CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
EXHIBIT 3.2
==============================================================================
ASSET PURCHASE AGREEMENT
BETWEEN
CELESTICA CORPORATION
(AS "BUYER"),
CELESTICA INC.
(AS "GUARANTOR")
AND
INTERNATIONAL BUSINESS MACHINES CORPORATION,
(AS "SELLER")
DATED: JANUARY 12, 2000
Asset Purchase Agreement 112399 Confidential
==============================================================================
TABLE OF CONTENTS
Article I. Purchase and Sale of Assets ................................ 6
1.1 Transferred Assets ......................................... 6
1.2 Excluded Assets ............................................ 6
1.3 Consideration .............................................. 6
1.4 Assumed Liabilities ........................................ 7
Article II. Closing .................................................... 7
2.1 Closing Date ............................................... 7
2.2 Closing Statement .......................................... 7
Article III. Tax Matters ................................................ 8
3.1 Allocation of Purchase Price ............................... 8
3.2 Filing of Returns and Payment of Taxes ..................... 8
3.3 Refunds and Credits ........................................ 8
3.4 Transfer Taxes ............................................. 8
Article IV. Additional Covenants and Agreements ........................ 9
4.1 Consents, Novations and Subcontracted Work ................. 9
4.2 Employees and Employee Benefits ............................ 9
4.3 Shrink-Wrap Software ....................................... 11
4.4 Further Action ............................................. 12
4.5 Investigation of Environmental Conditions .................. 12
4.6 Guarantee .................................................. 13
4.7 Post-Closing Payments ...................................... 13
Article V. Representations and Warranties of Buyer .................... 13
5.1 Incorporation .............................................. 13
5.2 Authority .................................................. 13
5.3 No Conflict ................................................ 14
5.4 Governmental Consents ...................................... 14
Asset Purchase Agreement 112399WCW Confidential
5.5 No Broker .................................................. 14
Article VI. Representations and Warranties of Seller ................... 14
6.1 Incorporation .............................................. 14
6.2 Authority .................................................. 15
6.3 No Conflict ................................................ 15
6.4 Governmental Consents ...................................... 15
6.5 No Broker .................................................. 15
6.6 Title to Personal Property ................................. 15
6.7 Litigation ................................................. 16
6.8 No Rights In Others To Transferred Assets .................. 16
6.9 Contracts .................................................. 16
6.10 Licenses and Permits ....................................... 16
6.11 Employees .................................................. 16
6.12 Warranties ................................................. 17
6.13 Taxes ...................................................... 17
6.14 Other Information .......................................... 17
6.15 Financial Information ...................................... 17
Article VII. Conditions to Buyer's Obligations .......................... 17
7.1 Representations and Warranties ............................. 18
7.2 Consents, Approvals and Injunctions ........................ 18
7.3 Consents, Burdensome Conditions ............................ 18
7.4 Governmental Rule .......................................... 18
7.5 Operative Agreements ....................................... 18
7.6 Closing Documents .......................................... 18
7.7 Proceedings ................................................ 19
Article VIII. Conditions to Seller's Obligations ......................... 19
8.1 Payment of Purchase Price .................................. 19
8.2 Representations and Warranties ............................. 20
Asset Purchase Agreement 112399WCW Confidential
8.3 Consents, Burdensome Conditions ............................ 20
8.4 Operative Agreements ....................................... 20
8.5 Closing Documents .......................................... 20
8.6 Proceedings ................................................ 20
8.7 Employees .................................................. 21
Article IX. General Matters ............................................ 21
9.1 Survival of Representations and Warranties ................. 21
9.2 Limitation of Liability .................................... 21
9.3 Public Announcements ....................................... 21
9.4 Costs ...................................................... 22
9.5 Due Diligence .............................................. 22
9.6 Bulk Sales ................................................. 22
9.7 Modification and Waiver .................................... 22
9.8 Governing Law .............................................. 22
9.9 Notices .................................................... 22
9.10 Assignment ................................................. 23
9.11 Counterparts ............................................... 24
9.12 No Third Party Beneficiaries ............................... 24
9.13 Entire Agreement ........................................... 24
Exhibits:
Exhibit A Assumption Agreement
Exhibit B Bill of Sale
Exhibit C Schedule of Disclosures and Exceptions
Exhibit D Lease Agreement
Asset Purchase Agreement 112399WCW Confidential
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, dated as of January 12, 2000, by and among
Celestica Corporation, a Delaware corporation ("Buyer") and a wholly owned
direct or indirect subsidiary of Celestica Inc., Clestica Inc., incorporated
under the laws of the Province of Ontario, Canada ("Guarantor") and
International Business Machines Corporation, a New York corporation
("Seller").
WITNESSETH:
------------
WHEREAS, Seller wishes to sell certain assets used in the
production of manufacturing components; and
WHEREAS, ▇▇▇▇▇ wishes to purchase from Seller, and Seller wishes to
sell to Buyer, the Transferred Assets (as defined herein) for the purchase
price and subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises set forth above
and the respective covenants, agreements, representation and warranties
hereinafter set forth, Buyer and Seller hereby agree as follows:
DEFINITIONS.
------------
CERTAIN DEFINITIONS. As used in this Agreement, the following
terms shall have the meanings specified below:
"AFFILIATE" shall mean, as to any Person, any other Person or
entity which is controlling, controlled by or under common control with such
Person or entity.
"ALLOCATION STATEMENTS" shall have the meaning set forth in Section
3.1.
"ASSUMED LIABILITIES" shall have the meaning set forth in Section
1.4.
"ASSUMPTION AGREEMENT" shall mean the Assignment and Assumption
Agreement in the form set out in Exhibit A to be entered into by the Buyer
and the Seller on the Closing Date and by which ▇▇▇▇▇ assumes the Assumed
Liabilities.
"BILL OF SALE" shall mean the Bill of Sale in the form set out in
Exhibit B to be entered into by the Buyer and Seller on the Closing Date.
Asset Purchase Agreement 112399 Confidential
"BURDENSOME CONDITION" shall mean any action taken or credibly
threatened, by or before any Governmental Authority or other Person to
challenge the legality of the transactions contemplated by the Operative
Agreements or that would otherwise deprive a Party of the material benefit of
any such transaction, including (i) the pendency of an investigation by a
Governmental Authority (formal or informal), (ii) the institution of any
litigation, or threat thereof, (iii) an order by a Governmental Authority of
competent jurisdiction preventing consummation of the transactions
contemplated by the Operative Agreements or placing material conditions or
limitations upon such consummation, or (iv) the issuance of any subpoena,
civil investigative demand or other request for documents or information
relating to such transactions that is unreasonably burdensome in the
reasonable judgment of the applicable Person.
"CLOSING" shall have the meaning set forth in Section 2.1.
"CLOSING DATE" shall have the meaning set forth in Section 2.1.
"CLOSING STATEMENT" shall have the meaning set forth in Section 2.2.
"COBRA" shall have the meaning set forth in Section 6.11.
"CODE" shall have the meaning set forth in Section 3.1.
"CONFIDENTIALITY AGREEMENT" shall mean that certain letter
agreement between Celestica Inc. and ▇▇▇▇▇▇, dated August 5, 1999, concerning
the subject matter of this Agreement.
"control" means, in respect of any Person, the power or authority
to direct, or cause the direction of, directly or indirectly, the management,
policies or actions of any other Person, whether through the ownership of
equity securities or voting securities or by contract or otherwise (and
"controlling" and "controlled by" shall be construed accordingly).
"DATE OF EXECUTION" shall mean the date this Agreement and the
other Operative Agreements identified for signature on that date are signed.
"DISCLOSURE SCHEDULE" shall have the meaning set forth in the
Schedule of Disclosures and Exceptions to this Agreement.
"EMPLOYEES" shall have the meaning set forth in Section 4.2.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and
foreign laws and regulations relating to the protection of human health or
the environment (including ambient air, surface water, groundwater, land
surface or subsurface strata) including laws and regulations relating to the
release of Hazardous Materials, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
Asset Purchase Agreement 112399 2 Confidential
"ERISA" means the Employee Retirement Income Security Act of 1974
as amended.
"FINANCIAL INFORMATION" means the financial information attached as
Schedule A.
"GOVERNMENTAL ACTIONS" shall mean any authorizations, consents,
approvals, waivers, exceptions, variances, franchises, permissions, permits,
and licenses of, and filings and declarations with, Governmental Authorities,
including the expiration or termination of waiting periods imposed under the
HSR Act.
"GOVERNMENTAL AUTHORITY" shall mean any Federal, state, local or
foreign court, governmental or administrative agency or commission or other
governmental agency, authority, instrumentality or regulatory body.
"GOVERNMENTAL RULE" shall mean any statute, law, treaty, rule,
code, ordinance, regulatioin or order of any Governmental Authority or any
judgment, decree, injunction, writ, order or like action of any Federal,
state, local or foreign court, arbitrator or other judicial tribunal of
competent jursidiction.
"GUARANTOR" shall mean Celestica Inc., an Ontario corporation.
"HAZARDOUS MATERIALS" shall mean only those pollutants,
contaminants or wastes that are included in the definition of such terms in
any applicable Environmental Law.
"HSR ACT" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"INTELLECTUAL PROPERTY AGREEMENT" shall mean the agreement so
entitled between the Seller and Celestica Liquidity Management Hungary
L.L.C., an Hungarian limited liability company, entered into on the Date of
Execution, dealing with intellectual property in connection with the
Rochester site where assets are being transferred under this Agreement.
"LEASE AGREEMENT" shall mean the Real Estate Lease Agreement
between the Buyer and Seller, to be entered into on the Closing Date, the
form of which is attached hereto as Exhibit D.
"LEASED PREMISES" shall have the meaning set forth in the Lease
Agreement.
"LIMITATION AMOUNT" shall have the meaning set forth in Section 9.2.
"OPERATIVE AGREEMENTS" shall mean this Agreement, the Intellectual
Property Agreement, the Bill of Sale, the Assumption Agreement, the Lease
Agreement, the Supply Agreement and the Transition Services Agreement.
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"PARTIES" shall mean Buyer, Seller and Guarantor.
"PARTY" shall mean Buyer, Seller or Guarantor, respectively, as
applicable.
"PERMITTED LIENS" shall mean: (i) liens for Taxes, assessments and
governmental charges due and being contested in good faith by Seller; (ii)
any liens upon any of the Transferred Assets, provided that the same are not
of such a nature that would individually or in the aggregate materially
adversely affect the value of the Transferred Assets; (iii) liens for Taxes
either not due and payable or due but for which notice of assessment has not
been given, or which may thereafter be paid without penalty; (iv)
undetermined or inchoate liens, charges and privileges incidental to current
operations or the ordinary course of business; any statutory liens, charges,
adverse claims, security interests or encumbrances of any nature whatsoever
claimed or held by any Governmental Authority that have not at the time been
filed and registered against title to the Transferred Assets or that relate
to obligations that are not due or delinquent; (v) security given in the
ordinary course of business to any public utility, Governmental Authority or
to any statutory or public authority in connection with the Transferred
Assets; (vi) other imperfections of title or encumbrances, if any, which
imperfections of title or other encumbrances do not materially impair the use
of the assets to which they relate; and (vii) all encumbrances, covenants,
easements, agreements and restrictions of record applicable to the land and
buildings thereon which encumber Buyer's leasehold interest and are described
in the Lease Agreement.
"PERSON" shall mean any individual, firm, corporation, partnership,
limited liability company, trust, joint venture, Governmental Authority or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
"PRE-CLOSING TAX PERIOD" shall have the meaning set forth in
Section 3.2.
"PURCHASE PRICE" shall have the meaning specified in Section 1.3.
"REGULAR EMPLOYEES" shall have the meaning set forth in Section 4.2.
"RETAINED ENVIRONMENTAL LIABILITIES" shall mean any liability,
obligation, judgment, penalty, fine, cost or expense, of any kind or nature,
or the duty to indemnify, defend or reimburse any Person with respect to: (i)
the presence on or before the Closing Date of any Hazardous Materials in the
soil, groundwater, surface water, air or building materials of the Seller's
Rochester site ("Pre-Existing Contamination"); (ii) the migration at any time
prior to or after the Closing Date of Pre-Existing Contamination to any other
real property, or the soil, groundwater, surface water, air or building
materials thereof; (iii) any transportation, transfer, recycling, storage,
use, handling, treatment, manufacture, removal, investigation, remediation,
release, emission, sale, disposal or distribution of any Hazardous Materials
or any waste containing Hazardous Materials conducted on or from the Seller's
Rochester site on or prior to the Closing Date or otherwise occurring prior
to the Closing Date in connection with or to benefit the operations at the
Seller's Rochester site ("Pre-Closing Hazardous Materials Activities"), (iv)
the exposure of any Person to Pre-Existing Contamination in the course of or
as
Asset Purchase Agreement 112399 4 Confidential
a consequence of any Pre-Closing Hazardous Materials Activities, without
regard to whether any health effect of the exposure has been manifested as of
the Closing PROVIDED, HOWEVER, that the burden of proof shall be on the Buyer
to show that such liability, obligation or expense with respect to such
Person was proximately caused by the Pre-Existing Contamination and arose
prior to Closing; (v) the violation of any Environmental Laws by Seller or
its Affiliates or their agents, employees, predecessors in interest,
contractors, invitees or licensees on or prior to the Closing Date or in
connection with any Pre-Closing Hazardous Materials Activities on or prior to
the Closing Date; (vi) any actions or proceedings brought or threatened by
any third party with respect to any of the foregoing; and (vii) any of the
foregoing to the extent they continue after the Closing Date.
"SERVICE CREDIT" shall have the meaning set forth in Section 4.2.
"SUBCONTRACTED WORK" shall have the meaning set forth in Section
4.1.
"SUBSIDIARY" of any Person shall mean a corporation, company, or
other entity (i) more than 50% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other
managing authority) are, or (ii) which does not have outstanding shares or
securities (as may be the case in a partnership, limited liability company,
joint venture or unincorporated association), but more than 50% of whose
ownership interest representing the right to make decisions for such entity
is, now or hereafter owned or controlled, directly or indirectly, by such
Person, but such corporation, company or other entity shall be deemed to be a
Subsidiary only so long as such ownership or control exists.
"SUPPLEMENTAL EMPLOYEES" shall have the meaning set forth in
Section 4.2.
"SUPPLY AGREEMENT" shall mean the agreement so entitled between the
Buyer and Seller entered into on the Date of Execution.
"TAX" OR "TAXES" shall mean all taxes, imposts, duties,
withholdings, charges, fees, levies, or other assessments imposed by any
governmental or taxing authority, whether domestic or foreign (including but
not limited to, income, excise, property, sales, use, transfer, conveyance,
payroll or other employment related tax, license, ad valorem, value added,
withholding, social security, national insurance (or other similar
contributions or payments), franchise, estimated severance, stamp taxes,
taxes based upon or measured by capital stock, net worth or gross receipts
and other taxes), together with all interest, fines, penalties and additions
attributable to or imposed with respect to such amounts and any obligations
under any agreement or arrangements with any Person with respect to such
amounts.
"TAX RETURNS" shall have the meaning set forth in Section 3.2.
"TRANSFERRED ASSETS" shall mean such items of equipment, office
furniture, contracts, inventory, work in process and other assets which are
owned by Seller as are listed on the subschedules to Schedule 1.1 to this
Agreement, as the same may be depleted or augmented prior to the Closing Date
while being managed in the ordinary course of business.
Asset Purchase Agreement 112399 5 Confidential
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
"TRANSITION SERVICES AGREEMENT" shall mean the agreement so
entitled between the Buyer and Seller entered into on the Date of Execution.
ARTICLE I. PURCHASE AND SALE OF ASSETS.
1.1. TRANSFERRED ASSETS. Upon the terms and subject to the conditions
hereof, as of the Closing Date (as defined in Section 2.1 hereof), Seller
hereby sells, transfers, conveys, assigns and delivers to Buyer, and Buyer
hereby purchases and accepts from Seller, all right, title and interest of
Seller in and to the Transferred Assets (subject to the Closing Statement
adjustments), and leases the buildings described in and pursuant to the
provisions of the Lease Agreement. The Transferred Assets will be made
available on the Closing Date, where then located on the Rochester site, and
Buyer will make arrangements, if any, concerning possible repositioning,
packing, moving, and reinstallation of the Transferred Assets.
1.2. EXCLUDED ASSETS. Notwithstanding anything to the contrary in this
Agreement, any assets which are not Transferred Assets will be retained by
Seller and are excluded from the transaction, including (i) except as set
forth in Schedule 1.4., any interest in any contractual arrangement with any
Affiliate of Seller, and (ii) any interests of Seller in real property, other
than as set forth in the Lease Agreement. All intellectual property matters
are addressed exclusively in the Intellectual Property Agreement and no
intellectual property matters (other than as set forth in Section 4.3.) are
included in the subject matter of this Agreement.
1.3. CONSIDERATION. The purchase price to be paid by Buyer to Seller
for the Transferred Assets and the Assumed Liabilities (the "Purchase Price")
shall be (a) the net book value of the Transferred Assets, as set forth in
this Agreement, which is seventy five million dollars ($75,000,000); plus (b)
fifty six million dollars ($56,000,000) in additional consideration; and (c)
plus any additional consideration to be paid by Buyer pursuant to Section
4.8., below. The $56,000,000 amount identified in (b) of the preceding
sentence is consideration for the know-how license provided by the
Intellectual Property Agreement. On the Closing Date, Buyer shall pay to
Seller the aggregate amount set forth in this Section 1.3., which is one
hundred thirty one million dollars ($131,000,000), by electronic funds
transfer, such sum in immediately available funds in U.S. dollars to the
following account.
Account Name: International Business Machines Corporation
Bank: Chase Manhattan
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Bank Contact: Chase Contact: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Account Number: ****
Asset Purchase Agreement 112399 6 Confidential
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
Reference: Celestica Corporation, Rochester Assets;
IBM Contact Person is ▇.▇. ▇▇▇▇
ABA Routing Number: ***
1.4. ASSUMED LIABILITIES. Upon the terms and subject to the conditions
hereof, as of the Closing, Seller will assign and transfer to Buyer, and
▇▇▇▇▇ will assume, and thereafter shall fully perform and discharge, on a
timely basis and in accordance with their respective terms, only the
liabilities and obligations of Seller listed on Schedule 1.4. hereto (the
"Assumed Liabilities"). Without limiting the generality of the foregoing,
except for the Assumed Liabilities or as provided in the Operative
Agreements, Buyer is not assuming any liability, obligation or commitment of
any nature of Seller (including, but not limited to, Retained Environmental
Liabilities) related to Seller's operations prior to Closing.
ARTICLE II. CLOSING.
2.1. CLOSING DATE. Subject to the conditions set forth in Articles VII
and VIII below, the closing of the transaction provided for in this Agreement
(the "Closing") shall take place at the offices of Seller at Armonk, New York
on the last business day of the calendar month, once this Agreement is
executed, when both of the following have occurred: (i) the expiration or
early termination of all applicable HSR Act waiting periods; and (ii) the
satisfaction or waiver of the other conditions set forth in Articles VII and
VIII hereof, or at such other time or on such other date as may be agreed
upon by ▇▇▇▇▇▇ and ▇▇▇▇▇ (the "Closing Date"). All transactions provided for
herein to occur on and as of the Closing Date shall be deemed to have
occurred simultaneously and to be effective as soon as the Parties have
completed the Closing or as of the close of business on the Closing Date,
whichever first occurs.
2.2. CLOSING STATEMENT. Five (5) days after Closing, Seller will
prepare and deliver to Buyer a closing statement for the physical assets and
inventory of the Transferred Assets (the "Closing Statement"), as of the
Closing Date. The purpose of the Closing Statement is to show the numerical
increase or decrease, as applicable, in the physical assets and inventory of
the Transferred Assets, between the Date of Execution and the Closing. Each
item of inventory will be assigned the same standard cost and manufacturing
value add that is set forth for such items of inventory in this Agreement at
the Date of Execution. Each physical asset other than inventory will be
assigned its net book value on the books of the Seller as of the Closing
Date. The Closing Statement shall become final and binding upon the Parties
unless ▇▇▇▇▇ gives written notice of its disagreement of such items included
on or excluded from the Closing Statement within ten (10) days following
Seller's receipt of the Closing Statement, which disagreement will be based
solely upon the methodology set forth in Schedule 2.2 for reviewing the
Closing Statement. Any such notice shall specify in reasonable detail the
nature of any disagreement so asserted. In the event that the Closing
Statement (as finally resolved) indicates an error in the
Asset Purchase Agreement 112399 7 Confidential
Purchase Price, within 15 days of such statement becoming final, such error
shall be corrected by either (i) Seller tendering a check to Buyer in the
event that Buyer overpaid at the Closing or (ii) Buyer tendering a check to
Seller in the event that Buyer underpaid at the Closing.
ARTICLE III. TAX MATTERS.
3.1. ALLOCATION OF PURCHASE PRICE. Buyer and Seller hereby agree to the
allocation of the Purchase Price set forth in Schedule 3.1. (the "Allocation
Statements"), allocating the total of the Purchase Price (and other payments
properly treated as additional Purchase Price for Tax purposes) to the
different Transferred Assets pursuant to Section 1060 of the Internal Revenue
code of 1986, as amended, and the Treasury Regulations promulgated thereunder
(hereinafter, the "Code").
Buyer and Seller shall each file all income, franchise and other Tax
Returns (as defined below), and execute such other documents as may be
required by any Governmental Authority, in a manner consistent with the
Allocation Statements. Buyer shall prepare the Form 8594 under Section 1060
of the Code based on the Allocation Statements and deliver such form and all
documentation used in the preparation and support of such form to Seller
within 30 days after the Closing Date. Buyer and Seller agree to file such
form with each relevant taxing authority and to refrain from taking any
position inconsistent with such form or the Allocation Statements.
3.2. FILING OF RETURNS AND PAYMENT OF TAXES. Seller shall prepare and
file, or cause to be prepared and filed, with the appropriate authorities all
Tax returns, reports and forms (herein "Tax Returns") and shall pay, or cause
to be paid, when due all Taxes relating to the Transferred Assets or their
use attributable to any taxable period which ends on or prior to the Closing
Date (herein "Pre-Closing Tax Period"). Buyer shall prepare and file, or
cause to be prepared and filed, with the appropriate authorities all Tax
Returns, and shall pay, or cause to be paid, when due all Taxes relating to
the Transferred Assets attributable to taxable periods which are not part of
the Pre-Closing Tax Period. If, in order to properly prepare its Tax Returns
or other documents required to be filed with governmental authorities, it is
necessary that a Party be furnished with additional information, documents or
records relating to the Transferred Assets, both Seller and Buyer agree to
use reasonable efforts to furnish or make available such non-privileged
information at the recipient's request, cost and expense; PROVIDED, HOWEVER,
that no Party shall be entitled to review or examine the Tax Returns of any
other Party.
For purposes of this Section 3.2., in the case of any Taxable period
that includes (but does not end on) the Closing Date (a "Straddle Period"),
the Taxes for the Pre-Closing Tax Period shall be computed as if the
Pre-Closing Tax Period ended as of the close of business on the Closing Date
and the amount of Taxes for the Post-Closing Tax Period shall be the excess,
if any, of (x) the Taxes for the Straddle Period over (y) the Taxes for the
Pre-Closing Tax Period.
3.3. REFUNDS AND CREDITS. Any refunds and credits attributable to the
Pre-Closing Tax Period shall be for the account of Seller and any refunds and
credits attributable to any period which is not part of the Pre-Closing Tax
Period are for the account of Buyer
Asset Purchase Agreement 112399 8 Confidential
3.4. TRANSFER TAXES. All transfer, documentary, sales, use,
registration, value-added and real estate transfer taxes and any similar
taxes and related fees (including interest, penalties and additions to Tax)
incurred in connection with this Agreement and the other Operative Agreements
and the transactions contemplated hereby and thereby shall be borne by Buyer,
in addition to the consideration provided for in Section 1.3. To the extent
legally able to do so, Buyer and Seller shall cooperate with each other to
obtain exemptions from such taxes, provided that neither Party shall be
obligated to seek any exemption that would require any governmental audit of
its books and records.
ARTICLE IV. ADDITIONAL COVENANTS AND AGREEMENTS.
4.1. CONSENTS, NOVATIONS AND SUBCONTRACTED WORK. Buyer and Seller shall
use reasonable efforts to obtain, as soon as practicable, all requisite
consents to transfers, assignments and novations, as the case may be, of all
of the Transferred Assets and the Assumed Liabilities. Buyer shall cooperate
with Seller (including, where necessary, entering into appropriate
instruments of assumption as shall be agreed upon) to have Seller released
from all liability to third parties with respect to the Assumed Liabilities,
and the Parties will each solicit such releases concurrently, in a manner
acceptable to the Parties, with the solicitation of consents from third
parties to the transfer, assignment and novation of the Transferred Assets
and the Assumed Liabilities; provided, that neither Party shall be required
to grant any additional consideration to any third party in order to obtain
any such consent, novation, assumption or release. For any Assumed
Liabilities for which Seller has any secondary liability to third parties,
Buyer shall provide Seller reasonable access and information in order for
Seller to ascertain continuing compliance by Buyer with all contract terms
and conditions applicable thereto. The material consents to assignments and
novations identified by the Parties as of the Date of Execution are listed on
Schedule 4.1. If any such required consents and novations cannot be secured
without the incurring of any significant additional costs, where additional
actions is deemed necessary by the Parties, the Parties agree to (other than
with respect to the ECAT Licensed Software set forth on Schedules 1.1(d) and
1.4) enter into such other arrangements with respect to the underlying
rights and obligations as shall permit Buyer to perform the obligations of
Seller thereunder, as a subcontractor or otherwise, and Buyer to obtain the
benefit thereof (the "Subcontracted Work"), and until the requisite consents
and novations are obtained, such obligations will not be deemed to be
included in the Assumed Liabilities and nothing contained herein will be
deemed to create an obligation or relationship that would constitute a breach
of the contract underlying such rights and obligations. ▇▇▇▇▇ agrees to
diligently perform and discharge the obligations of Seller in connection with
the Subcontracted Work directly, or indirectly through Seller, as applicable
and to the extent that consents to assignment and novation are obtained after
the Closing, the Parties agree that such obligations will no longer be
considered to be Subcontracted Work at such time, but will instead be deemed
to be Assumed Liabilities for all purposes of this Agreement.
4.2. EMPLOYEES AND EMPLOYEE BENEFITS. (a) Schedule 4.2.(a)(1) contains
a list of the regular employees employed by Seller as of the date hereof in
connection with the
Asset Purchase Agreement 112399 9 Confidential
Transferred Assets (including active employees and employees who are on leave
of absence or sick leave) (the "Regular Employees") and Schedule 4.2.(a)(2)
contains a list of the supplemental employees temporarily employed by Seller
as of the date hereof in connection with the Transferred Assets (the
"Supplemental Employees", and together with the Regular Employees, the
"Employees"). These schedules will be updated immediately prior to the
Closing to reflect changes in that population between the Date of Execution
and the Closing. Buyer shall make employment offers to the Employees
effective as of the Closing Date. The Regular Employees who shall have
received employment offers from Buyer and who begin their employment with
Buyer shall be employed by Buyer in accordance with the terms and conditions
set forth in subsections 4.2(b)(2), 4.2(c), 4.2(d) AND 4.2(e) below.
Supplemental Employees who shall have received employment offers from Buyer
and who begin their employment with Buyer shall be employed by Buyer in
accordance with the terms and conditions set forth in subsection 4.2(f) below.
(b) Effective upon the Closing, ▇▇▇▇▇ agrees that it will employ the
Regular Employees in the same positions and at the same salaries and
substantially the same terms and conditions, including benefit plans, as
those in effect immediately prior to the Closing. In determining whether
▇▇▇▇▇'s offer of employment to Regular Employees includes compensation
components that are substantially comparable in the aggregate to those
provided by Seller prior to Closing, such determination shall take into
consideration all stock options, restricted stock and restricted units
granted to the Regular Employees prior to the Closing. For twelve (12) months
after the Closing (or for purposes of seniority for the calculation of shift
preference, the later of (i) twelve (12) months after the Closing, and (ii)
as long as the shift arrangement existing on the Closing Date is in effect),
prior periods of a Regular Employee's employment with Seller (herein "Service
Credit") will be considered as employment with Buyer for purposes of
seniority for the calculation of shift preference and severance pay only.
Buyer has summarized its planned employment terms and benefit plans for the
Regular Employees in Schedule 4.2.(a)(3). Buyer shall implement the following
severance pay practice for the Regular Employees: if, within the first twelve
(12) months after Closing, a Regular Employee is involuntarily severed
without cause from full time employment with Buyer, such Regular Employee
shall receive one (1) week of severance pay for each six (6) months of
service, with a minimum of eight (8) weeks and a maximum of twenty-six (26)
weeks. Each week of severance pay will be an amount equal to one week of such
Regular Employee's total base cash employment compensation from Buyer for
full time employment. For one year from the Closing Date, ▇▇▇▇▇ agrees that
it will not change this severance pay practice as applied to the Regular
Employees. Buyer agrees to use reasonable efforts to obtain a general release
from such severed Regular Employees which includes Seller and its
Subsidiaries and Affiliates, as a condition of such severance pay. Nothing
contained in this Agreement shall be construed to in any way limit or prevent
Buyer from terminating any Regular Employee at any time for cause or for
reasons related to poor performance or conditions of employment. For the
purposes of this paragraph, "cause" shall mean the determinations of the
applicable courts, under the applicable common law and statutes, as "cause"
in such employment termination cases.
(c) Buyer shall be responsible as of Closing for all liabilities,
salaries, benefits and similar employer obligations for the post-Closing
period for all Regular Employees. Vacation
Asset Purchase Agreement 112399 10 Confidential
earned by Regular Employees in the calendar year in which the Closing takes
place will be transferred to and honoured by ▇▇▇▇▇. Seller shall pay Buyer a
cash payment per Regular Employee equal to such Regular Employee's daily base
salary for each vacation day earned prior to the Closing Date which such
Regular Employee has not taken as of the Closing Date. Buyer shall pay Seller
a cash payment per Employee equal to such Employee's daily base salary for
each previously taken but not yet earned vacation day for such Employee as of
the Closing Date.
(d) Buyer shall be responsible for liabilities with respect to the
termination of any Regular Employees by Buyer after the Closing, including
without limitation, health care continuation coverage with respect to plans
established or maintained by Buyer after the Closing, and damages or
settlements arising out of any claims of wrongful or illegal termination, and
for complying with the requirements of all applicable laws with respect to
any such termination.
(e) Seller agrees that, for a period of two years from the Closing Date,
it will not, directly or indirectly, solicit for employment any Regular
Employee (so long as such person is employed by Buyer); PROVIDED, HOWEVER,
that solicitation shall not include general employment advertising or the use
of any independent employment agency or search firm not specifically directed
to employees of Buyer or any of its Affiliates.
Buyer agrees that, for a period of two years from the Closing Date, it
will not, directly or indirectly, solicit for employment any employee of
Seller (or any of its Subsidiaries) employed in Rochester, Minn. or with whom
▇▇▇▇▇ had contact in connection with this transaction (so long as such
person is employed by Seller), PROVIDED, HOWEVER, that solicitation shall not
include general employment advertising or the use of any independent
employment agency or search firm not specifically directed to employees of
Seller or any of its Affiliates.
(f) Buyer will employ each Supplemental Employee as either a temporary
or regular employee of Buyer, or will enter into a contractor relationship
with any such Supplemental Employee, in each instance as Buyer may determine
in its own discretion. The terms and conditions of any such relationship
between Buyer and a Supplemental Employee shall be as determined by Buyer.
Prior periods of a Supplemental Employee's employment with Seller will not be
considered as employment with Buyer for any purpose. Buyer shall have no
responsibility for any liabilities, salaries, benefits, or similar employer
obligations accruing to the Supplemental Employees as a result of their
employment with Seller. Nothing contained in this Agreement shall be
construed in any way to limit or prevent Buyer from terminating any
Supplemental Employee at any time for any reason.
4.3. SHRINK-WRAP SOFTWARE. Seller shall transfer at Closing, to the
extent it has the legal right to do so and subject to the applicable license
agreements with the licensors, its royalty-free usage rights to the
shrink-wrap personal computer software (also known as conditions-of-use
software) being used in its ordinary course of business as of the Date of
Execution on the personal computers that are Transferred Assets. Seller
further agrees to transfer at Closing, to the extent it has the legal right
to do so and subject to the applicable license agreements with the licensors,
its royalty-free usage rights to all upgrades and updates (including
Asset Purchase Agreement 112399 11 Confidential
but not limited to Year 2000 upgrades and updates) to the shrink-wrap personal
computer software that is in Seller's possession and being used on the
personal computers that are as of the Closing Date. If such software
copyrights are owned by Seller, Seller's license terms and conditions
continue to apply.
4.4. FURTHER ACTION. The Parties each agree to execute and deliver
after the Closing Date such other documents, certificates, agreements and
other writings and to take such other actions as may be necessary or
desirable, in the opinion of the Parties' counsel in order to consummate or
implement expeditiously the transactions contemplated hereby.
4.5. INVESTIGATION OF ENVIRONMENTAL CONDITIONS. Prior to the Closing
Date, Buyer shall have the right to obtain and investigate such reports and
information concerning (i) the use, storage, transport or manufacture of
Hazardous Materials by Seller on or about the Leased Premises, (ii) exposure
of the Seller's employees to Hazardous Materials, (iii) the Hazardous
Materials disposal practices of Seller with respect to the electronic card
assembly and test activities at Seller's Rochester site, (iv) the presence or
absence of Hazardous Materials on or about the Leased Premises and (v) the
likelihood that Hazardous Materials on property in the vicinity of the Leases
Premises would have migrated to the Leased Premises from another location
(collectively, the "Environmental Matters"). Prior to Closing, Buyer and its
consultants and other representatives (i) shall have the right to enter the
Leased Premises for the purpose of conducting such inspections and tests and
taking such soil and groundwater samples as Buyer or its consultants or
representatives shall deem necessary, and (ii) shall have access to all
records relating to the Environmental Matters with respect to the electronic
card assembly and test activities at the Seller's Rochester site and the
Leased Premises. In this regard, ▇▇▇▇▇ shall have the right, but not the
obligation, to retain such environmental consultants as Buyer shall deem
desirable to assist ▇▇▇▇▇ in evaluating the Environmental Matters.
4.6. GUARANTEE. Guarantor hereby fully and unconditionally guarantees,
without notice and presentment or other legal formalities, (i) all of the
representations and warranties of, and (ii) the timely performance of all of
the obligations of, its Subsidiaries and Affiliates, including Buyer, under
all of the Operative Agreements and closing documents. Guarantor also agrees
to cause such Subsidiaries and Affiliates to perform all such obligations in
a timely manner. Guarantor hereby agrees and represents that, for the
purposes of this Agreement, for itself in its own corporate capacity, it will
meet the conditions of Sections 8.2., 8.3., 8.5., and 8.6., as if it were
Buyer.
4.7. POST-CLOSING PAYMENTS. The Parties acknowledge that, after the
Closing Date, Seller may make payments to third parties on behalf of Buyer
associated with the Transferred Assets and Assumed Liabilities. ▇▇▇▇▇ agrees
to reimburse Seller for such payments immediately upon receipt of an invoice
from Seller. Seller shall invoice Buyer monthly on the fifth (5th) day of each
month. If Buyer disputes such invoice on the basis that such payment did not
relate to the Transferred Assets or the Assumed Liabilities. Buyer shall,
within three (3) business days of receiving such invoice, give notice to
Seller of such dispute and the Parties shall
Asset Purchase Agreement 112399 12 Confidential
act in good faith to resolve such dispute. All amounts payable by Buyer to
Seller pursuant to this Section 4.8, shall be paid in immediately available
funds in U.S. dollars to Seller's account set forth in Section 1.3.
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller as follows:
5.1. INCORPORATION. Buyer is a duly organized and validly existing
corporation in good standing under the laws of the State of Delaware, and
Guarantor is a duly incorporated and validly existing corporation in good
standing under the laws of the State of Delaware, each with all requisite
corporate power and authority to own its properties and conduct its business.
5.2. AUTHORITY. Each of Buyer and Guarantor has the requisite corporate
power and authority to execute and deliver each of the Operative Agreements
and to perform its respective obligations under each of the foregoing. Each
of the Operative Agreements has been duly and validly authorized, executed
and delivered by each of Buyer and Guarantor and constitutes the valid and
binding agreement of Buyer and Guarantor in accordance with its respective
terms. No other corporate proceedings on the part of Buyer or corporate
proceedings on the part of Guarantor are necessary to authorize the Operative
Agreements and the transactions contemplated by any of the foregoing.
5.3. NO CONFLICT. The execution and delivery by each of Buyer and
Guarantor of each of the Operative Agreements does not, and the performance
of its obligations thereunder, will not:
(a) conflict with, or result in a breach of, any of the provisions of
Buyer's Certificate of Incorporation or Guarantor's Certificate of
Incorporation or By-laws;
(b) breach, violate or contravene any Governmental Rule, or create any
right of termination or acceleration or encumbrance, that, singly or in the
aggregate, would have a material adverse effect on the authority or ability
of either to perform either of its obligations under this Agreement, the
Lease Agreement, the Supply Agreement, the Transition Services Agreement and
the Assumption Agreement or the Assumed Liabilities; and
(c) conflict in any respect with, or result in a breach of or default
under, any contract, license, franchise, permit or any other agreement or
instrument to which either Buyer or Guarantor is a Party or by which either
Buyer or Guarantor or any of their properties may be affected or bound that,
singly or in the aggregate, would have a material adverse effect on the
authority or ability of either Buyer or Guarantor to perform its obligations
under this Agreement, the Lease Agreement, the Supply Agreement, the
Transition Services Agreement and the Assumption Agreement or the Assumed
Liabilities.
Asset Purchase Agreement 112399 13 Confidential
5.4. GOVERNMENTAL CONSENTS. Other than compliance with the HSR Act
pre-notification requirements, no material consent, approval or
authorization of, or designation, declaration or filing with, any
Governmental Authority on the part of Buyer or Guarantor is required in
connection with the execution or delivery by Buyer and Guarantor of this
Agreement, the Lease Agreement, the Supply Agreement, the Transition Services
Agreement or the Assumption Agreement, or the consummation by Buyer and
Guarantor of the transactions contemplated by any of the foregoing.
5.5. NO BROKER. Neither Buyer nor Guarantor has engaged any
corporation, firm or other Person who is entitled to any fee or commission as
a finder or a broker in connection with the negotiation of the Operative
Agreements or the consummation of the transactions contemplated thereby, and
Buyer and Guarantor shall be responsible for all liabilities and claims
(including costs and expenses of defending against same) arising in
connection with any claim by a finder or broker that it acted on behalf of
Buyer or Guarantor in connection with the transactions contemplated thereby.
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF SELLER.
Except as set forth on the disclosure schedule delivered by Seller to
Buyer (the "Disclosure Schedule"), Seller hereby represents and warrants to
Buyer as follows:
6.1. INCORPORATION. Seller is a duly incorporated and validly existing
corporation in good standing under the laws of the State of New York, with
all requisite corporate power and authority to own its properties and conduct
its business, and is duly qualified in each jurisdiction in which its
ownership of property requires such qualification except where the failure to
so qualify would not have a material adverse effect upon the Transferred
Assets.
6.2. AUTHORITY. Seller has the requisite corporate power and authority
to execute and deliver the Operative Agreements and to perform its
obligations under each of the foregoing. Each of the Operative Agreements has
been duly and validly authorized, executed and delivered by Seller and
constitutes the valid and binding agreement of Seller in accordance with its
respective terms. No other corporate proceedings on the part of Seller are
necessary to authorize the Operative Agreements and the transactions
contemplated by any of the foregoing.
6.3. NO CONFLICT. The execution and delivery by Seller of each of the
Operative Agreements does not, and the performance by Seller of its
obligations thereunder will not:
(a) conflict with, or result in a breach of, any of the provisions of
its Articles of Incorporation or By-laws;
(b) breach, violate or contravene any Governmental Rule, or create any
right of termination or acceleration or encumbrance, that, singly or in the
aggregate, would have a material adverse effect on (i) its authority or
ability to perform its obligations under this Agreement, the Lease Agreement,
the Supply Agreement, the Intellectual Property Agreement,
Asset Purchase Agreement 112399 14 Confidential
the Transition Services Agreement, the Assumption Agreement or the Bill of
Sale; or (ii) the Transferred Assets; and
(c) conflict in any respect with, or result in a breach of or default
under, any contract, license, franchise, permit or any other agreement or
instrument to which it is a party or by which it or any of the Transferred
Assets may be bound that, singly or in the aggregate, would have a material
adverse effect on (i) its authority or ability to perform its obligations
under this Agreement, the Lease Agreement, the Supply Agreement, the
Intellectual Property Agreement, the Transition Services Agreement, the
Assumption Agreement or the Bill of Sale; or (ii) the Transferred Assets
(except for agreements and instruments that require the consent or approval
of a third party for the transactions contemplated by this Agreement).
6.4. GOVERNMENTAL CONSENTS. Other than compliance with the HSR Act
pre-notification requirements and Section 6.10., no material consent,
approval or authorization of, or designation, declaration or filing with, any
Governmental Authority on the part of Seller is required in connection with
the execution or delivery by Seller of the Operative Agreements or the
consummation by Seller of the transactions contemplated by any of the
foregoing.
6.5. NO BROKER. Seller has engaged no corporation, firm or other Person
who is entitled to any fee or commission as a finder or a broker in
connection with the negotiation of the Operative Agreements or the
consummation of the transactions contemplated thereby, and Seller shall be
responsible for all liabilities and claims (including costs and expenses of
defending against same) arising in connection with any claim by a finder or
broker that it acted on behalf of Seller in connection with the transactions
contemplated thereby.
6.6. TITLE TO PERSONAL PROPERTY. Seller has good and marketable title
to all tangible personal property listed on Schedule 1.1. hereto, free and
clear of any liens or encumbrances, other than Permitted Liens. All of the
Transferred Assets are located at the Seller's Rochester site.
6.7. LITIGATION. There are no actions, suits, proceedings or
investigations pending or, to Seller's knowledge, threatened in a writing to
Seller against or directly affecting the Transferred Assets, at law or in
equity, including any administrative proceedings or condemnation actions with
any regulatory authority. There is no existing default by Seller with respect
to any judgment, order, writ, injunction or decree of any Governmental
Authority or arbitrator which materially adversely affects the Transferred
Assets.
6.8. NO RIGHTS IN OTHERS TO TRANSFERRED ASSETS. Neither Seller nor any
Affiliate of Seller is party to any outstanding contracts or other
arrangements giving any Person any present or future right to require Seller
to transfer to any Person any ownership or possessory interest in, or to
grant any lien on, any of the Transferred Assets, other than pursuant to this
Agreement.
6.9. CONTRACTS. Schedule 1.4. contains a true and complete list of all
material contracts included in the Assumed Liabilities. Seller has performed
or is performing all material
Asset Purchase Agreement 112399 15 Confidential
obligations required to be performed by it under such contracts and is not
(with or without notice, lapse of time or both) in breach or default in any
material respect thereunder, and, to the knowledge of Seller, no other party
to any of such contracts is (with or without notice, lapse of time or both)
in breach or default in any material respect thereunder.
6.10. LICENSES AND PERMITS. Seller has all licenses and permits and
other governmental authorizations and approvals required for Seller's
operation of the Transferred Assets, except where the failure to have such
licenses and permits would not have a material adverse effect on Seller's
ability to operate the Transferred Assets. All licenses and permits held by
Seller which are material to the operation of the Transferred Assets are
valid and in full force and effect and there are not pending or, to the
knowledge of Seller, threatened in a writing to Seller, any proceedings which
could result in the termination or impairment of any such license or permit
which termination or impairment would materially interfere with the operation
of the Transferred Assets as presently operated by Seller. Buyer must seek a
regulatory or other permitted transfer of, or obtain through separate
application for itself, any applicable licenses and permits, including
environmental licenses and permits, which are required for Buyer's operation
or ownership of the Transferred Assets. At Buyer's request and expense,
Seller will assist Buyer in obtaining the transfer of applicable licenses and
permits.
6.11. EMPLOYEES. (a) Seller is not a party to or bound by any union
contract insofar as it applies to the Transferred Assets or the Employees. No
representation petition has been filed with the National Labor Relations
Board and, to ▇▇▇▇▇▇'s knowledge, no union card signing campaign is in
progress at Seller's facility, concerning the Transferred Assets or the
Employees, other than recent organizational activity triggered by retirement
plan changes, which has been disclosed to Buyer.
(b) Each "employee benefit plan" (as such term is defined in Section
3(3) of ERISA) providing for benefits in connection with the performance of
services to Seller and maintained by Seller with respect to the Employees has
been identified in Schedule 6.11. and has been delivered to Buyer, together
with the most recent determination letter in the case of any "pension benefit
plan" (as such term is defined in Section 3(2) of ERISA). Other than as set
forth in this Section 6.11., Seller does not have any agreement or
understanding, whether written or oral, with any Employee concerning
employment benefits for such Employee from Seller. Seller retains and does
not transfer to Buyer any liability or obligation with respect to or under
any agreement between Seller and any of its employees except as set forth in
this Agreement, or under any "employee benefit plan". Seller has complied
with the health care continuation requirements under Section 601 et. seq. of
ERISA ("COBRA") with respect to the Employees and their spouses, former
spouses and dependents up through the Closing Date.
6.12. WARRANTIES. EXCEPT FOR THE EXPRESS REPRESENTATIONS AND WARRANTIES
MADE BY SELLER IN THIS ARTICLE VI, SELLER MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, CONCERNING THE TRANSFERRED ASSETS AND ASSUMED
LIABILITIES INCLUDING ENVIRONMENTAL MATTERS, IT BEING SPECIFICALLY UNDERSTOOD
BY BUYER THAT, EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE
VI,
Asset Purchase Agreement 112399 16 Confidential
THE TRANSFERRED ASSETS AND ASSUMED LIABILITIES ARE BEING SOLD AND TRANSFERRED
"AS IS" IN ALL RESPECTS. SELLER SPECIFICALLY DISCLAIMS ANY WARRANTY OF
MERCHANTABILITY OR SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF
BUYER'S, WHETHER OR NOT SELLER HAS BEEN MADE AWARE OF ANY SUCH PURPOSE.
6.13. TAXES. Seller has timely filed within the time period for filing
or any extension granted with respect thereto, all Tax returns which it is
required to file relating or pertaining to any and all Taxes attributable to
or levied upon the Transferred Assets with respect to the Pre-Closing Tax
Period and has paid any and all Taxes it is required to pay in connection
with the taxable period to which such Tax returns relate. There are (and as
of immediately following the Closing there will be) no liens for Taxes on the
Transferred Assets, other than Permitted Liens, and no action, proceeding or,
to the knowledge of Seller, investigation has been instituted against Seller
which would give rise to any such lien, other than Permitted Liens. Seller
has no knowledge of any claims asserted or threatened with respect to any
Taxes. None of the Transferred Assets are treated as "tax-exempt use
property" within the meaning of Section 168(b) of the Code.
6.14. OTHER INFORMATION. This Agreement, the Exhibits, Appendices and
Schedules hereto, as each may be amended prior to the Closing, and all
certificates delivered to Buyer and its representatives from Seller at
Closing in connection with this Agreement do not and will not contain any
untrue statement of any material fact and do not and when delivered will not
omit to state a material fact necessary to make the statement herein or
therein not misleading.
6.15. FINANCIAL INFORMATION. The Financial Information provided by
Seller to Buyer with respect to the Transferred Assets was derived from or
included in the financial records of the Seller, which have been maintained
in accordance with the Seller's normal internal practices for such
information.
ARTICLE VII. CONDITIONS TO BUYER'S OBLIGATIONS.
The obligation of Buyer to consummate the transactions contemplated
herein is subject to the satisfaction (or waiver by Buyer) of the conditions
set forth below in this Article.
7.1. REPRESENTATIONS AND WARRANTIES. Subject to Section 9.2., the
representations and warranties of Seller made in this Agreement shall be true
and correct in all material respects as of the Date of Execution and as of
the Closing Date with the same effect as if made at and as of the Closing
Date, except to the extent such representations and warranties expressly
relate to an earlier time. Seller shall have performed in all material
respects its respective covenants and agreements contained in this Agreement
and the other Operative Agreements required to be performed at or prior to
the Closing.
7.2. CONSENTS, APPROVALS AND INJUNCTIONS. (a) Seller shall have
obtained or made all consents, approvals, orders, licenses, permits and
authorizations of, and registrations,
Asset Purchase Agreement 112399 17 Confidential
declarations and filings with, any Governmental Authority or any other Person
required to be obtained or made by or with respect to the Transferred Assets
in connection with the execution and delivery of this Agreement.
(b) No injunction, order or decree of any Governmental Authority shall
be in effect as of the Closing, and no lawsuit, claim, proceeding or
investigation shall be pending or threatened by or before any Governmental
Authority as of the Closing, which would restrain, prohibit or make unlawful
the consummation of the transactions contemplated by the Operative Agreements
or invalidate or suspend any provision of the Operative Agreements.
(c) No action or proceeding challenging the transactions or any
provision of this Agreement or the other Operative Agreements shall be
pending or threatened against any party.
7.3. CONSENTS, ETC.; BURDENSOME CONDITIONS. (a) All Governmental
Actions set forth on Schedule 7.3.(a), including the issuance or transfer of
all permits or other consents of Governmental Authorities necessary for
Seller to transfer the Transferred Assets shall (i) have been taken, given or
obtained, (ii) be in full force and effect and (iii) not be subject to any
pending proceedings or appeals, administrative, judicial or otherwise (and
the time for appeal shall have expired or, if an appeal shall have been
taken, it shall have been dismissed).
(b) All consents of any other Person listed on Schedule 7.3.(b)
necessary in order for Seller to transfer the Transferred Assets shall have
been obtained and shall be in full force and effect.
(c) No Burdensome Condition shall exist with respect to Buyer in
connection with the transactions contemplated by the Operative Agreements.
7.4. GOVERNMENTAL RULE. No Governmental Rule shall have been
instituted, issued or proposed to restrain, enjoin or prevent the transfer of
the Transferred Assets as contemplated hereby or to invalidate, suspend or
require modification of any material provision of any Operative Agreement.
7.5. OPERATIVE AGREEMENTS. Seller shall have entered into each of the
Operative Agreements to be executed by it and each such Operative Agreement
shall be in full force and effect without breach thereunder.
7.6. CLOSING DOCUMENTS. Seller shall have delivered to Buyer the
following documents:
(a) a certificate of Seller, dated the Closing Date, to the effect that
Seller's representations and warranties in this Agreement are true and
correct and that all actions required to be taken by Seller prior to the
Closing have been duly taken;
Asset Purchase Agreement 112399 18 Confidential
(b) an incumbency certificate dated the Closing Date for the authorized
signatories of Seller executing this Agreement and any documents delivered in
connection with this Agreement at the Closing; and
(c) a certificate of the secretary or assistant secretary of ▇▇▇▇▇▇,
dated the Closing Date, as to the continued existence of Seller.
7.7. PROCEEDINGS. All corporate and legal proceedings taken by Seller
in connection with the execution of the Operative Agreements and the transfer
of the Transferred Assets shall be reasonably satisfactory in form and
substance to Buyer and its counsel, and Buyer shall have received all such
certified or other copies of all such documents as it shall have reasonably
requested.
ARTICLE VIII. CONDITIONS TO SELLER'S OBLIGATIONS.
The obligations of Seller to consummate the transactions contemplated
herein shall be subject to the satisfaction (or waiver by Seller) of the
conditions set forth below in this Article.
8.1. PAYMENT OF PURCHASE PRICE. The payment of the Purchase Price in
the manner specified in Section 1.3.
8.2. REPRESENTATIONS AND WARRANTIES. The covenants, agreements,
representations and warranties of Buyer made in this Agreement shall be true
and correct in all material respects as of the Date of Execution and as of
the Closing Date with the same effect as if made at and as of the Closing
Date.
8.3. CONSENTS, APPROVALS AND INJUNCTIONS. (a) Buyer shall have
obtained or made all consents, approvals, licenses, permits and
authorizations of, and registrations, declarations and filings with, any
Governmental Authority or any other Person required to be obtained or made by
or with respect to Buyer in connection with the execution and delivery of
this Agreement and the other Operative Agreements and the Closing.
(b) No injunction, order or decree of any Governmental Authority shall
be in effect as of the Closing, and no lawsuit, claim, proceeding or
investigation shall be pending or threatened by or before any Governmental
Authority as of the closing, which would restrain, prohibit or make unlawful
the transfer of the Transferred Assets or the Assumed Liabilities or
invalidate or suspend any provision of the Operative Agreements.
(c) No Burdensome Condition shall exist with respect to Seller in
connection with the transactions contemplated by the Operative Agreements.
Asset Purchase Agreement 112399 19 Confidential
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
8.4. OPERATIVE AGREEMENTS. Buyer shall have entered into each of the
Operative Agreements to be executed by it and each such Operative Agreement
shall be in full force and effect without breach thereunder.
8.5. CLOSING DOCUMENTS. Buyer shall have delivered to Seller the
following documents:
(a) a certificate of an authorized signatory of Buyer, dated the Closing
Date, to the effect that Buyer's representations and warranties in this
Agreement are true and correct and that all actions required to be taken by
Buyer prior to the closing have been duly taken;
(b) an incumbency certificate dated the Closing Date for the authorized
signatories of Buyer executing any Operative Agreements and any documents
delivered in connection with the Operative Agreements at the Closing; and
(c) a certificate of the secretary of ▇▇▇▇▇, dated the Closing Date, as
to the continued existence of Buyer, certifying the attached copy of the
By-laws of Buyer, the authorization of the execution, delivery and performance
of the Operative Agreements and the resolutions adopted by the Board of
Directors of Buyer authorizing the actions to be taken by Buyer under the
Operative Agreements.
8.6. PROCEEDINGS. All corporate and legal proceedings taken by ▇▇▇▇▇
in connection with the transactions contemplated by the Operative Agreements
and all documents and papers relating to such transactions shall be
reasonably satisfactory in form and substance to Seller and its counsel, and
Seller shall have received all such certified or other copies of all such
documents as it shall have reasonably requested.
8.7. EMPLOYEES. Buyer shall have made offers of employment, effective
upon and contingent upon the closing and consistent with the terms and
conditions of this Agreement, to all of the Employees.
ARTICLE IX. GENERAL MATTERS.
9.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made by the Parties in this Agreement or in any schedule,
document, certificate or other instrument delivered by or on behalf of the
Parties pursuant to this Agreement shall survive the Closing for a period of
**** after the Closing Date; PROVIDED, HOWEVER, that all representations and
warranties relating to **** and the Seller's *** shall survive the Closing
Date ***.
9.2. LIMITATION OF LIABILITY. Notwithstanding anything to the contrary
set forth in the Operative Agreements other than this Agreement, unless this
section is specifically excluded from application to a specific Operative
Agreement or provision in an Operative Agreement,
Asset Purchase Agreement 112399 20 Confidential
CONFIDENTIAL MATERIALS OMITTED AND
FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
ASTERISKS DENOTE OMISSIONS.
Seller shall not be liable for any amounts with respect to the breach of
representations and warranties unless and until such amounts shall exceed in
the aggregate **** dollars (the "Limitation Amount") (in which case Seller
shall only be liable with respect to the excess over the Limitation Amount).
There shall be no Seller liability for individual breaches of a
representation or warranty when the damages resulting from such breach are
less than **** and such amounts shall not be taken into account in
determining whether the Limitation Amount has been exceeded. In no event
shall Seller's liability with respect to the breach of representations and
warranties exceed **** percent of the Purchase Price in the aggregate;
PROVIDED, HOWEVER, that such limitation shall not be applicable with respect
to Seller's representations and warranties regarding ****. Neither Seller or
Buyer shall be responsible for any indirect, incidental, punitive, special or
consequential damages whatsoever, including loss of profits or goodwill,
unless specifically allowed under the Supply Agreement.
9.3. PUBLIC ANNOUNCEMENTS. The Confidentiality Agreement between the
Seller and Celestica Inc., dated August 5, 1999, concerning the subject matter
of this Agreement, continues to apply, and the Operative Agreements and the
proposed transaction is subject to and confidential under that
Confidentiality Agreement. For six (6) months after the Closing Date, all
public announcements relating to this Agreement or the transactions
contemplated hereby shall be made only after consultation between the
Parties, except for disclosures by either Party that in the opinion of
counsel for such Party are required by law, rule or regulation. Any
disclosures to customers in connection with commercial relationships shall
not reveal the Purchase Price of this Agreement. Notwithstanding the
foregoing, either Party shall have the right, in its sole discretion, to make
such disclosures as it may deem necessary or advisable to any Governmental
Authority. In the event of a breach or anticipatory breach of this Section
9.3. by either Party, the other Party shall be entitled, in addition to any
and all other remedies available at law or in equity, to preliminary and
permanent injunctive relief and specific performance without proving damages.
9.4. COSTS. Each Party shall be responsible for the costs and expenses
incurred by it in the negotiation, execution and delivery of the Operative
Agreements and, except as otherwise provided elsewhere in such agreements,
the consummation of the transactions contemplated hereby.
9.5. DUE DILIGENCE. ▇▇▇▇▇ has engaged in the entire due diligence
effort it deemed appropriate prior to executing this Agreement. The sale of
the Transferred Assets is based solely upon the results of that due diligence
and there has been no reliance upon the representations or statements of
Seller, other than as set forth in Article VI.
9.6. BULK SALES. Buyer hereby waives compliance with any applicable
bulk sales or similar laws and Seller will indemnify Buyer from damages
resulting from such waiver. Buyer shall discharge the Assumed Liabilities in
accordance with their terms and Buyer agrees that Seller shall have no
liability for any failure of Buyer to discharge the Assumed Liabilities in
accordance with their terms.
Asset Purchase Agreement 112399 21 Confidential
9.7. MODIFICATION AND WAIVER. No modification or waiver of any
provision of this Agreement and no consent by either Party to any departure
therefrom shall be effective unless in a writing referencing the particular
section of this Agreement to be modified or waived and signed by a duly
authorized signatory of each Party, and the same will only then be effective
for the period and on the conditions and for the specific instances and
purposes specified in such writing.
9.8. GOVERNING LAW. This Agreement has been delivered at and shall be
deemed to have been made at Armonk, New York, and shall be interpreted, and
the rights and liabilities of the Parties hereto determined, in accordance
with the laws of the State of New York applicable to agreements executed,
delivered and performed within such State, without regard to the principles
of conflicts of laws thereof. As part of the consideration for value this day
received, each of the Parties hereby consents to the exclusive jurisdiction
of any New York State court located within the County of Westchester and any
federal court of the United States of America located in the Southern
District of New York. Each of the Parties hereby: (i) waives trial by jury,
(ii) waives any objection to New York venue of any action instituted
hereunder, and (iii) consents to the granting of such legal or equitable
relief as is deemed appropriate by any aforementioned court.
9.9. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given and shall be effective
(a) when delivered by messenger or courier, or (b) five days after deposit
for mailing by registered or certified mail, postage prepaid, return receipt
requested, when also transmitted by telecopy as follows:
(a) if to Seller, to:
International Business Machines Corporation
New Orchard Road
Armonk, New York 10504
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Corporate Development and
Real Estate
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
International Business Machines Corporation
New Orchard Road
Armonk, New York 10504
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Associate General Counsel
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Buyer, to:
Asset Purchase Agreement 112399 22 Confidential
Celestica Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attention:
Telecopy:
with a copy to:
Celestica Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇/▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President and General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
(c) if to Guarantor, to:
Celestica Inc.
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇/▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Vice President and General Counsel
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
None.
Attention:
Telecopy:
or to such Person or address as the Parties shall hereafter designate to the
other from time to time by similar written notice.
9.10. ASSIGNMENT. This Agreement shall be binding upon, and inure to
the benefit of, and be enforceable by, the successors and assigns of the
Parties; PROVIDED, that, no Party may assign its rights hereunder without the
written consent of the other unaffiliated Party.
9.11. COUNTERPARTS. This Agreement may be executed by the Parties in
one or more counterparts, each of which shall be an original and all of which
shall constitute one and the same instrument.
9.12. NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the Parties and their permitted successors and assigns and nothing
herein expressed or implied shall
Asset Purchase Agreement 112399 23 Confidential
give or be construed to give any Person, other than Parties and such
permitted successors and assigns, any legal or equitable rights hereunder.
REMAINDER OF ▇▇▇▇ INTENTIONALLY LEFT BLANK
9.13. ENTIRE AGREEMENT. This Agreement, together with the Intellectual
Property Agreement, the Lease Agreement, the Supply Agreement, the Transition
Services Agreement, the Assumption Agreement, the Bill of Sale and the
Confidentiality Agreement, each between Buyer and Seller (and in the case of
this Agreement, Guarantor), comprise the entire agreement between the Parties
with respect to the subject matter hereof and thereof and supersede all prior
agreements, understanding and representations, oral or written, between Buyer
and Seller relating hereto and thereto.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized signatories as of the date and year first
above written.
INTERNATIONAL BUSINESS CELESTICA CORPORATION
MACHINES CORPORATION
BY: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------- ---------------------------------
NAME: ▇▇▇ ▇. ▇▇▇▇▇▇ NAME: ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------- ---------------------------------
TITLE: Vice President, TITLE: Authorized Signatory
Corporate Development & ---------------------------------
Real Estate
--------------------------
CELESTICA INC.
BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
NAME: ▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
TITLE: Senior Vice President
---------------------------
Asset Purchase Agreement 112399 24 Confidential