CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
EXHIBIT 2.10
ASSET PURCHASE AGREEMENT
of the Wafer and Reticle Carrier Business
of
ASYST TECHNOLOGIES, INC.
by
ENTEGRIS, INC.
and
ENTEGRIS CAYMAN LTD.
February 11, 2003
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
TABLE OF CONTENTS
PAGE NO.
--------
ARTICLE 1 PURCHASE AND SALE OF ASSETS....................................................................... 1
1.1 Definition of "Business"............................................................................ 1
1.2 Assets to be Transferred............................................................................ 1
1.2(a) Leased Real Property..................................................................... 2
1.2(b) Machinery and Equipment.................................................................. 2
1.2(c) Inventory................................................................................ 2
1.2(d) Trade Rights............................................................................. 2
1.2(e) Contracts................................................................................ 2
1.2(f) Computer Software........................................................................ 3
1.2(g) Literature............................................................................... 3
1.2(h) Records and Files........................................................................ 3
1.2(i) Licenses; Permits........................................................................ 3
1.2(j) Employee Note............................................................................ 3
1.3 Excluded Assets..................................................................................... 3
1.3(a) Cash and Cash Equivalents................................................................ 3
1.3(b) Accounts Receivable...................................................................... 4
1.3(c) Tax Credits.............................................................................. 4
1.3(d) Tax Records.............................................................................. 4
1.3(e) Obligations of Affiliates................................................................ 4
1.3(f) Company Trade Rights..................................................................... 4
1.3(g) Excluded Products........................................................................ 4
1.3(h) ▇▇▇▇ Assets.............................................................................. 4
1.3(i) Pre-existing Claims...................................................................... 4
1.3(j) Demo Units............................................................................... 4
1.3(k) Inspection Machine....................................................................... 5
1.3(l) The Company's SMIF-Enclosure Products.................................................... 5
1.3(m) Any Prepaid Insurance of the Company..................................................... 5
ARTICLE 2 WARRANTY/SERVICE OBLIGATIONS...................................................................... 5
ARTICLE 3 ASSUMPTION OF LIABILITIES......................................................................... 6
3.1 Liabilities to be Assumed........................................................................... 6
3.1(a) Contractual Liabilities.................................................................. 6
3.1(b) Liabilities Under Permits and Licenses................................................... 6
3.1(c) Taxes Arising from Transaction........................................................... 6
3.2 Liabilities Not to be Assumed....................................................................... 7
3.2(a) Accounts Payable......................................................................... 7
3.2(b) Income and Franchise Taxes............................................................... 7
3.2(c) [*]...................................................................................... 7
3.2(d) Liabilities to Affiliates................................................................ 7
ARTICLE 4 PURCHASE PRICE.................................................................................... 7
4.1 Cash................................................................................................ 7
4.2 Royalties........................................................................................... 7
4.3 Other Payments and Adjustments...................................................................... 8
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
i
TABLE OF CONTENTS (CONT'D)
PAGE NO.
--------
4.4 Allocation of Purchase Price........................................................................ 8
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF COMPANY......................................................... 8
5.1 Corporate........................................................................................... 8
5.1(a) Organization............................................................................. 8
5.1(b) Corporate Power.......................................................................... 8
5.1(c) Qualification............................................................................ 8
5.1(d) No Subsidiaries.......................................................................... 9
5.1(e) Authority................................................................................ 9
5.1(f) No Violation............................................................................. 9
5.2 Business Financial Report........................................................................... 10
5.3 Tax Matters......................................................................................... 10
5.4 Inventory........................................................................................... 10
5.5 Absence of Certain Changes.......................................................................... 10
5.5(a) Any Adverse Change....................................................................... 10
5.5(b) Any Damage............................................................................... 11
5.5(c) Any Increase in Compensation............................................................. 11
5.5(d) Any Labor Disputes....................................................................... 11
5.5(e) Any Commitments.......................................................................... 11
5.5(f) Any Disposition of Property.............................................................. 11
5.5(g) Any Indebtedness......................................................................... 11
5.5(h) Any Liens................................................................................ 11
5.5(i) Any Amendment of Contracts............................................................... 11
5.5(j) Any Loans and Advances................................................................... 11
5.5(k) Any Credit............................................................................... 12
5.5(l) Any Unusual Events....................................................................... 12
5.6 Absence of Undisclosed Liabilities.................................................................. 12
5.7 No Litigation....................................................................................... 12
5.8 Compliance with Laws................................................................................ 12
5.8(a) Compliance............................................................................... 12
5.8(b) Licenses and Permits..................................................................... 13
5.8(c) Environmental Matters.................................................................... 13
5.9 Title to and Condition of Properties................................................................ 14
5.9(a) Marketable Title......................................................................... 14
5.9(b) Condition................................................................................ 15
5.9(c) Real Property............................................................................ 15
5.9(d) No Condemnation or Expropriation......................................................... 16
5.10 Insurance........................................................................................... 16
5.11 Contracts and Commitments........................................................................... 17
5.11(a) Real Property Leases..................................................................... 17
5.11(b) Personal Property Leases................................................................. 17
5.11(c) Purchase Commitments..................................................................... 17
5.11(d) Sales Commitments........................................................................ 17
5.11(e) Contracts with Affiliates and Certain Others............................................. 17
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
ii
TABLE OF CONTENTS (CONT'D)
PAGE NO.
--------
5.11(f) Powers of Attorney....................................................................... 17
5.11(g) Collective Bargaining Agreements......................................................... 18
5.11(h) Loan Agreements.......................................................................... 18
5.11(i) Guarantees............................................................................... 18
5.11(j) Contracts Subject to Renegotiation....................................................... 18
5.11(k) Restrictive Agreements................................................................... 18
5.11(l) Other Material Contracts................................................................. 18
5.11(m) No Default............................................................................... 18
5.12 Labor Matters....................................................................................... 19
5.13 Employee Benefit Plans.............................................................................. 19
5.14 Employment Compensation............................................................................. 20
5.15 Trade Rights........................................................................................ 20
5.16 Major Customers and Suppliers....................................................................... 20
5.16(a) Major Customers.......................................................................... 20
5.16(b) Major Suppliers.......................................................................... 21
5.16(c) Dealers and Distributors................................................................. 21
5.17 Product Warranty and Product Liability.............................................................. 21
5.18 Affiliates' Relationships to Company................................................................ 22
5.18(a) Contracts with Affiliates................................................................ 22
5.18(b) No Adverse Interests..................................................................... 22
5.19 Assets Necessary to Business........................................................................ 22
5.20 No Brokers or Finders............................................................................... 22
5.21 Disclosure.......................................................................................... 22
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER........................................................... 22
6.1 Corporate........................................................................................... 23
6.1(a) Organization............................................................................. 23
6.1(b) Corporate Power.......................................................................... 23
6.2 Authority........................................................................................... 23
6.3 No Brokers or Finders............................................................................... 23
6.4 No Violation........................................................................................ 23
6.5 Disclosure.......................................................................................... 23
6.6 Litigation.......................................................................................... 24
ARTICLE 7 EMPLOYEES - EMPLOYEE BENEFITS..................................................................... 24
7.1 Affected Employees.................................................................................. 24
7.2 Retained Responsibilities........................................................................... 24
7.3 Payroll Tax......................................................................................... 24
7.4 Termination Benefits................................................................................ 24
7.5 Employee Benefits Plans............................................................................. 25
7.6 No Third-Party Rights............................................................................... 25
ARTICLE 8 OTHER MATTERS..................................................................................... 25
8.1 Patent Assignment and Cross-License and Trademark License Agreement................................. 25
8.2 Transition Services Agreement....................................................................... 25
8.3 Employment and Noncompetition Agreement............................................................. 25
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
iii
TABLE OF CONTENTS (CONT'D)
PAGE NO.
--------
8.4 Noncompetition; Confidentiality..................................................................... 25
8.4(a) Covenant Not to Compete.................................................................. 25
8.4(b) Covenant of Confidentiality.............................................................. 27
8.4(c) Equitable Relief for Violations.......................................................... 27
8.4(d) Transition Services Agreement and Patent Assignment and
Cross-License and Trademark License Agreement............................................ 27
8.5 HSR Act Filings..................................................................................... 27
8.6 Access to Information and Records................................................................... 28
8.7 Bulk Sales Compliance............................................................................... 28
ARTICLE 9 FURTHER COVENANTS OF THE PARTIES.................................................................. 28
9.1 Covenants of Company................................................................................ 28
9.1(a) Consents................................................................................. 28
9.1(b) Other Action............................................................................. 28
9.1(c) Disclosure............................................................................... 28
9.1(d) Process for Product Compatibility........................................................ 29
9.1(e) Confidentiality/Non-Disclosure Agreements................................................ 29
9.1(f) 300mm Dome Tool.......................................................................... 29
9.1(g) Accounts Receivable...................................................................... 29
9.2 Covenants of Buyer.................................................................................. 29
9.2(a) Process for Resolution of Product Compatibility.......................................... 29
ARTICLE 10 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS...................................................... 29
10.1 Representations and Warranties True on the Closing Date............................................. 29
10.2 Compliance with Agreement........................................................................... 30
10.3 Absence of Suit..................................................................................... 30
10.4 Consents and Approvals.............................................................................. 30
10.5 Buyer Consents and Approvals........................................................................ 30
10.6 Closing Documents................................................................................... 30
ARTICLE 11 CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS.................................................... 30
11.1 Representations and Warranties True on the Closing Date............................................. 30
11.2 Compliance with Agreement........................................................................... 31
11.3 Absence of Suit..................................................................................... 31
11.4 Consents............................................................................................ 31
11.5 Closing Documents................................................................................... 31
ARTICLE 12 INDEMNIFICATION.................................................................................. 31
12.1 By Company.......................................................................................... 31
12.2 By Buyer............................................................................................ 32
12.3 Indemnification of Third-Party Claims............................................................... 32
12.3(a) Notice and Defense....................................................................... 32
12.3(b) Failure to Defend........................................................................ 32
12.3(c) Indemnified Party's Rights............................................................... 32
12.4 Indemnification Regarding Warranty/Services......................................................... 33
12.5 Payment............................................................................................. 33
12.6 Limitations on Indemnification...................................................................... 33
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
iv
TABLE OF CONTENTS (CONT'D)
PAGE NO.
--------
12.6(a) Time Limitation.......................................................................... 33
12.6(b) Amount Limitation........................................................................ 34
12.7 No Waiver........................................................................................... 34
12.8 Right to Set-Off.................................................................................... 34
12.9 Exclusivity of Article 12 Indemnity................................................................. 35
ARTICLE 13 CLOSING.......................................................................................... 35
13.1 Documents to be Delivered by Company................................................................ 35
13.1(a) Deeds, Bills of Sale..................................................................... 35
13.1(b) Compliance Certificate................................................................... 35
13.1(c) Opinion of Counsel....................................................................... 35
13.1(d) Employment and Noncompetition Agreements................................................. 36
13.1(e) Certified Resolutions.................................................................... 36
13.1(f) Patent Assignment and Cross-License and Trademark
License Agreement........................................................................ 36
13.1(g) Transition Services Agreement............................................................ 36
13.1(h) Incumbency Certificate................................................................... 36
13.1(i) Other Documents.......................................................................... 36
13.2 Documents to be Delivered by Buyer.................................................................. 36
13.2(a) Cash Purchase Price...................................................................... 36
13.2(b) Assumption of Liabilities................................................................ 36
13.2(c) Compliance Certificate................................................................... 36
13.2(d) Opinion of Counsel....................................................................... 36
13.2(e) Certified Resolutions.................................................................... 37
13.2(f) Patent Assignment and Cross-License and Trademark
License Agreement........................................................................ 37
13.2(g) Transition Services Agreement............................................................ 37
13.2(h) Incumbency Certificate................................................................... 37
13.2(i) Other Documents.......................................................................... 37
ARTICLE 14 DISCLOSURE SCHEDULE.............................................................................. 37
ARTICLE 15 FURTHER ASSURANCE................................................................................ 37
ARTICLE 16 ANNOUNCEMENTS.................................................................................... 38
ARTICLE 17 ASSIGNMENT; PARTIES IN INTEREST.................................................................. 38
17.1 Assignment.......................................................................................... 38
17.2 Parties in Interest................................................................................. 38
ARTICLE 18 RESOLUTION OF DISPUTES........................................................................... 38
18.1 Arbitration......................................................................................... 38
18.2 Arbitrators......................................................................................... 38
18.3 Procedures; No Appeal............................................................................... 39
18.4 Authority........................................................................................... 39
18.5 Entry of Judgment................................................................................... 39
18.6 Confidentiality..................................................................................... 39
18.7 Continued Performance............................................................................... 39
18.8 Tolling............................................................................................. 39
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
v
TABLE OF CONTENTS (CONT'D)
PAGE NO.
--------
ARTICLE 19 LAW GOVERNING AGREEMENT.......................................................................... 39
ARTICLE 20 AMENDMENT AND MODIFICATION....................................................................... 40
ARTICLE 21 NOTICE........................................................................................... 40
ARTICLE 22 EXPENSES......................................................................................... 41
22.1 Brokerage........................................................................................... 41
22.2 Expenses to be Paid by Company...................................................................... 41
22.2(a) Professional Fees........................................................................ 41
22.3 Other............................................................................................... 42
22.4 Costs of Litigation or Arbitration.................................................................. 42
ARTICLE 23 ENTIRE AGREEMENT................................................................................. 42
ARTICLE 24 COUNTERPARTS..................................................................................... 42
ARTICLE 25 HEADINGS......................................................................................... 42
ARTICLE 26 SEVERABILITY..................................................................................... 42
ARTICLE 27 THIRD-PARTY BENEFICIARIES........................................................................ 43
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
vi
DISCLOSURE SCHEDULE
Schedule 1.2(a) - Leased Real Property
Schedule 1.2(b) - Machinery and Equipment
Schedule 1.2(c) - Inventory
Schedule 1.2(d) - Purchased Trade Rights
Schedule 1.2(e) - Contracts
Schedule 1.2(f) - Computer Software
Schedule 1.3(h) - ▇▇▇▇ Assets
Schedule 5.1(c) - Qualification
Schedule 5.1(d) - Subsidiaries
Schedule 5.1(f) - No Violation
Schedule 5.2 - Business Financial Statements
Schedule 5.3 - Tax Matters
Schedule 5.4 - Inventory
Schedule 5.5 - Absence of Certain Changes
Schedule 5.6 - Absence of Undisclosed Liabilities
Schedule 5.7 - Litigation
Schedule 5.8(a) - Compliance
Schedule 5.8(b) - Licenses and Permits
Schedule 5.8(c) - Environmental Matters
Schedule 5.9(a) - Marketable Title
Schedule 5.10 - Insurance
Schedule 5.11(c) - Purchase Commitments
Schedule 5.11(d) - Sales Commitments
Schedule 5.11(e) - Contracts with Affiliates and Certain Others
Schedule 5.11(f) - Powers of Attorney
Schedule 5.11(g) - Collective Bargaining Agreements
Schedule 5.11(h) - Loan Agreements
Schedule 5.11(i) - Guarantees
Schedule 5.11(k) - Restrictive Agreements
Schedule 5.11(l) - Material Contracts
Schedule 5.12 - Labor Matters
Schedule 5.13 - Employee Benefit Plans
Schedule 5.14 - Employment Compensation
Schedule 5.15 - Trade Rights
Schedule 5.16(a) - Major Customers
Schedule 5.16(b) - Major Suppliers
Schedule 5.16(c) - Dealers and Distributors
Schedule 5.17 - Product Warranty and Product Liability
Schedule 5.18(a) - Contracts w/Affiliates
Schedule 5.20 - No Brokers or Finders of Company
Schedule 7.1 - Affected and Key Employees
Schedule 8.4(a) - Exceptions to Assignment of Non-Compete
Schedule 8.8 - Process for Resolution of Product Compatibility
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
vii
EXHIBIT SCHEDULE
Exhibit A Form of Patent Assignment and Cross-License and Trademark License
Agreement
Exhibit B Form of Transition Services Agreement
Exhibit C [DELETED]
Exhibit D Form of Legal Opinion by ▇▇▇▇▇▇ Godward, LLP
Exhibit E Form of Legal Opinion by Dunkley, Bennett, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.A.
Exhibit F Form of Escrow Agreement
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
viii
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT (this "Agreement") dated February 11, 2003,
by and among ENTEGRIS CAYMAN LTD., a Cayman Island corporation and wholly-owned
subsidiary of ENTEGRIS, INC., and ENTEGRIS, INC., a Minnesota corporation
(collectively, the "Buyer") with their principal place of business located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and ASYST TECHNOLOGIES, INC., a
California corporation ("Company") with its principal place of business located
at ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
A. Company is engaged, through its wafer and reticle carrier
division in the manufacture, distribution, and sale of 300mm FOUPs, SMIF-pod
300mm, 200mm SMIF Pods, SMIF-Pod 200mm, 150mm Pods, SRP-150 Single Reticle SMIF
Pods, MRP-150 Multiple Reticle SMIF Pods and RSP-200 Single Reticle SMIF Pods
(collectively the "Products").
B. Buyer desires to purchase from Company, and Company desires to
sell to Buyer, the business and substantially all of the property and assets of
Company related to the Business (as hereinafter defined) as set forth herein.
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, and intending to be legally bound hereby, the parties hereto agree as
follows.
ARTICLE 1
PURCHASE AND SALE OF ASSETS
1.1 Definition of "Business." As used herein, "Business" shall mean the
manufacture, production, marketing, distribution, exploitation, sale
and related research and development by Company and its subsidiaries of
the Products. Such term shall include, without limitation and except as
otherwise specifically provided herein, all operations carried on by or
related to the Products on the date hereof.
1.2 Assets to be Transferred. Subject to the terms and conditions of this
Agreement, on the Closing Date (as defined in Section 13 below) Company
shall sell, transfer, convey, assign, and deliver to Buyer (or upon
Buyer's request, to one or more wholly-owned subsidiaries of Buyer as
designated by Buyer), and Buyer shall purchase and accept, all of the
business, rights, claims and assets (of every kind, nature, character
and description, whether real, personal or mixed, tangible or
intangible, accrued, contingent or otherwise, and wherever situated) of
the Company, used, held for use or acquired or developed for use in the
Business, or developed in the course of conducting the Business or by
persons employed in the Business (collectively the "Purchased Assets").
The Purchased Assets
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
1
shall include, but not be limited to (except as set forth below in
Trade Rights), all of the following assets or rights of the Company, to
the extent so used, held, acquired or developed in connection with the
Business:
1.2(a) Leased Real Property. The leases of real property (the "Leased
Real Property") used in connection with the Business, as set
forth on Schedule 1.2(a) of the Disclosure Schedule (the "Real
Property Leases").
1.2(b) Machinery and Equipment. All molds, fixtures, cleaning
systems, machinery, equipment, vehicles, tools, supplies,
spare parts, furniture and all other personal property not
included in inventory used in connection with the manufacture,
assembly, inspection, or cleaning of the Products including
but not limited to those located at the Colorado facility and
those described on Schedule 1.2(b) of the Disclosure Schedule.
1.2(c) Inventory. All inventories of raw materials, work-in-process
and finished goods (including all such in transit and on
consignment) on the Closing Date, together with related
packaging materials including but not limited to those
assembled on Schedule 1.2(c) of the Disclosure Schedule
(collectively the "Inventory").
1.2(d) Trade Rights. All of the Company's interest in any Trade
Rights of the Business as set forth on Schedule 1.2(d) of the
Disclosure Schedule ("Purchased Trade Rights"). As used
herein, the term "Trade Rights" shall mean and include: (i)
all United States, state and foreign trademark rights,
business identifiers, trade dress, service marks, trade names,
and brand names, including all claims for infringement, and
all registrations thereof and applications therefor and all
goodwill associated with the foregoing accruing from the dates
of first use thereof; (ii) all United States and foreign
copyrights, copyright registrations and copyright
applications, including all claims for infringement, and all
other rights associated with the foregoing and the underlying
works of authorship; (iii) those United States and foreign
patents and patent applications, including all claims for
infringement and all international proprietary rights
associated therewith as set forth in the Cross-Licensing
Agreement between Company and Buyer dated contemporaneously
herewith; (iv) all contracts or agreements granting any right,
title, license or privilege under the intellectual property
rights of any third party; and (v) all inventions, mask works
and mask work registrations, know-how, discoveries,
improvements, designs, trade secrets, shop and royalty rights,
employee covenants and agreements respecting intellectual
property and non-competition and all other types of
intellectual property.
1.2(e) Contracts. Those contracts, contractual rights, purchase
orders and sales orders (hereinafter in this Section 1.2(e))
("Contracts") described in Schedules 1.2(a), 1.2(d) and 1.2(e)
of the Disclosure Schedule.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
2
The Contracts described above are hereinafter collectively
described as the "Assumed Contracts." To the extent that any
Assumed Contract for which assignment to Buyer is provided
herein is not assignable without the consent of another party,
this Agreement shall not constitute an assignment or an
attempted assignment thereof if such assignment or attempted
assignment would constitute a breach thereof. Company agrees
to use its commercially reasonable efforts (without any
requirement on the part of Buyer to pay any money or agree to
any change in the terms of any such Contract) to obtain the
consent of such other party to the assignment of any such
Assumed Contract to Buyer in all cases in which such consent
is or may be required for such assignment. If any required
consent shall not be obtained, Company agrees to cooperate
with Buyer in any reasonable arrangement designed to provide
for Buyer the benefits intended to be assigned to Buyer under
the relevant Assumed Contract, including enforcement at the
cost and for the account of Buyer of any and all rights of
Company against the other party thereto arising out of the
breach or cancellation thereof by such other party or
otherwise. If and to the extent that such arrangement cannot
be made, Buyer, upon notice to Company, shall have no
obligation pursuant to Section 3.1 or otherwise with respect
to any such Assumed Contract and any such Assumed Contract
shall not be deemed to be a Purchased Asset hereunder.
1.2(f) Computer Software. A manufacturing database to track FOUPs.
1.2(g) Literature. All sales literature, promotional literature,
catalogs and similar materials related to the Business.
1.2(h) Records and Files. All records, files, invoices, customer
lists, blueprints, specifications, designs, drawings,
accounting records, business records, manufacturing process
documentation, operating data and other data related to the
Business.
1.2(i) Licenses; Permits. All licenses, permits and approvals related
to the Business.
1.2(j) Employee Note. The indebtedness of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ as evidenced
by a promissory note dated January 2001.
1.3 Excluded Assets. Company shall retain all of its rights, claims and
assets not described in Section 1.2 without limiting the generality of
the foregoing, and any contrary provisions of Section 1.2
notwithstanding, Company shall not sell, transfer, assign, convey or
deliver to Buyer, and Buyer will not purchase or accept the following
assets of the Business:
1.3(a) Cash and Cash Equivalents. All cash and cash equivalents of
the Business as of Closing.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
3
1.3(b) Accounts Receivable. All outstanding accounts receivable of
the Business accrued by the Company as of Closing, except as
set forth in Section 9.1(g) below.
1.3(c) Tax Credits. Federal, state and local income and franchise tax
credits and tax refund claims.
1.3(d) Tax Records. Company's income and franchise tax returns and
tax records. Buyer and its designated agents shall have
reasonable access to such records and may make excerpts
therefrom and copies thereof.
1.3(e) Obligations of Affiliates. Notes (other than the note set
forth in Section 1.2(k)), drafts, accounts receivable or other
obligations for the payment of money, made or owed by any
Affiliate of Company. For purposes of this Agreement, the term
"Affiliate" shall mean and include all shareholders, directors
and officers of Company; the spouse of any such person; any
person who would be the heir or descendant of any such person
if he or she were not living; and any entity in which any of
the foregoing has a direct or indirect interest (except
through ownership of less than 5% of the outstanding shares of
any entity whose securities are listed on a national
securities exchange or traded in the national over-the-counter
market).
1.3(f) Company Trade Rights. All Trade Rights of the Company, other
than the Purchased Trade Rights and the rights of the Company
as set forth in the Patent Assignment and Cross-License and
Trademark License Agreement attached hereto as Exhibit A
("Patent Assignment and Cross-License and Trademark License
Agreement").
1.3(g) Excluded Products. All products now or hereafter produced by
the Company that are not Products.
1.3(h) ▇▇▇▇ Assets. All assets owned by ▇▇▇▇ Industries in connection
with the Business including those specifically set forth in
Schedule 1.3(h) of the Disclosure Schedule, as well as the
Company's contract rights with respect to its ▇▇▇▇
manufacturing agreement.
1.3(i) Pre-existing Claims. All rights to receive insurance
settlements that existed as of Closing and all causes of
action arising out of occurrences before the Closing.
1.3(j) Demo Units. Any demonstration units or sample products related
to the Business provided by the Company to Company customers
or prospective customers before the Closing.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
4
1.3(k) Inspection Machine. One August CV9812 inspection machine
currently used in the Business which is located in Oregon.
1.3(l) The Company's SMIF-Enclosure Products.
1.3(m) Any Prepaid Insurance of the Company.
ARTICLE 2
WARRANTY/SERVICE OBLIGATIONS
Warranty/Service Obligations. [*] warranty obligations for products
sold or shipped [*] to service such warranty obligations [*] for a period of [*]
as follows:
(i) [*] of warranty expense;
(ii) [*] of expense [*]; and
(iii) [*], and [*] shall have the rights and be subject to the
limitations set forth in Article 12 with respect thereto.
[*] shall keep records with respect to the warranty expense. [*] shall
at its own expense have a right, through an independent certified public
accountant selected by the [*], to examine and audit, not more than once each
fiscal year, and during normal business hours and upon prior reasonable notice,
all such records and accounts as may, under recognized accounting practices,
contain information bearing upon the amount of warranty payment due to [*] from
[*] under this Agreement.
If the [*] calculation of warranty expense differs from [*]
calculation, the [*] may, at its option, deliver a notice to [*] disputing [*]
calculation (a "Challenge Notice") at any time, but in no event more than ninety
(90) days after the close of a calendar year with respect to warranty expense
accrued during that calendar year. If a Challenge Notice is delivered to [*]
pursuant to the preceding sentence, Company and Buyer shall, during the thirty
(30) days following such delivery, use all commercially reasonable efforts to
reach agreement. If during such period the Company and Buyer are unable to agree
regarding the disputed calculation, the Company and Buyer shall promptly
thereafter select an Accounting Referee (as hereinafter defined) and cause such
Accounting Referee to promptly review this Agreement, any related agreements,
all such records and accounts as may, under recognized accounting practices,
contain information bearing upon the amount of warranty expense paid by [*] to
[*] under this Agreement and the respective parties' disputed calculations. The
Accounting Referee shall deliver to the Company and Buyer as promptly as
practicable a report setting forth the Accounting Referee's calculation. Such
report shall be final and binding upon Company and Buyer. The cost of such
report shall be borne by (i) [*] if the Accounting Referee's calculation changes
warranty expense by less than five percent (5%) of the warranty expense stated
in the disputed statement(s); or (ii) the [*] if the Accounting Referee's
calculation changes warranty expense by greater than five percent (5%) of
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
5
the warranty expense stated in the disputed statement(s). The "Accounting
Referee" shall mean a reputable firm of independent auditors of national
standing other than the auditors of the Buyer, at or prior to the Closing Date.
In any event, adjustment shall be made to compensate for any errors or omission
disclosed by Accounting Referee's report.
Within fifteen (15) days after the end of each month, [*] shall furnish
[*] a statement signed by a duly authorized officer of [*] showing all warranty
expense incurred during said month. The warranty expense payable to [*] shall be
paid within thirty (30) days after receipt of above statement.
ARTICLE 3
ASSUMPTION OF LIABILITIES
3.1 Liabilities to be Assumed. As used in this Agreement, the term
"Liability" shall mean and include any direct or indirect indebtedness,
guaranty, endorsement, claim, loss, damage, deficiency, cost, expense,
obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, liquidated or unliquidated, secured or
unsecured. Subject to the terms and conditions of this Agreement, on
the Closing Date, Buyer shall assume and agree to perform and discharge
the following, and only the following, Liabilities of Company
(collectively the "Assumed Liabilities"):
3.1(a) Contractual Liabilities. Company's Liabilities arising from
and after the Closing Date under and pursuant to the Assumed
Contracts.
3.1(b) Liabilities Under Permits and Licenses. Company's Liabilities
arising from and after the Closing Date under any permits or
licenses listed in Schedule 5.8(b) of the Disclosure Schedule
and assigned to Buyer at the Closing.
3.1(c) Taxes Arising from Transaction. Any United States, foreign,
state or other taxes applicable to, imposed upon or arising
out of the sale or transfer of the Purchased Assets to Buyer
and the other transactions contemplated by this Agreement,
including but not limited to any transfer, sales, use, gross
receipts or documentary stamp taxes.
3.2 Liabilities Not to be Assumed. Except as and to the extent specifically
set forth in Section 3.1, Buyer is not assuming any Liabilities of
Company and all such Liabilities shall be and remain the responsibility
of Company including, without limitation, the following.
3.2(a) Accounts Payable. All outstanding accounts payable related to
the Business as of the Closing.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
6
3.2(b) Income and Franchise Taxes. Any Liability of Company for
Federal income taxes and any state or local income, profit or
franchise taxes (and any penalties or interest due on account
thereof).
3.2(c) [*]. All obligations with respect to [*].
3.2(d) Liabilities to Affiliates. Liabilities of Company to its
present or former Affiliates, except obligations for
compensation for services rendered as an employee of the
Business pursuant to plans or practices disclosed in the
Disclosure Schedule.
ARTICLE 4
PURCHASE PRICE
The aggregate purchase price (the "Purchase Price") for the Purchased
Assets shall be as follows:
4.1 Cash. The sum of up to Thirty-Eight Million Seven Hundred
Fifty Thousand and no/100 Dollars ($38,750,000.00) to be paid
as follows:
4.1(a) The sum of Thirty-Eight Million and no/100 Dollars
($38,000,000.00) by wire transfer on the Closing Date; and
4.1(b) The sum of Seven Hundred Fifty Thousand and no/100 Dollars
($750,000.00) to be deposited into an escrow account pursuant
to an Escrow Agreement attached hereto as Exhibit F (the
"Escrow Agreement") and shall be paid upon the earlier of (i)
June 29, 2003, or (ii) a date on which Buyer is satisfied in
good faith that all of the transition and integration issues
related to the Business by Company to Buyer have been
completed. Buyer shall be entitled to offset any amounts
payable hereunder as set forth in Article 12 below.
4.2 Royalties. In addition, the Company shall be entitled to receive
certain royalties as set forth in the Patent Assignment and
Cross-License and Trademark License Agreement.
4.3 Other Payments and Adjustments. The amount of wages and other
remuneration due in respect of periods to and including the Closing to
employees of the Business and the amount of bonuses due to such
employees for all such periods will be paid by Company directly to such
employees.
4.4 Allocation of Purchase Price. The aggregate Purchase Price (including
the assumption by Buyer of the Assumed Liabilities) shall be allocated
among the Purchased Assets for tax purposes based upon an appraisal
conducted by a third-party valuation firm retained by Buyer as soon as
reasonably practicable after the Closing Date. The parties will work
together in good faith toward an agreed-upon valuation. Company and
Buyer will follow
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
7
and use such allocation in all income, sales registration and other tax
returns, filings or other related reports made by them to any
governmental agencies. Buyer shall not revalue the parties' agreed-upon
valuation for its own purposes without the Company's consent. To the
extent that disclosures of this allocation are required to be made by
the parties to the Internal Revenue Service ("IRS") under the
provisions of Section 1060 of the Internal Revenue Code of 1986, as
amended (the "Code") or any regulations thereunder, Buyer and Company
will disclose such reports to the other prior to filing with the IRS.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF COMPANY
Company makes the following representations and warranties to Buyer,
each of which is true and correct on the date hereof, shall remain true and
correct to and including the Closing Date, shall be unaffected by any
investigation heretofore or hereafter made by Buyer, or any knowledge of Buyer
other than as specifically disclosed in the Disclosure Schedule delivered to
Buyer at the time of the execution of this Agreement, and shall survive the
Closing of the transactions provided for herein.
5.1 Corporate.
5.1(a) Organization. Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of
California.
5.1(b) Corporate Power. Company has all requisite corporate power and
authority to own, operate and lease its properties, to carry
on its business as and where such is now being conducted, to
enter into this Agreement and the other documents and
instruments to be executed and delivered by Company pursuant
hereto and to carry out the transactions contemplated hereby
and thereby.
5.1(c) Qualification. Company is duly licensed or qualified to do
business as a foreign corporation in the State of Colorado and
is in good standing in each jurisdiction wherein the character
of its properties which are Purchased Assets or the nature of
the Business makes such licensing or qualification necessary,
and where the failure to be so qualified and licensed would
have a material adverse effect on the Business; such
jurisdictions are listed in Schedule 5.1(c) of the Disclosure
Schedule.
5.1(d) No Subsidiaries. No portion of the Business is conducted by
the Company by means of any subsidiary or any other interest
in any corporation, partnership or other entity, except as set
forth in Schedule 5.1(d) of the Disclosure Schedule.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
8
5.1(e) Authority. The execution and delivery of this Agreement and
the other documents and instruments to be executed and
delivered by Company pursuant hereto and the consummation of
the transactions contemplated hereby and thereby have been
duly authorized by the Board of Directors of Company. No other
or further corporate act or proceeding on the part of Company
or its shareholders is necessary to authorize this Agreement
or the other documents and instruments to be executed and
delivered by Company pursuant hereto or the consummation of
the transactions contemplated hereby and thereby, and it is
not intended that Company be dissolved or its remaining
operations terminated. This Agreement constitutes, and when
executed and delivered, the other documents and instruments to
be executed and delivered by Company pursuant hereto will
constitute, valid binding agreements of Company, enforceable
in accordance with their respective terms, except as such may
be limited by bankruptcy, insolvency, reorganization or other
laws affecting creditors' rights generally, and by general
equitable principles.
5.1(f) No Violation. Except as set forth on Schedule 5.1(f) of the
Disclosure Schedule, neither the execution and delivery of
this Agreement or the other documents and instruments to be
executed and delivered by Company pursuant hereto, nor the
consummation by Company of the transactions contemplated
hereby and thereby (a) will violate any statute or law or any
rule, regulation, order, writ, injunction or decree of any
court or governmental authority, (b) will require any
authorization, consent, approval, exemption or other action by
or notice to any court, administrative or governmental agency,
instrumentality, commission, authority, board or body, or (c)
subject to obtaining the consents referred to in Schedule
5.1(f) of the Disclosure Schedule, will violate or conflict
with, or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under,
or will result in the termination of, or accelerate the
performance required by, or result in the creation of any Lien
(as defined in Section 5.9(a)), upon any of the Purchase
Assets of Company under, any term or provision of the Articles
of Incorporation or By-laws of Company or of any contract,
commitment, understanding, arrangement, agreement or
restriction of any kind or character to which Company is a
party or by which Company or any of its assets or properties
may be bound or affected.
5.2 Business Financial Report. Included as Schedule 5.2 of the Disclosure
Schedule are the statements of income and expense of the Business for
the seven quarters ended December 31, 2002 (the "Business Financial
Report"). The Business Financial Report is prepared from and consistent
in all respects with financial reports prepared and used by the Company
in the ordinary course in managing its business and measuring and
reporting its operating results; have been prepared in accordance with
the books and records of the Company; and fairly present the results of
operations of the Business as of the dates and for the periods
indicated.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
9
5.3 Tax Matters. Except as set forth on Schedule 5.3 of the Disclosure
Schedule: (i) all state, foreign, county, local and other tax returns
relating primarily to the Business or the Purchased Assets, or required
to be filed by or on behalf of Company in any jurisdiction required to
be listed in Schedule 5.1(c) of the Disclosure Schedule or any
political subdivision thereof, have been timely filed and the taxes
paid or adequately accrued; (ii) Company has duly withheld and paid all
taxes which it is required to withhold and pay relating to salaries and
other compensation heretofore paid to the employees of the Business;
and (iii) Company has not received any notice of underpayment of taxes
or other deficiency which has not been paid and there are outstanding
no agreements or waivers extending the statutory period of limitations
applicable to any tax return or report relating primarily to the
Business or the Purchased Assets, or required to have been filed by
Company in any jurisdiction required to be listed in Schedule 5.1(c) of
the Disclosure Schedule or any political subdivision thereof.
5.4 Inventory. The Inventory of the Business which is located in the State
of Oregon consists of a quality and quantity usable and saleable in the
ordinary course of business. Except as set forth in Schedule 5.4 of the
Disclosure Schedule, all Inventory of the Business is located on
premises owned or leased by Company or on consignment with customers
which premises, leaseholds, or consignments thereof constitute
Purchased Assets pursuant to this Agreement. All work-in-process
contained in Inventory constitutes items in process of production
pursuant to contracts or open orders taken in the ordinary course of
business, from regular customers of the Business with no recent history
of credit problems with respect to Company; neither Company nor any
such customer is in material breach of the terms of any obligation to
the other, and no valid grounds exist for any set-off of amounts
billable to such customers on the completion of orders to which
work-in-process relates. All work-in-process is of a quality ordinarily
produced in accordance with the requirements of the orders to which
such work-in-process is identified, and will require no rework with
respect to services performed prior to Closing.
5.5 Absence of Certain Changes. Except as and to the extent set forth in
Schedule 5.5 of the Disclosure Schedule, since December 31, 2002, there
has not been:
5.5(a) Any Adverse Change. Any adverse change in the financial
condition, assets, Liabilities, business, prospects or
operations of the Business;
5.5(b) Any Damage. Any loss, damage or destruction, whether covered
by insurance or not, in connection with or reasonably related
to the Business or the Purchased Assets;
5.5(c) Any Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable
to any employee or agent of Company who is employed in the
Business or whose compensation is reflected in the Business
Financial Statements (including, without limitation, any
increase or change pursuant to any bonus, pension, profit
sharing, retirement or other plan or commitment), or any bonus
or other employee benefit granted, made or accrued as it
pertains to the Affected Employees;
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
10
5.5(d) Any Labor Disputes. Any labor dispute or disturbance, other
than routine individual grievances which are not material to
the financial condition or results of operations of the
Business;
5.5(e) Any Commitments. Any commitment or transaction by Company in
connection with or affecting the Business (including, without
limitation, any borrowing or capital expenditure) other than
in the ordinary course of business consistent with past
practice;
5.5(f) Any Disposition of Property. Any sale, lease or other transfer
or disposition of any properties or assets of Company that are
Purchased Assets (or would have been Purchased Assets had no
sale, lease, transfer or disposition occurred), except for the
sale of inventory items in the ordinary course of business;
5.5(g) Any Indebtedness. Except as set forth on Schedule 5.5(g) to
the Disclosure Schedule, any indebtedness for borrowed money
incurred, assumed or guaranteed by Company in connection with
the Business or Purchased Assets;
5.5(h) Any Liens. Any Lien made on any of the properties or assets of
Company that are Purchased Assets (or would become Purchased
Assets if not sold, leased, transferred or disposed of prior
to the Closing Date);
5.5(i) Any Amendment of Contracts. Any entering into, amendment or
termination by Company of any contract in connection with or
affecting the Business, or any waiver of material rights
thereunder, other than in the ordinary course of business;
5.5(j) Any Loans and Advances. Any loan or advance by the Business
(other than advances to employees in the ordinary course of
business for travel and entertainment in accordance with past
practice);
5.5(k) Any Credit. Other than as set forth in Schedule 5.11(h) of the
Disclosure Schedule, any grant of credit to any customer of
the Business or distributor of its products on terms or in
amounts more favorable than those which have been extended to
such customer or distributor in the past, any other change in
the terms of any credit heretofore extended, or any other
change of Company's policies or practices with respect to the
granting of credit in connection with the Business; or
5.5(l) Any Unusual Events. Any other event or condition not in the
ordinary course of Company's operation of the Business which
would have a material adverse effect on the Business.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
11
5.6 Absence of Undisclosed Liabilities. Except as and to the extent
specifically disclosed in the Business Financial Report or in Schedule
5.6 of the Disclosure Schedule, to the best of the Company's knowledge,
the Business does not have any liabilities, other than commercial
liabilities and obligations incurred since the date of the Business
Financial Report in the ordinary course of business and consistent with
past practice and none of which has or will have a material adverse
effect on the financial condition or results of operations of the
Business by Buyer after the Closing. Except as and to the extent
described in the Business Financial Report or in Schedule 5.6 of the
Disclosure Schedule, Company has no knowledge of any basis for the
assertion against Company of any material liability in connection with
or affecting the Business or the Purchased Assets, except commercial
liabilities and obligations incurred in the ordinary course of the
Business and consistent with past practice.
5.7 No Litigation. Except as set forth in Schedule 5.7 of the Disclosure
Schedule, there is no action, suit, arbitration proceeding,
investigation or inquiry pending or threatened against Company or its
directors (in such capacity) that questions the validity of this
Agreement and the transactions contemplated hereby or reasonably
relates to the Business, the Purchased Assets or the Assumed
Liabilities, nor does Company know, or have grounds to know, of any
basis for any such proceedings, investigations or inquiries which would
have a material adverse effect on the same. Schedule 5.7 of the
Disclosure Schedule also identifies all such actions, suits,
proceedings, investigations and inquiries to which Company or any of
its directors have been parties since December 31, 2002, related to the
Business. Except as set forth in Schedule 5.7 of the Disclosure
Schedule, neither Company as related to the Purchased Assets, the
Purchased Assets, nor the Assumed Liabilities is subject to any
judgment, order, writ or injunction of any court, arbitrator or
federal, state, foreign, municipal or other governmental department,
commission, board, bureau, agency or instrumentality.
5.8 Compliance With Laws. With respect to the following representations
5.8(a), 5.8(b), and 5.8(c), the Company makes no representations
regarding these matters with respect to the operations of ▇▇▇▇
Industries.
5.8(a) Compliance. Except as set forth in Schedule 5.8(a) of the
Disclosure Schedule, to the best of the Company's knowledge,
the Business (including each and all of its operations,
practices, properties and assets) is in material compliance
with all applicable federal, state, local and foreign laws,
ordinances, orders, rules and regulations (collectively,
"Laws"), including, without limitation, those applicable to
discrimination in employment, occupational safety and health,
trade practices, competition and pricing, product warranties,
zoning, building and sanitation, employment, retirement and
labor relations, product advertising and the Environmental
Laws as hereinafter defined. Except as set forth in Schedule
5.8(a) of the Disclosure Schedule, Company has not received
notice of any violation or alleged violation of, and is
subject to no Liability for past or continuing violation of,
any Laws with respect to the operations of the Business, the
result of which would have a material adverse effect on the
Business. All reports and returns
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
12
required to be filed by Company with any governmental
authority have been filed, and were accurate and complete when
filed. Without limiting the generality of the foregoing:
(i) To the best of the Company's knowledge, the operation
of the Business as it is now conducted does not, nor
does any condition existing at any of the Business
facilities, in any manner constitute a material
nuisance or other tortious interference with the
rights of any person or persons in such a manner as
to give rise to or constitute the grounds for a suit,
action, claim or demand by any such person or persons
seeking compensation or damages or seeking to
restrain, enjoin or otherwise prohibit any aspect of
the conduct of the Business or the manner in which it
is now conducted.
(ii) Company has made all required payments to its
unemployment compensation reserve accounts with the
appropriate governmental departments of the states
where it is required to maintain such accounts with
respect to the operations of the Business, and each
of such accounts has a positive balance.
5.8(b) Licenses and Permits. To the best of the Company's knowledge,
Company has all licenses, permits, approvals, authorizations
and consents of all governmental and regulatory authorities
and all certification organizations required for the conduct
of the Business and the operation of the Facilities. All such
licenses, permits, approvals, authorizations and consents are
described in Schedule 5.8(b) of the Disclosure Schedule, are
in full force and effect and are assignable to Buyer in
accordance with the terms hereof. Except as set forth in
Schedule 5.8(b) of the Disclosure Schedule, the Business
(including its operations, properties and assets) is and has
been in material compliance with all such permits and
licenses, approvals, authorizations and consents.
5.8(c) Environmental Matters. The applicable Laws relating to
pollution or protection of the environment, including Laws
relating to emissions, discharges, generation, storage,
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic, hazardous or petroleum or
petroleum-based substances or wastes (collectively, "Waste")
into the environment (including, without limitation, ambient
air, surface water, ground water, land surface or subsurface
strata) or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of Waste including, without limitation, the Clean
Water Act, the Clean Air Act, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability
Act ("CERCLA"), as amended, and their state and local
counterparts are herein collectively referred to as the
"Environmental Laws". Without limiting the generality of the
foregoing
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
13
provisions of this Section 5.8, to the best of the Company's
knowledge, the Business is in full compliance with all other
material limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and
timetables contained in the Environmental Laws or contained in
any regulations, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered,
promulgated or approved thereunder. Except as set forth in
Schedule 5.8(c) of the Disclosure Schedule, there is no civil,
criminal or administrative action, suit, demand, claim,
hearing, notice of violation, investigation, proceeding,
notice or demand letter pending or threatened against Company
with respect to the Business relating in any way to the
Environmental Laws or any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder. Except as set
forth in Schedule 5.8(c) of the Disclosure Schedule, to the
best of the Company's knowledge, there are no past or present
(or, to the best of Company's knowledge, future) events,
conditions, circumstances, activities, practices, incidents,
actions, omissions or plans which may interfere with or
prevent compliance or continued compliance with the
Environmental Laws or with any regulation, code, plan, order,
decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, or which may give
rise to any liability, including, without limitation,
liability under CERCLA or similar state or local Laws, or
otherwise form the basis of any claim, action, demand, suit,
proceeding, hearing, notice of violation, study or
investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or
threatened release into the environment, of any Waste. To the
best of Company's knowledge, no portion of any of the Leased
Real Property has been used as a landfill or for storage or
landfill of hazardous or toxic materials.
5.9 Title to and Condition of Properties.
5.9(a) Marketable Title. Company has good and marketable title to all
the Purchased Assets, free and clear of all mortgages, liens
(statutory or otherwise), security interests, claims, pledges,
licenses, equities, options, conditional sales contracts,
assessments, levies, easements, covenants, reservations,
restrictions, rights-of-way, exceptions, limitations, charges
or encumbrances of any nature whatsoever (collectively,
"Liens") except those described in Schedule 5.9(a) of the
Disclosure Schedule; and, in the case of real property, Liens
for taxes not yet due or which are being contested in good
faith by appropriate proceedings (and which have been
sufficiently accrued or reserved against in the Business
Financial Report), municipal and zoning ordinances and
easements for public utilities, none of which interfere with
the use of the property as currently utilized ("Permitted Real
Property Liens"). None of the Purchased Assets are subject to
any restrictions with respect to the transferability thereof.
Company has complete and unrestricted power and right to sell,
assign, convey and deliver the Purchased Assets to Buyer as
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
14
contemplated hereby. At Closing, Buyer will receive good and
marketable title to all the Purchased Assets, free and clear
of all Liens of any nature whatsoever except those described
in Schedule 5.9(a) of the Disclosure Schedule and Permitted
Real Property Liens which Buyer has agreed to assume.
5.9(b) Condition. All tangible assets (real and personal)
constituting Purchased Assets hereunder are in good operating
condition and repair, free from any defects (except such minor
defects as do not interfere with the use thereof in the
conduct of the normal operations of Company), and, to the best
of Company's knowledge, have been maintained consistent with
the standards generally followed in the industry and are
sufficient to carry on the business of Company as conducted
during the preceding 12 months. All buildings, plants and
other structures owned or otherwise utilized by Company in
operating the Business are in good condition and repair and
have no structural defects or defects affecting the plumbing,
electrical, sewerage, or heating, ventilating or air
conditioning systems.
5.9(c) Real Property. Company does not own any real property in
connection with the Business. Schedule 1.2(a) of the
Disclosure Schedule sets forth all Leased Real Property used
or occupied by Company in operating the Business. To the best
of the Company's knowledge, there are now in full force and
effect duly issued certificates of occupancy permitting the
Leased Real Property and improvements located thereon to be
legally used and occupied as the same are now constituted. To
the best of the Company's knowledge, all of the Leased Real
Property has permanent rights of access to dedicated public
highways. To the best of the Company's knowledge, no fact or
condition exists which would prohibit or adversely affect the
ordinary rights of access to and from the Leased Real Property
from and to the existing highways and roads and there is no
pending or threatened restriction or denial, governmental or
otherwise, upon such ingress and egress. To the best of the
Company's knowledge, there is not (i) any claim of adverse
possession or prescriptive rights involving any of the Leased
Real Property, (ii) any structure located on any Leased Real
Property which encroaches on or over the boundaries of
neighboring or adjacent properties or (iii) any structure of
any other party which encroaches on or over the boundaries of
any of such Leased Real Property. To the best of Company's
knowledge, none of the Leased Real Property is located in a
flood plain, flood hazard area, wetland or lakeshore erosion
area within the meaning of any Law. To the best of the
Company's knowledge, no public improvements have been
commenced and none are planned which in either case may result
in special assessments against or otherwise materially
adversely affect any Leased Real Property. Company has no
notice or knowledge of any (i) planned or proposed increase in
assessed valuations of any Leased Real Property, (ii)
governmental agency or court order requiring repair,
alteration, or correction of any existing condition
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
15
affecting any Leased Real Property or the systems or
improvements thereat, (iii) condition or defect which could
give rise to an order of the sort referred to in "(ii)" above,
or (iv) underground storage tanks, or any structural,
mechanical, or other defects of material significance
affecting any Leased Real Property or the systems or
improvements thereat (including, but not limited to,
inadequacy for normal use of mechanical systems or disposal or
water systems at or serving the Leased Real Property).
5.9(d) No Condemnation or Expropriation. Neither the whole nor any
portion of the Purchased Assets is subject to any governmental
decree or order to be sold or is being condemned, expropriated
or otherwise taken by any public authority with or without
payment of compensation therefor, nor to the best of Company's
knowledge has any such condemnation, expropriation or taking
been proposed.
5.10 Insurance. Set forth in Schedule 5.10 of the Disclosure Schedule is a
complete and accurate list and description of all policies of fire,
liability, product liability, workers compensation, health and other
forms of insurance presently in effect with respect to the Business or
the Purchased Assets. Schedule 5.10 of the Disclosure Schedule
includes, without limitation, the carrier, the description of coverage,
the limits of coverage, retention or deductible amounts, amount of
annual premiums, date of expiration, and any pending claims in excess
of $100,000.00. All such policies are valid, outstanding and
enforceable policies and provide insurance coverage for the Business
and its associated properties of the kinds, in the amounts and against
the risks customarily maintained by organizations similarly situated.
Schedule 5.10 of the Disclosure Schedule indicates each policy as to
which (a) the coverage limit has been reached or (b) the total incurred
losses to date equal 75% or more of the coverage limit. No notice of
cancellation or termination has been received with respect to any such
policy, and Company has no knowledge of any act or omission of Company
which could result in cancellation of any such policy prior to its
scheduled expiration date. Company has not been refused any insurance
with respect to any aspect of the operations of the Business nor has
its coverage been limited by any insurance carrier to which it has
applied for insurance or with which it has carried insurance during the
last three years. Company has duly and timely made all claims it has
been entitled to make under each policy of insurance. There is no claim
by Company pending under any such policies as to which coverage has
been questioned, denied or disputed by the underwriters of such
policies, and Company knows of no basis for denial of any claim under
any such policy.
5.11 Contracts and Commitments.
5.11(a) Real Property Leases. Except as set forth in Schedule 1.2(a)
of the Disclosure Schedule, Company has no leases of real
property used or held for use in connection with the Business
or the Purchased Assets.
5.11(b) Personal Property Leases. Company has no leases of personal
property used or held for use in connection with the Business
or the Purchased Assets
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
16
involving consideration or other expenditure in excess of
$25,000.00 or involving performance over a period of more than
twelve (12) months.
5.11(c) Purchase Commitments. Except with respect to ▇▇▇▇ Industries
or as set forth on Schedule 5.11(c) of the Disclosure
Schedule, Company has no purchase commitments for inventory
items or supplies in connection with the Business in excess of
twelve (12) months normal usage, or which exceed an aggregate
of $100,000.00.
5.11(d) Sales Commitments. Except as set forth on Schedule 5.11(d) of
the Disclosure Schedule, Company has no sales contracts or
commitments to customers or distributors in connection with or
affecting the Business or the Purchased Assets which aggregate
in excess of $100,000.00 to any one customer or distributor
(or group of affiliated customers or distributors) except for
purchase orders taken in the ordinary course of business.
Company has no sales contracts or commitments in connection
with or affecting the Business or the Purchased Assets except
those made in the ordinary course of business, at arm's
length, and no such contracts or commitments are for a sales
price which would result in a material loss to the Business.
5.11(e) Contracts With Affiliates and Certain Others. Except as set
forth on Schedule 5.11(e) of the Disclosure Schedule, Company
has no agreement, understanding, contract or commitment
(written or oral) in connection with or affecting the Business
or the Purchased Assets with any Affiliate or any other
officer, employee, agent, consultant, distributor or dealer
that is not cancelable by Company on notice of not longer than
30 days without liability, penalty or premium of any nature or
kind whatsoever.
5.11(f) Powers of Attorney. Except as set forth on Schedule 5.11(f) of
the Disclosure Schedule, the Company has not given a power of
attorney, which is currently in effect, to any person, firm or
corporation for any purpose whatsoever in connection with or
reasonably related to the Business or the Purchased Assets.
5.11(g) Collective Bargaining Agreements. Except as set forth in
Schedule 5.11(g) of the Disclosure Schedule, Company is not a
party to any collective bargaining agreements with any unions,
guilds, shop committees or other collective bargaining groups
representing or purporting to represent employees of the
Business. Copies of all such agreements have heretofore been
delivered to Buyer.
5.11(h) Loan Agreements. Except as set forth in Schedule 5.11(h) of
the Disclosure Schedule, Company is not obligated under any
loan agreement, promissory note, letter of credit, or other
evidence of indebtedness as a signatory, guarantor or
otherwise, which obligation constitutes or gives rise or could
by
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
17
its terms, through the giving of notice or any other events
short of judgment by a court, give rise to a lien against any
Purchased Asset.
5.11(i) Guarantees. Except as disclosed on Schedule 5.11(i) of the
Disclosure Schedule, Company has not guaranteed the payment or
performance of any person, firm or corporation, agreed to
indemnify any person or act as a surety, or otherwise agreed
to be contingently or secondarily liable for the obligations
of any person, in connection with the Business or reasonably
related to the Business or the Purchased Assets.
5.11(j) Contracts Subject to Renegotiation. Company is not a party to
any contract with any governmental body which is subject to
renegotiation in connection with or reasonably related to the
Business or the Purchased Assets.
5.11(k) Restrictive Agreements. Except as set forth on Schedule
5.11(k) of the Disclosure Schedule, Company is not a party to
nor is it bound by any agreement requiring Company to assign
any interest in any trade secret or proprietary information
constituting Purchased Assets hereunder, or prohibiting or
restricting Company in its operation of the Business from
competing in any business or geographical area or soliciting
customers or otherwise restricting it from carrying on the
Business anywhere in the world.
5.11(l) Other Material Contracts. Company has no lease, contract or
commitment of any nature affecting the Business and involving
consideration or other expenditure in excess of $100,000.00,
or involving performance over a period of more than twelve
(12) months, or which is otherwise individually material to
the operations of the Business, except for purchase orders
taken in the ordinary course of business and except as
explicitly described in Schedule 5.11(l) or in any other
Schedule of the Disclosure Schedule.
5.11(m) No Default. Except as set forth on Schedule 5.11(m) of the
Disclosure Schedule, Company is not in default under any
lease, contract or commitment in its operation of the
Business, nor has any event or omission occurred which through
the passage of time or the giving of notice, or both, would
constitute a default thereunder and which would cause a
material adverse effect on the Business or cause the
acceleration of any of Company's obligations or result in the
creation of any Lien on any Purchased Asset. No third party is
in default under any such lease, contract or commitment to
which Company is a party, nor has any event or omission
occurred which, through the passage of time or the giving of
notice, or both, would constitute a default thereunder, or
give rise to an automatic termination, or the right of
discretionary termination thereof.
5.12 Labor Matters. Except as set forth in Schedule 5.12 of the Disclosure
Schedule, within the last five years Company has not experienced any
labor disputes, union organization
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
18
attempts or any work stoppage due to labor disagreements in connection
with the Business. In its operation of the Business, except to the
extent set forth in Schedule 5.12 of the Disclosure Schedule, (a)
Company is in compliance with all applicable laws respecting employment
and employment practices, terms and conditions of employment and wages
and hours, and is not engaged in any unfair labor practice; (b) there
is no unfair labor practice charge or complaint against Company pending
or threatened; (c) there is no labor strike, dispute, request for
representation, slowdown or stoppage actually pending or threatened
against or affecting Company nor any secondary boycott with respect to
products of the Business; (d) no question concerning representation has
been raised or is threatened respecting the employees of the Business;
(e) no grievance which might have a material adverse effect on the
Business, nor any arbitration proceeding arising out of or under
collective bargaining agreements, is pending and no such claim therefor
exists; and (f) there are no administrative charges or court complaints
against Company concerning alleged employment discrimination or other
employment related matters pending or threatened before the U.S. Equal
Employment Opportunity Commission or any state or federal court or
agency.
5.13 Employee Benefit Plans. All of the accrued obligations of Company,
whether arising by operation of law, by contract or by past custom, for
payments by it to trust or other funds or any governmental agency with
respect to unemployment compensation benefits, social security
benefits, or any other benefits for employees of the Business
("Business Employees") shall have been paid prior to Closing or, if due
after Closing, shall be paid when due under applicable laws,
regulations, or provisions of benefit plans or policies as the case may
be. All accrued vacation benefits payable to Business Employees shall
have been paid prior to or contemporaneously with Closing. All other
accrued benefits or contributions, and all other reasonably anticipated
obligations of Company, whether arising by operation of law, by
contract or by past custom, for holiday pay, bonuses or other forms of
compensation or benefits which are and may become payable to Business
Employees shall be paid in accordance with the provisions of applicable
laws, regulations, benefit plans or policies, as the case may be.
Except as set forth in the Transition Services Agreement and except as
set forth in Schedule 5.13 of the Disclosure Schedule, in no event
shall Buyer assume or be responsible for past or future obligations of
Company to any employee, including any obligations to pay salary,
benefits, severance pay, vacation pay, or other benefits to any
employee, regardless of whether such employees are hired by Buyer;
provided, however, that with respect to those employees listed in
Schedule 7.1, Buyer agrees to extend to the employee the same severance
benefits that the employee had at the Company (regardless of whether
Buyer hires such Employees), and the employees shall be given credit
for years of service in determining the applicable amount of vacation
they are entitled to under Buyer's vacation policy.
5.14 Employment Compensation. Schedule 5.14 of the Disclosure Schedule
contains a true and correct list of all Business Employees to whom the
Company is paying compensation for services rendered or otherwise; and
in the case of salaried employees such list identifies the current
annual rate of compensation for each employee and in the case of hourly
or commission employees identifies certain reasonable ranges of rates
and the number of employees falling within each such range.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
19
5.15 Trade Rights. Schedule 5.15 of the Disclosure Schedule lists all Trade
Rights of the type described in Section 1.2(d) which are or were used,
held for use, or acquired or developed for use in the Business, or
developed in the course of conducting the Business or by persons
employed in the Business, specifying whether such Trade Rights are
owned, controlled, used or held (under license or otherwise) by
Company, and also indicating which of such Trade Rights are registered.
All Trade Rights shown as registered in Schedule 5.15 of the Disclosure
Schedule have been properly registered, all pending registrations and
applications have been properly made and filed and all annuity,
maintenance, renewal and other fees relating to registrations or
applications are current. To our knowledge, the Purchased Trade Rights
and the rights acquired by Buyer pursuant to the Patent Assignment and
Cross-License and Trademark License Agreement provide Buyer with all of
the Trade Rights necessary in order to conduct the Business as such is
currently being conducted. To our knowledge, Company is not infringing
and has not infringed any Trade Rights of another in the operation of
the Business, nor is any other person infringing the Trade Rights of
Company. Company has not granted any license or made any assignment of
any Trade Right listed on Schedule 5.15 of the Disclosure Schedule, nor
does Company pay any royalties or other consideration for the right to
use any Trade Rights of others. There are no inquiries, investigations
or claims or litigation challenging or threatening to challenge
Company's right, title and interest with respect to its continued use
and right to preclude others from using any Trade Rights of Company. To
the best of the Company's knowledge, all Trade Rights of Company, with
the exception of patent and trademark applications, are valid,
enforceable and in good standing, and there are no equitable defenses
to enforcement based on any act or omission of Company. With respect to
patent and trademark applications, all such applications are in good
standing.
5.16 Major Customers and Suppliers.
5.16(a) Major Customers. Schedule 5.16(a) of the Disclosure Schedule
contains a list of the ten (10) largest customers, including
distributors, of the Business for each of the two (2) most
recent fiscal years (determined on the basis of the total
dollar amount of net sales) showing the total dollar amount of
net sales to each such customer during each such year. Company
has no knowledge or information of any facts indicating, nor
any other reason to believe, that any of the customers listed
on Schedule 5.16(a) of the Disclosure Schedule will not
continue to be customers of the Business after the Closing at
substantially the same level of purchases as heretofore.
5.16(b) Major Suppliers. Schedule 5.16(b) of the Disclosure Schedule
contains a list of the two (2) major suppliers to the Business
for each of the two (2) most recent fiscal years (determined
on the basis of the total dollar amount of purchases); showing
the total dollar amount of purchases from each such supplier
during each such year. Company has no knowledge or information
of any facts indicating, nor any other reason to believe, that
any of the suppliers listed on Schedule 5.16(b) of the
Disclosure Schedule will not continue to be suppliers to the
Business after the Closing and will not continue to supply the
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
20
Business with substantially the same quantity and quality of
goods at competitive prices.
5.16(c) Dealers and Distributors. Schedule 5.16(c) of the Disclosure
Schedule contains a list by product line of all dealers and
distributors of the Business, together with representative
copies of all dealer, distributor and franchise contracts and
policy statements, and a description of all substantial
modifications or exceptions.
5.17 Product Warranty and Product Liability. Schedule 5.17 of the Disclosure
Schedule contains a true, correct and complete copy of Company's
standard warranty or warranties for sales of Products (as defined
below) and, except as stated therein, there are no warranties,
commitments or obligations with respect to the return, repair or
replacement of Products. Schedule 5.17 of the Disclosure Schedule
contains a description of all product liability claims and similar
claims, actions, litigation and other proceedings relating to Products
which are presently pending or which to Company's knowledge are
threatened, or which have been asserted or commenced against Company
within the last two (2) years, in which a party thereto either requests
injunctive relief (whether temporary or permanent) or alleges damages
in excess of $100,000.00 (whether or not covered by insurance). To the
best of the Company's knowledge, there are no defects in design,
construction or manufacture of Products which would adversely affect
performance or create an unusual risk of injury to persons or property.
Except as set forth on Schedule 5.17, none of the Products has been the
subject of any replacement, field fix, retrofit, modification or recall
campaign other than in the ordinary course of business. The Products
have been designed and manufactured so as to meet and comply with all
governmental standards and specifications currently in effect, and have
received all governmental approvals necessary to allow their sale and
use. As used herein, the term "Products" means any and all products
currently or at any time previously manufactured, distributed or sold
by Company, or by any predecessor of Company under any brand name or
▇▇▇▇ under which products are or have been manufactured over the last
three (3) years, distributed or sold by Company, in or through the
Business.
5.18 Affiliates' Relationships to Company.
5.18(a) Contracts With Affiliates. All leases, contracts, agreements
or other arrangements concerning the Business between Company
and any Affiliate or between the Business and other business
units of the Company are described on Schedule 5.18(a) of the
Disclosure Schedule.
5.18(b) No Adverse Interests. No Affiliate has any direct or indirect
interest in (i) any entity which does business with Company in
connection with the operation of, or is competitive with, the
Business, or (ii) any property, asset or right which is used
by Company in the conduct of the Business.
5.19 Assets Necessary to Business. The Purchased Assets, together with the
assets and rights licensed pursuant to the Assignment and Patent
Assignment and Cross-License and
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
21
Trademark License Agreement in the form of Exhibit A hereto, include
all property and assets (except for the Excluded Assets), and all
leases, licenses, and other agreements currently used by Company in the
conduct of the Business. There are no Company-owned assets (except for
the Excluded Assets), which are necessary to permit Buyer to carry on,
or currently used or held for use in, the Business as presently
conducted.
5.20 No Brokers or Finders. Except as set forth on Schedule 5.20 of the
Disclosure Schedule, neither Company nor any of its directors,
officers, employees, shareholders or agents have retained, employed or
used any broker or finder in connection with the transaction provided
for herein or in connection with the negotiation thereof and that no
person, corporation, partnership, or entity is entitled to a broker's
commission, finder's fee, or any similar compensation upon the
consummation of the transactions contemplated herein.
5.21 Disclosure. No representation or warranty by Company in this Agreement,
nor any statement, certificate, schedule or exhibit hereto furnished or
to be furnished by or on behalf of Company pursuant to this Agreement,
nor any document or certificate delivered to Buyer pursuant to this
Agreement or in connection with transactions contemplated hereby,
contains or shall contain any untrue statement of material fact or
omits or shall omit a material fact necessary to make the statements
contained therein not misleading. All statements and information
contained in any certificate, instrument, or Disclosure Schedules
delivered by or on behalf of Company shall be deemed representations
and warranties by Company.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties to Company,
each of which is true and correct on the date hereof, shall remain true and
correct to and including the Closing Date, shall be unaffected by any
investigation heretofore or hereafter made by Company or any notice to Company,
and shall survive the Closing of the transactions provided for herein.
6.1 Corporate.
6.1(a) Organization. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Minnesota.
6.1(b) Corporate Power. Buyer has all requisite corporate power to
enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry
out the transactions contemplated hereby and thereby.
6.2 Authority. The execution and delivery of this Agreement and the other
documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
22
authorized by the Board of Directors of Buyer. No other corporate act
or proceeding on the part of Buyer or its shareholders is necessary to
authorize this Agreement or the other documents and instruments to be
executed and delivered by Buyer pursuant hereto or the consummation of
the transactions contemplated hereby and thereby. This Agreement
constitutes, and when executed and delivered, the other documents and
instruments to be executed and delivered by Buyer pursuant hereto will
constitute, valid and binding agreements of Buyer, enforceable in
accordance with their respective terms, except as such may be limited
by bankruptcy, insolvency, reorganization or other laws affecting
creditors' rights generally, and by general equitable principles.
6.3 No Brokers or Finders. Neither Buyer nor any of its directors,
officers, employees or agents have retained, employed or used any
broker or finder in connection with the transaction provided for herein
or in connection with the negotiation thereof and that no person,
corporation, partnership, or entity is entitled to a broker's
commission, finder's fee, or any similar compensation upon the
consummation of the transactions contemplated herein.
6.4 No Violation. Neither the execution and delivery of this Agreement or
the other documents and instruments to be executed and delivered by
Buyer pursuant hereto, nor the consummation by Buyer of the
transactions contemplated hereby and thereby (a) will violate any
statute or law or any rule, regulation, order, writ, injunction, or
decree of any court or governmental authority, or (b) will violate or
conflict with, or constitute a material default under, any term or
provision of the material agreements, Articles of Incorporation, or
By-laws of Buyer.
6.5 Disclosure. No representation or warranty by Buyer in this Agreement,
nor any statement, certificate, schedule or exhibit hereto furnished or
to be furnished by or on behalf of Buyer pursuant to this Agreement,
nor any document or certificate delivered to Company pursuant to this
Agreement or in connection with transactions contemplated hereby,
contains or shall contain any untrue statement of material fact or
omits or shall omit a material fact necessary to make the statements
contained therein not misleading.
6.6 Litigation. There is no action, suit, arbitration proceeding,
investigation or inquiry pending or threatened against Buyer or its
directors (in such capacity) that questions the validity of this
Agreement and the transactions contemplated hereby.
ARTICLE 7
EMPLOYEES - EMPLOYEE BENEFITS
7.1 Affected Employees. "Affected Employees" shall mean employees of the
Company who are employed by Buyer immediately after the Closing as set
forth on Schedule 7.1 of the Disclosure Schedule. Certain Affected
Employees who are also noted as key to the Business on Schedule 7.1 of
the Disclosure Schedule (herein referred to also as "Key Employees")
shall enter into Employment and Non-Competition Agreements with the
Buyer.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
23
7.2 Retained Responsibilities. Company agrees to satisfy, or cause its
insurance carriers to satisfy, all claims for benefits, whether insured
or otherwise (including, but not limited to, workers' compensation,
life insurance, medical and disability programs), under Company's
employee benefit programs brought by, or in respect of, Affected
Employees and other employees and former employees of the Company,
which claims arise out of events occurring on or prior to the Closing
Date, in accordance with the terms and conditions of such programs or
applicable workers' compensation statutes without interruption as a
result of the employment by Buyer of any such employees after the
Closing Date.
7.3 Payroll Tax. Company agrees to make a clean cut-off of payroll and
payroll tax reporting with respect to the Affected Employees paying
over to the federal, state and city governments those amounts
respectively withheld or required to be withheld for periods ending on
or prior to the Closing Date. Company also agrees to issue, by the date
prescribed by IRS Regulations, Forms W-2 for wages paid through the
Closing Date. Except as set forth in this Agreement, Buyer shall be
responsible for all payroll and payroll tax obligations after the
Closing Date for Affected Employees.
7.4 Termination Benefits. Buyer shall be solely responsible for, and shall
pay or cause to be paid, severance payments and other termination
benefits, if any, to Affected Employees who may become entitled to such
benefits by reason of any events occurring within the first year after
Closing on terms substantially equivalent to those offered by the
Company prior to the Closing Date. If any action on the part of Company
prior to the Closing, or if the sale to Buyer of the Business and the
Purchased Assets pursuant to this Agreement or the transactions
contemplated hereby, or if the failure by Buyer to hire as a permanent
employee of Buyer any employee of Company, shall result in any
liability or claim of liability for severance payments or termination
benefits, or any liability, forfeiture, fine or other obligation by
virtue of any state, federal or local "plant-closing" or similar law,
such liability or claim of liability shall be the sole responsibility
of Company, and Company shall indemnify and hold harmless Buyer for any
losses resulting directly or indirectly from such liability or claim.
7.5 Employee Benefit Plans. Buyer agrees to provide the Affected Employees
with benefits substantially equal to the benefits provided by Company
prior to Closing. In addition, Buyer agrees that it will credit
Affected Employees with the same number of years of service that such
employees had with the Company prior to Closing (i.e., if an Affected
Employee had five years of service with the Company, Buyer will treat
Affected Employee as having had five years with Buyer). As such, the
Buyer will make available to the Affected Employees the same employment
benefits he/she would have been entitled to receive had such Affected
Employee been employed by Buyer for a period of time equal to his/her
employment with the Company.
7.6 No Third-Party Rights. Nothing in this Agreement, express or implied,
is intended to confer upon any of Company's employees, former
employees, collective bargaining representatives, job applicants, any
association or group of such persons or any Affected
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
24
Employees any rights or remedies of any nature or kind whatsoever under
or by reason of this Agreement, including, without limitation, any
rights of employment.
ARTICLE 8
OTHER MATTERS
8.1 Patent Assignment and Cross-License and Trademark License Agreement. As
an inducement to the parties to execute this Agreement and complete the
transactions contemplated hereby, the Company and Buyer agree to enter
into a Patent Assignment and Cross-License and Trademark License
Agreement in the form attached hereto as Exhibit A (the "Patent
Assignment and Cross-License and Trademark License Agreement").
8.2 Transition Services Agreement. As an inducement to the parties to
execute this Agreement and complete the transactions contemplated
hereby, the parties agree to enter into a Transition Services Agreement
in the form attached hereto as Exhibit B (the "Transition Services
Agreement").
8.3 Employment and Noncompetition Agreement. At the Closing, Company shall
cause to be delivered to Buyer Employment and Noncompetition Agreements
in a form requested by Buyer executed by each of the Key Employees.
8.4 Noncompetition; Confidentiality. Subject to the Closing, and as an
inducement to Buyer to execute this Agreement and complete the
transactions contemplated hereby, and in order to preserve the goodwill
associated with the Business, and in addition to and not in limitation
of any covenants contained in any agreement executed and delivered
pursuant to Section 8.4 hereof, Company hereby covenants and agrees as
follows:
8.4(a) Covenant Not to Compete. For a period of seven (7) years from
the Closing Date (except pursuant to subsection 8.4(a)(iii)),
Company will not directly or indirectly engage in any
Competitive Activities (as hereinafter defined). The term
"Competitive Activities" as used herein shall mean:
(i) directly or indirectly engaging in, continuing in or
carrying on the Business, or any businesses
substantially similar thereto, including any carrier
related products in the semiconductor industry or any
injection molded materials handling products in any
other industry, and including owning or controlling
any financial interest in any corporation,
partnership, firm or other form of business
organization which competes with or is engaged in or
carries on any aspect of such business or any
business substantially similar thereto;
(ii) consulting with or advising, whether or not for
consideration, any corporation, partnership, firm or
other business organization which is, at the time
such consultation or advice is given, a competitor of
Buyer
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
25
with respect to any aspect of the Business or
Purchased Assets which Buyer is acquiring hereunder,
whether or not related to the semiconductor industry,
including, but not limited to, advertising or
otherwise endorsing the products of any such
competitor; soliciting customers or otherwise serving
as an intermediary for any such competitor; loaning
money or rendering any other form of financial
assistance to or engaging in any form of business
transaction on other than an arms' length basis with
any such competitor; provided, however, that this
restriction shall not prevent the Company from
continuing to work with its customers in the ordinary
course of business.
(iii) for a period of three (3) years from the Closing
Date, offering employment to an Affected Employee,
without the prior written consent of Buyer; or
(iv) engaging in any practice the purpose of which is to
evade the provisions of this covenant not to compete.
provided, however, that the term "Competitive Activities"
shall not include the ownership of securities of corporations
which are listed on a national securities exchange or traded
in the national over-the-counter market in an amount which
shall not exceed 5% of the outstanding shares of any such
corporation. The parties agree that the geographic scope of
this covenant not to compete shall extend world wide. Except
as set forth on Schedule 8.4(a) of the Disclosure Schedule,
the parties agree that Buyer may sell, assign or otherwise
transfer this covenant not to compete, in whole or in part, to
any person, corporation, firm or entity that purchases all or
part of the Business or the Purchased Assets. In the event a
court of competent jurisdiction determines that the provisions
of this covenant not to compete are excessively broad as to
duration, geographical scope, industry, or activity, it is
expressly agreed that this covenant not to compete shall be
construed so that the remaining provisions shall not be
affected, but shall remain in full force and effect, and any
such over broad provisions shall be deemed, without further
action on the part of any person, to be modified, amended
and/or limited, but only to the extent necessary to render the
same valid and enforceable in such jurisdiction.
8.4(b) Covenant of Confidentiality. Company shall not at any time
subsequent to the Closing, except as explicitly requested by
Buyer, (i) use for any purpose, (ii) disclose to any person,
or (iii) keep or make copies of documents, tapes, discs or
programs containing, any confidential information concerning
the Business, the Purchased Assets or the Assumed Liabilities.
For purposes hereof, "confidential information" shall mean and
include, without limitation, all Trade Rights which are
Purchased Assets, all customer lists and customer information
of the Business, and all other information concerning the
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
26
processes, apparatus, equipment, packaging, Products,
marketing and distribution methods of the Business, not
previously disclosed to the public directly by Company;
provided, however, that this restriction shall not prevent the
Company from continuing to utilize customer lists and customer
information in continuing the ordinary course of its business
with such customers.
8.4(c) Equitable Relief for Violations. Company agrees that the
provisions and restrictions contained in this Section 8.4 are
necessary to protect the legitimate continuing interests of
Buyer in acquiring the Business through the purchase of the
Purchased Assets and the assumption of the Assumed
Liabilities, and that any violation or breach of these
provisions will result in irreparable injury to Buyer for
which a remedy at law would be inadequate and that, in
addition to any relief at law which may be available to Buyer
for such violation or breach and regardless of any other
provision contained in this Agreement, Buyer shall be entitled
to injunctive and other equitable relief as a court may grant
after considering the intent of this Section 8.4.
8.4(d) Transition Services Agreement and Patent Assignment and
Cross-License and Trademark License Agreement. Nothing in this
Section 8.4 shall prevent the Company from performing its
obligations under the Transition Services Agreement or the
Patent Assignment and Cross-License and Trademark License
Agreement entered into between Buyer and the Company.
8.5 HSR Act Filings. To the extent such filings are determined to be
necessary or have not been completed prior to the execution of this
Agreement, each of Company and Buyer shall, in cooperation with the
other, file any reports or notifications that may be required to be
filed by it under the HSR Act, with the Federal Trade Commission and
the Antitrust Division of the Department of Justice, and shall furnish
to the other all such information in its possession as may be necessary
for the completion of the reports or notifications to be filed by the
other. Prior to making any communication, written or oral, with the
Federal Trade Commission, the Antitrust Division of the federal
Department of Justice or any other governmental agency or authority or
members of their respective staffs with respect to this Agreement or
the transactions contemplated hereby, the Company shall consult with
Buyer.
8.6 Access to Information and Records. After the Closing, each party will
afford the other party, its counsel, accountants and other
representatives, during normal business hours, reasonable access to the
books, records and other data in such party's possession relating
directly or indirectly to the properties, liabilities or operations of
the Business, with respect to periods prior to the Closing, and the
right to make copies and extracts therefrom, to the extent that such
access may be reasonably required by the requesting party for any
proper business purpose. Each party agrees for a period extending six
years after the Closing not to destroy or otherwise dispose of any such
records without first offering in writing to surrender such records to
the other party, which party shall have ten (10) days after such offer
to agree in writing to take possession thereof.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
27
8.7 Bulk Sales Compliance. Following the execution of this Agreement,
unless compliance with this Section 8.7 is waived by Buyer, Buyer and
Company shall cooperate in complying with all provisions of the bulk
sales or bulk transfer statutes of all states having jurisdiction, in
such a way as to provide Buyer the greatest measure of protection
against the creditors of Company allowable under all such statutes.
ARTICLE 9
FURTHER COVENANTS OF THE PARTIES
9.1 Covenants of Company. The Company covenants and agrees as follows,
which covenants shall survive Closing:
9.1(a) Consents. Company has obtained all consents necessary for the
consummation of the transactions contemplated hereby,
including, without limitation, the consent of each lessor of
personal property leased by Company under leases being assumed
by Buyer herein to assignment of the lessee's interest under
the lease of such property to Buyer. All such consents shall
be in writing and executed counterparts thereof shall be
delivered to Buyer promptly after Company's receipt thereof
but in no event later than two business days prior to the
Closing.
9.1(b) Other Action. Company shall use its best efforts to cause the
fulfillment at the earliest practicable date of all of the
conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.
9.1(c) Disclosure. Company shall have a continuing obligation to
promptly notify Buyer in writing with respect to any matter
hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set
forth or described in the Disclosure, but no such disclosure
shall cure any breach of any representation or warranty which
is inaccurate.
9.1(d) Process for Product Compatibility. Company agrees that it will
use commercially reasonable efforts to comply with the general
principles set forth in the Process for Resolution of Product
Compatibility described on Schedule 8.8 of the Disclosure
Schedule.
9.1(e) Confidentiality/Non-Disclosure Agreements. The Company agrees
to work with Buyer in enforcing any confidentiality and
non-disclosure agreements it has entered into with third
parties prior to Closing which relate to the Business.
9.1(f) 300mm Dome Tool. The Company agrees that the Purchased Assets
includes a 300mm Dome Tool which is located in Malaysia and is
in the process of being developed. The Company agrees to pay
for the completion of this tool
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
28
and will use its commercially reasonable efforts to timely
complete and deliver such tool to Buyer after the Closing
Date.
9.1(g) Accounts Receivable. In the event that inventory valued at
approximately $300,000 is returned by United Microelectronics
Corporation or such inventory is modified by Buyer, the
Company agrees that such inventory shall be included in the
Purchased Assets and Company shall have no rights to any
accounts receivable in connection with such inventory whether
arising prior to, on or after the Closing Date. In the event
United Microelectronics Corporation pays the Company for such
inventory, without modification, Company shall be entitled to
keep such payment.
9.2 Covenants of Buyer. The Buyer covenants and agrees as follows which
covenants shall survive Closing:
9.2(a) Process for Resolution of Product Compatibility. The Buyer
agrees to use commercially reasonable efforts to comply with
the general principles set forth in the Process for Resolution
of Product Compatibility described on Schedule 8.8 of the
Disclosure Schedule.
ARTICLE 10
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of the
following conditions:
10.1 Representations and Warranties True on the Closing Date. Each of the
representations and warranties made by Company in this Agreement, and
the statements contained in the Disclosure Schedule or in any
instrument, list, certificate or writing delivered by Company pursuant
to this Agreement, shall be true and correct in all material respects
when made and shall be true and correct in all material respects at and
as of the Closing Date as though such representations and warranties
were made or given on and as of the Closing Date, except for any
changes permitted by the terms of this Agreement or consented to in
writing by Buyer.
10.2 Compliance With Agreement. Company shall have in all material respects
performed and complied with all of its agreements and obligations under
this Agreement which are to be performed or complied with by Company
prior to or on the Closing Date, including the delivery of the closing
documents specified in Section 13.1.
10.3 Absence of Suit. No action, suit or proceeding before any court or any
governmental authority shall have been commenced or threatened, and no
investigation by any governmental or regulating authority shall have
been commenced, against Buyer, Company or any of the affiliates,
officers or directors of any of them, seeking to restrain, prevent or
change the transactions contemplated hereby, or questioning the
validity or
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
29
legality of any such transactions, or seeking damages in connection
with, or imposing any condition on, any such transactions.
10.4 Consents and Approvals. All approvals, consents and waivers that are
required to effect the transactions contemplated hereby including but
not limited to the consent of Comerica Bank - California shall have
been received, and executed counterparts thereof shall have been
delivered to Buyer. Notwithstanding the foregoing, receipt of the
consent of any third party to the assignment of an Assumed Contract
which is not (and is not required to be) disclosed in the Disclosure
Schedule shall not be a condition to Buyer's obligation to close,
provided that the aggregate of all such Contracts does not represent a
material portion of the sales or expenditures of the Business. After
the Closing, Company will continue to use its commercially reasonable
efforts to obtain any such consents or approvals, and Company shall not
hereby be relieved of any liability hereunder for failure to perform
any of its covenants or for the inaccuracy of any representation or
warranty.
10.5 Buyer Consents and Approvals. Buyer shall have received approval by its
Board of Directors and Buyer shall have received approval from ▇▇▇▇▇
Fargo Bank, N.A. to consummate this Agreement and the transactions
contemplated hereby.
10.6 Closing Documents. Company shall have executed and delivered all of the
documents to be delivered by Company as set forth in Section 13.1.
ARTICLE 11
CONDITIONS PRECEDENT TO COMPANY'S OBLIGATIONS
Each and every obligation of Company to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of the
following conditions:
11.1 Representations and Warranties True on the Closing Date. Each of the
representations and warranties made by Buyer in this Agreement shall be
true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing Date as
though such representations and warranties were made or given on and as
of the Closing Date.
11.2 Compliance With Agreement. Buyer shall have in all material respects
performed and complied with all of Buyer's agreements and obligations
under this Agreement which are to be performed or complied with by
Buyer prior to or on the Closing Date, including the delivery of the
closing documents specified in Section 13.2.
11.3 Absence of Suit. No action, suit or proceeding before any court or any
governmental authority shall have been commenced or threatened, and no
investigation by any governmental or regulating authority shall have
been commenced, against Buyer, Company or any of the affiliates,
officers or directors of any of them, seeking to restrain, prevent or
change the transactions contemplated hereby, or questioning the
validity or
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
30
legality of any such transactions, or seeking damages in connection
with, or imposing any condition on, any such transactions.
11.4 Consents. Company shall have obtained approval by its Board of
Directors and Comerica Bank - California pursuant to the Loan and
Security Agreement entered into between such bank and Company to
consummate the transactions contemplated hereby.
11.5 Closing Documents. Buyer shall have executed and delivered all of the
documents to be delivered by Buyer as set forth in Section 13.2.
ARTICLE 12
INDEMNIFICATION
12.1 By Company. Subject to the terms and conditions of this Article 12,
Company hereby agrees to indemnify, defend and hold harmless Buyer, and
its directors, officers, employees and controlled and controlling
persons (hereinafter "Buyer's affiliates"), from and against all Claims
asserted against, resulting to, imposed upon, or incurred by Buyer,
Buyer's affiliates, the Business or the Purchased Assets, by reason of,
arising out of or resulting from (a) the inaccuracy or breach of any
representation or warranty of Company contained in or made pursuant to
this Agreement (regardless of whether such breach is deemed
"material"); (b) the breach of any covenant of Company contained in
this Agreement (regardless of whether such breach is deemed
"material"); or (c) any Claim of or against Company, the Purchased
Assets or the Business not specifically assumed by Buyer pursuant
hereto. As used in this Article 12, the term "Claim" shall include (i)
any liability not assumed by Buyer; (ii) all losses, damages
(including, without limitation, consequential damages), judgments,
awards, settlements, costs and expenses (including, without limitation,
interest (including prejudgment interest in any litigated matter),
penalties, court costs and attorneys fees and expenses); and (iii) all
demands, claims, actions, costs of investigation, causes of action,
proceedings and assessments, whether or not ultimately determined to be
valid.
12.2 By Buyer. Subject to the terms and conditions of this Article 12, Buyer
hereby agrees to indemnify, defend and hold harmless Company, its
directors, officers, employees and controlling persons, from and
against all Claims asserted against, resulting to, imposed upon or
incurred by any such person, directly or indirectly, by reason of or
resulting from (a) the inaccuracy or breach of any representation or
warranty of Buyer contained in or made pursuant to this Agreement
(regardless of whether such breach is deemed "material"); (b) the
breach of any covenant of Buyer contained in this Agreement (regardless
of whether such breach is deemed "material"); or (c) all Claims of or
against Company specifically assumed by Buyer pursuant hereto.
12.3 Indemnification of Third-Party Claims. The obligations and liabilities
of any party to indemnify any other under this Article 12 with respect
to Claims relating to third parties shall be subject to the following
terms and conditions:
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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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12.3(a) Notice and Defense. The party or parties to be indemnified
(whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying
Party") prompt written notice of any such Claim, and the
Indemnifying Party will undertake the defense thereof by
representatives chosen by it. Failure to give such notice
shall not affect the Indemnifying Party's duty or obligations
under this Article 12, except to the extent the Indemnifying
Party is prejudiced thereby. So long as the Indemnifying Party
is defending any such Claim actively and in good faith, the
Indemnified Party shall not settle such Claim. The Indemnified
Party shall make available to the Indemnifying Party or its
representatives all records and other materials required by
them and in the possession or under the control of the
Indemnified Party, for the use of the Indemnifying Party and
its representatives in defending any such Claim, and shall in
other respects give reasonable cooperation in such defense. So
long as the Indemnifying Party is defending any such Claim
actively and in good faith, the Company shall not pay for
separate counsel for Buyer of Buyer's choice.
12.3(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to
defend such Claim actively and in good faith, the Indemnified
Party will have the right to undertake the defense, compromise
or settlement of such Claim or consent to the entry of a
judgment with respect to such Claim, on behalf of and for the
account and risk of the Indemnifying Party, and the
Indemnifying Party shall thereafter have no right to challenge
the Indemnified Party's defense, compromise, settlement or
consent to judgment; provided, however, that the Indemnified
Party will use commercially reasonable efforts to notify and
obtain the consent of the Indemnifying Party, which consent
will not be unreasonably withheld.
12.3(c) Indemnified Party's Rights. Anything in this Section 12 to
the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect
the Indemnified Party other than as a result of money damages
or other money payments, the Indemnified Party shall have the
right to defend, compromise or settle such Claim, and (ii) the
Indemnifying Party shall not, without the written consent of
the Indemnified Party, which consent shall not be unreasonably
withheld, settle or compromise any Claim or consent to the
entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all
liability in respect of such Claim.
12.4 Indemnification Regarding Warranty/Services. [*] for all warranty and
service obligations for [*] which exceed [*] of warranty expense under
Article 2 hereof. The indemnification obligations by [*] under this
Section 12.4 is not subject to the minimum $225,000.00 threshold
limitation set forth in Section 12.6(b) below.
12.5 Payment. The Indemnifying Party shall promptly pay the Indemnified
Party any amount due under this Article 12, which payment may be
accomplished in whole or in part, as set
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
32
forth in Section 12.8, by the Indemnified Party setting off any amount
owed to the Indemnifying Party by the Indemnified Party. To the extent
set-off is made by an Indemnified Party in satisfaction or partial
satisfaction of an indemnity obligation under this Article 12 that is
disputed by the Indemnifying Party, upon a subsequent determination by
final judgment not subject to appeal that all or a portion of such
indemnity obligation was not owed to the Indemnified Party, the
Indemnified Party shall pay the Indemnifying Party the amount which was
set off and not owed together with interest from the date of set-off
until the date of such payment at an annual rate equal to the average
annual rate in effect as of the date of the set-off, on those three
maturities of United States Treasury obligations having a remaining
life, as of such date, closest to the period from the date of the
set-off to the date of such judgment. Upon judgment, determination,
settlement or compromise of any third party Claim, the Indemnifying
Party shall pay promptly on behalf of the Indemnified Party, and/or to
the Indemnified Party in reimbursement of any amount theretofore
required to be paid by it, the amount so determined by judgment,
determination, settlement or compromise and all other Claims of the
Indemnified Party with respect thereto, unless in the case of a
judgment an appeal is made from the judgment. If the Indemnifying Party
desires to appeal from an adverse judgment, then the Indemnifying Party
shall post and pay the cost of the security or bond to stay execution
of the judgment pending appeal. Upon the payment in full by the
Indemnifying Party of such amounts, the Indemnifying Party shall
succeed to the rights of such Indemnified Party, to the extent not
waived in settlement, against the third party who made such third party
Claim.
12.6 Limitations on Indemnification. Except for any fraud, willful or
knowing breach or misrepresentation, as to which claims may be brought
without limitation as to time or amount:
12.6(a) Time Limitation. No claim or action shall be brought under
this Article 12 for breach of a representation or warranty
after the lapse of two (2) years following the Closing.
Regardless of the foregoing, however, or any other provision
of this Agreement:
(i) The time limitation on claims on actions brought for
breach of any representation or warranty made in or
pursuant to Section 5.9(a) shall be the applicable
statutory limitation period with respect thereto.
(ii) Any claim or action brought for breach of any
representation or warranty made in or pursuant to
Section 5.3 may be brought at any time until the
underlying tax obligation is barred by the applicable
period of limitation under federal and state laws
relating thereto (as such period may be extended by
waiver).
(iii) Any claim made by a party hereunder by filing a suit
or action in a court of competent jurisdiction or a
court reasonably believed to be of competent
jurisdiction or by a demand for arbitration in
accordance with Article 18 hereof for breach of a
representation or warranty prior
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
33
to the termination of the survival period for such
claim shall be preserved despite the subsequent
termination of such survival period.
(iv) If any act, omission, disclosure or failure to
disclosure shall form the basis for a claim for
breach of more than one representation or warranty,
and such claims have different periods of survival
hereunder, the termination of the survival period of
one claim shall not affect a party's right to make a
claim based on the breach of representation or
warranty still surviving.
12.6(b) Amount Limitation. Except with respect to claims for breaches
of representations or warranties contained in Section 5.9(a)
and claims related to Sections 12.1(c), 12.4, and 12.5, an
Indemnified Party shall not be entitled to indemnification
under this Article 12 for breach of a representation or
warranty unless the aggregate of the Indemnifying Party's
indemnification obligations to the Indemnified Party pursuant
to this Article 12 (but for this Section 12.7(b)) exceeds Two
Hundred Twenty-Five Thousand and no/100 Dollars ($225,000.00);
but in such event, the Indemnified Party shall be entitled to
indemnification in full for all breaches of representations
and/or warranties. Except with respect to claims related to
Sections 12.1(c), the liability of Company under this Article
12 shall be limited to Seven Million Five Hundred Thousand and
no/100 Dollars ($7,500,000.00).
12.7 No Waiver. The closing of the transactions contemplated by this
Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of
condition constituting the basis of the Claim at or before the Closing,
and regardless of whether such breach, violation or failure is deemed
to be "material."
12.8 Right to Set-Off. If a claim for indemnification is made by the Buyer
as the Indemnified Party under this Article 12, the Buyer shall by
written notice to the Company (and without limiting any other rights it
may have at law or in equity) offset such amount by (i) any payments
due Company under the Escrow Agreement; and (ii) any payments due
Company under the Patent Assignment and Cross-Licensing Agreement and
Trademark Agreement. To the extent that the amount due from the Company
exceeds any offset amounts which are payable within sixty (60) days, or
to the extent that the amount due from the Company exceeds Five Hundred
Thousand and no/100 Dollars ($500,000.00), the difference shall be due
from the Company promptly.
12.9 Exclusivity of Article 12 Indemnity. Each Indemnified Party
acknowledges that, from and after the Closing Date, its sole and
exclusive remedy with respect to any and all claims and causes of
action relating to this Agreement and the transactions contemplated
hereby shall be pursuant to the indemnification provisions set forth in
this Article 12. In furtherance of the foregoing, each Indemnified
Party hereby waives and releases, from and after the Closing Date, any
and all rights, claims, and causes of action (other than indemnity
claims arising under this Article 12) it may have relating to this
Agreement
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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and the transactions contemplated hereby. Each Indemnified Party makes
this waiver and release with full knowledge that it may be releasing
presently unknown or unsuspected claims.
ARTICLE 13
CLOSING
The closing of this transaction ("▇▇▇ ▇▇▇▇▇▇▇") shall take place on
February 11, 2003, by facsimile transmission, or at such other time, place, and
method as the parties hereto shall agree upon. Such date is referred to in this
Agreement as the "Closing Date."
13.1 Documents to be Delivered by Company. At the Closing, Company shall
deliver to Buyer the following documents, in each case duly executed or
otherwise in proper form:
13.1(a) Deeds, Bills of Sale. Warranty deeds to real estate and bills
of sale and such other instruments of assignment, transfer,
conveyance and endorsement as will be sufficient in the
opinion of Buyer and its counsel to transfer, assign, convey
and deliver to Buyer the Purchased Assets as contemplated
hereby.
13.1(b) Compliance Certificate. A certificate signed by the chief
executive officer of Company that each of the representations
and warranties made by Company in this Agreement is true and
correct in all material respects on and as of the Closing
Date, and that Company has performed and complied with all of
Company's obligations under this Agreement which are to be
performed or complied with on or prior to the Closing Date.
13.1(c) Opinion of Counsel. A written opinion of Cooley Godward, LLP,
counsel to Company, dated as of the Closing Date, addressed to
Buyer, substantially in the form of Exhibit D hereto.
13.1(d) Employment and Noncompetition Agreements. The Employment and
Noncompetition Agreements referred to in Sections 7.1 and 8.3,
duly executed by the persons referred to in such Sections.
13.1(e) Certified Resolutions. A certified copy of the resolutions of
the Board of Directors of Company authorizing and approving
this Agreement and the consummation of the transactions
contemplated by this Agreement.
13.1(f) Patent Assignment and Cross-License and Trademark License
Agreement. The Patent Assignment and Cross-License and
Trademark License Agreement duly executed by the Company in
the form of Exhibit A hereto.
13.1(g) Transition Services Agreement. The Transition Services
Agreement duly executed by Company in form of Exhibit B
hereto.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
35
13.1(h) Incumbency Certificate. Incumbency certificates relating to
each person executing any document executed and delivered to
Buyer pursuant to the terms hereof.
13.1(i) Other Documents. All other documents, instruments or writings
required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement and such other certificates of
authority and documents as Buyer may reasonably request.
13.2 Documents to be Delivered by Buyer. At the Closing, Buyer shall deliver
to Company the following documents, in each case duly executed or
otherwise in proper form:
13.2(a) Cash Purchase Price. To Company by wire transfer as required
by Section 4.1(a) hereof.
13.2(b) Assumption of Liabilities. Such undertakings and instruments
of assumption as will be reasonably sufficient in the opinion
of Company and its counsel to evidence the assumption of
Company debts, liabilities and obligations as provided for in
Section 3.1.
13.2(c) Compliance Certificate. A certificate signed by the chief
operating officer of Buyer that the representations and
warranties made by Buyer in this Agreement are true and
correct on and as of the Closing Date, and that Buyer has
performed and complied with all of Buyer's obligations under
this Agreement which are to be performed or complied with on
or prior to the Closing Date.
13.2(d) Opinion of Counsel. A written opinion of Dunkley, Bennett,
▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., counsel to Buyer, dated as of the
Closing Date, addressed to Company, in substantially the form
of Exhibit E hereto.
13.2(e) Certified Resolutions. A certified copy of the resolutions of
the Board of Directors of Buyer authorizing and approving this
Agreement and the consummation of the transactions
contemplated by this Agreement.
13.2(f) Patent Assignment and Cross-License and Trademark License
Agreement. The Patent Assignment and Cross-License and
Trademark License Agreement duly executed by Buyer in the form
of Exhibit A hereto.
13.2(g) Transition Services Agreement. The Transition Services
Agreement duly executed by Buyer in the form of Exhibit B
hereto.
13.2(h) Incumbency Certificate. Incumbency certificates relating to
each person executing any document executed and delivered to
Company by Buyer pursuant to the terms hereof.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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13.2(i) Other Documents. All other documents, instruments or writings
required to be delivered to Company at or prior to the Closing
pursuant to this Agreement and such other certificates of
authority and documents as Company may reasonably request.
ARTICLE 14
DISCLOSURE SCHEDULE
The Schedules are attached to this Agreement (the "Disclosure
Schedule") and have been executed by Company and dated and delivered to Buyer on
the date hereof. Information set forth in the Disclosure Schedule specifically
refers to the article and section of this Agreement to which such information is
responsive and such information shall not be deemed to have been disclosed with
respect to any other article or section of this Agreement or for any other
purpose except where appropriate, provided such disclosure is obvious and clear.
The Disclosure Schedule shall not vary, change or alter the language of the
representations and warranties contained in this Agreement and, to the extent
the language in the Disclosure Schedule does not conform in every respect to the
language of such representations and warranties, such language shall be
disregarded and be of no force or effect.
ARTICLE 15
FURTHER ASSURANCE
From time to time and without further consideration, each party hereto
will execute and deliver to the other party hereto such documents and take such
other action as may be reasonably required or requested in order to consummate
more effectively the transactions contemplated hereby and to vest in Buyer good,
valid and marketable title to the Purchased Assets.
ARTICLE 16
ANNOUNCEMENTS
Announcements concerning the transactions provided for in this
Agreement by either Company or Buyer shall be subject to the approval of the
other in all essential respects, except that one party's approval shall not be
required as to any statements and other information which the other party may
submit to the Securities and Exchange Commission, or their stockholders or be
required to make pursuant to any rule or regulation of the Securities and
Exchange Commission or NASDAQ, or otherwise required by law.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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ARTICLE 17
ASSIGNMENT; PARTIES IN INTEREST
17.1 Assignment. Except as expressly provided herein, the rights and
obligations of a party hereunder may not be assigned, transferred or
encumbered without the prior written consent of the other parties.
Notwithstanding the foregoing, Buyer may, without consent of any other
party, cause one or more subsidiaries of Buyer to carry out all or part
of the transactions contemplated hereby; provided, however, that Buyer
shall, nevertheless, remain liable for all of its obligations, and
those of any such subsidiary, to Company hereunder.
17.2 Parties in Interest. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by the respective successors and
permitted assigns of the parties hereto. Nothing contained herein shall
be deemed to confer upon any other person any right or remedy under or
by reason of this Agreement.
ARTICLE 18
RESOLUTION OF DISPUTES
18.1 Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement or any contract or agreement entered into
pursuant hereto or the performance by the parties of its or their terms
shall be settled by binding arbitration held in Denver, Colorado, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect, except as specifically
otherwise provided in this Article 18. Notwithstanding the foregoing,
Buyer may, in its discretion, apply to a court of competent
jurisdiction for equitable relief from any violation or threatened
violation of the covenants of Company under Section 8.4 of this
Agreement, or any covenants not to compete contained in any Employment
and Noncompetition Agreement delivered pursuant to Section 8.3 hereof.
18.2 Arbitrators. The panel to be appointed shall consist of one neutral
arbitrator approved by the parties.
18.3 Procedures; No Appeal. The arbitrator shall allow such discovery as the
arbitrator determine appropriate under the circumstances and shall
resolve the dispute as expeditiously as practicable, and if reasonably
practicable, within 120 days after the selection of the arbitrator. The
arbitrator shall give the parties written notice of the decision, with
the reasons therefor set out, and shall have 30 days thereafter to
reconsider and modify such decision if any party so requests within 10
days after the decision. Thereafter, the decision of the arbitrator
shall be final, binding, and nonappealable with respect to all persons,
including (without limitation) persons who have failed or refused to
participate in the arbitration process.
18.4 Authority. The arbitrator shall have authority to award relief under
legal or equitable principles, including interim or preliminary relief,
and to allocate responsibility for the costs of the arbitration and to
award recovery of attorneys fees and expenses in such manner as is
determined to be appropriate by the arbitrator(s).
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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18.5 Entry of Judgment. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having in personam and
subject matter jurisdiction. Company and Buyer hereby submit to the in
personam jurisdiction of the Federal and State courts in Minneapolis,
Minnesota, for the purpose of confirming any such award and entering
judgment thereon.
18.6 Confidentiality. All proceedings under this Article 18, and all
evidence given or discovered pursuant hereto, shall be maintained in
confidence by all parties.
18.7 Continued Performance. The fact that the dispute resolution procedures
specified in this Article 18 shall have been or may be invoked shall
not excuse any party from performing its obligations under this
Agreement and during the pendency of any such procedure all parties
shall continue to perform their respective obligations in good faith,
subject to any rights to terminate this Agreement that may be available
to any party and to the right of setoff provided in Section 12.4
hereof.
18.8 Tolling. All applicable statutes of limitation shall be tolled while
the procedures specified in this Article 18 are pending. The parties
will take such action, if any, required to effectuate such tolling.
ARTICLE 19
LAW GOVERNING AGREEMENT
This Agreement may not be modified or terminated orally, and shall be
construed and interpreted according to the internal laws of the State of
Minnesota, excluding any choice of law rules that may direct the application of
the laws of another jurisdiction.
ARTICLE 20
AMENDMENT AND MODIFICATION
Buyer and Company may amend, modify and supplement this Agreement in
such manner as may be agreed upon by them in writing.
ARTICLE 21
NOTICE
All notices, requests, demands and other communications hereunder shall
be given in writing and shall be: (a) personally delivered; (b) sent by
telecopier, facsimile transmission or other electronic means of transmitting
written documents; or (c) sent to the parties at their respective addresses
indicated herein by registered or certified U.S. mail, return receipt requested
and postage prepaid, or by private overnight mail courier service. The
respective addresses to be used for all such notices, demands or requests are as
follows:
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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(a) If to Buyer, to:
Entegris, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Dunkley, Bennett, ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as Buyer shall furnish to Company in writing.
(b) If to Company, to:
Asyst Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(with a copy to)
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ Godward, LLP
Five Palo Alto Square
▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other person or address as Company shall furnish to Buyer in writing.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this paragraph,
such communication shall be deemed delivered the next business day after
transmission (and sender shall bear the burden of proof of delivery); if sent by
overnight courier pursuant to this paragraph, such communication shall be deemed
delivered upon receipt; and if sent by U.S. mail pursuant to this paragraph,
such communication shall be deemed delivered as of the date of delivery
indicated on the receipt issued by the relevant postal service, or, if the
addressee fails or refuses to accept delivery, as of the date of such failure or
refusal. Any party to this Agreement may change its address for the purposes of
this Agreement by giving notice thereof in accordance with this Section.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
40
ARTICLE 22
EXPENSES
Regardless of whether or not the transactions contemplated hereby are
consummated:
22.1 Brokerage. Except as to U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc., who shall be
compensated by Company, Company and Buyer each represent and warrant to
each other that there is no broker involved or in any way connected
with the transactions provided for herein. Buyer agrees to hold Company
harmless from and against all other claims for brokerage commissions or
finder's fees incurred through any act of Buyer in connection with the
execution of this Agreement or the transactions provided for herein.
Company agrees to hold Buyer harmless from and against all other claims
for brokerage commissions or finder's fees incurred through any act of
Company or any shareholder in connection with the execution of this
Agreement or the transactions provided for herein.
22.2 Expenses to be Paid by Company. Company shall pay, and shall indemnify,
defend and hold Buyer harmless from and against, each of the following:
22.2(a) Professional Fees. All fees and expenses of Company's legal,
accounting, investment banking and other professional counsel
in connection with the transactions contemplated hereby.
22.3 Other. Except as otherwise provided herein, each of the parties shall
bear its own expenses and the expenses of its counsel and other agents
in connection with the transactions contemplated hereby.
22.4 Costs of Litigation or Arbitration. The parties agree that (subject to
the discretion, in an arbitration proceeding, of the arbitrator as set
forth in Section 18.4) the prevailing party in any action brought with
respect to or to enforce any right or remedy under this Agreement shall
be entitled to recover from the other party or parties all reasonable
costs and expenses of any nature whatsoever incurred by the prevailing
party in connection with such action, including without limitation
attorneys' fees and prejudgment interest.
ARTICLE 23
ENTIRE AGREEMENT
Other than a side letter, Transition Services Agreement, and Patent
Assignment and Cross-License and Trademark License Agreement entered into
between the parties as of the Closing Date, this instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements, representations
or warranties between the parties other than those set forth or provided for
herein and the mutual nondisclosure agreement entered into by the parties, dated
August 8, 2002, as extended.
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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ARTICLE 24
COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
ARTICLE 25
HEADINGS
The headings in this Agreement are inserted for convenience only and
shall not constitute a part hereof.
ARTICLE 26
SEVERABILITY
In case any provision of this Agreement shall be invalid, illegal, or
unenforceable, it shall, to the extent possible, be modified in such manner as
to be valid, legal, and enforceable but so as most nearly to retain the intent
of the parties. If such modification is not possible, such provision shall be
severed from this Agreement. In either case the validity, legality, and
enforceability of the remaining provisions of this Agreement shall not in any
way be affected or impaired thereby.
ARTICLE 27
THIRD-PARTY BENEFICIARIES
With the exception of the parties to this Agreement, there shall exist
no right of any person to claim a beneficial interest in this Agreement or any
rights occurring by virtue of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
ASYST TECHNOLOGIES, INC. ENTEGRIS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------- -------------------
Its: Senior Vice President and Its: Chief Operating Officer
Chief Financial Officer
ENTEGRIS CAYMAN LTD.
By: /s/ ▇▇▇▇ ▇. Villas
-------------------
Its: Director
[*] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.
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