ASSET PURCHASE AGREEMENT
By and Among
PALM, INC.,
ECA SUBSIDIARY ACQUISITION CORPORATION
and
BE INCORPORATED
August 16, 2001
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TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS.........................................................2
1.1 Capitalized Terms...........................................2
1.2 Construction................................................8
ARTICLE 2 PURCHASE AND SALE...................................................8
2.1 Purchase and Sale of Assets.................................8
2.2 Excluded Assets.............................................9
2.3 Delivery of Acquired Assets.................................9
2.4 Assignments.................................................9
2.5 Transfer of Product Software Copyrights....................10
2.6 Transfer of Patent Rights..................................10
2.7 Transfer of Trademarks.....................................10
2.8 Transferred Contracts......................................10
2.9 Assumed Liabilities........................................10
2.10 Excluded Liabilities.......................................10
ARTICLE 3 CLOSING AND CONSIDERATION..........................................11
3.1 Closing....................................................11
3.2 Stock Consideration........................................11
3.3 Allocation of Consideration................................11
3.4 Transfer Taxes.............................................12
ARTICLE 4 LICENSE TO BUYER...................................................12
4.1
4.2 Bankruptcy.................................................13
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF SELLER...........................13
5.1 Organization of Seller.....................................13
5.2 Authority..................................................13
5.3 No Conflict................................................14
5.4 SEC Filings; Seller Financial Statements...................14
5.5 Transferred Contracts......................................15
5.6 Consents...................................................15
5.7 Support and Service Contracts..............................15
5.8 No Liquidation, Insolvency, WindingUp......................15
5.9 Restrictions on Business Activities........................16
5.10 Title to Properties; Absence of Liens and Encumbrances.....17
5.11 Intellectual Property......................................17
5.12 Litigation.................................................19
5.13 Brokers' or Finders' Fees..................................19
5.14 Tax Matters................................................19
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5.15 Power of Attorney..........................................20
5.16 Compliance with Laws.......................................20
5.17 Product Warranties.........................................20
5.18 Employee Matters...........................................21
5.19 International Employee Plan................................22
5.20 Business Changes...........................................22
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER.................23
6.1 Organization, Good Standing and Qualification..............23
6.2 Authority..................................................23
6.3 No Conflict................................................23
6.4 SEC Filings................................................24
6.5 Consents...................................................24
6.6 Brokers' and Finders' Fees.................................24
ARTICLE 7 COVENANTS AND AGREEMENTS...........................................24
7.1 Access.....................................................24
7.2 PreClosing Activities of Seller............................24
7.3 Conduct Prior to Closing...................................25
7.4 Confidentiality............................................26
7.5 Use of Confidential Information............................26
7.6 Seller Intellectual Property Covenants.....................27
7.7 Covenant Not to Compete or Solicit.........................27
7.8 No Solicitation............................................28
7.9 Notification of Certain Matters............................30
7.10 New Employment Arrangements................................31
7.11 Public Disclosure..........................................31
7.12 Consents...................................................31
7.13 COBRA Continuation Coverage................................31
7.14 Prepaid Service Payment Update.............................32
7.15 Exemption from Registration or Registration Statement......32
7.16 Proxy Statement............................................34
7.17 Meeting of Seller's Stockholders...........................36
7.18 Reasonable Efforts.........................................37
7.19 Change of Control Agreements...............................38
7.20 Post Closing Tax Covenants.................................38
7.21 Employee Withholding.......................................39
7.22 Termination of Compaq Agreement............................39
7.23 Additional Documents and Further Assurances................39
7.24 Disclosure by Seller.......................................40
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7.25 Disclosure by Buyer or Parent..............................40
7.26 Sublicensing Requirements..................................40
7.27 Supplemental Transferred Contracts.........................41
ARTICLE 8 CONDITIONS TO THE CLOSING..........................................41
8.1 Conditions to Obligations of Each Party....................41
8.2 Additional Conditions to the Obligations
of Parent and Buyer.......................................42
8.3 Additional Conditions to Obligations of Seller.............43
ARTICLE 9 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION........44
9.1 Survival of Representations, Warranties and Covenants......44
9.2 Indemnification............................................45
9.3 Indemnification Procedure..................................45
9.4 Resolution of Conflicts; Arbitration.......................45
9.5 ThirdParty Claims..........................................46
9.6 Maximum Payments; Remedy...................................46
9.7 Liability of Parent and Buyer..............................47
ARTICLE 10 TERMINATION, AMENDMENT AND WAIVER.................................48
10.1 Termination................................................48
10.2 Notice of Termination......................................50
10.3 Effect of Termination......................................50
10.4 Amendment..................................................50
10.5 Extension; Waiver..........................................50
ARTICLE 11 GENERAL...........................................................50
11.1 Notices....................................................50
11.2 Entire Agreement; Assignment...............................52
11.3 Severability...............................................52
11.4 Other Remedies.............................................52
11.5 GOVERNING LAW..............................................52
11.6 Jurisdiction and Venue.....................................52
11.7 Rules of Construction......................................52
11.8 WAIVER OF JURY TRIAL.......................................52
11.9 Fees and Expenses..........................................53
11.10 Counterparts...............................................53
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EXHIBITS
Exhibit A..............................Form of NonCompetition Agreement
Exhibit B.........................Form of Stockholder Support Agreement
Exhibit C....................................Form of General Assignment
Exhibit D......................................Form of Solvency Opinion
SCHEDULES
Schedule 1.1(o) Designated Employees
Schedule 1.1(x) Excluded Contracts
Schedule 1.1(hh) Key Employees
Schedule 1.1(tt) Products
Schedule 1.1(bbb) Tangible Assets
Schedule 1.1(eee) Transferred Contracts
Schedule 1.1(ggg) Transferred Technology
Schedule 1.1(hhh) Transferred Trademarks
Schedule 2.2 Excluded Assets
Schedule 8.2(d) Required Key Employees under Section 8.2(d)
Schedule 8.2(e) Key Employees Signing NonCompetition Agreement
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