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Asset Purchase Agreement

 

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Title:

Asset Purchase Agreement

Entities:

Citadel Security Software Inc.; Mcafee, Inc.; Bank of America, NA

Date:

2006

Size:

Preview shows 43KB of 221KB total

Price:

$83

ID:

#2572501

 

 

► Purchase & Sale ► Purchase ► Asset Purchase Agreements
► Financial ► Money Center Banks

 

 

Start of Preview


ASSET PURCHASE AGREEMENT
By and Among
MCAFEE, INC.
MCAFEE SECURITY, LLC,
CITADEL SECURITY SOFTWARE INC.,
CITADEL SECURITY SOFTWARE INTERNATIONAL, LLC,
CANBERRA OPERATING, L.P. and
CANBERRA, LLC
Dated as of October 2, 2006

 


 

TABLE OF CONTENTS
             
        Page  
ARTICLE I
  Purchase of Assets     2  
 
           
1.1
  Purchase of Assets     2  
1.2
  Excluded Assets     3  
1.3
  Assumed Liabilities     4  
1.4
  Excluded Liabilities     5  
1.5
  Consideration     6  
1.6
  Closing     9  
1.7
  Closing Deliveries     9  
1.8
  Further Assurances     10  
1.9
  Allocation of Purchase Price     10  
 
           
ARTICLE II
  Representations and Warranties of the Sellers     11  
 
           
2.1
  Organization     11  
2.2
  Authority     12  
2.3
  Title to Assets     12  
2.4
  No Violation     13  
2.5
  Governmental Consents     13  
2.6
  SEC Filings; Seller Financial Statements     14  
2.7
  Business Changes     15  
2.8
  Taxes     16  
2.9
  Litigation     18  
2.10
  Compliance with Laws     18  
2.11
  Permits     18  
2.12
  Employee Matters     18  
2.13
  Employee Benefit Plans; Change of Control Benefits     20  
2.14
  Business Contracts     21  
2.15
  Customers     23  
2.16
  Intellectual Property Rights     24  
2.17
  Environmental Matters     26  
2.18
  Competing Interests     27  
2.19
  Illegal Payments or Activities     28  
2.20
  No Misrepresentations     28  
2.21
  Sufficiency of Consideration     28  
2.22
  No Involuntary Liquidation, Insolvency, Winding-Up     28  
2.23
  Disclosure     29  
2.24
  Bulk Transfer Laws     29  
2.25
  Product Warranties     29  
2.26
  Various Agreements     30  
2.27
  Settlement Agreements     30  
2.28
  Insurance Coverage     30  

i


 

             
        Page  
2.29
  Backlog     30  
2.30
  Privacy of Customer Information     30  
2.31
  Distributors and Partners     31  
2.32
  Suppliers     31  
2.33
  Fairness Opinion Provider     31  
2.34
  Broker Fees     31  
2.35
  [Intentionally Omitted]     31  
2.36
  Internal Controls     31  
2.37
  Export Control Laws     32  
2.38
  [Intentionally Omitted]     32  
2.39
  Ordinary Course of Business     32  
2.40
  Remaining Proceeds     32  
2.41
  2006 Reorganization     32  
 
           
ARTICLE III
  Representations and Warranties of Buyer     33  
 
           
3.1
  Organization     33  
3.2
  Authority     33  
3.3
  No Violation     33  
3.4
  Governmental Consents     33  
3.5
  Disclosure     33  
3.6
  Financing     34  
3.7
  Certain Proceedings     34  
3.8
  Brokers Fees     34  
 
           
ARTICLE IV
  Covenants and Agreements     34  
 
           
4.1
  Conduct of Business     34  
4.2
  Access and Information     37  
4.3
  Supplemental Disclosure     38  
4.4
  Regulatory Filings; Reasonable Efforts     38  
4.5
  Publicity     40  
4.6
  Transaction Costs     40  
4.7
  No-Shop Provisions     40  
4.8
  Nondisclosure     43  
4.9
  Employee Matters     43  
4.10
  Tax Information     45  
4.11
  Proxy Statement     45  
4.12
  Meeting of Citadels Stockholders     46  
4.13
  Post-Closing Payment of Citadel Party Liabilities     47  
4.14
  Name Changes     48  
4.15
  Access to Records     49  
4.16
  Voluntary Self-Disclosure Proceedings     49  
4.17
  Buyers Certificate     49  
4.18
  Third Party Consents     49  

ii


 

             
        Page  
ARTICLE V
  Closing Conditions     50  
 
           
5.1
  Conditions to Obligations of Buyer     50  
5.2
  Conditions to Obligations of the Sellers     52  
 
           
ARTICLE VI
  Indemnification     53  
 
           
6.1
  Indemnification of Buyer and Parent     53  
6.2
  Indemnification of the Citadel Parties     54  
6.3
  Survival     54  
6.4
  Notice     55  
6.5
  Defense of Claims     55  
6.6
  Amount Limitation of Indemnification     56  
 
           
ARTICLE VII
  Covenant Not to Compete or Solicit     57  
 
           
7.1
  Covenant Not to Compete     57  
7.2
  Covenant Not to Solicit     57  
7.3
  Enforcement     58  
7.4
  Acknowledgement of Consideration     58  
7.5
  Remedies     58  
 
           
ARTICLE VIII
  Termination, Amendment And Waiver     58  
 
           
8.1
  Termination     58  
8.2
  Effect of Termination     60  
 
           
ARTICLE IX
  Miscellaneous     60  
 
           
9.1
  Notices     60  
9.2
  Fees and Expenses     61  
9.3
  Counterparts     62  
9.4
  Interpretation     63  
9.5
  Severability     63  
9.6
  Binding Effect; Assignment     63  
9.7
  Entire Agreement, Amendment     63  
9.8
  Specific Performance, Remedies Not Exclusive     63  
9.9
  GOVERNING LAW     64  
9.10
  JURISDICTION AND VENUE     64  
9.11
  Drafting     64  
9.12
  Usage     64  
9.13
  Certain Definitions     64  

iii


 

ASSET PURCHASE AGREEMENT
     This Asset Purchase Agreement (the Agreement) is made and entered into as of October 2, 2006, by and between McAfee, Inc. a Delaware corporation (Parent), and McAfee Security, LLC, a Delaware limited liability company (the Buyer), Citadel Security Software Inc., a Delaware corporation (Citadel), Citadel Security Software International, LLC, a Delaware limited liability company and wholly owned subsidiary of Citadel (Citadel Sub), Canberra Operating, L.P., a Texas limited partnership of which Citadel is the general partner (Canberra LP), and Canberra, LLC, a Delaware limited liability company which is the limited partner of Canberra LP and which is a wholly owned subsidiary of Citadel (Canberra LLC). Each of Citadel, Citadel Sub and Canberra LP are a Seller and together they are the Sellers. The Sellers and Canberra LLC are each referred to as a Citadel Party and together they are the Citadel Parties.
     WHEREAS, Sellers engage in the business of providing enterprise vulnerability management and policy compliance and enforcement software solutions (such business, the Business);
     WHEREAS, Sellers desire to sell substantially all of their assets to Buyer, and Buyer desires to purchase such assets from Sellers, and Buyer wishes to assume certain identified liabilities of Sellers, all on the terms and subject to the conditions set forth in this Agreement;
     WHEREAS, other than the Assets and Excluded Assets held by Citadel Sub, Citadel owns legal title to all of the Assets and Excluded Assets, and Canberra LP owns the beneficial interests in all of the Assets and Excluded Assets;
     WHEREAS, concurrently with the execution and delivery of this Agreement, as a material inducement to Buyer and Parent to enter into this Agreement, the Chief Executive Officer of Citadel (the Citadel CEO) has entered into a consulting agreement contingent on and subject to the Closing (as defined in Section 1.6) in the form attached hereto as Exhibit A (the Independent Contractor Agreement) and the appropriate related attachments thereto;
     WHEREAS, concurrently with the execution and delivery of this Agreement, as a material inducement to Buyer and Parent to enter into this Agreement, certain employees and stockholders of Citadel (including the Persons (as defined in Section 2.9(a)) identified on Schedule 2.26) are executing and delivering support agreements (the Support Agreements) substantially in the form attached hereto as Exhibit C, to Buyer;
     WHEREAS, concurrently with the execution and delivery of this Agreement, as a material inducement to Buyer and Parent to enter into this Agreement, all holders of Citadels outstanding shares of preferred stock (the Preferred Holder Entities) have entered into an agreement in the form attached hereto as Exhibit D with Citadel (the Preferred Holder Agreement); and
     WHEREAS, concurrently with the execution and delivery of this Agreement, as a material inducement to Buyer and Parent to enter into this Agreement, each Key Employee (as defined in Section 4.9(a)) has agreed to employment with Parent pursuant to an Offer Letter, the effectiveness of which is contingent on and subject to the Closing (as defined in Section 1.6) in

 


 

the form attached hereto as Exhibit E (the Key Employee Offer Letter) and the appropriate attachments related thereto;
     NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
Purchase of Assets
     1.1 Purchase of Assets. At the Closing, Sellers agree to sell, transfer, assign and deliver to Buyer the Assets (as defined below), and Buyer agrees to purchase and take the Assets, on the terms and subject to the conditions set forth in this Agreement.
     Subject to the provisions of Section 1.2, the Assets means all right, title and interest to all the tangible and intangible assets of each of the Sellers (other than the Excluded Assets, as defined in Section 2.3(a)), including but not limited to all of Sellers right, title and interest in and to any of the following:
     (a) all (1) patents, patent applications of any kind, patent rights, inventions, discoveries and invention disclosures (whether or not patented) (collectively, Patents); (2) trade names, trade dress, brands, logos, packaging design, slogans, Internet domain names, all phone numbers of any Seller, registered and unregistered trademarks and service marks and related registrations and applications for registration (collectively, Marks); (3) copyrights in both published and unpublished works, including all compilations, databases and computer programs, source code, object code, manuals and other documentation and all copyright registrations and applications, and all derivatives, translations, adaptations and combinations of the above (collectively, Copyrights); (4) know-how, trade secrets, confidential or proprietary information, research in progress, knowledge, methods, algorithms, data, designs, processes, formulae, drawings, diagrams, schematics, blueprints, flow charts, models, strategies, prototypes, techniques, benchmark data, testing procedures and testing results (collectively, Trade Secrets); (5) other intellectual property rights and/or proprietary rights relating to any of the foregoing; and (6) goodwill, franchises, licenses, permits, consents, approvals, and claims of infringement against third parties (collectively, Seller Intellectual Property);

 

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