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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
dated as of May 7, 1997
by and between
VARIAN ASSOCIATES, INC., a Delaware corporation
and
NOVELLUS SYSTEMS, INC., a California corporation
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TABLE OF CONTENTS
Page
1. DEFINITIONS...................................................................................... 1
2. SALE AND PURCHASE OF ASSETS...................................................................... 4
2.1 Sale of Assets.......................................................................... 4
2.2 Assets Not Purchased.................................................................... 6
2.3 Purchase Price.......................................................................... 7
2.4 No Assignment in Certain Circumstances.................................................. 9
2.5 Assumed Liabilities..................................................................... 9
2.6 Closing................................................................................. 10
2.7 Consent of Third Parties................................................................ 12
3. REPRESENTATIONS AND WARRANTIES OF SELLER......................................................... 12
3.1 Organization and Authority.............................................................. 13
3.2 Authority Relating to this Agreement and Other Agreements; No
Violation of Other Instruments.......................................................... 13
3.3 Ownership and Delivery of Assets........................................................ 14
3.4 Compliance with Law..................................................................... 14
3.5 Financial Statements.................................................................... 15
3.6 Absence of Certain Changes or Events.................................................... 15
3.7 Inventory............................................................................... 15
3.8 Personal Property....................................................................... 16
3.9 Lease................................................................................... 16
3.10 Intellectual Property................................................................... 16
3.11 Product Warranties and Returns.......................................................... 17
3.12 Litigation.............................................................................. 17
3.13 Protection of Intangible Property....................................................... 17
3.14 Personnel............................................................................... 17
3.15 Brokers and Finders..................................................................... 18
3.16 Contracts............................................................................... 18
3.17 Absence of Environmental Liabilities.................................................... 18
4. REPRESENTATIONS AND WARRANTIES OF BUYER.......................................................... 18
4.1 Organization and Authority.............................................................. 18
4.2 Authority Relating to this Agreement; No Violation of Other
Instruments............................................................................. 18
4.3 [Intentionally Omitted]................................................................. 19
4.4 Sufficient Funds........................................................................ 19
5. CONDITIONS TO THE OBLIGATIONS OF BUYER........................................................... 19
5.1 Compliance Certificate.................................................................. 19
5.2 Landlord's Consent to Assignment........................................................ 19
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5.3 Opinion of Counsel...................................................................... 19
5.4 No Orders............................................................................... 20
5.5 Delivery of Closing Documents........................................................... 20
5.6 HSR Act................................................................................. 20
6. CONDITIONS TO THE OBLIGATIONS OF SELLER.......................................................... 20
6.1 Compliance Certificate.................................................................. 20
6.2 Landlord's Consent to Assignment........................................................ 20
6.3 Opinion of Counsel...................................................................... 20
6.4 No Orders............................................................................... 20
6.5 Delivery of Closing Documents........................................................... 20
6.6 HSR Act................................................................................. 20
7. COVENANTS OF SELLER.............................................................................. 20
7.1 Access to Properties and Records........................................................ 20
7.2 Conduct of the Business Prior to Closing Date........................................... 21
7.3 Advice of Developments.................................................................. 22
7.4 Acquisition, Merger or Similar Negotiations With Other Parties......................... 22
7.5 Financial Covenants..................................................................... 22
7.6 Non-Compete............................................................................. 23
7.7 Seller's Auditors....................................................................... 24
7.8 Transition Services..................................................................... 24
7.9 Satisfaction of Conditions.............................................................. 24
8. COVENANTS OF BUYER............................................................................... 25
8.1 Satisfaction of Conditions.............................................................. 25
8.2 Warranty Obligations.................................................................... 25
8.3 Prohibition on Use of Names, Etc........................................................ 25
9. EMPLOYMENT MATTERS............................................................................... 26
9.1 Employees............................................................................... 26
9.2 Employee Plans.......................................................................... 26
10. HSR ACT.......................................................................................... 27
10.1 Filings Under HSR Act................................................................... 27
11. INDEMNITY........................................................................................ 27
11.1 Survival of Representations and Warranties.............................................. 27
11.2 Seller's Indemnity ..................................................................... 27
11.3 Buyer's Indemnity....................................................................... 28
11.4 Procedure for Indemnification -- Third Party Claims..................................... 28
11.5 Collection of Accounts Receivable....................................................... 29
11.6 Limitations on Indemnification.......................................................... 29
12. TERMINATION...................................................................................... 30
12.1 Mutual Agreement........................................................................ 30
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12.2 Permanent Injunction.................................................................... 30
12.3 Termination by Buyer.................................................................... 30
12.4 Termination by Seller................................................................... 30
12.5 Confidentiality and Effect of Termination............................................... 30
13. MISCELLANEOUS.................................................................................... 31
13.1 Assignment.............................................................................. 31
13.2 Allocation of Purchase Price............................................................ 31
13.3 Prorations.............................................................................. 31
13.4 Confidentiality......................................................................... 32
13.5 Transfer Taxes.......................................................................... 32
13.6 Expenses................................................................................ 32
13.7 Further Assurances...................................................................... 32
13.8 Dispute Resolution...................................................................... 33
13.9 Notices................................................................................. 33
13.10 Entire Agreement and Modification....................................................... 34
13.11 No Other Remedies....................................................................... 34
13.12 Governing Law........................................................................... 35
13.13 Buyer's Brokers......................................................................... 35
13.14 Severability............................................................................ 35
13.15 Headings................................................................................ 35
13.16 Counterparts............................................................................ 36
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TABLE OF EXHIBITS
Exhibit 2.6.2(a): ▇▇▇▇ of Sale
Exhibit 2.6.2(b): Assignment of Trademarks
Exhibit 2.6.2(c): Assignment of Patents
Exhibit 2.6.2(d): Assignment of Licenses
Exhibit 2.6.2(e): Assumption Agreement
Exhibit 2.6.2(f): Secretary's Certificate of Seller
Exhibit 2.6.2(g): Compliance Certificate of Seller
Exhibit 2.6.2(h): Consent to Assignment
Exhibit 2.6.2(i): Opinion of Seller's General Counsel
Exhibit 2.6.3(b): Secretary's Certificate of Buyer
Exhibit 2.6.3(c): Compliance Certificate of Buyer
Exhibit 2.6.3(d): Opinion of Buyer's Counsel
TABLE OF SCHEDULES
Schedule 2.1(e): Patents, trademarks and trademark applications
Schedule 3.5: Balance Sheets for the Business dated as of December
27, 1996 and as of March 28, 1997
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made as of May 7,
1997, between Varian Associates, Inc., a Delaware corporation ("Seller"), and
Novellus Systems, Inc., a California corporation ("Buyer").
R E C I T A L S
A. Seller conducts the business of, among other things, the
development, manufacture and sale of products for physical vapor deposition and
chemical vapor deposition of thin films through its Thin Film Systems Business
(collectively, the "Business"). The Business is conducted by Seller primarily at
its facility at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Facility") and
is conducted by Seller, in part, internationally through certain of Seller's
Subsidiaries.
B. Seller also conducts the business of the development,
manufacture, sale and service of ion implant equipment (the "IIS Business"),
primarily at a facility in Gloucester, Massachusetts.
C. Subject to the terms and conditions of this Agreement,
Buyer desires to purchase, and Seller desires to sell, certain of the assets,
rights and tangible and intangible properties constituting the Business as
presently conducted, and to assume certain of Seller's liabilities associated
therewith.
D. Buyer and Seller are concurrently executing and delivering
(i) an Assignment and Assumption of Lessee's Interest in Lease and Covenants,
Conditions and Restrictions on Leasehold Interests (the "Assignment of Lease
Agreement"), (ii) a Sublease (the "Sublease"), (iii) a Shared Use Agreement (the
"Shared Use Agreement"), (iv) an Environmental Agreement (the "Environmental
Agreement"), (v) a Cross-License Agreement (the "Cross-License Agreement"), and
(vi) a Parts Supply Agreement (the "Supply Agreement"), all of which shall be
effective as of the Closing Date, and are hereinafter sometimes collectively
referred to as the "Ancillary Documents."
TERMS, COVENANTS AND CONDITIONS
1. DEFINITIONS.
For the purposes of this Agreement, in addition to any other
terms defined in this Agreement, the definitions cross-referenced below shall be
applicable:
1.1 Accounts Payable: shall be as defined in Section 2.5.1(a).
1.2 Accounts Receivable: shall be as defined in Section 2.1(a).
1.3 Agreement: shall be as defined in the preamble.
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1.4 Ancillary Documents: shall be as defined in the recitals.
1.5 Approval: shall be as defined in Section 2.4.1
1.6 Assets: shall be as defined in Section 2.1.
1.7 Assignment of Lease Agreement: shall be as defined in the recitals.
1.8 Assumed Liabilities: shall be as defined in Section 2.5.1.
1.9 Books and Records: shall be as defined in Section 2.2(i).
1.10 Business: shall be as defined in the recitals.
1.11 Buyer: shall be as defined in the preamble.
1.12 Buyer Closing Documents: shall be as defined in Section 2.6.3.
1.13 Buyer's Damages: shall be as defined in Section 11.2.
1.14 CERCLA: shall be as defined in Section 3.17.
1.15 Closing: shall be as defined in Section 2.6.1.
1.16 Closing Date: shall be as defined in Section 2.6.1.
1.17 Closing Date Balance Sheet: shall be as defined in Section 2.3.2(b).
1.18 Contract Advances: shall be as defined in Section 2.5.1(b).
1.19 Contracts: shall be as defined in Section 2.1(g).
1.20 Cross-License Agreement: shall be as defined in the recitals.
1.21 Damages: shall be as defined in Section 11.3.
1.22 Employee Plan: shall be as defined in Section 9.2.
1.23 ERISA: shall be as defined in Section 9.2.
1.24 Estimated Adjustment: shall be as defined in Section 2.3.2(a).
1.25 Excluded Assets: shall be as defined in Section 2.2.
1.26 Exclusively Used in the Business: shall be as defined in Section 2.1
1.27 Facility: shall be as defined in the recitals.
1.28 Facility Improvements: shall be as defined in Section 2.1(d).
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1.29 Final Adjustment: shall be as defined in Section 2.3.2(b).
1.30 Financial Statements: shall be as defined in Section 3.5.
1.31 GAAP: shall be as defined in Section 2.3.2(b).
1.32 Hazardous Material: shall be as defined in Section 3.17.
1.33 HSR Act: shall be as defined in Section 10.
1.34 IIS Business: shall be as defined in the recitals.
1.35 Intangible Personal Property: shall be as defined in Section 2.1(f).
1.36 Intellectual Property: shall be as defined in Section 2.1(e).
1.37 Inventory: shall be as defined in Section 2.1(b).
1.38 IRC: shall be as defined in Section 9.2.
1.39 Lease: shall be as defined in Section 3.9.
1.40 Licensed Intellectual Property: shall be as defined in Section 2.1(e).
1.41 Liens: shall be as defined in Section 3.3.
1.42 Machinery and Equipment: shall be as defined in Section 2.1(c).
1.43 Material Adverse Effect: shall be as defined in Section 3.
1.44 Net Asset Amount: shall be as defined in Section 2.3.2(b).
1.45 Permitted Liens: shall be as defined in Section 3.3.
1.46 Primarily Used in the Business: shall be as defined in Section 2.1.
1.47 Proprietary Rights and Information Agreement: shall be as defined in
Section 3.13.
1.48 Purchase Price: shall be as defined in Section 2.3.1.
1.49 Reference Balance Sheet: shall be as defined in Section 2.3.2(b).
1.50 Seller: shall be as defined in the preamble.
1.51 Seller Closing Documents: shall be as defined in Section 2.6.2.
1.52 Seller's Damages: shall be as defined in Section 11.3.
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1.53 Seller's Key Officers: shall be as defined in Section 3.
1.54 Seller Logos: shall be as defined in Section 8.3.1.
1.55 Seller Names: shall be as defined in Section 8.3.1.
1.56 Shared Use Agreement: shall be as defined in the recitals.
1.57 Sublease: shall be as defined in the recitals.
1.58 Subsidiary: shall be as defined in Section 2.1.
1.59 Supply Agreement: shall be as defined in the recitals.
1.60 Taxes: shall be as defined in Section 2.2(e).
1.61 TFS Intellectual Property: shall be as defined in Section 2.1(e).
1.62 Transition Services: shall be as defined in Section 7.8.
1.63 Warranty Obligations: shall be as defined in Section 2.5.1(f).
2. SALE AND PURCHASE OF ASSETS.
2.1 Sale of Assets.
Subject to the terms and conditions of this Agreement and for
the consideration set forth herein, (a) Seller shall, at the Closing, sell,
convey, assign, transfer and deliver to Buyer, and Buyer shall purchase and
acquire from Seller, and (b) Seller shall cause Seller's Subsidiaries, at the
Closing, to sell, convey, assign, transfer and deliver to Buyer or the foreign
Subsidiaries of Buyer (if and as designated in writing by Buyer), and Buyer or
such foreign Subsidiaries of Buyer, if applicable, shall purchase and acquire
from Seller's Subsidiaries, in each case, all of the right, title and interest
of Seller or Seller's Subsidiaries, as applicable, in and to the assets, rights
and tangible and intangible property Primarily Used in the Business (other than
the Excluded Assets), including, without limitation, the assets, right, tangible
and intangible property specifically described in Sections 2.1(a)-(i) below, as
the same may exist at the Closing (the "Assets"). As used in this Agreement, (x)
the term "Primarily Used in the Business" with respect to any asset, right,
tangible and intangible property, liability or obligation, shall mean (1) the
use or accrual of such item primarily relates to or primarily derives from the
Business, and (2) the item is reasonably necessary for the operation of the
Business as presently conducted and as conducted on the Closing Date, and (y)
the term "Exclusively Used in the Business" with respect to any asset, right,
tangible and intangible property, liability or obligation, shall mean such item
is solely used in or accrues solely from or relates solely to the operation of
the Business and not from any other operations or activities of Seller or any of
Seller's Subsidiaries. As used herein, "Subsidiary" shall mean, with respect to
a specified company, an entity controlled, directly or indirectly by such
company, including, without limitation, by such company's beneficial
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ownership of 50% or more of such entity's outstanding voting stock or other
equity interests. Without limiting the generality of the foregoing, the Assets
shall include, without duplication, the right, title and interest of Seller or
its Subsidiaries in and to the following as the same may exist at the Closing:
(a) Accounts Receivable. All accounts receivable of
Seller and its Subsidiaries accrued in the Business and outstanding as of the
Closing Date (the "Accounts Receivable").
(b) Inventory. All inventories of raw materials,
work-in-process, finished goods (including installation tooling), supplies and
repair materials owned by Seller or its Subsidiaries Primarily Used in the
Business existing as of the Closing Date, whether on or within the Facility, en
route thereto or elsewhere (the "Inventory").
(c) Fixed Assets and Tangible Personal Property. All fixed
assets and tangible personal property owned or leased by Seller or its
Subsidiaries (other than the Inventory and the Facility Improvements) Primarily
Used in the Business, including, without limitation, all machinery (including
replacement parts), equipment (including demo equipment and replacement parts),
supplies, tools, tooling, furniture, fixtures, hardware, dies and spare parts
Primarily Used in the Business ("Machinery and Equipment").
(d) Facility Improvements. All leasehold improvements
and fixtures located at the Facility (the "Facility Improvements").
(e) Intellectual Property. All patents, trademarks and
trademark applications listed on Schedule 2.1(e) attached hereto, all patent
applications and invention disclosures set forth in a letter, dated the date
hereof, concurrently delivered by Seller to Buyer, and all service marks,
service ▇▇▇▇ applications, trade and other names (either registered, common law
or registration applied for), copyrights, copyright applications, trade secrets,
know-how, processes, manufacturing or marketing procedures, recipes, formulae,
drawings, schematics and patterns ("Intellectual Property") owned by Seller or
its Subsidiaries that are Exclusively Used in the Business (all such
Intellectual Property, collectively, the "TFS Intellectual Property"). Without
limitation of the foregoing, the Assets shall be deemed to further include any
drawings, documentation, schematics, manuals or other materials, whether in
written or magnetic form to the extent that the same describe, disclose or
otherwise set forth any of the TFS Intellectual Property. The TFS Intellectual
Property shall not include any Intellectual Property that is not TFS
Intellectual Property, including, without limitation, the Intellectual Property
listed on Exhibit A to the Cross-License Agreement (the "Licensed Intellectual
Property").
(f) Intangible Personal Property. All warranties, guaranties,
vendor lists, customer lists, customer files, customer records, trade and other
association memberships and rights, licenses and permits susceptible of transfer
under regulatory agency rules Exclusively Used in the Business (the "Intangible
Personal Property").
(g) Contracts. Subject to the Cross-License Agreement and
excluding the Licensed Intellectual Property, all contracts of Seller
Exclusively Used in the Business,
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including, without limitation, (i) all patent, technology, software and other
intellectual property license agreements, assignment agreements, purchase
contracts, purchase orders, sales contracts, sales orders, rights to discounts,
maintenance agreements, sales representative agreements, service agreements,
distribution agreements, joint development contracts and agreements for leased
equipment Exclusively Used in the Business, (ii) that certain Professional
Services Agreement dated as of March 27, 1996 (the "Professional Services
Agreement"), between Seller and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇"), and (iii) that
certain Development and Design Agreement dated August 1, 1996 (the "Development
and Design Agreement"), between Seller and Multilevel Metals, Inc. (the
"Contracts").
(h) Facility. Subject to the terms of the Assignment of Lease
Agreement, and subject to the existing sublease in favor of a third party and
the Sublease, all of Seller's right, title and interest as tenant in and to the
Lease. The parties agree to reasonably cooperate to amend the Assignment of
Lease Agreement, in non-material respects only, if requested by the Landlord
under the Lease.
(i) Books and Records. All books, records, logs, plans,
specifications, blueprints, data, operating manuals, drawings, sketches,
diagrams, marketing materials, and other reports or documents Exclusively Used
in the Business (collectively, "Books and Records").
2.2 Assets Not Purchased.
Notwithstanding Section 2.1, Seller shall not sell, and Buyer
shall not acquire any interest in, any of the following (collectively, the
"Excluded Assets"):
(a) Cash. Any cash, cash deposits, other cash equivalents,
cash refunds, insurance policies or rights thereunder, security bonds or
deposits, or bank accounts.
(b) Other Intellectual Property. Any patents, patent
applications, trademark, trademark applications, software or other Intellectual
Property of Seller or any of its Subsidiaries that are not TFS Intellectual
Property.
(c) Royalty Bearing Licenses. Any agreements by Seller to
license or assign patent, technology, software or other intellectual property
license agreements to other parties where royalties (or claims with respect
thereto) accrue to the licensor.
(d) Other Real Property. Real property or real property
interests other than as set forth in the Assignment of Lease Agreement (with
respect to the Facility) or the Shared Use Agreement.
(e) Tax Refunds. Any refund of the following: any federal,
state, local, or foreign income, gross receipts, license, payroll, parking,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including, without limitation, taxes under IRC Code Sec. 59A),
customs duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, documentary, value added, alternative or add-on
minimum, estimated tax or
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other tax of any kind whatsoever (collectively, "Taxes"), or any claim for a
refund of Taxes for periods before the Closing. Notwithstanding the foregoing,
or anything else to the contrary set forth in this Agreement, neither Buyer nor
Seller shall have any obligation to apply for, pursue or otherwise seek to
obtain any refund for Taxes for periods prior to or after the Closing.
(f) Contingent Benefits. Other than (1) accounts or notes
receivable, (2) any Assets reflected on the Closing Date Balance Sheet, or (3)
rights described in clause (g) of Section 2.1 with respect to Contracts that
remain executory, any claims or rights against third parties arising from the
ownership of the Assets or the conduct of the Business before the Closing Date.
(g) Intercompany Agreements. Any distributor, representative
or service agreements, contracts or commitments between or among any of Seller
and its Subsidiaries, except as expressly set forth in the Supply Agreement.
(h) Other Intangible Personal Property. Any warranties,
guaranties, vendor lists, customer lists, customer files, customer records,
trade and other association memberships or rights, licenses and permits that are
not Intangible Personal Property.
(i) Other Contracts. Any contracts, patent agreements,
technology agreements, software agreements or other intellectual property
license agreements, assignment agreements, purchase contracts, purchase orders,
sales contracts, sales orders, right to discounts, maintenance agreements, sales
representative agreements, service agreements, distribution agreements, joint
development agreements or agreements for leased equipment, that are not included
within the Contracts.
(j) Other Book and Records. Any books, records, logs, plans,
specifications, blueprints, data, operating manuals, drawings, sketches,
diagrams, marketing materials, and other reports or documents that are not Books
and Records.
(k) Unrelated Assets and Businesses. Any businesses,
operations, subsidiaries or divisions, properties or assets of Seller or its
Subsidiaries not Primarily Used in the Business, including, without limitation,
Seller's Ion Implant Systems business, Health Care Systems business, Instruments
business, Ginzton Research Center (other than Assets included therein) and
corporate functions of Seller.
(l) Stock in Subsidiaries. Any capital stock in any of
Seller's Subsidiaries.
Such assets shall remain the property of Seller and Buyer
shall have no liability or other responsibility with respect thereto.
2.3 Purchase Price.
2.3.1 Purchase Price. Subject to the terms and conditions of
this Agreement (including, without limitation, adjustment pursuant to Sections
2.3.2 and 13.3 below), as consideration for the Business and the Assets: (a)
Buyer shall pay to Seller (acting on behalf of
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itself and as agent for the applicable Subsidiaries of Seller) One Hundred Fifty
Million Dollars ($150,000,000) (the "Purchase Price") payable to Seller at the
Closing, in immediately available funds; and (b) Buyer shall assume the Assumed
Liabilities (but no other liabilities).
2.3.2 Purchase Price Adjustment.
(a) At the Closing, a reasonable estimate of the
adjustment to the Purchase Price provided for in Section 2.3.2(b) below shall be
made by Seller based upon a review of the Assets, Accounts Payable and Contract
Advances, as of a date as close as practicable to the Closing Date (the
"Estimated Adjustment"). The Estimated Adjustment shall be used as the basis of
calculating and paying the Purchase Price at the Closing until such time as the
Final Adjustment is fully determined.
(b) The Purchase Price shall be adjusted upward
or downward on a dollar for dollar basis to (i) provide to Buyer a credit in the
amount of the value of any accrued employee vacation or sick leave transferred
to Buyer pursuant to Section 9.1 below to the extent not reflected on the
Closing Date Balance Sheet, and (ii) reflect any difference between the Net
Asset Amount reflected on the unaudited balance sheet of the Business as at
December 27, 1996 attached hereto as Schedule 3.5 (which excludes Excluded
Assets) (the "Reference Balance Sheet") and the Net Asset Amount reflected on
the audited Closing Date balance sheet of the Business as at the close of
business on the Closing Date, which shall be prepared by Seller and its
accountants from the books and records of the Business in accordance with this
Agreement and generally accepted accounting principles ("GAAP") applied on a
basis consistent with the Reference Balance Sheet (the "Closing Date Balance
Sheet"); provided that Buyer shall reimburse Seller for the fees and expenses of
its auditors or any out-of-pocket expenses incurred by Seller in connection with
auditing such balance sheet. In furtherance thereof, Buyer shall cooperate with
Seller and its accountants, and shall provide such persons full access to the
books, records, work papers, information, facilities and employees of Buyer
relating to the Business as conducted by Buyer from and after the Closing Date.
Seller shall deliver the Closing Date Balance Sheet to Buyer within sixty-five
(65) days following the Closing. Buyer shall have thirty (30) days from receipt
of the Closing Date Balance Sheet in which to notify Seller in detail of any
specific objections thereto, during which period Seller shall provide Buyer and
its accountants with reasonable access to Seller's and Seller's accountants'
working papers used in preparing the Reference Balance Sheet and the Closing
Date Balance Sheet. If such notice is given and the parties are unable to
resolve their disagreements within fifteen (15) days following Seller's receipt
of such notice, the matter in dispute shall be resolved by arbitration as
provided in Section 13.8 hereof. Resolution of such dispute by agreement of the
parties hereto or by arbitration shall be final, conclusive and binding on the
parties. The Purchase Price shall be adjusted based upon such final resolution
(the "Final Adjustment"). Within ten (10) business days following the date of
such final resolution, Seller or Buyer, as the case may be, shall remit in cash
the amount of the difference between the Estimated Adjustment and the Final
Adjustment to the other party. For purposes of this Section 2.3.2(b), the "Net
Asset Amount" shall mean the difference between the book value of the assets and
liabilities of the Business as such assets and liabilities are reflected in the
Reference Balance Sheet or the Closing Date Balance Sheet, as applicable.
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2.4 No Assignment in Certain Circumstances.
2.4.1 Consents. Notwithstanding anything else contained in
this Agreement to the contrary, this Agreement shall not constitute an agreement
to sell, convey, assign, transfer or deliver any interest in any instrument,
commitment, contract, lease, permit or other agreement or arrangement or any
claim, right or benefit arising thereunder or resulting therefrom if such a
transfer or an attempt to make such a transfer without the authorization,
approval, consent or waiver (collectively, "Approval") of a third party would
constitute a breach or violation thereof, or affect adversely the rights of
Buyer, Buyer's Subsidiaries, Seller or Seller's Subsidiaries thereunder, or
constitute a Material Adverse Effect; and any such transfer to Buyer or its
Subsidiaries that requires the Approval of a third party shall be made subject
only to such Approval being obtained. Seller shall use its commercially
reasonable efforts to obtain any such Approval prior to the Closing Date, and
Buyer shall reasonably cooperate, at Seller's cost, in connection therewith. In
the event that any such Approval is not obtained on or prior to the Closing
Date, Seller shall, for a period of six (6) months thereafter, continue to use
its commercially reasonable efforts to obtain any such Approval and cooperate
with Buyer in any reasonable and lawful arrangement to provide that Buyer or its
Subsidiaries, as the case may be, shall receive all of Seller's and any of
Seller's Subsidiaries' right, title and interest in any Asset with respect to
which such Approval is required, including, without limitation, performance by
Seller or such Subsidiary of Seller, as agent; provided, however, that, in
connection with the foregoing, Seller shall not be obligated to commence or
prosecute any proceeding of any nature before any governmental entity or pay any
amount to any third party other than at the sole expense of Buyer; provided
further, however, that any and all consent and assignment costs or charges
expressly set forth in the Contracts, including, without limitation, payments
stated to be due in connection with the sale, transfer, or other disposition of
the Business by Seller, shall be paid by Seller. Except as provided in section
2.4.2 below, no such Approval shall be a condition to Closing.
2.4.2 Required Consent. Notwithstanding anything to the
contrary set forth in Section 2.4.1 above, the landlord consent of the ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Junior University to the assignment of the Lease pursuant to the
Assignment of Lease (as the same may be modified in accordance with Section
2.1(h)), shall be a condition to Closing.
2.5 Assumed Liabilities.
2.5.1 Assumption of Liabilities. In connection with the
purchase and sale of the Assets pursuant to this Agreement, Buyer shall assume
in writing at the Closing pursuant to the Assumption Agreement only those
liabilities and obligations of Seller and Seller's Subsidiaries, as applicable,
set forth below (collectively, the "Assumed Liabilities"):
(a) Accounts Payable. Those accounts payable of Seller
and its Subsidiaries, outstanding as of the Closing Date, arising from Seller's
and any of its Subsidiaries' operation of the Business ("Accounts Payable").
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(b) Contract Advances. Any liability or credit of or
owing from Seller and its Subsidiaries for deposits, prepayments or advances
paid to Seller or its Subsidiaries prior to the Closing Date with respect to
Contracts ("Contract Advances").
(c) Contract Obligations. Any obligation remaining to be
performed under the Contracts, including, without limitation, installation
obligations, but specifically excluding any and all amounts required to be paid
by Seller pursuant to (i) Section 3.2 of the Professional Services Agreement,
and (ii) Sections 5.2 and 5.3 of the Development and Design Agreement, which
amounts shall be the sole responsibility of Seller.
(d) Balance Sheet Liabilities. The amounts for any liabilities
reflected on the Closing Date Balance Sheet.
(e) Product Liability. Any liability for bodily injury or
property damage arising from occurrences after the Closing as a result of any
alleged or actual defects in products of the Business designed, manufactured or
assembled by or on behalf of Seller or any of its Subsidiaries (including,
without limitation, liabilities for negligence, failures to warn, and breach of
express or implied warranty), other than any such liability relating to a
product shipped or sold or service rendered by Seller or any of its Subsidiaries
prior to the Closing.
(f) Warranty Obligations. Any continuing obligation of Seller
or its Subsidiaries with respect to the performance of warranty and/or service
obligations with respect to products of the Business shipped or sold prior to
the Closing Date by Seller or any of its Subsidiaries ("Warranty Obligations").
(g) Sales Taxes. Any transfer, sales, value added or similar
Taxes arising out of or incurred in connection with the transfer of the Assets
or the Business.
Except as provided in this Section 2.5, no other liabilities
or obligations of any nature, whether known or unknown, foreseen or unforeseen,
fixed or contingent, liquidated or unliquidated, accrued or unaccrued, shall be
assumed by Buyer in connection with the purchase and sale of the Assets
hereunder, and any such liabilities and obligations of any nature of Seller or
its Subsidiaries not expressly assumed by Seller pursuant to this Section 2.5
shall remain the sole and absolute responsibility of Seller (collectively, the
"Retained Liabilities").
2.6 Closing.
2.6.1 Closing Date. Subject to Sections 5 and 6, the closing
of the purchase and sale of the Assets and the assumption of the Assumed
Liabilities (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, 755 Page Mill Road, Palo Alto, California at 10:00 a.m. on the
date that is three (3) business days after the later of (i) delivery by the
landlord of its consent to assignment of the Lease as contemplated hereby or
(ii) expiration of the period set forth in Sections 5.6 and 6.6, or at such
other place, date or time as Buyer and Seller may agree in writing. The date of
the Closing shall constitute the "Closing Date."
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2.6.2 Seller's Deliveries at Closing. At the
Closing, Seller shall deliver or cause to be delivered to Buyer:
(a) An executed ▇▇▇▇ of Sale substantially in the form of
Exhibit 2.6.2(a) (the "▇▇▇▇ of Sale");
(b) An executed Assignment of Trademarks substantially in the form
of Exhibit 2.6.2(b) (the "Assignment of Trademarks");
(c) An executed Assignment of Patents substantially in the form of
Exhibit 2.6.2(c) (the "Assignment of Patents");
(d) An executed Assignment of Licenses, Contracts and Intangibles
substantially in the form of Exhibit 2.6.2(d) (the "Assignment of
Licenses");
(e) An executed counterpart of an Assumption of Liabilities
Agreement substantially in the form of Exhibit 2.6.2(e) (the
"Assumption Agreement");
(f) A Secretary's Certificate certifying the
resolutions of the Executive Committee of
the Board of Directors of Seller authorizing
consummation of the transactions
contemplated by this Agreement substantially
in the form of Exhibit 2.6.2(f);
(g) A compliance certificate substantially in the form of
Exhibit 2.6.2(g);
(h) Subject to execution by the landlord, a written consent to
assignment executed by the landlord under the Lease substantially
in the form of Exhibit 2.6.2(h); and
(i) The opinion of Seller's General Counsel substantially in the form
of Exhibit 2.6.2(i).
The documents referred to in Sections 2.6.2(a)-(e) above are hereinafter
referred to, collectively, as the "Seller Closing Deliveries." The Seller
Closing Deliveries and the Ancillary Documents are hereinafter referred to,
collectively, as the "Seller Closing Documents."
2.6.3 Buyer's Deliveries at Closing. At the Closing, Buyer
shall deliver or cause to be delivered to Seller the following instruments and
documents against delivery of the items specified in Section 2.6.2:
(a) The Purchase Price, subject to any
adjustment thereto pursuant to Section 2.3.2
or Section 13.3 below, by wire transfer of
immediately available funds to an account
designated by Seller;
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(b) A Secretary's Certificate certifying the
resolutions of the Board of Directors of
Buyer authorizing consummation of the
transactions contemplated by this Agreement
substantially in the form of Exhibit
2.6.3(b);
(c) A compliance certificate substantially in the form of
Exhibit 2.6.3(c).
(d) The opinion of Buyer's counsel substantially in the form of
Exhibit 2.6.3(d); and
(e) An executed counterpart of the ▇▇▇▇ of Sale,
Assignment of Trademarks, Assignment of
Patents, Assignment of Licenses and an
executed Assumption Agreement.
The documents referred to in Section 2.6.3(e) above, are hereinafter referred to
collectively, as the "Buyer Closing Deliveries." The Buyer Closing Deliveries
and the Ancillary Documents are hereinafter referred to, collectively, as the
"Buyer Closing Documents."
2.7 Consent of Third Parties. At the Closing, Seller shall provide
Buyer with copies of such third party consents as may have been actually
obtained by Seller through the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF SELLER.
The sale of the Assets to Buyer pursuant to this Agreement
shall, except as otherwise expressly provided in this Agreement, be without any
representations or warranties of any kind or nature, express or implied, as to
the title to, or the condition, value or quality of, the Assets or the Business
and, except as otherwise expressly provided in this Section 3 of this Agreement
or in Section 15 of the Assignment of Lease Agreement, Seller SPECIFICALLY
DISCLAIMS ANY REPRESENTATION OR WARRANTY OF MERCHANTABILITY, USAGE, SUITABILITY
OR FITNESS FOR ANY PARTICULAR PURPOSE WITH RESPECT TO THE ASSETS, OR ANY PART
THEREOF, OR AS TO THE WORKMANSHIP THEREOF, OR THE ABSENCE OF ANY DEFECTS
THEREIN, WHETHER LATENT OR PATENT, IT BEING UNDERSTOOD THAT SUCH ASSETS SHALL BE
SO SOLD "AS IS, WHERE IS" AND IN THEIR PRESENT CONDITION.
Seller hereby represents and warrants to Buyer that the
following statements (Sections 3.1 through 3.17) are true and correct as of the
date of this Agreement. Whenever the term "to Seller's knowledge" or "to the
best of Seller's knowledge" or similar expression appears in any representation
or warranty in this Section 3, it means to the actual knowledge (without
investigation) of Seller's (i) Vice President, Finance and Chief Financial
Officer, (ii) Executive Vice President, Semiconductor Equipment, (iii) Vice
President, General Counsel and Secretary, and (iv) Associate General Counsel,
Intellectual Property (collectively, "Seller's Key Officers"). Whenever the term
"Seller has received no notice" or like expression appears in any representation
or warranty in this Section 3, it means that none of Seller's Key Officers has
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received actual oral or written notice of the matter to which such term is
applied, without inquiry as to whether notice has been received. Whenever the
term "Material Adverse Effect" or similar expression appears in this Agreement,
it means, an effect, on the Assets or the Business, which is or is reasonably
likely to be materially adverse to (a) the results of operations or financial
condition of the Business, taken as a whole, or (b) Buyer's ability to operate
the Business as presently conducted after the Closing Date.
3.1 Organization and Authority. Seller: (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware; (ii) has all necessary corporate power to own and lease its
properties, to carry on its business as and where it is now being conducted and
to enter into and perform this Agreement; and (iii) is qualified to do business
in all jurisdictions in which the failure to so qualify would have a Material
Adverse Effect. Each of Seller's Subsidiaries: (i) is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it was
formed; (ii) has all necessary corporate or entity power to own and lease its
properties, and to carry on its business as now being conducted; and (iii) is
qualified to do business in all jurisdictions in which the failure to so qualify
would have a Material Adverse Effect.
3.2 Authority Relating to this Agreement and Other Agreements;
No Violation of Other Instruments.
3.2.1 The execution and delivery of this Agreement and the
Seller Closing Documents and the performance by Seller of its obligations
hereunder and thereunder have been duly authorized by all necessary corporate
action on the part of Seller and, assuming execution of this Agreement by Buyer,
this Agreement and each of the Seller Closing Documents will constitute legal,
valid and binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, subject as to enforcement only: (i) to
bankruptcy, insolvency, reorganization, arrangement, moratorium and other
similar laws of general applicability relating to or affecting creditors' rights
generally; and (ii) to general principles of equity.
3.2.2 To Seller's knowledge, neither execution of this
Agreement nor any of the Seller Closing Documents, nor the performance hereof or
thereof by Seller or any of its Subsidiaries, will: (i) conflict with or result
in any breach or violation of the terms of any decree, judgment, order, law or
regulation of any court or other governmental body now in effect applicable to
Seller or any of Seller's Subsidiaries; (ii) conflict with, or result in, with
or without the passage of time or the giving of notice (or both), any breach of
any of the terms, conditions and provisions of, or constitute a default under,
or result in the creation of, any Lien upon any of the Assets pursuant to, any
indenture, mortgage, lease, agreement or other instrument to which Seller or any
Subsidiary of Seller is a party or by which it or any such Subsidiary or any of
the Assets are bound; or (iii) violate or conflict with any provision of
Seller's or any of Seller's Subsidiaries' Certificate of Incorporation, By-laws,
or similar organizational instruments.
3.2.3 Except as provided in Section 2.4.2 or the HSR Act, no
consent from any third party and no consent, approval or authorization of, or
declaration, filing or registration with, any government or regulatory authority
is required to be made or obtained by Seller or any of its
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Subsidiaries in order to (i) assign and transfer the TFS Intellectual Property
to Buyer and to perform Seller's obligations under the License Agreement, except
for such consents which the failure to obtain would not have, in the aggregate,
a Material Adverse Effect; or (ii) to Seller's knowledge, permit the execution,
delivery or performance of this Agreement or any of the Seller Closing Documents
by Seller, or the consummation by Seller or any of its Subsidiaries of any of
the other transactions contemplated by this Agreement.
3.3 Ownership and Delivery of Assets. Seller and/or Subsidiaries of
Seller have, or immediately prior to the Closing will have, good and marketable
title to all of the Assets consisting of personal property (other than Assets
which are leased by or licensed to Seller or its Subsidiaries) and Seller has
all necessary power and authority to transfer the Assets to Buyer, free and
clear of all liens, charges, easements, covenants, mortgages, restrictions or
other encumbrances or limitations (collectively, "Liens") other than any (a)
mechanics', carriers', workers' and other similar Liens arising in the ordinary
course of business; (b) Liens for current real property Taxes and assessments
not yet due and payable; (c) usual and customary non-monetary real property
encumbrances that do not materially interfere with the operation of that portion
of the Business conducted on such property; (d) Liens securing purchase money
obligations or obligations under equipment leases which, in the aggregate, are
not material in amount and have not arisen other than in the ordinary course of
business; (e) all applicable zoning ordinances and land use restrictions, with
which Seller and its Subsidiaries have complied in all material respects and
which do not interfere materially with the operation of that portion of the
Business currently conducted on the property subject to such ordinances or
restrictions; (f) with respect to any Asset which consists of a leasehold or
other possessory interest in real property, all liens, mortgages, covenants,
imperfections in title, charges, easements, restrictions, encumbrances and other
title matters (whether or not the same are recorded) of which Seller has no
knowledge to which the underlying fee estate in such real property is subject,
which were not created or incurred by Seller or any of Seller's Subsidiaries and
which do not interfere materially with the operation of that portion of the
Business currently conducted on such property; and (g) with respect to the
Lease, the subleasehold estate created in favor of Communications & Power
Industries Inc. with respect to Parcel B as described in the Lease; (h) with
respect to patents, patent applications, trademarks, trademark applications,
software and other Intellectual Property, any licenses which may have been
granted by Seller to third parties and (i) Liens associated with Accounts
Payable assumed by Buyer (collectively, "Permitted Liens").
3.4 Compliance with Law. Except with respect to the matters described
in Section 3.17, which are treated separately in Section 3.17, to Seller's
knowledge, Seller and/or Seller's Subsidiaries hold all licenses, permits and
authorizations necessary for the lawful conduct of the Business whenever and
wherever conducted pursuant to all applicable statutes, laws, ordinances, rules
and regulations of all foreign and domestic governmental bodies, agencies and
subdivisions having, asserting or claiming jurisdiction over Seller, Seller's
Subsidiaries, or the Assets, or over any part of Seller's or Seller's
Subsidiaries' operations, and to Seller's knowledge, there is no violation
thereof or default thereunder. Except with respect to the matters
described in Section 3.17, which are treated separately in Section 3.17, to
Seller's knowledge, neither Seller nor any of Seller's Subsidiaries is in
violation of any decree, judgment, order, law or regulation of any court or
other foreign or domestic governmental body (including,
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without limitation, applicable equal employment and civil rights regulations,
wages, hours and the payment of social security taxes and occupational health
and safety legislation).
3.5 Financial Statements. Seller has delivered financial statements of
Seller for the Business (the "Financial Statements") to Buyer as follows:
Financial Statement Delivery to Buyer
------------------- -----------------
Balance Sheet for the Business dated as of Schedule 3.5 hereto
December 27, 1996
Balance Sheet for the Business dated as of March 28, Schedule 3.5 hereto
1997
The Financial Statements are in accordance with the books and records of
Seller, fairly present, in all material respects, the financial condition of
the Business at the dates indicated, and have been prepared in all material
respects in accordance with GAAP consistently applied. Notwithstanding
anything else herein to the contrary, Seller makes no representation or
warranty as to the adequacy of any reserves reflected in the Financial
Statements.
3.6 Absence of Certain Changes or Events.
(a) Since March 28, 1997, except as contemplated by this
Agreement or to the extent reflected in the Closing Date Balance Sheet as an
adjustment to the Purchase Price pursuant to Section 2.3.2, there have been no
material changes in the condition, financial or otherwise, of any of the Assets,
liabilities, business, or operations of the Business, other than changes in the
ordinary course of business which in the aggregate would not have a Material
Adverse Effect.
(b) Without limiting the foregoing, since March 28, 1997,
except as contemplated by this Agreement or to the extent reflected in the
Closing Date Balance Sheet as an adjustment to the Purchase Price pursuant to
Section 2.3: (i) to Seller's knowledge, neither Seller nor any Subsidiary of
Seller has entered into any transaction other than in the ordinary course of
business relating to or affecting the Assets or the Business; (ii) there have
been no losses or damage to any of the Assets due to fire or other casualty,
whether or not insured, amounting to more than Fifty Thousand Dollars ($50,000)
in the aggregate; (iii) to Seller's knowledge, neither Seller nor any Subsidiary
of Seller has executed, created, amended or terminated any Contract except in
the ordinary course of business; (iv) there has been no waiver or compromise by
Seller or any of its Subsidiaries of a material right or of a material debt owed
to it which would have a Material Adverse Effect; (v) there has been no
revaluation by Seller or any of its Subsidiaries of any of the Assets; and (vi)
there has been no revocation of any license, permit, approval or right to do
business granted to Seller or any of its Subsidiaries relating to or affecting
the Business which would have a Material Adverse Effect.
3.7 Inventory. Except for Inventories received but not yet inspected by
Seller, all of the Inventory is of the type used in the ordinary course of the
Business, except for excess,
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defective, obsolete and slow-moving items, all of which have been written down
to net realizable market value or for which a reserve has been provided on the
Reference Balance Sheet or the Closing Date Balance Sheet in accordance with
GAAP and Seller's standard accounting methods and policies consistently applied;
provided that, no representation or warranty is given as to the adequacy of any
such reserves. All of the Inventory reflected on the Reference Balance Sheet and
the Closing Date Balance Sheet has been, or will be, so reflected in accordance
with GAAP and Seller's standard accounting methods and policies consistently
applied. Seller has previously furnished to Buyer in writing a chart showing
orders either booked by the Business as of March 28, 1997 or forecasted by
Seller (as of such date) to be received by the Business during the succeeding
twelve (12) months with respect to ▇▇▇, ▇▇▇ and Inline products. Seller used the
foregoing information to assist Seller in determining the Inventory reserves
with respect to such products reflected in the March 28, 1997 balance sheet
referred to in Section 3.5 above. No representation or warranty is given as to
the accuracy of such information or forecasts or as to whether such forecast
will in fact be achieved.
3.8 Personal Property. All Machinery and Equipment is in good operating
condition reasonable wear and tear excepted. All of the leases to personal
property utilized in the Business are valid and enforceable and are not, with or
without the passage of time, the delivery of notice (or both), in default by any
party thereto, which defaults would, in the aggregate, have a Material Adverse
Effect.
3.9 Lease. The lease for the Facility (the "Lease") is a valid and
binding obligation of Seller and, to Seller's knowledge, the landlord
thereunder, and is enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and general principles of equity (regardless of whether enforceability
is considered in a proceeding at law or in equity) and is not, with or without
the passage of time or the delivery of notice (or both), in default by any party
thereto. Except with respect to matters described in Section 3.17, which are
treated separately in Section 3.17, to Seller's knowledge, the Facility
Improvements (including plumbing, heating, air conditioning and electrical
systems) conform to any and all applicable health, fire, safety and building
laws, ordinances and regulations.
3.10 Intellectual Property. Except as previously disclosed in writing
by Seller to Buyer, all of the TFS Intellectual Property is owned by Seller or
its Subsidiaries, free and clear of all Liens (other than Permitted Liens and
other than as provided in the Cross-License Agreement). To Seller's knowledge,
the use of any of the TFS Intellectual Property or the Licensed Intellectual
Property in the conduct of the Business does not violate any license agreement
between Seller and any third party. Except as previously disclosed in writing by
Seller to Buyer, with respect to the Business, Seller has received no written
notice of any alleged infringement on the rights of any third party. Except as
previously disclosed in writing by Seller to Buyer, Seller has received no
written notice of any action or proceeding pending or threatened, contesting the
validity, ownership or right to use, sell, license or dispose of the TFS
Intellectual Property or the Licensed Intellectual Property. Seller has the
right to transfer and assign the TFS Intellectual Property to Buyer hereunder
and to license the Licensed Intellectual Property to Buyer pursuant to the
Cross-License Agreement. To Seller's knowledge, there has been no
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infringement or unauthorized use by any other person or entity of any TFS
Intellectual Property, except as previously disclosed in writing by Seller to
Buyer. To Seller's knowledge, the TFS Intellectual Property comprises all of the
Intellectual Property Exclusively Used in the Business by Seller and its
Subsidiaries on the date hereof and on the Closing Date; and the Licensed
Intellectual Property, together with the TFS Intellectual Property, comprise all
of the Intellectual Property Primarily Used in the Business by Seller and its
Subsidiaries on the date hereof and on the Closing Date.
3.11 Product Warranties and Returns. Except to the extent reserves
therefor are reflected in the Closing Date Balance Sheet, which reserves are
determined in accordance with GAAP and consistent with the Reference Balance
Sheet, neither Seller nor any of Seller's Subsidiaries has made any warranties
or guarantees relating to its products that will be in effect as of the Closing
Date. No representation or warranty is given as to the adequacy of any such
reserves.
3.12 Litigation. None of Seller, Seller's Subsidiaries, or any officer,
director, shareholder, employee or agent of any of the foregoing, is a party to
any pending or, to Seller's knowledge, threatened action, suit, proceeding or
investigation, at law or in equity or otherwise in, for or by any court or other
governmental body which would have a Material Adverse Effect. Neither Seller nor
any of Seller's Subsidiaries is subject to any pending or, to Seller's
knowledge, threatened product liability claim relating to the Assets or the
Business. Neither Seller nor any of Seller's Subsidiaries is subject to any
decree, judgment, order, law or regulation of any court or other governmental
body which would have a Material Adverse Effect.
3.13 Protection of Intangible Property. It has been, during the last 24
months, Seller's practice to require all employees of Seller who have worked on
or contributed in any material respect to the development of the TFS
Intellectual Property or Licensed Intellectual Property to execute a proprietary
rights and information agreement substantially in the form previously delivered
by Seller to Buyer (the "Proprietary Rights and Information Agreement").
Seller's rights under any such Proprietary Rights and Information Agreements,
for all purposes with respect to the TFS Intellectual Property, are included in
the Contracts. Seller's and Seller's Subsidiaries' rights under such Proprietary
Rights and Information Agreements are freely assignable to Buyer.
3.14 Personnel. Except with respect to employees located outside the
United States, Seller has no union contracts or collective bargaining agreements
with, or any other obligations to, employee organizations or groups relating to
the Business, nor is Seller currently engaged in any labor negotiations, except
in minor grievances not involving any employee organization or group, nor, to
the knowledge of Seller, is Seller the subject of any union organization
affecting its Business. There is no pending or, to Seller's knowledge,
threatened labor dispute, strike or work stoppage affecting the Business. No
employees of the Business are parties to any employment agreement or other
arrangement with Seller or any of Seller's Subsidiaries providing for such
employees to receive any bonus or other payment (in cash or otherwise) upon such
employees' termination of employment, other than ordinary accrued but unpaid
salary, vacation pay and/or severance pay under Seller's policies or law.
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3.15 Brokers and Finders. None of Seller or any Subsidiary,
shareholder, director, officer, employee or agent of Seller has retained any
broker or finder in connection with the transactions contemplated by this
Agreement.
3.16 Contracts. Neither Seller, any Subsidiary of Seller nor, to
Seller's knowledge, any other party to any Contract is, with or without the
passage of time or the giving of notice (or both), in default in the performance
of, or not in compliance with, any provisions of such Contract, other than any
such default or non-compliance which would not have a Material Adverse Effect.
Seller has no knowledge of any intent by any other party not to perform its
obligations under any Contract.
3.17 Absence of Environmental Liabilities. To Seller's knowledge,
neither Seller nor all or any portion of the Facility is in violation of any
federal, state or local law, ordinance or regulation relating to industrial
hygiene, worker safety, environmental protection or Hazardous Materials. To
Seller's knowledge, all environmental licenses, permits, clearances, covenants
and authorizations material to and required for the current conduct of the
Business have been obtained by Seller and are in full force and effect. As used
herein, the term "Hazardous Materials" means any hazardous or toxic substance,
material or waste which is or becomes regulated by any local government
authority, the State of California, any other state or the United States
Government, including, without limitation, any material or substance which is:
(1) PCB; (2) petroleum; (3) asbestos; (4) defined as a "hazardous substance"
under Section 25316 of the California Health and Safety Code, Division 20,
Chapter 6.8 (▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substance Account Act); or (5)
defined as a "hazardous substance" under Section 101 of the Comprehensive
Environmental Response Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., as amended ("CERCLA").
4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer hereby represents and warrants to Seller that the
following statements (Sections 4.1 through 4.4) are true and correct as of the
date of this Agreement.
4.1 Organization and Authority. Buyer (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
California; (ii) has all necessary corporate power to own and lease its
properties, to carry on its business as now being conducted and to enter into
and perform this Agreement; and (iii) is qualified to do business in all
jurisdictions in which the failure to so qualify would have a material adverse
effect on the business, results of operations or financial condition of Buyer
taken as a whole.
4.2 Authority Relating to this Agreement; No Violation of Other
Instruments.
4.2.1 The execution and delivery of this Agreement and the
Buyer Closing Documents and the performance hereunder and thereunder by Buyer
have been duly authorized by all necessary corporate action on the part of Buyer
and, assuming execution of this Agreement by Seller, this Agreement and each of
the Buyer Closing Documents will constitute a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with their
respective terms, subject as to enforcement only: (i) to bankruptcy, insolvency,
reorganization, arrangement,
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moratorium and other similar laws of general applicability relating to or
affecting creditors' rights generally; and (ii) to general principles of equity.
4.2.2 To Buyer's knowledge, neither the execution of this
Agreement or any of the Buyer Closing Documents, nor the performance hereof or
thereof by Buyer will: (i) conflict with or result in the breach or violation of
the terms of any decree, judgment, order, law or regulation of any court or
other governmental body now in effect applicable to Buyer; (ii) conflict with,
or result in, with or without the passage of time or the giving of notice, any
breach of any of the terms, conditions and provisions of, or constitute a
default under, any indenture, mortgage, lease, agreement or other instrument to
which Buyer is a party or by which it is bound; or (iii) violate or conflict
with any provisions of Buyer's Articles of Incorporation, Bylaws, or similar
organizational instruments.
4.2.3 Except as required pursuant to the HSR Act, no consent
from any third party and no consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority is required to be made or obtained by Buyer in order to permit the
execution, delivery or performance of this Agreement by Buyer, or the
consummation by Buyer of its obligations contemplated by this Agreement, except
for such consents (i) where the failure to obtain the same would not have a
material adverse effect on the business, results of operations or financial
condition of Buyer taken as a whole, or (ii) which have not been received by
Buyer and may be necessary for Buyer to execute, deliver and perform this
Agreement and to consummate the transactions set forth herein, and all of which
shall be obtained by Buyer on or prior to the Closing Date.
4.3 [Intentionally Omitted]
4.4 Sufficient Funds. Buyer will have on the Closing Date
sufficient funds available to pay the Purchase Price.
5. CONDITIONS TO THE OBLIGATIONS OF BUYER.
Except as otherwise specifically set forth herein or as
contemplated by this Agreement, all obligations of Buyer under this Agreement
are subject to the fulfillment, satisfaction or waiver in writing by Buyer,
prior to or at the Closing Date, of each of the following conditions:
5.1 Compliance Certificate. Buyer shall have received a certificate of
the Vice President, Finance and Chief Financial Officer of Seller substantially
in the form of Exhibit 2.6.2(g), dated the Closing Date, certifying to the
fulfillment of all Closing conditions contained in this Section 5.
5.2 Landlord's Consent to Assignment. The landlord under the Lease
shall have given its consent to the assignment thereof pursuant to Section
2.4.2.
5.3 Opinion of Counsel. Buyer shall have been furnished with an
opinion of Seller's General Counsel, dated the Closing Date, substantially in
the form of Exhibit 2.6.2(i).
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5.4 No Orders. There shall not have been issued any preliminary or
permanent court order enjoining or restraining the transactions contemplated by
this Agreement; provided that, in the event of any such preliminary order, the
Closing shall be delayed pending the lifting of such order, subject to Buyer's
rights pursuant to Section 12.3 below.
5.5 Delivery of Closing Documents. Seller shall have delivered to Buyer
the Seller Closing Documents.
5.6 HSR Act. The waiting period with regard to the purchase and sale of
the Assets and the Business under the HSR Act shall have expired or terminated.
6. CONDITIONS TO THE OBLIGATIONS OF SELLER.
Except as otherwise specifically set forth herein, all
obligations of Seller under this Agreement are subject to the fulfillment,
satisfaction or waiver in writing by Seller, prior to or at the Closing, of each
of the following conditions:
6.1 Compliance Certificate. Seller shall have received a certificate of
the President and Secretary of Buyer substantially in the form of Exhibit
2.6.3(c), dated the Closing Date, certifying to the fulfillment of all Closing
conditions contained in this Section 6.
6.2 Landlord's Consent to Assignment. The landlord under the Lease
shall have given its consent to the assignment thereof pursuant to Section
2.4.2.
6.3 Opinion of Counsel. Seller shall have been furnished with an
opinion of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, dated the Closing Date, substantially in the
form of Exhibit 2.6.3(d).
6.4 No Orders. There shall not have been issued any preliminary or
permanent court order enjoining or restraining the transactions contemplated by
this Agreement; provided that, in the event of any such preliminary order, the
Closing shall be delayed pending the lifting of such order, subject to Seller's
rights pursuant to Section 12.4 below.
6.5 Delivery of Closing Documents. Buyer shall have delivered to Seller
the Buyer Closing Documents.
6.6 HSR Act. The waiting period with regard to the purchase and sale of
the Assets and the Business under the HSR Act shall have expired or terminated.
7. COVENANTS OF SELLER
Seller and, to the extent obligations of Buyer are set forth
in Sections 7.5, 7.6 and 7.8 of this Section 7, Buyer, covenant as follows:
7.1 Access to Properties and Records. Throughout the period between the
date of this Agreement and the Closing Date, Seller shall give to Buyer and
Buyer's authorized representatives reasonable access, during reasonable business
hours, in such a manner as to not unduly disrupt the normal business activities
of Seller, to the Facility and any and all of the
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properties, documents, books, records, commitments and affairs of Seller
relating to the Business that would be relevant to Buyer for the transactions
contemplated hereby, and that would be reasonably necessary for purposes of
facilitating the consummation of the transactions contemplated hereby, provided
that, notwithstanding anything herein to the contrary, Seller shall not be
required to disclose any documents or information subject to any confidentiality
obligation that would by the terms of such confidentiality obligation prohibit
such disclosure. Any unintentionally disclosed confidential or privileged
documents shall be kept confidential and returned immediately upon request by
Seller without further disclosure. Without limiting the foregoing, Buyer shall
be permitted to interview during regular business hours all employees of Seller
reasonably determined by Buyer to be important to the Business. A representative
of Seller shall have the right to be present at all such interviews. Buyer's
satisfaction with respect to information revealed by such access shall not be a
condition to Closing.
7.2 Conduct of the Business Prior to Closing Date. Between the date of
this Agreement and the Closing, and except as otherwise consented to or approved
by an officer of Buyer in writing or as required by this Agreement:
(i) The Business shall be operated in the ordinary course
consistent with past practices and in a normal businesslike fashion (including,
without limitation, its normal accounts receivable practice), and Seller shall
take such actions as are in its business judgment reasonably necessary to
facilitate a smooth transition of the operation of the Business from Seller to
Buyer at the Closing. Seller shall use its commercially reasonable efforts to
preserve and maintain its goodwill, including relationships with employees,
suppliers and customers. Seller shall maintain quantities of Inventories in a
manner consistent with prior practice and in a normal businesslike fashion. In
addition, Seller shall maintain records and books of account for the Business
consistent with past practices and in a normal businesslike fashion, and shall
continue to carry all of the insurance for the Business consistent with past
practice.
(ii) Seller shall not take (and shall not permit its
Subsidiaries to take) any action which would cause any material change in any of
the items and matters covered by the representations and warranties set forth in
Section 3, including, without limitation:
(a) incurring or becoming subject to, or agreeing to
incur or become subject to, any obligation or liability (absolute or contingent)
primarily related to the Business, except current liabilities incurred, and
obligations under contracts entered into, in the ordinary course of business
consistent with past practices;
(b) mortgaging, pledging or assuming any Lien (other than
any Permitted Lien), or agreeing to do so, in respect to any of the Assets,
except in each case in the ordinary course of business consistent with past
practices;
(c) waiving or compromising any material rights or any
material debt owed to Seller with respect to the Business;
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(d) entering into any transactions primarily related to
the Business, other than in the ordinary course of business consistent with past
practices and in a normal businesslike fashion;
(e) increasing the rate of compensation payable or to
become payable to any employees working primarily in the Business, other than in
the ordinary course of the business consistent with past practices;
(f) terminating or amending any Contract, unless
terminated or amended in the ordinary course of business consistent with past
practices and in a normal businesslike fashion;
(g) introducing any new method of accounting with respect
to the Business or any of the Assets or liabilities of the Business (assumed or
not assumed) (including, without limitation, any change in depreciation or
amortization policies or rates);
(h) making any capital expenditures or entering into
commitments for capital expenditures for the Business exceeding, in the
aggregate, One Hundred Thousand Dollars ($100,000);
(i) without Buyer's prior consent (which consent Buyer
shall not unreasonably withhold or delay), hire or terminate employees engaged
in and primarily dedicated to the Business;
(j) alter its practice for creating or accounting for
Inventory; or
(k) commencing any litigation relating to the Business,
except those related to insured claims or arising in the ordinary course of
business consistent with past practices.
7.3 Advice of Developments. Seller shall have continuing obligations
after the date of this Agreement through the Closing Date to advise Buyer of all
significant matters concerning the Business.
7.4 Acquisition, Merger or Similar Negotiations With Other Parties.
From the date hereof until the earlier of termination of this Agreement or
consummation of transactions contemplated hereby, none of Seller or any of its
officers, directors, employees, representatives, agents or affiliates shall
directly or indirectly encourage, solicit, initiate or conduct discussions or
negotiations with, provide any information to, or enter into any agreement with,
any corporation, partnership, limited liability company, person or other entity
or group concerning any merger, combination, consolidation, sale of assets
(other than in the ordinary course of business) or other similar transaction
directly involving the Business or the Assets.
7.5 Financial Covenants. At all times prior to the Closing and for the
five (5) year period thereafter, (a) Seller and Buyer shall maintain and make
available to the other and such other's consultants and auditors its books,
records and financial information with respect to the
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Assets and the Business, and (b) otherwise provide information reasonably
requested by the other regarding the Assets and the Business in connection with
any of such other's reporting or other obligations under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended; provided
that the requesting party shall reimburse the other for any auditors' fees or
other out-of-pocket costs and expenses incurred by such other party in
connection with its compliance with clauses (a) or (b) above. After the Closing,
Buyer and Seller shall make available to the other and to any taxing authority,
as reasonably requested, all information, records or documents relating to tax
liabilities or potential tax liabilities of or relating to the Business for all
periods prior to or including the Closing Date and shall preserve all such
information, records and documents until the expiration of any applicable
statute of limitations or extensions thereof. Buyer and Seller shall each
prepare and provide to each other any federal, state, local or foreign Tax data
and other information, including such information required by their respective
customary tax and accounting questionnaires, requested by Buyer or Seller, as
applicable, for its use in preparing its tax returns. Buyer and Seller shall
prepare such Tax data and other information and shall provide the same to the
other party within ninety (90) days after the Closing. Each party shall bear its
own expenses in complying with the preceding two sentences.
7.6 Non-Compete. (a) Provided that nothing herein shall prevent Seller
and/or its Subsidiaries from owning, in the aggregate, not more than 10% of the
outstanding stock or other equity interests in any company with shares or other
equity interests registered pursuant to Sections 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, Seller agrees that, for a period of
three (3) years from the Closing Date, Seller will not (1) make, sell or service
(whether directly, indirectly or through any Subsidiary or affiliate), or (2)
directly or indirectly engage or invest in, own, manage, operate, finance,
control, or participate in the ownership, management, operation or control of,
any business that makes, sells or services products that compete with any
products included in the Novellus Field of Use (as defined in the Cross- License
Agreement) (a "Competing Business"); provided, however, that the term "Competing
Business" shall not include a direct or indirect acquisition by Seller and/or
its Subsidiaries of, or a merger or consolidation of Seller and/or its
Subsidiaries with or into, another company or business whose competitive
business either (1) represents less than 10% of the total annual sales for such
entity's last fiscal year, or (2) represents less than 40% of such sales and
Seller has first offered Buyer the opportunity to purchase that portion of the
entity which is competitive, on the same terms available to Seller, and at a
price determined by an independent appraiser, mutually acceptable to both
parties.
(b) Seller and Buyer each further agrees that, for a period of
two (2) years following the Closing Date, neither will, directly or indirectly,
either for itself, or any other person or entity, induce or attempt to induce
any employee of the other (including all employees of the Business) or any
entity under common control with the other to leave the employ of such other
(other than pursuant to advertisements of general circulation).
(c) Buyer agrees that, for a period of three (3) years from
the Closing Date, Buyer will not (whether directly or indirectly through any
Subsidiary or affiliate) make, sell or
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service products that compete with products of Seller's IIS Business as
conducted at and after the Closing Date.
7.7 Seller's Auditors. Seller will use its commercially reasonable
efforts to cause its management and its independent auditors to facilitate on a
timely basis (i) the preparation of financial statements (including pro forma
financial statements if required) as reasonably required by Buyer to comply with
applicable SEC regulations under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, and (ii) the review by Buyer and
its independent auditors of Seller's audit work papers for up to the past three
(3) years with respect to such audit; provided that Buyer shall reimburse Seller
for all auditors' fees and other out-of-pocket fees and expenses incurred by
Seller in connection with its compliance with this Section 7.7.
7.8 Transition Services.
(a) For the period after the Closing Date until Buyer
otherwise notifies Seller in writing, such period not to exceed one (1) year
after the Closing Date (the "Transition Period"), Seller shall provide to Buyer
any administrative services reasonably requested by Buyer in order to continue
the Business (the "Transition Services"); provided, however, that the Transition
Services shall not include (i) any services not provided by Seller to the
Business in the ordinary course as of the Closing, or (ii) any legal,
environmental, medical emergency response, OSHA compliance or import-export
services. During the Transition Period, Buyer shall use its commercially
reasonable efforts to cease the Transition Services by eliminating the need for,
providing to itself, or otherwise obtaining, such services.
(b) Buyer shall reimburse Seller for all of Seller's (i)
normal direct labor charges (including overtime) for actual time devoted to
performance of the Transition Services requested by Buyer, plus an allocation
(based on such actual time) of fringe benefit costs, then multiplied by a factor
of 1.2 for overhead, and (ii) out-of-pocket expenses (including, without
limitation, materials costs consumed in providing such services), all to the
extent reasonably incurred and necessary to provide the Transition Services. Any
reimbursements required to be made by Buyer to Seller under this Section 7.8(b)
shall be made to Seller within thirty (30) days after Buyer's receipt of
Seller's invoices therefor, which invoices shall include supporting
documentation providing, in reasonable detail, a description of all amounts
subject to reimbursement.
(c) Seller's total liability to Buyer arising out of or
relating to the Transition Services shall not exceed the aggregate amount of
reimbursements paid by Buyer to Seller for the Transition Services, and in no
event shall Seller be liable to Buyer for any incidental, consequential,
indirect or special loss or damage of any kind, including without limitation
lost business, lost profits, costs of downtime, whether based in contract, tort
or any other legal theory.
7.9 Satisfaction of Conditions. Seller shall in good faith proceed to
take or cause to be taken all actions within its power necessary to satisfy all
conditions to its obligations to close and consummate the transactions
contemplated by this Agreement.
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8. COVENANTS OF BUYER.
Buyer and, to the extent obligations of Seller are set forth in Section
8.3.2 of this Section 8, Seller, covenant as follows:
8.1 Satisfaction of Conditions. Buyer shall in good faith proceed to
take or cause to be taken all actions within its power necessary to satisfy all
conditions to its obligations to close and consummate the transactions
contemplated by this Agreement.
8.2 Warranty Obligations. Buyer shall perform the Warranty Obligations
following the Closing Date in a timely and workmanlike manner in accordance with
the obligations of Seller with respect thereto that are to be assumed by Buyer
as of the Closing pursuant to Section 2.5.1(f) hereof.
8.3 Prohibition on Use of Names, Etc.
8.3.1 Buyer acknowledges that Seller has the absolute and
exclusive proprietary right to all names, marks, trade names, trademarks and
service marks (collectively, "Seller Names") incorporating "Varian" and/or the
initials "VA" in any form, and to all corporate symbols or logos (collectively,
"Seller Logos") incorporating "Varian" and/or the initials "VA," including the
VA in a circle logo, all rights to which and the goodwill represented thereby
and pertaining thereto are being retained by Seller. Buyer shall not use, and
Buyer shall cause its Subsidiaries not to use, the name "Varian" or "VA" or any
Seller Logo incorporating either such Seller Name in connection with the sale of
any products or services, and if any of the Assets bear such Seller Name or
Seller Logo, Buyer shall, prior to the use or sale of such Assets, delete such
Seller Name or Seller Logo and clearly and prominently indicate that the
business conducted with the Assets is no longer affiliated with Seller or any of
its Subsidiaries or affiliates.
8.3.2 Notwithstanding Section 8.3.1. and subject to Section
8.3.4 below, Seller grants to Buyer a paid up nonexclusive nontransferable
license (i) to use Seller Logos and Seller Names affixed to products of the
Business manufactured before the Closing or manufactured by Buyer after the
Closing and meeting the same quality standards met by Seller's products prior to
the Closing, in either case for a period of time not to exceed three (3) months
from the Closing Date; (ii) to use Seller Logos and Seller Names affixed to
products of the Business manufactured by Seller before the Closing or
manufactured by Buyer after the Closing for a period of time not to exceed six
(6) months from the Closing Date; provided that Buyer identifies itself in
predominant fashion as the manufacturer of such products; and (iii) for a period
of time not to exceed six (6) months from the Closing Date, to include in a less
conspicuous manner on products of Buyer substantially similar to those which
Seller marketed through the Business prior to the Closing Date, and in product
literature therefor, the legend "formerly made by Varian."
8.3.3 Buyer may use existing supplies of literature, packaging
and documentation of the Business which refer to or employ the Seller Logos and
Seller Names until such supplies are expended, but in no event beyond three
months following the Closing Date; provided that such supplies include a
statement that the Business is no longer affiliated with
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Seller or any of its Subsidiaries or affiliates and, with respect to products
referenced in such supplies, the legend "formerly made by Varian."
8.3.4 Any benefits which accrue to the Seller Logos and Seller
Names because of usage by Buyer (and any successor or transferee to the
Business) shall be for the exclusive benefit of Seller, and any proprietary
interest therein shall be owned solely by Seller.
9. EMPLOYMENT MATTERS
9.1 Employees. Prior to the Closing, Buyer shall offer employment to
all of the employees primarily dedicated to the Business (including, without
limitation, those employees engaged in sales and support service functions
primarily dedicated to the Business), effective at the Closing, at the salary
levels currently in place with Seller as of the Closing Date, and will provide
employee benefits to such employees in accordance with Buyer's current policies
and practices, except that Buyer shall (i) grant prior service credit under
Buyer's employee benefit plans, programs and policies to each such employee
based on the service date used by Seller in determining his or her service
credit under Seller's employee benefit plans, programs and policies, (ii) waive
any preexisting condition limitations under Buyer's employee benefit plans,
programs and policies which otherwise would be applicable to such employees, and
(iii) offer such employees the right to transfer accrued vacation and sick
leave. Notwithstanding the foregoing, Buyer shall have no liability for accrued
wages (including salaries, bonuses and commissions), severance pay, sick leave
or other benefits, or other Employee Plans of any type or nature on account of
Seller's employment or termination of such employees prior to the Closing Date,
except (x) under clause (iii) above, or (y) any other liability reflected on the
Closing Date Balance Sheet.
9.2 Employee Plans. Buyer is not assuming any of the Employee Plans of
Seller. Without limiting the foregoing, Buyer shall have no liability whatsoever
to employees of Seller (or to Seller) with respect to accrued or future benefits
under any such Employee Plans, whether or not any of such employees are offered
employment by or become employees of Buyer; provided, however, that Buyer shall
remain responsible for all liabilities reflected on the Closing Date Balance
Sheet. For the purposes of this Section, the term "Seller" includes Seller and
its Subsidiaries, any controlled group (within the meaning of Section 414(b) of
the Internal Revenue Code of 1986, as amended ("IRC")) of which Seller or any of
its Subsidiaries is a member, all trades or businesses under common control
(within the meaning of IRC Section 414(c)) of which Seller or any of its
Subsidiaries is a member and all affiliated service groups (within the meaning
of IRC Section 414(m)) of which Seller or any of its Subsidiaries is a member.
The term "Employee Plan" shall mean all present and prior (including terminated
and transferred) plans, programs, agreements, arrangements and methods of
contributions or compensation (including all amendments to and components of the
same, such as a trust with respect to a plan) providing any remuneration or
benefits, other than current cash compensation, to any current or former
employee of Seller or to any other person who provides services to Seller,
whether or not such plan or plans, programs, agreements, arrangements and
methods of contribution or compensation are subject to Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and whether or not such plan
or plans, programs, agreements, arrangements and methods of
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contribution or compensation are qualified under the IRC, including, without
limitation, pension, retirement, profit sharing, percentage compensation, stock
purchase, stock option, bonus and non-qualified deferred compensation plans,
disability plans, medical plans, dental plans, workers compensation, health
insurance, life insurance or other death benefits, incentive, severance plans,
vacation benefits and fringe benefits. The term "Employee Plan" also includes
any employee plan that is a multi-employer plan as defined in Section 3(37) of
ERISA. Notwithstanding the foregoing, the term "Employee Plan" shall not include
(and Buyer shall assume at the Closing) (x) any accrued vacation or sick leave
transferred to Buyer pursuant to Section 9.1 above, or (y) any amounts reflected
on the Closing Date Balance Sheet to the extent included in the Assumed
Liabilities.
10. HSR ACT
10.1 Filings Under HSR Act. As soon as practicable, but in no event
later than seven (7) days after the date hereof, each of Seller and Buyer shall
file with the Federal Trade Commission (the "FTC") and the Antitrust Division of
the Department of Justice (the "Antitrust Division") a premerger notification
form and any supplemental information (other than privileged information) which
may be requested in connection therewith pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Anti-Trust Improvements Act of 1976, as amended (the "HSR Act"), which filings
and supplemental information will comply in all material respects with the
requirements of the HSR Act. Each of Seller and Buyer shall cooperate fully with
the other in connection with the preparation of such filings and shall use their
respective best efforts to respond to any requests for supplemental information
from the FTC or the Antitrust Division and to obtain early termination of any
waiting period applicable to the purchase and sale of the Assets under the HSR
Act. Any and all filing fees required to be paid in connection with the
premerger notification pursuant to the HSR Act shall be borne and paid by Buyer.
11. INDEMNITY.
11.1 Survival of Representations and Warranties. The representations
and warranties of Seller in Section 3 above and of Buyer in Section 4 above
shall survive for a period of one (1) year from the Closing. If written notice
of a claim has been given prior to the expiration of the applicable
representations and warranties by a party in whose favor such representations
and warranties have been made to the party that made such representations and
warranties, then the relevant representations and warranties shall survive as to
such claim until such claim has been finally resolved.
11.2 Seller's Indemnity. Seller shall indemnify, defend, protect and
hold harmless Buyer (and Buyer's Subsidiaries and their respective officers,
directors, shareholders, employees and agents) from and against any and all
losses, costs, expenses, liabilities, obligations, claims, demands, causes of
action, suits, settlements and judgments of every nature, including the costs
and expenses associated therewith and reasonable attorneys', consultants' and
witness fees incurred in connection therewith ("Buyer's Damages"), which arise
out of: (i) the breach of any representation or warranty made by Seller pursuant
to Section 3 of this Agreement or Section 15 of the Assignment of Lease
Agreement; (ii) the non-performance, partial or total, of any
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covenant made by Seller pursuant to this Agreement or the Seller Closing
Documents; (iii) any Retained Liability; or (iv) Seller's hiring and employment
practices with respect to employment with Seller or Seller's Subsidiaries of, or
termination with Seller or Seller's Subsidiaries of, all employees of the
Business (except solely as provided in Section 9.1 above). Notwithstanding any
term or condition of this Section 11.2, any indemnity rights of Buyer with
respect to uncollectible Accounts Receivable shall be limited solely to breaches
by Seller of its obligations under Section 11.5 below.
11.3 Buyer's Indemnity. Buyer shall indemnify, defend, protect and hold
harmless Seller (and Seller's Subsidiaries and their respective officers,
directors, shareholders, employees and agents) from and against any and all
losses, costs, expenses, liabilities, obligations, claims, demands, causes of
action, suits, settlements and judgments of every nature, including the costs
and expenses associated therewith and reasonable attorneys', consultants' and
witness fees incurred in connection therewith ("Seller's Damages"; and when used
together with or in the alternative to Buyer's Damages, "Damages"), which arise
out of: (i) the breach by Buyer of any certification, representation or warranty
made by Buyer pursuant to this Agreement; (ii) the non-performance, partial or
total, of any covenant made by Buyer pursuant to this Agreement or the Buyer
Closing Documents; (iii) any Assumed Liability; or (iv) Buyer's hiring and
employment practices with respect to employment with Buyer of, or termination of
employment with Buyer of, the employees to be offered employment or hired by
Buyer for the Business.
11.4 Procedure for Indemnification -- Third Party Claims. Promptly
after receipt by an indemnified party under Section 11.2 or 11.3 of written
notice of a claim or the commencement of any proceeding against it, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability that it may have to any indemnified
party, except to the extent, the indemnifying party demonstrates that the
defense of such action is or has been prejudiced thereby. In case any such
proceeding shall be brought against an indemnified party and it shall give
notice to the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it shall
wish (unless the indemnifying party is also a party to such proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate) to assume the defense thereof with counsel which is not
reasonably satisfactory to such indemnified party and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
unindemnified party under such Section for any fees of such counsel or any other
expenses with respect to the defense of such proceeding, in each case,
subsequently incurred by such indemnified party in connection with the defense
thereof. If an indemnifying party assumes the defense of such proceeding, (a) no
compromise or settlement thereof may be effected by the indemnifying party
without the indemnified party's reasonable consent unless (i) there is no
finding or admission of any violation of law or any violation of the rights of
any Person and no effect on any other claims that may be made against the
indemnified party, and (ii) the sole relief provided is monetary damages that
are paid in full by the indemnifying party; and (b) the indemnifying party shall
have no liability with respect to any compromise or settlement thereof effected
without its
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consent. If notice is given to an indemnifying party of the commencement of any
proceeding and it does not, within fifteen (15) business days after the
indemnified party's notice is given, give notice to the indemnified party of its
election to assume the defense thereof, the indemnifying party shall be bound by
any determination made in such action or any compromise or settlement thereof
effected by the indemnified party. Notwithstanding the foregoing, if an
indemnified party determines in good faith that there is a reasonable
probability that a proceeding may adversely affect it or its affiliates, other
than as a result of monetary damages, such indemnified party may, by notice to
the indemnifying party, assume the exclusive right to defend, compromise or
settle such proceeding, but the indemnifying party shall not be bound by any
determination of a proceeding so defended or any compromise or settlement
thereof effected without its consent (which shall not be unreasonably withheld).
11.5 Collection of Accounts Receivable. Seller covenants to Buyer that
the unpaid balance of all Accounts Receivable unpaid on the Closing Date will be
paid within one (1) year of the Closing Date, less the reserve for uncollectible
Accounts Receivable set forth in the Closing Date Balance Sheet, so long as
Buyer shall have used its commercially reasonable efforts to collect such
Accounts Receivable, including, without limitation, undertaking reasonable
collection actions against accounts delinquent more than 180 days. Within five
(5) business days after delivery to Seller of a schedule of any Accounts
Receivable existing at the Closing Date uncollected within such one-year period
in excess of such reserve, Seller shall remit to Buyer the amount of such unpaid
Accounts Receivable (less such reserve). After the one-year period expires,
Buyer shall, upon the written request of Seller, assign to Seller for
collection, and pay over to Seller any payments received by Buyer in respect of,
all of the scheduled Accounts Receivable of any given vendor, provided that the
aggregate balance of all Accounts Receivable so assigned does not exceed the
amount by which the total scheduled Accounts Receivable exceeds the reserve for
uncollectible Accounts Receivable. If more than one (1) invoice is outstanding
for any customer, the "first-in, first-out" principle shall be applied in
determining the invoice to which a payment relates, unless the payment by its
terms specifies or clearly indicates the invoice to which it relates.
11.6 Limitations on Indemnification.
11.6.1 No claim or claims may be made against an indemnifying party
for indemnification pursuant to clause (i) of either Section 11.2 or Section
11.3, as the case may be,
unless the aggregate Damages of the indemnified parties with respect to such
Sections shall exceed an aggregate amount equal to $3,000,000, in which case the
indemnifying party shall be obligated to the indemnified party for the full
amount of the Damage, including, without limitation, those Damages up to said
$3,000,000 amount.
11.6.2 In addition to the provisions and limitations as provided in
(i) Section 11.1 with respect to the period of survival of representations and
warranties, and (ii) Section 11.6.1 with respect to dollar amounts of Damages
for which indemnification for breaches of representations and warranties is not
available, no indemnifying party shall be liable for any Seller Damage or Buyer
Damage, as the case may be, (a) to the extent such Seller Damages (in the
aggregate) or Buyer Damages (in the aggregate) relate to breaches of
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representations and warranties contained in Sections 3 and 4 (but not to any
other item subject to indemnification pursuant to Section 11.2 or 11.3 above),
as the case may be, and exceed an amount equal to $30,000,000 or (b) for which a
claim for indemnification relating to such a breach is not asserted hereunder
within one (1) year after the Closing Date.
11.6.3 In addition, the liability of any indemnifying party with
respect to any Damages shall be determined on a basis that is net of the amount
of any such Damages covered by insurance (less any deductibles).
11.6.4 Notwithstanding anything in this Agreement to the contrary,
Damages related to environmental liabilities shall be handled exclusively in the
Environmental Agreement.
11.6.5 Notwithstanding any term or condition of this Section 11.6, the
foregoing limitations shall not apply to (i) any claim arising as a result of
the fraud of a party hereto, or (ii) any breach by Buyer of its representation
pursuant to Section 4.4.
12. TERMINATION.
12.1 Mutual Agreement. This Agreement may be terminated at any time
prior to the Closing Date by the written agreement of Seller and Buyer.
12.2 Permanent Injunction. This Agreement shall be terminated upon the
entry of a permanent order by a governmental entity having jurisdiction over
Buyer, Seller or any of their respective Subsidiaries, affiliates or assets,
enjoining or restraining the transactions contemplated by this Agreement.
12.3 Termination by Buyer. This Agreement may be terminated by Buyer
if, on or before December 31, 1997, the conditions set forth in Section 5 of
this Agreement shall not have been met by Seller or waived by Buyer, provided
that, if on such date a preliminary injunction has been entered preventing the
Closing, such date shall automatically be extended until (i) such injunction
shall have been lifted, in which case the Closing shall thereupon take place as
soon as practicably possible, assuming that all other conditions to Closing are
satisfied, or (ii) a permanent injunction shall have been entered, in which case
this Agreement shall be terminated as provided in Section 12.2 above.
12.4 Termination by Seller. This Agreement may be terminated by Seller
if, on or before December 31, 1997, the conditions set forth in Section 6 of
this Agreement shall not have been met by Buyer or waived by Seller, provided
that, if on such date a preliminary injunction has been entered preventing the
Closing, such date shall automatically be extended until (i) such injunction
shall have been lifted, in which case the Closing shall thereupon take place as
soon as practicably possible, assuming that all other conditions to Closing are
satisfied, or (ii) a permanent injunction shall have been entered, in which case
this Agreement shall be terminated as provided in Section 12.2 above.
12.5 Confidentiality and Effect of Termination. In the event that this
Agreement is terminated, each of the parties shall return (without retaining
copies) all documents and papers
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containing confidential or proprietary information of the other party
(including, without limitation, technical information, customer lists, financial
data and any similar information developed by another party pursuant to this
Agreement or in contemplation of the transactions contemplated by this
Agreement), and shall neither use nor disclose any such information, except to
the extent that such information is available to the public, is required to be
disclosed by law or has otherwise been rightfully obtained. In the event of
termination of this Agreement pursuant to this Section 12, neither party shall
have any obligation to the other whatsoever with respect to this Agreement
(except for this Section 12.5, which obligations shall continue and subsist
beyond such termination), the transactions provided for herein or the expenses
either of them incurred in connection with or in contemplation of such
transactions. In the event this Agreement is terminated as permitted herein,
each party shall return to the other party (without retaining copies) all such
documents, information and reports.
13. MISCELLANEOUS.
13.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the parties, except that no
party hereto may assign its rights or obligations hereunder without the prior
written consent of the other party; provided, however, that, without the consent
of either party, the parties may assign this Agreement, in whole or in part, and
any of its rights or obligations hereunder, to a wholly owned Subsidiary of such
party; and provided, further, that in no case shall such assignment release such
party from any obligation or liability under this Agreement. Any assignment in
contravention of this Section 13.1 shall be null and void.
13.2 Allocation of Purchase Price. No later than sixty (60) days after
the Closing Date, Buyer and Seller shall mutually agree upon the allocation of
the Purchase Price among the various items included in the Assets and the
Business being transferred by Seller to Buyer. Both of Buyer and Seller have
agreed that the allocation to be provided hereby shall be determined by the
appraisal report of an independent, mutually agreed upon appraiser, if the
parties cannot agree on the allocation after good faith negotiations, and that
Buyer and Seller shall each bear an equal portion of the costs of such
appraisal. Buyer and Seller shall file all tax returns and reports in a manner
consistent with the allocation provided for in this Section 13.2.
13.3 Prorations. All state and local real and personal property Taxes
relating to the Assets which properly apply to periods commencing prior to and
ending after the Closing Date shall be prorated as between Seller and Buyer of
the Closing Date. Seller shall receive a credit, at the Closing for the security
deposit, if any, held by the landlord under the Lease. Seller shall also receive
a credit for any fees paid in advance by Seller under the Contracts, which fees
represent prepayments for periods after the Closing Date. State and local real
and personal property Taxes relating to the Assets for the tax period in which
the Closing occurs shall be prorated between Buyer and Seller on the following
basis: Seller shall be responsible for the payment of all such Taxes for the
period up to the Closing Date; and Buyer shall be responsible for payment of all
such Taxes for the period from and after the Closing Date. All such Taxes
assessed on an annual basis shall be prorated on the assumption that an equal
amount of Tax applies to each day of the year, regardless of how installment
payments are billed or made. Any
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supplemental property Taxes or assessments which arise out of a revaluation of
an Asset, which revaluation would not have occurred except for the change in
ownership of the Asset, shall be borne by Buyer. Any payments of Taxes due from
one party to the other pursuant to this Section 13.3 shall be paid at the
Closing Date. If such Taxes and assessments are not available as of the Closing
Date, for purposes of apportionment between Buyer and Seller and payment
pursuant to this Section 13.3, the amount thereof shall be estimated on the
basis of the prior year's Taxes and assessments, and any incremental payment
shall be adjusted after receipt of the final Tax statements, but in any event
within fifteen (15) days after such statements are provided by one party to the
other. Buyer shall not be responsible for any other Tax (including but not
limited to any business, occupation, unemployment compensation, workers'
compensation, withholding or similar Tax) attributable to the operations of the
Business for any period prior to the Closing. Seller shall not be responsible
for any other Tax (including but not limited to any business, occupation,
unemployment compensation, workers' compensation, withholding or similar Tax)
attributable to the operations of the Business for any period from and after the
Closing. The total estimated prorations, as reasonably determined by Seller,
shall be paid by Buyer at the Closing, with final complete prorations to be
determined as soon as practicable after the Closing.
13.4 Confidentiality. Neither party shall issue a press release or
otherwise publicize the transactions contemplated by this Agreement or otherwise
disclose the nature or contents of this Agreement on or prior to the Closing
Date, except as otherwise required by applicable law (and any such press release
shall be mutually acceptable to Buyer and Seller), regulation, stock exchange
requirement or by the mutual consent of each of Buyer and Seller. No
information, documents or reports provided to or obtained by either party in
connection with this transaction shall be disclosed to any non-party except as
required by law or in carrying out the transactions contemplated hereby. All
provisions relating to confidentiality in this Agreement are in addition to and
shall not supersede or in any way nullify the effect of the Confidentiality
Agreement (the "Confidentiality Agreement"), dated February 28, 1997, executed
and delivered by Buyer and Seller in connection with the preliminary discussions
relating to this transaction.
13.5 Transfer Taxes. Any Taxes arising out of or incurred in
connection with the transactions contemplated by this Agreement shall be paid by
Buyer, whether or not such Taxes are assessed initially against Seller or
Seller's Subsidiaries.
13.6 Expenses. Except as otherwise expressly provided herein, each
party will pay its own costs and expenses, including legal and accounting
expenses, related to the transactions provided for herein, irrespective of when
incurred.
13.7 Further Assurances. It is the intention of the parties hereto that
all assets, rights, and tangible and intangible property constituting the Assets
be sold to Buyer. Accordingly, each party will from time to time prior to or
subsequent to the Closing Date, at the other party's reasonable request and
without further consideration, execute and deliver such other instruments of
conveyance, assignment and transfer and take such other actions as the other
party may reasonably request in order to cause all of the Assets to be
transferred to Buyer and otherwise to more effectively consummate the
transactions contemplated hereby. Without limiting the
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generality of the foregoing, Seller covenants and agrees to take any and all
actions as may be necessary to cause each applicable Subsidiary of Seller to
take all actions necessary on its part to give effect to the transfer of the
Assets to Buyer as provided in, or contemplated by, the terms of this Agreement
and the Seller Closing Documents.
13.8 Dispute Resolution. Any dispute, controversy or claim between the
parties relating to, or arising out of or in connection with, this Agreement (or
any subsequent agreements or amendments thereto), including as to its existence,
enforceability, validity, interpretation, performance, breach or damages,
including claims in tort, whether arising before or after the termination of
this Agreement, shall be settled only by binding arbitration pursuant to the
Commercial Arbitration Rules, as then amended and in effect, of the American
Arbitration Association (the "Rules"), subject to the following:
13.8.1 The arbitration shall take place in Palo Alto, California.
13.8.2 There shall be three arbitrators, who shall be selected under
the normal procedures prescribed in the Rules, except that one such arbitrator
shall be a certified public accountant and one (1) such arbitrator (who shall
chair the arbitration panel) shall be a member of the American Board of Trial
Advocates or the American College of Trial Lawyers.
13.8.3 Subject to legal privileges, each party shall be entitled to
discovery in accordance with the Federal Rules of Civil Procedure.
13.8.4 At the arbitration hearing, each party may make written and
oral presentations to the arbitrator, present testimony and written evidence and
examine witnesses.
13.8.5 The arbitrators' decision shall be in writing, shall be binding
and final and may be entered and enforced in any court of competent
jurisdiction.
13.8.6 No party shall be eligible to receive, and the arbitrators
shall not have the authority to award, exemplary or punitive damages.
13.8.7 Each party to the arbitration shall pay one-half of the fees
and expenses of the arbitrators and the American Arbitration Association.
13.8.8 The arbitrators shall not have the power to amend this
Agreement.
13.9 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given on the
date of service if served personally or by facsimile, or five (5) days after the
date of mailing if mailed, by first class mail, registered or certified, postage
prepaid. Notices shall be addressed as follows:
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To Seller at: Varian Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Varian Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Buyer at: Novellus Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as a party has designated by notice in writing to the
other party in the manner provided by this Section.
13.10 Entire Agreement and Modification. This Agreement constitutes and
contains the entire agreement of the parties and supersedes any and all prior
negotiations, correspondence, understandings and agreements (other than the
Confidentiality Agreement) between the parties respecting the subject matter
hereof. This Agreement may only be amended by written instrument signed by the
parties.
13.11 No Other Remedies. Any and all remedies herein expressly
conferred upon a party hereby are deemed exclusive of any other remedy conferred
hereby or by law or equity on such party. In particular, the remedies provided
by Section 11 for Damages shall be exclusive of any other rights or remedies
available to a party against the other party, either at law or in equity,
in relation to any breach, default or nonperformance of any representation,
warranty, covenant, agreement or undertaking made or entered into by such other
party pursuant to this Agreement.
13.11.1 No action for termination or rescission, or claiming
repudiation, of this Agreement or any agreement executed pursuant to this
Agreement may be brought or maintained by either party against the other from
and after the date hereof, no matter how severe, grave or fundamental any such
breach, default or nonperformance may be by one party, provided that the
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foregoing shall not apply if and to the extent such action is based on the fraud
of the other party. Accordingly, except as provided in the preceding sentence,
the parties hereby expressly waive and forego any and all rights they may posses
to bring any such action.
13.11.2 Notwithstanding any provision in this Agreement, Buyer
shall not be entitled to indemnification or any other remedy, at law or in
equity, as to a breach of Section 3.17.
13.11.3 With regard to Section 13.11 as well as Section 11,
Buyer and Seller each acknowledge that it has read and is familiar with, and
hereby waives the benefit of, the provisions of California Civil Code Section
1542, which is set forth below.
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the
time of executing the release, which if known by him must have
materially affected his settlement with the debtor."
13.12 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed in the State of California by California
residents.
13.13 Buyer's Brokers. Buyer shall be solely responsible for and shall
indemnify, defend, protect and hold harmless Seller with respect to any broker's
or finder's fee payable to any person or entity acting on behalf of Buyer in
connection with the transactions contemplated by this Agreement.
13.14 Severability. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the fullest extent possible.
13.15 Headings. The headings appearing at the beginning of several
sections contained herein have been inserted for the convenience of the parties
and shall not be used to determine the construction or interpretation of this
Agreement.
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13.16 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but both of which when taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date first above set forth.
VARIAN ASSOCIATES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President, Finance and Chief
Financial Officer
NOVELLUS SYSTEMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Executive Vice President, Operations
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EXHIBIT 2.6.2(a)
▇▇▇▇ OF SALE
This ▇▇▇▇ of Sale is made as of June 13, 1997 (the "Closing Date"), by
and between Varian Associates, Inc., a Delaware corporation ("Seller"), and
Novellus Systems, Inc., a California corporation ("Buyer"). Capitalized terms
used without definitions herein shall have the same meanings ascribed to such
terms in the Asset Purchase Agreement by and between Buyer and Seller dated May
7, 1997, as amended as of June 20, 1997 (the "Purchase Agreement").
1. Sale of Assets. In accordance with and subject to the terms and conditions
set forth in the Purchase Agreement, for good and valuable consideration, the
receipt of which is hereby acknowledged, Seller does hereby sell, convey,
assign, transfer and deliver (collectively, "sell") to Buyer all of Seller's
right, title and interest in and to the Assets.
2. Non-Contravention. To the extent that any Assets may not be sold to Buyer
without the consent of a third party, this ▇▇▇▇ of Sale shall not constitute a
sale or attempted sale thereof. Such sale shall occur immediately after receipt
of the applicable consent.
3. Effect of Sale. Nothing in this ▇▇▇▇ of Sale shall, or shall be deemed to,
modify or otherwise affect any provisions of the Purchase Agreement or affect
the rights of the parties under the Purchase Agreement. In the event of any
conflict between the provisions hereof and the provisions of the Purchase
Agreement, the provisions of the Purchase Agreement shall govern and control.
4. Execution in Counterparts. For the convenience of the parties, this ▇▇▇▇ of
Sale may be executed in one or more counterparts, each of which shall be deemed
an original but all of which together shall constitute one and the same
instrument.
5. Amendment; Waiver. Any term or provision of this ▇▇▇▇ of Sale may be amended
only by a writing signed by Seller and Buyer. The observance of any term or
provision of this ▇▇▇▇ of Sale may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this ▇▇▇▇ of Sale will be deemed to constitute a waiver of any other
breach or any succeeding breach.
6. Dispute Resolution. Any dispute, controversy or claim between the parties
relating to, arising out of or in connection with this ▇▇▇▇ of Sale, including
as to its existence, enforceability, validity, interpretation, performance,
breach or damages, including claims in tort, shall be settled in accordance with
the procedures set forth in Section 13.8 of the Purchase Agreement.
7. Governing Law. This ▇▇▇▇ of Sale shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed in the State of California by California
residents.
43
IN WITNESS WHEREOF, Seller and Buyer have caused this ▇▇▇▇ of Sale to
be executed on the date first written above.
VARIAN ASSOCIATES, INC. NOVELLUS SYSTEMS, INC.
By: By:
-------------------------------- ---------------------------
Title: Title:
------------------------ ---------------------
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EXHIBIT 2.6.2(b)
ASSIGNMENT OF TRADEMARKS
This Assignment of Trademarks (this "Assignment") is entered into as of
June 13, 1997 (the "Closing Date"), by and between Varian Associates, Inc., a
Delaware corporation ("Assignor"), and Novellus Systems, Inc., a California
corporation ("Assignee").
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement, dated as of May 7, 1997, as amended as of June 20, 1997 (the
"Purchase Agreement"), providing for, among other things, the sale by Assignor
of the Assets to Assignee; and
WHEREAS, in conjunction with such sale, Assignor desires to sell,
convey, assign, transfer and deliver to Assignee all of Assignor's rights, title
and interest in and to the Trademarks which form part of the Assets.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
contained herein and in the Purchase Agreement, the parties hereby agree as
follows:
1. Definitions. Capitalized terms used without definitions in the text of this
Assignment shall have the same meanings ascribed to such terms in the Purchase
Agreement.
"Trademarks" shall mean all trademarks, trademark applications, service
marks, service ▇▇▇▇ applications, trade and other names (either registered,
common law or registration applied for) owned by Assignor or its Subsidiaries
that are part of the Assets and that are listed on Schedule 2.1.(e) to the
Purchase Agreement.
2. Assignment. In accordance with and subject to the terms and conditions set
forth in the Purchase Agreement, for valuable consideration received, Assignor
hereby irrevocably sells, conveys, assigns, transfers and delivers to Assignee
all of Assignor's right, title and interest in the Trademarks and their
registration, together with the goodwill exclusively related to the Business.
3. Effect of Assignment. Nothing in this Assignment shall, or shall be deemed
to, modify or otherwise affect any provisions of the Purchase Agreement or
affect the rights of the parties under the Purchase Agreement. In the event of
any conflict between the provisions hereof and the provisions of the Purchase
Agreement, the provisions of the Purchase Agreement shall govern and control.
4. Execution in Counterparts. For the convenience of the parties, this
Assignment may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
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5. Amendment; Waiver. Any term or provision of this Assignment may be amended
only by a writing signed by Assignor and Assignee. The observance of any term or
provision of this Assignment may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a writing signed by
the party to be bound by such waiver. No waiver by a party of any breach of this
Assignment will be deemed to constitute a waiver of any other breach or any
succeeding breach.
6. Dispute Resolution. Any dispute, controversy or claim between the parties
relating to, arising out of or in connection with this Assignment, including as
to its existence, enforceability, validity, interpretation, performance, breach
or damages, including claims in tort, shall be settled in accordance with the
procedures set forth in Section 13.8 of the Purchase Agreement.
7. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed in the State of California by California
residents.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
to be executed on the date first written above.
VARIAN ASSOCIATES, INC. NOVELLUS SYSTEMS, INC.
By: By:
---------------------------------- ------------------------------
Title: Title:
------------------------- -----------------------
2
46
ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF _____________ )
On _______________________, 1997, before me, the undersigned notary public in
and for said County and State, personally appeared
_______________________________ [person signing on behalf of Varian Associates,
Inc.],
____ personally known to me [or]
____ proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity
and that, by his/her signature on the instrument, the entity upon behalf of
which the person acted executed the instrument.
WITNESS my hand and official seal.
--------------------------------
My commission expires on
--------------------------
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EXHIBIT 2.6.2(c)
ASSIGNMENT OF PATENTS
This Assignment of Patents (this "Assignment") is entered into as of
June 13, 1997 (the "Closing Date"), by and between Varian Associates, Inc., a
Delaware corporation ("Assignor"), and Novellus Systems, Inc., a California
corporation ("Assignee").
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement, dated as of May 7, 1997, as amended as of June 20, 1997 (the
"Purchase Agreement"), providing for, among other things, the sale by Seller of
the Assets to Assignee; and
WHEREAS, in conjunction with such sale, Assignor desires to sell,
convey, assign, transfer and deliver to Assignee all of Assignor's rights, title
and interest in and to the Patents which form part of the Assets.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
contained herein and in the Purchase Agreement, the parties hereby agree as
follows:
1. Definitions. Capitalized terms used without definitions in the text of
this Assignment shall have the same meanings ascribed to such terms in the
Purchase Agreement.
"Patents" shall mean all patents and patent applications owned by
Assignor or its Subsidiaries that are part of the Assets and that are listed on
Schedule 2.1.(e) to the Purchase Agreement.
2. Assignment. In accordance with and subject to the terms and conditions
set forth in the Purchase Agreement, for valuable consideration received,
Assignor hereby irrevocably sells, conveys, assigns, transfers and delivers to
Assignee all of Assignor's right, title and interest in the Patents and their
registration.
3. Effect of Assignment. Nothing in this Assignment shall, or shall be
deemed to, modify or otherwise affect any provisions of the Purchase Agreement
or affect the rights of the parties under the Purchase Agreement. In the event
of any conflict between the provisions hereof and the provisions of the Purchase
Agreement, the provisions of the Purchase Agreement shall govern and control.
4. Execution in Counterparts. For the convenience of the parties, this
Assignment may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
5. Amendment; Waiver. Any term or provision of this Assignment may be
amended only by a writing signed by Assignor and Assignee. The observance of any
term or provision of this
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Assignment may be waived (either generally or in a particular instance and
either retroactively or prospectively) only by a writing signed by the party to
be bound by such waiver. No waiver by a party of any breach of this Assignment
will be deemed to constitute a waiver of any other breach or any succeeding
breach.
6. Dispute Resolution. Any dispute, controversy or claim between the
parties relating to, arising out of or in connection with this Assignment,
including as to its existence, enforceability, validity, interpretation,
performance, breach or damages, including claims in tort, shall be settled in
accordance with the procedures set forth in Section 13.8 of the Purchase
Agreement.
7. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed in the State of California by California
residents.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
to be executed on the date first written above.
VARIAN ASSOCIATES, INC. NOVELLUS SYSTEMS, INC.
By: By:
---------------------------- ---------------------------
Title: Title:
-------------------- --------------------
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ACKNOWLEDGEMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF _____________ )
On _______________________, 1997, before me, the undersigned notary public in
and for said County and State, personally appeared
_______________________________ [person signing on behalf of Varian Associates,
Inc.],
____ personally known to me [or]
____ proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity
and that, by his/her signature on the instrument, the entity upon behalf of
which the person acted executed the instrument.
WITNESS my hand and official seal.
--------------------------------
My commission expires on
--------------------------
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EXHIBIT 2.6.2(d)
ASSIGNMENT OF LICENSES, CONTRACTS AND INTANGIBLES
This Assignment of Licenses, Contracts and Intangibles (this
"Assignment") is entered into as of June 13, 1997 (the "Closing Date"), by and
between Varian Associates, Inc., a Delaware corporation ("Assignor"), and
Novellus Systems, Inc., a California corporation ("Assignee").
WHEREAS, Assignor and Assignee have entered into an Asset Purchase
Agreement, dated as of May 7, 1997, as amended as of June 20, 1997 (the
"Purchase Agreement"), providing for, among other things, the sale by Assignor
of the Assets to Assignee; and
WHEREAS, in conjunction with such sale, Assignor desires to sell,
convey, assign, transfer and deliver to Assignee all of Assignor's rights, title
and interest in and to the Intangible Personal Property and the Contracts which
form part of the Assets.
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
contained herein and in the Purchase Agreement, the parties hereby agree as
follows:
1. Definitions. Capitalized terms used without definitions in the text of
this Assignment shall have the same meanings ascribed to such terms in the
Purchase Agreement.
2. Assignment. In accordance with and subject to the terms and conditions
set forth in the Purchase Agreement, for valuable consideration received,
Assignor hereby irrevocably sells, conveys, assigns, transfers and delivers to
Assignee Assignor's entire right, title and interest in the Intangible Personal
Property and the Contracts.
3. Non-Contravention. Certain parts of the Intangible Property and the
Contracts may require the consent of third parties to any assignment. Such
assignments to Assignee are made subject to the obtaining of such consents and
shall be effective as of the date of such consents. The execution of this
Assignment shall not be interpreted, and is not intended to be interpreted, as
any action taken by Assignor that would be contrary to the terms and conditions
of any contract requiring the consent of any third party to such assignment.
4. Effect of Assignment. Nothing in this Assignment shall, or shall be
deemed to, modify or otherwise affect any provisions of the Purchase Agreement
or affect the rights of the parties under the Purchase Agreement. In the event
of any conflict between the provisions hereof and the provisions of the Purchase
Agreement, the provisions of the Purchase Agreement shall govern and control.
1
51
5. Execution in Counterparts. For the convenience of the parties, this
Assignment may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.
6. Amendment; Waiver. Any term or provision of this Assignment may be
amended only by a writing signed by Assignor and Assignee. The observance of any
term or provision of this Assignment may be waived (either generally or in a
particular instance and either retroactively or prospectively) only by a writing
signed by the party to be bound by such waiver. No waiver by a party of any
breach of this Assignment will be deemed to constitute a waiver of any other
breach or any succeeding breach.
7. Dispute Resolution. Any dispute, controversy or claim between the
parties relating to, arising out of or in connection with this Assignment,
including as to its existence, enforceability, validity, interpretation,
performance, breach or damages, including claims in tort, shall be settled in
accordance with the procedures set forth in Section 13.8 of the Purchase
Agreement.
8. Governing Law. This Assignment shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed in the State of California by California
residents.
IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment
to be executed on the date first written above.
VARIAN ASSOCIATES, INC. NOVELLUS SYSTEMS, INC.
By: By:
---------------------------- ----------------------------
Title: Title:
-------------------- ---------------------
2
52
Exhibit 2.6.2(e)
ASSUMPTION OF LIABILITIES AGREEMENT
THIS ASSUMPTION OF LIABILITIES AGREEMENT (this "Assumption Agreement"),
dated as of ____________, 1997, by and between Varian Associates, Inc., a
Delaware corporation ("Seller"), and Novellus Systems, Inc., a California
corporation ("Buyer").
RECITALS:
A. Buyer and Seller are parties to an Asset Purchase Agreement,
dated as of May 7, 1997 (the "Asset Purchase Agreement").
B. Pursuant to Section 2.5 of the Asset Purchase Agreement, Buyer has
agreed to assume from Seller and its Subsidiaries, as applicable, the Assumed
Liabilities (as defined in the Asset Purchase Agreement) as and to the extent
provided therein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the respective
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Defined Terms. Capitalized terms contained herein and not
otherwise defined herein shall have the respective meanings assigned to them in
the Asset Purchase Agreement.
2. Assumption of Liabilities. Buyer, without any further
responsibility or liability of or recourse to Seller or any of Seller's
Subsidiaries, stockholders, officers, directors, employees, agents, successors
or assigns, hereby absolutely and irrevocably assumes and agrees to pay, perform
and be liable and responsible for any and all of the Assumed Liabilities.
3. Effect of Assumption. Nothing in this Assumption Agreement
shall, or shall be deemed to modify or otherwise affect any provisions of the
Asset Purchase Agreement or affect the rights of the parties under the Asset
Purchase Agreement. In the event of any conflict between the provisions hereof
and the provisions of the Asset Purchase Agreement, the provisions of the Asset
Purchase Agreement shall govern and control.
4. Execution in Counterparts. For the convenience of the parties,
this Assumption Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.
53
5. Amendment; Waiver. Any term or provision of this Assumption
Agreement may be amended only by a writing signed by Seller and Buyer. The
observance of any term or provision of this Assumption Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only by a writing signed by the party to be bound by such waiver.
No waiver by a party of any breach of this Assumption Agreement will be deemed
to constitute a waiver of any other breach or any succeeding breach.
6. Dispute Resolution. Any dispute, controversy or claim between
the parties relating to, arising out of or in connection with this Assumption
Agreement, including as to its existence, enforceability, validity,
interpretation, performance, breach or damages, including claims in tort, shall
be settled in accordance with the procedures set forth in Section 13.8 of the
Asset Purchase Agreement.
7. Governing Law. This Assumption Agreement shall be governed by
and construed in accordance with the laws of the State of California applicable
to contracts entered into and wholly to be performed in the State of California
by California residents.
IN WITNESS WHEREOF, Buyer and Seller have caused this Assumption
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
VARIAN ASSOCIATES, INC.
By:_____________________________
Name:
Title:
NOVELLUS SYSTEMS, INC.
By:_____________________________
Name:
Title:
2
54
Exhibit 2.6.2(f)
SECRETARY'S CERTIFICATE
OF
VARIAN ASSOCIATES, INC.
A Delaware Corporation
In connection with the consummation of the transactions contemplated by
the Asset Purchase Agreement, dated as of May 7, 1997 (the "Agreement"), by and
between Varian Associates, Inc., a Delaware corporation (the "Company"), and
Novellus Systems, Inc., a California corporation ("Buyer"), and pursuant to
Section 2.6.2(f) of the Agreement, the undersigned, being the duty elected,
qualified and acting Secretary of the Company, hereby certifies that:
1. Attached hereto as Exhibit A is a true, correct and complete
copy of certain resolutions duly adopted by the Executive Committee of the Board
of Directors of the Company at its May 2, 1997 meeting. Each of said resolutions
were duly adopted in accordance with the Restated Certificate of Incorporation
and By-laws of the Company. Such resolutions constitute the only resolutions of
the Board of Directors with respect to the matters referenced therein and have
not been modified, amended or rescinded and remain in full force and effect as
of the date hereof.
Executed as of _______, 1997.
_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
1, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, being the duly elected, qualified and acting
Assistant Secretary of Varian Associates, Inc., a Delaware corporation (the
"Company"), hereby certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is the duly elected, qualified
and acting Secretary of the Company and that his signature above is genuine.
Dated: __________, 1997
_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Assistant Secretary
55
Exhibit 2.6.2(g)
VARIAN ASSOCIATES, INC.
Officer's Compliance Certificate
In connection with the consummation of the transactions contemplated by
the Asset Purchase Agreement, dated as of May 7, 1997 (the "Agreement"), by and
between Varian Associates, Inc., a Delaware corporation (the "Company"), and
Novellus Systems, Inc., a California corporation, and pursuant to Section
2.6.2(g) of the Agreement, the undersigned, being the duly elected, qualified
and acting Vice President, Finance and Chief Financial Officer of the Company,
hereby certifies, to the best of his knowledge, that all conditions to Closing
set forth in Section 5 of the Agreement have been satisfied or waived as of the
date hereof.
All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings given to them in the Agreement.
Executed as of this ____ day of _______, 1997.
_________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President, Finance
and Chief Financial Officer
56
Exhibit 2.6.2(h)
CONSENT
The Board of Trustees of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Junior University, a body
having corporate powers under the laws of the State of California ("Lessor"),
hereby consents to the assignment of the lease dated as of January 1, 1961 (the
"Lease"), by and between Lessor and Varian Associates, Inc., a Delaware
corporation ("Assignor"), to Novellus Systems, Inc., a California corporation
("Assignee"), as set forth in the Assignment and Assumption of Lessee's Interest
in Lease (Units 8 and 9, Palo Alto) and Covenants, Conditions and Restrictions
on Leasehold Interests (Units 1-12, Palo Alto) dated as of May 7, 1997 (the
"Assignment"), which Assignment is to be effective as of the closing of the
transactions contemplated by the Asset Purchase Agreement, dated as of May 7,
1997, by and between Assignor and Assignee, and a copy of which Assignment is
attached hereto as Exhibit A, and further agrees to accept Assignee as Lessee
under the Lease.
Lessor hereby represents and warrants to Assignee, as of the date
hereof, that the copy of the Lease attached to the Assignment is a true,
complete and correct copy of the Lease and that the Lease is in full force and
effect and has not been amended, supplemented or modified in any material
manner; and that neither Lessor nor, to Lessor's knowledge, Assignor is in
material default (beyond any applicable cure or grace period).
Dated: ___________, 1997 LESSOR
THE BOARD OF TRUSTEES OF THE
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ JUNIOR UNIVERSITY
By:________________________________
(Signature)
___________________________________
(Print Name)
___________________________________
(Print Title)
57
EXHIBIT A
[Assignment and Assumption of Lessee's Interest in Lease]
58
1997
EXHIBIT 2.6.2(i)
Novellus Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Re: Varian Associates, Inc. - Sale of Thin Film Systems
Business
Ladies and Gentlemen:
DESCRIPTION OF REPRESENTATION
This opinion is furnished to you pursuant to Section 2.6.2(i) of
the Asset Purchase Agreement, dated as of May 7, 1997 (the "Agreement"), by
and between Varian Associates, Inc., a Delaware corporation ("Seller"), and
Novellus Systems, Inc., a California corporation ("Buyer"). I have acted as
counsel for Seller, and as such I have participated in and I am familiar
with the corporate proceedings of Seller relating to the sale of the Assets
in accordance with the terms of the Agreement. Capitalized terms used in
this opinion, unless specifically defined in this opinion, have the meanings
given to them in the Agreement.
MATERIALS EXAMINED
In this regard, I have examined executed originals or copies of
the following, copies of which have been delivered to you or your counsel:
(a) the Restated Certificate of Incorporation of Seller,
certified by the Secretary of State of the State of Delaware;
(b) the By-laws, as amended, of the Seller as now in
effect, certified by the Secretary of the Seller,
(c) resolutions of the Executive Committee of the Board
of Directors of Seller adopted on May 2, 1997;
(d) the Agreement;
(e) the Assignment of Lease Agreement;
(f) the Sublease;
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Novellus Systems, Inc.
__________________, 1997
Page 2
(g) the Shared Use Agreement,
(h) the Environmental Agreement;
(i) the Cross-License Agreement;
(j) the Supply Agreement;
(k) the ▇▇▇▇ of Sale;
(l) the Assignment of Trademarks;
(m) the Assignment of Patents;
(n) the Assignment of licenses;
(o) the Assumption Agreement;
(p) an Officers' Certificate, an Assistant Secretary's
Certificate and Incumbency Certificate, each dated the date hereof, delivered by
Seller to me;
(q) the certificates, each dated the date hereof, delivered
by Seller to Buyer pursuant to Section 2.6.2 of the Agreement; and
(r) such other instruments, corporate records, certificates
and other documents as I have deemed necessary as a basis for the opinions
hereinafter expressed.
OPINIONS
Based upon such examination, having regard for legal
considerations which I deem relevant, and subject to the assumptions,
limitations, and qualifications below, I am of the following opinions:
1. Seller (i) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware; (ii) has
all necessary corporate power to own and lease its properties, to carry on its
business as and where it is now being conducted; and (iii) is qualified to do
business in all jurisdictions in which the failure to so qualify would have a
Material Adverse Effect.
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Novellus Systems, Inc.
_____________, 1997
Page 3
2. Seller has all necessary corporate power and corporate authority
to execute and deliver the agreements referred to in subsections (d) through (n)
above (collectively, the "Transaction Agreements"). The execution and delivery
of the Transaction Agreements by Seller and the consummation of the transactions
contemplated thereby by Seller have been duly authorized by all necessary
corporate action on the part of Seller. The Transaction Agreements have been
duly executed and delivered by Seller and each of the Transaction Agreements is
a legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its terms.
3. To my knowledge, neither the execution and delivery of the
Transaction Agreements by Seller, nor the consummation of the transactions
contemplated thereby by Seller, will (i) conflict with or result in any breach
or violation of the terms of any decree, judgment, order, law or regulation of
any court or other governmental body now in effect applicable to Seller or any
of Seller's Subsidiaries; (ii) conflict with, or result in, with or without the
passage of time or the giving of notice (or both), any breach of any of the
terms, conditions and provisions of, or constitute a default under, or result in
the creation of any Lien upon any of the Assets pursuant to, any indenture,
mortgage, lease, agreement or other instrument to which Seller or any Subsidiary
of Seller is a party or by which Seller or any such Subsidiary or any of the
Assets are bound; or (iii) violate or conflict with any provision of the
Restated Certificate of Incorporation or By-laws, as amended, of Seller or any
provision of the Charter or Bylaws of any of Seller's Subsidiaries, as currently
in effect.
4. To my knowledge, none of Seller, Seller's Subsidiaries, or any
officer, director, shareholder, employee or agent of any of the foregoing, is a
party to any pending or threatened action, suit, proceeding or investigation, at
law or in equity or otherwise in, for or by any court or other governmental body
which would have a Material Adverse Effect. To my knowledge, neither Seller nor
any of Seller's Subsidiaries is subject to any decree, judgment, order, law or
regulation of any court or other governmental body which would have a Material
Adverse Effect, or which could prevent the transactions contemplated by the
Asset Purchase Agreement.
CERTAIN ASSUMPTIONS
With your permission I have assumed the following: (a) the authenticity
of original documents and the genuineness of all signatures; (b) the conformity
to the originals of all documents submitted to me as copies; (c) with respect to
factual matters therein, the truth, accuracy and completeness of the
information, representations and warranties contained in the records, documents,
instruments and certificates I have reviewed; (d) the due authorization,
execution and delivery by you and the binding effect thereof on you; (e) the
compliance by you
61
Novellus Systems, Inc.
______________, 1997
Page 4
with any applicable requirements to file returns and pay taxes under the
California Franchise Tax Law; and (f) the absence of any evidence extrinsic to
the provisions of the written agreements between the parties that the parties
intended a meaning contrary to that expressed by those provisions.
CERTAIN LIMITATIONS AND QUALIFICATIONS
Whenever a statement herein is qualified by the phrase "to my knowledge"
or similar phrase, it is intended to indicate that, during the course of my
representation of the Seller in connection with the sale of the Business, no
information that would give me current actual knowledge of the inaccuracy of
such statement has come to my attention or the attention of those attorneys
presently in the Legal Department of Seller who have rendered legal services in
connection with the representation described in the first paragraph of this
opinion letter. However, I have not undertaken any independent investigation or
review to determine the accuracy of any such statement, and any limited inquiry
undertaken by the Legal Department during the preparation of this opinion letter
should not be regarded as such an investigation or review. No inference as to my
knowledge of any matters bearing on the accuracy of any such statement should be
drawn from the fact of my representation of Seller.
I express no opinion as to: (a) matters of law in jurisdictions other
than the State of California and the United States, except to the extent
necessary to render the opinions set forth with respect to Delaware corporate
law, or (b) the enforceability under California law of a choice of law provision
in the documents described herein. As you know, I am not licensed to practice
law in the State of Delaware and my opinions as to Delaware law are based solely
on my review of a standard compilation of the corporate statutes of Delaware.
Finally, I express no opinion as to any matters of municipal law or the laws of
any other local agencies or governmental or regulatory authorities within any
state.
My opinion that any document is valid, binding or enforceable against
Seller in accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency fraudulent
conveyance, reorganization, arrangement, moratorium or other similar laws
relating to or affecting the rights of creditors generally;
(b) rights to indemnification and contribution which may be limited
by applicable law or equitable principles or otherwise unenforceable as against
public policy;
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Novellus Systems, Inc.
_____________, 1997
Page 5
(c) general principles of equity, including without limitation
concepts of materiality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance or injunctive relief, regardless
of whether such enforceability is considered in a proceeding in equity or at
law;
(d) certain rights, remedies and waivers contained in the
Transaction Agreements which may be limited or rendered ineffective by
applicable California laws or judicial decisions applying such laws (which laws
and judicial decisions would not render the Transaction Agreements invalid or
unenforceable as a whole or in material part); and
(e) limitations on provisions requiring the payment of attorneys'
fees, except to the extent that a court determines such fees to be reasonable.
I express no opinion as to compliance with the notification, filing and
waiting period requirements of the HSR Act.
USE OF OPINION
This opinion letter is solely for the benefit of you in connection with
the transaction covered by the first paragraph of this letter and may not be
relied upon or used by, circulated, quoted, or referred to, nor may copies
hereof be delivered to, any other person without my prior written approval. I
disclaim any obligation to update this opinion letter for events occurring or
coming to my attention after the date hereof.
Very truly yours,
63
EXHIBIT 2.6.3(b)
SECRETARY'S CERTIFICATE
OF
NOVELLUS SYSTEMS, INC.
A California Corporation
In connection with the consummation of the transactions contemplated by
the Asset Purchase Agreement, dated as of May 7, 1997 (the "Agreement"), by and
between Novellus Systems, Inc., a California corporation (the "Company"), and
Varian Associates, Inc., a Delaware corporation ("Seller"), and pursuant to
Section 2.6.3(b) of the Agreement, the undersigned, being the duly elected,
qualified and acting Secretary of the Company, hereby certifies that:
Attached hereto as Exhibit A is a true, correct and complete copy of
certain resolutions duly adopted by the Board of Directors of the Company at its
May 7, 1997 meeting. Each of said resolutions were duly adopted in accordance
with the Restated Certificate of Incorporation and By-laws of the Company. Such
resolutions constitute the only resolutions of the Board of Directors with
respect to the matters referenced therein and have not been modified, amended or
rescinded and remain in full force and effect as of the date hereof.
Executed as of ____________, 1997.
-------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Secretary
I, ▇▇▇▇ ▇▇▇▇▇▇▇▇, being the duly elected, qualified and acting
Executive Vice President, Operations of Novellus Systems, Inc., a California
corporation (the "Company"), hereby certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is the duly
elected, qualified and acting Secretary of the Company and that his signature
above is genuine.
Dated: ______________, 1997
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Chief Executive Officer, Operations
64
EXHIBIT 2.6.3(c)
NOVELLUS SYSTEMS, INC.
OFFICER'S COMPLIANCE CERTIFICATE
In connection with the consummation of the transactions contemplated by
the Asset Purchase Agreement, dated as of May 7, 1997 (the "Agreement"), by and
between Novellus Systems, Inc., a California corporation (the "Company"), and
Varian Associates, Inc., a Delaware corporation ("Seller"), and pursuant to
Section 2.6.3(c) of the Agreement, the undersigned, being the duly elected,
qualified and acting Executive Vice President, Chief Financial officer and
Secretary of the Company, hereby certifies, to the best of his knowledge, that
all conditions to Closing set forth in Section 6 of the Agreement have been
satisfied or waived as of the date hereof.
All capitalized terms used herein and not otherwise defined herein
shall have the respective meanings given to them in the Agreement.
Executed as of this ______ day of __________, 1997.
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President,
Chief Financial Officer and Secretary
65
EXHIBIT 26.3(d)
June 20, 1997
Varian Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Mesdames and Gentlemen:
We have acted as counsel for Novellus Systems, Inc. (the "Company") in
connection with the transaction contemplated by the Asset Purchase Agreement,
dated as of May 7, 1997, by and between you and the Company, as amended as of
June 20, 1997 (the "Agreement"). This opinion is furnished to you pursuant to
Section 2.6.3(d) of the Agreement. All capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Agreement.
We have examined originals or copies of the following documents (the
"Documents"; the Documents referred to in items (i) through (viii) below being
referred to, collectively, as the "Transaction Documents"):
(i) The Agreement;
(ii) The Assignment of Lease Agreement, dated May 7, 1997;
(iii) The Sublease, dated May 7, 1997;
(iv) The Shared Use Agreement, dated May 7, 1997;
(v) The Environmental Agreement, dated May 7, 1997;
(vi) The Cross-License Agreement, dated May 7, 1997;
(vii) The Supply Agreement, dated May 7, 1997;
(viii) The Assumption Agreement, dated June 13, 1997;
(ix) The ▇▇▇▇ of Sale, dated June 13, 1997;
(x) The Assignment of Trademarks, dated June 13, 1997;
(xi) The Assignment of Patents, dated June 13, 1997; and
66
Varian Associates, Inc.
June 20, 1997
Page Two
(xii) The Assignment of Licenses, dated June 13, 1997.
In addition, we have examined such records, documents, certificates of
public officials and of the Company, made such inquiries of officials of the
Company, and considered such questions of law as we have deemed necessary for
the purpose of rendering the opinions set forth herein, including the following:
(xiii) Certified resolutions of the Board of Directors of the
Company adopted at a meeting held on May 7, 1997; and
(xiv) A certificate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Chief Executive
Officer of the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Secretary of the Company, dated
June 20, 1997.
We have assumed the genuineness of all signatures and the authenticity
of all items submitted to us as originals and the conformity with originals of
all items submitted to us as copies. In making our examination of the Documents,
we have assumed that each party to one or more of the Documents, other than the
Company, has the power and authority to execute and deliver, and to perform and
observe the provisions of, the Documents, and has duly authorized, executed and
delivered such Documents, and that such Documents constitute the legal, valid
and binding obligations of such party.
With respect to certain matters of fact (including capacity), our
opinions are based on the representations in the certificate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
Chief Executive Officer of the Company, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice
President and Chief Financial Officer of the Company, in their individual
capacities as well as in their capacities as officers of the Company, to the
extent addressed in such certificate. A copy of such certificate is attached
hereto. Although we have made no independent investigation as to whether such
certificate is accurate or complete, we have no actual knowledge that such
certificate is inaccurate or incomplete in any material respect.
Our opinion in paragraph (a) below, as to the qualification and good
standing of the Company in California, Texas, Arizona, New York and Oregon and
the qualification in Massachusetts, is based solely upon certificates of public
officials in the states named in that paragraph. In rendering such opinion, we
express no opinion as to the good standing of the Company with the Secretary of
the Commonwealth of Massachusetts. We have made no independent investigation as
to whether those certificates are accurate or complete, but we have no knowledge
of any such inaccuracy or incompleteness.
The opinions hereinafter expressed are subject to the following further
qualifications and exceptions:
(1) The effect of bankruptcy, insolvency, reorganization, arrangement,
moratorium or other similar laws relating to or affecting the rights of
creditors generally,
67
Varian Associates, Inc.
June 20, 1997
Page Three
including, without limitation, laws relating to fraudulent transfers or
conveyances, preferences and equitable subordination.
(2) Limitations imposed by general principles of equity upon the
availability of equitable remedies or the enforcement of provisions of the
Documents; and the effect of judicial decisions which have held that certain
provisions are unenforceable where their enforcement would violate the implied
covenant of good faith and fair dealing, or would be commercially unreasonable.
(3) We express no opinion as to the effect on the opinions expressed
herein of the legal or regulatory status or the nature of the business of
Seller's Subsidiaries or any party to the Documents (other than the Company).
(4) The enforceability of provisions of the Documents providing for
indemnification to the extent such indemnification is against public policy.
(5) The enforceability of provisions of the Documents providing for
arbitration of disputes to the extent that arbitration of a particular dispute
would be against public policy.
(6) The enforceability of a requirement that provisions of the
Documents may only be modified in writing to the extent that an oral agreement
has been executed modifying provisions of the Documents.
(7) The effect of judicial decisions which may permit the introduction
of extrinsic evidence to modify the terms or the interpretation of the
Documents.
(8) The enforceability of provisions of the Documents providing that
rights or remedies are not exclusive, that every right or remedy is cumulative,
or that the election of a particular remedy or remedies does not preclude
recourse to one or more remedies.
We call your attention to the arbitration provision of the Agreement
and to the existence of differences between the arbitral and judicial processes.
We have based our opinion upon an assessment of legal authorities which would be
applicable in judicial proceedings.
Based upon and subject to the foregoing, we are of the opinion that:
(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of California, is duly qualified in
each state in which failure to qualify would have a Material Adverse Effect and
has all necessary corporate power to own and lease its properties and to conduct
its business as presently conducted.
68
Varian Associates, Inc.
June 20, 1997
Page Four
(b) The Company has all necessary corporate power and authority to
enter into, and to perform its obligations under, the Transaction Documents.
(c) The execution and delivery of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of the Company. The Transaction Documents have been duly executed and delivered
by the Company, and constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms.
(d) To our knowledge, neither the execution and delivery of the
Transaction Agreements by the Company, nor the consummation by the Company of
the transactions contemplated thereby, will (i) conflict with or result in any
breach or violation of law, or of any of the terms of any decree, judgment,
order, or regulation of any court or other governmental body, now in effect
applicable to the Company; (ii) conflict with, or result in, with or without the
passage of time or the giving of notice (or both), any breach of any of the
terms, conditions and provisions of, or constitute a default under, any
indenture, mortgage, lease, agreement or other instrument to which the Company
is a party or by which the Company is bound; or (iii) violate or conflict with
any provision of the Articles of Incorporation or Bylaws, as amended, of the
Company, as currently in effect.
(e) To our knowledge, the Company is not subject to any decree,
judgment, order, law or regulation of any court or other governmental body which
could prevent the transactions contemplated by the Asset Purchase Agreement.
We express no opinion as to matters governed by any laws other than the
substantive laws of the State of California (without reference to its
choice-of-law rules) and federal laws of the United States, which are in effect
on the date hereof.
This opinion is solely for your benefit and may not be relied upon by,
nor may copies be delivered to, any other person without our prior written
consent.
Very truly yours,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
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NOVELLUS SYSTEMS, INC.
OPINION CERTIFICATE
In connection with the opinion letter of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP to be
issued pursuant to Section 2.6.3(d) of the Asset Purchase Agreement (the
"Agreement") dated as of May 7, 1997, by and between Novellus Systems, Inc., a
California corporation (the "Company"), and Varian Associates, Inc. ("Varian"),
the undersigned, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, hereby certify as follows:
1. On the date hereof, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ is the duly elected and
qualified Chief Executive Officer of the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ is the duly
elected and qualified Executive Vice President, Chief Financial Officer and
Secretary of the Company, and as such each is familiar with the matters set
forth herein and each is authorized on behalf of the Company to execute and
perform any documents related to the acquisition of Varian's business of, among
other things, the development, manufacture, and sale of products for physical
vapor deposition and chemical vapor deposition of thin films (the
"Acquisition"), including without limitation, the Agreement and all related
documents (collectively, the "Documents").
2. All statements, representations and warranties of the Company
set forth in the Documentation and all exhibits and schedules thereto, and all
certificates and documentation delivered by the Company and its officers
pursuant thereto, including, without limitation, this Certificate, are true,
correct and complete, and you are hereby expressly authorized to rely thereon.
3. On the date hereof, the Officers of the Company had full legal
power, capacity and authority to execute and deliver the Documents and to
consummate the transactions contemplated thereby.
4. There are no pending or threatened proceedings (a) for the
liquidation or dissolution of the Company, (b) threatening its existence, or (c)
under state or federal bankruptcy laws.
5. [The Company owns, leases or has other interest in real property
or tangible personal property located in the State of California, the State of
Arizona, the State of New York, the State of Oregon, the State of Texas, and the
Commonwealth of Massachusetts. The Company has employees or carries on
significant activities in the State of California, the State of Arizona, the
State of New York, the State of Oregon, the State of Texas, and the Commonwealth
of Massachusetts. The Company is presently in the process of qua1ifying to do
business in the State of Florida, the State of Vermont and the Commonwealth of
Virginia.]
6. The undersigned have each reviewed the Opinion Letter, confirmed
the truth, accuracy and completeness of all statements made therein and are
unaware of any facts or information that would cast doubt on the validity of any
matters stated within the Opinion Letter, or the correctness thereof.
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7. There are no suits, actions, arbitrations or legal
administrative or other proceedings or governmental investigations pending or
threatened against the Company or any of its officers, directors, or assets.
8. Attached hereto as Exhibit A is a true and correct copy of
resolutions adopted by the Board of Directors of the Company on May __, 1997.
Such resolutions have not been altered, amended, rescinded or revoked, and are
in full force and effect.
9. Attached hereto as Exhibit B is the Amended and Restated
Articles of Incorporation of the Company and all amendments thereto. Such
Restated Articles are in full force and effect on the date of this Certificate
and have not been amended.
10. Attached hereto as Exhibit C are the Bylaws of the Company and
all amendments thereto. Such Bylaws are in full force and effect on the date of
this Certificate and have not been amended.
11. The undersigned has authorized ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP to render
the opinions requested of them in connection with the Acquisition and
understands that in so doing it might be construed to waive privileges with
respect to subject matter of opinion.
Capitalized terms not otherwise defined herein shall have the meanings
given them in the Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Opinion
Certificate as of __________ 1997.
___________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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71
Pursuant to Item 601(b)(2) of Regulation S-K, the following schedules to this
Asset Purchase Agreement have been omitted. Such schedules will be submitted to
the Securities and Exchange Commission upon request.
Schedule 2.1(e): Patents, trademarks and trademark applications
A listing of the patents, trademarks and trademark applications sold by
Varian to the Registrant as part of the transferred business.
Schedule 3.5: Balance sheets for the transferred business dated as of December
27, 1996, and as of March 28, 1997