLER PRODUCTS. "Seller Products" means any and all products and
services of the businesses in which Seller or any of its Subsidiaries is now or
hereafter engaged (including the business of making (but not having made) Third
Party products for Third Parties when Seller is acting as a contract
manufacturer or foundry for such Third Parties), other than Medical Products.
51.12. SELLER FIELD OF USE. "Seller Field of Use" means the business of
Seller, as currently or hereafter conducted, other than Medical Products.
51.13. SUBSIDIARY. "Subsidiary" means with respect to any specified
Person, any corporation, any limited liability company, any partnership or other
legal entity of which such Person owns, directly or indirectly, more than 50% of
the stock or other equity interest entitled to vote on the election of the
members of the board of directors or similar governing body. For example, if
Seller owns 70% of the stock of another corporation, and that corporation owns
60% of the equity interest of a limited liability company, then that corporation
is a Subsidiary of Seller but that limited liability company is not. However, if
such corporation owns 90% of the equity interest of a limited liability company,
then that limited liability company is a Subsidiary of Seller
51.14. THIRD PARTY. "Third Party" means a Person other than Seller and
its Subsidiaries or Purchaser and its Subsidiaries.
ARTICLE LII
ASSIGNMENTS
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52.1. ASSIGNED PATENTS. Subject to Section 2.2 below, Seller hereby
grants, conveys and assigns (and agrees to cause its appropriate Subsidiaries to
grant, convey and assign) to Purchaser, by execution hereof (or, where
appropriate or required, by execution of separate instruments of assignment),
all its (and their) right, title and interest in and to the Assigned Patents, to
be held and enjoyed by Purchaser, its Subsidiaries, its successors and assigns.
Seller further grants, conveys and assigns (and agrees to cause its appropriate
Subsidiaries to grant, convey and assign) to Purchaser all its (and their)
right, title and interest in and to any and all proceeds, causes of action and
rights of recovery for past and future infringement of the Assigned Patents and
the right to claim priority from the Assigned Patents. Seller will, without
demanding any further consideration therefor, at the request and expense of
Purchaser (except for the costs of the time of Seller employees), do (and cause
its Subsidiaries to do) all lawful and just acts, that may be or become
reasonably necessary for transferring, conveying, prosecuting, sustaining,
obtaining continuations, continuations-in-part, or divisionals of, reissuing or
re-examining said Assigned Patents, and for evidencing, maintaining, recording
and perfecting Purchaser's rights to said Assigned Patents, including but not
limited to execution and acknowledgement of (and causing its Subsidiaries to
execute and acknowledge) assignments and other instruments in a form reasonably
required by Purchaser for each Patent jurisdiction.
52.2. PRIOR GRANTS. Purchaser acknowledges and agrees that the foregoing
assignments are subject to any and all licenses or other rights that may have
been granted by Seller or its Subsidiaries or their predecessors in interest
with respect to the Assigned Patents prior to the Closing Date. Seller shall
respond to reasonable inquiries from Purchaser regarding any such prior grants.
ARTICLE LIII
LICENSES AND RIGHTS
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53.1. LICENSE GRANTS TO PURCHASER. Seller grants (and agrees to cause
its appropriate Subsidiaries to grant) to Purchaser, under the Licensed Seller
Patents, an irrevocable, non-exclusive, worldwide, fully-paid, royalty-free and
non-transferable (except as set forth in Section 9.10 hereof) license to design,
develop, make (including the right to practice methods, processes and
procedures), have made, use, lease, sell, offer for sale, maintain and import
Medical Products (as that term is defined in the Asset Purchase Agreement;
except that for purposes of this Section 3.1, the definition of Medical Products
shall also include successor products and services and product line or service
line extensions to those products defined as Medical Products in the Asset
Purchase Agreement, whether or not reasonably foreseeable as of the Closing
Date) in Purchaser's Field of Use. Seller covenants and agrees to cause its
Subsidiaries not to grant any other licenses under the Licensed Seller Patents
in Purchaser's Field of Use for a period of five (5) years, commencing on the
Closing Date. With respect to those Licensed Seller Patents owned by a Third
Party, the license grant set forth in this Section hereof shall be subject to
the limitations set forth in the relevant license agreement between Seller and
such Third Party (such license agreements, "Third Party Licenses").
53.2. LICENSE GRANTS TO SELLER. Purchaser grants (and agrees to cause
its appropriate Subsidiaries to grant) to Seller, under the Assigned Patents, an
irrevocable, non-exclusive, worldwide, fully-paid, royalty-free and
non-transferable (except as set forth in Section 9.10 hereof) license to design,
develop, make (including the right to practice methods, processes and
procedures), have made, use, lease, sell, offer for sale, maintain and import
Seller Products in Seller's Field of Use.
53.3. SUBLICENSE RIGHTS
(a) Subject to Sections 3.5 and 3.6, each party may grant
sublicenses to its respective Subsidiaries within the scope of its
respective license hereunder (with no right to grant further sublicenses
other than, in the case of a sublicensed Subsidiary, to another
Subsidiary of such party and as described in Sections 3.3(c) and (d)
below).
(b) Any sublicense under Section 3.3(a) may be made effective
retroactively, but not prior to the sublicensee's becoming a Subsidiary
of the granting party.
(c) Any licenses granted by Seller to its distributors,
resellers, OEM customers, VAR customers, VAD customers, systems
integrators and other channels of distribution and to its end user
customers with respect to any Seller Product in the form of software,
may include a sublicense under the Assigned Patents within the scope of
Seller's license hereunder, provided that the scope of such sublicense
is limited to the exercise of the rights granted by Seller with respect
to the Seller Product.
(d) Any licenses granted by Purchaser to its distributors,
resellers, OEM customers, VAR customers, VAD customers, systems
integrators and other channels of distribution and to its end user
customers with respect to any Purchaser Product in the form of software
may include a sublicense under the Licensed Seller Patents within the
scope of Purchaser's license hereunder, provided that the scope of such
sublicense is limited to the exercise of the rights granted by Purchaser
with respect to the Purchaser Product.
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53.4. HAVE MADE RIGHTS. Each party understands and acknowledges that the
"have made" rights granted to it in Section 3.1 or 3.2, as applicable, and the
sublicenses of such "have made" rights granted pursuant to Sections 3.3(a) are
intended to cover only the products of such party and its Subsidiaries
(including private label or OEM versions of such products), and are not intended
to cover foundry or contract manufacturing activities that such party may
undertake through Third Parties for Third Parties.
53.5. DURATION
(a) All licenses granted herein with respect to each Patent shall
expire upon the expiration of the term of such Patent; provided,
however, that licenses for those Licensed Seller Patents owned by a
Third Party shall expire on the expiration of the term of the relevant
license agreement between Seller and such Third Party.
(b) All sublicenses granted pursuant to this Agreement to a
particular Subsidiary of a party hereto shall terminate the date that
the Subsidiary ceases to be a Subsidiary of such party; provided
however, that the foregoing shall not affect the other party's
obligations under Section 3.6 below. The licenses granted to such other
party hereunder with respect to Patents and Patent applications of such
Subsidiary with a First Effective Filing Date prior to the date of such
cessation shall remain in effect notwithstanding such cessation.
53.6. SALE OF PART OF A BUSINESS
(a) If either party (the "Transferring Party"), after the Closing
Date, transfers a going business (but not all or substantially all of
its business or assets), and such transfer includes at least one
marketable product and tangible assets having a net value of at least
ten million U.S. dollars ($10,000,000.00), regardless of whether such
transfer is part of (i) an asset sale to any Third Party, (ii) a sale of
shares or securities in a Subsidiary to a Third Party such that (A) the
Subsidiary ceases to be a Subsidiary and (B) the Third Party owns at
least eighty percent (80%) of the outstanding shares or securities
representing the right to vote for the election of directors or other
managing authority, or (iii) a sale of shares or securities in a
Subsidiary such that (A) the Subsidiary ceases to be a Subsidiary and
(B) no single Third Party owns at least eighty percent (80%) of the
outstanding shares or securities representing the right to vote for the
election of directors or other managing authority of such ex-Subsidiary;
(b) then, upon written request to the other party (the
"Non-Transferring Party") jointly by the Transferring Party and the
Transferee (as defined below) within sixty (60) days following the
transfer, the Non-Transferring Party shall grant a royalty-free license
to the Transferee under the same terms as the license granted to the
Transferring Party under this Agreement subject to the following:
(i) the effective date of such license shall be the effective
date of such transfer,
(ii) the products, services and processes of the Transferee
that are subject to such license shall be limited to the
products, services and processes of the Subsidiary or the
products, services and processes in the transferred business that
are
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commercially released or for which substantial steps have been
taken to commercialization and for new versions that have merely
minor incremental differences from such products, services and
processes,
(iii) the Patents of the Non-Transferring Party that are
subject to such license shall be limited to Licensed Seller
Patents or Assigned Patents, as the case may be,
(iv) the Transferee shall have no right to grant sublicenses
except that the Transferee shall have the right to grant
sublicenses to any Person at least eighty percent (80%) of whose
outstanding shares or securities representing the right to vote
for the election of directors or other managing authority are,
directly or indirectly, owned by the Transferee ("Transferee
Subsidiaries"), only for so long as such ownership exists, and
(i) the license to be granted by the Non-Transferring Party
pursuant to this Section 3.6 shall not contain this provision or a provision
containing comparable terms;
(c) provided, further, that in the event that the
Non-Transferring Party and the Transferee are engaged in litigation,
arbitration or other formal dispute resolution proceedings covering
Patent infringement (pending in any court, tribunal, or administrative
agency or before any appointed or agreed upon arbitrator in any
jurisdiction worldwide), then the Non-Transferring Party shall have no
obligation to enter into a license with the Transferee under this
Section 3.6; and
(d) provided, further, that the Transferring Party shall
relinquish its license under this Agreement in the field of use covered
by the license granted to the Transferee.
(e) As used above in this Section 3.6, "Transferee" in the case
of Sections 3.6(a)(i) and (ii) means the Third Party acquiring the going
business or eighty percent (80%) of the Subsidiary and in the case of
Section 3.6(a)(iii) means the ex-Subsidiary only.
53.7. SALE OF A PARTY OR SUBSTANTIALLY ALL THE ASSETS OF A PARTY
(a) Each party (including its respective Subsidiaries or its
permitted successive assignees or transferees hereunder) may assign or
transfer this Agreement as a whole without consent in connection with a
corporate reorganization which leaves such party substantially
equivalent in terms of business, assets and ownership as before the
reorganization (e.g., a reincorporation in another state).
(b) Each party (including its respective Subsidiaries or its
permitted successive assignees or transferees hereunder) (the "Acquired
Party") may assign or transfer this Agreement as a whole without consent
to a Person that succeeds to all or substantially all of the business or
assets of such party (the "Acquiring Party"); provided, however, that in
the event of any assignment or transfer under this Section 3.7(b) that
is not covered by Section 3.7(a) above:
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(i) the Acquired Party promptly shall give notice of such
acquisition to the other party (the "Non-Acquired Party"),
(ii) the license granted to the Acquired Party by the
Non-Acquired Party pursuant to this Agreement, and any
sublicenses granted by the Acquired Party to its Subsidiaries,
shall automatically become limited to the products, processes and
services of the Acquired Party or its Subsidiaries that are
commercially released or for which substantial steps have been
taken to commercialization as of the effective date of the
acquisition and for new versions that have merely minor
incremental differences from such products, processes and
services and shall not in any event include any products,
processes or services of the Acquiring Party; provided, however,
that in any event such license shall be terminable at will by the
Non-Acquired Party if the Non-Acquired Party and the Acquiring
Party are engaged in litigation, arbitration or other formal
dispute resolution proceedings covering Patent infringement
(pending in any court, tribunal, or administrative agency or
before any appointed or agreed upon arbitrator in any
jurisdiction worldwide) at the time that the acquisition
agreement between the Acquired Party and the Acquiring Party is
entered into or if such proceedings are initiated by the
Acquiring Party within one hundred twenty-one days (121) days
after the date that such acquisition agreement is entered into,
and
(iii) the license granted by the Acquired Party to the
Non-Acquired Party pursuant to this Agreement shall remain in
place unchanged.
53.8. PATENT APPLICATIONS AND INVENTION DISCLOSURES. Seller agrees, at
its own expense, to provide to Purchaser a complete and authentic set of
Seller's files concerning all Patents, Patent applications and Invention
Disclosures that are listed in the Schedule 4.10(a) to the Asset Purchase
Agreement, as well as any other Patents and Patent applications referred to in
Article 1.1(f), at the Closing Date or such other time as the parties may agree.
Except as otherwise set forth in the Asset Purchase Agreement, neither party has
any obligation to disclose or provide copies to the other party any other
Patents, Patent applications or Invention Disclosures. The licenses granted
under this Agreement cover only statutory rights under Patents and statutory
rights (if any) under Patent applications. Trade secret and other non-Patent
licenses with respect to inventions described in Invention Disclosures and
Patent applications shall be solely as set forth in the Technology Ownership and
License Agreement. On the Closing Date, Seller shall provide to Purchaser a
listing of all Licensed Patents owned by Seller or its Subsidiaries then issued,
such listing to include the appropriate identification number for each relevant
Patent jurisdiction.
ARTICLE LIV
ADDITIONAL OBLIGATIONS
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54.1. ADDITIONAL OBLIGATIONS WITH REGARD TO ASSIGNED PATENTS
(a) The parties will cooperate to effect a smooth transfer of the
responsibility for prosecution, maintenance and enforcement of the
Assigned Patents from Seller to Purchaser. Until such transfer has been
effected, Seller agrees to continue the prosecution and maintenance of,
and ongoing litigation (if any) with respect to, the Assigned Patents
(including payment of maintenance fees), and to maintain its files and
records relating to the Assigned Patents using the same standard of care
and diligence that it uses with respect to the Licensed Seller Patents.
Purchaser will reimburse Seller for all actual and reasonable expenses
(excluding the costs of the time of Seller employees) to continue to
prosecute and maintain the Assigned Patents after the Closing Date until
the transfer of responsibility for the Assigned Patents has been
completed and to continue any such ongoing litigation. The parties shall
agree on a case by case basis on compensation, if any, of Seller for the
costs of time of Seller's employees as reasonably required in connection
with any such litigation.
(b) Seller shall provide continuing reasonable support to
Purchaser with respect to the Assigned Patents, including by way of
example the following:
(i) executing all documents prepared by Purchaser necessary
for prosecution, maintenance, and litigation of the Assigned
Patents,
(ii) making available to Purchaser or its counsel, inventors
and other persons employed by Seller for interviews and/or
testimony to assist in good faith in further prosecution,
maintenance or litigation of the Assigned Patents, including the
signing of documents related thereto,
(iii) forwarding copies of all correspondence sent and
received concerning the Assigned Patents within a reasonable
period of time after receipt by Seller, and
(iv) making all relevant documents in the possession or
control of Seller and corresponding to the Assigned Patents, or
any licenses thereunder, available to Purchaser or its counsel.
Any actual and reasonable out-of-pocket expenses associated with any such
assistance shall be borne by Purchaser, expressly excluding the costs of the
time of such Seller employees; provided, however, that in the case of assistance
with litigation, the parties shall agree on a case by case basis on
compensation, if any, of Seller for the value of the time of Seller's employees
as reasonably required in connection with such litigation.
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54.2. ADDITIONAL OBLIGATIONS WITH REGARD TO SELLER PATENTS. Purchaser
acknowledges that its employees and contractors who are former Seller employees
and contractors have a continuing duty to assist Seller with the prosecution of
Seller Patent applications and, accordingly, Purchaser agrees to make available,
to Seller or its counsel, inventors and other persons employed by Purchaser for
interviews and/or testimony to assist in good faith in further prosecution,
maintenance or litigation of the Licensed Seller Patents, including the signing
of documents related thereto. Any actual and reasonable out-of-pocket expenses
associated with such assistance shall be borne by Seller, expressly excluding
the costs of the time of such Purchaser personnel; provided, however, that in
the case of assistance with litigation, the parties shall agree on a case by
case basis on compensation, if any, of Purchaser for the value of the time of
Purchaser's employees as reasonably required in connection with such litigation.
54.3. ASSIGNMENT OF PATENTS. Seller shall not assign or grant any rights
under any of the Licensed Seller Patents unless such assignment or grant is made
subject to the licenses granted by Seller in this Agreement. Purchaser shall not
assign or grant any rights under any of the Assigned Patents unless such
assignment or grant is made subject to the licenses granted by Purchaser in this
Agreement.
54.4. RESPONSE TO REQUESTS. Each party shall, upon a request from the
other party sufficiently identifying any Patent or Patent application, inform
the other party as to the extent to which said Patent or Patent application is
subject to the licenses and other rights granted hereunder.
54.5. PRESERVATION OF THIRD PARTY LICENSES. Seller agrees not to
adversely affect Purchaser's rights under the Licensed Seller Patents by: (a)
voluntarily terminating or relinquishing any of Seller's rights under any Third
Party Licenses in such a manner as would materially restrict any of Purchaser's
rights derived from Seller pursuant thereto; or (b) materially breaching any
Third Party License. Seller further agrees to notify Purchaser promptly of any
notice received by Seller of any alleged material breach or termination of a
Third Party License.
54.6. JOINT INVENTIONS; RECORDATION OF LICENSES.
(a) For any country, now or in the future, that requires by law
the express consent of all inventors or their assignees to the grant of
licenses or rights under Patents issued in such countries for joint
inventions:
(i) each party shall give such consent, or shall obtain such
consent from its employees, its Subsidiaries or employees of any
of its Subsidiaries, as required to make full and effective any
such licenses and rights respecting any joint invention granted
to a grantee hereunder by such party; and
(ii) each party shall take steps that are reasonable under
the circumstances to obtain from Third Parties whatever other
consents are necessary to make full and effective such licenses
and rights respecting any joint invention purported to be granted
by it hereunder. If, in spite of such reasonable steps, such
party is unable to obtain the requisite consents from such Third
Parties, the resulting inability of such party to make full and
effective its purported grant of such licenses and rights shall
not be considered to be a breach of this Agreement.
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(b) Each party agrees, without demanding any further
consideration, to execute (and to cause its Subsidiaries to execute) all
documents reasonably requested by the other party to effect recordation
of the license relationship between the parties created by this
Agreement.
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ARTICLE LV
CONFIDENTIALITY
55.1. CONFIDENTIAL INFORMATION. The parties hereto expressly acknowledge
and agree that all information, whether written or oral, furnished by either
party to the other party or any Subsidiary of such other party pursuant to this
Agreement ("Confidential Information") shall be deemed to be confidential and
shall be maintained by each party and their respective Subsidiaries in
confidence, using the same degree of care to preserve the confidentiality of
such Confidential Information that the party to whom such Confidential
Information is disclosed would use to preserve the confidentiality of its own
information of a similar nature and in no event less than a reasonable degree of
care. Except as authorized in writing by the other party, neither party shall at
any time disclose or permit to be disclosed any such Confidential Information to
any person, firm, corporation or entity, (i) except as may reasonably be
required in connection with the performance of this Agreement by Purchaser,
Seller or its respective Subsidiaries, as the case may be, and (ii) except as
may reasonably be required after the Closing by Purchaser or its Subsidiaries in
connection with the use of the Licensed Seller Patents or operation of their
businesses or by Seller or its Subsidiaries in connection with the use of the
Assigned Patents or operation of their businesses, and (iii) except to the
parties' agents or representatives who are informed by the parties of the
confidential nature of the information and are bound to maintain its
confidentiality, and (iv) in the course of due diligence in connection with the
sale of all or a portion of either party's business provided the disclosure is
pursuant to a nondisclosure agreement having terms comparable to Sections 5.1
and 5.2 hereof.
55.2. EXCEPTIONS. The obligation not to disclose information under
Section 5.1 hereof shall not apply to information that, as of the Closing Date
or thereafter, (i) is or becomes generally available to the public other than as
a result of disclosure made after the execution of the Asset Purchase Agreement
by the party desiring to treat such information as non-confidential or any of
its Subsidiaries or representatives thereof, (ii) was or becomes readily
available to the party desiring to treat such information as non-confidential or
any of its Subsidiaries or representatives thereof on a non-confidential basis,
(iii) is or becomes available to the party desiring to treat such information as
non-confidential or any of its Subsidiaries or representatives thereof on a
non-confidential basis from a source other than its own files or personnel or
the other party or its Subsidiaries, provided that such source is not known by
the party desiring to treat such information as non-confidential to be bound by
confidentiality agreements with the other party or its Subsidiaries or by legal,
fiduciary or ethical constraints on disclosure of such information, or (iv) is
required to be disclosed pursuant to a governmental order or decree or other
legal requirement (including the requirements of the U.S. Securities and
Exchange Commission and the listing rules of any applicable securities
exchange), provided that the party required to disclose such information shall
give the other party prompt notice thereof prior to such disclosure and, at the
request of the other party, shall cooperate in all reasonable respects in
maintaining the confidentiality of such information, including obtaining a
protective order or other similar order. Nothing in this Section 5.2 shall limit
in any respect either party's ability to disclose information in connection with
the enforcement by such party of its rights under this Agreement; provided that
the proviso of clause (v) in the immediately preceding sentence shall apply to
the party desiring to disclose such information.
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55.3. DURATION. The obligations of the parties set forth in this Article
V, with respect to the protection of Confidential Information, shall remain in
effect until five years after (i) the Closing Date, with respect to Confidential
Information of one party that is known to or in the possession of the other
party as of the Closing Date, or (ii) the date of disclosure, with respect to
Confidential Information that is disclosed by the one party to the other party
after the Closing Date.
ARTICLE LVI
TERMINATION
56.1. VOLUNTARY TERMINATION. By written notice to the other party, each
party may voluntarily terminate all or a specified portion of the licenses and
rights granted to it hereunder by such other party. Such notice shall specify
the effective date of such termination and shall clearly specify any affected
Patent, Patent application, Invention Disclosure, product or service.
56.2. SURVIVAL. Any voluntary termination of licenses and rights of a
party under Section 6.1 shall not affect such party's licenses and rights with
respect to any licensed product made or service furnished prior to such
termination, and shall not affect the licenses and rights granted to the other
party hereunder.
56.3. NO OTHER TERMINATION. Each party acknowledges and agrees that its
remedy for breach by the other party of the licenses granted to it hereunder or
of any other provision hereof, shall be, subject to the requirements of Article
VII, to bring a claim to recover damages subject to the limits set forth in this
Agreement and to seek any other appropriate equitable relief, other than
termination of the licenses granted by it in this Agreement.
ARTICLE LVII
DISPUTE RESOLUTION
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57.1. NEGOTIATION. The parties shall make a good faith attempt to
resolve any dispute or claim arising out of or related to this Agreement through
negotiation. Within thirty (30) days after notice of a dispute or claim is given
by either party to the other party, the parties' first tier negotiating teams
(as determined by each party's Director of Intellectual Property (or person
holding a similar position or title) or his or her delegate) shall meet and make
a good faith attempt to resolve such dispute or claim and shall continue to
negotiate in good faith in an effort to resolve the dispute or claim or
renegotiate the applicable section or provision without the necessity of any
formal proceedings. If the first tier negotiating teams are unable to agree
within thirty (30) days of their first meeting, then the parties' second tier
negotiating teams (as determined by each party's Director of Intellectual
Property or his or her delegate) shall meet within thirty (30) days after the
end of the first thirty (30) day negotiating period to attempt to resolve the
matter. During the course of negotiations under this Section 7.1, all reasonable
requests made by one party to the other for information, including requests for
copies of relevant documents, will be honored. The specific format for such
negotiations will be left to the discretion of the designated negotiating teams
but may include the preparation of agreed upon statements of fact or written
statements of position furnished to the other party. All negotiations between
the parties pursuant to this Section 7.1 shall be treated as compromise and
settlement negotiations. Nothing said or disclosed, nor any document produced,
in the course of such negotiations that is not otherwise independently
discoverable shall be offered or received as evidence or used for impeachment or
for any other purpose in any current or future litigation.
57.2. NONBINDING MEDIATION. In the event that any dispute or claim
arising out of or related to this Agreement is not settled by the parties within
fifteen (15) days after the first meeting of the second tier negotiating teams
under Section 7.1 hereof, the parties will attempt in good faith to resolve such
dispute or claim by nonbinding mediation in accordance with the American
Arbitration Association Commercial Mediation Rules. The mediation shall be held
within thirty (30) days of the end of such fifteen (15) day negotiation period
of the second tier negotiating teams. Except as provided below in Section 7.3,
no litigation for the resolution of such dispute may be commenced until the
parties try in good faith to settle the dispute by such mediation in accordance
with such rules and either party has concluded in good faith that amicable
resolution through continued mediation of the matter does not appear likely. The
costs of mediation shall be shared equally by the parties to the mediation. Any
settlement reached by mediation shall be recorded in writing, signed by the
parties, and shall be binding on them.
57.3. PROCEEDINGS. Nothing herein, however, shall prohibit either party
from initiating litigation or other judicial or administrative proceedings if
such party would be substantially harmed by a failure to act during the time
that such good faith efforts are being made to resolve the dispute or claim
through negotiation or mediation. In the event that litigation is commenced
under this Section 7.3, the parties agree to continue to attempt to resolve any
dispute according to the terms of Sections 7.1 and 7.2 hereof during the course
of such litigation proceedings under this Section 7.3.
ARTICLE LVIII
LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY OR ITS SUBSIDIARIES BE LIABLE TO THE OTHER PARTY
OR ITS SUBSIDIARIES FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT,
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INCIDENTAL OR PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY
OF LIABILITY (INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT,
WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT DAMAGES FOR
INFRINGEMENT AVAILABLE TO EITHER PARTY UNDER APPLICABLE LAW IN THE EVENT OF
BREACH BY THE OTHER PARTY OF SECTIONS 3.1 OR 3.2 HEREOF; PROVIDED FURTHER THAT
THE EXCLUSION OF PUNITIVE DAMAGES SHALL APPLY IN ANY EVENT.
ARTICLE LIX
MISCELLANEOUS PROVISIONS
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59.1. DISCLAIMER. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN THE ASSET
PURCHASE AGREEMENT, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL (A) PATENTS,
PATENT APPLICATIONS AND INVENTION DISCLOSURES ASSIGNED PURSUANT TO THIS
AGREEMENT AND (B) PATENTS, PATENT APPLICATIONS AND INVENTION DISCLOSURES, AND
OTHER INFORMATION OR MATERIALS, LICENSED OR FURNISHED HEREUNDER ARE ASSIGNED,
LICENSED OR FURNISHED WITHOUT ANY WARRANTIES WHATSOEVER, WHETHER EXPRESS,
IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ENFORCEABILITY OR
NON-INFRINGEMENT. Except as otherwise set forth herein or in the Asset Purchase
Agreement, neither party nor any of its Subsidiaries makes any warranty or
representation as to the validity and/or scope of any Patent licensed by it to
the other party hereunder or any warranty or representation that any
manufacture, use, importation, offer for sale or sale of any product or service
will be free from infringement of any Patent or other intellectual property
right of any Third Party.
59.2. NO IMPLIED LICENSES. Nothing contained in this Agreement shall be
construed as conferring any rights by implication, estoppel or otherwise, under
any intellectual property right, other than the rights expressly granted in this
Agreement with respect to the Assigned Patents and the Licensed Seller Patents.
Neither party is required hereunder to furnish or disclose to the other any
technical or other information (including copies of the Assigned Patents and the
Licensed Seller Patents, Patent applications or Invention Disclosures) except as
specifically provided herein or in the Asset Purchase Agreement.
59.3. INFRINGEMENT SUITS. Neither party shall have any obligation
hereunder to institute any action or suit against Third Parties for infringement
of any of the Assigned Patents or the Licensed Seller Patents or to defend any
action or suit brought by a Third Party which challenges or concerns the
validity of any of the Assigned Patents or the Licensed Seller Patents. Seller
shall not have any right to institute any action or suit against Third Parties
for infringement of any of the Assigned Patents, and Purchaser shall not have
any right to institute any action or suit against Third Parties for infringement
of any of the Licensed Seller Patents. Notwithstanding the foregoing, if, at any
time prior to five (5) years from the Closing Date, Purchaser believes a patent
to which it is licensed by Seller is being infringed by a Third Party in the
field of the license, it may present evidence of such infringement to Seller,
together with its recommendation for enforcement. Seller may thereafter consult
with Purchaser concerning the proposed enforcement and shall make a good faith
evaluation of the desirability of taking any enforcement action, considering the
evidence available to it, the materiality of the alleged infringement, the costs
and risks of taking such action, and such other reasonable, legal and commercial
factors as it would ordinarily consider in determining whether to take such
action.
59.4. NO OBLIGATION TO OBTAIN OR MAINTAIN PATENTS. Except as otherwise
set forth herein or in the Asset Purchase Agreement neither party, nor any of
its Subsidiaries is obligated to (i) file any Patent application, or to secure
any Patent or Patent rights, (ii) to maintain any Patent in force, or (iii)
provide any technical assistance, except for the obligations expressly assumed
in this Agreement.
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59.5. ENTIRE AGREEMENT. This Agreement and the Asset Purchase Agreement
constitute the entire understanding between the parties with respect to the
subject matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof. To the extent there is a conflict between this Agreement and the
Asset Purchase Agreement between the parties, the terms of the Asset Purchase
Agreement shall govern, provided, however, that the terms of this Agreement
shall govern with respect to (a) Sections 3.6, 3.7 and 9.10 of this Agreement
concerning assignment or transfer of rights or obligations arising under this
Agreement, (b) Article V with respect to Confidential Information transferred,
licensed or disclosed pursuant to this Agreement, (c) Article VI with respect to
termination of the licenses granted hereunder, (d) Article VII concerning
dispute resolution, (e) Article VIII solely with respect to intellectual
property that is licensed by one party to another party pursuant to this
Agreement, and (f) Section 9.9 concerning notice.
59.6. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
made and to be performed wholly within the state, except for the internal
matters or any corporation, partnership or similar entity, which shall be
governed by the laws of the jurisdictions of incorporation or organization of
such corporation, partnership or similar entity.
59.7. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. Each party hereto
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Southern District of New York located in the borough of Manhattan
in the City of New York, or if such court does not have jurisdiction, the
Supreme Court of the State of New York, New York County, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each of the parties hereto further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth in Section 9.9 hereof shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction as set forth
above in the immediately preceding sentence. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (a) the United States District Court for the Southern
District of New York or (b) the Supreme Court of the State of New York, New York
County, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. The parties
hereto hereby irrevocably and unconditionally waive trial by jury in any legal
action or proceeding relating to this Agreement or any other agreement entered
into in connection therewith and for any counterclaim with respect thereto.
59.8. SECTION HEADINGS; TABLE OF CONTENTS. The section headings
contained in this Agreement and the Table of Contents to this Agreement are
inserted for reference purposes only and are not intended to be a part, nor
should they affect the meaning or interpretation, of this Agreement.
59.9. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by telecopy with answer back, by express or overnight mail delivered by an
internationally recognized air courier (delivery charges prepaid), by registered
or certified mail (postage prepaid, return receipt requested) or by e-mail with
receipt confirmed by return e-mail to the respective parties as follows:
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if to Seller:
c/o Agilent Technologies, Inc.
395 Page Mill Road, MS A3-10
P.O. Box 10395
Palo Alto, California 94303-0870
Attention: Vice President, Associate General Counsel and
Director of Intellectual Property
Telecopy: +1 (650) 752-5742
with a copy to
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Kerry L. Konrad
Telecopy: +1 (212) 455-2502
if to Purchaser:
c/o Philips Medical Systems B.V.
P.O. Box 10.000
5680 DA Best, The Netherlands
Attention: General Counsel
Telecopy: +31 40 2762651
with a copy to
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: Matthew G. Hurd
Telecopy: +1 (212) 558-3588
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by e-mail, telecopy or by air courier
shall be deemed effective on the first Business Day following the day on which
such notice or communication was sent. Any notice or communication sent by
registered or certified mail shall be deemed effective on the third Business Day
following the day on which such notice or communication was mailed. As used in
this Section 9.9, "Business Day" means any day other than a Saturday, a Sunday
or a day on which banking institutions located in the jurisdiction in which the
person to whom notice is to be provided is located are authorized or obligated
by law or executive order to close.
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59.10. NONASSIGNABILITY. Except as set forth in Sections 3.6 or 3.7
hereof, neither party may, directly or indirectly, in whole or in part, whether
by operation of law or otherwise, assign or transfer this Agreement, without the
other party's prior written consent, and any attempted assignment, transfer or
delegation without such prior written consent shall be voidable at the sole
option of such other party. Notwithstanding the foregoing, each party (or its
permitted successive assignees or transferees hereunder) may assign or transfer
any or all of its rights or obligations under this Agreement to one or more
Subsidiaries of such party; provided, however, that no such assignment or
transfer shall release the assigning party from any of its liabilities or
obligations hereunder. Without limiting the foregoing, this Agreement will be
binding upon and inure to the benefit of the parties and their permitted
successors and assigns.
59.11. SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect, and Seller and Purchaser shall negotiate
in good faith to replace such illegal, void or unenforceable provision with a
provision that corresponds as closely as possible to the intentions of the
parties as expressed by such illegal, void or unenforceable provision.
59.12. AMENDMENT; WAIVER; REMEDIES CUMULATIVE. This Agreement, including
this provision of this Agreement, may be amended, supplemented or otherwise
modified only by a written instrument executed by the parties hereto. No waiver
by either party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any party or a failure or delay
by any party in exercising any power, right or privilege under this Agreement,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants, or agreements
contained herein, and in any documents delivered or to be delivered pursuant to
this Agreement and in connection with the Closing hereunder. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
59.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 9.13, provided that receipt of copies of such counterparts is confirmed.
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WHEREFORE, the parties have signed this Patent Ownership and License
Agreement effective as of the Closing Date first set forth above.
AGILENT TECHNOLOGIES, INC. KONINKLIJKE PHILIPS
ELECTRONICS N.V.
By: By:
------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title: Title:
---------------------------- ---------------------------------
[SIGNATURE PAGE TO PATENT OWNERSHIP AND LICENSE AGREEMENT]
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TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS........................................................ 1
1.1 CLOSING DATE.................................................. 2
1.2 COPYRIGHTS.................................................... 2
1.3 DATABASE RIGHTS............................................... 2
1.4 IMPROVEMENTS.................................................. 2
1.5 INVENTION DISCLOSURE.......................................... 2
1.6 MASK WORK RIGHTS.............................................. 2
1.7 PATENTS....................................................... 2
1.8 PERSON........................................................ 2
1.9 PURCHASER'S FIELD OF USE...................................... 2
1.10 PURCHASER PRODUCTS............................................ 2
1.11 PURCHASER TECHNOLOGY.......................................... 2
1.12 SELL.......................................................... 3
1.13 SELLER FIELD OF USE........................................... 3
1.14 SELLER PRODUCTS............................................... 3
1.15 SELLER TECHNOLOGY............................................. 3
1.16 SUBSIDIARY.................................................... 3
1.17 TECHNOLOGY.................................................... 3
1.18 THIRD PARTY................................................... 3
ARTICLE II ASSIGNMENT OF OWNERSHIP........................................... 3
2.1 ASSIGNMENT.................................................... 4
2.2 PRIOR GRANTS.................................................. 4
2.3 COPIES IN ITS POSSESSION...................................... 4
ARTICLE III LICENSE GRANTS................................................... 5
3.1 LICENSE TO PURCHASER.......................................... 5
3.2 LICENSE BACK TO SELLER........................................ 7
3.3 IMPROVEMENTS.................................................. 9
3.4 DURATION OF SUBLICENSES TO SUBSIDIARIES....................... 10
3.5 NO PATENT LICENSES............................................ 10
3.6 THIRD PARTY TECHNOLOGY........................................ 10
ARTICLE IV CONFIDENTIALITY................................................... 10
4.1 CONFIDENTIAL INFORMATION...................................... 10
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TABLE OF CONTENTS
(CONTINUED)
4.2 EXCEPTIONS.................................................... 11
4.3 DURATION...................................................... 11
ARTICLE V TERMINATION........................................................ 11
5.1 VOLUNTARY TERMINATION......................................... 11
5.2 SURVIVAL...................................................... 11
5.3 NO OTHER TERMINATION.......................................... 11
ARTICLE VI DISPUTE RESOLUTION................................................ 12
6.1 NEGOTIATION................................................... 12
6.2 NONBINDING MEDIATION.......................................... 12
6.3 PROCEEDINGS................................................... 12
ARTICLE VII LIMITATION OF LIABILITY.......................................... 13
ARTICLE VIII MISCELLANEOUS PROVISIONS........................................ 14
8.1 DISCLAIMER.................................................... 14
8.2 NO IMPLIED LICENSES........................................... 14
8.3 INFRINGEMENT SUITS............................................ 14
8.4 NO OBLIGATION TO OBTAIN OR MAINTAIN RIGHTS IN TECHNOLOGY...... 15
8.5 ENTIRE AGREEMENT.............................................. 15
8.6 GOVERNING LAW................................................. 15
8.7 CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL................. 15
8.8 SECTION HEADINGS; TABLE OF CONTENTS........................... 15
8.9 NOTICES....................................................... 16
8.10 NONASSIGNABILITY.............................................. 18
8.11 SEVERABILITY.................................................. 18
8.12 AMENDMENT; WAIVER; REMEDIES CUMULATIVE........................ 18
8.13 COUNTERPARTS.................................................. 18
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ST&B DRAFT
NOVEMBER 16, 2000
TECHNOLOGY OWNERSHIP AND
LICENSE AGREEMENT
BETWEEN
AGILENT TECHNOLOGIES, INC.
AND
KONINKLIJKE PHILIPS ELECTRONICS N.V.
EFFECTIVE AS OF ___________ ___, 2000
159
TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT
This Technology Ownership and License Agreement (the "Agreement") is effective
as of the Closing Date (as defined herein), between Agilent Technologies, Inc.,
a Delaware corporation ("Seller"), and Koninklijke Philips Electronics N.V., a
company incorporated under the laws of The Netherlands ("Purchaser").
WHEREAS, Seller and certain direct and indirect Subsidiaries of Seller are
engaged in, among other things, supplying Medical Products (as defined in the
Asset Purchase Agreement);
WHEREAS, Seller and Purchaser have entered into an Asset Purchase Agreement,
dated as of November 16, 2000 ("Asset Purchase Agreement"), pursuant to which
Purchaser, through one or more of its direct or indirect Subsidiaries, shall
purchase and assume, and Seller, through itself and one or more of its direct or
indirect Subsidiaries, shall sell, transfer and assign substantially all of the
assets and liabilities of the Business (as defined in the Asset Purchase
Agreement) to Purchaser;
WHEREAS, as part of the foregoing, Seller desires to assign to Purchaser
ownership of certain technology and each party desires to license to the other
party certain of its technology; and
NOW, THEREFORE, in consideration of the mutual promises of the parties, and of
good and valuable consideration, it is agreed by and between the parties as
follows:
ARTICLE LX
DEFINITIONS
For the purpose of this Agreement the following capitalized terms are defined in
this Article I and shall have the meaning specified herein:
160
60.1. CLOSING DATE. "Closing Date" means the Closing Date as defined in
the Asset Purchase Agreement.
60.2. COPYRIGHTS. "Copyrights" mean (i) any copyright in any original
works of authorship fixed in any tangible medium of expression as set forth in
17 U.S.C. Section 101 et. seq., whether registered or unregistered, including
any applications for registration thereof, (ii) any corresponding foreign
copyrights under the laws of any jurisdiction, in each case, whether registered
or unregistered, and any applications for registration thereof, and (iii) moral
rights under the laws of any jurisdiction.
60.3. DATABASE RIGHTS. "Database Rights" means any rights in databases
under the laws of the United States or any other jurisdiction, whether
registered or unregistered, and any applications for registration thereof.
60.4. IMPROVEMENTS. "Improvements" to Technology means (i) with respect
to Copyrights, any modifications, derivative works, and translations of works of
authorship, (ii) with respect to Database Rights, any database that is created
by extraction or re-utilization of another database, and (iii) with respect to
Mask Work Rights, trade secrets and other intellectual property rights included
within the definition of Technology and not covered by Sections 1.4(i) - (ii)
above, any improvements of Technology. For the purposes of clarification, an
item of Technology will be deemed to be an Improvement of another item of
Technology only if it is actually derived from such other item of Technology and
not merely because it may have the same or similar functionality or use as such
other item of Technology.
60.5. INVENTION DISCLOSURE. "Invention Disclosure" means a disclosure of
an invention (i) written for the purpose of allowing legal and business people
to determine whether to file a Patent application with respect to such invention
and (ii) recorded with a control number in the owning party's records prior to
the Closing Date.
60.6. MASK WORK RIGHTS. "Mask Work Rights" means (i) any rights in mask
works, as defined in 17 U.S.C. Section 901, whether registered or unregistered,
including applications for registration thereof, and (ii) any foreign rights in
semiconductor topologies under the laws of any jurisdiction, whether registered
or unregistered, including applications for registration thereof.
60.7. PATENTS. "Patents" means patents, utility models, design patents,
design registrations, certificates of invention and other governmental grants
for the protection of inventions or industrial designs anywhere in the world and
all reissues, renewals, re-examinations, continuations, continuations-in-part,
divisionals, substitutions and extensions of any of the foregoing.
60.8. PERSON. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, and a governmental
entity or any department, agency or political subdivision thereof.
60.9. PURCHASER'S FIELD OF USE. "Purchaser's Field of Use" means the
Business (as defined in the Asset Purchase Agreement).
60.10. PURCHASER PRODUCTS. "Purchaser Products" means Medical Products
(as defined in the Asset Purchase Agreement).
60.11. PURCHASER TECHNOLOGY. "Purchaser Technology" means all Technology
primarily associated with the development, design, testing, manufacture,
maintenance, support, debugging, quality control, repair, use, marketing and
sale of the Purchaser Products as of the Closing Date.
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60.12. SELL. To "Sell" a product means to sell, transfer, lease or
otherwise dispose of a product. "Sale" and "Sold" have the corollary meanings
ascribed thereto.
60.13. SELLER FIELD OF USE. "Seller Field of Use" means the business of
Seller, as currently or hereafter conducted, other than Medical Products.
60.14. SELLER PRODUCTS. "Seller Products" means any and all products and
services of the businesses in which Seller or any of its Subsidiaries is now or
hereafter engaged (including the business of making (but not having made) Third
Party products for Third Parties when Seller, its Subsidiaries is acting as a
contract manufacturer or foundry for such Third Parties), other than Medical
Products.
60.15. SELLER TECHNOLOGY. "Seller Technology" means any other Technology
not included within the definition of Purchaser Technology that is associated
with the development, design, testing, manufacture, maintenance, support,
debugging, quality control, repair, use, marketing and sale of the Purchaser
Products as of the Closing Date.
60.16. SUBSIDIARY. "Subsidiary" means with respect to any specified
Person, any corporation, any limited liability company, any partnership or other
legal entity of which such Person owns, directly or indirectly, more than 50% of
the stock or other equity interest entitled to vote on the election of the
members of the board of directors or similar governing body. For example, if
Seller owns 70% of the stock of another corporation, and that corporation owns
60% of the equity interest of a limited liability company, then that corporation
is a Subsidiary of Seller but that limited liability company is not. However, if
such corporation owns 90% of the equity interest of a limited liability company,
then that limited liability company is a Subsidiary of Seller.
60.17. TECHNOLOGY. "Technology" means technological models, algorithms,
manufacturing processes, design processes, behavioral models, logic diagrams,
schematics, test vectors, know-how, computer and electronic data processing and
other apparatus programs and software (object code and source code), optical,
hydraulic and fluidic apparatus and processes, detection and analytical devices,
databases and documentation thereof, trade secrets, technical information,
specifications, drawings, records, documentation, works of authorship or other
creative works, ideas, knowledge, data or the like. The term Technology includes
Copyrights, Database Rights, Mask Work Rights, trade secrets and any other
intellectual property right, but expressly does not include (i) any trademark,
trade name, trade dress or service mark, or applications for registration
thereof or (ii) any Patents or applications therefor, including any of the
foregoing that may be based on Invention Disclosures that are covered by the
Patent Ownership and Assignment Agreement between the parties, but does include
trade secret rights in and to inventions disclosed in such Patent applications
and Invention Disclosures.
60.18. THIRD PARTY. "Third Party" means a Person other than Seller and
its Subsidiaries or Purchaser and its Subsidiaries.
ARTICLE LXI
ASSIGNMENT OF OWNERSHIP
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61.1. ASSIGNMENT. Subject to Sections 2.2 and 2.3 below, Seller hereby
grants, conveys and assigns (and agrees to cause its appropriate Subsidiaries to
grant, convey and assign) to Purchaser, by execution hereof (or, where
appropriate or required, by execution of separate instruments of assignment),
all its (and their) right, title and interest in and to the Purchaser
Technology, to be held and enjoyed by Purchaser, its Subsidiaries, its
successors and assigns. Seller further grants, conveys and assigns (and agrees
to cause its appropriate Subsidiaries to grant, convey and assign) to Purchaser
all its (and their) right, title and interest in and to any and all proceeds,
causes of action and rights of recovery for past and future infringement of
Copyrights, Database Rights and Mask Work Rights in and to the Purchaser
Technology, and for past and future misappropriation of trade secrets in and to
the Purchaser Technology. Seller further covenants that Seller will, without
demanding any further consideration therefor, at the request and expense of
Purchaser (except for the costs of the time of Seller employees), do (and cause
its Subsidiaries to do) all lawful and just acts that may be or become
reasonably necessary for transferring, conveying, evidencing, maintaining,
recording and perfecting Purchaser's rights to such Purchaser Technology,
including but not limited to, execution and acknowledgement of (and causing its
Subsidiaries to execute and acknowledge) assignments and other instruments in a
form reasonably required by Purchaser for each Copyright, Mask Work Right or
Database Right jurisdiction.
61.2. PRIOR GRANTS. Purchaser acknowledges and agrees that the foregoing
assignment is subject to any and all licenses or other rights that may have been
granted by Seller or its Subsidiaries (or their predecessors in interest) with
respect to the Purchaser Technology prior to the Closing Date. Seller shall
respond to reasonable inquiries from Purchaser regarding any such prior grants.
61.3. COPIES IN ITS POSSESSION.
(a) Notwithstanding the assignment of ownership in this Article
II, Seller shall have the right to retain copies of all materials and
other tangible items reflecting, incorporating, embodying or describing
any Purchaser Technology that it may have in its possession as of the
Closing Date, and Purchaser shall have the right to retain copies of all
materials and other tangible items reflecting, incorporating, embodying
or describing any Seller Technology that it may have in its possession
as of the Closing Date. By agreeing to the retention of such copies, the
parties do not agree that either party shall have any right to use the
Purchaser Technology or the Seller Technology, as the case may be, in a
manner inconsistent with the Asset Purchase Agreement, this Agreement,
or any other agreement executed concurrently therewith.
(b) If, at any time prior to two years after the Closing Date,
Purchaser becomes aware of the existence of certain documents or other
tangible materials that are not in its possession but are or are likely
to be in the possession of Seller that Purchaser requires in order to
make effective use of the Purchaser Technology to be assigned to
Purchaser pursuant to the Asset Purchase Agreement and this Agreement,
Purchaser may make a request therefor to Seller; whereupon Seller shall
conduct a reasonable search therefor and advise Purchaser as to whether
or not Seller is in possession of such documents or tangible materials.
If Seller is not in possession of such documents or tangible materials,
it shall have no further obligation to Purchaser with respect thereto.
If Seller is in such possession, it shall provide Purchaser or its
designees, at Purchaser's expense, with access to such documents or
tangible materials
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under such reasonable terms and conditions as the parties may agree.
Nothing in this provision, however, shall create any obligation on the
part of Seller to preserve, keep or maintain in any particular order or
condition any documents or other tangible materials for any period of
time after the Closing Date.
ARTICLE LXII
LICENSE GRANTS
62.1. LICENSE TO PURCHASER.
(a) Seller grants (and agrees to cause its appropriate
Subsidiaries to grant) to Purchaser and its Subsidiaries the following
personal, irrevocable, non-exclusive, worldwide, fully paid,
royalty-free and non-transferable (except as specified in Section 8.10
below) licenses for use solely within Purchaser's Field of Use, to
design, develop, make, have made, sell, use, maintain and practice and
have practiced any methods with Medical Products (as that term is
defined in the Asset Purchase Agreement; except that for purposes of
this Section 3.1, the definition of Medical Products shall also include
successor products and services and product line or service line
extensions to those products defined as Medical Products in the Asset
Purchase Agreement, whether or not reasonably foreseeable as of the
Closing Date):
(i) under its and their Copyrights in and to the Seller
Technology that it owns, (A) to reproduce and have reproduced the
works of authorship included in such Seller Technology and
Improvements thereof prepared by or for Purchaser, in whole or in
part, as part of Purchaser Products, (B) to prepare Improvements
or have Improvements prepared for it based upon the works of
authorship included in such Seller Technology in order to create
Purchaser Products, (C) to distribute (by any means and using any
technology, whether now known or unknown, including without
limitation electronic transmission) copies of the works of
authorship included in such Seller Technology and Improvements
thereof prepared by or for Purchaser to the public by sale or
other transfer of ownership or by rental, lease or lending, as
part of Purchaser Products, and (D) to perform (by any means and
using any technology, whether now known or unknown, including
without limitation electronic transmission) and display the works
of authorship included in such Seller Technology and Improvements
thereof prepared by or for Purchaser, as part of Purchaser
Products;
(ii) under its and their Database Rights in and to the Seller
Technology it owns, to extract data from the databases included
in such Seller Technology and to re-utilize such data to design,
develop, manufacture and have manufactured Purchaser Products and
to Sell such Purchaser Products that incorporate such data,
databases and Improvements thereof prepared by or for Purchaser;
(iii) under its and their Mask Work Rights in and to the
Seller Technology it owns, (A) to reproduce and have reproduced
mask works and semiconductor
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topologies included in such Seller Technology and embodied in
Purchaser Products by optical, electronic or any other means, (B)
to import or distribute a product in which any such mask work or
semiconductor topology is embodied, and (C) to induce or
knowingly to cause a Third Party to do any of the acts described
in Sections 3.1(a)(iii)(A) and (B) above; and
(iv) under its and their trade secrets and other intellectual
property rights in and to the Seller Technology it owns to use
such Seller Technology and Improvements thereof prepared by or
for Purchaser to design, develop, manufacture and have
manufactured Purchaser Products and to Sell and maintain such
Purchaser Products.
Seller covenants and agrees to cause its Subsidiaries not to grant any other
licenses under any of the foregoing in Purchaser's Field of Use for a period of
five (5) years , commencing on the Closing Date.
(b) With regard to Seller Technology that is owned by
Hewlett-Packard, Seller grants to Purchaser and its Subsidiaries a
sublicense to use such Seller Technology solely in the Purchaser Field
of Use, in connection with Medical Products, and solely to the extent of
Seller's right to grant any such sublicense to Purchaser under the
relevant provisions of the Master Technology Ownership and License
Agreement between Hewlett-Packard and Seller, dated as of November 1,
1999.
(c) Without limiting the generality of the foregoing licenses
granted in Section 3.1(a) above, with respect to software included
within the Seller Technology, such licenses include the right to use,
modify, and reproduce such software and Improvements thereof made by or
for Purchaser or its Subsidiaries to create Purchaser Products, in
source code and object code form, and to Sell and maintain such software
and Improvements thereof made by or for Purchaser or its Subsidiaries,
in source code and object code form, as part of Purchaser Products;
provided, however, that with respect to Seller's software products that
are Seller Products and are commercially released as of the Closing
Date, Purchaser shall be limited to using no more than ten percent (10%)
of the lines of code of any such commercially released software product
in any Purchaser Product Sold or maintained by Purchaser or its
Subsidiaries to a Third Party after the Closing Date (it being
understood that such restriction shall not apply, however, to
Purchaser's or its Subsidiaries' use of any code contained in any
Purchaser Product that was commercially released by Seller as of or
prior to the Closing Date, to the extent that Purchaser desires to
continue to sell such Purchaser Product in a form containing such code
or improvements thereto). Any other rights of Purchaser and its
Subsidiaries to Sell and maintain such commercially released software
products of Seller shall be solely as set forth in a separate written
agreement, which may be entered into by the parties, consistent with the
licensing criteria and commercial terms and conditions upon which Seller
makes such software products available to Third Parties at the time of
such separate written agreement. For purposes of this Section 3.1(c), a
"commercially released" product shall mean a product that has been
placed on a corporate price list by Seller or any of
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its Subsidiaries, or (if applicable) that has been released by Seller or
any of its Subsidiaries to Third Parties for beta testing.
(d) The foregoing licenses in this Section 3.1 include the right
to have contract manufacturers and foundries manufacture Purchaser
Products for Purchaser.
(e) Purchaser may grant sublicenses within the scope of the
licenses granted under Sections 3.1(a) and (b) above as follows:
(i) Purchaser may grant sublicenses to its Subsidiaries for
so long as they remain its Subsidiaries, with no right to grant
further sublicenses other than, in the case of a sublicensed
Subsidiary, to another Subsidiary of such party; provided that
any such sublicense may be made effective retroactively but not
prior to the sublicensee's becoming a Subsidiary; and
(ii) Purchaser may grant sublicenses with respect to
Purchaser Products in the form of software, in object code and
source code form, to its distributors, resellers, OEM customers,
VAR customers, VAD customers, systems integrators and other
channels of distribution and to its end user customers.
62.2. LICENSE BACK TO SELLER.
(a) Purchaser grants back (and agrees to cause its appropriate
Subsidiaries to grant back) to Seller and its Subsidiaries the following
personal, irrevocable, non-exclusive, worldwide, fully paid,
royalty-free and non-transferable (except as specified in Section 8.10
below) licenses for use solely within Seller's Field of Use to design,
develop, make, have made, sell, use, maintain and practice and have
practiced any methods with Seller Products:
(i) under its and their Copyrights in and to the Purchaser
Technology, (A) to reproduce and have reproduced the works of
authorship included in the Purchaser Technology and Improvements
thereof prepared by or for Seller, in whole or in part, as part
of Seller Products, (B) to prepare Improvements or have
Improvements prepared for it based upon the works of authorship
included in the Purchaser Technology in order to create Seller
Products, (C) to distribute (by any means and using any
technology, whether now known or unknown, including without
limitation electronic transmission) copies of the works of
authorship included in the Purchaser Technology and Improvements
thereof prepared by or for Seller to the public by sale or other
transfer of ownership or by rental, lease or lending, as part of
Seller Products, and (D) to perform (by any means and using any
technology, whether now known or unknown, including without
limitation electronic transmission) and display the works of
authorship included in the Purchaser Technology and Improvements
thereof prepared by or for Seller, as part of Seller Products;
(ii) under its and their Database Rights in and to the
Purchaser Technology, to extract data from the databases included
in the Purchaser Technology and to re-utilize such data to
design, develop, manufacture and have manufactured
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Seller Products and to Sell such Seller Products that incorporate
such data, databases and Improvements thereof prepared by or for
Seller;
(iii) under its and their Mask Work Rights in and to the
Purchaser Technology, (A) to reproduce and have reproduced mask
works and semiconductor topologies included in the Purchaser
Technology and embodied in Seller Products by optical, electronic
or any other means, (B) to import or distribute a product in
which any such mask work or semiconductor topology is embodied,
and (C) to induce or knowingly to cause a Third Party to do any
of the acts described in Sections 3.2(a)(iii)(A) and (B) above;
and
(iv) under its and their trade secrets and other intellectual
property rights in and to the Purchaser Technology, to use the
Purchaser Technology and Improvements thereof prepared by or for
Seller to design, develop, manufacture and have manufactured
Seller Products and to Sell such Seller Products.
(b) Without limiting the generality of the foregoing licenses
granted in Section 3.2(a) above, with respect to software included
within the Purchaser Technology, such licenses include the right to use,
modify, and reproduce such software and Improvements thereof made by or
for Seller or its Subsidiaries to create Seller Products, in source code
and object code form, and to Sell and maintain such software and
Improvements thereof made by or for Seller or its Subsidiaries, in
source code and object code form, as part of Seller Products; provided,
however, that, with respect to Purchaser's software products that are
Purchaser Products and are commercially released as of the Closing Date,
Seller shall be limited to using no more than ten percent (10%) of the
lines of code of any such commercially released software product in any
Seller Product Sold or maintained by Seller or its Subsidiaries to a
Third Party after the Closing Date (it being understood that such
restriction shall not apply, however, to Seller's or its Subsidiaries'
use of any code contained in any Seller Product that was commercially
released by Seller as of or prior to the Closing Date, to the extent
that Seller desires to continue to sell such Seller Products in a form
containing such code or improvements thereto). Any other rights of
Seller and its Subsidiaries to Sell and maintain such commercially
released software products of Purchaser shall be solely as set forth in
a separate written agreement. For purposes of this Section 3.2(b), a
"commercially released" product shall mean a product that has been
placed on a Purchaser corporate price list or (if applicable) released
by Purchaser to Third Parties for beta testing; and
(c) The foregoing licenses in this Section 3.2 include the right
to have contract manufacturers and foundries manufacture Seller Products
for Seller.
(d) Seller may grant sublicenses within the scope of the licenses
granted under Sections 3.2(a) and (b) above as follows:
(i) Seller may grant sublicenses to its Subsidiaries for so
long as they remain its Subsidiaries, with no right to grant
further sublicenses other than, in the case of a sublicensed
Subsidiary, to another Subsidiary of such party; provided that
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any such sublicense may be made effective retroactively but not
prior to the sublicensee's becoming a Subsidiary; and
(ii) Seller may grant sublicenses with respect to Seller
Products in the form of software, in object code and source code
form, to its distributors, resellers, OEM customers, VAR
customers, VAD customers, systems integrators and other channels
of distribution and to its end user customers.
62.3. IMPROVEMENTS. As between the parties, after the Closing Date:
(a) Seller hereby retains all right, title and interest,
including all intellectual property rights, in and to any Improvements
to Purchaser Technology made by or for Seller in the exercise of the
licenses granted to it hereunder, subject only to the ownership of
Purchaser in the underlying Purchaser Technology. Seller shall not have
any obligation under this Agreement to notify Purchaser of any
Improvements made by or for it or to disclose or license any such
Improvements to Purchaser; and
(b) Purchaser hereby retains all right, title and interest,
including all intellectual property rights, in and to any Improvements
to Seller Technology made by or for Purchaser in the exercise of the
licenses granted to it hereunder, subject only to the ownership of
Purchaser in the underlying Seller Technology. Purchaser shall not have
any obligation under this Agreement to notify Seller of any Improvements
made by or for it or to disclose or license any such Improvements to
Seller.
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62.4. DURATION OF SUBLICENSES TO SUBSIDIARIES . Any sublicenses granted
by either party to a particular Subsidiary pursuant to Sections 3.1(d)(i) or
(ii) and 3.2(d)(i) or (ii), respectively, shall terminate upon the date that
such Subsidiary ceases to be a Subsidiary of the respective party.
62.5. NO PATENT LICENSES. Nothing contained in this Agreement shall be
construed as conferring to either party by implication, estoppel or otherwise
any license or right under any Patent or applications therefor, whether or not
the exercise of any right herein granted necessarily employs an invention of any
existing or later issued Patent. The applicable assignments and licenses granted
between Seller and Purchaser with respect to Patents are set forth in a separate
Patent Ownership and License Agreement.
62.6. THIRD PARTY TECHNOLOGY. The assignment of any applicable license
agreements with respect to Third Party Technology will be set forth in a
separate Agreement between the parties.
ARTICLE LXIII
CONFIDENTIALITY
63.1. CONFIDENTIAL INFORMATION. The parties hereto expressly acknowledge
and agree that all information, whether written or oral, furnished by either
party to the other party or any Subsidiary of such other party pursuant to this
Agreement ("Confidential Information") shall be deemed to be confidential and
shall be maintained by each party and their respective Subsidiaries in
confidence, using the same degree of care to preserve the confidentiality of
such Confidential Information that the party to whom such Confidential
Information is disclosed would use to preserve the confidentiality of its own
information of a similar nature and in no event less than a reasonable degree of
care. Except as authorized in writing by the other party, neither party shall at
any time disclose or permit to be disclosed any such Confidential Information to
any person, firm, corporation or entity, (i) except as may reasonably be
required in connection with the performance of this Agreement by Purchaser,
Seller or its respective Subsidiaries, as the case may be, and (ii) except as
may reasonably be required after the Closing (A) by Purchaser or its
Subsidiaries in connection with the use of the Purchaser Technology, Seller
Technology and the operation of the Business or (B) by Seller or its
Subsidiaries in connection with the use of the Purchaser Technology and the
operation of its business, and (iii) except to the parties' agents or
representatives who are informed by the parties of the confidential nature of
the information and are bound to maintain its confidentiality, and (iv) in the
course of due diligence in connection with the sale of all or a portion of
either party's business provided the disclosure is pursuant to a nondisclosure
agreement having terms comparable to Sections 4.1 and 4.2 hereof.
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63.2. EXCEPTIONS. The obligation not to disclose information under
Section 4.1 hereof shall not apply to information that, as of the Closing Date
or thereafter, (i) is or becomes generally available to the public other than as
a result of disclosure made after the execution of the Asset Purchase Agreement
by the party desiring to treat such information as non-confidential or any of
its Subsidiaries or representatives thereof, (ii) was or becomes readily
available to the party desiring to treat such information as non-confidential or
any of its Subsidiaries or representatives thereof on a non-confidential basis,
(iii) is or becomes available to the party desiring to treat such information as
non-confidential or any of its Subsidiaries or representatives thereof on a
non-confidential basis from a source other than its own files or personnel or
the other party or its Subsidiaries, provided that such source is not known by
the party desiring to treat such information as non-confidential to be bound by
confidentiality agreements with the other party or its Subsidiaries or by legal,
fiduciary or ethical constraints on disclosure of such information, or (iv) is
required to be disclosed pursuant to a governmental order or decree or other
legal requirement (including the requirements of the U.S. Securities and
Exchange Commission and the listing rules of any applicable securities
exchange), provided that the party required to disclose such information shall
give the other party prompt notice thereof prior to such disclosure and, at the
request of the other party, shall cooperate in all reasonable respects in
maintaining the confidentiality of such information, including obtaining a
protective order or other similar order. Nothing in this Section 4.2 shall limit
in any respect either party's ability to disclose information in connection with
the enforcement by such party of its rights under this Agreement; provided that
the proviso of clause (v) in the immediately preceding sentence shall apply to
the party desiring to disclose such information.
63.3. DURATION. The obligations of the parties set forth in this Article
IV, with respect to the protection of Confidential Information, shall remain in
effect until five years after (i) the Closing Date, with respect to Confidential
Information of one party that is known to or in the possession of the other
party as of the Closing Date, or (ii) the date of disclosure, with respect to
Confidential Information that is disclosed by the one party to the other party
after the Closing Date.
ARTICLE LXIV
TERMINATION
64.1. VOLUNTARY TERMINATION. By written notice to Purchaser, Seller may
voluntarily terminate all or a specified portion of the license and rights
granted to it hereunder by Purchaser. Such notice shall specify the effective
date of such termination and shall clearly specify any affected Technology,
product or service.
64.2. SURVIVAL. Any voluntary termination by Seller of the license and
rights granted to it by Purchaser under Section 5.1 hereof shall not affect
Seller's license and rights with respect to any licensed product made or service
furnished prior to such termination.
64.3. NO OTHER TERMINATION. Each party acknowledges and agrees that its
remedy for breach by the other party of the licenses granted to it hereunder or
of any other provision hereof shall be, subject to the requirements of Article
VI, to bring a claim to recover damages subject to the limits set forth in this
Agreement and to seek any other appropriate equitable relief, other than
termination of the licenses granted by it in this Agreement.
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ARTICLE LXV
DISPUTE RESOLUTION
65.1. NEGOTIATION. The parties shall make a good faith attempt to
resolve any dispute or claim arising out of or related to this Agreement through
negotiation. Within thirty (30) days after notice of a dispute or claim is given
by either party to the other party, the parties' first tier negotiating teams
(as determined by each party's Director of Intellectual Property (or person
holding a similar position or title) or his or her delegate) shall meet and make
a good faith attempt to resolve such dispute or claim and shall continue to
negotiate in good faith in an effort to resolve the dispute or claim or
renegotiate the applicable section or provision without the necessity of any
formal proceedings. If the first tier negotiating teams are unable to agree
within thirty (30) days of their first meeting, then the parties' second tier
negotiating teams (as determined by each party's Director of Intellectual
Property or his or her delegate) shall meet within thirty (30) days after the
end of the first thirty (30) day negotiating period to attempt to resolve the
matter. During the course of negotiations under this Section 6.1, all reasonable
requests made by one party to the other for information, including requests for
copies of relevant documents, will be honored. The specific format for such
negotiations will be left to the discretion of the designated negotiating teams
but may include the preparation of agreed upon statements of fact or written
statements of position furnished to the other party. All negotiations between
the parties pursuant to this Section 6.1 shall be treated as compromise and
settlement negotiations. Nothing said or disclosed, nor any document produced,
in the course of such negotiations that is not otherwise independently
discoverable shall be offered or received as evidence or used for impeachment or
for any other purpose in any current or future litigation.
65.2. NONBINDING MEDIATION. In the event that any dispute or claim
arising out of or related to this Agreement is not settled by the parties within
fifteen (15) days after the first meeting of the second tier negotiating teams
under Section 6.1 hereof, the parties will attempt in good faith to resolve such
dispute or claim by nonbinding mediation in accordance with the American
Arbitration Association Commercial Mediation Rules. The mediation shall be held
within thirty (30) days of the end of such fifteen (15) day negotiation period
of the second tier negotiating teams. Except as provided below in Section 6.3,
no litigation for the resolution of such dispute may be commenced until the
parties try in good faith to settle the dispute by such mediation in accordance
with such rules and either party has concluded in good faith that amicable
resolution through continued mediation of the matter does not appear likely. The
costs of mediation shall be shared equally by the parties to the mediation. Any
settlement reached by mediation shall be recorded in writing, signed by the
parties, and shall be binding on them.
65.3. PROCEEDINGS. Nothing herein, however, shall prohibit either party
from initiating litigation or other judicial or administrative proceedings if
such party would be substantially harmed by a failure to act during the time
that such good faith efforts are being made to resolve the dispute or claim
through negotiation or mediation. In the event that litigation is commenced
under this Section 6.3, the parties agree to continue to attempt to resolve any
dispute or claim according to the terms of Sections 6.1 and 6.2 hereof during
the course of such litigation proceedings under this Section 6.3.
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ARTICLE LXVI
LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY OR ITS SUBSIDIARIES BE LIABLE TO THE OTHER PARTY
OR ITS SUBSIDIARIES FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR
PUNITIVE DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
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ARTICLE LXVII
MISCELLANEOUS PROVISIONS
67.1. DISCLAIMER. EXCEPT AS OTHERWISE SET FORTH HEREIN OR IN THE ASSET
PURCHASE AGREEMENT, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL (A) TECHNOLOGY
ASSIGNED PURSUANT TO THIS AGREEMENT AND (B) ALL TECHNOLOGY AND OTHER INFORMATION
OR MATERIALS LICENSED OR FURNISHED HEREUNDER ARE ASSIGNED, LICENSED OR FURNISHED
WITHOUT ANY WARRANTIES WHATSOEVER, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH
RESPECT THERETO, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, ENFORCEABILITY OR
NON-INFRINGEMENT. Except as otherwise set forth herein or in the Asset Purchase
Agreement, neither party nor any of its subsidiaries makes any warranty or
representation that any manufacture, use, importation, offer for sale or sale of
any product or service will be free from infringement of any patent or other
intellectual property right of any third party.
67.2. NO IMPLIED LICENSES. Nothing contained in this Agreement shall be
construed as conferring any rights by implication, estoppel or otherwise, under
any intellectual property right, other than the rights expressly granted in this
Agreement with respect to the Purchaser Technology or the Licensed Technology.
Neither party is required hereunder to furnish or disclose to the other any
technical or other information (including copies of the Purchaser Technology or
the Licensed Technology), except as specifically provided herein or in the Asset
Purchase Agreement.
67.3. INFRINGEMENT SUITS. Neither party shall have any obligation
hereunder to institute any action or suit against Third Parties for infringement
of any Copyrights, Database Rights or Mask Work Rights or misappropriation of
any trade secret rights in or to any Technology licensed to the other party
hereunder, or to defend any action or suit brought by a Third Party which
challenges or concerns the validity of any of such rights or which claims that
any Technology assigned or licensed to the other party hereunder infringes any
Patent, Copyright, Database Right, Mask Work Right or other intellectual
property right of any Third Party or constitutes a misappropriated trade secret
of any Third Party. Seller shall not have any right to institute any action or
suit against Third Parties for infringement of any of the Copyrights, Database
Rights or Mask Work Rights in or to the Purchaser Technology. Purchaser shall
not have any right to institute any action or suit against Third Parties for
infringement of any of the Copyrights, Database Rights or Mask Work Rights in or
to the Seller Technology. Notwithstanding the foregoing, if Purchaser believes
that certain Technology to which it is licensed by Seller is being infringed by
a Third Party in the field of use of the license, it may present evidence of
such infringement to Seller, together with its recommendation for enforcement.
Seller may thereafter consult with Purchaser concerning the proposed enforcement
and shall make a good faith evaluation of the desirability of taking any
enforcement action, considering the evidence available to it, the materiality of
the alleged infringement, the costs and risks of taking such action, and such
other reasonable, legal and commercial factors as it would ordinarily consider
in determining whether to take such action.
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67.4. NO OBLIGATION TO OBTAIN OR MAINTAIN RIGHTS IN TECHNOLOGY. Except
as otherwise set forth herein or in the Asset Purchase Agreement, neither party,
nor any of its Subsidiaries, shall be obligated to provide the other party with
any technical assistance or to furnish the other party with, or obtain, any
documents, materials or other information or Technology.
67.5. ENTIRE AGREEMENT. This Agreement and the Asset Purchase Agreement
constitute the entire understanding between the parties with respect to the
subject matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof. To the extent there is a conflict between this Agreement and the
Asset Purchase Agreement between the parties, the terms of the Asset Purchase
Agreement shall govern, provided, however, that the terms of this Agreement
shall govern with respect to (a) Article IV with respect to Confidential
Information transferred, licensed or disclosed pursuant to this Agreement, (b)
Article V with respect to termination of the licenses granted hereunder, (c)
Article VI concerning dispute resolution, (d) Article VII solely with respect to
intellectual property that is licensed by one party to another party pursuant to
this Agreement, (e) Section 8.9 concerning notice, and (f) Section 8.10
concerning assignment or transfer of rights or obligations arising under this
Agreement.
67.6. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to contracts
made and to be performed wholly within the state, except for the internal
matters or any corporation, partnership or similar entity, which shall be
governed by the laws of the jurisdictions of incorporation or organization of
such corporation, partnership or similar entity.
67.7. CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. Each party hereto
irrevocably submits to the exclusive jurisdiction of the United States District
Court for the Southern District of New York located in the borough of Manhattan
in the City of New York, or if such court does not have jurisdiction, the
Supreme Court of the State of New York, New York County, for the purposes of any
suit, action or other proceeding arising out of this Agreement or any
transaction contemplated hereby. Each of the parties hereto further agrees that
service of any process, summons, notice or document by U.S. registered mail to
such party's respective address set forth in Section 8.9 hereof shall be
effective service of process for any action, suit or proceeding in New York with
respect to any matters to which it has submitted to jurisdiction as set forth
above in the immediately preceding sentence. Each of the parties hereto
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (a) the United States District Court for the Southern
District of New York or (b) the Supreme Court of the State of New York, New York
County, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court that any such action, suit or proceeding
brought in any such court has been brought in an inconvenient forum. The parties
hereto hereby irrevocably and unconditionally waive trial by jury in any legal
action or proceeding relating to this Agreement or any other agreement entered
into in connection therewith and for any counterclaim with respect thereto.
67.8. SECTION HEADINGS; TABLE OF CONTENTS. The section headings
contained in this Agreement and the Table of Contents to this Agreement are
inserted for reference purposes only and are not intended to be a part, nor
should they affect the meaning or interpretation, of this Agreement.
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67.9. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given when delivered in person,
by telecopy with answer back, by express or overnight mail delivered by an
internationally recognized air courier (delivery charges prepaid), by registered
or certified mail (postage prepaid, return receipt requested) or by e-mail with
receipt confirmed by return e-mail to the respective parties as follows:
if to Seller:
c/o Agilent Technologies, Inc.
395 Page Mill Road, MS A3-10
P.O. Box 10395 Palo Alto, California
94303-0870
Attention: Vice President, Associate General Counsel and
Director of Intellectual Property
Telecopy: +1 (650) 752-5742
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Attention: Kerry L. Konrad
Telecopy: +1 (212) 455-2502
if to Purchaser:
c/o Philips Medical Systems B.V.
P.O. Box 10.000
5680 DA Best, The Netherlands
Attention: General Counsel
Telecopy: +31 40 2762651
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
Attention: Matthew G. Hurd
Telecopy: +1 (212) 558-3588
or to such other address as the party to whom notice is given may have
previously furnished to the other in writing in the manner set forth above. Any
notice or communication delivered in person shall be deemed effective on
delivery. Any notice or communication sent by e-mail, telecopy or by air courier
shall be deemed effective on the first Business Day following the day on which
such notice or communication was sent. Any notice or communication sent by
registered or certified mail shall be deemed effective on the third Business Day
following the day on which such notice or
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communication was mailed. As used in this Section 8.9, "Business Day" means any
day other than a Saturday, a Sunday or a day on which banking institutions
located in the jurisdiction in which the person to whom notice is to be provided
is located are authorized or obligated by law or executive order to close.
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67.10. NONASSIGNABILITY. Neither party may, directly or indirectly, in
whole or in part, whether by operation of law or otherwise, assign or transfer
this Agreement, without the other party's prior written consent, and any
attempted assignment, transfer or delegation without such prior written consent
shall be voidable at the sole option of such other party; provided, however,
that neither party shall withhold its consent to any proposed assignment or
transfer unless the non-transferring party has a good faith, reasonable belief,
grounded in an articulable basis in fact, that the proposed transfer will create
a substantial risk that the confidentiality of information belonging to the
non-transferring party which is to be transferred to the proposed transferee
will not be preserved or maintained with a reasonable degree of care by the
proposed transferee or otherwise as a result of the proposed transfer.
Notwithstanding the foregoing, each party (including its respective Subsidiaries
or its permitted successive assignees or transferees hereunder) may assign or
transfer this Agreement as a whole, without consent, (a) in connection with a
corporate reorganization that leaves such party substantially equivalent in
terms of business, assets or ownership as before the reorganization (e.g., a
reorganization in another state); or (b) any or all of its rights or obligations
under this Agreement to one or more Subsidiaries of such party, provided,
however, that no such assignment or transfer made pursuant to this Section
8.10(b) shall release the transferring or assigning party from any of its
liabilities or obligations hereunder. Without limiting the foregoing, this
Agreement will be binding upon and inure to the benefit of the parties and their
permitted successors and assigns.
67.11. SEVERABILITY. If any provision of this Agreement shall be
declared by any court of competent jurisdiction to be illegal, void or
unenforceable, all other provisions of this Agreement shall not be affected and
shall remain in full force and effect, and Seller and Purchaser shall negotiate
in good faith to replace such illegal, void or unenforceable provision with a
provision that corresponds as closely as possible to the intentions of the
parties as expressed by such illegal, void or unenforceable provision.
67.12. AMENDMENT; WAIVER; REMEDIES CUMULATIVE. This Agreement, including
this provision of this Agreement, may be amended, supplemented or otherwise
modified only by a written instrument executed by the parties hereto. No waiver
by either party of any of the provisions hereof shall be effective unless
explicitly set forth in writing and executed by the party so waiving. Except as
provided in the preceding sentence, no action taken pursuant to this Agreement,
including any investigation by or on behalf of any party or a failure or delay
by any party in exercising any power, right or privilege under this Agreement,
shall be deemed to constitute a waiver by the party taking such action of
compliance with any representations, warranties, covenants, or agreements
contained herein, and in any documents delivered or to be delivered pursuant to
this Agreement and in connection with the Closing hereunder. The waiver by any
party hereto of a breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
67.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 8.13, provided that receipt of copies of such counterparts is confirmed.
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WHEREFORE, the parties have signed this Technology Ownership and License
Agreement effective as of the Closing Date first set forth above.
AGILENT TECHNOLOGIES, INC. KONINKLIJKE PHILIPS
ELECTRONICS N.V.
By: By:
------------------------------- ------------------------------------
Name: Name:
----------------------------- ----------------------------------
Title: Title:
---------------------------- ---------------------------------
[SIGNATURE PAGE TO TECHNOLOGY OWNERSHIP AND LICENSE AGREEMENT]
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