Exhibit 2.1
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AGREEMENT AND PLAN OF MERGER AND REORGANIZATION
among:
Asyst Technologies, Inc.,
a California corporation;
Ramp Acquisition Corp.,
a Delaware corporation;
Advanced Machine Programming, Inc.,
a California corporation; and
New AMP, LLC
a California limited liability corporation
Xxxxxxx Xxxxxxx Xxxx & Company,
a California Corporation
And the
Selling Shareholders
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Dated as of December 7, 2000
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Table Of Contents
Page
SECTION 1. Description of Transaction................................................... 1
1.1 Merger of the Company into Merger Sub........................................ 1
1.2 Effect of the Merger......................................................... 2
1.3 Closing; Closing Date........................................................ 2
1.4 Conversion of Shares......................................................... 2
1.5 Escrow....................................................................... 4
1.6 Employee Stock Options....................................................... 4
1.7 Closing of the Company's Transfer Books...................................... 4
1.8 Exchange of Certificates..................................................... 5
1.9 Dissenting Shares............................................................ 6
1.10 Certificate of Incorporation and Bylaws; Directors and Officers.............. 7
1.11 Tax Consequences............................................................. 7
1.12 Further Action............................................................... 7
SECTION 2. Representations and Warranties of the Company................................ 7
2.1 Due Organization; No Subsidiaries; Etc....................................... 7
2.2 Articles of Incorporation and Bylaws; Records................................ 8
2.3 Capitalization, Etc.......................................................... 8
2.4 Financial Statements......................................................... 9
2.5 Absence of Changes........................................................... 10
2.6 Title to Assets.............................................................. 11
2.7 Bank Accounts; Receivables................................................... 12
2.8 Proprietary Assets........................................................... 12
2.9 Contracts.................................................................... 14
2.10 Liabilities.................................................................. 15
2.11 Compliance with Legal Requirements........................................... 16
2.12 Governmental Authorizations.................................................. 16
2.13 Tax Matters.................................................................. 16
2.14 Employee and Labor Matters; Benefit Plans.................................... 18
2.15 Environmental Matters........................................................ 20
2.16 Insurance.................................................................... 21
i.
Table of Contents
(CONTINUED)
Page
2.17 Related Party Transactions............................................................... 21
2.18 Legal Proceedings; Orders................................................................ 21
2.19 Authority; Binding Nature of Agreement................................................... 22
2.20 Non-Contravention; Consents.............................................................. 22
2.21 Full Disclosure.......................................................................... 23
2.22 Accredited Investors..................................................................... 23
SECTION 3. Representations and Warranties of Parent and Merger Sub.................................. 23
3.1 SEC Filings; Financial Statements........................................................ 23
3.2 Authority; Binding Nature of Agreement................................................... 23
3.3 Valid Issuance........................................................................... 24
3.4 Legal Proceedings; Orders................................................................ 24
3.5 Non-Contravention; Consents.............................................................. 24
3.6 Additional Representation................................................................ 24
SECTION 4. Certain Covenants of the Company and the Selling Shareholders............................ 24
4.1 Access and Investigation................................................................. 24
4.2 Operation of the Company's Business...................................................... 25
4.3 Notification; Updates to Disclosure Schedule............................................. 26
4.4 No Negotiation........................................................................... 27
4.5 Shareholder Approval..................................................................... 27
4.6 Termination of Other Agreements.......................................................... 28
SECTION 5. Certain Covenants of the Parent.......................................................... 28
5.1 Notification............................................................................. 28
5.2 Additional Covenants..................................................................... 28
SECTION 6. Additional Covenants of the Parties...................................................... 28
6.1 Filings and Consents..................................................................... 28
6.2 Public Announcements..................................................................... 29
6.3 Best Efforts............................................................................. 29
6.4 Offer Letters and Noncompetition Agreements.............................................. 29
6.5 FIRPTA Matters........................................................................... 29
6.6 Release.................................................................................. 29
ii.
Table of Contents
(CONTINUED)
Page
6.7 Termination of Employee Plans.......................................................... 29
6.8 Payment of Debt........................................................................ 29
6.9 Cash Distribution...................................................................... 29
6.10 Xxxx-Xxxxx-Xxxxxx Act.................................................................. 29
SECTION 7. Conditions Precedent to Obligations of Parent and Merger Sub........................... 30
7.1 Accuracy of Representations............................................................ 30
7.2 Performance of Covenants............................................................... 30
7.3 Shareholder Approval................................................................... 30
7.4 Consents............................................................................... 30
7.5 Agreements and Documents............................................................... 30
7.7 FIRPTA Compliance...................................................................... 31
7.8 No Restraints.......................................................................... 31
7.9 No Legal Proceedings................................................................... 31
7.10 Termination of Employee Plans.......................................................... 31
SECTION 8. Conditions Precedent to Obligations of the Company..................................... 31
8.1 Accuracy of Representations............................................................ 32
8.2 Performance of Covenants............................................................... 32
8.3 Legal Opinions......................................................................... 32
8.4 No Restraints.......................................................................... 32
SECTION 9. Termination............................................................................ 32
9.1 Termination Events..................................................................... 32
9.2 Termination Procedures................................................................. 32
9.3 Effect of Termination.................................................................. 33
SECTION 10. Indemnification, Etc................................................................... 33
10.1 Survival of Representations, Etc....................................................... 33
10.2 Indemnification by the Selling Shareholders............................................ 34
10.3 Threshold; Ceiling..................................................................... 34
10.4 Escrow Fund............................................................................ 35
10.5 Claim Procedure........................................................................ 35
10.6 Objections to Claims................................................................... 35
iii.
Table Of Contents
(CONTINUED)
Page
10.7 Resolution of Conflicts................................................................ 36
10.8 Defense of Third Party Claims.......................................................... 37
10.9 Exercise of Remedies by Indemnitees Other Than Parent.................................. 38
10.10 Exclusivity of Article 10 Indemnity.................................................... 38
SECTION 11. Registration of the Parent Common Stock; Compliance with the Securities Act............ 38
11.1 Definitions............................................................................ 38
11.2 Registration Procedures and Expenses................................................... 39
11.3 Indemnification........................................................................ 40
11.4 Transfer of Parent Common Stock after Registration; Notice............................. 42
11.5 Reporting Requirements................................................................. 42
11.6 Market Stand-Off....................................................................... 42
11.7 Termination of Obligations............................................................. 43
11.8 Assignability of Registration Rights................................................... 43
SECTION 12. Miscellaneous Provisions............................................................... 43
12.1 Further Assurances..................................................................... 43
12.2 Fees and Expenses...................................................................... 43
12.3 Attorneys' Fees........................................................................ 44
12.4 Notices................................................................................ 44
12.5 Shareholders' Agent.................................................................... 44
12.6 Confidentiality........................................................................ 45
12.7 Time of the Essence.................................................................... 45
12.8 Headings............................................................................... 45
12.9 Counterparts........................................................................... 45
12.10 Governing Law.......................................................................... 45
12.11 Successors and Assigns................................................................. 45
12.12 Remedies Cumulative; Specific Performance.............................................. 45
12.13 Waiver................................................................................. 45
12.14 Amendments............................................................................. 46
12.15 Severability........................................................................... 46
iv.
Table of Contents
(CONTINUED)
Page
12.16 Parties in Interest...................................... 46
12.17 Entire Agreement......................................... 46
12.18 Construction............................................. 46
v.
AGREEMENT AND PLAN
OF MERGER AND REORGANIZATION
This Agreement and Plan of Merger and Reorganization ("Agreement") is made
and entered into as of December 7, 2000, by and among: Asyst Technologies, Inc.,
a California corporation ("Parent"); Ramp Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Merger Sub"); Advanced
Machine Programming, Inc., a California corporation (the "Company"); New AMP,
LLC, a California limited liability company ("AMP Parent"), Xxxxxxx Xxxxxxx Xxxx
& Company, a California corporation ("Xxxxxxx"), and all of the parties set
forth on the signature pages of this Agreement who on the Closing Date will be
all of the shareholders of the Company (the "Selling Shareholders") after the
distribution described in Recital B below. Certain other capitalized terms used
in this Agreement are defined in Exhibit A and in the body of this Agreement.
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Recitals
A. Parent, Merger Sub and the Company intend to effect a merger of the
Company into the Merger Sub in accordance with this Agreement and the applicable
provisions of the California Corporations Code and the Delaware Corporation Law
(the "Merger"). Upon consummation of the Merger, the Company will cease to
exist, and the Merger Sub will remain a wholly owned subsidiary of Parent.
B. AMP Parent currently holds 100% of the Company's capital stock. On or
before the Closing Date, AMP Parent will distribute 100% of the Company's
capital stock to its members, the Selling Shareholders, in accordance with their
respective percentage ownership interests in AMP Parent.
C. It is intended that the Merger qualify as a tax-free reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code").
D. This Agreement has been approved by the respective boards of directors
of Parent, Merger Sub and the Company.
Agreement
The parties to this Agreement agree as follows:
SECTION 1. Description of Transaction
1.1 Merger of the Company into Merger Sub. Upon the terms and subject to
the conditions set forth in this Agreement, at the Closing Date (as defined in
Section 1.3), the Company shall be merged with and into Merger Sub, and the
separate existence of the Company shall cease. Merger Sub will continue as the
surviving corporation in the Merger (the "Surviving Corporation").
1.
1.2 Effect of the Merger. The Merger shall have the effects set forth in
this Agreement and in the applicable provisions of the California Corporations
Code and the Delaware Corporation Law.
1.3 Closing; Closing Date. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Cooley Godward LLP, 3175 Hanover, Xxxx Xxxx, Xxxxxxxxxx 00000 at 10:00 a.m.
on the fifth Business Day following receipt by the parties hereto of notice of
the expiration of the Xxxx-Xxxxx-Xxxxxx Act waiting period and the satisfaction
or waiver of all of the conditions set forth in Sections 7 and 8. The time when
the Merger shall become effective is herein referred to as the "Effective Time."
(The date on which the Effective Time occurs and the Closing actually takes
place is referred to in this Agreement as the "Closing Date").
1.4 Conversion of Shares.
(a) Subject to Sections 1.8 and 1.9, at the Closing Date, by virtue
of the Merger and without any further action on the part of Parent, Merger Sub,
the Company or any shareholder of the Company, each share of Company Common
Stock outstanding immediately prior to the Closing Date shall be converted into
the right to receive total consideration for the Merger (the "Merger
Consideration") comprised of (a) "Closing Cash"; and (b) the "Applicable
Fraction" of a share of common stock (par value $0.01 per share) of Parent
("Parent Common Stock"); (capitalized terms in quotations are as defined in
Section 1.4(b)).
(b) For the purposes of this Agreement:
(i) the "Adjusted Cash Price" shall be $19,000,000 (A) minus
the difference obtained by subtracting the "Net Working Capital" (as hereinafter
defined) from $3,000,000 if the Net Working Capital is less than 3,000,000 or
(B) plus the positive difference between Net Working Capital and $3,000,000 if
the Net Working Capital is greater than $3,000,000;
(ii) the "Adjusted Fully Diluted Company Share Amount" shall be
the sum of (A) the aggregate number of shares of Company Common Stock
outstanding immediately prior to the Closing Date (including any such shares
that are subject to a repurchase option or risk of forfeiture under any
restricted stock purchase agreement or other agreement); and (B) the aggregate
number of shares of Company Common Stock purchasable under all Company Options
(as defined in Section 1.6) outstanding immediately prior to the Closing Date
(including any shares of Company Common Stock that may ultimately be purchased
under Company Options that are unvested or are otherwise not then exercisable).
(iii) the "Applicable Fraction" shall be the fraction: (A)
having the numerator equal to $19,000,000; and (B) having a denominator equal to
the Adjusted Fully Diluted Company Share Amount multiplied by the Designated
Parent Stock Price.
(iv) the "Closing Cash" shall be an amount of cash equal to (x)
the "Adjusted Cash Price" divided by (y) the Adjusted Fully Diluted Company
Share Amount, as adjusted as provided in Section 1.4(d) hereof, but in no event
shall the Closing Cash portion of the Merger Consideration exceed 55% of the
total Merger Consideration.
2.
(v) "Designated Parent Stock Price" means the average of the
closing sale prices of a share of Parent Common Stock as reported on the Nasdaq
National Market over the 5 consecutive trading days immediately preceding the
Closing Date.
(vi) "Net Working Capital" shall be the sum of the accounts
receivable and inventory of the Company minus the sum of accounts payable and
other current payables of the Company, which include accrued expenses and
current deferred income taxes payable, but exclude the current portion of debt
of AMP Parent, as described in Part 6.8 of the Disclosure Schedule; the
financing debt as described in Part 6.8 of the Disclosure Schedule; the
bankruptcy debt as described in Part 6.8 of the Disclosure Schedule; the current
portion of capital leases and the current portion of new equipment loans
described in Part 2.5(h) of the Disclosure Schedule.
(c) If any shares of Company Stock outstanding immediately prior to
the Closing Date are unvested or are subject to a repurchase option, risk of
forfeiture or other condition under any applicable restricted stock purchase
agreement or other agreement with the Company, then the Closing Cash payable and
the shares of Parent Common Stock issuable in exchange for such shares of
Company Stock will also be unvested and subject to the same repurchase option,
risk of forfeiture or other condition, and the certificates representing such
shares of Parent Common Stock may accordingly be marked with appropriate
legends.
(d) The Merger Consideration shall be payable to the Selling
Shareholders of the Company on the Closing Date as follows:
(i) the Adjusted Cash Price shall be calculated and paid on the
Closing Date based upon an estimate of Net Working Capital prepared by Parent on
and as of the second business day prior to the Closing Date (the "Closing Date
Net Working Capital").
(ii) As soon as reasonably practicable but in no event later
than thirty (30) days after the Closing Date, Parent shall cause Xxxxxx Xxxxxxxx
LLP, independent public accountants, to prepare a statement of Net Working
Capital of the Company on and as of second business day prior to the Closing
Date (the "Closing Net Working Capital Statement"). The Closing Net Working
Capital Statement shall be prepared in accordance with generally accepted
accounting principles and consistent with the Company's past practices. The
Selling Shareholders will provide to Parent access to all workpapers, records
and personnel reasonably necessary to prepare the Closing Net Working Capital
Statement.
(iii) Parent will provide to the Selling Shareholders and its
Representatives the Closing Net Working Capital Statement, as well as access to
all workpapers, records and personnel reasonably necessary for the Selling
Shareholders to verify the Closing Net Working Capital Statement. If, within
thirty (30) calendar days after the date of the Parent's delivery of the Closing
Net Working Capital Statement, the Selling Shareholders shall have any
disagreement with respect thereto, the Selling Shareholders will give written
notice to the Parent within such 30-calendar day period, specifying such
disagreement and Selling Shareholders' basis therefor. The failure by Selling
Shareholders to express its disagreement within such 30-calendar day period will
constitute Selling Shareholders' acceptance of the Closing Net Working Capital
Statement as delivered by Parent. If the Selling Shareholders and Parent are
unable to resolve any disagreement between them within ten (10) calendar days
after giving notice of such
3.
disagreement, the items in dispute (collectively, the "Disputed Items") will
promptly be referred for determination to one of the "Big Five" accounting firms
as shall be mutually acceptable to Parent and the Selling Shareholders, other
than the Parent's Auditors (the "Accountants"); provided that if the Selling
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Shareholders and Parent are unable to agree on the identity of the Accountants
within (10) calendar days after the giving of the notice of such disagreement,
the Parent may select a "Big Five" Accounting firm to serve as the Accountants.
The Accountants shall, within sixty (60) calendar days of the date on which a
Disputed Item has been referred to them for determination, (x) make a
determination only as to each of the Disputed Items and shall have no authority
to review and make a determination with respect to any item which has not been
submitted by the parties hereto for determination by the Accountants, and (y)
based on the items not in dispute and on the Accountants' determination of the
Disputed Items, calculate the resultant Adjusted Cash Price, if any, which
determination and calculation will be (A) in writing, (B) promptly furnished to
each of the parties hereto after the Disputed Items have been referred to the
Accountants, (C) made in accordance with this Agreement, and (D) conclusive and
binding upon each of the parties hereto. In connection with their determination
of the Disputed Items, the Accountants will be entitled to review the
workpapers, trial balances and similar materials prepared by Xxxxxx Xxxxxxxx LLP
in connection with such firm's examination of the financial statements of the
Company, and any books and records related thereto. Based upon the Accountant's
determination of the Adjusted Cash Price, within ten (10) days of date the
parties receive the Accountant's written determination, (1) the Parent shall
remit to the Selling Shareholders the positive difference, if any, between the
Adjusted Cash Price as determined by the Accountants and the Adjusted Cash Price
paid on the Closing Date, or (2) the Selling Shareholders shall remit to the
Parent the positive difference, if any, between the Adjusted Cash Price paid on
the Closing Date and the Adjusted Cash Price determined by the Accountants.
(iv) All expenses and fees of Xxxxxx Xxxxxxxx LLP shall be borne by
the Parent. All expenses and fees of the Accountants, if any, shall be borne one
half by Parent and one half by the Selling Shareholders.
1.5 Escrow. As more fully described in Section 10.4 hereof and in the
Escrow Agreement attached hereto as Exhibit B (the "Escrow Agreement"), an
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Escrow Fund (as defined in the Escrow Agreement) shall be established into which
shall be deposited at Closing a portion of the total Closing Cash and a portion
of the Parent Common Stock which the Selling Shareholders are entitled to
receive pursuant to the provisions of this Section 1. The amount to be withheld
from the Selling Shareholders and contributed to the Escrow Fund shall be ten
percent (10%) of the aggregate amount of Closing Cash and ten percent (10%) of
the aggregate number of shares of Parent Common Stock that the Selling
Shareholders are entitled to receive pursuant to the provisions of this Section
1.
1.6 Employee Stock Options. As of the Closing Date, there are no options
to purchase Company stock, whether vested or unvested. Any options to purchase
Company stock that existed prior to the Closing Date have been terminated.
1.7 Closing of the Company's Transfer Books. At the Closing Date, holders
of certificates representing shares of the Company's capital stock that were
outstanding immediately prior to the Closing Date shall cease to have any rights
as shareholders of the Company, and the stock transfer books of the Company
shall be closed with respect to all shares
4.
of such capital stock outstanding immediately prior to the Closing Date. No
further transfer of any such shares of the Company's capital stock shall be made
on such stock transfer books after the Closing Date. If, after the Closing Date,
a valid certificate previously representing any of such shares of the Company's
capital stock (a "Company Stock Certificate") is presented to the Surviving
Corporation or Parent, such Company Stock Certificate shall be canceled and
shall be exchanged as provided in Section 1.8.
1.8 Exchange of Certificates.
(a) At or as soon as practicable after the Closing Date, Parent will
send to the holders of Company Stock Certificates a letter of transmittal in
customary form and containing such provisions as Parent may reasonably specify,
and instructions for use in effecting the surrender of Company Stock
Certificates in exchange for cash and for certificates representing Parent
Common Stock in accordance with the terms of this Section 1. Upon surrender of a
Company Stock Certificate to Parent for exchange, together with a duly executed
letter of transmittal and such other documents as may be reasonably required by
Parent, the Company Stock Certificate so surrendered shall be canceled and the
holder of such Company Stock Certificate shall be entitled to receive in
exchange therefor:
(i) the amount of cash equal to the Closing Cash multiplied by
the number of shares of capital stock of the Company represented by the
surrendered Company Stock Certificate; and
(ii) a certificate representing the number of whole shares of
Parent Common Stock equal to the Applicable Fraction multiplied by the number of
shares of capital stock of the Company represented by the surrendered Company
Stock Certificate.
Until surrendered as contemplated by this Section 1.8, each Company Stock
Certificate shall be deemed, from and after the Closing Date, to represent only
the right to receive upon such surrender cash, a certificate representing shares
of Parent Common Stock, (and cash in lieu of any fractional share of Parent
Common Stock) as contemplated by this Section 1. If any Company Stock
Certificate shall have been lost, stolen or destroyed, Parent may, in its
discretion and as a condition precedent to the delivery of any cash and the
issuance of any certificate representing Parent Common Stock require the owner
of such lost, stolen or destroyed Company Stock Certificate to provide an
appropriate affidavit and to deliver a bond (in such sum as Parent may
reasonably direct) as indemnity against any claim that may be made against
Parent or the Surviving Corporation with respect to such Company Stock
Certificate.
(b) No dividends or other distributions declared or made with respect
to Parent Common Stock with a record date after the Closing Date shall be paid
to the holder of any unsurrendered Company Stock Certificate with respect to the
shares of Parent Common Stock represented thereby, and no cash payment in lieu
of any fractional share shall be paid to any such holder, until such holder
surrenders such Company Stock Certificate in accordance with this Section 1.8
(at which time such holder shall be entitled to receive all such dividends and
distributions and such cash payment).
5.
(c) No fractional shares of Parent Common Stock shall be issued in
connection with the Merger, and no certificates for any such fractional shares
shall be issued. In lieu of such fractional shares, any holder of capital stock
of the Company who would otherwise be entitled to receive a fraction of a share
of Parent Common Stock (after aggregating all such fractional shares issuable to
such holder) shall, upon surrender of such holder's Company Stock
Certificate(s), be paid in cash the dollar amount (rounded to the nearest whole
cent), without interest, determined by multiplying such fraction by the
Designated Parent Stock Price (as defined in Section 1.4).
(d) Parent and the Surviving Corporation shall be entitled to deduct
and withhold from any consideration payable or otherwise deliverable to any
holder or former holder of capital stock of the Company pursuant to this
Agreement such amounts as Parent or the Surviving Corporation may be required to
deduct or withhold therefrom under the Code or under any provision of state,
local or foreign tax law. To the extent such amounts are so deducted or
withheld, such amounts shall be treated for all purposes under this Agreement as
having been paid to the Person to whom such amounts would otherwise have been
paid.
(e) Neither Parent nor the Surviving Corporation shall be liable to
any holder or former holder of capital stock of the Company for any shares of
Parent Common Stock, dividends or distributions with respect thereto, or for any
cash amounts, delivered to any public official pursuant to any applicable
abandoned property, escheat or similar law.
1.9 Dissenting Shares.
(a) Notwithstanding anything to the contrary contained in this
Agreement, any shares of capital stock of the Company that, as of the Closing
Date, are or may become "dissenting shares" within the meaning of the California
Corporations Code shall not be converted into or represent the right to receive
cash or Parent Common Stock in accordance with this Section 1 (or cash in lieu
of fractional shares in accordance with Section 1.8(c)), and the holder or
holders of such shares shall be entitled only to such rights as may be granted
to such holder or holders in the California Corporations Code; provided,
however, that if the status of any such shares as "dissenting shares" shall not
be perfected, or if any such shares shall lose their status as "dissenting
shares," then, as of the later of the Closing Date or the time of the failure to
perfect such status or the loss of such status, such shares shall automatically
be converted into and shall represent only the right to receive (upon the
surrender of the certificate or certificates representing such shares) cash and
Parent Common Stock in accordance with this Section 1 (and cash in lieu of
fractional shares in accordance with Section 1.8(c)).
(b) The Company shall give Parent (i) prompt notice of any written
demand received by the Company prior to the Closing Date to require the Company
to purchase shares of capital stock of the Company pursuant to the California
Corporations Code and of any other demand, notice or instrument delivered to the
Company prior to the Closing Date pursuant to the California Corporations Code,
and (ii) the opportunity to participate in all negotiations and proceedings with
respect to any such demand, notice or instrument. The Company shall not make any
payment or settlement offer prior to the Closing Date with respect to any such
demand unless Parent shall have consented in writing to such payment or
settlement offer.
6.
1.10 Certificate of Incorporation and Bylaws; Directors and Officers.
Unless otherwise determined by Parent and the Company prior to the Closing Date:
(a) the Certificate of Incorporation of the Surviving Corporation
shall, as of the Closing Date, continue in the same form as the Certificate of
Incorporation of the Merger Sub;
(b) the Bylaws of the Surviving Corporation shall, as of the
Closing Date, continue in the same form as the Bylaws of Merger Sub as in effect
immediately prior to the Closing Date; and
(c) the directors and officers of the Surviving Corporation
immediately after the Closing Date shall be the officers and directors of the
Merger Sub.
1.11 Tax Consequences. For federal income tax purposes, the Merger is
intended to constitute a reorganization within the meaning of Section 368 of the
Code. The parties to this Agreement hereby adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the
United States Treasury Regulations.
1.12 Further Action. If, at any time after the Closing Date, any further
action is determined by Parent to be necessary or desirable to carry out the
purposes of this Agreement or to vest the Surviving Corporation or Parent with
full right, title and possession of and to all rights and property of Merger Sub
and the Company, the officers and directors of the Surviving Corporation and
Parent shall be fully authorized (in the name of Merger Sub, in the name of the
Company and otherwise) to take such action.
SECTION 2. Representations and Warranties of the Company
The Company and each of the Selling Shareholders, severally, and not
jointly, represent and warrant, to and for the benefit of the Indemnitees, as
follows except as set forth in the Disclosure Schedule:
2.1 Due Organization; No Subsidiaries; Etc.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and has all
necessary power and authority: (i) to conduct its business in the manner in
which its business is currently being conducted; (ii) to own and use its assets
in the manner in which its assets are currently owned and used; and (iii) to
perform its obligations under all Company Contracts.
(b) Except as set forth in Part 2.1 of the Disclosure Schedule, the
Company has not conducted any business under or otherwise used, for any purpose
or in any jurisdiction, any fictitious name, assumed name, trade name or other
name, other than the name "Advanced Machine Programming, Inc."
(c) The Company is not and has not been required to be qualified,
authorized, registered or licensed to do business as a foreign corporation in
any jurisdiction other than the jurisdictions identified in Part 2.1 of the
Disclosure Schedule, except where the failure to be so
7.
qualified, authorized, registered or licensed would not have a Material Adverse
Effect on the Company. The Company is in good standing as a foreign corporation
in each of the jurisdictions identified in Part 2.1 of the Disclosure Schedule.
(d) Part 2.1 of the Disclosure Schedule accurately sets forth (i) the
names of the members of the Company's board of directors, (ii) the names of the
members of each committee of the Company's board of directors, and (iii) the
names and titles of the Company's officers.
(e) The Company does not own any controlling interest in any Entity
and, except for the equity interests identified in Part 2.1 of the Disclosure
Schedule, the Company has never owned, beneficially or otherwise, any shares or
other securities of, or any direct or indirect equity interest in, any Entity.
The Company has not agreed and is not obligated to make any future investment in
or capital contribution to any Entity. The Company has not guaranteed and is not
responsible or liable for any obligation of any of the Entities in which it owns
or has owned any equity interest.
2.2 Articles of Incorporation and Bylaws; Records. The Company has
delivered to Parent accurate and complete copies of: (1) the Company's articles
of incorporation and bylaws, including all amendments thereto; (2) the stock
records of the Company; and (3) except as set forth in Part 2.2 of the
Disclosure Schedule, the minutes and other records of the meetings and other
proceedings (including any actions taken by written consent or otherwise without
a meeting) of the shareholders of the Company, the board of directors of the
Company and all committees of the board of directors of the Company. There have
been no formal meetings or other proceedings of the shareholders of the Company,
the board of directors of the Company or any committee of the board of directors
of the Company that are not fully reflected in such minutes or other records.
There has not been any violation of any of the provisions of the Company's
articles of incorporation or bylaws, and the Company has not taken any action
that is inconsistent in any material respect with any resolution adopted by the
Company's shareholders, the Company's board of directors or any committee of the
Company's board of directors. The books of account, stock records, minute books
and other records of the Company are accurate, up-to-date and complete in all
material respects, and have been maintained in accordance with prudent business
practices.
2.3 Capitalization, Etc.
(a) The authorized capital stock of the Company consists of: 25,000
shares of Common Stock (with no par value), of which 1,000 shares have been
issued and are outstanding as of the date of this Agreement. All of the
outstanding shares of Company Common Stock have been duly authorized and validly
issued, and are fully paid and non-assessable. On the date hereof, AMP Parent
holds all of the outstanding shares of the capital stock of the Company. On and
as of the Closing Date, the Selling Shareholders shall hold all of the
outstanding shares of capital stock of the Company. Part 2.3 of the Disclosure
Schedule provides the name of each of the Selling Shareholders, and the
respective number and percentage of outstanding shares of Company Common Stock
held by each Selling Shareholder.
8.
(b) The Company has reserved no shares of Company Common Stock for
issuance under any stock option/issuance plan. Except as set forth in Part 2.3
of the Disclosure Schedule, there is no: (i) outstanding subscription, option,
call, warrant or right (whether or not currently exercisable) to acquire any
shares of the capital stock or other securities of the Company; (ii) outstanding
security, instrument or obligation that is or may become convertible into or
exchangeable for any shares of the capital stock or other securities of the
Company; (iii) Contract under which the Company is or may become obligated to
sell or otherwise issue any shares of its capital stock or any other securities;
or (iv) to the best of the knowledge of the Company, condition or circumstance
that may give rise to or provide a basis for the assertion of a claim by any
Person to the effect that such Person is entitled to acquire or receive any
shares of capital stock or other securities of the Company.
(c) All outstanding shares of Company Common Stock have been issued
and granted in compliance with (i) all applicable securities laws and other
applicable Legal Requirements, and (ii) all requirements set forth in applicable
Contracts.
(d) Except as set forth in Part 2.3 of the Disclosure Schedule, the
Company has never repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities of the Company. All securities so reacquired
by the Company were reacquired in compliance with (i) the applicable provisions
of the California General Corporation Law and all other applicable Legal
Requirements, and (ii) all requirements set forth in applicable restricted stock
purchase agreements and other applicable Contracts.
2.4 Financial Statements.
(a) The Company has delivered to Parent the following financial
statements and notes (collectively, the "Company Financial Statements"):
(i) The audited balance sheets of the Company as of September
30, 1999, and the related audited income statements, statements of shareholders'
equity and statements of cash flows of the Company for the years then ended,
together with the notes thereto and the unqualified report and opinion of BDO
Xxxxxxx LLP relating thereto; and
(ii) the unaudited balance sheet of the Company as of September
30, 2000 (the "Unaudited Interim Balance Sheet"), and the related unaudited
income statement of the Company for the twelve months then ended.
(b) The Company Financial Statements present fairly the financial
position of the Company as of the respective dates thereof and the results of
operations and (in the case of the financial statements referred to in Section
2.4(a)(i)) cash flows of the Company for the periods covered thereby. The
Company Financial Statements have not been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods covered.
(c) When delivered at Closing, the October 31, 2000 unaudited
financial statements referenced in Section 7.5(h) will present fairly the
financial position of the Company. These financial statements will not be
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods covered.
9.
2.5 Absence of Changes. Since September 30, 2000:
(a) there has not been any material adverse change in the Company's
business, condition, assets, liabilities, operations, financial performance or
prospects, and, to the best of the knowledge of the Company, no event has
occurred that will, or could reasonably be expected to, have a Material Adverse
Effect on the Company;
(b) there has not been any material loss, damage or destruction to,
or any material interruption in the use of, any of the Company's assets (whether
or not covered by insurance);
(c) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock, and has not repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;
(d) the Company has not sold, issued or authorized the issuance of
(i) any capital stock or other security (except for Company Common Stock issued
upon the exercise of outstanding Company Options), (ii) any option or right to
acquire any capital stock or any other security (except for Company Options
described in Part 2.3 of the Disclosure Schedule), or (iii) any instrument
convertible into or exchangeable for any capital stock or other security;
(e) the Company has not amended or waived any of its rights under, or
permitted the acceleration of vesting under, (i) any provision of a stock
option/issuance plan, (ii) any provision of any agreement evidencing any
outstanding Company Option, or (iii) any restricted stock purchase agreement;
(f) there has been no amendment to the Company's articles of
incorporation or bylaws, and the Company has not effected or been a party to any
Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;
(g) the Company has not formed any subsidiary or acquired any equity
interest or other interest in any other Entity;
(h) the Company has not made any capital expenditure which, when
added to all other capital expenditures made on behalf of the Company since
September 30, 2000, exceeds $10,000;
(i) the Company has not (i) entered into or permitted any of the
assets owned or used by it to become bound by any Contract that is or would
constitute a Material Contract (as defined in Section 2.9(a)), or (ii) amended
or prematurely terminated, or waived any material right or remedy under, any
such Contract;
(j) the Company has not (i) acquired, leased or licensed any right or
other asset from any other Person, except in the ordinary course of business and
consistent with the Company's past practices, (ii) sold or otherwise disposed
of, or leased or licensed, any right or other asset to any other Person, except
in the ordinary course of business and consistent with the Company's past
practices, or (iii) waived or relinquished any right, except for immaterial
rights
10.
or other immaterial assets acquired, leased, licensed or disposed of in the
ordinary course of business and consistent with the Company's past practices;
(k) the Company has not written off as uncollectable, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness;
(l) the Company has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for pledges of immaterial assets made in the ordinary course of business
and consistent with the Company's past practices and purchase money security
interests in assets acquired by the Company in the ordinary course of business
and consistent with the Company's past practices;
(m) the Company has not (i) lent money to any Person (other than
pursuant to routine travel advances made to employees in the ordinary course of
business), or (ii) incurred or guaranteed any indebtedness for borrowed money;
(n) the Company has not (i) established or adopted any Plans (as
defined in Section 2.14), (ii) paid any bonus or made any profit-sharing or
similar payment to, or increased the amount of the wages, salary, commissions,
fringe benefits or other compensation or remuneration payable to, any of its
directors, officers or employees, or (iii) hired any new employee with an annual
base salary in excess of $50,000;
(o) the Company has not changed any of its methods of accounting or
accounting practices in any respect;
(p) the Company has not made any Tax election;
(q) except as described in Part 2.5 of the Disclosure Schedule, with
reference to the matters referred to in Section 2.10(b) hereof, the Company has
not commenced or settled any Legal Proceeding;
(r) the Company has not entered into any material transaction or taken
any other material action outside the ordinary course of business or
inconsistent with its past practices; and
(s) the Company has not agreed or committed to take any of the actions
referred to in clauses "(c)" through "(r)" above.
2.6 Title to Assets.
(a) The Company owns, and has good, valid and marketable title to, all
assets purported to be owned by it, including: (i) all assets reflected on the
Unaudited Interim Balance Sheet; (ii) all assets referred to in Parts 2.1,
2.7(b) and 2.9 of the Disclosure Schedule and all of the Company's rights under
the Contracts identified in Part 2.10 of the Disclosure Schedule; and (iii) all
other assets reflected in the Company's books and records as being owned by the
Company. All of said assets are owned by the Company free and clear of any
liens or other Encumbrances, except for (x) any lien for current taxes not yet
due and payable, (y) minor liens that have arisen in the ordinary course of
business and that do not (in any case or in the
11.
aggregate) materially detract from the value of the assets subject thereto or
materially impair the operations of the Company and (z) those liens and
encumbrances described in Part 2.6 of the Disclosure Schedule.
(b) The Company has good title to all assets that are material to the
business of the Company and that are being leased or licensed to the Company.
(c) All material items of equipment and other tangible assets owned by
or leased to the Company are adequate for the uses to which they are being put,
are in good condition and repair (ordinary wear and tear excepted) and are
adequate for the conduct of the Company's business in the manner in which such
business is currently being conducted.
(d) The Company does not own any real property or any interest in real
property, except for the leasehold created under the real property lease
identified in Part 2.10 of the Disclosure Schedule.
2.7 Bank Accounts; Receivables.
(a) Part 2.7(a) of the Disclosure Schedule provides accurate
information with respect to each account maintained by or for the benefit of the
Company at any bank or other financial institution.
(b) Part 2.7(b) of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Company as of September 30, 2000. All existing
accounts receivable of the Company (including those accounts receivable
reflected on the Unaudited Interim Balance Sheet that have not yet been
collected and those accounts receivable that have arisen since September 30,
2000 and have not yet been collected) (i) represent valid obligations of
customers of the Company arising from bona fide transactions entered into in the
ordinary course of business, and (ii) are current and will be collected in full
without any counterclaim or set off.
(c) All unfilled orders for the purchase of Company products as of
September 30, 2000 represent valid obligations of customers of the Company
arising from bona fide transactions entered into in the ordinary course of
business.
2.8 Proprietary Assets.
(a) Part 2.8(a)(i) of the Disclosure Schedule sets forth, with respect
to each Company Proprietary Asset registered with any Governmental Body or for
which an application has been filed with any Governmental Body, (i) a brief
description of such Company Proprietary Asset, and (ii) the names of the
jurisdictions covered by the applicable registration or application. Part
2.8(a)(ii) of the Disclosure Schedule identifies and provides a brief
description of all other Company Proprietary Assets owned by the Company. Part
2.8(a)(iii) of the Disclosure Schedule identifies and provides a brief
description of each Company Proprietary Asset licensed to the Company by any
Person (except for any Proprietary Asset that is licensed to the Company under
any third party software license generally available to the public at a cost of
less than $10,000), and identifies the license agreement under which such
Proprietary Asset is being licensed to the Company. The Company has good, valid
and marketable title to all of the Company Proprietary
12.
Assets identified in Parts 2.8(a)(i) and 2.8(a)(ii) of the Disclosure Schedule,
free and clear of all liens and other Encumbrances, and has a valid right to use
all Proprietary Assets identified in Part 2.8(a)(iii) of the Disclosure
Schedule. The Company is not obligated to make any payment to any Person for the
use of any Company Proprietary Asset. The Company has not developed jointly with
any other Person any Company Proprietary Asset with respect to which such other
Person has any rights.
(b) The Company has taken all measures and precautions necessary to
protect and maintain the confidentiality and secrecy of all Company Proprietary
Assets (except Company Proprietary Assets whose value would be unimpaired by
public disclosure) and otherwise to maintain and protect the value of all
Company Proprietary Assets. The Company has not (other than pursuant to license
agreements identified in Part 2.9 of the Disclosure Schedule) disclosed or
delivered to any Person, or permitted the disclosure or delivery to any Person
of, (i) the source code, or any portion or aspect of the source code, of any
Company Proprietary Asset, or (ii) the object code, or any portion or aspect of
the object code, of any Company Proprietary Asset.
(c) None of the Company Proprietary Assets identified in Part 2.8(ii)
of the Disclosure Schedule infringes or conflicts with any Proprietary Asset
owned or used by any other Person; the Company is not infringing,
misappropriating or making any unlawful use of, and the Company has not at any
time infringed, misappropriated or made any unlawful use of, or received any
notice or other communication (in writing or otherwise) of any actual, alleged,
possible or potential infringement, misappropriation or unlawful use of, any
Proprietary Asset owned or used by any other Person. To the best of the
knowledge of the Company, no other Person is infringing, misappropriating or
making any unlawful use of, and no Proprietary Asset owned or used by any other
Person infringes or conflicts with, any Company Proprietary Asset.
(d) Each Company Proprietary Asset identified in Part 2.8(ii) of the
Disclosure Schedule conforms in all material respects with any specification,
documentation, performance standard, representation or statement made or
provided with respect thereto by or on behalf of the Company; and (ii) there has
not been any claim by any customer or other Person alleging that any Company
Proprietary Asset (including each version thereof that has ever been licensed or
otherwise made available by the Company to any Person) does not conform in all
material respects with any specification, documentation, performance standard,
representation or statement made or provided by or on behalf of the Company,
and, to the best of the knowledge of the Company, there is no basis for any such
claim. The Company has established adequate reserves on the Unaudited Interim
Balance Sheet to cover all costs associated with any obligations that the
Company may have with respect to the correction or repair of programming errors
or other defects in the Company Proprietary Assets.
(e) The Company Proprietary Assets, together with the Proprietary
Assets made available to the Company by its customer, constitute all the
Proprietary Assets necessary to enable the Company to conduct its business in
the manner in which such business has been and is being conducted. The Company
has not licensed any of the Company Proprietary Assets to any Person on an
exclusive basis, and the Company has not entered into any covenant not to
compete or Contract limiting its ability to exploit fully any of its Company
Proprietary Assets or to transact business in any market or geographical area or
with any Person.
13.
2.9 Contracts.
(a) Part 2.9 of the Disclosure Schedule identifies:
(i) each Company Contract relating to the employment of, or
the performance of services by, any employee, consultant or independent
contractor;
(ii) each Company Contract relating to the acquisition,
transfer, use, development, sharing or license of any technology or any
Proprietary Asset;
(iii) each Company Contract imposing any restriction on the
Company's right or ability (A) to compete with any other Person, (B) to acquire
any product or other asset or any services from any other Person, to sell any
product or other asset to or perform any services for any other Person or to
transact business or deal in any other manner with any other Person, or (C)
develop or distribute any technology;
(iv) each Company Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;
(v) each Company Contract relating to the acquisition,
issuance or transfer of any securities;
(vi) each Company Contract relating to the creation of any
Encumbrance with respect to any asset of the Company;
(vii) each Company Contract involving or incorporating any
guaranty, any pledge, any performance or completion bond, any indemnity or any
surety arrangement;
(viii) each Company Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses, costs
or liabilities;
(ix) each Company Contract relating to the purchase or sale of
any product or other asset by or to, or the performance of any services by or
for, any Related Party (as defined in Section 2.17);
(x) each Company Contract constituting or relating to a
Government Contract or Government Bid;
(xi) any other Company Contract that was entered into outside
the ordinary course of business or was inconsistent with the Company's past
practices;
(xii) any other Company Contract that has a term of more than
60 days and that may not be terminated by the Company (without penalty) within
60 days after the delivery of a termination notice by the Company; and
(xiii) any other Company Contract that contemplates or involves
(A) the payment or delivery of cash or other consideration in an amount or
having a value in excess of
14.
$25,000 for any such single Company Contract, or (B) the performance of services
having a value in excess of $25,000 for any single Company Contract.
(Contracts in the respective categories described in clauses "(i)" through
"(xiii)" above are referred to in this Agreement as "Material Contracts.")
(b) The Company has delivered to Parent accurate and complete copies
of all written Contracts identified in Part 2.9 of the Disclosure Schedule,
including all amendments thereto. Part 2.9 of the Disclosure Schedule provides
an accurate description of the terms of each Company Contract that is not in
written form. Each Contract identified in Part 2.9 of the Disclosure Schedule
is valid and in full force and effect, and, to the best of the knowledge of the
Company, is enforceable by the Company in accordance with its terms, subject to
(i) laws of general application relating to bankruptcy, insolvency and the
relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
(c) The Company has not violated or breached, or committed any default
under, any Company Contract which could result in or have a Material Adverse
Effect, and, to the best of the knowledge of the Company, no other Person has
violated or breached, or committed any default under, any Company Contract;
(d) To the best of the knowledge of the Company, no event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) will, or could reasonably be expected to, (A) result in a
violation or breach of any of the provisions of any Company Contract, (B) give
any Person the right to declare a default or exercise any remedy under any
Company Contract, (C) give any Person the right to accelerate the maturity or
performance of any Company Contract, or (D) give any Person the right to cancel,
terminate or modify any Company Contract;
(e) Since September 30, 1999, the Company has not received any notice
or other communication regarding any actual or possible violation or breach of,
or default under, any Company Contract; and
(f) To the best knowledge of the Company, it has not waived any of
its material rights under any Material Contract.
(g) No Person is renegotiating, or has a right pursuant to the terms
of any Company Contract to renegotiate, any amount paid or payable to the
Company under any Material Contract or any other material term or provision of
any Material Contract.
(h) The Contracts identified in Part 2.9 of the Disclosure Schedule
collectively constitute all of the Contracts necessary to enable the Company to
conduct its business in the manner in which its business is currently being
conducted.
2.10 Liabilities
(a) The Company has no accrued, contingent or other liabilities of any
nature, either matured or unmatured (whether or not required to be reflected in
financial statements in accordance with generally accepted accounting
principles, and whether due or to become due),
15.
except for: (i) liabilities identified as such in the "liabilities" column of
the Unaudited Interim Balance Sheet; (ii) accounts payable or accrued salaries
that have been incurred by the Company since September 30, 2000 in the ordinary
course of business and consistent with the Company's past practices; (iii)
liabilities under the Company Contracts identified in Part 2.9 of the Disclosure
Schedule, to the extent the nature and magnitude of such liabilities can be
specifically ascertained by reference to the text of such Company Contracts; and
(iv) the liabilities identified in Part 2.10(a) of the Disclosure Schedule.
(b) The First Amended Plan of Reorganization filed by the Company on
July 9, 1999 pursuant to Section 1121 of Title 22 of the United States Code, has
been approved by a final order of the Bankruptcy Court, a copy of which is
attached as Part 2.10 of the Disclosure Schedule.
2.11 Compliance with Legal Requirements. The Company is, and has at all
times since September 30, 1998 been, in compliance with all applicable Legal
Requirements, except where the failure to comply with such Legal Requirements
has not had and will not have a Material Adverse Effect on the Company. Since
September 30, 1998, the Company has not received any notice or other
communication from any Governmental Body regarding any actual or possible
violation of, or failure to comply with, any Legal Requirement.
2.12 Governmental Authorizations. The Governmental Authorizations held by
the Company are valid and in full force and effect, and collectively constitute
all Governmental Authorizations, to the best knowledge of the Company, necessary
to enable the Company to conduct its business in the manner in which its
business is currently being conducted. The Company is, and at all times since
September 30, 1998 has been, in substantial compliance with the terms and
requirements of the respective Governmental Authorizations identified in Part
2.12 of the Disclosure Schedule. Since September 30, 1998, the Company has not
received any notice or other communication from any Governmental Body regarding
(a) any actual or possible violation of or failure to company with any term or
requirement of any Governmental Authorization, or (b) any actual or possible
revocation, withdrawal, suspension, cancellation, termination or modification of
any Governmental Authorization.
2.13 Tax Matters
(a) All Tax Returns required to be filed by or on behalf of the
Company with any Governmental Body with respect to any taxable period ending on
or before the Closing Date (the "Company Returns") (i) have been or will be
filed on or before the applicable due date (including any extensions of such due
date), and (ii) have been, or will be when filed, accurately and completely
prepared in all material respects in compliance with all applicable Legal
Requirements. All amounts shown on the Company Returns to be due on or before
the Closing Date have been or will be paid on or before the Closing Date, and no
other Taxes are payable by the Company with respect to items or periods covered
by such Tax Returns (whether or not shown on or reportable on such Tax Returns)
or with respect to any period prior to the date of this Agreement. The Company
has withheld and paid over all Taxes required to have been withheld and paid
over, and complied with all information reporting and backup withholding
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent
contractor, or other third party.
16.
There are no liens on any of the assets of the Company with respect to Taxes,
other than liens for Taxes, not yet due and payable. The Company has delivered
to Parent accurate and complete copies of all Company Returns that are open to
review by the Internal Revenue Service or other Governmental Body. The amount of
the Company's liability for unpaid Taxes for all periods ending on or before
September 30, 1999 does not, in the aggregate, exceed the amount of the current
liability accruals for Taxes reflected on the Unaudited Interim Balance Sheet,
and the amount of the Company's liability for unpaid Taxes for all periods
ending on or before the Closing Date shall not, in the aggregate exceed the
amount of the current liability accruals for Taxes as such accruals are
reflected on the Unaudited Interim Balance Sheet, as adjusted for operations and
transactions in the ordinary course of business of the Company since the date of
the Unaudited Interim Balance Sheet in accordance with past custom and practice.
(b) The Company Financial Statements fully accrue all actual
liabilities for Taxes with respect to all periods through the dates thereof in
accordance with generally accepted accounting principles. The Company will
establish, in the ordinary course of business and consistent with its past
practices and in accordance with GAAP, reserves adequate for the payment of all
Taxes for the period from September 30, 1999 through the Closing Date, and the
Company will disclose the dollar amount of such reserves to Parent on or prior
to the Closing Date.
(c) No Company Return relating to income Taxes has ever been examined
or audited by any Governmental Body. The Company has delivered to Parent
accurate and complete copies of all audit reports and similar documents (to
which the Company has access) relating to the Company Returns. No extension or
waiver of the limitation period applicable to any of the Company Returns has
been granted (by the Company or any other Person), and no such extension or
waiver has been requested from the Company.
(d) No claim or Proceeding is pending or has been threatened against
or with respect to the Company in respect of any Tax. There are no unsatisfied
liabilities for Taxes (including liabilities for interest, additions to tax and
penalties thereon and related expenses) with respect to any notice of deficiency
or similar document received by the Company with respect to any Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and with respect
to which adequate reserves for payment have been established). There are no
liens for Taxes upon any of the assets of the Company except liens for current
Taxes not yet due and payable. The Company has not entered into or become bound
by any agreement or consent pursuant to Section 341(f) of the Code. The Company
has not been, and the Company will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 481
or 263A of the Code or any comparable provision under state or foreign Tax laws
as a result of transactions or events occurring, or accounting methods employed,
prior to the Closing.
(e) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of the Company that, considered individually or
considered collectively with any other such Contracts, will, or could reasonably
be expected to, give rise directly or indirectly to the payment of any amount
that would not be deductible pursuant to Section 280G or Section 162 of the
Code. The
17.
Company is not, and has never been, a party to or bound by any tax indemnity
agreement, tax sharing agreement, tax allocation agreement or similar Contract.
2.14 Employee and Labor Matters; Benefit Plans.
(a) Part 2.14(a) of the Disclosure Schedule identifies employee
benefit plans within the meaning of section 3(3) of ERISA, including each
salary, bonus, deferred compensation, incentive compensation, stock purchase,
stock option, severance pay, termination pay, hospitalization, medical, life or
other insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program or agreement (collectively, the "Plans") sponsored,
maintained, contributed to or required to be contributed to by the Company for
the benefit of any employee of the Company ("Employee"), except for Plans which
would not require the Company to make payments or provide benefits having a
value in excess of $25,000 in the aggregate.
(b) The Company does not maintain, sponsor or contribute to, and, to
the best of the knowledge of the Company has not at any time in the past
maintained, sponsored or contributed to, any employee pension benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), whether or not excluded from coverage under specific
titles or Merger subtitles of ERISA) for the benefit of Employees or former
Employees (a "Pension Plan").
(c) The Company maintains, sponsors or contributes only to those
employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific titles or Merger subtitles of ERISA)
for the benefit of Employees or former Employees which are described in Part
2.14(c) of the Disclosure Schedule (the "Welfare Plans"), none of which is a
multiemployer plan (within the meaning of Section 3(37) of ERISA).
(d) With respect to each Plan, the Company has delivered to Parent:
(i) an accurate and complete copy of such Plan (including all
amendments thereto);
(ii) an accurate and complete copy of the annual report, if
required under ERISA, with respect to such Plan for the last two years;
(iii) an accurate and complete copy of the most recent summary
plan description, together with each Summary of Material Modifications, if
required under ERISA, with respect to such Plan, and all material employee
communications relating to such Plan;
(iv) if such Plan is funded through a trust or any third party
funding vehicle, an accurate and complete copy of the trust or other funding
agreement (including all amendments thereto) and accurate and complete copies
the most recent financial statements thereof;
(v) accurate and complete copies of all Contracts relating to
such Plan, including service provider agreements, insurance contracts, minimum
premium contracts, stop-
18.
loss agreements, investment management agreements, subscription and
participation agreements and recordkeeping agreements; and
(vi) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).
(e) The Company is not required to be, and, to the best of the
knowledge of the Company has never been required to be, treated as a single
employer with any other Person under Section 4001(b)(1) of ERISA or Section
414(b), (c), (m) or (o) of the Code. The Company has never been a member of an
"affiliated service group" within the meaning of Section 414(m) of the Code. To
the best of the knowledge of the Company, the Company has never made a complete
or partial withdrawal from a multiemployer plan, as such term is defined in
Section 3(37) of ERISA, resulting in "withdrawal liability," as such term is
defined in Section 4201 of ERISA (without regard to subsequent reduction or
waiver of such liability under either Section 4207 or 4208 of ERISA).
(f) The Company does not have any plan or commitment to create any
additional Welfare Plan or any Pension Plan, or to modify or change any existing
Welfare Plan or Pension Plan (other than to comply with applicable law) in a
manner that would affect any Employee.
(g) No Welfare Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former Employee after
any such Employee's termination of service (other than (i) benefit coverage
mandated by applicable law, including coverage provided pursuant to Section
4980B of the Code, (ii) deferred compensation benefits accrued as liabilities on
the Unaudited Interim Balance Sheet, and (iii) benefits the full cost of which
are borne by current or former Employees (or the Employees' beneficiaries)).
(h) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.
(i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
but not limited to ERISA and the Code.
(j) Each of the Plans intended to be qualified under Section 401(a)
of the Code has received a favorable determination from the Internal Revenue
Service, and the Company is not aware of any reason why any such determination
letter should be revoked.
(k) Neither the execution, delivery or performance of this Agreement,
nor the consummation of the Merger or any of the other transactions contemplated
by this Agreement, will result in any payment (including any bonus, golden
parachute or severance payment) by the Company to any current or former Employee
or director of the Company (whether or not under any Plan), or materially
increase the benefits payable under any Plan, or result in any acceleration of
the time of payment or vesting of any such benefits.
19.
(l) Part 2.14(l) of the Disclosure Schedule contains a list of all
salaried employees of the Company as of November 30, 2000, and correctly
reflects, in all material respects, their salaries, any other compensation
payable to them (including compensation payable pursuant to bonus, deferred
compensation or commission arrangements), their dates of employment and their
positions. The Company is not a party to any collective bargaining contract or
other Contract with a labor union involving any of its Employees. All of the
Company's Employees are "at will Employees. Except as otherwise described in
Part 2.14(l) of the Disclosure Schedule, no Company Employees have executed
written employment contracts with the Company.
(m) Part 2.14(m) of the Disclosure Schedule identifies each Employee
who is not fully available to perform work because of disability or other leave
and sets forth the basis of such leave and the anticipated date of return to
full service.
(n) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, wages, bonuses and terms and conditions of employment, including
employee compensation matters.
(o) The Company has not experienced any work stoppage or material
labor dispute relating to its business in the last two years, nor is the Company
aware of any current material labor difficulty or dispute as of the date of this
Agreement, and, to the best knowledge of the Company, it has good labor
relations, and to the best of the knowledge of the Company (i) the consummation
of the Merger or any of the other transactions contemplated by this Agreement
will not have a material adverse effect on the Company's labor relations, and
(ii) as of the date of this Agreement, none of the Company's employees has
notified Company officers of his or her intention to terminate his or her
employment with the Company.
2.15 Environmental Matters. The Company is in compliance in all material
respects with all applicable Environmental Laws, which compliance includes the
possession by the Company of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Company has not received any notice or other
communication (in writing or otherwise), whether from a Governmental Body,
citizens group, employee or otherwise, that alleges that the Company is not in
compliance with any Environmental Law. To the best of the knowledge of the
Company, no current or prior owner of any property leased or controlled by the
Company has received any notice or other communication (in writing or
otherwise), whether from a Government Body, citizens group, employee or
otherwise, that alleges that such current or prior owner or the Company is not
in compliance with any Environmental Law. All Governmental Authorizations
currently held by the Company pursuant to Environmental Laws are identified in
Part 2.15 of the Disclosure Schedule. (For purposes of this Section 2.15: (i)
"Environmental Law" means any federal, state, local or foreign Legal Requirement
relating to pollution or protection of human health or the environment
(including ambient air, surface water, ground water, land surface or subsurface
strata), including any law or regulation relating to emissions, discharges,
releases or threatened releases of Materials of Environmental Concern, or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Materials of Environmental Concern;
and (ii) "Materials of Environmental Concern" include chemicals, pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum products
20.
and any other substance that is now or hereafter regulated by any Environmental
Law or that is otherwise a danger to health, reproduction or the environment.)
2.16 Insurance. Part 2.16 of the Disclosure Schedule identifies all
insurance policies maintained by, at the expense of or for the benefit of the
Company and identifies any material claims made thereunder, and the Company has
delivered to Parent accurate and complete copies of the insurance policies
identified on Part 2.16 of the Disclosure Schedule. Each of the insurance
policies identified in Part 2.16 of the Disclosure Schedule is in full force and
effect. Since September 30, 1999, the Company has not received any notice or
other communication regarding any actual or possible (a) cancellation or
invalidation of any insurance policy, (b) refusal of any coverage or rejection
of any claim under any insurance policy, or (c) material adjustment in the
amount of the premiums payable with respect to any insurance policy.
2.17 Related Party Transactions. No Related Party has: (a) had any direct
or indirect interest in any material asset used in or otherwise relating to the
business of the Company; (b) been indebted to the Company; (c) entered into, or
has had any direct or indirect financial interest in, any Contract, transaction
or business dealing involving the Company; (d) competed, directly or indirectly,
with the Company; and (e) any claim or right against the Company (other than
rights under company Options and rights to receive compensation for services
performed as an employee of the Company). (For purposes of this Section 2.17
each of the following shall be deemed to be a "Related Party": (i) the Selling
Shareholders; (ii) each individual who is an officer of the Company; (iii) each
member of the immediate family of each of the individuals referred to in clauses
"(i)" and "(ii)" above; and (iv) any trust or other Entity (other than the
Company) in which any one of the individuals referred to in clauses "(i),"
"(ii)" and "(iii)" above holds (or in which more than one of such individuals
collectively hold), beneficially or otherwise, a material voting, proprietary or
equity interest.)
2.18 Legal Proceedings; Orders.
(a) There is no pending Legal Proceeding, and (to the best of the
knowledge of the Company) no Person has threatened to commence any Legal
Proceeding: (i) that involves the Company or any of the assets owned or used by
the Company or any Person whose liability the Company has or may have retained
or assumed, either contractually or by operation of law; or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Merger or any of the other transactions
contemplated by this Agreement. To the best of the knowledge of the Company,
except as set forth in Part 2.18 of the Disclosure Schedule, no event has
occurred, and no claim, dispute or other condition or circumstance exists, that
will, or that could reasonably be expected to, give rise to or serve as a basis
for the commencement of any such Legal Proceeding.
(b) Except for the decrees of the Court in connection with the
Company's bankruptcy and the plan of reorganization described in Section 2.10(b)
hereof, there is no order, writ, injunction, judgment or decree to which the
Company, or any of the assets owned or used by the Company, is subject. The
Selling Shareholders are not subject to any order, writ, injunction, judgment or
decree that relates to the Company's business or to any of the assets owned or
used by the Company. To the best of the knowledge of the Company, no officer or
other employee of the Company is subject to any order, writ, injunction,
judgment or decree that
21.
prohibits such officer or other employee from engaging in or continuing any
conduct, activity or practice relating to the Company's business.
2.19 Authority; Binding Nature of Agreement. The Company has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary action
on the part of the Company and its board of directors. This Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to (i) laws of general
application relating to bankruptcy, insolvency and the relief of debtors, and
(ii) rules of law governing specific performance, injunctive relief and other
equitable remedies.
2.20 Non-Contravention; Consents. Neither (1) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (2) the consummation of the Merger or any of the other
transactions contemplated by this Agreement, will directly or indirectly (with
or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) any of
the provisions of the Company's articles of incorporation or bylaws, or (ii) any
resolution adopted by the Company's shareholders, the Company's board of
directors or any committee of the Company's board of directors;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any order, writ, injunction, judgment or decree
to which the Company, or any of the assets owned or used by the Company, is
subject;
(c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the Company's business
or to any of the assets owned or used by the Company;
(d) except as otherwise described in Part 2.20(d) of the Disclosure
Schedule, contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Company Contract that is or
would constitute a Material Contract, or give any Person the right to (i)
declare a default or exercise any remedy under any such Company Contract, (ii)
accelerate the maturity or performance of any such Company Contract, or (iii)
cancel, terminate or modify any such Company Contract; or
(e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Company).
The Company is not and will not be required to make any filing with or give any
notice to, or to obtain any Consent from, any Person in connection with (x) the
execution, delivery or
22.
performance of this Agreement or any of the other agreements referred to in this
Agreement, or (y) the consummation of the Merger or any of the other
transactions contemplated by this Agreement.
2.21 Full Disclosure. This Agreement (including the Disclosure Schedule)
does not (i) contain any representation, warranty or information that is false
or misleading with respect to any material fact, or (ii) omit to state any
material fact necessary in order to make the representations, warranties and
information contained and to be contained herein and therein (in the light of
the circumstances under which such representations, warranties and information
were or will be made or provided) not false or misleading.
2.22 Accredited Investors. Each Selling Shareholder represents that he is
an accredited investor within the meaning of Regulation D under the Securities
Act of 1933, as amended.
SECTION 3. Representations and Warranties of Parent and Merger Sub
Parent and Merger Sub jointly and severally represent and warrant to
the Company as follows:
3.1 SEC Filings; Financial Statements.
(a) Parent has delivered to the Company accurate and complete copies
(excluding copies of exhibits) of each report, registration statement (on a form
other than Form S-8) and definitive proxy statement filed by Parent with the SEC
between October 1, 1999 and the date of this Agreement (the "Parent SEC
Documents"). As of the time it was filed with the SEC (or, if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing): (i) each of the Parent SEC Documents complied in all material
respects with the applicable requirements of the Securities Act or the Exchange
Act (as the case may be); and (ii) none of the Parent SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(b) The consolidated financial statements contained in the Parent SEC
Documents: (i) complied as to form in all material respects with the published
rules and regulations of the SEC applicable thereto; (ii) were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered, except as may be indicated in the notes to
such financial statements and (in the case of unaudited statements) as permitted
by Form 10-Q of the SEC, and except that unaudited financial statements may not
contain footnotes and are subject to year-end audit adjustments; and (iii)
fairly present the consolidated financial position of Parent and its
subsidiaries as of the respective dates thereof and the consolidated results of
operations of Parent and its subsidiaries for the periods covered thereby.
3.2 Authority; Binding Nature of Agreement. Parent and Merger Sub have the
absolute and unrestricted right, power and authority to perform their
obligations under this Agreement; and the execution, delivery and performance by
Parent and Merger Sub of this
23.
Agreement (including the contemplated issuance of Parent Common Stock in the
Merger in accordance with this Agreement) have been duly authorized by all
necessary action on the part of Parent and Merger Sub and their respective
boards of directors. No vote of Parent's stockholders is needed to approve the
Merger. This Agreement constitutes the legal, valid and binding obligation of
Parent and Merger Sub, enforceable against them in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
3.3 Valid Issuance. Subject to Sections 1.4(c) and 2, the Parent Common
Stock to be issued in the Merger will, when issued in accordance with the
provisions of this Agreement, be validly issued, fully paid and nonassessable
and will not have been issued in violation of the preemptive rights of any
Person.
3.4 Legal Proceedings; Orders. There is no pending Legal Proceeding, and
(to the best of the knowledge of the Parent) no Person has threatened to
commence any Legal Proceeding that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, the Merger
or any of the other transactions contemplated by this Agreement. To the best of
the knowledge of the Parent, except as otherwise described to the Selling
Shareholders in writing, no event has occurred, and no claim, dispute or other
condition or circumstance exists, that will, or that could reasonably be
expected to, give rise to or serve as a basis for the commencement of any such
Legal Proceeding.
3.5 Non-Contravention; Consents. Neither (1) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (2) the consummation of the Merger of any of the other
transactions contemplated by this Agreement, will directly or indirectly (with
or without notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) any of
the provisions of the Parent's articles of incorporation or bylaws, or (ii) any
resolution adopted by the Parent's shareholders, the Parent's board of directors
or any committee of the Parent's board of directors;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any order, writ, injunction, judgment or decree
to which the Parent, or any of the assets owned or used by the Parent, is
subject.
3.6 Additional Representation. The Parent has no present intention or plan
to: (i) liquidate the Merger Sub, (ii) merge the Merger Sub with or into another
Person, (iii) redeem the Parent Common Stock issued pursuant to this Agreement,
or (iv) sell or otherwise dispose of the Merger Sub common stock, except for
dispositions made in the ordinary course of Parent's business.
SECTION 4. Certain Covenants of the Company and the Selling Shareholders
4.1 Access and Investigation. During the period from the date of this
Agreement through the Closing Date (the "Pre-Closing Period"), upon reasonable
prior notice the Company
24.
shall, and shall cause its Representatives to: (a) provide Parent and Parent's
Representatives with reasonable access to the Company's Representatives,
personnel and assets and to all existing books, records, Tax Returns, work
papers and other documents and information relating to the Company; and (b)
provide Parent and Parent's Representatives with copies of such existing books,
records, Tax Returns, work papers and other documents and information relating
to the Company, and with such additional financial, operating and other data and
information regarding the Company, as Parent may reasonably request.
4.2 Operation of the Company's Business. During the Pre-Closing Period:
(a) the Company shall conduct its business and operations in the
ordinary course and in substantially the same manner as such business and
operations have been conducted prior to the date of this Agreement;
(b) the Company shall use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and maintain its relations and good will with any
material suppliers, customers, landlords, creditors, employees and other Persons
having business relationships with the Company;
(c) the Company shall keep in full force all insurance policies
identified in Part 2.16 of the Disclosure Schedule;
(d) the Company shall not declare, accrue, set aside or pay any
dividend or make any other distribution in respect of any shares of capital
stock (except to make the distributions described in Section 6.9 hereof), and
shall not repurchase, redeem or otherwise reacquire any shares of capital stock
or other securities (except that the Company may repurchase Company Common Stock
from former employees pursuant to the terms of existing restricted stock
purchase agreements);
(e) the Company shall not sell, issue or authorize the issuance of (i)
any capital stock or other security, (ii) any option or right to acquire any
capital stock or other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security;
(f) the Company shall not amend or waive any of its rights under, or
permit the acceleration of vesting under, (i) any provision of its [Stock
Option/Issuance Plan], (ii) any provision of any agreement evidencing any
outstanding Company Option, or (iii) any provision of any restricted stock
purchase agreement;
(g) neither the Company nor the Selling Shareholders shall amend or
permit the adoption of any amendment to the Company's articles of incorporation
or bylaws, or effect or permit the Company to become a party to any Acquisition
Transaction, recapitalization, reclassification of shares, stock split, reverse
stock split or similar transaction;
(h) the Company shall not form any subsidiary or acquire any equity
interest or other interest in any other Entity;
25.
(i) except as set forth in Part 4.2(i) of the Disclosure Schedule, the
Company shall not make any capital expenditure, except for capital expenditures
that, when added to all other capital expenditures made on behalf of the Company
during the Pre-Closing Period, do not exceed $10,000 per month unless such
capital expenditures are approved in advance and funded by Parent;
(j) the Company shall not (i) enter into, or permit any of the assets
owned or used by it to become bound by, any Contract that is or would constitute
a Material Contract, or (ii) amend or prematurely terminate, or waive any
material right or remedy under, any such Contract;
(k) except in the ordinary course and consistent with the Company's
past practices, the Company shall not (i) acquire, lease or license any right or
other asset from any other Person, (ii) sell or otherwise dispose of, or lease
or license, any right or other asset to any other Person, or (iii) waive or
relinquish any right, except for assets acquired, leased, licensed or disposed
of by the Company pursuant to Contracts that are not Material Contracts;
(l) the Company shall not (i) lend money to any Person (except that
the Company may make routine travel advances to employees in the ordinary course
of business and may, consistent with its past practices, allow employees to
acquire Company Common Stock in exchange for promissory notes upon exercise of
Company Options), or (ii) incur or guarantee any indebtedness for borrowed money
except in connection with the purchase or lease of equipment and components
approved in advance by Parent;
(m) the Company shall not (i) establish, adopt or amend any Plans as
(defined in Section 2.14), (ii) except as set forth in Part 4.2(n) of the
Disclosure Schedule, pay any bonus or make any profit-sharing payment, cash
incentive payment or similar payment to, or increase the amount of the wages,
salary, commissions, fringe benefits or other compensation or remuneration
payable to, any of its directors, officers or employees, or (iii) hire any new
employee whose aggregate annual compensation is expected to exceed $75,000;
(n) the Company shall not change any of its methods of accounting or
accounting practices in any material respect;
(o) the Company shall not make any Tax election;
(p) the Company shall not commence or settle any material Legal
Proceeding;
(q) except as set forth in Part 4.2(q) of the Disclosure Schedule, the
Company shall not agree or commit to take any of the actions described in
clauses "(f)" through "(p)" above.
4.3 Notification; Updates to Disclosure Schedule.
(a) During the Pre-Closing Period, the Company shall promptly notify
Parent in writing of:
26.
(i) the discovery by the Company of any event, condition, fact
or circumstance that occurred or existed on or prior to the date of this
Agreement and that caused or constitutes an inaccuracy in or breach of any
representation or warranty made by the Company in this Agreement;
(ii) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or
constitute an inaccuracy in or breach of any representation or warranty made by
the Company in this Agreement if (A) such representation or warranty had been
made as of the time of the occurrence, existence or discovery of such event,
condition, fact or circumstance, or (B) such event, condition, fact or
circumstance had occurred, arisen or existed on or prior to the date of this
Agreement;
(iii) any breach of any covenant or obligation of the Company or
the Selling Shareholders; and
(iv) any event, condition, fact or circumstance that would make
the timely satisfaction of any of the conditions set forth in Section 6 or
Section 7 impossible or unlikely .
(b) If any event, condition, fact or circumstance that is required
to be disclosed pursuant to Section 4.3(a) requires any change in the Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the Disclosure Schedule were dated as of the date of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, then the Company shall promptly deliver to Parent an update to the
Disclosure Schedule specifying such change. No such update shall be deemed to
supplement or amend the Disclosure Schedule for the purpose of (i) determining
the accuracy of any of the representations and warranties made by the Company in
this Agreement, or (ii) determining whether any of the conditions set forth in
Section 7 has been satisfied.
4.4 No Negotiation During the Pre-Closing Period, neither the Company nor
the Selling Shareholders shall, directly or indirectly:
(a) solicit or encourage the initiation of any inquiry, proposal or
offer from any Person (other than Parent) relating to a possible Acquisition
Transaction;
(b) participate in any discussions or negotiations or enter into any
agreement with, or provide any non-public information to, any Person (other than
Parent or Parent Representative) relating to or in connection with a possible
Acquisition Transaction; or
(c) consider, entertain or accept any proposal or offer from any
Person (other than Parent) relating to a possible Acquisition Transaction.
The Company shall promptly notify Parent in writing if any material inquiry,
proposal or offer relating to a possible Acquisition Transaction is received by
the Company or the Selling Shareholders during the Pre-Closing Period.
4.5 Shareholder Approval. The Selling Shareholders shall cause all shares
of the capital stock of the Company that are owned, beneficially or of record,
by the Selling
27.
Shareholders on the record date for any meeting of the shareholders of the
Company for the purposes of approving the Merger to be voted in favor of the
Merger and this Agreement (or to execute a consent resolution in lieu thereof).
4.6 Termination of Other Agreements.
(a) the Company shall ensure that the September 10, 1999 Services
Agreement with MACHRO LLC for management services shall be terminated
immediately prior to the Closing Date; and
(b) the Company shall ensure that the Employment Agreements between
the Company and each of Xxxxx Xxxxxx dated September 10, 1999, Xxxx Xxxxxx dated
December 1, 1999 and Xxxxxxx Xxxxx dated December 1, 1999 shall be terminated
immediately prior to the Closing Date.
4.7 The Company shall use its best efforts to obtain written
acknowledgment of receipt of the Company's payment to the Internal Revenue
Service set forth on Part 6.8 of the Disclosure Schedule.
SECTION 5. Certain Covenants of the Parent
5.1 Notification. During the Pre-Closing Period, the Parent shall promptly
notify the Company in writing of:
(a) the discovery by the Parent of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes an inaccuracy in or breach of any representation
or warranty made by the Parent in this Agreement;
(b) any breach of any covenant or obligation of the Parent; and
(c) any event, condition, fact or circumstance that would make the
timely satisfaction of any of the conditions set forth in Section 7 or Section 8
impossible or unlikely.
5.2 Additional Covenants. During the Pre-Closing Period through and
including the period ending twenty-four (24) months after the Closing Date, the
Parent will not lose "control" of the Merger Sub within the meaning of Section
368(c) of the Code.
SECTION 6. Additional Covenants of the Parties
6.1 Filings and Consents. As promptly as practicable after the execution
of this Agreement, each party to this Agreement (a) shall make all filings (if
any) and give all notices (if any) required to be made and given by such party
in connection with the Merger and the other transactions contemplated by this
Agreement, and (b) shall use all commercially reasonable efforts to obtain all
Consents (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Merger and the other transactions contemplated by this Agreement. Either party
shall (upon request of the other)
28.
promptly deliver to the requesting party a copy of each such filing made, each
such notice given and each such Consent obtained by the other during the Pre-
Closing Period.
6.2 Public Announcements. During the Pre-Closing Period, (a) neither the
Company nor the Selling Shareholders shall (and neither the Company nor the
Selling Shareholders shall permit any of its Representatives to) issue any press
release or make any public statement regarding this Agreement or the Merger, or
regarding any of the other transactions contemplated by this Agreement, without
Parent's prior written consent; and (b) Parent will use reasonable efforts to
consult with the Company and the Selling Shareholders prior to issuing any press
release or making any public statement regarding the Merger.
6.3 Best Efforts. During the Pre-Closing Period, (a) the Company shall use
its best efforts to cause the conditions set forth in Section 7 to be satisfied
on a timely basis, and (b) Parent and Merger Sub shall use their best efforts to
cause the conditions set forth in Section 7 to be satisfied on a timely basis.
6.4 Offer Letters and Noncompetition Agreements. Prior to the Closing,
each of the persons identified on Exhibit D shall execute and deliver to the
---------
Company and Parent an Offer Letter in the form agreed upon by the parties prior
to the Closing Date and a Noncompetition Agreement in the form of Exhibit E.
---------
6.5 FIRPTA Matters. At the Closing, (a) the Company shall deliver to
Parent a statement (in such form as may be reasonably requested by counsel to
Parent) conforming to the requirements of Section 1.897 - 2(h)(1)(i) of the
United States Treasure Regulations, and (b) the Company shall deliver to the
Internal Revenue Service the notification required under Xxxxxxx 0.000 - 0(x)(0)
xx xxx Xxxxxx Xxxxxx Treasury Regulations.
6.6 Release. At the Closing, each of the persons identified on Exhibit F-2
-----------
shall execute and deliver to the Company a Release in the form of Exhibit F-1.
-----------
6.7 Termination of Employee Plans. Prior to the Closing, the Company shall
terminate its 401(k) Plan.
6.8 Payment of Debt. Prior to or at the time of the Closing, the Company
and the AMP Parent or the Selling Shareholders, as the case may be, shall cause
the Company's bankruptcy debt described in Part 6.8 of the Disclosure Schedule,
and the Company's financing debt described in Part 6.8 of the Disclosure
Schedule to be repaid in full. The Company's capital leases and the loans
pertaining to the equipment described in Section 2.5(h) hereof shall not be
repaid at Closing.
6.9 Cash Distribution. Notwithstanding anything to contrary contained
herein, any cash held by the Company, after having satisfied all of the
Company's pre-Closing obligations shall, at the Closing, be distributed to the
Selling Shareholders.
6.10 Xxxx-Xxxxx-Xxxxxx Act. Immediately following the execution of this
Agreement, the parties hereto shall, in respect of the Merger, prepare and file
with the appropriate authorities the notification forms required to be filed
pursuant to the provisions of the Xxxx-Xxxxx-Xxxxxx Act. The Parent shall pay
all fees associated with its own filing required by
29.
such act. To the extent that the Company, AMP Parent and/or the Selling
Shareholders are required to make their own filings, the Company, AMP Parent
and/or the Selling Shareholders will pay all fees associated with any such
filings. The parties shall thereafter comply promptly with any requests by such
authorities for additional information, and will otherwise use their best
efforts to cause the applicable waiting period under the Xxxx-Xxxxx-Xxxxxx Act
to expire or otherwise terminate at the earliest possible time.
SECTION 7. Conditions Precedent to Obligations of Parent and Merger Sub
The obligations of Parent and Merger Sub to effect the Merger and
otherwise consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions:
7.1 Accuracy of Representations. Each of the representations and
warranties made by the Company in this Agreement and in each of the other
agreements and instruments delivered to Parent in connection with the
transactions contemplated by this Agreement shall have been accurate in all
material respects as of the date of this Agreement (without giving effect to any
"Material Adverse Effect" or other materiality qualifications, or any similar
qualifications, contained or incorporated directly or indirectly in such
representations and warranties), and shall be accurate in all material respects
as of the Closing Date as if made at the Closing Date (without giving effect to
any update to the Disclosure Schedule, and without giving effect to any
"Material Adverse Effect" or other materiality qualifications, or any similar
qualifications, contained or incorporated directly or indirectly in such
representations and warranties).
7.2 Performance of Covenants. All of the covenants and obligations that
the Company and the Selling Shareholders are required to comply with or to
perform at or prior to the Closing shall have been complied with and performed
in all respects, except for Section 7.6.
7.3 Shareholder Approval. The principal terms of the Merger shall have
been duly approved by the affirmative vote of at least 95% of the shares of
Company Common Stock entitled to vote with respect thereto.
7.4 Consents. All Consents required to be obtained in connection with the
Merger and the other transactions contemplated by this Agreement, including the
following, shall have been obtained and shall be in full force and effect:
(a) Consents identified in Part 2.20 of the Disclosure Schedule;
(b) expiry or termination of the applicable waiting period under the
Xxxx-Xxxxx-Xxxxxx Act following filing by the Parent and the Company of the
notification forms required to be filed pursuant to the provisions of such Act;
and
(c) a tax clearance certificate from the California Franchise Tax
Board.
7.5 Agreements and Documents. Parent and the Company shall have received
the following agreements and documents, each of which shall be in full force and
effect:
30.
(a) Acceptance of Employment Offer Letters, in the form agreed upon
by the parties, by the individual identified on Exhibit D.
---------
(b) Noncompetition Agreements in the form of Exhibit E, executed by
---------
the individuals identified on Exhibit D;
---------
(c) a Release in the form of Exhibit F-1, executed by each of the
-----------
persons identified on Exhibit F-2;
-----------
(d) the Escrow Agreement substantially in the form of Exhibit B,
---------
executed by the Selling Shareholders;
(e) a legal opinion of Steptoe & Xxxxxxx LLP dated as of the Closing
Date, in the form of Exhibit G;
---------
(f) a certificate executed by the Chief Executive Officer of the
Company certifying that each of the representations and warranties set forth in
Section 2 is accurate in all respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 9.1, 9.2, 9.3 and 9.4
have been duly satisfied (the "Closing Certificate"); and
7.6 Unaudited Financial Statements. The Company shall deliver to Parent
the unaudited balance sheet of the Company as of October 31, 2000, and the
related unaudited income statement of the Company for the one month then ended.
7.7 FIRPTA Compliance. The Company shall have filed with the Internal
Revenue Service the notification referred to in Section 6.5.
7.8 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
7.9 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the Merger or seeking to prohibit or limit
the exercise by Parent of any material right pertaining to its ownership of
stock of the Surviving Corporation.
7.10 Termination of Employee Plans. The Company shall have provided Parent
with evidence, reasonably satisfactory to Parent, as to the termination of the
benefit plans referred to in Section 6.7.
SECTION 8. Conditions Precedent to Obligations of the Company
The obligations of the Company to effect the Merger and otherwise
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or prior to the Closing, of the following conditions:
31.
8.1 Accuracy of Representations. Each of the representations and
warranties made by Parent and Merger Sub in this Agreement shall have been
accurate in all material respects as of the date of this Agreement (without
giving effect to any materiality or similar qualifications contained in such
representations and warranties), and shall be accurate in all material respects
as of the Closing Date as if made at the Closing Date (without giving effect to
any materiality or similar qualifications contained in such representations and
warranties).
8.2 Performance of Covenants. All of the covenants and obligations that
Parent and Merger Sub are required to comply with or to perform at or prior to
the Closing shall have been complied with and performed in all respects.
8.3 Legal Opinions. A legal opinion of Xxxxxx Godward llp, dated as of
the Closing Date, in the form of Exhibit I; and
---------
8.4 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the Merger
shall have been issued by any court of competent jurisdiction and remain in
effect, and there shall not be any Legal Requirement enacted or deemed
applicable to the Merger that makes consummation of the Merger illegal.
SECTION 9. Termination
9.1 Termination Events. This Agreement may be terminated prior to the
Closing:
(a) by Parent if Parent reasonably determines that the timely
satisfaction of any condition set forth in Section 7 has become impossible
(other than as a result of any failure on the part of Parent or Merger Sub to
comply with or perform any covenant or obligation of Parent or Merger Sub set
forth in this Agreement);
(b) by the Company if the Company reasonably determines that the
timely satisfaction of any condition set forth in Section 8 has become
impossible (other than as a result of any failure on the part of the Company or
the Selling Shareholders to comply with or perform any covenant or obligation
set forth in this Agreement or in any other agreement or instrument delivered to
Parent);
(c) by the Parent if the Closing has not taken place on or before
February 28, 2001 (other than as a result of the failure on the part of the
Parent to comply with or perform any covenant or obligation set forth in this
Agreement);
(d) by the Company if the Closing has not taken place on or before
February 28, 2001 (other than as a result of the failure on the part of the
Company or the Selling Shareholders to comply with or perform any covenant or
obligation of Parent set forth in this Agreement or in any other agreement or
instrument delivered to Parent); or
(e) by the mutual consent of Parent and the Company.
9.2 Termination Procedures. If Parent wishes to terminate this Agreement
pursuant to Section 9.1(a), Section 9.1(c) or Section 9.1(e), Parent shall
deliver to the Company a written
32.
notice stating that Parent is terminating this Agreement and setting forth a
brief description of the basis on which Parent is terminating this Agreement. If
the Company wishes to terminate this Agreement pursuant to Section 9.1(b),
Section 9.1(d) or Section 9.1(f), the Company shall deliver to Parent a written
notice stating that the Company is terminating this Agreement and setting forth
a brief description of the basis on which the Company is terminating this
Agreement.
9.3 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1, all further obligations of the parties under this Agreement shall
terminate; provided, however, that: (a) neither the Company nor Parent shall be
relieved of any obligation or liability arising from any prior breach by such
party of any provision of this Agreement; (b) the parties shall, in all events,
remain bound by and continue to be subject to the provisions set forth in
Section 11; and (c) the Company shall, in all events, remain bound by and
continue to be subject to Section 6.2.
SECTION 10. Indemnification, Etc.
10.1 Survival of Representations, Etc.
(a) The representations and warranties made by the Company
(including the representations and warranties set forth in Section 2 and the
representations and warranties set forth in the Closing Certificate) and the
covenants set forth in Sections 4 and 5 hereof shall survive the Closing and
shall expire eighteen months after the Closing Date; provided, however, that if,
at any time prior to eighteen months after the Closing Date, any Indemnitee
(acting in good faith) delivers to the Escrow Agent and Shareholder's Agent (as
defined in Section 12.4 herein) a written notice alleging the existence of an
inaccuracy in or a breach of any of the representations and warranties made by
the Company (and setting forth in reasonable detail the basis for such
Indemnitee's belief that such an inaccuracy or breach may exist) and asserting a
claim for recovery under Section 10.2 based on such alleged inaccuracy or
breach, then the claim asserted in such notice shall survive eighteen months
after the Closing until such time as such claim is fully and finally resolved.
All representations and warranties made by Parent and Merger Sub and the
covenants set forth in Sections 6 and 7 hereof shall survive the Closing and
shall expire eighteen months after the Closing Date at which time any liability
of Parent or Merger Sub with respect to such representations, warranties, and
covenants shall thereupon cease.
(b) The representations, warranties, covenants and obligations of
the Company, and the rights and remedies that may be exercised by the
Indemnitees, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by or knowledge of, any of
the Indemnitees or any of their Representatives.
(c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Company in this Agreement.
33.
10.2 Indemnification by the Selling Shareholders
(a) From and after the Closing Date (but subject to Section
10.1(a)), the Selling Shareholders shall severally and not jointly, hold
harmless and indemnify each of the Indemnitees from and against, and shall
compensate and reimburse each of the Indemnitees for, any Damages which are
directly or indirectly suffered or incurred by any of the Indemnitees or to
which any of the Indemnitees may otherwise become subject (regardless of whether
or not such Damages relate to any third-party claim) and which arise from or as
a result of, or are directly or indirectly connected with: (i) any inaccuracy in
or breach of any representation or warranty set forth in Section 2 or in the
Closing Certificate (after giving effect to any update to the Disclosure
Schedule delivered by the Company to Parent prior to the Closing); (ii) any
breach of any covenant or obligation of the Company (including the covenants set
forth in Sections 4 and 5); (iii) any claim or proceeding brought by any current
or former Company employee, consultant and/or independent contractor which
involves a dispute over intellectual property rights, including, but not limited
to any claim for patent, trademark, trade secret and/or copyright infringement;
or (iv) any Legal Proceeding relating to any inaccuracy or breach of the type
referred to in clause "(i)" or "(ii)" above (including any Legal Proceeding
commenced by any Indemnitee for the purpose of enforcing any of its rights under
this Section 10).
(b) The Company and the Selling Shareholders acknowledge and agree
that, if the Surviving Corporation suffers, incurs or otherwise becomes subject
to any Damages as a result of or in connection with any inaccuracy in or breach
of any representation, warranty, covenant or obligation, then (without limiting
any of the rights of the Surviving Corporation as an Indemnitee) Parent shall
also be deemed, by virtue of its ownership of the stock of the Surviving
Corporation, to have incurred Damages as a result of and in connection with such
inaccuracy or breach.
10.3 Threshold; Ceiling.
(a) The Selling Shareholders shall not be required to make any
indemnification payment pursuant to Section 10.2(a) for any inaccuracy in or
breach of any of the representations and warranties set forth in Section 2 until
such time as the total amount of all Damages (including the Damages arising from
such inaccuracy or breach and all other Damages arising from any other
inaccuracies in or breaches of any representations or warranties) that have been
directly or indirectly suffered or incurred by any one or more of the
Indemnitees, or to which any one or more of the Indemnitees has or have
otherwise become subject, exceeds $500,000 in the aggregate. If the total amount
of such Damages exceeds $500,000 then the Indemnitees shall be entitled to be
indemnified against and compensated and reimbursed for the full amount of such
damages (and not merely the portion of such Damages exceeding $500,000).
(b) The liability of the Selling Shareholders under this Section 10
shall be limited to $6,000,000 in the aggregate. The liability of any individual
Selling Shareholder shall be pro rata in accordance with such Selling
Shareholder's percentage ownership of the outstanding shares of Company Common
Stock as described in Part 2.3 of the Disclosure Schedule.
34.
10.4 Escrow Fund.
(a) The Selling Shareholders, the Parent, the Surviving
Corporation, the Shareholders' Agent and a banking institution selected by
Parent as escrow agent ("Escrow Agent") shall enter into the Escrow Agreement
(modified as requested by the Escrow Agent), under which, on the terms and
conditions set forth therein, a portion of the amounts to be paid to the Selling
Shareholders hereunder will be escrowed to pay amounts payable to Parent or the
Surviving Corporation under this Section 10.
(b) The Escrow Fund shall consist of the amount set forth in
Section 1.5.
(c) One half of the Escrow Fund shall be distributed to the Selling
Shareholders nine months after the Closing Date, unless a claim that is greater
than one-half of the Escrow Fund has been made by the Parent or Surviving
Corporation under this Section 10, in which case no such distribution shall be
made until after either (i) such claim is reduced as a result of mutual
agreement or by order of the court before which the matters giving rise to the
claim are pending or (ii) resolution of the claim, in which event any remaining
portion of one-half of the Escrow Fund shall be promptly remitted to the Selling
Shareholders pursuant to joint escrow instructions executed by Parent and the
Selling Shareholders.
(d) The amount remaining in the Escrow Fund less the sum of any
amounts payable from the Escrow Fund that are subject to a not yet resolved
claim made by Parent or the Surviving Corporation under this Section 10 shall be
distributed to the Selling Shareholders eighteen months after the Closing Date.
10.5 Claim Procedure. Upon delivery to the Escrow Agent and the
Shareholders' Agent in accordance with Section 12.4 on or before the last day of
the period set forth in Section 10.1(a) above of a certificate signed by any
officer of Parent (an "Officer's Certificate")
(a) stating that Parent or the Surviving Corporation has paid or
properly accrued or reasonably anticipates that Parent or the Surviving
Corporation will have to pay or accrue Damages in an aggregate stated amount,
and stating that Parent or the Surviving Corporation is entitled to indemnity
pursuant to this Agreement with respect to such amount, and
(b) specifying the individual items of Damages included in the
amount so stated, the date each such item was paid, or the basis for such
anticipated liability;
The Escrow Agent shall, subject to the provisions of Section 10.6 hereof,
deliver to Parent as promptly as practicable, an amount from the Escrow Fund
sufficient to fully indemnify Parent or the Surviving Corporation against such
Damages.
10.6 Objections to Claims. At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such certificate shall be
delivered to the Shareholders' Agent and for a period of thirty (30) days after
such delivery, the Escrow Agent shall make no delivery of cash pursuant to
Section 10.5 hereof unless the Escrow Agent shall have received written
authorization from the Shareholders' to make such delivery. After the expiration
of such 30-day period, the Escrow Agent shall make delivery of the amount
requested in the Officer's Certificate in accordance with Section 10.5 hereof,
provided that no such payment or delivery
35.
need be made if the Shareholders' shall object in a written statement to the
claim made in the Officer's Certificate, and such statement shall have been
delivered to Parent (with a copy to the Escrow Agent) prior to the expiration of
such 30-day period.
10.7 Resolution of Conflicts.
(a) In case the Shareholders' Agent shall so object in writing to
the indemnity of Parent or the Surviving Corporation in respect of any claim or
claims made in any Officer's Certificate, the Shareholders' Agent and Parent
(acting on its own behalf or on behalf of the Surviving Corporation) shall
attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims. If the Shareholders' Agent and Parent should so
agree, a memorandum setting forth such agreement shall be prepared and signed by
both parties and shall be furnished to the Escrow Agent who shall thereupon
promptly pay the agreed upon amount of the claim to Parent.
(b) If no such agreement can be reached after good faith
negotiation, the claim shall be submitted to non-binding mediation under the
rules then in effect under the American Arbitration Association, or such other
forum as the parties may select. Each party shall have in attendance at such
mediation persons who have actual authority to bind the party to any settlement
reached. If the matter cannot be settled through mediation, then the claim shall
be submitted to binding arbitration under the following rules:
(i) Unless otherwise agreed by the parties, all such claims
shall be decided in San Jose, California by a single arbitrator, acting under
the Commercial Rules of the American Arbitration Association except as modified
herein. Either party may initiate the arbitration following failure of mediation
to resolve the issue by filing a demand for arbitration with the American
Arbitration Association, and simultaneously delivering a copy of such demand to
the other party.
(ii) Unless the parties agree to a mutually acceptable
arbitrator within thirty (30) days of a demand for arbitration, the arbitrator
shall be selected by the American Arbitration Association.
(iii) Unless otherwise agreed by the parties, the arbitrator
shall be a business attorney in practice for at least 10 years, with substantial
experience in the negotiating and drafting of business acquisition agreements.
(iv) It is the intent of the parties that the arbitration be
held in an efficient, economical and expeditious manner. Accordingly, the
parties shall meet in a pre-hearing conference as promptly as practicable after
selection of the arbitrator to establish the scope and extent of all discovery
and the schedule of the arbitration. Discovery shall be limited to that
necessary to resolve the disputed issues, in the judgment of the arbitrator. If
any party wishes to take discovery, including document productions,
interrogatories or depositions, a request to do so must be submitted to the
arbitrator in accordance with the procedures determined at the pre-hearing
conference. The arbitrator in his sole discretion may allow limited discovery,
all of which must be completed within 20 business days of the arbitrator's
directive unless extended for good cause by the arbitrator.
36.
(v) The arbitrator shall not be bound by rules of evidence or
judicial procedures regarding the conduct of the hearing and shall be obligated
to follow California substantive law.
(vi) The arbitrator's authority shall be limited to
determining whether the claim gives rise to a right to indemnification under the
provisions of this Section 10 and, if so, the amount of Damages as to such
claim. No other issue involving interpretation of this Agreement shall be
submitted to the arbitrator without the consent of both parties.
(vii) The decision of the arbitrator as to the validity and
amount of Damages and the amounts in (c) below shall, subject to the above
limitations, be binding and conclusive upon the parties of this Agreement. The
arbitrator shall issue such decision, including a brief statement of the reasons
for the award and the calculation of damages awarded, within 25 days after
completion of the arbitration hearing and deliver such decision to the Escrow
Agent.
(c) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction. The non-prevailing party shall pay the
reasonable expenses (including attorneys' fees) of the prevailing party and the
arbitrator fees and administrative expenses associated with the arbitration
(which expenses and fees, in the event the Parent is the prevailing party, shall
constitute Damages to be satisfied solely from the Escrow Fund).
10.8 Defense of Third Party Claims. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against the
Surviving Corporation, against Parent or against any other Person) with respect
to which the Surviving Corporation may become obligated to hold harmless,
indemnify, compensate or reimburse any Indemnitee pursuant to this Section 10,
Parent shall give the Shareholders' Agent prompt notice of the commencement of
any such Legal Proceeding; provided, however, that any failure on the part of
Parent to so notify the Shareholders' Agent shall not limit any of the
obligations of the Selling Shareholders or the Company under this Section 10
(except to the extent such failure materially prejudices the defense of such
Legal Proceeding). Promptly after receipt by the Shareholders' Agent of a notice
of a claim pursuant to this Section 10.8, the Selling Shareholders shall be
entitled to participate in the defense of such claim or Legal Proceeding, and,
to the extent such Selling Shareholders shall wish, to assume the defense
thereof, with counsel reasonably satisfactory to the Parent. After notice from
the Shareholders' Agent to the Parent of its election to assume the defense
thereof, such Selling Shareholder shall not be liable to the Parent for any
legal expenses subsequently incurred by the Parent in connection with the
defense thereof; provided, however, that if there exists or shall exist a
conflict of interest that would make it inappropriate, in the opinion of counsel
to the Parent, for the same counsel to represent both the Parent and such
Selling Shareholders or any affiliate or associate thereof, the Parent shall be
entitled to retain its own counsel at the expense of such Selling Shareholder;
provided, however, that the Selling Shareholders shall not be responsible for
the fees and expenses of more than one separate counsel for the Parent. If the
Selling Shareholders elect to participate in the defense of any claim or Legal
Proceeding, Parent will use reasonable efforts to assign to Selling Shareholders
any contractual right to a defense or indemnity arising out of any insurance
policy in effect prior to the Closing Date and on which the Company is a "Named
Insured" as that term is defined under any such policy, subject to any
restrictions or limitations imposed on assignment by any such insurance policy
or applicable law. If the Shareholders' Agent does not elect to
37.
proceed with the defense of any such claim as provided herein, the Parent shall
have the right to proceed with the defense of such claim or Legal Proceeding on
its own. If Parent so proceeds with the defense of any such claim or Legal
Proceeding:
(a) all reasonable expenses relating to the defense of such claim
or Legal Proceeding shall be borne and paid exclusively by the Surviving
Corporation;
(b) neither Party shall have the right to settle, adjust or
compromise such claim or Legal Proceeding with the consent of the other Party;
provided, however, that such consent shall not be unreasonably withheld; and
(c) Parent shall not have any obligation to assign to Selling
Shareholders any rights arising out of any insurance policy.
10.9 Exercise of Remedies by Indemnitees Other Than Parent. No Indemnitee
(other than Parent or any successor thereto or assign thereof) shall be
permitted to assert any indemnification claim or exercise any other remedy under
this Agreement unless Parent (or any successor thereto or assign thereof) shall
have consented to the assertion of such indemnification claim or the exercise of
such other remedy.
10.10 Exclusivity of Article 10 Indemnity. Each Indemnitee acknowledges
that, from and after the Closing Date, its sole and exclusive remedy with
respect to any and all claims and causes of action relating to this Agreement
and the transactions contemplated hereby shall be pursuant to the
indemnification provisions set forth in this Article 9, provided that nothing in
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this Agreement shall be deemed to constitute a limitation on or other waiver of
any claims for fraud or intentional misrepresentation. In furtherance of the
foregoing, each Indemnitee hereby waives and releases, from and after the
Closing Date any and all rights, claims and causes of action (other than
indemnity claims arising under this Article 9 and claims for fraud or
intentional misrepresentation) it may have relating to this Agreement and the
transactions contemplated hereby. Each Indemnitee (i) makes this waiver and
release with full knowledge that it may be releasing presently unknown or
unsuspected claims, (ii) has had the opportunity to be advised by its
independent legal counsel with respect to, and is familiar with Section 1542 of
the California Civil Code, which provides as follows: "A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR," and (iii)
expressly waives any and all rights which it may have under Section 1542 of the
California Civil Code, or any other state or federal statute or common law
principle of similar effect.
SECTION 11. Registration of the Parent Common Stock; Compliance with the
Securities Act
11.1 Definitions. As used in this Section 11 the following terms shall
have the following respective meanings:
(a) "Registrable Parent Common Stock" shall mean the Parent Common
Stock issued pursuant to this Agreement;
38.
(b) "Registration Statement" shall include any final prospectus,
exhibit, supplement or amendment included in or relating to the Registration
Statement referred to in Section 11.2; and
(c) "Untrue Statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
11.2 Registration Procedures and Expenses. Parent is obligated to do the
following:
(a) Immediately following the Closing Date, prepare and file with
the SEC a registration statement on Form S-3 in order to register with the SEC
under the Securities Act a sale by any Selling Shareholder on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of any or all of
the Registrable Parent Common Stock through the automated quotation system of
the Nasdaq National Market System or the facilities of any national securities
exchange on which Parent's Common Stock is then traded, or in privately-
negotiated transactions (a "Registration Statement") (notwithstanding anything
to the contrary expressed or implied herein, if a registration statement on Form
S-3, or any substitute form, is not then available for registration of the
Registrable Parent Common Stock, Parent shall be obligated instead to prepare
and file with the SEC a registration statement on Form S-1 in order to register
the Registrable Parent Common Stock under the Securities Act and such
registration statement will be a "Registration Statement" for the purposes of
this Agreement);
(b) prior to and following the Closing Date, use its best efforts,
subject to receipt of necessary information from any Selling Shareholder, to
cause such Registration Statement to become effective as promptly after filing
as practicable and, in any event, within 48 hours of notice of non-review or
clearance of the Registration Statement by the SEC and to maintain the
effectiveness of the Registration Statement until termination of such obligation
as provided in Section 11.7 below; but, notwithstanding the Registration
Statement being made effective, the re-sale of the Registrable Parent Common
Stock may be restricted for the 5 business days following the Closing Date
pursuant to Section 11.6 below. If the SEC has not given notice of non-review or
clearance of the Registration Statement prior to the Closing Date, then the
Selling Shareholders may, at their sole option, elect to delay the Closing Date
until the SEC has given such notice;
(c) notify the Selling Shareholders, at any time when a prospectus
relating to such Registration Statement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in or relating to such Registration Statement contains an
untrue statement of a material fact or omits to state any fact necessary to make
the statements therein not misleading;
(d) prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective until
termination of such obligation as provided in Section 12.7 below;
39.
(e) furnish to the Selling Shareholders such number of copies of
prospectuses as the Selling Shareholders reasonably requests in order to
facilitate the public sale or other disposition of all or any of the Registrable
Parent Common Stock by the Selling Shareholders in conformity with the
requirements of the Securities Act;
(f) file such documents as may be required of Parent for normal
securities law clearance for the resale of the Registrable Parent Common Stock
in the states of the United States as may be reasonably requested by each
Selling Shareholder provided, however, that Parent shall not be required in
connection with this paragraph (e) to qualify as a foreign corporation or
execute a general consent to service of process in any jurisdiction;
(g) use its best efforts to cause all Registrable Parent Common
Stock to be listed on each securities exchange, if any, on which equity
securities of Parent are then listed; and
(h) bear all expenses in connection with the procedures in
paragraphs (a) through (f) of this Section 11.2, other than (i) fees and
expenses, if any, of counsel or other advisers to the Selling Shareholders, and
(ii) any expenses relating to the sale of the Registrable Parent Common Stock by
the Selling Shareholders, including broker's commission, discounts or fees and
transfer taxes.
11.3 Indemnification
(a) Parent agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to which
such Selling Shareholder may become subject (under the Securities Act or
otherwise) insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of, or are based upon, any Untrue
Statement made in the Registration Statement, or arise out of any failure by
Parent to fulfill any undertaking included in the Registration Statement and
Parent will reimburse such Selling Shareholder for any reasonable legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided, however, that Parent shall not
be liable in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an Untrue Statement made in such
Registration Statement in reliance upon and in conformity with written
information furnished to Parent by or on behalf of such Selling Shareholder
specifically for use in preparation of the Registration Statement, or the
failure of such Selling Shareholder to comply with the covenants and agreements
contained in Section 11.4 hereof respecting the sale of the Parent Common Stock
or any statement or omission in any prospectus that is corrected in any
subsequent prospectus that was delivered to the Selling Shareholder prior to the
pertinent sale or sales by the Selling Shareholder.
(b) Each Selling Shareholder, severally and not jointly, agrees to
indemnify and hold harmless Parent (and each person, if any, who controls Parent
within the meaning of Section 14 of the Securities Act, each officer of Parent
who signs the Registration Statement and each director of Parent) from and
against any losses, claims, damages or liabilities to which Parent (or any such
officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or
40.
proceedings in respect thereof) arise out of, or are based upon, any failure to
comply with the covenants and agreements contained in Section 11.4 hereof
respecting sale of the Parent Common Stock, or any Untrue Statement contained in
the Registration Statement on the effective date thereof if such Untrue
Statement was made in reliance upon and in conformity with written information
furnished by or on behalf of such Selling Shareholder specifically for use in
preparation of the Registration Statement, and such Selling Shareholder will
reimburse Parent (or such officer, director or controlling person), as the case
may be, for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim; provided
that in no event shall any indemnity by a Selling Shareholder under this Section
11.3 exceed the net proceeds received by such Selling Shareholder from the sale
of the Parent Common Stock covered by such Registration Statement.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 11.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel for all indemnified parties.
(d) If the indemnification provided for in this Section 11.3 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim, damage, or expense
in such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and of the indemnified party on the other in
connection with the statements or omissions that resulted in such loss,
liability, claim, damage, or expense as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of material fact or the omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party and the parties' relative intent, knowledge,
access to information, and opportunity to correct or prevent such statement or
omission; provided, that in no event shall any contribution by a Selling
Shareholder hereunder exceed the net proceeds received by such Selling
Shareholder from the sale of the Parent Common Stock covered by the Registration
Statement.
41.
(e) Notwithstanding the foregoing, to the extent that the provisions
on indemnification and contribution in the underwriting agreement entered into
in connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.
11.4 Transfer of Parent Common Stock after Registration; Notice. Each
Selling Shareholder hereby covenants with Parent not to make any sale of the
Parent Common Stock after registration without effectively causing the
prospectus delivery requirement under the Securities Act to be satisfied (if a
prospectus delivery requirement applies to the sale). Each Selling Shareholder
acknowledges that there may be times when Parent must suspend the use of the
prospectus forming a part of the Registration Statement until such time as an
amendment to the Registration Statement has been filed by Parent and declared
effective by the SEC, or until such time as Parent has filed an appropriate
report with the SEC pursuant to the Exchange Act. Each Selling Shareholder
hereby covenants that it will not sell any Parent Common Stock pursuant to said
prospectus or pursuant to Regulation S during the period commencing at the time
at which Parent gives the Selling Shareholders notice of the suspension of the
use of said prospectus and ending at the time Parent gives the Selling
Shareholders notice that the Selling Shareholders may thereafter effect sales
pursuant to said prospectus. The foregoing provisions of this Section 11.4
shall in no manner diminish or otherwise impair Parent's obligations under
Section 11.2 hereof and Parent is obligated to use its best efforts to file and
have declared effective by the SEC any report or other document necessary to end
the period of suspension.
11.5 Reporting Requirements.
(a) Parent agrees to use its best efforts to:
(i) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act;
(ii) file with the SEC in a timely manner all reports and other
documents required of Parent under the Securities Act and the Securities
Exchange Act of 1934; and
(iii) so long as the Selling Shareholders own Registrable
Securities, to furnish to the Selling Shareholder forthwith upon request (1) a
written statement by Parent as to whether it complies with the reporting
requirements of said Rule 144, the Securities Act and Securities Exchange Act of
1934, or whether it qualifies as a registrant whose securities may be resold
pursuant to SEC Form S-3, (2) a copy of the most recent annual or quarterly
report of Parent and such other reports and documents so filed by Parent, and
(3) such other information as may be reasonably requested in availing the
Selling Shareholders of any rule or regulation of the SEC that would permit the
selling of the Registrable Parent Common Stock without registration.
11.6 Market Stand-Off. The Selling Shareholders will provide Parent two
business days advance notice of a proposed transfer of more than 100,000 shares
of Registrable Parent Common Stock. If Parent requests that any Selling
Shareholder not Transfer any of the Registrable Parent Common Stock for up to 90
days following an underwritten public offering
42.
by Parent of its capital stock, then Parent shall give such Selling Shareholder
at least 30 days notice of such proposed firmly underwritten public offering by
Parent of its capital stock and will offer such Selling Shareholder the
opportunity to have its shares of Registrable Parent Common Stock included in
the public offering.
11.7 Termination of Obligations The obligations of Parent pursuant to
Sections 11.2 through 11.5 hereof shall cease and terminate as to each Selling
Shareholder upon the earlier to occur of (i) such time as each Selling
Shareholder has sold all of the Registrable Parent Common Stock held by such
Selling Shareholder, or (ii) such time as all of the Registrable Parent Common
Stock held by each Selling Shareholder may be sold during any 90 day period
pursuant to Rule 144.
11.8 Assignability of Registration Rights The registration rights set
forth in this Section 11 are not assignable other than to an affiliate of a
Selling Shareholder.
SECTION 12. Miscellaneous Provisions
12.1 Further Assurances Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
12.2 Fees and Expenses
(a) Subject to Section 12.2 (b), each party to this Agreement shall
bear and pay all fees, costs and expenses (including legal fees and accounting
fees) that have been incurred or that are incurred by such party in connection
with the transactions contemplated by this Agreement, including all fees, costs
and expenses incurred by such party in connection with or by virtue of (i) the
investigation and review conducted by Parent and its Representatives with
respect to the Company's business (and the furnishing of information to Parent
and its Representatives in connection with such investigation and review), (ii)
the negotiation, preparation and review of this Agreement (including the
Disclosure Schedule) and all agreements, certificates, opinions and other
instruments and documents delivered or to be delivered in connection with the
transactions contemplated by this Agreement, (iii) the preparation and
submission of any filing or notice required to be made or given in connection
with any of the transactions contemplated by this Agreement, and the obtaining
of any Consent required to be obtained in connection with any of such
transactions, and (iv) the consummation of the Merger.
(b) All such fees, costs and expenses described in Section 12.2(a)
incurred by or for the benefit of the Company (including all such fees, costs
and expenses incurred prior to the Closing Date and including the amount of all
special bonuses and other amounts that may become payable to any officers of the
Company or other Persons in connection with the consummation of the transactions
contemplated by this Agreement and including the brokerage fee of Xxxxxx
Xxxxxxxx & Co.) shall be borne and paid by the Selling Shareholders and not by
the Company.
43.
(c) Neither the Parent nor the Merger Sub has authorized or employed
anyone to represent it as a broker, banker or finder in connection with the
transactions contemplated by this Agreement.
12.3 Attorneys' Fees. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
12.4 Notices. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
if to Parent: Attention: Chief Financial Officer
----------
Asyst Technologies, Inc.
00000 Xxxx Xxxx
Xxxxxxx, XX 00000
Facsimile No. (000) 000-0000
if to the Company: Attention: President
----------
Advanced Machine Programming, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Facsimile No. (000) 000-0000
if to the Selling Shareholders: Attention: Xxxxxxx X. Pura
----------
Xxxxxxx Xxxxxxx Xxxx & Company
00 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No. (000) 000-0000
12.5 Shareholders' Agent. Xxxxxxx shall be the agent of the Selling
Shareholders of the Company for purposes of this Agreement (the "Shareholders'
Agent") The Selling Shareholders hereby irrevocably appoint Xxxxxxx as their
agent for purposes of this Agreement, and Xxxxxxx hereby accepts the appointment
as the Shareholders' Agent. Parent shall be entitled to deal exclusively with
the Designated Shareholders' Agent on all matters relating to Sections 1.5 and
10 in this Agreement, and shall be entitled to rely conclusively (without
further evidence of any kind whatsoever) on any document executed or purported
to be executed on behalf of all Selling Shareholders by the Shareholders' Agent,
and on any other action taken or purported to be taken on behalf of any Selling
Shareholder by the Shareholders' Agent, as fully binding upon such Selling
Shareholder. If the Shareholders' Agent shall die, become disabled or otherwise
be unable to fulfill his responsibilities as agent of the Selling Shareholders,
then the remaining Selling Shareholders shall, within ten days after such death
or disability, appoint a successor agent and, promptly thereafter, shall notify
Parent of the identity of such successor. Any such
44.
successor shall become the "Shareholders' Agent" for purposes of this Agreement.
If for any reason there is no Shareholders' Agent at any time, all references
herein to the Shareholders' Agent shall be deemed to refer to the Selling
Shareholders.
12.6 Confidentiality. Without limiting the generality of anything
contained in Section 7.2, on and at all times after the Closing Date, the
parties hereto shall keep confidential, and shall not use or disclose to any
other Person, any non-public document or other non-public information in its
possession, except as required by the Securities Act, the Exchange Act, or other
similar Legal Requirement.
12.7 Time of the Essence. Time is of the essence of this Agreement.
12.8 Headings. The headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
12.9 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
12.10 Governing Law. This Agreement shall be construed in accordance
with, and governed in all respects by, the internal laws of the State of
California (without giving effect to principles of conflicts of laws).
12.11 Successors and Assigns. This Agreement shall be binding upon: the
Company and its successors and assigns (if any); Parent and its successors and
assigns (if any); Selling Shareholders and their successors and assigns; and
Merger Sub and its successors and assigns (if any). This Agreement shall inure
to the benefit of: Parent; Selling Shareholders and their successors and
assigns; Merger Sub; the other Indemnitees (subject to Section 10.9); and the
respective successors and assigns (if any) of the foregoing.
12.12 Remedies Cumulative; Specific Performance. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this Agreement,
such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
12.13 Waiver.
(a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or
45.
remedy shall preclude any other or further exercise thereof or of any other
power, right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
12.14 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
12.15 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
12.16 Parties in Interest. Except for the provisions of Sections 1.5 and
10, none of the provisions of this Agreement is intended to provide any rights
or remedies to any Person other than the parties hereto and their respective
successors and assigns (if any).
12.17 Entire Agreement. This Agreement and the other agreements referred
to herein set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof.
12.18 Construction.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement
to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.
46.
The parties hereto have caused this Agreement to be executed and delivered
as of December __, 2000.
Asyst Technologies, Inc.
a California corporation
By: /s/ Xxxxxxx X. McCurcheon
---------------------------------
Ramp Acquisition Corp.,
a Delaware corporation
By: /s/ Xxxxxxx X. McCurcheon
---------------------------------
Advanced Machine Programming, Inc.
a California corporation
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
New AMP, LLC, a California limited
liability company
By: /s/ Xxxxx X. Xxxxxx
---------------------------------
Selling Shareholders:
/s/ Xxxxxxx X. Pura
------------------------------------
(Name)
/s/ Xxxxxxx X. Pura
------------------------------------
(Name)
____________________________________
1.
Xxxxxxx Xxxxxxx Xxxx & Company
a California Corporation
By: Xxxxxxx X. Pura
----------------------------------
[Merger Agreement]
EXHIBITS
Exhibit A - Certain definitions
Exhibit B - Escrow Agreement
Exhibit C - [reserved]
Exhibit D - Persons to sign Offer Letters and Noncompetition Agreements
Exhibit E - Form of Noncompetition Agreement
Exhibit F-1 - Form of Release
Exhibit F-2 - Persons to execute Release
Exhibit G - Form of legal opinion of Steptoe & Xxxxxxx LLP
Exhibit I - Form of legal opinion of Xxxxxx Godward LLP
Exhibit A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale, license, disposition or acquisition of all or a material
portion of the Company's business or assets;
(b) the issuance, disposition or acquisition of (i) any capital stock
or other equity security of the Company (other than common stock issued to
employees of the Company, upon exercise of Company Options or otherwise, in
routine transactions in accordance with the Company's past practices), (ii) any
option, call, warrant or right (whether or not immediately exercisable) to
acquire any capital stock or other equity security of the Company (other than
stock options granted to employees of the Company in routine transactions in
accordance with the Company's past practices), or (iii) any security, instrument
or obligation that is or may become convertible into or exchangeable for any
capital stock or other equity security of the Company; or
(c) any merger, consolidation, business combination, reorganization or
similar transaction involving the Company.
Company Contract. "Company Contract" shall mean any Contract: (a) to which
the Company is a party; (b) by which the Company or any of its assets is or may
become bound or under which the Company has, or may become subject to, any
obligation; or (c) under which the Company has or may acquire any right or
interest.
Company Proprietary Asset. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan or legally binding commitment or undertaking of
any nature.
Damages. "Damages" shall include any loss, damage, injury, decline in
value, lost opportunity, liability, claim, demand, settlement, judgment, award,
fine, penalty, Tax, fee (including attorneys' fees), charge, cost (including
costs of investigation) or expense of any nature.
Disclosure Schedule. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to Parent on behalf of the Company.
1.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, organization, unit, body or Entity and any court or
other tribunal).
Indemnitees. "Indemnitees" shall mean the following Persons: (a) Parent;
(b) Parent's current affiliates (including the Surviving Corporation); (c) the
respective Representatives of the Persons referred to in clauses "(a)" and "(b)"
above; and (d) the respective successors and assigns of the Persons referred to
in clauses "(a)," "(b)" and "(c)" above; provided, however, that the Selling
Shareholders shall not be deemed to be "Indemnitees."
Knowledge of the Company. "Best knowledge of the Company" and similar terms
and expressions shall mean the actual knowledge of: Xxxxx Xxxxxx, the Company's
President; Xxxx Xxxxxx, the Company's Director of Operations; Xxxxxxx Xxxxx, the
Company's Manager of Engineering, Purchasing and Process Quality; Xxxx Xxxxx,
the Company's general manager of its Austin, Texas facility; Xxxxxxx X. Pura, a
Company Director; Xxxxxx X. Xxxxxxxxx, a Company Director; together with the
knowledge a reasonable business person performing the ordinary scope of the
duties of such office, would have obtained with respect to the matter at hand,
after making such inquire and exercising such diligence as would be reasonable
and customary in connection with the ongoing operation of the Company's
business.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by
2.
or before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.
Material Adverse Effect. A violation or other matter will be deemed to have
a "Material Adverse Effect" on the Company if such violation or other matter
(considered together with all other matters that would constitute exceptions to
the representations and warranties set forth in the Agreement or in the Closing
Certificate but for the presence of "Material Adverse Effect" or other
materiality qualifications, or any similar qualifications, in such
representations and warranties) would have a material adverse effect on the
Company's business, condition, assets, liabilities, operations, financial
performance or prospects.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset; or (b) right to use or exploit any of the
foregoing.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
SEC. "SEC" shall mean the United States Securities and Exchange Commission.
Securities Act. "Securities Act" shall mean the Securities Act of 1933, as
amended.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
3.
Exhibit B
Exhibit D
PERSONS TO SIGN OFFER LETTERS
1. Xxxxxxx Xxxxx
2. Xxxxx Xxxxxx
3. Xxxx Xxxxxx
4. Xxxx Xxxxx
PERSONS TO SIGN NON-COMPETITION AGREEMENTS
1. Xxxxxxx X. Pura
2. Xxxxxx X. Xxxxxxxxx
3. Xxx Xxxxxxxxx
4. Xx Xxxxxxx
5. Xxxxx Xxxxxxx
6. Xxxxxxx Xxxxx (for two years)
7. Xxxxx Xxxxxx (for two years)
8. Xxxx Xxxxxx (for two years)
9. Xxxx Xxxxx (for two years)
Exhibit E
Exhibit F-1
Exhibit F-2
PERSONS TO EXECUTE RELEASE
The Pura Family Trust
Xxxxxx X. Xxxxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx and Xxxxxxx Xxxxxxx 2000 Revocable Trust
Xxxxxxxxx Family LLC
Xxxxx X. and Brandone Xxxxxx
Xxxx and Xxxxxx Xxxxxx
Xxxxxxx and Xxxxxxx Xxxxx
Xxxxx X. Xxxxxxx
Xxxxxx and Xxxxxx Xxxxxxx Family Trust
Xxxxxx and Xxxxx Xxxxxxx
Xxxxxx and Xxxxxxx Xxxxxxxx, Trustees Xxxxxxxx Family Revocable Trust u/d/t/
date 2/18/99
Pier Xxxxxx
Xxxx Xxxxxx
MACHRO LLC
Exhibit G
Exhibit H
