EXHIBIT 2.8
________________________________________________________________________________
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among:
Asyst Technologies, Inc.,
a California corporation;
Gem Acquisition Corp.,
a Delaware corporation;
GW Associates, Inc.,
a California corporation
And ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
an individual
----------------------------
Dated as of May 22, 2001
----------------------------
________________________________________________________________________________
Table Of Contents
Page
SECTION 1. Description of Transaction................................................................... 1
1.1 Merger of the Company into Merger Sub........................................................ 1
1.2 Effect of the Merger......................................................................... 1
1.3 Closing; Closing Date........................................................................ 1
1.4 Conversion of Shares......................................................................... 2
1.5 Escrow....................................................................................... 3
1.6 Stock Appreciation Rights.................................................................... 3
1.7 Closing of the Company's Transfer Books...................................................... 5
1.8 Exchange of Certificates..................................................................... 5
1.9 Dissenting Shares............................................................................ 6
1.10 Certificate of Incorporation and Bylaws; Directors and Officers.............................. 6
1.11 Tax Consequences............................................................................. 7
1.12 Further Action............................................................................... 7
SECTION 2. Representations and Warranties of the Company and ▇▇▇▇▇▇▇▇................................... 7
2.1 Due Organization; No Subsidiaries; Etc....................................................... 7
2.2 Articles of Incorporation and Bylaws; Records................................................ 8
2.3 Capitalization, Etc.......................................................................... 8
2.4 Financial Statements......................................................................... 9
2.5 Absence of Changes........................................................................... 9
2.6 Title to Assets.............................................................................. 11
2.7 Bank Accounts; Receivables................................................................... 12
2.8 Proprietary Assets........................................................................... 12
2.9 Inventory.................................................................................... 13
2.10 Contracts.................................................................................... 14
2.11 Liabilities.................................................................................. 16
2.12 Compliance with Legal Requirements........................................................... 16
2.13 Governmental Authorizations.................................................................. 16
2.14 Tax Matters.................................................................................. 16
2.15 Employee and Labor Matters; Benefit Plans.................................................... 17
2.16 Environmental Matters........................................................................ 20
i.
Table Of Contents
(continued)
Page
2.17 Insurance.................................................................................... 20
2.18 Related Party Transactions................................................................... 21
2.19 Legal Proceedings; Orders.................................................................... 21
2.20 Authority; Binding Nature of Agreement....................................................... 21
2.21 Non-Contravention; Consents.................................................................. 22
2.22 Full Disclosure.............................................................................. 22
2.23 Accredited Investor.......................................................................... 23
2.24 Stock Ownership.............................................................................. 23
SECTION 3. Representations and Warranties of Parent and Merger Sub...................................... 23
3.1 SEC Filings; Financial Statements............................................................ 23
3.2 Authority; Binding Nature of Agreement....................................................... 23
3.3 Valid Issuance............................................................................... 24
3.4 Acquisition for Investment................................................................... 24
SECTION 4. Conditions Precedent to Obligations of Parent and Merger Sub................................. 24
4.1 Shareholder Approval......................................................................... 24
4.2 Consents..................................................................................... 24
4.3 Agreements and Documents..................................................................... 24
4.5 FIRPTA Compliance............................................................................ 25
4.6 No Restraints................................................................................ 25
4.7 No Legal Proceedings......................................................................... 25
4.8 Termination of Employee Plans................................................................ 25
SECTION 5. Conditions Precedent to Obligations of the Company........................................... 25
5.1 Legal Opinions............................................................................... 25
5.2 No Restraints................................................................................ 25
SECTION 6. Indemnification, Etc......................................................................... 26
6.1 Survival of Representations, Etc............................................................. 26
6.2 Indemnification by ▇▇▇▇▇▇▇▇.................................................................. 26
6.3 Threshold; Ceiling........................................................................... 26
6.4 Escrow Fund.................................................................................. 27
6.5 Defense of Third Party Claims................................................................ 27
ii.
Table Of Contents
(continued)
Page
6.6 Exercise of Remedies by Indemnitees Other Than Parent........................................ 28
6.7 Exclusivity of Section 6 Indemnity........................................................... 28
SECTION 7. Registration of the Parent Common Stock; Compliance with the Securities Act.................. 29
7.1 Definitions.................................................................................. 29
7.2 Registration Procedures and Expenses......................................................... 29
7.3 Indemnification.............................................................................. 30
7.4 Transfer of Parent Common Stock after Registration; Notice................................... 32
7.5 Reporting Requirements....................................................................... 32
7.6 Market Stand-Off............................................................................. 32
7.7 Termination of Obligations................................................................... 33
7.8 Assignability of Registration Rights......................................................... 33
SECTION 8. Miscellaneous Provisions..................................................................... 33
8.1 Further Assurances........................................................................... 33
8.2 Fees and Expenses............................................................................ 33
8.3 Attorneys' Fees.............................................................................. 34
8.4 Notices...................................................................................... 34
8.5 Confidentiality.............................................................................. 34
8.6 Time of the Essence.......................................................................... 35
8.7 Headings..................................................................................... 35
8.8 Counterparts................................................................................. 35
8.9 Governing Law................................................................................ 35
8.10 Successors and Assigns....................................................................... 35
8.11 Remedies Cumulative; Specific Performance.................................................... 35
8.12 Waiver....................................................................................... 35
8.13 Amendments................................................................................... 35
8.14 Severability................................................................................. 36
8.15 Parties in Interest.......................................................................... 36
8.16 Entire Agreement............................................................................. 36
8.17 Construction................................................................................. 36
iii.
AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
This Agreement and Plan of Merger and Reorganization ("Agreement") is
made and entered into as of May 22, 2001, by and among: Asyst Technologies,
Inc., a California corporation ("Parent"); Gem Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"); GW
Associates, Inc.; a California corporation (the "Company"); and ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, an individual and the sole shareholder of the Company ("▇▇▇▇▇▇▇▇").
Certain other capitalized terms used in this Agreement are defined in Exhibit A
and in the body of this Agreement.
Recitals
A. Parent, Merger Sub and the Company intend to effect a merger of
the Company into the Merger Sub in accordance with this Agreement and the
applicable provisions of the California Corporations Code and the Delaware
Corporation Law (the "Merger"). Upon consummation of the Merger, the Company
will cease to exist, and the Merger Sub will remain a wholly owned subsidiary of
Parent.
B. It is intended that the Merger qualify as a tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code").
C. This Agreement has been approved by the respective boards of
directors of Parent, Merger Sub and the Company and the shareholders of Merger
Sub and the Company.
Agreement
The parties to this Agreement agree as follows:
SECTION 1. Description of Transaction
1.1 Merger of the Company into Merger Sub. Upon the terms and subject to
the conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.3), the Company shall be merged with and into Merger Sub, and the
separate existence of the Company shall cease. Merger Sub will continue as the
surviving corporation in the Merger (the "Surviving Corporation").
1.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the California Corporations
Code and the Delaware Corporation Law.
I.
1.3 Closing; Closing Date. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of ▇▇▇▇▇▇ Godward LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00
a.m. on the date the first above written (the "Closing Date") and the Merger
shall become effective at such time (the "Effective Time").
1.4 Conversion of Shares.
(a) Subject to Sections 1.5, 1.8 and 1.9, at the Closing Date,
by virtue of the Merger and without any further action on the part of Parent,
Merger Sub, the Company or any shareholder of the Company, each share of Company
Common Stock outstanding immediately prior to the Closing Date shall be
converted into the right to receive the following (the "Merger Consideration")
as the total consideration for the Merger:
(i) at the Closing Date, (x) the difference calculated by
subtracting the Closing Deductions from the Merger Price divided by (y) two
times the Adjusted Fully Diluted Company Share Amount; and
(ii) on the one year anniversary of the Closing Date, the
Merger Price divided by two times the Adjusted Fully Diluted Company Share
Amount.
(b) The Merger Consideration shall be payable in shares of
common stock (no par value) of Parent ("Parent Common Stock"), or a combination
of shares of Parent Common Stock and cash (as determined by the Parent in its
sole discretion), provided, however, that in no event shall the Merger
Consideration be comprised of fifty percent (50%) or more cash.
(c) The number of shares of Parent Common Stock comprising any
portion of the Merger Consideration payable on:
(i) the Closing Date, shall be calculated by dividing such
portion of the Merger Consideration by the Closing Designated Parent Stock
Price, and rounding such quotient to the nearest whole number; and
(ii) the one year anniversary of the Closing Date, shall be
calculated by dividing such portion of the Merger Consideration by the
Designated Parent Stock Price as of the one year anniversary of the Closing, and
rounding such quotient to the nearest whole number.
(d) For the purposes of this Agreement:
(i) the "Adjusted Fully Diluted Company Share Amount" shall
be the sum of (A) the aggregate number of shares of Company Common Stock
outstanding immediately prior to the Closing Date (including any such shares
that are subject to a repurchase option or risk of forfeiture under any
restricted stock purchase agreement or other agreement); and (B) the aggregate
number of shares of Company Common Stock purchasable under any options or other
rights to acquire stock in the capital of the Company, outstanding immediately
prior to the Closing Date, but excluding all rights to acquire stock under a SAR
(as such term is defined in Section 1.6.)
2.
(ii) "Closing Deductions" means the total of:
(1) Closing Date Fee Payments (as defined in Section
8.2(b));
(2) the cumulative sum obtained by adding the Vested
SAR Value for each SAR Holder (as such terms are defined in Section 1.6);
(3) any payment obligations of the Company due to its
employees in the event of a change of control of the Company, including, without
limitation, change of control bonuses in the aggregate amount of four hundred
thousand dollars ($400,000) declared by the board of directors of the Company;
and
(4) all SAR Pay-outs made pursuant to Section 1.6.
(iii)"Closing Designated Parent Stock Price" means the
lesser of the Designated Parent Stock Price as of the Closing Date and the
Designated Parent Stock Price as of May 16, 2001.
(iv) "Designated Parent Stock Price" means the average of
the closing sale prices of a share of Parent Common Stock as reported on the
Nasdaq National Market over the five (5) consecutive trading days ending one (1)
trading day before any specified Date.
(v) "Merger Price" means thirty-two million dollars
($32,000,000).
(e) If any shares of Company Stock outstanding immediately prior to
the Closing Date are unvested or are subject to a repurchase option, risk of
forfeiture or other condition under any applicable restricted stock purchase
agreement or other agreement with the Company, then the Merger Consideration
payable or issuable in exchange for such shares of Company Stock will also be
unvested and subject to the same repurchase option, risk of forfeiture or other
condition, and the certificates representing such shares of Parent Common Stock
may accordingly be marked with appropriate legends.
1.5 Escrow. As more fully described in Section 6.4 hereof and in the
Escrow Agreement attached hereto as Exhibit B (the "Escrow Agreement"), an
---------
Escrow Fund (as defined in the Escrow Agreement) shall be established into which
shall be deposited at Closing ten percent (10%) of the Merger Price contributed
from that portion of the Merger Consideration payable at Closing. The Escrow
Fund shall be comprised solely of Parent Common Stock. The number of shares of
Parent Common Stock comprising the Escrow Fund shall be calculated by dividing
the amount of the Escrow Fund by the Closing Designated Parent Stock Price.
1.6 Stock Appreciation Rights.
(a) Each holder (a "SAR Holder") of a stock appreciation right that,
immediately prior to the Effective Time, is outstanding under the Company's 2000
Incentive Plan (a "SAR"), whether vested or unvested, who shall, subject to
Section 1.6(i) agree in writing, prior to the Effective Time, that all SARs held
be him or her shall be cancelled immediately prior to the Effective Time and
that all claims against the Company, the Parent and the Parent's
3.
affiliates in respect of such SARs shall be released, shall in consideration
therefor receive the following after the Effective Time:
(i) a cash payment equal to the "Vested SAR Value" (as
defined below) of such cancelled SAR;
(ii) an option to purchase Parent Common Stock (a
"Substitute Parent Option") pursuant to the Parent's 2001 Non-Officer Equity
Plan for that number of shares and with an exercise price as follows:
(1) the number of shares of Parent Common Stock
subject to such Substitute Parent Option shall be equal to the unvested number
of shares of Company stock subject to such cancelled SAR immediately prior to
the Effective Time, multiplied by the "SAR Conversion Factor" (as defined
below), rounded down to the nearest whole number of shares of Parent Common
Stock.
(2) the per share exercise price for the Parent Common
Stock issuable upon exercise of each such Substitute Parent Option shall be
determined by dividing (x) the exercise price per share of Company stock subject
to such cancelled SAR, by (y) the SAR Conversion Factor, and rounding the
resulting exercise price up to the nearest whole cent.
(b) subject to the continued service of the SAR Holder with Asyst or
an affiliate of Asyst, the fraction of the shares covered by a Substitute Parent
Option which shall vest and become exercisable in any month shall be the same
fraction of the unvested portion of the cancelled SAR which would have vested
and become exercisable in such month if the SAR had not been cancelled and if no
SAR vesting acceleration event had occurred, provided, however, that as may be
provided in an employment offer letter made by Parent to the holder of a
Substitute Parent Option, the shares subject to such Substitute Parent Option
may, upon the terms of such employment offer letter, vest immediately if the
Parent terminates the employment of the holder of a Substitute Parent Option
without cause or for good reason within twenty-four (24) months of the Effective
Time, and the terms of any such immediate vesting shall be determined solely by
reference to such employment offer letter and the stock option grant notice in
respect of such Substitute Parent Option.
(c) the terms and conditions of the Substitute Parent Option shall be
determined solely by reference to the Parent 2001 Equity Plan and the stock
option grant notice and stock option agreement associated therewith.
(d) for the purposes of this Section 1.6:
(i) "SAR Closing Value" means the quotient obtained by dividing
(x) the Merger Price by (y) the Adjusted Fully Diluted Company Share Amount.
(ii) "SAR Conversion Factor" means the quotient obtained by
dividing (x) the Merger Price by (y) the product of the Adjusted Fully Diluted
Company Share Amount times the Closing Designated Parent Stock Price.
4.
(iii)"Vested SAR Value" means, with respect to any SAR, the
number of shares of Company stock subject to such SAR which are vested
immediately prior to the Effective Time multiplied by the difference obtained by
subtracting the exercise price of such SAR from the SAR Closing Value.
(e) Subject to Section 1.6(i), each SAR Holder who is offered
employment by Asyst, other than Incompatible Employment (as defined in Section
1.6(f)), who does not accept such employment and who does not agree in writing,
prior to the Effective Time, that all SARs held by him or her shall be cancelled
immediately prior to the Effective Time, and that all claims against the
Company, the Parent and the Parent's affiliates in respect of such SARs shall be
released, shall be paid the Vested SAR Value of the outstanding and unexercised
SARs held by him or her that have vested, in accordance with the Company's 2000
Incentive Plan, but shall not be paid any amount with respect to unvested SARs.
(f) Each SAR Holder who (i) is not offered employment by Asyst, or
(ii) is offered employment by Asyst with duties that are significantly
incompatible with, and detract from, the SAR Holder's position, duties, titles,
offices, responsibilities or status with the Company immediately before the
Effective Date, or (iii) is offered employment by Asyst at a place of work that
is more than fifty (50) miles distant from that SAR Holder's place of work with
the Company immediately before the Effective Date (1.6(f)(ii) and 1.6(f)(iii)
defined as "Incompatible Employment") shall be paid the full value of all
outstanding and unexercised SARs held by him or her (a "SAR Pay-out"), in
accordance with the Company's 2000 Incentive Plan. The full value of all
outstanding and unexercised SARs means, with respect to any SAR, the number of
unexercised shares of Company stock subject to such SAR, whether vested or
unvested, multiplied by the difference obtained by subtracting the exercise
price of such SAR from the SAR Closing Value
(g) The Board of Directors of the Company shall terminate the
Company's 2000 Incentive Plan immediately prior to the Effective Time.
(h) All cash payments under this Section 1.6 shall be made from the
Surviving Corporation's payroll account as soon as practicable following the
Effective time, and shall be subject to applicable withholding requirements.
▇▇▇▇▇▇▇▇ shall reimburse to the Surviving Corporation the actual increase in the
employer's contribution portion of all taxes resulting from such cash payments,
measured at the end of the calendar year. If ▇▇▇▇▇▇▇▇ does not make such
reimbursement to the Surviving Corporation by the one year anniversary of the
Closing Date, such reimbursement amount shall be subtracted from the portion of
the Merger Consideration payable to ▇▇▇▇▇▇▇▇ at such time.
(i) If, due to absence from the workplace of the Company, a SAR
Holder has been unable to accept an offer of employment by Parent (other than
Incompatible Employment) and has been unable to enter the agreement set forth in
Section 1.6(e) regarding the cancellation of all SARs held by him or her and the
release of claims, such SAR Holder shall not be paid the Vested SAR Value of the
outstanding and unexercised SARs held by him or her, in accordance with Section
1.6(e), until the earlier of either thirty (30) days after the Effective Time or
the time at which such SAR Holder affirmatively rejects such offer and refuses
to make such agreement, provided, however, that such SAR Holder may, after the
Effective Time, elect instead to accept
5.
employment with Parent and agree to the cancellation of SARs and release of
claims in accordance with Section 1.6(a) in exchange for the consideration
specified in such section.
1.7 Closing of the Company's Transfer Books. At the Closing Date, holders
of certificates representing shares of the Company's capital stock that were
outstanding immediately prior to the Effective Time shall cease to have any
rights as shareholders of the Company, and the stock transfer books of the
Company shall be closed with respect to all shares of such capital stock
outstanding immediately prior to the Effective Time. No further transfer of any
such shares of the Company's capital stock shall be made on such stock transfer
books after the Effective Time. If, after the Effective Time, a valid
certificate previously representing any of such shares of the Company's capital
stock (a "Company Stock Certificate") is presented to the Surviving Corporation
or Parent, such Company Stock Certificate shall be canceled and shall be
exchanged as provided in Section 1.8.
1.8 Exchange of Certificates.
(a) At or as soon as practicable after the Closing Date, Parent will
send to the holders of Company Stock Certificates a letter of transmittal in
customary form and containing such provisions as Parent may reasonably specify,
and instructions for use in effecting the surrender of Company Stock
Certificates in exchange for Merger Consideration in accordance with the terms
of this Section 1. Upon surrender of a Company Stock Certificate to Parent for
exchange, together with a duly executed letter of transmittal and such other
documents as may be reasonably required by Parent, the Company Stock Certificate
so surrendered shall be canceled and the holder of such Company Stock
Certificate shall be entitled to receive in exchange therefor Merger
Consideration in accordance with the terms of this Section 1.
(b) Until surrendered as contemplated by this Section 1.8, each
Company Stock Certificate shall be deemed, from and after the Closing Date, to
represent only the right to receive upon such surrender Merger Consideration as
contemplated by this Section 1. If any Company Stock Certificate shall have been
lost, stolen or destroyed, Parent may, in its discretion and as a condition
precedent to the delivery of any cash and the issuance of any certificate
representing Parent Common Stock require the owner of such lost, stolen or
destroyed Company Stock Certificate to provide an appropriate affidavit and to
deliver a bond (in such sum as Parent may reasonably direct) as indemnity
against any claim that may be made against Parent or the Surviving Corporation
with respect to such Company Stock Certificate.
(c) No dividends or other distributions declared or made with respect
to Parent Common Stock with a record date after the Closing Date shall be paid
to the holder of any unsurrendered Company Stock Certificate with respect to the
shares of Parent Common Stock represented thereby, and no cash payment in lieu
of any fractional share shall be paid to any such holder, until such holder
surrenders such Company Stock Certificate in accordance with this Section 1.8
(at which time such holder shall be entitled to receive all such dividends and
distributions and such cash payment).
(d) No fractional shares of Parent Common Stock shall be issued in
connection with the Merger, and no certificates for any such fractional shares
shall be issued. In
6.
lieu of such fractional shares, any holder of capital stock of the Company who
would otherwise be entitled to receive a fraction of a share of Parent Common
Stock (after aggregating all such fractional shares issuable to such holder)
shall, upon surrender of such holder's Company Stock Certificate(s), be paid in
cash the dollar amount (rounded to the nearest whole cent), without interest,
determined by multiplying such fraction by the Designated Parent Stock Price (as
defined in Section 1.4) as of the Closing Date.
(e) Parent and the Surviving Corporation shall be entitled to deduct
and withhold from any consideration payable or otherwise deliverable to any
holder or former holder of capital stock of the Company pursuant to this
Agreement such amounts as Parent or the Surviving Corporation may be required to
deduct or withhold therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
(f) Neither Parent nor the Surviving Corporation shall be liable to
any holder or former holder of capital stock of the Company for any shares of
Parent Common Stock, dividends or distributions with respect thereto, or for any
cash amounts, delivered to any public official pursuant to any applicable
abandoned property, escheat or similar law.
1.9 Dissenting Shares.
(a) Notwithstanding anything to the contrary contained in this
Agreement, any shares of capital stock of the Company that, as of the Closing
Date, are or may become "dissenting shares" within the meaning of the California
Corporations Code shall not be converted into or represent the right to receive
cash or Parent Common Stock in accordance with this Section 1 (or cash in lieu
of fractional shares in accordance with Section 1.8(c)), and the holder or
holders of such shares shall be entitled only to such rights as may be granted
to such holder or holders in the California Corporations Code; provided,
however, that if the status of any such shares as "dissenting shares" shall not
be perfected, or if any such shares shall lose their status as "dissenting
shares," then, as of the later of the Closing Date or the time of the failure to
perfect such status or the loss of such status, such shares shall automatically
be converted into and shall represent only the right to receive (upon the
surrender of the certificate or certificates representing such shares) Merger
Consideration in accordance with this Section 1 (and cash in lieu of fractional
shares in accordance with Section 1.8(c)).
(b) The Company shall give Parent (i) prompt notice of any written
demand received by the Company prior to the Closing Date to require the Company
to purchase shares of capital stock of the Company pursuant to the California
Corporations Code and of any other demand, notice or instrument delivered to the
Company prior to the Closing Date pursuant to the California Corporations Code,
and (ii) the opportunity to participate in all negotiations and proceedings with
respect to any such demand, notice or instrument. The Company shall not make
any payment or settlement offer prior to the Closing Date with respect to any
such demand unless Parent shall have consented in writing to such payment or
settlement offer.
1.10 Certificate of Incorporation and Bylaws; Directors and Officers.
Unless otherwise determined by Parent and the Company prior to the Closing Date:
7.
(a) the Certificate of Incorporation of the Surviving Corporation
shall, as of the Closing Date, continue in the same form as the Certificate of
Incorporation of the Merger Sub;
(b) the Bylaws of the Surviving Corporation shall, as of the Closing
Date, continue in the same form as the Bylaws of Merger Sub as in effect
immediately prior to the Closing Date; and
(c) the directors and officers of the Surviving Corporation
immediately after the Closing Date shall be the officers and directors of the
Merger Sub.
1.11 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.12 Further Action. If, at any time after the Closing Date, any further
action is determined by Parent to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation or Parent with
full right, title and possession of and to all rights and property of Merger Sub
and the Company, the officers and directors of the Surviving Corporation and
Parent shall be fully authorized (in the name of Merger Sub, in the name of the
Company and otherwise) to take such action.
SECTION 2. Representations and Warranties of the Company and ▇▇▇▇▇▇▇▇
The Company and ▇▇▇▇▇▇▇▇, jointly and severally represent and
warrant, to and for the benefit of the Indemnitees, as follows except as set
forth in the Disclosure Schedule:
2.1 Due Organization; No Subsidiaries; Etc.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and has all
necessary power and authority: (i) to conduct its business in the manner in
which its business is currently being conducted; (ii) to own and use its assets
in the manner in which its assets are currently owned and used; and (iii) to
perform its obligations under all Company Contracts.
(b) Except as set forth in Part 2.1 of the Disclosure Schedule, the
Company has not conducted any business under or otherwise used, for any purpose
or in any jurisdiction, any fictitious name, assumed name, trade name or other
name, other than the name "GW Associates, Inc."
(c) The Company is not and has not been required to be qualified,
authorized, registered or licensed to do business as a foreign corporation in
any jurisdiction other than the jurisdictions identified in Part 2.1 of the
Disclosure Schedule, except where the failure to be so qualified, authorized,
registered or licensed would not have a Material Adverse Effect on the Company.
The Company is in good standing as a foreign corporation in each of the
jurisdictions identified in Part 2.1 of the Disclosure Schedule.
8.
(d) Part 2.1 of the Disclosure Schedule accurately sets forth (i) the
names of the members of the Company's board of directors, (ii) the names of the
members of each committee of the Company's board of directors, and (iii) the
names and titles of the Company's officers.
(e) The Company does not own any controlling interest in any Entity
and, except for the equity interests identified in Part 2.1 of the Disclosure
Schedule, the Company has never owned, beneficially or otherwise, any shares or
other securities of, or any direct or indirect equity interest in, any Entity.
The Company has not agreed and is not obligated to make any future investment in
or capital contribution to any Entity. The Company has not guaranteed and is
not responsible or liable for any obligation of any of the Entities in which it
owns or has owned any equity interest.
2.2 Articles of Incorporation and Bylaws; Records. The Company has
delivered to Parent accurate and complete copies of: (1) the Company's articles
of incorporation and bylaws, including all amendments thereto; (2) the stock
records of the Company; and (3) except as set forth in Part 2.2 of the
Disclosure Schedule, the minutes and other records of the meetings and other
proceedings (including any actions taken by written consent or otherwise without
a meeting) of the shareholders of the Company, the board of directors of the
Company and all committees of the board of directors of the Company. There have
been no formal meetings or other proceedings of the shareholders of the Company,
the board of directors of the Company or any committee of the board of directors
of the Company that are not fully reflected in such minutes or other records.
There has not been any violation of any of the provisions of the Company's
articles of incorporation or bylaws, and the Company has not taken any action
that is inconsistent in any material respect with any resolution adopted by the
Company's shareholders, the Company's board of directors or any committee of the
Company's board of directors. The books of account, stock records, minute books
and other records of the Company are accurate, up-to-date and complete in all
material respects, and have been maintained in accordance with prudent business
practices.
2.3 Capitalization, Etc.
(a) The authorized capital stock of the Company consists of: ten
million (10,000,000) shares of Common Stock (with no par value), of which three
million eight hundred twenty-eight thousand shares have been issued and are
outstanding as of the date of this Agreement. All of the outstanding shares of
Company Common Stock have been duly authorized and validly issued, and are fully
paid and non-assessable. On the date hereof, ▇▇▇▇▇▇▇▇ holds all of the
outstanding shares of the capital stock of the Company.
(b) The Company has reserved no shares of Company Common Stock for
issuance under any stock option/issuance plan. There is no: (i) outstanding
subscription, option, call, warrant or right (whether or not currently
exercisable) to acquire any shares of the capital stock or other securities of
the Company; (ii) outstanding security, instrument or obligation that is or may
become convertible into or exchangeable for any shares of the capital stock or
other securities of the Company; (iii) Contract under which the Company is or
may become obligated to sell or otherwise issue any shares of its capital stock
or any other securities; or (iv) to the best of the knowledge of the Company,
condition or circumstance that may give rise to or provide a
9.
basis for the assertion of a claim by any Person to the effect that such Person
is entitled to acquire or receive any shares of capital stock or other
securities of the Company.
(c) All outstanding shares of Company Common Stock have been issued
and granted in compliance with (i) all applicable securities laws and other
applicable Legal Requirements, and (ii) all requirements set forth in applicable
Contracts.
(d) Except as set forth in Part 2.3 of the Disclosure Schedule, the
Company has never repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities of the Company. All securities so reacquired
by the Company were reacquired in compliance with (i) the applicable provisions
of the California General Corporation Law and all other applicable Legal
Requirements, and (ii) all requirements set forth in applicable restricted stock
purchase agreements and other applicable Contracts.
2.4 Financial Statements.
(a) The Company has delivered to Parent the following financial
statements and notes (collectively, the "Company Financial Statements"):
(i) The audited balance sheets of the Company as of July 31,
2000, and the related audited income statements, statements of shareholders'
equity and statements of cash flows of the Company for the year then ended,
together with the notes thereto and the unqualified report and opinion of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & Co. LLP relating thereto; and
(ii) the unaudited financial statements of the Company for the
period beginning on August 1, 2000 and ending on March 31, 2001 (the "Unaudited
Interim Financials"), and the related unaudited income statement of the Company
for the eight months then ended.
(b) The Company Financial Statements present fairly the financial
position of the Company as of the respective dates thereof and the results of
operations and cash flows of the Company for the periods covered thereby. The
Company Financial Statements have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered.
2.5 Absence of Changes. Since March 31, 2001:
(a) there has not been any material adverse change in the Company's
business, condition, assets, liabilities, operations, financial performance or
prospects, and, to the best of the knowledge of the Company, no event has
occurred that will, or could reasonably be expected to, have a Material Adverse
Effect on the Company;
(b) there has not been any material loss, damage or destruction to,
or any material interruption in the use of, any of the Company's assets (whether
or not covered by insurance);
10.
(c) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock, and has not repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;
(d) the Company has not sold, issued or authorized the issuance of
(i) any capital stock or other security, (ii) any option or right to acquire any
capital stock or any other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security;
(e) the Company has not amended or waived any of its rights under, or
permitted the acceleration of vesting under, (i) any provision of a stock
option/issuance plan or stock appreciation rights plan (other than as
contemplated be Section 1.6 hereof), (ii) any provision of any agreement
evidencing any outstanding stock appreciation right, or (iii) any restricted
stock purchase agreement;
(f) there has been no amendment to the Company's articles of
incorporation or bylaws, and the Company has not effected or been a party to any
Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;
(g) the Company has not formed any subsidiary or acquired any equity
interest or other interest in any other Entity;
(h) the Company has not made any capital expenditure which, when
added to all other capital expenditures made on behalf of the Company since
March 31, 2001, exceeds $25,000;
(i) the Company has not (i) entered into or permitted any of the
assets owned or used by it to become bound by any Contract that is or would
constitute a Material Contract (as defined in Section 2.10(a)), or (ii) amended
or prematurely terminated, or waived any material right or remedy under, any
such Contract;
(j) the Company has not (i) acquired, leased or licensed any right or
other asset from any other Person, except in the ordinary course of business and
consistent with the Company's past practices, (ii) sold or otherwise disposed
of, or leased or licensed, any right or other asset to any other Person, except
in the ordinary course of business and consistent with the Company's past
practices, or (iii) waived or relinquished any right, except for immaterial
rights or other immaterial assets acquired, leased, licensed or disposed of in
the ordinary course of business and consistent with the Company's past
practices;
(k) the Company has not written off as uncollectable, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness;
(l) the Company has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for pledges of immaterial assets made in the ordinary course of business
and consistent with the Company's past practices and purchase money security
interests in assets acquired by the Company in the ordinary course of business
and consistent with the Company's past practices;
11.
(m) the Company has not (i) lent money to any Person (other than
pursuant to routine travel advances made to employees in the ordinary course of
business), or (ii) incurred or guaranteed any indebtedness for borrowed money;
(n) the Company has not (i) established or adopted any Plans (as
defined in Section 2.15), (ii) paid any bonus or made any profit-sharing or
similar payment to, or increased the amount of the wages, salary, commissions,
fringe benefits or other compensation or remuneration payable to, any of its
directors, officers or employees, or (iii) hired any new employee with an annual
base salary in excess of $50,000;
(o) the Company has not changed any of its methods of accounting or
accounting practices in any respect;
(p) the Company has not made any Tax election;
(q) except as described in Part 2.5 of the Disclosure Schedule, the
Company has not commenced or settled any Legal Proceeding;
(r) the Company has not entered into any material transaction or
taken any other material action outside the ordinary course of business or
inconsistent with its past practices; and
(s) the Company has not agreed or committed to take any of the
actions referred to in clauses "(c)" through "(r)" above.
2.6 Title to Assets.
(a) The Company owns, and has good, valid and marketable title to,
all assets purported to be owned by it, including: (i) all assets reflected on
the Unaudited Interim Financials; (ii) all assets referred to in Parts 2.7(b),
2.8(a)(i) and 2.8(a)(ii) of the Disclosure Schedule and all of the Company's
rights under the Contracts identified in Part 2.9 of the Disclosure Schedule;
and (iii) all other assets reflected in the Company's books and records as being
owned by the Company. All of said assets are owned by the Company free and clear
of any liens or other Encumbrances, except for (x) any lien for current taxes
not yet due and payable, (y) minor liens that have arisen in the ordinary course
of business and that do not (in any case or in the aggregate) materially detract
from the value of the assets subject thereto or materially impair the operations
of the Company and (z) those liens and encumbrances described in Part 2.6 of the
Disclosure Schedule.
(b) All material items of equipment and other tangible assets owned
by or leased to the Company are adequate for the uses to which they are being
put, are in good condition and repair (ordinary wear and tear excepted) and are
adequate for the conduct of the Company's business in the manner in which such
business is currently being conducted.
(c) The Company does not own any real property or any interest in
real property, except for the leasehold created under the real property leases
identified in Part 2.10 of the Disclosure Schedule.
12.
2.7 Bank Accounts; Receivables.
(a) Part 2.7(a) of the Disclosure Schedule provides accurate
information with respect to each account maintained by or for the benefit of the
Company at any bank or other financial institution.
(b) Part 2.7(b) of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Company as of March 31, 2001. All existing accounts
receivable of the Company (including those accounts receivable reflected on the
Unaudited Interim Financials that have not yet been collected and those accounts
receivable that have arisen since March 31, 2001 and have not yet been
collected) (i) represent valid obligations of customers of the Company arising
from bona fide transactions entered into in the ordinary course of business,
(ii) are current or aged as reflected in Part 2.7 (b) of the Disclosure
Schedule, and (iii) to the knowledge of the Company, are will be collected in
full without any counterclaim or set off.
(c) All unfilled orders for the purchase of Company products as of
March 31, 2001 represent valid obligations of customers of the Company arising
from bona fide transactions entered into in the ordinary course of business.
2.8 Proprietary Assets.
(a) Part 2.8(a)(i) of the Disclosure Schedule sets forth, with
respect to each Company Proprietary Asset registered with any Governmental Body
or for which an application has been filed with any Governmental Body, (i) a
brief description of such Company Proprietary Asset, and (ii) the names of the
jurisdictions covered by the applicable registration or application. Part
2.8(a)(ii) of the Disclosure Schedule identifies and provides a brief
description of all other Company Proprietary Assets owned by the Company. Part
2.8(a)(iii) of the Disclosure Schedule identifies and provides a brief
description of each Company Proprietary Asset licensed to the Company by any
Person (except for any Proprietary Asset that is licensed to the Company under
any third party software license generally available to the public at a cost of
less than $10,000), and identifies the license agreement under which such
Proprietary Asset is being licensed to the Company. The Company has good, valid
and marketable title to all of the Company Proprietary Assets identified in
Parts 2.8(a)(i) and 2.8(a)(ii) of the Disclosure Schedule, free and clear of all
liens and other Encumbrances, and has a valid right to use all Proprietary
Assets identified in Part 2.8(a)(iii) of the Disclosure Schedule. The Company is
not obligated to make any payment to any Person for the use of any Company
Proprietary Asset. The Company has not developed jointly with any other Person
any Company Proprietary Asset with respect to which such other Person has any
rights.
(b) The Company has taken all measures and precautions necessary to
protect and maintain the confidentiality and secrecy of all Company Proprietary
Assets (except Company Proprietary Assets whose value would be unimpaired by
public disclosure) and otherwise to maintain and protect the value of all
Company Proprietary Assets. The Company has not (other than pursuant to license
agreements identified in Part 2.10 of the Disclosure Schedule) disclosed or
delivered to any Person, or permitted the disclosure or delivery to any Person
of, (i) the source code, or any portion or aspect of the source code, of any
Company
13.
Proprietary Asset, or (ii) the object code, or any portion or aspect of the
object code, of any Company Proprietary Asset.
(c) None of the Company Proprietary Assets infringes or conflicts
with any Proprietary Asset owned or used by any other Person; the Company is not
infringing, misappropriating or making any unlawful use of, and the Company has
not at any time infringed, misappropriated or made any unlawful use of, or
received any notice or other communication (in writing or otherwise) of any
actual, alleged, possible or potential infringement, misappropriation or
unlawful use of, any Proprietary Asset owned or used by any other Person. To the
best of the knowledge of the Company, no other Person is infringing,
misappropriating or making any unlawful use of, and no Proprietary Asset owned
or used by any other Person infringes or conflicts with, any Company Proprietary
Asset.
(d) Each Company Proprietary Asset conforms in all material respects
with any specification, documentation, performance standard, representation or
statement made or provided with respect thereto by or on behalf of the Company;
and (ii) there has not been any claim by any customer or other Person alleging
that any Company Proprietary Asset (including each version thereof that has ever
been licensed or otherwise made available by the Company to any Person) does not
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the best of the knowledge of the Company, there
is no basis for any such claim. The Company has established adequate reserves on
the Unaudited Interim Financials to cover all costs associated with any
obligations that the Company may have with respect to the correction or repair
of programming errors or other defects in the Company Proprietary Assets.
(e) The Company Proprietary Assets, together with the Proprietary
Assets made available to the Company by its customers, constitute all the
Proprietary Assets necessary to enable the Company to conduct its business in
the manner in which such business has been and is being conducted. The Company
has not licensed any of the Company Proprietary Assets to any Person on an
exclusive basis, and the Company has not entered into any covenant not to
compete or Contract limiting its ability to exploit fully any of its Company
Proprietary Assets or to transact business in any market or geographical area or
with any Person.
2.9 Inventory. Part 2.9 of the Disclosure Schedule provides an accurate
and complete breakdown of all inventory (including raw materials, work in
process and finished goods) of the Company as of April 30, 2001. All of
Company's existing inventory (including all inventory that is reflected on the
Unaudited Interim Financials and that has not been disposed of by the Company
since March 31, 2001):
(a) of such quality and quantity as to be usable and saleable by the
Company in its ordinary course of business;
(b) has been priced at the lower of cost or market value using the
"last-in, first-out" method; and
(c) is free of any defect or deficiency.
14.
The inventory levels maintained by the Company (i) are not excessive in light of
the Company's normal operating requirements, (ii) are adequate for the conduct
of the Company's operations in its ordinary course of business, and (iii) are
comparable to the inventory levels maintained by Entities engaged in businesses
similar to the Company's business.
2.10 Contracts.
(a) Part 2.10 of the Disclosure Schedule identifies:
(i) each Company Contract relating to the employment of, or
the performance of services by, any employee, consultant or independent
contractor;
(ii) each Company Contract relating to the acquisition,
transfer, use, development, sharing or license of any technology or any
Proprietary Asset;
(iii) each Company Contract imposing any restriction on the
Company's right or ability (A) to compete with any other Person, (B) to acquire
any product or other asset or any services from any other Person, to sell any
product or other asset to or perform any services for any other Person or to
transact business or deal in any other manner with any other Person, or (C)
develop or distribute any technology;
(iv) each Company Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;
(v) each Company Contract relating to the acquisition,
issuance or transfer of any securities;
(vi) each Company Contract relating to the creation of any
Encumbrance with respect to any asset of the Company;
(vii) each Company Contract involving or incorporating any
guaranty, any pledge, any performance or completion bond, any indemnity or any
surety arrangement;
(viii) each Company Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses, costs
or liabilities;
(ix) each Company Contract relating to the purchase or sale of
any product or other asset by or to, or the performance of any services by or
for, any Related Party (as defined in Section 2.18);
(x) each Company Contract constituting or relating to a
Government Contract or Government Bid;
(xi) any other Company Contract that was entered into outside
the ordinary course of business or was inconsistent with the Company's past
practices;
15.
(xii) any other Company Contract that has a term of more than 60
days and that may not be terminated by the Company (without penalty) within 60
days after the delivery of a termination notice by the Company; and
(xiii) any other Company Contract that contemplates or involves
(A) the payment or delivery of cash or other consideration in an amount or
having a value in excess of $25,000 for any such single Company Contract, or (B)
the performance of services having a value in excess of $25,000 for any single
Company Contract.
(Contracts in the respective categories described in clauses "(i)" through
"(xiii)" above are referred to in this Agreement as "Material Contracts.")
(b) The Company has delivered to Parent accurate and complete copies
of all written Contracts identified in Part 2.10 of the Disclosure Schedule,
including all amendments thereto. Part 2.10 of the Disclosure Schedule provides
an accurate description of the terms of each Company Contract that is not in
written form. Each Contract identified in Part 2.10 of the Disclosure Schedule
is valid and in full force and effect, and, to the best of the knowledge of the
Company, is enforceable by the Company in accordance with its terms, subject to
(i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
(c) The Company has not violated or breached, or committed any
default under, any Company Contract which could result in or have a Material
Adverse Effect, and, to the best of the knowledge of the Company, no other
Person has violated or breached, or committed any default under, any Company
Contract;
(d) To the best of the knowledge of the Company, no event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) will, or could reasonably be expected to, (A) result in a
violation or breach of any of the provisions of any Company Contract, (B) give
any Person the right to declare a default or exercise any remedy under any
Company Contract, (C) give any Person the right to accelerate the maturity or
performance of any Company Contract, or (D) give any Person the right to cancel,
terminate or modify any Company Contract;
(e) The Company has not received any notice or other communication
regarding any actual or possible violation or breach of, or default under, any
Company Contract; and
(f) The Company has not waived any of its material rights under any
Material Contract.
(g) No Person is renegotiating, or has a right pursuant to the terms
of any Company Contract to renegotiate, any amount paid or payable to the
Company under any Material Contract or any other material term or provision of
any Material Contract.
(h) The Contracts identified in Part 2.10 of the Disclosure Schedule
collectively constitute all of the Contracts necessary to enable the Company to
conduct its business in the manner in which its business is currently being
conducted.
16.
2.11 Liabilities. The Company has no accrued, contingent or other
liabilities of any nature, either matured or unmatured (whether or not required
to be reflected in financial statements in accordance with generally accepted
accounting principles, and whether due or to become due), except for: (i)
liabilities identified as such in the "liabilities" column of the Unaudited
Interim Financials; (ii) accounts payable or accrued salaries that have been
incurred by the Company since March 31, 2001 in the ordinary course of business
and consistent with the Company's past practices; (iii) liabilities under the
Company Contracts identified in Part 2.10 of the Disclosure Schedule, to the
extent the nature and magnitude of such liabilities can be specifically
ascertained by reference to the text of such Company Contracts; and (iv) the
liabilities identified in Part 2.11(a) of the Disclosure Schedule.
2.12 Compliance with Legal Requirements. The Company is in compliance with
all applicable Legal Requirements, except where the failure to comply with such
Legal Requirements has not had and will not have a Material Adverse Effect on
the Company. The Company has not received any notice or other communication from
any Governmental Body regarding any actual or possible violation of, or failure
to comply with, any Legal Requirement.
2.13 Governmental Authorizations. The Governmental Authorizations held by
the Company are valid and in full force and effect, and collectively constitute
all Governmental Authorizations, to the best knowledge of the Company, necessary
to enable the Company to conduct its business in the manner in which its
business is currently being conducted. The Company is in substantial compliance
with the terms and requirements of the respective Governmental Authorizations
identified in Part 2.13 of the Disclosure Schedule. The Company has not
received any notice or other communication from any Governmental Body regarding
(a) any actual or possible violation of or failure to company with any term or
requirement of any Governmental Authorization, or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental Authorization.
2.14 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of the
Company with any Governmental Body with respect to any taxable period ending on
or before the Closing Date (the "Company Returns") (i) have been or will be
filed on or before the applicable due date (including any extensions of such due
date), and (ii) have been, or will be when filed, accurately and completely
prepared in all material respects in compliance with all applicable Legal
Requirements. All amounts shown on the Company Returns to be due on or before
the Closing Date have been or will be paid on or before the Closing Date, and no
other Taxes are payable by the Company with respect to items or periods covered
by such Tax Returns (whether or not shown on or reportable on such Tax Returns)
or with respect to any period prior to the date of this Agreement. The Company
has withheld and paid over all Taxes required to have been withheld and paid
over, and complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third party. There are no liens on any of the assets of
the Company with respect to Taxes, other than liens for Taxes, not yet due and
payable. The Company has delivered to Parent accurate and complete copies of
all Company Returns that are open to review by the Internal Revenue Service or
other Governmental Body. The amount of the Company's liability for unpaid Taxes
for all periods
17.
ending on or before March 31, 2001 does not, in the aggregate, exceed the amount
of the current liability accruals for Taxes reflected on the Unaudited Interim
Financials, and the amount of the Company's liability for unpaid Taxes for all
periods ending on or before the Closing Date shall not, in the aggregate exceed
the amount of the current liability accruals for Taxes as such accruals are
reflected on the Unaudited Interim Financials, as adjusted for operations and
transactions in the ordinary course of business of the Company since the date of
the Unaudited Interim Financials in accordance with past custom and practice.
(b) The Company Financial Statements fully accrue all actual
liabilities for Taxes with respect to all periods through the dates thereof in
accordance with generally accepted accounting principles. The Company has
established, in the ordinary course of business and consistent with its past
practices and in accordance with GAAP, reserves adequate for the payment of all
Taxes for the period from March 31, 2001 through the Closing Date, and the
Company has disclosed the dollar amount of such reserves to Parent on or prior
to the Closing Date.
(c) No Company Return relating to income Taxes has ever been examined
or audited by any Governmental Body. The Company has delivered to Parent
accurate and complete copies of all audit reports and similar documents (to
which the Company has access) relating to the Company Returns. No extension or
waiver of the limitation period applicable to any of the Company Returns has
been granted (by the Company or any other Person), and no such extension or
waiver has been requested from the Company.
(d) No claim or Proceeding is pending or has been threatened against
or with respect to the Company in respect of any Tax. There are no unsatisfied
liabilities for Taxes (including liabilities for interest, additions to tax and
penalties thereon and related expenses) with respect to any notice of deficiency
or similar document received by the Company with respect to any Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and with respect
to which adequate reserves for payment have been established). There are no
liens for Taxes upon any of the assets of the Company except liens for current
Taxes not yet due and payable. The Company has not entered into or become bound
by any agreement or consent pursuant to Section 341(f) of the Code. The Company
has not been, and the Company will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 481
or 263A of the Code or any comparable provision under state or foreign Tax laws
as a result of transactions or events occurring, or accounting methods employed,
prior to the Closing.
(e) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of the Company that, considered individually or
considered collectively with any other such Contracts, will, or could reasonably
be expected to, give rise directly or indirectly to the payment of any amount
that would not be deductible pursuant to Section 280G or Section 162 of the
Code. The Company is not, and has never been, a party to or bound by any tax
indemnity agreement, tax sharing agreement, tax allocation agreement or similar
Contract.
2.15 Employee and Labor Matters; Benefit Plans.
18.
(a) Part 2.15(a) of the Disclosure Schedule identifies employee
benefit plans within the meaning of section 3(3) of ERISA, including each
salary, bonus, deferred compensation, incentive compensation, stock purchase,
stock option, severance pay, termination pay, hospitalization, medical, life or
other insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program or agreement (collectively, the "Plans") sponsored,
maintained, contributed to or required to be contributed to by the Company for
the benefit of any employee of the Company ("Employee"), except for Plans which
would not require the Company to make payments or provide benefits having a
value in excess of $25,000 in the aggregate.
(b) The Company does not maintain, sponsor or contribute to, and, to
the best of the knowledge of the Company has not at any time in the past
maintained, sponsored or contributed to, any employee pension benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), whether or not excluded from coverage under specific
titles or Merger subtitles of ERISA) for the benefit of Employees or former
Employees (a "Pension Plan").
(c) The Company maintains, sponsors or contributes only to those
employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific titles or Merger subtitles of ERISA)
for the benefit of Employees or former Employees which are described in Part
2.15(c) of the Disclosure Schedule (the "Welfare Plans"), none of which is a
multiemployer plan (within the meaning of Section 3(37) of ERISA).
(d) With respect to each Plan, the Company has delivered to Parent:
(i) an accurate and complete copy of such Plan (including all
amendments thereto);
(ii) an accurate and complete copy of the annual report, if
required under ERISA, with respect to such Plan for the last two years;
(iii) an accurate and complete copy of the most recent summary
plan description, together with each Summary of Material Modifications, if
required under ERISA, with respect to such Plan, and all material employee
communications relating to such Plan;
(iv) if such Plan is funded through a trust or any third party
funding vehicle, an accurate and complete copy of the trust or other funding
agreement (including all amendments thereto) and accurate and complete copies
the most recent financial statements thereof;
(v) accurate and complete copies of all Contracts relating to
such Plan, including service provider agreements, insurance contracts, minimum
premium contracts, stop-loss agreements, investment management agreements,
subscription and participation agreements and record-keeping agreements; and
(vi) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).
19.
(e) The Company is not required to be, and, to the best of the
knowledge of the Company has never been required to be, treated as a single
employer with any other Person under Section 4001(b)(1) of ERISA or Section
414(b), (c), (m) or (o) of the Code. The Company has never been a member of an
"affiliated service group" within the meaning of Section 414(m) of the Code. To
the best of the knowledge of the Company, the Company has never made a complete
or partial withdrawal from a multiemployer plan, as such term is defined in
Section 3(37) of ERISA, resulting in "withdrawal liability," as such term is
defined in Section 4201 of ERISA (without regard to subsequent reduction or
waiver of such liability under either Section 4207 or 4208 of ERISA).
(f) The Company does not have any plan or commitment to create any
additional Welfare Plan or any Pension Plan, or to modify or change any existing
Welfare Plan or Pension Plan (other than to comply with applicable law) in a
manner that would affect any Employee.
(g) No Welfare Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former Employee after
any such Employee's termination of service (other than (i) benefit coverage
mandated by applicable law, including coverage provided pursuant to Section
4980B of the Code, (ii) deferred compensation benefits accrued as liabilities on
the Unaudited Interim Financials, and (iii) benefits the full cost of which are
borne by current or former Employees (or the Employees' beneficiaries)).
(h) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.
(i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
but not limited to ERISA and the Code.
(j) Each of the Plans intended to be qualified under Section 401(a)
of the Code has received a favorable determination from the Internal Revenue
Service, and the Company is not aware of any reason why any such determination
letter should be revoked.
(k) Neither the execution, delivery or performance of this Agreement,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement, will result in any payment (including any bonus, golden
parachute or severance payment) by the Company to any current or former Employee
or director of the Company (whether or not under any Plan), or materially
increase the benefits payable under any Plan, or result in any acceleration of
the time of payment or vesting of any such benefits.
(l) Part 2.15(l) of the Disclosure Schedule contains a list of all
salaried employees of the Company as of April 30, 2001, and correctly reflects,
in all material respects, their salaries, any other compensation payable to them
(including compensation payable pursuant to bonus, deferred compensation or
commission arrangements), their dates of employment and their positions. The
Company is not a party to any collective bargaining contract or other Contract
with a labor union involving any of its Employees. All of the Company's
Employees
20.
are "at will" Employees. Except as otherwise described in Part 2.15(l) of the
Disclosure Schedule, no Company Employees have executed written employment
contracts with the Company.
(m) Part 2.15(m) of the Disclosure Schedule identifies each Employee
who is not fully available to perform work because of disability or other leave
and sets forth the basis of such leave and the anticipated date of return to
full service.
(n) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, wages, bonuses and terms and conditions of employment, including
employee compensation matters.
(o) The Company has not experienced any work stoppage or material
labor dispute relating to its business in the last two years, nor is the Company
aware of any current material labor difficulty or dispute as of the date of this
Agreement, and, to the best knowledge of the Company, it has good labor
relations, and to the best of the knowledge of the Company (i) the consummation
of the Merger or any of the other transactions contemplated by this Agreement
will not have a material adverse effect on the Company's labor relations, and
(ii) as of the date of this Agreement, none of the Company's employees has
notified Company officers of his or her intention to terminate his or her
employment with the Company.
2.16 Environmental Matters. The Company is in compliance in all material
respects with all applicable Environmental Laws, which compliance includes the
possession by the Company of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Company has not received any notice or other
communication (in writing or otherwise), whether from a Governmental Body,
citizens group, employee or otherwise, that alleges that the Company is not in
compliance with any Environmental Law. To the best of the knowledge of the
Company, no current or prior owner of any property leased or controlled by the
Company has received any notice or other communication (in writing or
otherwise), whether from a Government Body, citizens group, employee or
otherwise, that alleges that such current or prior owner or the Company is not
in compliance with any Environmental Law. All Governmental Authorizations
currently held by the Company pursuant to Environmental Laws are identified in
Part 2.16 of the Disclosure Schedule. (For purposes of this Section 2.16: (i)
"Environmental Law" means any federal, state, local or foreign Legal Requirement
relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata), including any law or regulation relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern;
and (ii) "Materials of Environmental Concern" include chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products and any
other substance that is now or hereafter regulated by any Environmental Law or
that is otherwise a danger to health, reproduction or the environment.)
2.17 Insurance. Part 2.17 of the Disclosure Schedule identifies all
insurance policies maintained by, at the expense of or for the benefit of the
Company and identifies any material claims made thereunder, and the Company has
delivered to Parent accurate and complete copies
21.
of the insurance policies identified on Part 2.17 of the Disclosure Schedule.
Each of the insurance policies identified in Part 2.17 of the Disclosure
Schedule is in full force and effect. The Company has not received any notice or
other communication regarding any actual or possible (a) cancellation or
invalidation of any insurance policy, (b) refusal of any coverage or rejection
of any claim under any insurance policy, or (c) material adjustment in the
amount of the premiums payable with respect to any insurance policy.
2.18 Related Party Transactions. No Related Party has: (a) had any direct
or indirect interest in any material asset used in or otherwise relating to the
business of the Company; (b) been indebted to the Company; (c) entered into, or
has had any direct or indirect financial interest in, any Contract, transaction
or business dealing involving the Company; (d) competed, directly or indirectly,
with the Company; and (e) any claim or right against the Company (other than
rights under company Options and rights to receive compensation for services
performed as an employee of the Company). (For purposes of this Section 2.18
each of the following shall be deemed to be a "Related Party": (i) ▇▇▇▇▇▇▇▇;
(ii) each individual who is an officer of the Company; (iii) each member of the
immediate family of each of the individuals referred to in clauses "(i)" and
"(ii)" above; and (iv) any trust or other Entity (other than the Company) in
which any one of the individuals referred to in clauses "(i)," "(ii)" and
"(iii)" above holds (or in which more than one of such individuals collectively
hold), beneficially or otherwise, a material voting, proprietary or equity
interest.)
2.19 Legal Proceedings; Orders.
(a) There is no pending Legal Proceeding, and (to the best of the
knowledge of the Company) no Person has threatened to commence any Legal
Proceeding: (i) that involves the Company or any of the assets owned or used by
the Company or any Person whose liability the Company has or may have retained
or assumed, either contractually or by operation of law; or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Merger or any of the other transactions
contemplated by this Agreement. To the best of the knowledge of the Company,
except as set forth in Part 2.19 of the Disclosure Schedule, no event has
occurred, and no claim, dispute or other condition or circumstance exists, that
will, or that could reasonably be expected to, give rise to or serve as a basis
for the commencement of any such Legal Proceeding.
(b) There is no order, writ, injunction, judgment or decree to which
the Company, or any of the assets owned or used by the Company, is subject.
▇▇▇▇▇▇▇▇ is not subject to any order, writ, injunction, judgment or decree that
relates to the Company's business or to any of the assets owned or used by the
Company. To the best of the knowledge of the Company, no officer or other
employee of the Company is subject to any order, writ, injunction, judgment or
decree that prohibits such officer or other employee from engaging in or
continuing any conduct, activity or practice relating to the Company's business.
2.20 Authority; Binding Nature of Agreement. The Company has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary action
on the part of the Company and its board of directors. This Agreement
constitutes the legal, valid and binding obligation of the Company,
22.
enforceable against the Company in accordance with its terms, subject to (i)
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
2.21 Non-Contravention; Consents. Neither (1) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (2) the consummation of the Merger or any of the other
transactions contemplated by this Agreement, will directly or indirectly (with
or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) any of
the provisions of the Company's articles of incorporation or bylaws, or (ii) any
resolution adopted by the Company's shareholders, the Company's board of
directors or any committee of the Company's board of directors;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any order, writ, injunction, judgment or decree
to which the Company, or any of the assets owned or used by the Company, is
subject;
(c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the Company's business
or to any of the assets owned or used by the Company;
(d) except as otherwise described in Part 2.21(d) of the Disclosure
Schedule, contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Company Contract that is or
would constitute a Material Contract, or give any Person the right to (i)
declare a default or exercise any remedy under any such Company Contract, (ii)
accelerate the maturity or performance of any such Company Contract, or (iii)
cancel, terminate or modify any such Company Contract; or
(e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Company).
The Company is not and will not be required to make any filing with or give any
notice to, or to obtain any Consent from, any Person in connection with (x) the
execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of the Merger
or any of the other transactions contemplated by this Agreement.
2.22 Full Disclosure. This Agreement (including the Disclosure Schedule)
does not (i) contain any representation, warranty or information that is false
or misleading with respect to any material fact, or (ii) omit to state any
material fact necessary in order to make the representations, warranties and
information contained and to be contained herein and therein (in
23.
the light of the circumstances under which such representations, warranties and
information were or will be made or provided) not false or misleading.
2.23 Accredited Investor. ▇▇▇▇▇▇▇▇ represents that he is an accredited
investor within the meaning of Regulation D under the Securities Act of 1933, as
amended.
2.24 Stock Ownership. ▇▇▇▇▇▇▇▇ represents that he owns all shares of
the outstanding capital stock of the Company, free and clear of all
Encumbrances.
SECTION 3. Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub jointly and severally represent and warrant
to the Company as follows:
3.1 SEC Filings; Financial Statements.
(a) Parent has delivered to the Company accurate and complete
copies (excluding copies of exhibits) of each report, registration statement (on
a form other than Form S-8) and definitive proxy statement filed by Parent with
the SEC between May 1, 2000 and the date of this Agreement (the "Parent SEC
Documents"). As of the time it was filed with the SEC (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing): (i) each of the Parent SEC Documents complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be); and (ii) none of the Parent SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The consolidated financial statements contained in the Parent
SEC Documents: (i) complied as to form in all material respects with the
published rules and regulations of the SEC applicable thereto; (ii) were
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered, except as may be indicated in
the notes to such financial statements and (in the case of unaudited statements)
as permitted by Form 10-Q of the SEC, and except that unaudited financial
statements may not contain footnotes and are subject to year-end audit
adjustments; and (iii) fairly present the consolidated financial position of
Parent and its subsidiaries as of the respective dates thereof and the
consolidated results of operations of Parent and its subsidiaries for the
periods covered thereby.
3.2 Authority; Binding Nature of Agreement. Parent and Merger Sub
have the absolute and unrestricted right, power and authority to perform their
obligations under this Agreement; and the execution, delivery and performance by
Parent and Merger Sub of this Agreement (including the contemplated issuance of
Parent Common Stock in the Merger in accordance with this Agreement) have been
duly authorized by all necessary action on the part of Parent and Merger Sub and
their respective boards of directors. No vote of Parent's stockholders is needed
to approve the Merger. This Agreement constitutes the legal, valid and binding
obligation of Parent and Merger Sub, enforceable against them in accordance with
its terms, subject to (i) laws of general application relating to bankruptcy,
insolvency and the relief of
24.
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
3.3 Valid Issuance. The Parent Common Stock to be issued in the Merger
will, when issued in accordance with the provisions of this Agreement, be
validly issued, fully paid and nonassessable.
3.4 Acquisition for Investment. Parent and Merger Sub are aware that the
Company Common Stock has not been registered under the Securities Act or under
any state securities laws. Merger Sub is not an "underwriter" (as such term is
defined under the Securities Act), and is acquiring the Company Common Stock
through the Merger solely for investment with no present intention to distribute
any of the Company Common Stock to any Person, and Merger Sub will not sell or
otherwise dispose of any Company Common Stock, except in compliance with the
registration requirements or exemption provisions under the Securities Act and
the rules and regulations promulgated thereunder, and other applicable
securities laws.
SECTION 4. Conditions Precedent to Obligations of Parent and Merger Sub
The obligations of Parent and Merger Sub to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions and, by entry into this Agreement, the Parent and Merger Sub hereby
certify that such conditions have been satisfied:
4.1 Shareholder Approval. The principal terms of the Merger shall have
been duly approved by the affirmative vote of all the shares of Company Common
Stock entitled to vote with respect thereto.
4.2 Consents. All Consents required to be obtained in connection with the
Merger and the other transactions contemplated by this Agreement, including the
following, shall have been obtained and shall be in full force and effect:
(a) Consents identified in Part 2.20 of the Disclosure Schedule; and
(b) a tax clearance certificate from the California Franchise Tax
Board.
4.3 Agreements and Documents. Parent and the Company shall have received
the following agreements and documents, each of which shall be in full force and
effect:
(a) Noncompetition Agreement in the form of Exhibit C, executed by
---------
▇▇▇▇▇▇▇▇;
(b) a Release in the form of Exhibit D, executed by ▇▇▇▇▇▇▇▇;
---------
(c) the Escrow Agreement substantially in the form of Exhibit B,
---------
executed by ▇▇▇▇▇▇▇▇;
(d) a legal opinion of Alexander & ▇▇▇▇▇▇ dated as of the Closing
Date, in the form of Exhibit E;
---------
25.
4.4 Unaudited Financial Statements. The Company shall deliver to Parent
the unaudited balance sheet of the Company as of March 31, 2001, and the related
unaudited income statement of the Company for the eight months then ended.
4.5 FIRPTA Compliance. The Company shall have delivered to Parent a
statement (in such form as may be reasonably requested by counsel to Parent)
conforming to the requirements of Section 1.897 - 2(h)(1)(i) of the United
States Treasure Regulations, and (b) the Company shall have delivered to the
Internal Revenue Service the notification required under ▇▇▇▇▇▇▇ ▇.▇▇▇ - ▇(▇)(▇)
▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Treasury Regulations.
4.6 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
4.7 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by Parent of any material right pertaining to its ownership of
stock of the Surviving Corporation.
4.8 Termination of Employee Plans.
(a) The Company shall have provided Parent with evidence, reasonably
satisfactory to Parent, as to the agreement by each SAR Holder to the
cancellation of all SARs held by such SAR Holder or, in the event that such
agreement is not obtained from all SAR Holders, a certificate specifying the
amount of the SAR Pay-out to be made to such SAR Holder(s).
(b) The Company shall have provided Parent with a resolution of the
Board of Directors of Company terminating the Company's 2000 Incentive Plan and
the Company's 401(k) plan as of the Effective Time.
SECTION 5. Conditions Precedent to Obligations of the Company
The obligations of the Company to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of the following conditions and, by
entry into this Agreement the Company hereby certifies that such conditions have
been justified:
5.1 Legal Opinions. A legal opinion of ▇▇▇▇▇▇ Godward LLP, dated as of
the Closing Date, in the form of Exhibit F; and
---------
5.2 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
26.
SECTION 6. Indemnification, Etc.
6.1 Survival of Representations, Etc.
(a) The representations and warranties made by the Company shall
survive the Closing and shall expire June 30, 2002; provided, however, that if,
at any time prior to June 30, 2002; any Indemnitee (acting in good faith)
delivers to the Escrow Agent and ▇▇▇▇▇▇▇▇ a written notice alleging the
existence of an inaccuracy in or a breach of any of the representations and
warranties made by the Company (and setting forth in reasonable detail the basis
for such Indemnitee's belief that such an inaccuracy or breach may exist) and
asserting a claim for recovery under Section 6.2 based on such alleged
inaccuracy or breach, then the claim asserted in such notice shall survive after
June 30, 2002 until such time as such claim is fully and finally resolved. All
representations and warranties made by Parent and Merger Sub shall survive the
Closing and shall expire June 30, 2002 at which time any liability of Parent or
Merger Sub with respect to such representations, warranties, and covenants shall
thereupon cease.
(b) The representations, warranties, covenants and obligations of
the Company, and the rights and remedies that may be exercised by the
Indemnitees, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or knowledge of, any of
the Indemnitees or any of their Representatives.
(c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Company in this Agreement.
6.2 Indemnification by ▇▇▇▇▇▇▇▇.
(a) From and after the Closing Date (but subject to Section 6.1(a)),
▇▇▇▇▇▇▇▇ shall hold harmless and indemnify each of the Indemnitees from and
against, and shall compensate and reimburse each of the Indemnitees for, any
Damages which are directly or indirectly suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise become subject
(regardless of whether or not such Damages relate to any third-party claim) and
which arise from or as a result of, or are directly or indirectly connected with
any inaccuracy in or breach of any representation or warranty set forth in
Section 2, any breach of any covenant by the Company or ▇▇▇▇▇▇▇▇ set forth in
this Agreement or any Legal Proceeding relating to any inaccuracy or breach of
the type referred to above (including any Legal Proceeding commenced by any
Indemnitee for the purpose of enforcing any of its rights under this Section 6).
(b) The Company and ▇▇▇▇▇▇▇▇ acknowledge and agree that, if the
Surviving Corporation suffers, incurs or otherwise becomes subject to any
Damages as a result of or in connection with any inaccuracy in or breach of any
representation, warranty, covenant or obligation, then (without limiting any of
the rights of the Surviving Corporation as an Indemnitee) Parent shall also be
deemed, by virtue of its ownership of the stock of the Surviving Corporation, to
have incurred Damages as a result of and in connection with such inaccuracy or
breach.
6.3 Threshold; Ceiling.
27.
(a) ▇▇▇▇▇▇▇▇ shall not be required to make any indemnification
payment pursuant to Section 6.2(a) for any inaccuracy in or breach of any of the
representations and warranties set forth in Section 2 until such time as the
total amount of all Damages (including the Damages arising from such inaccuracy
or breach and all other Damages arising from any other inaccuracies in or
breaches of any representations or warranties) that have been directly or
indirectly suffered or incurred by any one or more of the Indemnitees, or to
which any one or more of the Indemnitees has or have otherwise become subject,
exceeds $100,000 in the aggregate. If the total amount of such Damages exceeds
$100,000 then the Indemnitees shall be entitled to be indemnified against and
compensated and reimbursed for the full amount of such damages (and not merely
the portion of such Damages exceeding $100,000).
(b) The liability of ▇▇▇▇▇▇▇▇ under this Section 6 shall be limited
to the Escrow Fund pursuant to Section 1.5.
6.4 Escrow Fund.
(a) ▇▇▇▇▇▇▇▇, the Parent, the Surviving Corporation and a banking
institution selected by Parent as escrow agent ("Escrow Agent") shall enter into
the Escrow Agreement concurrent with the execution of this Agreement, under
which, on the terms and conditions set forth therein, a portion of the amounts
to be paid to ▇▇▇▇▇▇▇▇ hereunder will be escrowed to pay amounts payable to
Parent or the Surviving Corporation under this Section 6.
(b) The Escrow Fund shall consist of the amount set forth in Section
1.5.
(c) The amount remaining in the Escrow Fund less the sum of any
amounts payable from the Escrow Fund that are subject to a not yet resolved
claim made by Parent or the Surviving Corporation under this Section 6 and the
Escrow Agreement shall be distributed to ▇▇▇▇▇▇▇▇ on June 30, 2002.
6.5 Defense of Third Party Claims. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against the
Surviving Corporation, against Parent or against any other Person) with respect
to which the Surviving Corporation or Parent may become obligated to hold
harmless, indemnify, compensate or reimburse any Indemnitee pursuant to this
Section 6, Parent shall give ▇▇▇▇▇▇▇▇ prompt notice of the commencement of any
such Legal Proceeding; provided, however, that any failure on the part of Parent
to so notify ▇▇▇▇▇▇▇▇ shall not limit any of the obligations of ▇▇▇▇▇▇▇▇ under
this Section 6 (except to the extent such failure materially prejudices the
defense of such Legal Proceeding). Promptly after receipt by ▇▇▇▇▇▇▇▇ of a
notice of a claim pursuant to this Section 6.5, ▇▇▇▇▇▇▇▇ shall be entitled to
participate in the defense of such claim or Legal Proceeding, and, to the extent
▇▇▇▇▇▇▇▇ shall wish, to assume the defense thereof, with counsel reasonably
satisfactory to the Parent. After notice from ▇▇▇▇▇▇▇▇ to the Parent of its
election to assume the defense thereof, ▇▇▇▇▇▇▇▇ shall not be liable to the
Parent for any legal expenses subsequently incurred by the Parent in connection
with the defense thereof; provided, however, that if there exists or shall exist
a conflict of interest that would make it inappropriate, in the opinion of
counsel to the Parent, for the same counsel to represent both the Parent and
▇▇▇▇▇▇▇▇ or any affiliate or associate thereof, the Parent shall be entitled to
retain its own counsel at the expense of ▇▇▇▇▇▇▇▇; provided, however, that
▇▇▇▇▇▇▇▇ shall not be responsible for the fees and expenses of more than one
28.
separate counsel for the Parent. If ▇▇▇▇▇▇▇▇ elects to participate in the
defense of any claim or Legal Proceeding, Parent will use reasonable efforts to
assign to ▇▇▇▇▇▇▇▇ any contractual right to a defense or indemnity arising out
of any insurance policy in effect prior to the Closing Date and on which the
Company is a "Named Insured" as that term is defined under any such policy,
subject to any restrictions or limitations imposed on assignment by any such
insurance policy or applicable law. If ▇▇▇▇▇▇▇▇ does not elect to proceed with
the defense of any such claim as provided herein, the Parent shall have the
right to proceed with the defense of such claim or Legal Proceeding on its own.
If Parent so proceeds with the defense of any such claim or Legal Proceeding:
(a) all reasonable expenses relating to the defense of such claim or
Legal Proceeding shall be borne and paid exclusively by ▇▇▇▇▇▇▇▇;
(b) neither Party shall have the right to settle, adjust or
compromise such claim or Legal Proceeding without the consent of the other
Party; provided, however, that such consent shall not be unreasonably withheld;
and
(c) Parent shall not have any obligation to assign to ▇▇▇▇▇▇▇▇ any
rights arising out of any insurance policy.
6.6 Exercise of Remedies by Indemnitees Other Than Parent. No Indemnitee
(other than Parent or any successor thereto or assign thereof) shall be
permitted to assert any indemnification claim or exercise any other remedy under
this Agreement unless Parent (or any successor thereto or assign thereof) shall
have consented to the assertion of such indemnification claim or the exercise of
such other remedy.
6.7 Exclusivity of Section 6 Indemnity. Each Indemnitee 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 Section 6, provided that nothing in
--------
this Agreement shall be deemed to constitute a limitation on or other waiver of
any claims for fraud or intentional misrepresentation. In furtherance of the
foregoing, each Indemnitee 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 Section 6 and claims for fraud or
intentional misrepresentation) it may have relating to this Agreement and the
transactions contemplated hereby. Each Indemnitee (i) makes this waiver and
release with full knowledge that it may be releasing presently unknown or
unsuspected claims, (ii) has had the opportunity to be advised by its
independent legal counsel with respect to, and is familiar with Section 1542 of
the California Civil Code, which provides as follows: "A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR," and (iii)
expressly waives any and all rights which it may have under Section 1542 of the
California Civil Code, or any other state or federal statute or common law
principle of similar effect.
29.
SECTION 7. Registration of the Parent Common Stock; Compliance with the
Securities Act.
7.1 Definitions. As used in this Section 7 the following terms shall have
the following respective meanings:
(a) "Registrable Parent Common Stock" shall mean the Parent Common
Stock issued pursuant to this Agreement;
(b) "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 7.2; and
(c) "Untrue Statement" shall include any untrue statement or alleged
untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
7.2 Registration Procedures and Expenses Parent is obligated to do the
following:
(a) within twenty (20) business days following the Closing Date,
prepare and file with the SEC a registration statement on Form S-3 in order to
register with the SEC under the Securities Act a sale by ▇▇▇▇▇▇▇▇ on a delayed
or continuous basis pursuant to Rule 415 under the Securities Act of any or all
of the Registrable Parent Common Stock through the automated quotation system of
the Nasdaq National Market System or the facilities of any national securities
exchange on which Parent's Common Stock is then traded, or in privately-
negotiated transactions (a "Registration Statement") (notwithstanding anything
to the contrary expressed or implied herein, if a registration statement on Form
S-3, or any substitute form, is not then available for registration of the
Registrable Parent Common Stock, Parent shall be obligated instead to prepare
and file with the SEC a registration statement on Form S-1 in order to register
the Registrable Parent Common Stock under the Securities Act and such
registration statement will be a "Registration Statement" for the purposes of
this Agreement);
(b) following the filing of such Registration Statement, use its
best efforts, subject to receipt of necessary information from ▇▇▇▇▇▇▇▇, to
cause such Registration Statement to become effective as promptly after filing
as practicable;
(c) notify ▇▇▇▇▇▇▇▇, at any time when a prospectus relating to such
Registration Statement is required to be delivered under the Securities Act, of
the happening of any event as a result of which the prospectus included in or
relating to such Registration Statement contains an untrue statement of a
material fact or omits to state any fact necessary to make the statements
therein not misleading;
(d) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective until termination
of such obligation as provided in Section 7.7 below;
30.
(e) furnish to ▇▇▇▇▇▇▇▇ such number of copies of prospectuses as
▇▇▇▇▇▇▇▇ reasonably requests in order to facilitate the public sale or other
disposition of all or any of the Registrable Parent Common Stock by ▇▇▇▇▇▇▇▇ in
conformity with the requirements of the Securities Act;
(f) file such documents as may be required of Parent for normal
securities law clearance for the resale of the Registrable Parent Common Stock
in the states of the United States as may be reasonably requested by ▇▇▇▇▇▇▇▇
provided, however, that Parent shall not be required in connection with this
paragraph (e) to qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction;
(g) use its best efforts to cause all Registrable Parent Common
Stock to be listed on each securities exchange, if any, on which equity
securities of Parent are then listed; and
(h) bear all expenses in connection with the procedures in
paragraphs (a) through (f) of this Section 7.2, other than (i) fees and
expenses, if any, of counsel or other advisers to ▇▇▇▇▇▇▇▇, and (ii) any
expenses relating to the sale of the Registrable Parent Common Stock by
▇▇▇▇▇▇▇▇, including broker's commission, discounts or fees and transfer taxes.
7.3 Indemnification
(a) Parent agrees to indemnify and hold harmless ▇▇▇▇▇▇▇▇ from and
against any losses, claims, damages or liabilities to which ▇▇▇▇▇▇▇▇ may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any Untrue Statement made in the Registration Statement,
or arise out of any failure by Parent to fulfill any undertaking included in the
Registration Statement and Parent will reimburse ▇▇▇▇▇▇▇▇ for any reasonable
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that Parent shall not be liable in any such case to the extent that such loss,
claim, damage or liability arises out of, or is based upon, an Untrue Statement
made in such Registration Statement in reliance upon and in conformity with
written information furnished to Parent by or on behalf of ▇▇▇▇▇▇▇▇ specifically
for use in preparation of the Registration Statement, or the failure of ▇▇▇▇▇▇▇▇
to comply with the covenants and agreements contained in Section 7.4 hereof
respecting the sale of the Parent Common Stock or any statement or omission in
any prospectus that is corrected in any subsequent prospectus that was delivered
to ▇▇▇▇▇▇▇▇ prior to the pertinent sale or sales by ▇▇▇▇▇▇▇▇.
(b) ▇▇▇▇▇▇▇▇ agrees to indemnify and hold harmless Parent (and each
person, if any, who controls Parent within the meaning of Section 14 of the
Securities Act, each officer of Parent who signs the Registration Statement and
each director of Parent) from and against any losses, claims, damages or
liabilities to which Parent (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, any failure to comply with the
covenants and agreements contained in Section 7.4 hereof respecting sale of the
Parent Common Stock, or any Untrue Statement contained in the Registration
Statement on the effective date thereof if such Untrue Statement was made in
31.
reliance upon and in conformity with written information furnished by or on
behalf of ▇▇▇▇▇▇▇▇ specifically for use in preparation of the Registration
Statement, and ▇▇▇▇▇▇▇▇ will reimburse Parent (or such officer, director or
controlling person), as the case may be, for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided that in no event shall any indemnity by
▇▇▇▇▇▇▇▇ under this Section 7.3 exceed the net proceeds received by ▇▇▇▇▇▇▇▇
from the sale of the Parent Common Stock covered by such Registration Statement.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
(d) If the indemnification provided for in this Section 7.3 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or the omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission; provided, that in no event shall any contribution by ▇▇▇▇▇▇▇▇
hereunder exceed the net proceeds received by him from the sale of the Parent
Common Stock covered by the Registration Statement.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution in the underwriting agreement entered into
in connection with
32.
the underwritten public offering are in conflict with the foregoing provisions,
the provisions in the underwriting agreement shall control.
7.4 Transfer of Parent Common Stock after Registration; Notice. ▇▇▇▇▇▇▇▇
hereby covenants with Parent not to make any sale of the Parent Common Stock
after registration without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied (if a prospectus delivery
requirement applies to the sale). ▇▇▇▇▇▇▇▇ acknowledges that there may be times
when Parent must suspend the use of the prospectus forming a part of the
Registration Statement until such time as an amendment to the Registration
Statement has been filed by Parent and declared effective by the SEC, or until
such time as Parent has filed an appropriate report with the SEC pursuant to the
Exchange Act. ▇▇▇▇▇▇▇▇ hereby covenants that it will not sell any Parent Common
Stock pursuant to said prospectus or pursuant to Regulation S during the period
commencing at the time at which Parent gives ▇▇▇▇▇▇▇▇ notice of the suspension
of the use of said prospectus and ending at the time Parent gives ▇▇▇▇▇▇▇▇
notice that ▇▇▇▇▇▇▇▇ may thereafter effect sales pursuant to said prospectus.
The foregoing provisions of this Section 7.4 shall in no manner diminish or
otherwise impair Parent's obligations under Section 7.2 hereof and Parent is
obligated to use its best efforts to file and have declared effective by the SEC
any report or other document necessary to end the period of suspension.
7.5 Reporting Requirements.
(a) Parent agrees to use its best efforts to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(ii) file with the SEC in a timely manner all reports and other
documents required of Parent under the Securities Act and the Securities
Exchange Act of 1934; and
(iii) so long as ▇▇▇▇▇▇▇▇ owns Registrable Securities, to
furnish to ▇▇▇▇▇▇▇▇ forthwith upon request (1) a written statement by Parent as
to whether it complies with the reporting requirements of said Rule 144, the
Securities Act and Securities Exchange Act of 1934, or whether it qualifies as a
registrant whose securities may be resold pursuant to SEC Form S-3, (2) a copy
of the most recent annual or quarterly report of Parent and such other reports
and documents so filed by Parent, and (3) such other information as may be
reasonably requested in availing ▇▇▇▇▇▇▇▇ of any rule or regulation of the SEC
that would permit the selling of the Registrable Parent Common Stock without
registration.
7.6 Market Stand-Off. ▇▇▇▇▇▇▇▇ will provide Parent two business days
advance notice of a proposed transfer of more than 100,000 shares of Registrable
Parent Common Stock. If Parent requests that ▇▇▇▇▇▇▇▇ not Transfer any of the
Registrable Parent Common Stock for up to 90 days following an underwritten
public offering by Parent of its capital stock, then Parent shall give ▇▇▇▇▇▇▇▇
at least thirty (30) days notice of such proposed firmly underwritten public
offering by Parent of its capital stock, and ▇▇▇▇▇▇▇▇ covenants to comply with
such request of Parent.
33.
7.7 Termination of Obligations The obligations of Parent pursuant to
Sections 7.2 through 7.5 hereof shall cease and terminate as to ▇▇▇▇▇▇▇▇ upon
the earlier to occur of (i) such time as ▇▇▇▇▇▇▇▇ has sold all of the
Registrable Parent Common Stock held by him, or (ii) such time as all of the
Registrable Parent Common Stock held by ▇▇▇▇▇▇▇▇ may be sold during any 90 day
period pursuant to Rule 144.
7.8 Assignability of Registration Rights The registration rights set
forth in this Section 7 are not assignable other than to an affiliate of
▇▇▇▇▇▇▇▇.
SECTION 8. Miscellaneous Provisions
8.1 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement. As promptly as practicable
after the execution of this Agreement, each party to this Agreement shall make
all filings (if any) and give all notices (if any) required to be made and given
by such party in connection with the Merger and the other transactions
contemplated by this Agreement.
8.2 Fees and Expenses.
(a) Subject to Section 8.2 (b), each party to this Agreement shall
bear and pay all fees, costs and expenses (including legal fees and accounting
fees) that have been incurred or that are incurred by such party in connection
with the transactions contemplated by this Agreement, including all fees, costs
and expenses incurred by such party in connection with or by virtue of (i) the
investigation and review conducted by Parent and its Representatives with
respect to the Company's business (and the furnishing of information to Parent
and its Representatives in connection with such investigation and review), (ii)
the negotiation, preparation and review of this Agreement (including the
Disclosure Schedule) and all agreements, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the
transactions contemplated by this Agreement, (iii) the preparation and
submission of any filing or notice required to be made or given in connection
with any of the transactions contemplated by this Agreement, and the obtaining
of any Consent required to be obtained in connection with any of such
transactions, and (iv) the consummation of the Merger.
(b) All such fees, costs and expenses described in Section 8.2(a)
incurred by or for the benefit of the Company including all such fees, costs and
expenses incurred prior to the Closing Date and including the amount of all
special bonuses and other amounts that may become payable to any officers of the
Company or other Persons in connection with the consummation of the transactions
contemplated by this Agreement and including the brokerage fee of Via Inc. shall
be borne and paid by ▇▇▇▇▇▇▇▇ and not by the Company. Parent agrees to
facilitate payments of certain fees and expenses which are ▇▇▇▇▇▇▇▇'▇ obligation
under this Section 8.2(b) by deduction and payment of such amounts out of the
Merger Price as follows:
(i) At least one day in advance of the Closing Date, ▇▇▇▇▇▇▇▇ may
deliver to Parent a certificate setting forth (i) specific dollar payment
amounts for each of the
34.
Company's advisors and attorneys (including Alexander & ▇▇▇▇▇▇ and Via Inc.) for
services described in this Section 8.2(b) which ▇▇▇▇▇▇▇▇ requests be deducted
from and paid out of the Merger Price ("Closing Date Fee Payments"); and (ii)
addresses and/or wire transfer instructions with respect to each advisor or
attorney firm listed.
(ii) At Closing, Parent shall immediately pay the amounts of
Closing Date Fee Payments out of the Merger Price as directed by ▇▇▇▇▇▇▇▇;
provided that in no event shall Parent be required to pay any amount of Closing
Date Fee Payments which shall cause the Closing Deductions to be in excess of
one half of the Merger Price.
(c) Neither the Parent nor the Merger Sub has authorized or employed
anyone to represent it as a broker, banker or finder in connection with the
transactions contemplated by this Agreement.
8.3 Attorneys' Fees. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
8.4 Notices. Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
if to Parent: Attention: Chief Financial Officer
----------
Asyst Technologies, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
if to the Company: Attention: President
----------
GW Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
if to ▇▇▇▇▇▇▇▇: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.5 Confidentiality. The parties hereto shall keep confidential, and shall
not use or disclose to any other Person, any non-public document or other non-
public information in its possession, except as required by the Securities Act,
the Exchange Act, or other similar Legal Requirement.
35.
8.6 Time of the Essence. Time is of the essence of this Agreement.
8.7 Headings. The headings contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.
8.8 Counterparts. This Agreement may be executed in several counterparts,
each of which shall constitute an original and all of which, when taken
together, shall constitute one agreement.
8.9 Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws).
8.10 Successors and Assigns. This Agreement shall be binding upon: the
Company and its successors and assigns (if any); Parent and its successors and
assigns (if any); ▇▇▇▇▇▇▇▇ and his heirs and assigns; and Merger Sub and its
successors and assigns (if any). This Agreement shall inure to the benefit of:
Parent; ▇▇▇▇▇▇▇▇ and his heirs and assigns; Merger Sub; the other Indemnitees
(subject to Section 6.9); and the respective successors and assigns (if any) of
the foregoing.
8.11 Remedies Cumulative; Specific Performance. The rights and remedies of
the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this Agreement,
such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
8.12 Waiver.
(a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out of
this Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is expressly
set forth in a written instrument duly executed and delivered on behalf of such
Person; and any such waiver shall not be applicable or have any effect except in
the specific instance in which it is given.
8.13 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
36.
8.14 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
8.15 Parties in Interest. Except for the provisions of Sections 1.5 and 6,
none of the provisions of this Agreement is intended to provide any rights or
remedies to any Person other than the parties hereto and their respective
successors and assigns (if any).
8.16 Entire Agreement. This Agreement and the other agreements referred to
herein set forth the entire understanding of the parties hereto relating to the
subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof.
8.17 Construction.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement
to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.
37.
The parties hereto have caused this Agreement to be executed and delivered
as of May ____, 2001.
Asyst Technologies, Inc.
a California corporation
By:________________________________
Gem Acquisition Corp.,
a Delaware corporation
By:________________________________
GW Associates, Inc.
a California corporation
By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___________________________________
[Merger Agreement]
Exhibit A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(e) the sale, license, disposition or acquisition of all or a
material portion of the Company's business or assets;
(f) the issuance, disposition or acquisition of (i) any capital
stock or other equity security of the Company (other than common stock issued to
employees of the Company, upon exercise of Company Options or otherwise, in
routine transactions in accordance with the Company's past practices), (ii) any
option, call, warrant or right (whether or not immediately exercisable) to
acquire any capital stock or other equity security of the Company (other than
stock options granted to employees of the Company in routine transactions in
accordance with the Company's past practices), or (iii) any security, instrument
or obligation that is or may become convertible into or exchangeable for any
capital stock or other equity security of the Company; or
(g) any merger, consolidation, business combination, reorganization
or similar transaction involving the Company.
Company Contract. "Company Contract" shall mean any Contract: (a) to
which the Company is a party; (b) by which the Company or any of its assets is
or may become bound or under which the Company has, or may become subject to,
any obligation; or (c) under which the Company has or may acquire any right or
interest.
Company Proprietary Asset. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan or legally binding commitment or undertaking of
any nature.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including attorneys' fees), charge, cost (including
costs of investigation) or expense of any nature.
Disclosure Schedule. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to Parent on behalf of the Company.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
Indemnitees. "Indemnitees" shall mean the following Persons: (a) Parent;
(b) Parent's current affiliates (including the Surviving Corporation); (c) the
respective Representatives of the Persons referred to in clauses "(a)" and "(b)"
above; and (d) the respective successors and assigns of the Persons referred to
in clauses "(a)," "(b)" and "(c)" above; provided, however, that ▇▇▇▇▇▇▇▇ shall
not be deemed to be an "Indemnitee."
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.
Material Adverse Effect. A violation or other matter will be deemed to
have a "Material Adverse Effect" on the Company if such violation or other
matter (considered together with all other matters that would constitute
exceptions to the representations and warranties set forth in the Agreement or
in the Closing Certificate but for the presence of "Material Adverse Effect" or
other materiality qualifications, or any similar qualifications, in such
representations and warranties) would have or could be expected to have a
material adverse effect on the Company's business, condition, assets,
liabilities, operations, financial performance or prospects.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service ▇▇▇▇ (whether
registered or unregistered), service ▇▇▇▇ application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset; or (b) right to use or exploit any of the
foregoing.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange
Commission.
Securities Act. "Securities Act" shall mean the Securities Act of 1933, as
amended.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
EXHIBITS
Exhibit A - Certain definitions
Exhibit B - Escrow Agreement
Exhibit C - Form of Noncompetition Agreement
Exhibit D - Form of Release
Exhibit E - Form of legal opinion of Alexander & ▇▇▇▇▇▇
Exhibit F - Form of legal opinion of ▇▇▇▇▇▇ Godward llp