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Exhibit 2.2
AGREEMENT AND PLAN OF REORGANIZATION
BY AND AMONG
ASPEC TECHNOLOGY, INC.,
ASPEC ACQUISITION CORPORATION,
SIS MICROELECTRONICS, INC.
AND CERTAIN SHAREHOLDERS OF
SIS MICROELECTRONICS, INC.
MARCH 17, 1998
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TABLE OF CONTENTS
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1. Certain Definitions....................................................... 1
2. The Merger................................................................ 3
2.1 Merger; Effective Time of the Merger................................ 3
2.2 Closing............................................................. 3
2.3 Effect of the Merger................................................ 3
2.4 Tax-Free Reorganization............................................. 4
2.5 SIS Stock Options and Convertible Securities........................ 4
3. Effect of Merger on the Capital Stock of SIS; Exchange of Certificates.... 4
3.1 Exchange of Stock................................................... 4
3.2 Dissenters' Rights.................................................. 4
3.3 Fractional Shares................................................... 5
3.4 Exchange of Certificates............................................ 5
3.5 Taking of Necessary Action; Further Action.......................... 6
4. Securities Act Compliance................................................. 6
4.1 Securities Act Exemption............................................ 6
4.2 Stock Restrictions.................................................. 6
5. Representations and Warranties of SIS and the Majority Shareholders....... 7
5.1 Organization, Qualification, and Corporate Power.................... 7
5.2 Authorization....................................................... 7
5.3 Capitalization...................................................... 7
5.4 Noncontravention.................................................... 8
5.5 Broker's Fees....................................................... 8
5.6 Financial Statements................................................ 8
5.7 Subsidiaries........................................................ 9
5.8 Title to Assets..................................................... 9
5.9 Events Subsequent to Most Recent Fiscal Period End.................. 9
5.10 Undisclosed Liabilities............................................. 11
5.11 Legal Compliance.................................................... 12
5.12 Tax Matters......................................................... 12
5.13 Properties.......................................................... 13
5.14 Intellectual Property............................................... 14
5.15 Tangible Assets..................................................... 15
5.16 Inventory........................................................... 15
5.17 Contracts........................................................... 15
5.18 Notes and Accounts Receivable....................................... 17
5.19 Power of Attorney................................................... 17
5.20 Insurance........................................................... 17
5.21 Litigation.......................................................... 17
5.22 Product Warranty.................................................... 17
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TABLE OF CONTENTS
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5.23 Product Liability.................................................. 18
5.24 Employees.......................................................... 18
5.25 Employee Benefits.................................................. 18
5.26 Guaranties......................................................... 20
5.27 Environment, Health, and Safety.................................... 20
5.28 Certain Business Relationships With SIS............................ 21
5.29 No Adverse Developments............................................ 22
5.30 Full Disclosure.................................................... 22
6. Representations and Warranties of Aspec.................................. 22
6.1 Organization, Qualification, and Corporate Power................... 22
6.2 Authorization...................................................... 22
6.3 Capitalization..................................................... 23
6.4 Noncontravention................................................... 23
6.5 Brokers' Fees...................................................... 23
6.6 Financial Statements............................................... 23
6.7 Undisclosed Liabilities............................................ 24
6.8 Litigation......................................................... 24
6.9 Legal Compliance................................................... 24
6.10 No Adverse Developments............................................ 24
7. Pre-Closing Covenants.................................................... 24
7.1 General............................................................ 24
7.2 Notices and Consents............................................... 25
7.3 Conduct of Business................................................ 25
7.4 Preservation of Business........................................... 25
7.5 Access to Information.............................................. 25
7.6 Notice of Developments............................................. 26
7.7 Preparation of Shareholder Notice and Information Statement........ 26
7.8 Exclusivity........................................................ 26
7.9 Voting Agreement and Voting Proxy.................................. 27
8. Post-Closing Covenants................................................... 27
8.1 General............................................................ 27
8.2 Litigation Support................................................. 27
8.3 Transition......................................................... 27
8.4 Confidentiality.................................................... 27
8.5 SIS Employees; Employee Stock Options.............................. 28
8.6 Restrictions on Sales of Aspec Common Stock........................ 28
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TABLE OF CONTENTS
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9. Conditions to Obligations to Close....................................... 28
9.1 Conditions to Aspec's Obligation to Close.......................... 28
9.2 Conditions to SIS's Obligation..................................... 29
10. Survival of Representations, Indemnification............................. 30
10.1 Limited Survival of Representations and Warranties................. 30
10.2 Indemnification by Aspec........................................... 30
10.3 Indemnification by Majority Shareholders........................... 31
10.4 Notice of Claims................................................... 31
10.5 Third Party Claims................................................. 32
10.6 Limitation of Claims............................................... 32
11. Termination.............................................................. 32
11.1 Termination of the Agreement....................................... 32
11.2 Effect of Termination.............................................. 33
12. Miscellaneous............................................................ 33
12.1 Publicity.......................................................... 33
12.2 No Third-Party Beneficiaries....................................... 33
12.3 Entire Agreement................................................... 34
12.4 Succession and Assignment.......................................... 34
12.5 Counterparts....................................................... 34
12.6 Headings........................................................... 34
12.7 Notices............................................................ 34
12.8 Governing Law; Dispute Resolution.................................. 35
12.9 Amendments and Waivers............................................. 36
12.10 Severability....................................................... 36
12.11 Expenses........................................................... 36
12.12 Construction....................................................... 36
12.13 Incorporation of Exhibits and Schedules............................ 37
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EXHIBITS
Exhibit A Certificate of Merger
Exhibit B SIS Disclosure Schedule
Exhibit C Aspec Disclosure Schedule
Exhibit D Voting Agreement and Voting Proxy
Exhibit E Opinion of Counsel for SIS and Majority Shareholders
Exhibit F Opinion of Counsel for Aspec
Exhibit G Registration Agreement Amendment
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AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "AGREEMENT") is entered
into as of March 17, 1998, by and among Aspec Technology, Inc., a Delaware
corporation ("ASPEC"), Aspec Acquisition Corporation, a Delaware corporation and
a wholly-owned subsidiary of Aspec ("MERGER SUB"), SIS Microelectronics, Inc., a
Colorado corporation ("SIS"), and Xxxxxxx X. Xxxxxxx, Xxxxx X. X. Xxxxx and
Xxxxxx X. Xxxxx (collectively, the "MAJORITY SHAREHOLDERS"). Aspec, Merger Sub,
SIS and the Majority Shareholders are sometimes referred to herein individually
as a "PARTY" and collectively as the "PARTIES."
RECITALS
A. Pursuant to a Certificate of Merger (together with any Articles of
Merger required by the CBCA) providing for the merger of Merger Sub with and
into SIS pursuant to the Colorado Business Corporation Act (the "CBCA") and the
Delaware General Corporation Law (the "DGCL"), the shares of Common Stock of
SIS, no par value, issued and outstanding immediately prior to the effective
time of the Merger will be converted into an aggregate of 400,000 shares of
Common Stock of Aspec, and SIS will become a wholly-owned subsidiary of Aspec.
B. The Parties desire to enter into this Agreement for the purpose of
setting forth certain representations, warranties and covenants made by each to
the other as an inducement to the execution and delivery of this Agreement, and
to serve as conditions precedent to the consummation of the merger of Merger Sub
with and into SIS.
C. The respective Boards of Directors of Aspec and SIS have approved and
adopted this Agreement, and the Agreement is intended to be a plan of
reorganization under the provisions of Section 368(a) of the Internal Revenue
Code of 1986, as amended.
NOW, THEREFORE, in consideration of these premises and of the mutual
agreements, representations, warranties and covenants herein contained, the
parties hereto do hereby agree as follows:
AGREEMENT
1. Certain Definitions. As used in this Agreement, the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa). Certain other terms are defined
in the text of this Agreement.
"AFFILIATE" of a Person means any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such Person.
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"BUSINESS CONDITION" means the current business, financial
condition, results of operations and assets of such corporate entity.
"EMPLOYEE BENEFIT PLAN" means any (a) nonqualified deferred
compensation, retirement plan, severance plan or similar plan or arrangement;
(b) Employee Pension Benefit Plan; (c) Employee Welfare Benefit Plan; and (d)
any other nonqualified plan providing welfare benefits, including but not
limited to medical, dental, life insurance and disability benefits.
"EMPLOYEE PENSION BENEFIT PLAN" has the meaning set forth in ERISA
Sec. 3(2).
"EMPLOYEE WELFARE BENEFIT PLAN" has the meaning set forth in ERISA
Sec. 3(1).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"GROSS NEGLIGENCE" consists of an intentional act, or the failure to
perform a duty, with reckless disregard for the consequences of such act or
failure.
"INTELLECTUAL PROPERTY" means (a) all inventions (whether patentable
or unpatentable and whether or not reduced to practice), all improvements
thereto, and all patents, patent applications, and patent disclosures, together
with all reissuances, continuations, continuations-in-part, revisions,
extensions, and reexaminations thereof, (b) all trademarks, service marks, trade
dress, logos, trade names, and corporate names, together with all translations,
adaptations, derivations, and combinations thereof and including all goodwill
associated therewith, (c) all copyrightable works, all copyrights, and all
applications, registrations, and renewals in connection therewith, (d) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, drawings, specifications,
customer and supplier lists, pricing and cost information, financial
information, and business and marketing plans and proposals), (e) all computer
software (including data and related documentation), (f) all other proprietary
rights, and (g) all copies and tangible embodiments thereof (in whatever form or
medium).
"LOSSES" shall mean any and all actions, suits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
reasonable amounts paid in settlement, liabilities, obligations, taxes, liens,
losses, expenses, and fees, including court costs and reasonable attorneys' fees
and expenses in connection with any action, suit or proceeding to the extent of
the amount of such actions, suits, proceedings, hearings, investigations,
charges, complaints, claims, demands, injunctions, judgments, orders, decrees,
rulings, damages, dues, penalties, fines, costs, reasonable amounts paid in
settlement, liabilities, obligations, taxes, liens, losses, expenses or fees.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
the Business Condition of the corporate entity and its subsidiaries.
"MULTIEMPLOYER PLAN" has the meaning set forth in ERISA Sec. 3(37)
and Code Sec. 414(f).
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"SIS SHAREHOLDERS" shall mean the shareholders of record of SIS
immediately prior to the Effective Time of the Merger (other than the holders of
Dissenting Shares (as defined herein)).
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"PERSON" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"SECURITY INTEREST" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable, (c) purchase
money liens and liens securing rental payments under capital lease arrangements,
and (d) other liens arising in the Ordinary Course of Business and not incurred
in connection with the borrowing of money.
2. The Merger.
2.1 Merger; Effective Time of the Merger. Subject to the terms and
conditions of this Agreement, Merger Sub will be merged with and into SIS (the
"MERGER") in accordance with the CBCA and the DGCL, and, as a result, SIS will
become a wholly-owned subsidiary of Aspec. In accordance with the provisions of
this Agreement, a Certificate of Merger in the form attached hereto as Exhibit A
shall be filed with the Delaware Secretary of State in accordance with the DGCL
and such Certificate of Merger (or, to the extent required by the CBCA, Articles
of Merger in form and substance mutually acceptable to counsel for SIS and
counsel for Aspec) shall be filed with the Colorado Secretary of State in
accordance with the CBCA on the Closing Date (as defined in Section 2.2) and
each issued and outstanding share of Common Stock, no par value, of SIS ("SIS
COMMON STOCK") shall be converted into a fraction of a share of Common Stock,
$0.001 par value, of Aspec ("ASPEC COMMON STOCK") in the manner contemplated by
Section 3. The Merger shall become effective at the time of the filing of the
Merger Agreement with the Colorado Secretary of State and the Delaware Secretary
of State (the date of such filing being hereinafter referred to as the
"EFFECTIVE DATE OF THE MERGER" and the time of such filing being hereinafter
referred to as the "EFFECTIVE TIME OF THE MERGER").
2.2 Closing. The closing of the Merger (the "CLOSING") will take
place as soon as practicable after satisfaction or waiver of the latest to occur
of the conditions set forth in Section 9 (the "CLOSING DATE"), at the offices of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, Xxxxxxxxxx 00000-0000.
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2.3 Effect of the Merger. At the Effective Time of the Merger, (i)
the separate existence of Merger Sub shall cease and Merger Sub shall be merged
with and into SIS (Merger Sub and SIS are sometimes referred to herein as the
"CONSTITUENT CORPORATIONS" and SIS after the Merger is sometimes referred to
herein as the "SURVIVING CORPORATION"), (ii) the Certificate of Incorporation of
Merger Sub shall be the Certificate of Incorporation of the Surviving
Corporation, (iii) the Bylaws of Merger Sub shall be the Bylaws of the Surviving
Corporation, (iv) the directors of Merger Sub shall be the directors of the
Surviving Corporation and (v) the Merger shall, from and after the Effective
Time of the Merger, have all the effects provided by applicable law.
2.4 Tax-Free Reorganization. The Merger is intended to qualify as a
tax free reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended (the "CODE").
2.5 SIS Stock Options and Convertible Securities. On or prior to the
Effective Time of the Merger, all outstanding options and convertible securities
of SIS shall terminate unless otherwise exercised prior to such time.
3. Effect of Merger on the Capital Stock of SIS; Exchange of Certificates.
3.1 Exchange of Stock. As of the Effective Time of the Merger, each
share of SIS Common Stock that is issued and outstanding immediately prior to
the Effective Time of the Merger (other than shares, if any, held by persons
exercising dissenters' rights in accordance with Article 113 of the CBCA
("DISSENTING SHARES") as provided for in Section 3.2 below), shall, by virtue of
the Merger and without any action on the part of SIS shareholders, be converted
into a fraction of a share of Aspec Common Stock (the "EXCHANGE RATIO"),
determined by dividing 400,000 by the aggregate number of shares of SIS Common
Stock issued and outstanding immediately prior to the Effective Time of the
Merger (including any shares issued upon the exercise of outstanding SIS options
or SIS convertible securities and any Dissenting Shares).
3.2 Dissenters' Rights. If holders of SIS Common Stock are entitled
to dissenters' rights at the Effective Time of the Merger under Article 113 of
the CBCA, the shares as to which dissenters' rights are available ("DISSENTING
SHARES") shall not be converted into the Merger Consideration on or after the
Effective Time of the Merger, but shall instead be converted into the right to
receive from the Surviving Corporation such consideration as may be determined
to be due with respect to such Dissenting Shares pursuant to the CBCA. Each
holder of Dissenting Shares (a "DISSENTING SHAREHOLDER") who, pursuant to the
provisions of Article 113 of the CBCA, becomes entitled to payment of the value
of shares of SIS Common Stock held by such Dissenting Shareholder shall receive
payment therefor (but only after the value therefor shall have been agreed upon
or finally determined pursuant to such provisions). In the event of the legal
obligation, after the Effective Time of the Merger, to deliver shares of Aspec
Common Stock pursuant to the Exchange Ratio (as defined herein) to any
Dissenting Shareholder who shall have failed to make an effective demand for
appraisal or shall have lost his status as a Dissenting Shareholder, the
Surviving Corporation shall issue and deliver, upon surrender by such Dissenting
Shareholder of his certificate
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or certificates representing shares of SIS Common Stock, the shares of Aspec
Common Stock to which such Dissenting Shareholder is then entitled under this
Section 3.2 and Article 113 of the CBCA. In the event that Aspec makes any
payment or payments in respect of any Dissenting Shares, Aspec shall not be
entitled to recover any such amounts under the terms of Section 10 hereof or
otherwise.
3.3 Fractional Shares. No fractional shares of Aspec Common Stock
shall be issued in the Merger. In lieu thereof, each holder of shares of SIS
Common Stock who would otherwise be entitled to receive a fraction of a share of
Aspec Common Stock shall receive from Aspec an amount of cash (rounded to the
nearest whole cent) equal to the product of the fraction of a share of Aspec
Common Stock to which such holder would otherwise be entitled, multiplied by
$10.00. For the purpose of determining fractional shares, all shares of Aspec
Common Stock to be issued to any SIS shareholder shall be aggregated.
3.4 Exchange of Certificates.
(a) Exchange Agent. Prior to the Closing Date, Aspec shall
appoint itself or ChaseMellon Shareholder Services, L.L.C. to act as the
exchange agent (the "EXCHANGE AGENT") in the Merger.
(b) Aspec to Provide Aspec Common Stock. Promptly after the
Effective Date of the Merger, Aspec shall make available for exchange in
accordance with this Section 3, through such reasonable procedures as Aspec may
adopt, the shares of Aspec Common Stock issuable pursuant to Section 3.1 in
exchange for outstanding shares of SIS Common Stock.
(c) Exchange Procedures. Within ten (10) days after the
Effective Date of the Merger, the Exchange Agent shall mail to each holder of
record of a certificate or certificates which immediately prior to the Effective
Date of the Merger represented outstanding shares of SIS Common Stock (the
"CERTIFICATES") whose shares are being converted into shares of Aspec Common
Stock pursuant to Section 3.1 hereof (i) a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and which shall be in such form and have such other provisions as Aspec
may reasonably specify, including appropriate investment representations to be
made by each such shareholder) (the "LETTER OF TRANSMITTAL") and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for shares of Aspec Common Stock. Upon surrender of a Certificate for
cancellation to the Exchange Agent or to such other agent or agents as may be
appointed by Aspec, together with such letter of transmittal, duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor the
number of shares of Aspec Common Stock to which the holder of SIS Common Stock
is entitled pursuant to Section 3.1 hereof. The Certificate so surrendered shall
forthwith be canceled. No interest will accrue or be paid to the holder of any
outstanding SIS Common Stock. From and after the Effective Date of the Merger,
until surrendered as contemplated by this Section 3.4, each Certificate shall be
deemed for all corporate purposes to evidence the number of shares of Aspec
Common Stock into which the shares
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of SIS Common Stock represented by such Certificate have been converted.
Notwithstanding the foregoing procedures, Aspec shall use its reasonable efforts
to provide the form of Letter of Transmittal to SIS as soon as practical after
the date hereof, and SIS shall provide such Letter of Transmittal to each SIS
shareholder. The parties agree that in the event Aspec makes such Letter of
Transmittal available to SIS, any Exchange Agent shall not be obligated to mail
such Letter of Transmittal to the SIS shareholders. Aspec agrees that to the
extent a SIS shareholder provides a fully executed and completed Letter of
Transmittal together with the related SIS stock certificate(s) held by such
shareholder to Aspec at least five (5) business days prior to the Closing, then
Aspec will provide to SIS at the Closing a certificate representing the shares
of Aspec Common Stock to which such SIS shareholder is entitled pursuant to the
terms hereof.
(d) No Further Ownership Rights in Capital Stock of SIS. The
shares of Aspec Common Stock delivered upon the surrender for exchange of shares
of SIS Common Stock in accordance with the terms hereof shall be deemed to have
been delivered in full satisfaction of all rights pertaining to such SIS Common
Stock. There shall be no further registration of transfers on the stock transfer
books of the Surviving Corporation of SIS Common Stock which were outstanding
immediately prior to the Effective Date of the Merger. If, after the Effective
Date of the Merger, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Section
3.4, provided that the presenting holder is listed on SIS's shareholder list as
a holder of SIS Common Stock.
3.5 Taking of Necessary Action; Further Action. Aspec, Merger Sub,
SIS and the Majority Shareholders shall take all such actions as may be
necessary or appropriate in order to effect the Merger as promptly as possible.
If, at any time after the Effective Date of the Merger, any further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporation with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of SIS, the officers and
directors of the Surviving Corporation are fully authorized in the name of the
corporation or otherwise to take, and shall take, all such action.
4. Securities Act Compliance.
4.1 Securities Act Exemption. The issuance of the Aspec Common Stock
in the Merger shall not be registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), in reliance upon Section 4(2) and/or Regulation
D of the Securities Act.
4.2 Stock Restrictions. The certificates representing the shares of
Aspec Common Stock issued pursuant to this Agreement shall bear a restrictive
legend (and stop transfer orders shall be placed against the transfer thereof
with Aspec's transfer agent), stating substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. SUCH
SHARES MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED,
ASSIGNED OR
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OTHERWISE DISPOSED OF EXCEPT (I) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO, (II) IN COMPLIANCE
WITH RULE 144 OR (III) PURSUANT TO AN OPINION OF COUNSEL FOR
ASPEC THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933."
5. Representations and Warranties of SIS and the Majority Shareholders.
SIS and, to their respective knowledge, each of the Majority Shareholders
severally and not jointly represents and warrants to Aspec and Merger Sub that
the statements contained in this Section 5 are correct and complete as of the
date of this Agreement and will be correct and complete as of the Closing Date
(as though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this Section 5), except as set forth in the
disclosure schedule delivered by SIS to Aspec on the date hereof (and initialed
by Aspec), a copy of which is attached hereto as Exhibit B (referred to herein
as the "SIS DISCLOSURE SCHEDULE"). The SIS Disclosure Schedule will be arranged
in paragraphs corresponding to the lettered and numbered paragraphs contained in
this Section 5.
5.1 Organization, Qualification, and Corporate Power. SIS is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Colorado. SIS is duly authorized to conduct business and is
in good standing under the laws of each other jurisdiction where such
qualification is required. There is no state, other than Colorado, in which SIS
owns any property or in which it has any employees, offices or operations. SIS
has full corporate power and authority, and has all necessary and material
licenses and permits, to carry on the businesses in which it is engaged and to
own and use the properties owned and used by it. Section 5 of the SIS Disclosure
Schedule lists the directors and officers of SIS. The operations now being
conducted by SIS have not been conducted under any other name during the past
five (5) years.
5.2 Authorization. SIS has full power and authority to execute and
deliver this Agreement and the Merger Agreement, and, subject to receipt of the
requisite approval of its share holders, to consummate the transactions
contemplated hereunder and to perform its obligations here under and no other
proceedings on the part of SIS are necessary to authorize the execution,
delivery and performance of this Agreement and the Merger Agreement. This
Agreement and the Merger Agreement and the transactions contemplated thereby
have been approved by the unanimous vote of SIS's Board of Directors. This
Agreement and the Merger Agreement constitute the valid and legally binding
obligations of SIS, enforceable against SIS in accordance with their respective
terms and conditions. SIS need not give any notice to, make any filing with, or
obtain any authorization, con sent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
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5.3 Capitalization.
(a) Capital Stock. As of the date of this Agreement, the
entire authorized capital stock of SIS consists of 5,000,000 shares of Common
Stock, 1,174,375 of which are issued and outstanding. All of the issued and
outstanding shares of capital stock have been duly authorized, are validly
issued, fully paid, and non-assessable, and are held of record by the respective
shareholders as set forth in Section 5.3(a) of the SIS Disclosure Schedule. All
of the outstanding shares of capital stock have been offered, issued and sold by
SIS in material compliance with applicable Federal and state securities laws. As
of the Closing Date, the entire authorized capital stock of SIS shall consist of
5,000,000 shares of Common Stock, 1,224,375 of which shall be issued and
outstanding. As of the Closing Date, all of the then issued and outstanding
shares of capital stock shall have been duly authorized, shall be validly
issued, fully paid, and non-assessable, and shall be held of record by the
respective shareholders as set forth in Section 5.3(a) of the SIS Disclosure
Schedule. As of the Closing Date, all of the then outstanding shares of capital
stock shall have been offered, issued and sold by SIS in material compliance
with applicable Federal and state securities laws.
(b) No Other Rights or Agreements. As of the date of this
Agreement, Section 5.3(b) of the SIS Disclosure Schedule lists all of the
holders of options, warrants, purchase rights, subscription rights, conversion
rights, convertible debentures or other securities, exchange rights and other
rights that could require SIS to issue, sell or otherwise cause to become
outstanding any of its capital stock (the "STOCK RIGHTS"), and the number of
shares of SIS Common Stock subject to such Stock Rights. Except as set forth in
Section 5.3(b) of the SIS Disclosure Schedule, there are no other outstanding or
authorized Stock Rights. Except as set forth in Section 5.3(b) of the SIS
Disclosure Schedule, there are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to SIS.
Other than as contemplated by Section 7.9 hereof, there are no voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
capital stock of SIS. All of the SIS Stock Rights will be fully exercised or
canceled prior to the Effective Time of the Merger. As of the Effective Time of
the Merger, there will be (i) no outstanding or authorized Stock Rights, (ii) no
outstanding or authorized stock appreciation, phantom stock, profit
participation, or similar rights with respect to SIS and (iii) no voting trusts,
proxies, or other agreements or understandings with respect to the voting of the
capital stock of SIS (other than as contemplated by Section 7.9 hereof).
5.4 Noncontravention. Neither the execution and the delivery of this
Agreement by SIS nor the consummation by SIS of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which SIS is subject or any
provision of its Articles of Incorporation or bylaws, or (B) (i) conflict with,
(ii) result in a breach of, (iii) constitute a default under, (iv) result in the
acceleration of, (v) create in any party the right to accelerate, terminate,
modify, or cancel, or (vi) except as set forth in Section 5.4 of the SIS
Disclosure Schedule, require any notice under, any agreement, contract, lease,
license, instrument,
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franchise permit or other arrangement to which SIS is a party or by which it is
bound or to which any of its assets is subject (or result in the imposition of
any Security Interest upon any of its assets).
5.5 Broker's Fees. Neither SIS nor any of the Majority Shareholders
has any liability or obligation to pay any fees or commissions to any broker,
finder or agent with respect to the transactions contemplated by this Agreement.
5.6 Financial Statements. Section 5.6 of the SIS Disclosure Schedule
contains the following financial statements (collectively the "FINANCIAL
STATEMENTS"): (i) unaudited balance sheets and statements of income and cash
flows as of and for the fiscal years ended December 31, 1996 and December 31,
1997 (the "MOST RECENT FISCAL YEAR END") for SIS; and (ii) an unaudited balance
sheet and statements of income and cash flows (the "MOST RECENT FINANCIAL
STATEMENTS") as of and for the two month period ended February 28, 1998 (the
"MOST RECENT FISCAL PERIOD END") for SIS. The Financial Statements (including
the notes thereto) have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods covered thereby and present fairly the financial condition of SIS as of
such dates and the results of operations of SIS for such periods; provided,
however, that the Most Recent Financial Statements lack footnotes and certain
other presentation items and are subject to normal year end adjustments. Except
as set forth in Section 5.6 of the SIS Disclosure Schedule, the books of account
of SIS reflect as of the dates shown thereon all items of income and expenses,
and all assets, liabilities and accruals of SIS required to be reflected
therein, in accordance with generally accepted accounting principles
consistently applied.
5.7 Subsidiaries. SIS has no subsidiaries and has not been a
subsidiary of another company.
5.8 Title to Assets. SIS has good and marketable title to, or a
valid leasehold interest in, the properties and assets (including, without
limitation, all Intellectual Property) used by it, located on its premises, or
shown on the balance sheet contained within the Most Recent Financial Statements
(the "MOST RECENT BALANCE SHEET") or acquired after the date thereof, free and
clear of all Security Interests, except for properties and assets disposed of in
the Ordinary Course of Business since the date of the Most Recent Balance Sheet
and except as set forth in Section 5.8 of the SIS Disclosure Schedule. No Person
other than SIS will own at the time of the Closing any assets or properties
currently utilized in or necessary to the operations or business of SIS or
situated on any of the premises of SIS. There are no existing contracts,
agreements, commitments or arrangements with any Person to acquire any of the
assets or properties of SIS (or any interest therein) except for this Agreement.
5.9 Events Subsequent to Most Recent Fiscal Period End. Since the
Most Recent Fiscal Period End, there has not been any material adverse change in
the Business Condition of SIS. Without limiting the generality of the foregoing,
since that date:
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(a) SIS has not sold, leased, transferred, or assigned any
assets or properties, tangible or intangible, outside the Ordinary Course of
Business;
(b) except for those agreements, contracts, leases and
commitments identified in Section 5.17 of the SIS Disclosure Schedule, SIS has
not entered into, assumed or become bound under or obligated by any agreement,
contract, lease or commitment (collectively a "SIS AGREEMENT") or extended or
modified the terms of any SIS Agreement which (i) involves the payment of
greater than $10,000 per annum or which extends for more than one (1) year, (ii)
involves any payment or obligation to any Affiliate of SIS other than in the
Ordinary Course of Business, (iii) involves the sale of any material assets,
(iv) involves any OEM relationship, or (v) involves any license of SIS's
technology;
(c) to the knowledge of SIS, no party (including SIS) has
accelerated, terminated, made modifications to, or canceled any agreement,
contract, lease, or license to which SIS is a party or by which it is bound and
SIS has not modified, canceled or waived or settled any debts or claims held by
it, outside the Ordinary Course of Business, or waived or settled any rights or
claims of a substantial value, whether or not in the Ordinary Course of
Business;
(d) none of the assets of SIS, tangible or intangible, has
become subject to any Security Interest, except as set forth on Section 5.8 of
the SIS Disclosure Schedule;
(e) SIS has not made any capital expenditures except in the
Ordinary Course of Business and not exceeding $10,000 in the aggregate of all
such capital expenditures;
(f) SIS has not made any capital investment in, or any loan
to, any other Person;
(g) SIS has not created, incurred, assumed, prepaid or
guaranteed any indebtedness for borrowed money and capitalized lease
obligations, or extended or modified any existing indebtedness, except as
provided in Section 9.1(i) hereof;
(h) SIS has not granted any license or sublicense of any
rights under or with respect to any Intellectual Property;
(i) there has been no change made or authorized in the
Articles of Incorporation or bylaws of SIS;
(j) SIS has not issued, sold, or otherwise disposed of any of
its capital stock, or granted any options, warrants, or other rights to purchase
or obtain (except upon the conversion, exchange or exercise of any such
securities which are described on Section 5.3 of the SIS Disclosure Schedule)
any of its capital stock;
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(k) SIS has not declared, set aside, or paid any dividend or
made any distribution with respect to its capital stock (whether in cash or in
kind) or redeemed, purchased, or otherwise acquired any of its capital stock
(other than with respect to any Dissenting Shares (as defined herein));
(l) SIS has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property in excess of $10,000 in
the aggregate of all such damage, destruction and losses;
(m) SIS has not suffered any repeated, recurring or prolonged
shortage, cessation or interruption of inventory shipments, supplies or utility
services;
(n) SIS has not made any loan to, or entered into any other
transaction with, or paid any bonuses in excess of an aggregate of $10,000 to,
any of its Affiliates, directors, officers, or employees or their Affiliates,
and, in any event, any such transaction was on fair and reasonable terms no less
favorable to SIS than would be obtained in a comparable arm's length transaction
with a Person which is not such a director, officer or employee or Affiliate
thereof;
(o) SIS has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(p) SIS has not granted any increase in the base compensation
of any of its directors or officers, or, except in the Ordinary Course of
Business, any of its employees;
(q) SIS has not adopted, amended, modified, or terminated any
bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, or employees (or
taken any such action with respect to any other Employee Benefit Plan);
(r) SIS has not made any other change in employment terms for
any of its directors or officers, and SIS has not made any other change in
employment terms for any other employees outside the Ordinary Course of
Business;
(s) SIS has not suffered any material adverse change or any
threat of any material adverse change in its relations with, or any loss or
threat of loss of, any of its major customers, distributors or dealers;
(t) SIS has not suffered any material adverse change or any
threat of any material adverse change in its relations with, or any loss or
threat of loss of, any of it major suppliers;
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(u) SIS has not received notice or had knowledge of any actual
or threatened labor trouble or strike, or any other occurrence, event or
condition of a similar character;
(v) SIS has not changed any of the accounting principles
followed by it or the method of applying such principles, except as described on
Schedule 5.6 of the SIS Disclosure Schedule;
(w) SIS has not made a change in any of its banking or safe
deposit arrangements;
(x) SIS has not entered into any transaction other than in the
Ordinary Course of Business; and
(y) SIS has not committed to any of the foregoing.
5.10 Undisclosed Liabilities. SIS has no material liability (whether
known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes) of a
character which, under GAAP, should be accrued, shown or disclosed on a balance
sheet of SIS, except for (i) liabilities set forth on the Most Recent Balance
Sheet and (ii) liabilities which have arisen after the Most Recent Fiscal Period
End in the Ordinary Course of Business.
5.11 Legal Compliance. SIS has complied in all material respects
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof). To
the knowledge of SIS, no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, notice or inquiry has been filed or commenced
by or against, or received by, any governmental body alleging any failure to so
comply. SIS has all licenses, permits, approvals, registrations, qualifications,
certificates and other governmental authorizations that are necessary for the
operations of SIS as they are presently conducted, except for any such licenses,
permits, approvals, registrations, qualifications, certificates and other
governmental authorizations which, if not obtained, would not individually or in
the aggregate be likely to result Material Adverse Effect on SIS.
5.12 Tax Matters.
(a) For purposes of this Agreement, "TAXES" means all federal,
state, municipal, local or foreign income, gross receipts, windfall profits,
severance, property, production, sales, use, value added, license, excise,
franchise, employment, withholding, capital stock, levies, imposts, duties,
transfer and registration fees or similar taxes or charges imposed on the
income, payroll, properties or operations of SIS, together with any interest,
additions or penalties,
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deficiencies or assessments with respect thereto and any interest in respect of
such additions or penalties.
(b) SIS has filed all reports and returns with respect to any
Taxes ("TAX RETURNS") that it was required to file. All such Tax Returns were
correct and complete in all material respects, and no such Tax Returns are
currently the subject of audit. All Taxes owed by SIS (whether or not shown on
any Tax Return) were paid in full when due or are being contested in good faith
and are supported by adequate reserves on the Most Recent Financial Statements,
except any state Taxes (other than Colorado related Taxes) which are not
individually or in the aggregate material to SIS . SIS has provided adequate
reserves on its Financial Statements for the payment of any taxes accrued but
not yet due and payable. SIS is not currently the beneficiary of any extension
of time within which to file any Tax Return, and SIS has not waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to any Tax assessment or deficiency.
(c) There is no dispute or claim concerning any Tax liability
of SIS either (A) claimed or raised by any authority in writing or (B) based
upon personal contact with any agent of such authority. There are no tax liens
of any kind upon any property or assets of SIS, except for inchoate liens for
taxes not yet due and payable.
(d) SIS has not filed a consent under Sec. 341(f) of the
Internal Revenue Code of 1986, as amended (the "CODE") concerning collapsible
corporations. SIS has not made any payments, is not obligated to make any
payments, and is not a party to any agreement that under any circumstances could
obligate it to make any payments as a result of the consummation of the Merger
that will not be deductible under Code Sec. 280G. SIS has not been a United
States real property holding corporation within the meaning of Code Sec.
897(c)(2) during the applicable period specified in Code Sec. 897(c)(1)(A)(ii).
SIS is not a party to any tax allocation or sharing agreement. SIS (A) has not
been a member of any affiliated group within the meaning of Code Sec. 1504 or
any similar group defined under a similar provision of state, local, or foreign
law (an "AFFILIATED GROUP") filing a consolidated federal Income Tax Return and
(B) has no any liability for the taxes of any Person under Treas. Reg. Section
1.1502-6 (or any similar provision of state, local, or foreign law), as a
transferee or successor, by contract, or otherwise.
(e) The unpaid Taxes of SIS (A) did not, as of the Most Recent
Fiscal Period End, exceed by any amount the reserve for Tax liability (other
than any reserve for deferred taxes established to reflect timing differences
between book and tax income) set forth on the face of the Most Recent Balance
Sheet (rather than in any notes thereto) and (B) will not exceed that reserve as
adjusted for operations and transactions through the Closing Date in accordance
with the past custom and practice of SIS in filing its Tax Returns.
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5.13 Properties.
(a) SIS does not currently own and has never previously owned
any real property.
(b) Section 5.13 of the SIS Disclosure Schedule lists and
describes briefly all real property leased or subleased to SIS. SIS has
delivered to Aspec correct and complete copies of the leases and subleases
listed in Section 5.13 of the SIS Disclosure Schedule (as amended to date). With
respect to each lease and sublease listed in Section 5.13 of the SIS Disclosure
Schedule to the knowledge of SIS:
(i) the lease or sublease is legal, valid, binding,
enforceable, and in full force and effect in all respects;
(ii) no party to the lease or sublease is in breach or
default, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default or permit termination, modification, or
acceleration thereunder;
(iii) no party to the lease or sublease has repudiated
any provision thereof;
(iv) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease or sublease:
(v) SIS has not assigned, transferred, conveyed,
mortgaged, deeded in trust, or encumbered any interest in the leasehold or
subleasehold; and
(vi) all facilities leased or subleased thereunder have
received all approvals of governmental authorities (including licenses and
permits) required in connection with the operation thereof, and have been
operated and maintained in accordance with applicable laws, rules, and
regulations in all material respects.
5.14 Intellectual Property.
(a) To the knowledge of SIS, SIS has not interfered with,
infringed upon, misappropriated or violated any Intellectual Property rights of
third parties. SIS has not received since its inception any charge, complaint,
claim, demand, or notice alleging any such interference, infringement,
misappropriation, or violation (including any claim that SIS must license or
refrain from using any Intellectual Property rights of any third party), except
as disclosed in Section 5.14 of the SIS Disclosure Schedule. To the knowledge of
SIS, no third party has interfered with, infringed upon, misappropriated, or
violated any Intellectual Property rights of SIS. Each employee of SIS has
signed an invention assignment and/or confidentiality agreement with SIS that
provides that any
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Intellectual Property developed by such employee while employed by SIS is the
sole property of SIS.
(b) Section 5.14(b) of the SIS Disclosure Schedule identifies
each patent or registration which has been issued to SIS or any Affiliate of SIS
with respect to any of the Intellectual Property used in SIS's business,
identifies each pending patent application or application for registration which
SIS or any Affiliate of SIS has made with respect to any of the Intellectual
Property used in SIS's business, and identifies each material license,
agreement, or other permission which SIS or any Affiliate of SIS has granted to
any third party with respect to any of the Intellectual Property used in SIS's
business (together with any exceptions). SIS has delivered to Aspec correct and
complete copies of all such patents, registrations, applications, licenses,
agreements, and permissions (as amended to date). Section 5.14(b) of the SIS
Disclosure Schedule also identifies (i) each trade name or unregistered
trademark used by SIS or any Affiliate of SIS which is material to the business
of SIS and (ii) each unregistered copyright owned by SIS or any Affiliate of SIS
with respect to Intellectual Property which is material to the business of SIS.
With respect to each item of Intellectual Property required to be identified in
Section 5.14(b) of the SIS Disclosure Schedule, to the knowledge of SIS:
(i) SIS possesses all right, title, and interest in and
to the item, free and clear of any Security Interest (except as disclosed in
Section 5.8 of the SIS Disclosure Schedule), license or other restriction;
(ii) the item is legal and valid and in full force and
effect and is not subject to any outstanding injunction, judgment, order,
decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or, to the
knowledge of SIS, threatened which challenges the legality, validity,
enforceability, use or ownership of the item; and
(iv) SIS has never agreed to indemnify any Person for
or against any interference, infringement, misappropriation, or other conflict
with respect to the item, except pursuant to the contracts set forth in Section
5.17 of the SIS Disclosure Schedule.
(c) Section 5.14(c) of the SIS Disclosure Schedule identifies
each material item of Intellectual Property that any third party owns and that
SIS uses pursuant to license, sublicense, agreement, or permission. SIS has
delivered to Aspec correct and complete copies of all such licenses,
sublicenses, agreements, and permissions (as amended to date). With respect to
each item of Intellectual Property required to be identified in Section 5.14(c)
of the SIS Disclosure Schedule, to the knowledge of SIS:
(i) the license, sublicense, agreement or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect in all material respects;
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(ii) no party to the license, sublicense, agreement, or
permission is in breach or default, and, to the knowledge of SIS, no event has
occurred which with notice or lapse of time would constitute a breach or default
or permit termination, modification or acceleration thereunder;
(iii) no party to the license, sublicense, agreement,
or permission has repudiated any provision thereof; and
(iv) SIS has not granted any sublicense or similar
right with respect to the license, sublicense, agreement, or permission.
5.15 Tangible Assets. The buildings, machinery, equipment, and other
tangible assets that SIS owns and leases are free from material defects (patent
and latent) and are in good operating condition and repair (subject to normal
wear and tear) and are usable in the Ordinary Course of Business.
5.16 Inventory. In all material respects, all of the inventory of
SIS and any supplies, manufactured and processed parts, work in process or
finished goods, is usable, merchantable and fit for the purpose for which it was
procured or manufactured, and none of such inventory is slow-moving, obsolete,
damaged, or defective, subject to adjustments for operations and transactions
through the Closing Date in accordance with the past custom and practice of SIS.
5.17 Contracts. Section 5.17 of the SIS Disclosure Schedule lists
the following contracts, agreements, commitments and other arrangements to which
SIS is a party or by which SIS or any of its assets is bound:
(a) any agreement (or group of related agreements) for the
lease of personal property to or from any Person which involves the payment by
SIS of more than $10,000 per year;
(b) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year or involve
consideration in excess of $10,000;
(c) any agreement for the purchase of supplies, components,
products or services from single source suppliers, custom manufacturers or
subcontractors which involves the payment by SIS of more than $10,000 per year;
(d) any agreement concerning a partnership or joint venture;
(e) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money or any capitalized
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lease obligation in excess of $10,000 or under which a Security Interest has
been imposed on any of its assets, tangible or intangible;
(f) any agreement concerning noncompetition or restraint of
trade or any agreement on currently active projects which involves
confidentiality;
(g) any agreement with any SIS shareholder or any of such
shareholder's Affiliates (other than SIS) or with any Affiliate of SIS;
(h) any profit sharing, stock option, stock purchase, stock
appreciation, deferred compensation, severance, or other plan or arrangement for
the benefit of its current or former directors, officers or employees;
(i) any collective bargaining agreement;
(j) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis;
(k) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees;
(l) any agreement pursuant to which SIS is obligated to
provide services, maintenance, support or training which involves payments to
SIS of more than $50,000 per year;
(m) any standard form agreement used by SIS, including, but
not limited to, any purchase order, statement of standard terms and conditions
of sale, or employment offer letter; and
(n) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $10,000 or which is
expected to continue for more than six (6) months from the date hereof.
SIS has delivered to Aspec a correct and complete copy of each written agreement
listed in Section 5.17 of the SIS Disclosure Schedule (as amended to date) and a
written summary setting forth the terms and conditions of each oral agreement
referred to in Section 5.17 of the SIS Disclosure Schedule. With respect to each
such agreement: (A) the agreement is legal, valid, binding, enforceable, and in
full force and effect in all respects against SIS and, to the knowledge of SIS,
the other parties thereto; (B) SIS is not and, to the knowledge of SIS, no other
party is in breach or default, and no event has occurred, which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the agreement; (C) SIS has not and, to the
knowledge of SIS, no other party has repudiated any provision of the agreement;
and (D) SIS does not have any reason to believe that the service called for
thereunder cannot be supplied in accordance with its terms and without resulting
in a loss to any of SIS.
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5.18 Notes and Accounts Receivable. All notes and accounts
receivable of SIS, all of which are reflected properly on the books and records
of SIS in all material respects, are, to the knowledge of SIS, (i) valid
receivables subject to no setoffs, defenses or counterclaims, and are current
and collectible, and (ii) will be collected in accordance with their terms at
their recorded amounts, subject only to adjustments for operations and
transactions through the Closing Date in accordance with the past custom and
practice of SIS.
5.19 Power of Attorney. There are no outstanding powers of attorney
executed on behalf of SIS.
5.20 Insurance. SIS has delivered to Aspec copies of each insurance
policy (including policies providing property, casualty, liability, and workers'
compensation coverage and bond and surety arrangements) with respect to which
SIS is a party, a named insured, or otherwise the beneficiary of coverage. With
respect to each such insurance policy: (A) the policy is legal, valid, binding,
enforceable, and in full force and effect (and there has been no notice of
cancellation or nonrenewal of the policy received) with respect to SIS and, to
the knowledge of SIS, the other parties thereto; (B) neither SIS nor, to the
knowledge of SIS, any other party to the policy is in breach or default
(including with respect to the payment of premiums or the giving of notices),
and no event has occurred which, with notice or the lapse of time, would
constitute such a breach or default, or permit termination, modification, or
acceleration, under the policy; (C) neither SIS nor, to the knowledge of SIS,
any other party to the policy has repudiated any provision thereof; and (D)
there has been no failure by SIS to give any notice or present any claim under
the policy in due and timely fashion. Section 5.20 of the SIS Disclosure
Schedule describes any self-insurance arrangements presently maintained by SIS.
5.21 Litigation. Section 5.21 of the SIS Disclosure Schedule sets
forth each instance in which SIS (or any of its assets) (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (ii) is a
party or, to the knowledge of SIS, is threatened to be made a party, to any
action, suit, proceeding, hearing, arbitration, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator. To the knowledge
of SIS, there are no facts or circumstances which would form the basis of any
claim against SIS.
5.22 Product Warranty. All of the services performed and products
licensed, manufactured, sold, leased, and delivered by SIS have conformed in all
material respects with all applicable contractual commitments and all express
and implied warranties, and, to the knowledge of SIS, SIS has no liability
(whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due) for replacement or repair thereof or other damages in connection therewith,
other than in the Ordinary Course of Business in an aggregate amount not
exceeding $10,000. Section 5.17(o) of the SIS Disclosure Schedule includes
copies of the standard terms and conditions of license for SIS (containing
applicable guaranty, warranty, and indemnity provisions).
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5.23 Product Liability. To the knowledge of SIS, SIS has no material
liability (whether asserted or unasserted, whether absolute or contingent,
whether accrued or unaccrued, whether liquidated or unliquidated, and whether
due or to become due) arising out of any injury to individuals or property as a
result of the ownership, possession, or use of any product licensed,
manufactured, sold, leased, or delivered by SIS.
5.24 Employees. No executive, key employee, or significant group of
employees has advised any executive officer of SIS that he, she or they plan to
terminate employment with SIS during the next six (6) months. SIS is not a party
to or bound by any collective bargaining agreement, nor has it experienced any
strike or grievance, claim of unfair labor practices, or other collective
bargaining dispute. To the knowledge of SIS, SIS has not committed any unfair
labor practice. To the knowledge of SIS, there is no organizational effort
presently being made or threatened by or on behalf of any labor union with
respect to employees of SIS.
5.25 Employee Benefits.
(a) Section 5.25(a) of the SIS Disclosure Schedule lists each
Employee Benefit Plan that SIS maintains or to which SIS contributes or is
obligated to contribute.
(i) Each such Employee Benefit Plan (and each related
trust, or fund established by SIS) complies in form and in operation in all
material respects with their terms, the applicable requirements of ERISA, the
Code, and other applicable laws.
(ii) All required reports and descriptions (including
Form 5500 Annual Reports, Summary Annual Reports, PBGC-1's, and Summary Plan
Descriptions) have been filed or distributed appropriately with respect to each
such Employee Benefit Plan. The requirements of Code Sec. 4980B have been met in
all material respects with respect to each such Employee Benefit Plan which is
an Employee Welfare Benefit Plan. No event has occurred and no condition exists
with respect to any Employee Benefit Plan that would subject SIS to any tax
under Code Sections 4972, 4976 or 4979 or to a fine under ERISA Sections 502(i)
or 502(l).
(iii) All contributions, premiums or other payments
(including all employer contributions and employee salary reduction
contributions) which are due have been paid to each Employee Benefit Plan and
all contributions, premiums or other payments for any period ending on or before
the Closing Date which are not yet due shall been paid to each such Employee
Benefit Plan or shall be accrued in accordance with the custom and practice of
SIS.
(iv) Each such Employee Benefit Plan which is an
Employee Pension Benefit Plan and which is intended to qualify under Code Sec.
401(a), has received a favorable determination letter from the Internal Revenue
Service with respect to the qualification of the plan under Code Section 401(a)
and the exemption of any corresponding trust under Code Section 501, unless the
Internal Revenue Service is deemed to have approved the form of such Plan under
applicable IRS Revenue Procedures. A copy of such determination letters have
been provided
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to Aspec and nothing has occurred since the date of each such determination
letter that would cause such Employee Pension Benefit Plan to lose its ability
to rely on such letter. Each Employee Pension Benefit Plan has been restated to
comply with the 1986 Tax Reform Act and subsequent applicable tax legislation to
the extent required by governing tax law. A copy of any determination letters
applicable to such restatement which have been received by SIS has been provided
to Aspec.
(v) Neither SIS nor any other Person or entity under
common control with SIS within the meaning of Section 414(b), (c) or (m) of the
Code and the regulations thereunder has now or at any previous time, maintained,
established, sponsored, participated in, or contributed to, any Employee Pension
Benefit Plan that is subject to Part 3 of Subtitle B of Title I of ERISA, Title
IV of ERISA or Section 412 of the Code. No Employee Welfare Benefit Plan or
other Employee Benefit Plan providing welfare benefits is funded with a trust or
other funding vehicle, other than insurance policies or contracts with a health
maintenance organization or similar health care delivery entity.
(vi) SIS has delivered to Aspec correct and complete
copies of the plan documents and summary plan descriptions, the most recent
determination letter received from the Internal Revenue Service, if any, the
most recent Form 5500 Annual Report, and all related trust agreements, insurance
contracts, and other funding agreements which implement each maintained Employee
Benefit Plan. The terms of any such documentation or other communication do not
prohibit Aspec from amending or terminating any such Employee Benefit Plan.
(b) With respect to each Employee Benefit Plan that SIS,
and/or any controlled group of corporations within the meaning of Code Sec. 1563
(a "CONTROLLED GROUP OF CORPORATIONS") which includes SIS, maintains or ever has
maintained or to which any of them contributes, ever contributed, or ever has
been required to contribute:
(i) There have been no prohibited transactions within
the meaning of ERISA Sec 406 and Code Sec. 4975 with respect to any such
Employee Benefit Plan. No fiduciary within the meaning of ERISA Sec. 3(21) (a
"FIDUCIARY"), has any liability for breach of fiduciary duty or any other
failure to act or comply in connection with the administration or investment of
the assets of any such Employee Benefit Plan. No action, suit, proceeding,
hearing, or investigation with respect to the administration or the investment
of the assets of any such Employee Benefit Plan (other than routine claims for
benefits) is pending or threatened.
(c) Except as disclosed in Schedule 5.25(c) of the SIS
Disclosure Schedule, SIS does not maintain or contribute to, has never
maintained or contributed to, and has never been required to contribute to, any
Employee Welfare Benefit Plan or any other Employee Benefit Plan providing
medical, health, or life insurance or other welfare-type benefits for current or
future retired or terminated employees, their spouses, or their dependents
(other than in accordance with Code Sec. 4980B or Part 6 of Subtitle B of
Title I of ERISA).
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(d) There is no liability in connection with any Employee
Benefit Plan that is not fully disclosed or provided for on the Most Recent
Balance Sheet for which disclosure would be required under generally accepted
accounting principles.
(e) No Employee Benefit Plan or SIS has any liability to any
plan participant, beneficiary or other person by reason of the payment of
benefits or the failure to pay benefits with respect to benefits under or in
connection with any such Employee Benefit Plan, other than claims in the normal
administration of such plans.
5.26 Guaranties. SIS is not a guarantor or otherwise responsible for
any liability or obligation (including indebtedness) of any other Person.
5.27 Environment, Health, and Safety.
(a) For purposes of this Agreement, the following terms have
the following meanings:
"ENVIRONMENTAL, HEALTH, AND SAFETY LAWS" means any and all
federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, plans, injunctions, judgments, decrees, requirements or
rulings now or hereafter in effect, imposed by any governmental authority
regulating, relating to, or imposing liability or standards of conduct relating
to pollution or protection of the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
public health and safety, or employee health and safety, concerning any
Hazardous Materials or Extremely Hazardous Substances, as such terms as defined
herein, or otherwise regulated, under any Environmental, Health and Safety Laws.
The term "ENVIRONMENTAL, HEALTH AND SAFETY LAWS" shall include, without
limitation, the Clean Water Act (also known as the Federal Water Pollution
Control Act), 33 U.S.C. Section 1251 et seq., the Toxic Substances Control Act,
15 U.S.C. Section 2601 et seq., the Clean Air Act, 42 U.S.C. Section 7401 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section
136 et seq., the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq., the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., the Superfund Amendment and Reauthorization Act of 1986,
Public Law 99-4, 99, 100 Stat. 1613, the Emergency Planning and Community Right
to Know Act, 42 U.S.C. Section 11001 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., and the Occupational Safety and
Health Act, 29 U.S.C. Section 651 et seq., all as amended, together with any
amendments thereto, regulations promulgated thereunder and all substitutions
thereof.
"EXTREMELY HAZARDOUS SUBSTANCE" means a substance on the list
described in Section 302 (42 U.S.C. Section 11002(a)(2)) of the Emergency
Planning and Community Right to Know Act, 42 U.S.C. Section 11001 et seq., as
amended.
"HAZARDOUS MATERIAL" means any material or substance that,
whether by its nature or use, is now or hereafter defined as a pollutant,
dangerous substance, toxic substance, hazardous waste, hazardous material,
hazardous substance or contaminant under any Environmental,
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Health and Safety Laws, or which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and
which is now or hereafter regulated under any Environmental, Health and Safety
Laws, or which is or contains petroleum, gasoline, diesel fuel or other
petroleum hydrocarbon product.
(b) To the knowledge of SIS, each of SIS and its predecessors
and Affiliates (A) has complied with the Environmental, Health, and Safety Laws
(and no action, suit, proceeding, hearing, investigation, charge, complaint,
claim, demand, directive or notice has been filed or commenced against any of
them alleging any such failure to comply), (B) has obtained and been in
substantial compliance with all of the terms and conditions of all permits,
licenses, certificates and other authorizations which are required under the
Environmental, Health, and Safety Laws, and (C) has complied in all material
respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in the Environmental, Health, and Safety Laws.
(c) To the knowledge of SIS, SIS has no liability (whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), and none of SIS and its predecessors and Affiliates has handled or
disposed of any Hazardous Materials or extremely Hazardous Substances, arranged
for the disposal of any Hazardous Materials or Extremely Hazardous Substances,
exposed any employee or other individual to any Hazardous Materials or Extremely
Hazardous Substances, or owned or operated any property or facility in any
manner that could give rise to any liability, for damage to any site, location,
surface water, groundwater, land surface or subsurface strata, for any illness
of or personal injury to any employee or other individual, or for any reason
under any Environmental, Health, and Safety Law.
(d) To the knowledge of SIS, no Extremely Hazardous Substances
are currently, or have been, located at, on, in, under or about all properties
and equipment used in the business of SIS and its predecessors and Affiliates.
(e) To the knowledge of SIS, no Hazardous Materials are
currently located at, on, in, under or about all properties and equipment used
in the business of SIS and its predecessors and Affiliates in a manner which
violates any Environmental, Health and Safety Laws or which requires cleanup or
corrective action of any kind under any Environmental, Health and Safety Laws.
5.28 Certain Business Relationships With SIS. None of the Majority
Shareholders nor SIS nor any director or officer of SIS, nor any member of their
immediate families, nor any Affiliate of any of the foregoing, owns, directly or
indirectly, or has an ownership interest in any business (corporate or
otherwise) which is a party to, or in any property which is the subject of, any
business arrangement or relationship of any kind with SIS.
5.29 No Adverse Developments. To the knowledge of SIS, there is no
development (exclusive of general economic factors affecting business in
general) or threatened
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development affecting SIS (or affecting customers, suppliers, employees, and
other Persons which have relationships with SIS) that (i) is having or is
reasonably likely to have a Material Adverse Effect on SIS, or (ii) would
prevent Aspec from conducting the business of the Surviving Corporation
following the Closing in the manner in which it was conducted or planned to be
conducted by SIS prior to the Closing.
5.30 Full Disclosure. No representation or warranty in this Section
5 or in any document delivered by the Majority Shareholders or SIS pursuant to
the transactions contemplated by this Agreement, and no statement, list,
certificate or instrument furnished to Aspec pursuant hereto or in connection
with this Agreement, when taken as a whole, contains any untrue statement of a
material fact, or omits to state any fact necessary to make any statement herein
or therein not materially misleading. There is no fact, development or
threatened development (excluding general economic factors affecting business in
general) known to SIS or the Majority Shareholders which SIS has not disclosed
to Aspec and which is having or may have a Material Adverse Effect on SIS. SIS
has delivered to Aspec true, correct and complete copies of all documents,
including all amendments, supplements and modifications thereof or waivers
currently in effect thereunder, described in the SIS Disclosure Schedule.
6. Representations and Warranties of Aspec. Aspec represents and warrants
to SIS that the statements contained in this Section 6 are correct and complete
as of the date of this Agreement and will be correct and complete as of the
Closing Date (as though made then and as though the Closing Date were
substituted for the date of this Agreement throughout this Section 6), except as
set forth in the disclosure schedule delivered by Aspec to SIS on the date
hereof (and initialed by Aspec and SIS), a copy of which is attached hereto as
Exhibit C (referred to herein as the "ASPEC DISCLOSURE SCHEDULE"). The Aspec
Disclosure Schedule will be arranged in paragraphs corresponding to the numbered
paragraphs contained in this Section 6.
6.1 Organization, Qualification, and Corporate Power. Aspec is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware. Aspec is duly authorized to conduct business and
is in good standing under the laws of each other jurisdiction where such
qualification is required. Aspec has full corporate power and authority, and has
all necessary and material licenses and permits, to carry on the businesses in
which it is engaged and to own and use the properties owned and used by it.
6.2 Authorization. Aspec has full power and authority to execute and
deliver this Agreement and the Merger Agreement, and to consummate the
transactions contemplated hereunder and to perform its obligations hereunder and
no other proceedings on the part of Aspec is necessary to authorize the
execution, delivery and performance of this Agreement and the Merger Agreement.
This Agreement and the Merger Agreement and the transactions contemplated
thereby have been approved by the unanimous vote of Aspec's Board of Directors.
This Agreement and the Merger Agreement constitute the valid and legally binding
obligations of Aspec enforceable against Aspec in accordance with their
respective terms and conditions. Aspec need not give any notice to, make any
filing with, or obtain any authorization, consent, or approval of any government
or governmental agency in order to consummate the transactions contemplated by
this Agreement.
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6.3 Capitalization.
(a) As of February 28, 1998, the authorized capital stock of
Aspec consisted of (i) 130,378 shares of Series A Redeemable Preferred Stock,
$0.001 par value, all of which are issued were outstanding, (ii) 75,000,000
shares of Common Stock, of which 22,039,557 shares were issued and outstanding,
(iii) 5,000,000 shares of undesignated preferred stock, none of which were
issued and outstanding, and (iv) an aggregate of approximately 5,200,000 shares
were subject to outstanding options or reserved for issuance pursuant to Aspec's
employee and director stock plans. All of the outstanding shares of Aspec's
capital stock have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth in this Section 6.3, there are no
options, warrants or other rights, agreements, arrangements or commitments of
any character relating to the issued or unissued capital stock of Aspec or
obligating Aspec to issue or sell any shares of capital stock of, or other
equity interests in, Aspec. The authorized capital stock of Merger Sub consists
of 1,000 shares of common stock , all of which are held of record by Aspec.
(b) The shares of Aspec Common Stock to be issued pursuant to
Section 3.1 of this Agreement are duly authorized and reserved for issuance, and
upon issuance thereof will be validly issued, fully paid and nonassessable.
6.4 Noncontravention. Neither the execution and the delivery of this
Agreement nor the consummation of the transactions contemplated hereby, will (A)
violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Aspec is subject or any provision of its
Certificate of Incorporation or bylaws, or (B) (i) conflict with, (ii) result in
a breach of, (iii) constitute a default under, (iv) result in the acceleration
of, (v) create in any party the right to accelerate, terminate, modify, or
cancel, or (vi) require any notice under, any agreement, contract, lease,
license, instrument, or other arrangement to which Aspec is a party or by which
it is bound or to which any of its assets is subject.
6.5 Brokers' Fees. Aspec has no liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
6.6 Financial Statements. Section 6.6 of the Aspec Disclosure
Schedule contains Aspec's audited balance sheets and statements of income and
cash flows as of and for the fiscal years ended November 30, 1996 and November
30, 1997 (the "ASPEC FINANCIAL STATEMENTS"). The Aspec Financial Statements
(including the notes thereto) have been prepared in accordance with GAAP applied
on a consistent basis throughout the periods covered thereby and present fairly
the financial condition of Aspec as of such dates and the results of operations
of Aspec as of such periods. The books of account of Aspec reflect as of the
dates shown thereon all items of income and expenses, and all assets,
liabilities and accruals of Aspec required to be reflected therein, in
accordance with generally accepted accounting principles consistently applied.
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6.7 Undisclosed Liabilities. Aspec has no material liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes) of a
character which, under GAAP, should be accrued, shown or disclosed on a balance
sheet of Aspec, except for (i) liabilities set forth in the Aspec Financial
Statements and (ii) liabilities which have arisen after November 30, 1997 in the
Ordinary Course of Business.
6.8 Litigation. Section 6.8 of the Aspec Disclosure Schedule sets
forth each instance in which Aspec (or any of its assets) (i) is subject to any
outstanding injunction, judgment, order, decree, ruling, or charge or (ii) is a
party or, to the knowledge of Aspec, is threatened to be made a party, to any
action, suit, proceeding, hearing, arbitration, or investigation of, in, or
before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator.
6.9 Legal Compliance. Aspec has complied in all material respects
with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof). To
the knowledge of Aspec, no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, demand, notice or inquiry has been filed or commenced
by or against, or received by, any governmental body alleging any failure to so
comply. Aspec has all licenses, permits, approvals, registrations,
qualifications, certificates and other governmental authorizations that are
necessary for the operations of Aspec as they are presently conducted, except
for any such licenses, permits, approvals, registrations, qualifications,
certificates and other governmental authorizations which, if not obtained, would
not individually or in the aggregate be likely to result Material Adverse Effect
on Aspec.
6.10 No Adverse Developments. To the knowledge of Aspec, there is no
development (exclusive of general economic factors affecting business in
general) or threatened development affecting Aspec (or affecting customers,
suppliers, employees, and other Persons which have relationships with Aspec)
that (i) is having or is reasonably likely to have a Material Adverse Effect on
Aspec, or (ii) would prevent Aspec from conducting its business following the
Closing in the manner in which it was conducted or planned to be conducted by
Aspec prior to the Closing.
7. Pre-Closing Covenants. With respect to the period between the execution
of this Agreement and the earlier of the termination of this Agreement in
accordance with Section 11 hereof and the Effective Time of the Merger:
7.1 General. Each of the Parties will use their reasonable best
efforts to take all actions and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 9 below).
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7.2 Notices and Consents. Except as otherwise agreed to by Aspec,
SIS will give any notices to third parties and will use its best efforts to
obtain any third party consents that are required in connection with the matters
identified in Section 5.4 of the SIS Disclosure Schedule. Each of the Parties
will give any notices to, make any filings with, and use its best efforts to
obtain any authorizations, consents, and approvals of governments and
governmental agencies in connection with the matters identified in Section 5.4
of the SIS Disclosure Schedule.
7.3 Conduct of Business. SIS will not engage in any practice, take
any action, or enter into any transaction outside the Ordinary Course of
Business. Without limiting the generality of the foregoing, SIS will not (a)
issue or sell, or contract to issue or sell, any shares of its capital stock or
that of any of its subsidiaries or any securities convertible into to
exchangeable for shares of capital stock of it or any of its subsidiaries, or
securities, warrants, options or rights to purchase any of the foregoing (other
than shares issued upon exercise of outstanding options or upon the conversion
of outstanding convertible securities described on the SIS Disclosure Schedule),
(b) purchase or redeem any shares of its capital stock (other than with respect
to Dissenting Shares), (c) declare or pay any dividends or agree to make any
other distribution with respect to any shares of its capital stock (other than
with respect to Dissenting Shares), (d) amend its Articles of Incorporation or
Bylaws, or (e) enter into or propose to enter into an agreement with any other
person providing for the possible acquisition by it or any of its subsidiaries
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) of any material portion of the capital stock or assets of another
entity. In addition, SIS will comply with all laws, statutes, ordinances, rules,
regulations and orders applicable to it or to the conduct of its business,
except for violations that could not subject SIS to a penalty or loss that could
constitute a Material Adverse Effect on SIS.
7.4 Preservation of Business. SIS will use its best efforts to keep
its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers and employees. Aspec will use its best
efforts to keep its business and properties substantially intact, including its
present operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers and employees.
7.5 Access to Information. SIS will permit Aspec and its
representatives to have access at all reasonable times, and in a manner so as
not to interfere with the normal business operations of SIS, to the business and
operations of SIS. Neither such access, inspection and furnishing of information
to Aspec and its representatives, nor any investigation by Aspec and its
representatives, shall in any way diminish or otherwise effect Aspec's right to
rely on any representation or warranty made by SIS or the Majority Shareholders
hereunder. Aspec will permit SIS and its representatives to have access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of Aspec, to the business and operations of Aspec. Neither
such access, inspection and furnishing of information to SIS and its
representatives, nor any investigation by SIS and its representatives, shall in
any way diminish or otherwise effect SIS's right to rely on any representation
or warranty made by Aspec hereunder.
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7.6 Notice of Developments. Each Party will give prompt written
notice to the others of any adverse development causing a material breach of any
of its own representations and warranties in Section 5 or Section 6 above. No
disclosure by any Party pursuant to this Section 7.6, however, shall be deemed
to amend or supplement the SIS Disclosure Schedule or the Aspec Disclosure
Schedule or to prevent or cure any misrepresentation, breach of warranty, or
breach of covenant.
7.7 Preparation of Shareholder Notice and Information Statement. As
soon as practicable after the date hereof (but in no event later than ten (10)
days following the date hereof), SIS will prepare a shareholder notice and
information statement to be delivered to its shareholders for the purpose of
soliciting their consent to the Merger (the "INFORMATION STATEMENT") and shall
use its best efforts to obtain such consent. The Board of Directors of SIS will
recommend unanimously in the Information Statement the approval of the Merger by
the SIS shareholders. The Information Statement shall contain the information
required by Regulation D of the Securities Act with respect to transactions
under Rule 505 or Rule 506 thereof and shall be in form reasonably satisfactory
to Aspec and its counsel. Aspec will provide SIS will all necessary disclosure
with respect to Aspec to be included in the Information Statement.
7.8 Exclusivity. From and after the date hereof through the date
which is thirty (30) days following the termination of this Agreement pursuant
to Section 11 hereof, without the prior written consent of Aspec, neither SIS,
the Majority Shareholders nor any of SIS's other officers, directors,
shareholders, agents or Affiliates shall, directly or indirectly, (a) solicit,
conduct discussions with or engage in negotiations with any person, other than
Aspec, relating to the possible acquisition of SIS or any of its subsidiaries
(whether by way of merger, purchase of capital stock, purchase of assets or
otherwise) or any material portion of its or their capital stock or assets, (b)
provide information with respect to SIS or any of its subsidiaries to any
person, other than Aspec, relating to the possible acquisition of SIS or any of
its subsidiaries (whether by way of merger, purchase of capital stock, purchase
of assets or otherwise) or any material portion of its or their capital stock or
assets, (c) enter into an agreement with any person, other than Aspec, providing
for the acquisition of SIS or any of its subsidiaries (whether by way of merger,
purchase of capital stock, purchase of assets or otherwise) or any material
portion of its or their capital stock or assets, (d) make or authorize any
statement, recommendation or solicitation in support of any possible acquisition
of SIS or any of it subsidiaries (whether by way of merger, purchase of capital
stock, purchase of assets or otherwise) or any material portion of its or their
capital stock or assets by any person, other than by Aspec, (e) unless otherwise
agreed to by Aspec, enter into any agreement with any person, other than Aspec,
providing for any extension of credit (other than trade credit in the ordinary
course of business) or other debt investment in SIS, or (f) unless otherwise
agreed to by Aspec, enter into any additional agreement for the licensing or
distribution of products, technology, or intellectual property of SIS, whether
now existing or hereafter created. In addition to the foregoing, if SIS or any
of its subsidiaries receives any unsolicited offer or proposal to enter
negotiations relating to any of the above, SIS shall immediately notify Aspec
thereof, including information as to the identity of the offeror or the party
making any such offer or proposal and the specific terms of such offer or
proposal, as the case may be. From and after the date hereof until the first to
occur of the Closing of the Merger or the termination of this Agreement pursuant
to
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Section 11 hereof, none of the Majority Shareholders will transfer or offer to
transfer any of their SIS Common Stock except to Aspec pursuant to the Merger.
7.9 Voting Agreement and Voting Proxy. At or prior to the time this
Agreement is executed, SIS shall have delivered to Aspec a Voting Agreement and
Voting Proxy in the form attached hereto as Exhibit D, duly executed by each of
the Majority Shareholders and by such other shareholders of SIS that, together
with the Majority Shareholders, hold no less than 80% of the outstanding voting
power of SIS.
8. Post-Closing Covenants. With respect to the period following the
Effective Time of the Merger:
8.1 General. In case at any time after the Effective Time of the
Merger any further action is necessary to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents) as any other
Party reasonably may request, all at the sole cost and expense of the requesting
Party (unless the requesting Party is entitled to indemnification therefor under
Section 10 below).
8.2 Litigation Support. In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction (A) on or
prior to the Effective Time of the Merger involving SIS or the Majority
Shareholders or (B) arising out of Aspec's operation of the business of the
Surviving Corporation following the Effective Time of the Merger in the manner
in which it is presently conducted and planned to be conducted, each of the
other Parties will cooperate with the party, its counsel in the contest or
defense, make available their personnel, and provide such testimony and access
to their books and records as shall be reasonably necessary in connection with
the contest or defense, all at the sole cost and expense of the contesting or
defending Party (unless the contesting or defending Party is entitled to
indemnification therefor under Section 10 below).
8.3 Transition. None of the Majority Shareholders will take any
action that is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, or other business associate of SIS from
maintaining the same business relationships with the Surviving Corporation after
the Effective Time of the Merger as it maintained with SIS prior to the
Effective Time of the Merger.
8.4 Confidentiality. Each of the parties hereto hereby agrees to
keep such information or knowledge obtained in any due diligence or other
investigation pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby, confidential in accordance
with the terms of that certain Nondisclosure and Nonsolicitation Agreement
between Aspec and SIS dated March 5, 1998 (the "NONDISCLOSURE AGREEMENT").
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8.5 SIS Employees; Employee Stock Options. Upon the Effective Date
of the Merger, all employees of SIS shall be offered employment with the
Surviving Corporation. In addition, upon the Effective Date of the Merger, Xx.
Xxxxxxx shall be granted an option to purchase 175,000 shares of Aspec Common
Stock and the other employees of SIS shall be granted options to purchase an
aggregate of 150,000 shares of Aspec Common Stock (in such amounts to be
mutually determined by the Chief Executive Officer of SIS and Aspec). In each
case, such options shall be granted at the fair market value of the Aspec Common
Stock at the date of grant and shall vest monthly over a four-year period. The
options shall also be subject to the other terms and conditions of Aspec's 1996
Stock Option Plan (the "STOCK PLAN"). Aspec will file a Registration Statement
on Form S-8 with respect to the Stock Plan no later than 180 days following the
initial public offering of Aspec's Common Stock. With respect to such
Registration Statement on Form S-8, the options issued to the former SIS
employees shall be treated the same as the options granted to Aspec's other
employees. All employees of SIS that are employees of the Surviving Corporation
following the Closing shall execute Aspec's standard form of employee
confidentiality and inventions assignment agreement.
8.6 Restrictions on Sales of Aspec Common Stock. Other than in
connection with the exercise of the registration rights contemplated by Section
9.2(f) hereof, each of the Majority Shareholders agrees that, without the prior
written consent of Aspec, he will not, for a period of one hundred eighty (180)
days subsequent to the closing of the initial public offering of the Common
Stock of Aspec (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Aspec Common Stock or any securities convertible into
or exercisable or exchangeable for Aspec Common Stock or (ii) enter into any
swap or similar agreement that transfers, in whole or in part, the economic risk
of ownership of the Aspec Common Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Aspec Common Stock
or such other securities, in cash or otherwise. Each of the Majority
Shareholders further agrees and consents to the entry of stop-transfer
instructions with Aspec's transfer agent against the transfer of shares of Aspec
Common Stock held by the undersigned except in compliance with this Section 8.6.
9. Conditions to Obligations to Close.
9.1 Conditions to Aspec's Obligation to Close. The obligations of
Aspec to consummate the transactions to be performed by it in connection with
the Closing is subject to satisfaction of the following conditions:
(a) the representations and warranties of SIS and the Majority
Shareholders set forth in Section 5 above shall be true and correct in all
material respects at and as of the Closing Date;
(b) SIS and the Majority Shareholders shall have performed and
complied with all of their respective covenants hereunder in all material
respects through the Closing;
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(c) SIS shall have obtained such of the third party consents
listed on Section 5.4 of the SIS Disclousre Schedule as may be mutually agreed
to by Aspec and SIS;
(d) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator (other than such an action
initiated by Aspec or Merger Sub) wherein an unfavorable injunction, judgment,
order, decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or (C)
affect materially and adversely the right of Aspec or Merger Sub to control SIS
following the Effective Time of the Merger, and no law, statute, ordinance,
rule, regulation or order shall have been enacted, enforced or entered which has
caused or will likely cause any of the effects under clause (A), (B) or (C) of
this Section 9.1(d) to occur.
(e) the President and the Chief Financial Officer of SIS and
the Majority Shareholders shall have delivered to Aspec a certificate to the
effect that each of the conditions specified above in Section 9.1(a) to 9.1(d)
(inclusive) is satisfied in all material respects;
(f) No Material Adverse Effect shall have occurred with
respect to SIS;
(g) Aspec shall have received from counsel to SIS and the
Majority Shareholders an opinion in form and substance as set forth in Exhibit E
attached hereto, addressed to Aspec, and dated as of the Closing Date;
(h) this Agreement and the Merger shall have been approved by
the vote of the holders of at least 90% of the outstanding shares of Common
Stock of SIS.
(i) certain outstanding indebtedness of SIS in the amount of
$85,000 payable to a SIS shareholder shall have been repaid or canceled;
(j) all outstanding options, convertible securities and other
Stock Rights to purchase securities of SIS shall have been exercised or
canceled; and
(k) Xxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxx Xxxxxxxxxxxxx and at
least eight (8) other engineers presently employed by SIS shall have accepted
employment with the Surviving Corporation.
Aspec may waive any condition (in whole or in part) specified in
this Section 9.1 if it executes a writing so stating at or prior to the Closing.
9.2 Conditions to SIS's Obligation. The obligation of SIS and the
Majority Shareholders to consummate the transactions to be performed by each of
them in connection with the Closing is subject to satisfaction of the following
conditions:
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(a) the representations and warranties of Aspec set forth in
Section 6 above shall be true and correct in all material respects at and as of
the Closing Date;
(b) Aspec shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(c) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator (other than such an action
initiated by SIS or any of the Majority Shareholders) wherein an unfavorable
injunction, judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement or (B)
cause any of the transactions contemplated by this Agreement to be rescinded
following consummation (and no such injunction, judgment, order, decree, ruling,
or charge shall be in effect);
(d) the Chief Executive Officer or other duly authorized
officer of Aspec shall have delivered to SIS a certificate to the effect that
each of the conditions specified above in Section 9.2(a) to 9.2(c) (inclusive)
is satisfied in all material respects;
(e) SIS shall have received from counsel to Aspec an opinion
in form and substance as set forth in Exhibit F attached hereto, addressed to
SIS, and dated as of the Closing Date;
(f) The Registration Agreement dated May 28, 1996 by and
between Aspec and certain other parties shall have been amended in the form
attached hereto as Exhibit G.
(g) No Material Adverse Change shall have occurred with
respect to Aspec that would be reasonably likely to result in Aspec's revenues
for fiscal 1998 being reduced by $11 million or more.
SIS and the Majority Shareholders may waive any condition (in whole
or in part) specified in this Section 9.2 if SIS executes a writing so stating
at or prior to the Closing.
10. Survival of Representations, Indemnification.
10.1 Limited Survival of Representations and Warranties. All
covenants of Aspec, Merger Sub, SIS and the Majority Shareholders to be
performed prior to the Effective Time of the Merger, and all representations and
warranties of Aspec, SIS and the Majority Shareholders in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Merger for
a period of six (6) months from the Effective Time of the Merger (the
"EXPIRATION DATE"), and, notwithstanding anything to the contrary in this
Agreement, no claim for breach of any representation, warranty or covenant by
any Party and no claim for indemnification by Aspec or the Majority Shareholders
hereunder shall be brought at any time after the Expiration Date.
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10.2 Indemnification by Aspec.
(a) From and after the Effective Time of the Merger, Aspec
shall indemnify and hold harmless each of the Majority Shareholders, and each of
the heirs, executors, successors and assigns of any of the foregoing, from and
against any and all Losses arising out of, or in connection with, any breach of
any representation or warranty or of any covenant, agreement, or undertaking
made by Aspec in this Agreement.
(b) Notwithstanding any provision to the contrary in this
Agreement, the maximum obligation and liability of Aspec and Merger Sub to any
SIS shareholder (including the Majority Shareholders) shall be determined by
multiplying the number of shares of Aspec Common Stock received by each such SIS
shareholder in the Merger by $10.00.
10.3 Indemnification by Majority Shareholders.
(a) From and after the Effective Time of the Merger, each of
SIS and the Majority Shareholders shall indemnify and hold harmless Aspec,
Merger Sub and each of their respective Affiliates, and each of their respective
directors, officers, employees and agents, and each of the heirs, executors,
successors and assigns of any of the foregoing, from and against any and all
Losses arising out of, or in connection with, any breach of any representation
or warranty or of any covenant, agreement, or undertaking made by SIS or the
Majority Shareholders in this Agreement. The liability of the Majority
Shareholders hereunder shall be several in proportion to number of shares of
Aspec Common Stock received by each such Majority Shareholder and his Affiliates
as a result of the Merger, and not joint.
(b) Any claim for indemnification pursuant to this Section 10
may be satisfied by the Majority Shareholders by returning shares of Aspec
Common Stock received by each such Majority Shareholder and his Affiliates in
the Merger to Aspec. Notwithstanding any provision to the contrary in this
Agreement, the maximum obligation and liability of each of the Majority
Shareholders hereunder shall be limited to the forfeiture to Aspec of all of the
shares of Aspec Common Stock received by each such Majority Shareholder and his
Affiliates in the Merger to Aspec. Any shares of Aspec Common Stock returned to
Aspec shall be valued at the then fair market value of the Aspec Common Stock.
(c) The Majority Shareholders may agree, as among themselves
and without limiting the rights of Aspec or Merger Sub hereunder, as to the
respective amounts of any liability for which they each shall be responsible.
(d) Any payment made pursuant to this Section 10.3 or Section
10.2 hereof shall be treated by the Parties as an adjustment to the purchase
price provided for herein, and the Parties agree not to take any position
inconsistent therewith for any purpose.
10.4 Notice of Claims. No action or proceeding may be brought by a
party seeking indemnification hereunder (the "INDEMNIFIED PARTY") with respect
to any breach of the
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representations, warranties, covenants or agreements made hereunder unless
written notice thereof, setting forth in reasonable detail (to the extent then
known) the amount of the claim and the claimed misrepresentation or breach of
warranty or breach of covenant or agreement, or the reasons for which such
Indemnified Party believes there has been or may have been a breach of
representation, warranty, covenant or agreement, shall have been delivered to
the party alleged to have breached such representation, warranty, covenant or
agreement (the "INDEMNIFYING PARTY") on or prior to the Expiration Date. If the
Indemnifying Party contests the assertion of the claim, then the parties shall
act in good faith to reach agreement regarding such claim.
10.5 Third Party Claims. If a claim by a third party is made against
an Indemnified Party, and if such Indemnified Party intends to seek indemnity
with respect thereto under this Section 10, such Indemnified Party shall
promptly notify the Indemnifying Party in writing of such claims setting forth
such claims in reasonable detail; provided, however, that failure of such
Indemnified Party to give such notice shall not result in a waiver of its
indemnity rights except to the extent that such failure prejudices the
Indemnifying Party's ability to respond to or defend the claim. The Indemnifying
Party shall have thirty (30) days after receipt of such notice to undertake,
through counsel of its own choosing and at its own expense, the settlement or
defense thereof, and the Indemnified Party shall cooperate with it in connection
therewith; provided, however, that the Indemnified Party may participate in such
settlement or defense through counsel chosen by such Indemnified Party, provided
that the fees and expenses of such counsel shall be borne by such Indemnified
Party. The Indemnified Party shall not pay or settle any claim without the
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. The Indemnifying Party will not pay or settle any claim
unless it contains an unconditional release of the Indemnified Party. If the
Indemnifying Party does not within thirty (30) days after the receipt of the
Indemnified Party's notice of a claim of indemnity hereunder undertake the
defense thereof or if the Indemnified Party must obtain separate legal counsel
due to an actual or potential conflict arising from such claim (as determined in
good faith by the Indemnified Party's legal counsel), the Indemnified Party
shall have the right to contest, settle or compromise the claim but shall not
thereby waive any right to indemnity therefor (and for all associated reasonable
costs and attorney's fees which, in the case of such costs and fees, shall be
reimbursed by the Indemnifying Party as incurred) pursuant to this Agreement.
10.6 Limitation of Claims. The Majority Shareholders shall not be
liable for any claims by Aspec made hereunder unless and until the aggregate
amount of all such claims against one or more of the Majority Shareholders
exceeds $25,000, provided that in the event such claims exceed $25,000, Aspec
shall be entitled to recover for the full amount of such claims (including the
$25,000 limitation). Aspec and Merger Sub shall not be liable for any claims by
the Majority Shareholders made hereunder unless and until the aggregate amount
of all such claims against Aspec and Merger Sub exceeds $25,000, provided that
in the event such claims exceed $25,000, the Majority Shareholders shall be
entitled to recover for the full amount of such claims (including the $25,000
limitation).
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11. Termination.
11.1 Termination of the Agreement. This Agreement may be terminated
at any time prior to the Closing as follows:
(a) Aspec and SIS may terminate this Agreement as to all
Parties by mutual written consent at any time prior to the Closing.
(b) Aspec may terminate this Agreement by giving written
notice to SIS and the Majority Shareholders at any time prior to the Closing (A)
in the event either of SIS or the Majority Shareholders has materially breached
any representation, warranty, or covenant contained in this Agreement and Aspec
has notified SIS and the Majority Shareholders of the breach or (B) if the
Closing shall not have occurred on or before May 31, 1998, by reason of the
failure of any condition precedent under Section 9.1 hereof (unless the failure
results primarily from Aspec itself materially breaching any representation,
warranty, or covenants contained in this Agreement).
(c) Aspec may terminate this Agreement by giving written
notice to SIS and the Majority Shareholders at any time prior to 5:00 p.m.
(California time) on March 27, 1998 in the event that Aspec is not satisfied in
its sole discretion with the results of its due diligence investigation
regarding the business and financial and corporate records of SIS.
(d) SIS may terminate this Agreement by giving written notice
to Aspec at any time prior to the Closing (A) in the event Aspec has materially
breached any representation, warranty, or covenant contained in this Agreement
and SIS has notified Aspec of the breach, or (B) if the Closing shall not have
occurred on or before May 31, 1998, by reason of the failure of any condition
precedent under Section 9.2 hereof (unless the failure results primarily from
SIS or the Majority Shareholders materially breaching any representation,
warranty, or covenants contained in this Agreement).
11.2 Effect of Termination. If any Party terminates this Agreement
pursuant to Section 11 above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach); provided, however, that
the Confidentiality Agreement shall survive in accordance with its terms.
12. Miscellaneous.
12.1 Publicity. No Party shall issue any press release or make any
public announcement relating to the subject matter of this Agreement prior to
the Closing without the prior written approval of Aspec and SIS. Notwithstanding
the foregoing, Aspec may disclose the Merger in its Registration Statement on
Form S-1, and any amendments thereto, to be filed with the Securities and
Exchange Commission in connection with the initial public offering of its Common
Stock and may discuss the Merger with its underwriters and potential investors
in connection with such offering.
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12.2 No Third-Party Beneficiaries. This Agreement shall not confer
any rights or remedies upon any Person other than the Parties, the shareholders
of SIS and their respective successors and permitted assigns.
12.3 Entire Agreement. This Agreement (including the exhibits and
schedules hereto) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof (including that certain letter agreement between Aspec and
SIS dated March 9, 1998). Notwithstanding the foregoing, SIS and Aspec agree
that the terms of the Confidentiality Agreement shall remain in effect.
12.4 Succession and Assignment. This Agreement shall be binding upon
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties.
12.5 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together will
constitute one and the same instrument.
12.6 Headings. The Section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
12.7 Notices. All notices and other communications required or
permitted hereunder shall be in writing, shall be effective when given, and
shall in any event be deemed to be given upon receipt or, if earlier, (a) five
(5) days after deposit with the U.S. Postal Service or other applicable postal
service, if delivered by first class mail, postage prepaid, (b) upon delivery,
if deli vered by hand, (c) one (1) business day after the business day of
deposit with Federal Express or similar overnight courier, freight prepaid or
(d) one (1) business day after the business day of facsimile transmission, if
delivered by facsimile transmission with copy by first class mail, postage
prepaid, and shall be addressed to the intended recipient as set forth below:
If to Aspec or Merger Sub:
Aspec Technology, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Dell'Oca,
President and Chief Executive Officer
Copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: J. Xxxxxx Xxxxxxxxxx, Esq.
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If to SIS or the Majority Shareholders:
SIS Microelectronics, Inc.
X.X. Xxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx,
President and Chief Executive Officer
Copy to:
Xxxx, XxXxxxx & Xxxxxx, P.C.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Any Party may change the address to which notices, requests, demands, claims,
and other communications hereunder are to be delivered by giving the other
Parties written notice of such change in accordance with the above provisions.
12.8 Governing Law; Dispute Resolution.
(a) This Agreement shall be governed by and construed in
accordance with the domestic laws of the State of California without giving
effect to any choice or conflict of law provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California.
(b) It is the express intention of the Parties to this
Agreement to make a good faith effort to resolve, without resort to arbitration,
any dispute arising under or related to this Agreement. In the event of a
dispute relating to any provision of this Agreement which cannot be resolved
promptly by negotiations between the Parties involved directly in the dispute,
any Party to the dispute may give the other Party written notice of its intent
to arbitrate, as provided in this Section 12.8. No arbitration may commence
earlier than thirty (30) days after the delivery of the notice of intent to
arbitrate, unless the failure to commence arbitration is reasonably likely to
result in some demonstrable harm.
(c) The Parties hereto agree that the appropriate and
exclusive forum for any disputes among any of the Parties hereto arising out of
this Agreement or the transactions contemplated hereby, shall be settled by
arbitration in Santa Xxxxx County, California, in accordance with the rules of
the American Arbitration Association, and judgment upon any award rendered by
the arbitrator or arbitrators may be entered in any court having jurisdiction
thereof. The arbitration panel will consist of three (3) people to be mutually
selected by the Parties to the dispute. In the event that the Parties to the
dispute cannot agree upon the arbitrators within ten (10) days after
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the commencement of the arbitration procedures, one (1) arbitrator shall be
selected by Aspec, one (1) arbitrator shall be selected by the Majority
Shareholders involved in the dispute and one (1) arbitrator shall be selected by
the two (2) other arbitrators so designated. The parties further agree, to the
extent permitted by law, that final and non-appealable judgment against any of
them in any action or proceeding contemplated above shall be conclusive and may
be enforced in any other jurisdiction within or outside the United States by
suit on the judgment, a certified or exemplified copy of which shall be
conclusive evidence of the fact and amount of such judgment. The Parties hereby
consent to the jurisdiction of the Superior Court of the State of California and
the United States District Courts of California and waive any objections or
rights as to forum nonconvenience, lack of personal jurisdiction or similar
grounds with respect to the enforcement of any such judgment.
(d) In the event of any arbitration proceeding hereunder, the
arbitrator(s) shall have the discretion to award the prevailing party
reimbursement of all costs and expenses incurred in connection with said action,
including reasonable attorney's fees.
(e) To the extent that Aspec or the Majority Shareholders have
or hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether through service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, Aspec and the Majority Shareholders (as the case may be) hereby
irrevocably waive such immunity in respect of its obligations with respect to
this Agreement.
12.9 Amendments and Waivers. No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by
Aspec, Merger Sub, SIS and the Majority Shareholders. No waiver by any Party of
any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior to subsequent
default, misrepresentation, or breach of warranty or covenant hereunder or
affect in any way any rights arising by virtue of any prior or subsequent
occurrence.
12.10 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
12.11 Expenses. Each of Aspec, SIS and the Majority Shareholders
will bear its or their own costs and expenses (including legal and accounting
fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby; provided, however, that the Majority
Shareholders will be responsible for (i) any brokers', finders' or advisory fees
payable on behalf of SIS in connection with the Agreement and the transactions
contemplated hereby, and (ii) any legal or accounting fees undertaken on behalf
of SIS or the Majority Shareholders in connection with the Agreement and the
transactions contemplated hereby in excess of $50,000 which may be paid by SIS.
12.12 Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises,
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this Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring any Party by
virtue of the authorship of any of the provisions of this Agreement. Any
reference to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated thereunder, unless
the context requires otherwise. The word "including" shall mean including
without limitation.
12.13 Incorporation of Exhibits and Schedules. The Exhibits
identified in this Agreement are incorporated herein by reference and made a
part hereof.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on as
of the date first above written.
Aspec: ASPEC TECHNOLOGY, INC.
By: /s/ XXXXXX X. DELL'OCA
--------------------------------------
Xxxxxx X. Dell'Oca
President and Chief Executive Officer
Merger Sub: ASPEC ACQUISITION CORPORATION
By: /s/ XXXXXX X. DELL'OCA
--------------------------------------
Xxxxxx X. Dell'Oca
President and Chief Executive Officer
SIS: SIS MICROELECTRONICS, INC.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Xxxxxxx X. Xxxxxxx
Chief Executive Officer
Majority Shareholders: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ XXXXX X.X. XXXXX
------------------------------------------
Xxxxx X.X. Xxxxx
/s/ XXXXXX X. XXXXX
------------------------------------------
Xxxxxx X. Xxxxx
[AGREEMENT AND PLAN OF REORGANIZATION SIGNATURE PAGE]
