EXHIBIT 10.2
ASSET PURCHASE AGREEMENT
AMONG
3COM CORPORATION
AND
INTEGRATED CIRCUIT SYSTEMS, INC.
AND
ICS TECHNOLOGIES, INC.
JANUARY 15, 1999
TABLE OF CONTENTS
PAGE
---- ARTICLE I DEFINITIONS............................................... 1
ARTICLE II PURCHASE AND SALE TRANSACTION ............................ 8
2.1 Purchase and Sale of Assets .............................. 8
2.2 No Assumption of Liabilities ............................. 8
2.3 Purchase Price ........................................... 8
2.4 The Closing .............................................. 9
2.5 Deliveries at the Closing ................................ 10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER AND ICS ......... 10
3.1 Organization of the Sellers .............................. 10
3.2 Sub Capital Structure .................................... 11
3.3 ICS Options .............................................. 11
3.4 Authorization of Transaction ............................. 11
3.5 Noncontravention.......................................... 12
3.6 Consents.................................................. 12
3.7 Financial Statements...................................... 12
3.8 [INTENTIONALLY OMITTED]................................... 13
3.9 Absence of Changes........................................ 13
3.10 Taxes, Tax Returns and Audits............................. 15
3.11 Restrictions on Business Activities....................... 15
3.12 Title of Properties; Absence of Liens and Encumbrances;
Condition of Equipment................................... 15
3.13 Intellectual Property..................................... 16
3.14 Contracts................................................. 20
3.15 Governmental Authorization................................ 21
3.16 Litigation................................................ 22
3.17 No Liquidation, Insolvency, Winding-Up.................... 22
3.18 [INTENTIONALLY OMITTED]................................... 23
3.19 Environmental Matters..................................... 23
3.20 Brokers' and Finders' Fees; Third Party Expenses.......... 23
3.21 Employee Matters and Benefit Plans........................ 24
3.22 Affiliated Transactions................................... 26
3.23 Government Contracts...................................... 26
3.24 Suppliers................................................. 26
3.25 [INTENTIONALLY OMITTED]................................... 26
3.26 Insurance................................................. 26
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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3.27 Compliance with Laws...................................... 26
3.28 Product Warranties; Defects; Liability.................... 26
3.29 Import/Export............................................. 27
3.30 Complete Copies of Materials.............................. 27
3.31 Representations Complete.................................. 27
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER................... 27
4.1 Organization of Buyer..................................... 27
4.2 Authority for Agreement................................... 27
4.3 Adequate Resources........................................ 28
4.4 Noncontravention.......................................... 28
4.5 Consents.................................................. 28
4.6 Brokers' and Finders' Fees; Third Party Expenses.......... 28
4.7 Representations Complete.................................. 28
ARTICLE V CONDUCT PRIOR TO THE CLOSING DATE......................... 28
5.1 Conduct of Business of Seller............................. 28
5.2 No Solicitation........................................... 30
ARTICLE VI ADDITIONAL AGREEMENTS..................................... 31
6.1 Access to Information..................................... 31
6.2 Confidentiality........................................... 31
6.3 Expenses.................................................. 31
6.4 Public Disclosure......................................... 32
6.5 Consents.................................................. 32
6.6 Reasonable Efforts........................................ 32
6.7 Notification of Certain Matters........................... 32
6.8 Tax Returns............................................... 33
6.9 Bulk Sales Laws........................................... 33
6.10 Registered Intellectual Property Activities............... 33
6.11 HSR Act Filings........................................... 33
6.12 Covenant Not to Solicit................................... 33
6.13 Employment Offers......................................... 34
6.14 COBRA..................................................... 34
6.15 401(k) Plan............................................... 34
6.16 Agreement with Respect to Retained Employee's Stock Options 35
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TABLE OF CONTENTS
(CONTINUED)
PAGE
----
6.17 ICS Lease................................................. 35
6.18 Additional Documents and Further Assurances............... 35
ARTICLE VII CONDITIONS TO OBLIGATION TO CLOSE......................... 35
7.1 Conditions to Obligations of Each Party to Effect the
Acquisition.............................................. 35
7.2 Additional Conditions to Obligations of the Sellers....... 36
7.3 Additional Conditions to the Obligations of Buyer......... 37
ARTICLE VIII SURVIVAL OF REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION 38
8.1 Survival of Representations and Warranties................ 38
8.2 Indemnity by Sellers...................................... 38
8.3 Indemnity by Buyer........................................ 38
8.4 Officer's Certificate..................................... 38
8.5 Resolution of Conflicts; Arbitration...................... 39
8.6 Third-Party Claims........................................ 39
8.7 Indemnification Limitations............................... 40
ARTICLE IX TERMINATION, AMENDMENT AND WAIVER......................... 41
9.1 Termination............................................... 41
9.2 Effect of Termination..................................... 42
9.3 Amendment................................................. 42
9.4 Extension; Waiver......................................... 42
ARTICLE X GENERAL PROVISIONS........................................ 42
10.1 Notices................................................... 42
10.2 Interpretation............................................ 43
10.3 Counterparts.............................................. 43
10.4 Entire Agreement; Assignment.............................. 43
10.5 Severability.............................................. 44
10.6 Other Remedies............................................ 44
10.7 Governing Law............................................. 44
10.8 Rules of Construction..................................... 44
10.9 No Third Party Beneficiaries.............................. 45
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EXHIBITS AND SCHEDULES
EXHIBITS A-1 Bill of Sale A-2 Copyright Assignment A-3 Patent Assignment A-4 Trademark Assignments B Form of License and Services Agreement C Retained Employees D Short Term Occupancy Arrangements E Form of Legal Opinion of Counsel to Seller
SCHEDULES 2.1(a) Acquired Assets 2.1(b) Excluded Assets 3.1 Directors and Officers of Sellers 3.3 ICS Options 3.5 Noncontravention 3.6 Required Consents 3.9 Material Adverse Effects since Most Recent Balance Sheet 3.12(a) Real Property Leases 3.12(d) Inclusion of All Seller Intellectual Property 3.13(a) Seller's Registered Intellectual Property 3.13(d) Transfers of Intellectual Property 3.13(f) Intellectual Property Contracts 3.13(g) Indemnification Agreements in Connection with Intellectual Property 3.13(q) Transferability of Intellectual Property 3.14 General Contracts 3.15 Governmental Authorizations 3.21(a) Employee Plans and Agreements 3.21(g) Effect of Transaction 3.21(i) Labor Disputes 3.24 Suppliers 3.26 Insurance 3.28 Product Warranties 5.1 Conduct of Business of Seller
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into on January
--------- 15, 1999 by and among 3Com Corporation, a Delaware corporation whose principal place of business is at 5400 Bayfront Plaza, Santa Clara, CA 95052-8145, California ("Buyer"), Integrated Circuit Systems, Inc., a Pennsylvania
----- corporation whose principal place of business is at 2435 Boulevard of the Generals, Norristown,
Pennsylvania 19403 ("ICS"), and ICS Technologies, Inc., a
--- wholly-owned subsidiary of ICS, organized under the laws of Delaware whose principal place of business is in the State of Delaware and whose mailing address is at 2435 Boulevard of the Generals, Norristown, Pennsylvania 19403 ("Sub" and together with ICS, the "Sellers"). - ----- -------
RECITALS
WHEREAS, Buyer desires to purchase from the Sellers, and Sellers desire to sell to Buyer, certain assets of the Sellers used in the business of designing, developing and selling silicon microchips for use in networking applications as conducted or contemplated to be conducted by the Sellers, including without limitation the making, having made, using, selling, offering for sale, importing, exporting, copying, modifying, distributing, publicly displaying and performing and otherwise exploiting such assets (such business, the "Business"),
-------- without limitation all Intellectual Property (as defined below) of Sub, free and clear of all Liens (as defined below) in consideration of the Purchase Price (as defined below) on the terms and conditions set forth herein (the "Acquisition").
-----------
WHEREAS, in connection with the Acquisition, Buyer and the Sellers, desire to make certain representations, warranties, covenants and other agreements.
WHEREAS, Sub is a wholly-owned subsidiary of ICS, established to own the intellectual property used in Seller's business, including the Business.
NOW, THEREFORE, in consideration of the mutual promises herein made, and in consideration of the warranties, and covenants herein contained, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS
"AAA" shall mean the American Arbitration Association.
---
"Accountant" shall have the meaning set forth in Section 2.3(c).
----------
"Accountant Report" shall have the meaning set forth in Section 2.3(c).
-----------------
"Acquired Assets" shall have the meaning set forth in Section 2.1.
---------------
"Acquisition" shall have the meaning set forth in the recitals above.
-----------
"Affiliate" shall have the meaning set forth in Rule 12b-2 of the
--------- regulations promulgated under the Securities Exchange Act of 1934, as amended, of the United States.
"Agreement" shall have the meaning set forth in the preamble above.
---------
"Allocation Notice" shall have the meaning set forth in Section 2.3(c).
-----------------
"Basis" shall mean any past or present fact, situation, circumstance,
----- status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act, or transaction that forms or could reasonably form the basis for any specified consequence.
"Bill of Sale" shall mean that certain document in form and substance as
------------ shall be acceptable to the parties hereto to be set forth as Exhibit A-1
----------- attached hereto prior to Closing.
"Bulk Sales Laws" shall have the meaning set forth in Section 6.9.
---------------
"Business" shall have the meaning set forth in the Recitals above.
--------
"Buyer" shall have the meaning set forth in the preamble above.
-----
"Buyer's 401(k) Plan" shall have the meaning set forth in Section 6.15.
-------------------
"Cash" shall mean cash and cash equivalents within the meaning of GAAP.
----
"Closing" shall have the meaning set forth in Section 2.4.
-------
"Closing Date" shall have the meaning set forth in Section 2.4.
------------
"Closing Payment" shall mean an amount of Cash equal to Fourteen Million
--------------- Four Hundred Thousand Dollars ($14,400,000).
"COBRA" shall mean the Consolidated Omnibus Budget Reconciliation Act of
----- 1985, as amended.
"Code" shall mean the Internal Revenue Code of 1986, as amended, of the
---- United States.
"Confidentiality Agreement" shall mean the Confidential Disclosure
------------------------- Agreement between Buyer, ICS and ICS Networking, Inc., a wholly owned subsidiary of Sub, dated December 2, 1998, as amended.
"Conflict" shall have the meaning set forth in Section 3.5.
--------
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"Contingency Amount" shall mean an amount of Cash equal to One Million Six
------------------ Hundred Thousand Dollars ($1,600,000).
"Contract" shall have the meaning set forth in Section 3.14.
--------
"Copyright Assignment" shall mean that certain document in form and
-------------------- substance as shall be reasonably acceptable to the parties hereto to be set forth as Exhibit A-2 attached hereto prior to Closing.
-----------
"Disagreement Notice" has the meaning set forth in Section 2.3(c).
-------------------
"DOL" shall mean the Department of Labor.
---
"Employee" shall mean any current, former, or retired employee, consultant,
-------- officer or director of the Sellers or any Affiliate who works or worked primarily in the Business.
"Employee Agreement" shall mean each management, employment, severance,
------------------ consulting, relocation, repatriation, expatriation, visas, work permit or other agreement, contract or similar agreement or contract and any amendments thereto, whether written or oral, between a Seller or any Affiliate and any Employee.
"Employee Plan" shall mean any plan, program, policy, practice, contract,
------------- agreement or other arrangement providing for compensation, severance, termination pay, deferred compensation, pensions, profit sharing, performance awards, stock or stock-related awards, fringe benefits or other employee benefits or remuneration of any kind, whether written or otherwise, funded or unfunded, including each "employee benefit plan," within the meaning of Section 3(3) of ERISA which is or has been maintained, contributed to, or required to be contributed to, by the Sellers or any ERISA Affiliate for the benefit of any Employee, or with respect to which the Sellers or any ERISA Affiliate has or may have any liability or obligation, contingent or otherwise.
"Environmental Permits" shall have the meaning set forth in Section
--------------------- 3.19(c).
"Equipment" shall have the meaning set forth in Section 3.12.
---------
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
----- amended.
"ERISA Affiliate" shall mean any entity which, with the Sellers, comprises
--------------- a controlled group of corporations described in Section 414(b) of the Code or a commonly-controlled group of entities described in Section 414(c) of the Code.
"Excluded Assets" shall mean those assets of the Sellers set forth on
--------------- Schedule 2.1(b). - ---------------
"FMLA" shall mean the Family Medical Leave Act of 1993, as amended.
----
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"GAAP" shall mean generally accepted accounting principles as in effect
---- from time to time in the United States.
"Governmental Entity" shall have the meaning set forth in Section 3.6.
-------------------
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvement Act of
------- 1976, as amended.
"HSR Clearance" shall have the meaning set forth in Section 6.11.
-------------
"Hazardous Material" shall have the meaning set forth in Section 3.19(a).
------------------
"ICS" shall have the meaning set forth in the preamble above.
---
"ICS Common Stock" shall mean the Common Stock of ICS.
----------------
"ICS Lease" shall have the meaning set forth in Section 6.17.
---------
"ICS Option Plans" shall mean collectively, the ICS 1992 Stock Option Plan
---------------- and the ICS 1997 Equity Compensation Plan.
"ICS Options" shall mean all options, warrants or other rights held by
----------- consultants, employees, officers or directors of Sub, to purchase ICS Common Stock (whether or not vested) pursuant to a ICS Option Plan, issued and outstanding at the Closing.
"Imported Goods" shall have the meaning set forth in Section 3.29.
--------------
"INS" shall mean the U.S. Immigration and Naturalization Service.
---
"Intellectual Property" shall mean any or all of the following and all
--------------------- statutory and/or common law rights throughout the world in, arising out of, or associated therewith: (i) all patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations, reexaminations and continuations-in-part thereof; (ii) all inventions (whether patentable or not), invention disclosures and improvements, all trade secrets, proprietary information, know how and technology; (iii) all works of authorship, "moral rights," copyrights, mask works, copyright and mask work registrations and applications; (iv) all industrial designs and any registrations and applications therefor; (v) all trade names, logos, trademarks and service marks; trademark and service mark registrations and applications; (vi) all databases and data collections (including customer lists); (vii) all computer software including all source code, object code, firmware, development tools, files, records and data, all media on which any of the foregoing is recorded; (viii) URLs, Web site addresses and domain names; (ix) any similar, corresponding or equivalent rights to any of the foregoing; (x) all documentation related to any of the foregoing; and (xi) all goodwill associated with any of the foregoing.
"Interim Financials" shall have the meaning set forth in Section 3.7.
------------------
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"IRS" shall mean the Internal Revenue Service of the United States.
---
"Lease" shall have the meaning set forth in Section 3.12.
-----
"Liability" shall mean any liability or obligation (whether known or
--------- unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), including any liability for Taxes.
"License and Services Agreement" shall have the meaning set forth in
------------------------------ Section 7.2(b).
"Lien" shall mean any mortgage, pledge, lien, security interest, charge,
---- claim, equity, encumbrance, restriction on transfer, conditional sale or other title retention device or arrangement (including a capital lease), transfer for the purpose of subjection to the payment of any indebtedness, or restriction on the creation of any of the foregoing, whether relating to any property or right or the income or profits therefrom.
"Loss" and "Losses" shall have the respective meanings set forth in Section
---- ------ 8.2.
"Material Adverse Effect" shall mean a material adverse effect or change on
----------------------- the business, assets (including intangible assets), condition (financial or otherwise), or results of operations or of a specified party or a business.
"Most Recent Balance Sheet" shall have the meaning set forth in Section
------------------------- 3.7.
"Multiemployer Plan" shall mean any "Pension Plan" (as defined below) which
------------------ is a "multiemployer plan," as defined in Section 3(37) of ERISA.
"Occupancy Agreement" shall have the meaning set forth in Section 6.17.
-------------------
"Officer's Certificate" shall have the meaning set forth in Section 8.4.
---------------------
"Ordinary Course of Business" shall mean the ordinary course of business
--------------------------- consistent with past custom and practice (including with respect to quantity and frequency).
"Patent" shall mean any: (i) patent, patent application, patent disclosure
------ or other patent right in any jurisdiction of the world; (ii) any division, continuation, continuation-in-part, reissuance, reexamination, or extension of a Patent; and (iii) any future patent or other patent right that issues or is based upon a patent disclosure or upon an application that is a Patent.
"Patent Assignment" shall mean that certain document in form and substance
----------------- as shall ...