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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
XXXXXX AUTOMATION, INC.
ASI MERGER CORP.
ASC MERGER CORP.
DAIFUKU AMERICA CORPORATION
AND
DAIFUKU CO., LTD.
DATED: DECEMBER 15, 1999
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TABLE OF CONTENTS
1. DEFINITIONS...........................................................................................2
2. THE MERGER; CLOSING..................................................................................10
2.1 THE MERGER...........................................................................................10
2.2 EFFECTIVE TIME.......................................................................................11
2.3 EFFECTS OF THE MERGERS...............................................................................11
2.4 ARTICLES OF INCORPORATION OF SURVIVING CORPORATIONS..................................................11
2.5 BYLAWS OF SURVIVING CORPORATION......................................................................11
2.6 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION......................................................12
2.7 CONVERSION OR CANCELLATION OF CAPITAL STOCK OF THE COMPANIES AND PAYMENT OF PURCHASE PRICE...........12
2.8 ADJUSTMENT TO PURCHASE PRICE.........................................................................13
2.9 SURRENDER OF CERTIFICATES............................................................................14
2.10 ESCROW AMOUNT........................................................................................14
3. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY................................................15
3.1 ORGANIZATION AND GOOD STANDING.......................................................................15
3.2 AUTHORITY; NO CONFLICT...............................................................................15
3.3 CAPITALIZATION.......................................................................................17
3.4 BOOKS, RECORDS AND ACCOUNTS..........................................................................17
3.5 FINANCIAL STATEMENTS.................................................................................18
3.6 NO UNDISCLOSED LIABILITIES...........................................................................18
3.7 NO MATERIAL ADVERSE CHANGE...........................................................................19
3.8 TAXES................................................................................................19
3.9 ACCOUNTS RECEIVABLE..................................................................................21
3.10 TITLE TO PROPERTIES; ENCUMBRANCES....................................................................22
3.11 CONDITION AND SUFFICIENCY OF ASSETS..................................................................23
3.12 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS....................................................23
3.13 LEGAL PROCEEDINGS....................................................................................24
3.14 ABSENCE OF CERTAIN CHANGES AND EVENTS................................................................24
3.15 CONTRACTS; NO DEFAULTS...............................................................................26
3.16 INSURANCE............................................................................................29
3.17 ENVIRONMENTAL MATTERS................................................................................30
3.18 EMPLOYEES............................................................................................31
3.19 EMPLOYEE BENEFITS....................................................................................32
3.20 LABOR RELATIONS......................................................................................34
3.21 INTELLECTUAL PROPERTY................................................................................35
3.22 CERTAIN PAYMENTS.....................................................................................38
3.23 RELATIONSHIPS WITH RELATED PERSONS...................................................................39
3.24 BROKERS OR FINDERS...................................................................................39
3.25 OUTSTANDING INDEBTEDNESS.............................................................................39
3.26 CUSTOMERS AND SUPPLIERS..............................................................................40
3.27 YEAR 2000 COMPLIANCE.................................................................................40
3.28 PAYABLES.............................................................................................41
3.29 INVENTORIES..........................................................................................42
3.30 PRODUCT WARRANTIES; PRODUCT LIABILITY................................................................42
3.31 FINANCIAL SERVICE RELATIONS AND POWERS OF ATTORNEY...................................................43
3.32 REGULATORY CORRESPONDENCE............................................................................43
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3.33 COMPANY ACTION.......................................................................................43
3.34 DISCLOSURE...........................................................................................43
3.35 FADA BUSINESS........................................................................................44
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS.............................................44
4.1 ORGANIZATION AND GOOD STANDING.......................................................................44
4.2 AUTHORITY; NO CONFLICT...............................................................................44
4.3 CAPITALIZATION; PARENT SHARES........................................................................45
4.4 FILINGS WITH THE COMMISSION..........................................................................46
4.5 NO MATERIAL ADVERSE CHANGE...........................................................................46
4.6 LEGAL PROCEEDINGS....................................................................................46
4.7 BROKERS OR FINDERS...................................................................................46
5. COVENANTS OF SELLERS.................................................................................47
5.1 NORMAL COURSE........................................................................................47
5.2 CONDUCT OF BUSINESS..................................................................................47
5.3 CERTAIN FILINGS......................................................................................49
5.4 NOTIFICATION OF CERTAIN MATTERS......................................................................50
5.5 NO SOLICITATION......................................................................................50
5.6 CERTAIN SECTION 401 (K) PLANS........................................................................50
5.7 SUBORDINATION........................................................................................51
5.8 INTEGRAM LICENSE AGREEMENT ASSIGNMENT AND INDEMNITY..................................................51
5.9 ASC AUDITED FINANCIAL STATEMENTS.....................................................................51
5.10 TITLE AND SURVEY.....................................................................................51
5.11 SECTION 3.15(A)(I) TO DISCLOSURE SCHEDULES...........................................................51
5.12 ACTION TO ASSURE INDEMNITY...........................................................................51
6. COVENANTS OF PARENT AND MERGER SUBS..................................................................52
6.1 CERTAIN FILINGS......................................................................................52
6.2 NOTIFICATION OF CERTAIN MATTERS......................................................................52
7. ADDITIONAL COVENANTS.................................................................................52
7.1 PAYMENT OF FEES AND INTEREST.........................................................................52
7.2 ACCESS TO INFORMATION; CONFIDENTIALITY...............................................................53
7.3 REASONABLE BEST EFFORTS; FURTHER ACTION..............................................................53
8. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUBS..................................................54
8.1 DUE DILIGENCE REVIEW.................................................................................54
8.2 REPRESENTATIONS AND WARRANTIES.......................................................................54
8.3 PERFORMANCE OF COVENANTS.............................................................................54
8.4 DISTRIBUTION OF FADA BUSINESS........................................................................54
8.5 ADJUSTMENT OR DISPOSITION OF CERTAIN OBLIGATIONS OF COMPANIES........................................55
8.6 UPDATE CERTIFICATE...................................................................................55
8.7 NO GOVERNMENTAL OR OTHER PROCEEDING; ILLEGALITY......................................................55
8.8 APPROVALS AND CONSENTS...............................................................................56
8.9 DELIVERY OF FINANCIAL INFORMATION....................................................................56
8.10 FAIRNESS OPINION.....................................................................................57
8.11 OPINION OF COUNSEL...................................................................................57
8.12 ESCROW AGREEMENT.....................................................................................57
8.13 EMPLOYMENT, NONCOMPETITION, CONFIDENTIALITY AND PROPRIETARY INFORMATION AGREEMENTS...................57
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8.14 OPERATING AGREEMENT..................................................................................57
8.15 SHAREHOLDER AGREEMENT................................................................................57
8.16 NASDAQ NATIONAL MARKET; RESET ELECTION...............................................................57
9. CONDITIONS TO OBLIGATIONS OF THE COMPANY SHAREHOLDER.................................................58
9.1 REPRESENTATIONS AND WARRANTIES.......................................................................58
9.2 PERFORMANCE OF COVENANTS.............................................................................58
9.3 UPDATE CERTIFICATE...................................................................................58
9.4 NO GOVERNMENTAL OR OTHER PROCEEDING; ILLEGALITY......................................................59
9.5 APPROVALS AND CONSENTS...............................................................................59
9.6 OPINION OF COUNSEL...................................................................................59
9.7 OPERATING AGREEMENT..................................................................................59
9.8 REGISTRATION RIGHTS AGREEMENT........................................................................59
9.9 RELEASES.............................................................................................59
9.10 ASC COMMITMENT LETTER................................................................................60
10. INDEMNIFICATION......................................................................................60
10.1 INDEMNIFICATION BY COMPANY SHAREHOLDER...............................................................60
10.2 INDEMNIFICATION BY PARENT............................................................................62
10.3 DEFENSE OF THIRD PARTY ACTIONS.......................................................................63
10.4 MISCELLANEOUS........................................................................................64
10.5 PAYMENT OF INDEMNIFICATION...........................................................................64
11. TERMINATION OF AGREEMENT.............................................................................64
11.1 TERMINATION..........................................................................................64
11.2 TERMINATION BY THE PARENT............................................................................65
11.3 TERMINATION BY THE COMPANY SHAREHOLDER...............................................................65
11.4 PROCEDURE FOR TERMINATION............................................................................66
11.5 EFFECT OF TERMINATION................................................................................66
11.6 RIGHT TO PROCEED.....................................................................................66
12. GENERAL PROVISIONS...................................................................................66
12.1 EXPENSES.............................................................................................66
12.2 PUBLIC ANNOUNCEMENTS.................................................................................67
12.3 NOTICES..............................................................................................67
12.4 JURISDICTION; SERVICE OF PROCESS.....................................................................68
12.5 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE................................................68
12.6 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS...................................................69
12.7 SEVERABILITY.........................................................................................69
12.8 GOVERNING LAW........................................................................................69
12.9 COUNTERPARTS.........................................................................................69
12.10 ENTIRE AGREEMENT AND MODIFICATION; SCHEDULES AND EXHIBITS............................................70
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT") is made and entered into as
of December 15, 1999, among (i) Xxxxxx Automation, Inc. ("PARENT"), a Delaware
corporation and a party to this Agreement but not a constituent corporation in
the Merger (as hereinafter defined), (ii) ASI Merger Corp. ("ASI MERGER SUB")
and ASC Merger Corp. (individually, "ASC MERGER SUB" and collectively with ASI
Merger Sub, the "MERGER SUBS" and each individually, a "MERGER SUB" as the
context requires), both Delaware corporations all of whose capital stock is
owned directly by Parent, and (iii) Daifuku America Corporation, an Illinois
corporation ("COMPANY SHAREHOLDER") and Daifuku Co., Ltd., a Japanese
corporation ("DAIFUKU JAPAN").
RECITALS:
A. Company Shareholder holds all of the issued and outstanding capital
stock of both AutoSimulations, Inc. ("ASI") and Auto-Soft Corporation
(individually, "ASC" and collectively with ASI, the "COMPANIES"), both Utah
corporations.
B. Daifuku Japan holds all of the issued and outstanding capital stock of
Company Shareholder.
C. The Boards of Directors of Parent, Merger Subs and Company
Shareholder, deeming it advisable and for the respective benefit of Parent,
Merger Subs and the Company Shareholder, and their shareholders, have approved
the Mergers of Merger Subs with and into the Companies upon the terms and
subject to the conditions set forth in this Agreement, and have approved this
Agreement and authorized the transactions contemplated hereby.
D. Company Shareholder has approved the Mergers and this Agreement.
E. Pursuant to the Mergers, the Companies' entire capital stock (with
respect to each Company, the "COMPANY CAPITAL STOCK") shall be automatically
converted into the right to receive the consideration specified in Section 2.7
upon the terms and subject to the conditions hereinafter set forth.
F. Upon consummation of the Mergers, the Companies, as the surviving
corporations of the Mergers, will become wholly-owned subsidiaries of Parent.
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For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"ACCOUNTS RECEIVABLE"--as defined in Section 3.9.
"AFFILIATE" --of a Person means another Person which is controlling,
controlled by or under common control with the first Person.
"AGREEMENT"--this Agreement, including the Schedules and Exhibits hereto.
"AGREEMENTS OF MERGER" --as defined in Section 2.2.
"ALTERNATIVE ACQUISITION" --as defined in Section 5.5.
"ASC" - Auto-Soft Corporation, a Utah Corporation.
"ASI" - AutoSimulations, Inc., a Utah Corporation.
"ASC PURCHASE PRICE"--see definition of Purchase Price.
"ASI PURCHASE PRICE" --see definition of Purchase Price.
"BASE BALANCE SHEET" -the audited balance sheets of ASC and ASI as of
September 30, 1999.
"CASH PORTION OF THE PURCHASE PRICE --that portion of the Purchase Price to
be paid in cash or by wire transfer or certified funds plus that portion of the
Purchase Price to be paid with the Note pursuant to this Agreement.
"CERTIFICATES" --as defined in Section 2.9(a).
"CLOSING"--as defined in Section 2.1(b).
"CLOSING BALANCE SHEET" - as defined in Section 2.8.
"CLOSING DATE" --the date and time as of which the Closing actually takes
place.
"CLOSING EXCHANGE PRICE" --the average closing price of a share of Parent
Common Stock for the 20 consecutive Trading Days ending on the Trading Day that
is two Trading Days immediately prior to the Closing Date, as reported on the
Nasdaq National Market (subject to appropriate adjustment for any stock split,
reverse split, stock dividend, reorganization,
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recapitalization or other like change with respect to the Parent Common Stock
occurring after the date hereof and prior to the Effective Time).
"CODE" --the Internal Revenue Code of 1986, as amended, or any successor
law.
"COMMISSION" --the United States Securities and Exchange Commission.
"COMPANIES" --ASI and ASC.
"COMPANY CAPITAL STOCK" --the capital stock of each of the Companies held
by the Company Shareholder.
"COMPANY SHAREHOLDER" --as defined in the first paragraph of this
Agreement.
"COMPANY SUBSIDIARIES" -as to ASI: ASI Software Asia Pacific Pte. Ltd., a
Singapore company, Auto Simulations Limited, a corporation under the laws of
England and Wales; and as to ASC: Auto-Soft (Corporation) Limited, a corporation
under the laws of Scotland.
"CONFIDENTIALITY AGREEMENTS" -- the Confidentiality Agreements dated 20
April, 1999 between each of the Companies and Parent.
"CONTRACT" --any agreement, contract, obligation, promise, commitment or
undertaking (whether written or oral), other than those that have been
terminated or fully performed by all parties thereto.
"CONTRACTUAL RESTRICTION" --as defined in Section 2.12(b).
"COPYRIGHTS" --as defined in Section 3.21(a).
"DGCL" --Delaware General Corporation Law.
"DISCLOSURE SCHEDULE" --the disclosure schedule delivered to Parent and
each of the Merger Subs concurrently with the execution and delivery of this
Agreement.
"EFFECTIVE TIME" --as defined in Section 2.2.
"EMPLOYEE BENEFIT PLAN" --means any "employee benefit plan" as defined in
Section 3(3) of ERISA and any other plan, policy, program, practice, agreement,
understanding or arrangement (whether written or oral) providing compensation or
other benefits (other than ordinary cash compensation) to any current or former
director, officer, employee or consultant (or to any dependent or beneficiary
thereof), of either of the Companies or any of the Company Subsidiaries, which
are now, or were within the past five years, maintained by either of the
Companies or any of the Company Subsidiaries, or under which it has or could
have any obligation or liability, whether actual or contingent, including,
without limitation, all incentive, bonus, deferred compensation, vacation,
holiday, cafeteria, medical, disability, stock purchase,
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stock option, stock appreciation, phantom stock, restricted stock or other
stock-based compensation plans, policies, programs, practices or arrangements.
"ENCUMBRANCE" --any mortgage, charge, claim, community property interest,
equitable interest, lien, option, pledge, security interest, right of first
refusal or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership; and
the verb "Encumber" shall be construed accordingly.
"ENVIRONMENTAL CLAIM" --any accusation, allegation, notice of violation,
action, claim, Encumbrance, Lien, demand, abatement or other Order or direction
(conditional or otherwise) by any Governmental Authority or any Person for
personal injury (including sickness, disease or death), tangible or intangible
property damage, damage to the environment, nuisance, pollution, contamination
or other adverse effects on the environment, or for fines, penalties or
restrictions resulting from or based upon: (i) the existence, or the
continuation of the existence, of a Release (including, without limitation,
sudden or non-sudden accidental or non-accidental Releases) of, or exposure to,
any Hazardous Material or other substance, odor, audible noise, or other Release
in, into or onto the environment (including, without limitation, the air soil,
soil, surface water or groundwater) at, in, by, from or related to the
Facilities or any activities conducted thereon; (ii) the environmental aspects
of the transportation, storage, treatment or disposal of Hazardous Materials in
connection with the operation of the Facilities; or (iii) the violation, or
alleged violation, of any Environmental Law, Order or Governmental Permit of or
from any Governmental Authority relating to environmental matters connected with
the Facilities.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" --any cost, damage,
expense, liability, obligation or other responsibility arising from or under any
Environmental Law or Occupational Safety and Health Law and consisting of or
relating to: (a) any environmental, health or safety matter or condition
(including on-site or off-site contamination, generation, handling and disposal
of Hazardous Materials, occupational safety and health, and regulation of
chemical and Hazardous Materials); (b) fines, penalties, judgments, awards,
settlements, legal or administrative proceedings, damages, losses, litigation,
including civil and criminal claims, demands and responses, investigative,
remedial, response or inspection costs and expenses arising under Environmental
Law or Occupational Safety and Health Law; (c) financial responsibility under
Environmental Law or Occupational Safety and Health Law for cleanup costs or
corrective action, including any investigation, cleanup, removal, containment or
other remediation or response actions required by applicable Environmental Law
or Occupational Safety and Health Law and for any natural resource damages; or
(d) any other compliance, corrective, investigative or remedial measures
required under Environmental Law or Occupational Safety and Health Law. The
terms "removal," "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., as amended
("CERCLA").
"ENVIRONMENTAL LAW" --any Law concerning the environment, or activities
that might threaten or result in damage to the environment or human health, or
any Law that is concerned in whole or in part with the environment and with
protecting or improving the quality of the
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environment and human and employee health and safety and includes, but is not
limited to, CERCLA, the Hazardous Materials Transportation Act (49 U.S.C. ss.
1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et
seq.), the Clean Water Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (33
U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601
et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss.
136 et seq.) and the Occupational Safety and Health Act (29 U.S.C. ss. 651 et
seq.) ("OSHA"), as such laws have been amended or supplemented, and the
regulations promulgated pursuant thereto, and any and all analogous state or
local statutes, and the regulations promulgated pursuant thereto.
"ERISA" --the Employee Retirement Income Security Act of 1974, as amended,
or any successor law.
"ERISA AFFILIATE" --means any entity (whether or not incorporated) other
than the Companies or Company Subsidiaries that, together with the Companies or
Company Subsidiaries, is a member of (i) a controlled group of corporations
within the meaning of Section 414(b) of the Code; (ii) a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Code; or (iii) an affiliated service group within the meaning of Section 414(m)
of the Code.
"ESCROW AGENT" -- State Street Bank and Trust Company, acting as Escrow
Agent pursuant to the Escrow Agreement.
"ESCROW AGREEMENT" --as defined in Section 8.12.
"ESCROW AMOUNT" --$8,000,000, in the form of cash or, at Company
Shareholder's election, Parent Shares (valued based on the Closing Exchange
Price).
"ESCROW SHARES" --as defined in Section 2.10.
"EXCHANGE ACT" --the Securities Exchange Act of 1934, as amended, or any
successor law.
"FACILITIES" --any real property, leaseholds or other interests currently
(or, for purposes of Section 3.17 only, formerly) owned or operated by either of
the Companies and any buildings, plants, structures or equipment (including
motor vehicles) currently or formerly owned or operated by either of the
Companies.
"FADA BUSINESS" --the assets, liabilities, customers, prospects and
projects of the Factory Automation/Distribution Automation business of Auto-Soft
which will be distributed to Company Shareholder prior to Closing in accordance
with Section 8.4.
"FINANCIAL STATEMENTS" --as defined in Section 3.5(a).
"GAAP" --United States generally accepted accounting principles.
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"GOVERNMENTAL AUTHORITY"--any court, tribunal, authority, agency,
commission, bureau, department, official or other instrumentality of the United
States, any foreign country or any domestic, foreign, state, local, county, city
or other political subdivision.
"GOVERNMENTAL PERMIT" --any license, franchise, permit or other
authorization of any Governmental Authority.
"HAZARDOUS MATERIALS" --any substance, material or waste which is regulated
by Environmental Law, including, without limitation, any material or substance
which is defined as a "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or "restricted hazardous waste,"
"subject waste," "contaminant," "toxic waste" or "toxic substance," under any
provision of Environmental Law, including but not limited to, petroleum
products, asbestos and polychlorinated biphenyls.
"HSR ACT" --the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, or any successor law.
"INDEMNIFIED PERSON" -- any Person who is to be indemnified by another
Person under Article 10 hereof.
"INDEMNIFYING PERSON" --any person obligated to indemnify another Person
under Article 10.
"INTEGRAM LICENSE AGREEMENT -the Purchase and License Agreement between ASC
and Magna Seating Systems of America, Inc. d/b/a Integram--St. Louis Seating of
Pacific, Missouri dated June 25, 1999.
"INTELLECTUAL PROPERTY ASSETS" --as defined in Section 3.21(a).
"KEY EMPLOYEES" - Xxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxx Xxxxxxx,
Xxxxxxx X. Xxxxxx, Xxxxx Xx-Xxxxx, Xxxxx Xxxxxx, Xxxx Xxxxx, Xxxx Xxxxxxxxx and
Xxxx Xxxxxx (who shall be a consultant rather than an employee).
"LAW" --any federal, state, local or foreign law (including common law),
statute, code, ordinance, rule, regulation or other legal requirement.
"LIEN" --any lien, pledge, hypothecation, levy, mortgage, deed of trust,
security interest, claim, lease, charge, option, right of first refusal,
easement, or other real estate declaration, covenant, condition, restriction or
servitude, transfer restriction under any shareholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.
"LOSSES" --for purposes of Article 10, all losses, costs, damages
(including, without limitation, punitive and consequential damages), fines,
penalties, liabilities, payments and obligations, and all expenses related
thereto. Losses shall include any reasonable legal fees and costs incurred by
any Indemnified Person subsequent to the Closing in defense of or in connection
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with any alleged or asserted liability, payment or obligation, whether or not
any liability or payment, obligation or judgment is ultimately imposed against
the Indemnified Person and whether or not the Indemnified Person is made or
become parties to any such action. However, Losses shall not include any amounts
which have been adequately compensated for as an adjustment to Purchase Price
pursuant to Section 2.8 hereof.
"MARKS" --as defined in Section 3.21(a).
"MATERIAL ADVERSE EFFECT" -- means (i) an adverse effect on the business,
properties, operations, assets, revenues or condition (financial or otherwise)
of (A) ASI and its Subsidiaries, or (B) ASC and its Subsidiaries, or (C) Parent
and its Subsidiaries, which is material to such Persons, in each case on a
consolidated basis, or (ii) an effect which materially impairs or precludes the
Person's ability to consummate the Merger or the transactions contemplated
hereby.
"MATERIAL CUSTOMERS" --as defined in Section 3.26.
"MATERIAL PERSONAL PROPERTY" --as defined in Section 3.10.
"MATERIAL SUPPLIER" --as defined in Section 3.26.
"MERGER" OR "MERGERS" --as defined in Section 2.1(a).
"MERGER SUBS" --as defined in the first paragraph of this Agreement.
"NET TANGIBLE BOOK VALUE" --as defined in Section 2.8(f).
"NOTE" --a note dated as of the Closing Date made by Parent and given to
the Company Shareholder in the principal amount of $16,000,000; which note shall
bear interest at a rate of 4% per annum.
"OCCUPATIONAL SAFETY AND HEALTH LAW" --any legal or governmental
requirement or obligation relating to safe and healthful working conditions or
to reduce occupational safety and health hazards or designed to provide safe and
healthful working conditions.
"OPERATING AGREEMENT" --as defined in Section 8.14.
"ORDER" --any order, consent order, injunction, judgment, decree, consent
decree, ruling, writ, assessment or arbitration award.
"ORGANIZATIONAL DOCUMENTS" --(a) the articles or certificate of
incorporation and the bylaws or code of regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the articles or certificate of formation and
operating agreement of a limited liability company; (e) any charter, trust
certificate or document
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or similar document adopted or filed in connection with the creation, formation
or organization of a Person; and (e) any and all currently effective amendments
to any of the foregoing.
"PARENT" --as defined in the first paragraph of this Agreement.
"PARENT COMMON STOCK" --the Common Stock, $0.01 par value per share, of
Parent.
"PARENT PURCHASE RIGHT" --as defined in Section 2.7(d).
"PARENT SEC REPORTS" --as defined in Section 4.4(a).
"PARENT SHARES" --the shares of Parent Common Stock to be issued to the
Company Shareholder in connection with the Mergers.
"PARENT'S INDEMNIFIED PERSONS" --the Parent and the Merger Subs before and
after the Effective Times of the Mergers, and each of the Surviving
Corporations, only after the Effective Time of its Merger; and the Persons who
are their respective directors, officers, employees and agents in their
capacities as such, and subsidiaries during the same time periods.
"PATENTS" --as defined in Section 3.21(a).
"PENSION PLAN" --as defined in Section 3.19(e).
"PERSON" --any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or governmental body or Governmental Authority.
"PROCEEDING" --any pending claim, action, investigation, arbitration,
litigation or other judicial, regulatory or administrative proceeding.
"PURCHASE PRICE" -- $59,000,000 in the aggregate, (i) $27,000,000 of which
shall be paid at the Closing in cash or by certified funds or wire transfer of
immediately available funds, (ii)$16,000,000 of which shall be evidenced by the
Note, and (iii) $16,000,000 of which shall be payable in the form of shares of
Parent Common Stock calculated in accordance with this Agreement. This Purchase
Price shall be allocated between payment for the capital stock of ASI (the "ASI
Purchase Price") and payment for the capital stock of ASC (the "ASC Purchase
Price") as provided in Section 2.7(a). Such Purchase Price is subject to
adjustment as provided in Section 2.8 hereof.
"PWC" -- Pricewaterhouse Coopers, independent public accountants.
"REGISTRATION RIGHTS AGREEMENT" --as defined in Section 9.8.
"REGULATION D" --Regulation D promulgated pursuant to the Securities Act.
"RESET ELECTION" --as defined in Section 8.15.
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"RELATED PERSON" --as defined in Section 3.23.
"RELEASE" --any release, spill, effluent, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or migration into
the indoor or outdoor environment of any Hazardous Material through or in the
air, soil, surface water or groundwater.
"REMEDIAL ACTION" --all actions, including, without limitation, any
expenditures, required or voluntarily undertaken to (i) clean up, remove, treat,
or in any other way address any Hazardous Material or other substance in the
indoor or outdoor environment; (ii) prevent the Release or threat of Release, or
minimize the further Release of any Hazardous Material or other substance so it
does not migrate or endanger or threaten to endanger public health or welfare of
the indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations or post-remedial monitoring and care; or (iv) bring any Facility
into compliance with all applicable Environmental Laws and Environmental
Permits.
"RETURNS" --as defined in Section 3.8(b).
"SECURITIES ACT" --the Securities Act of 1933, as amended, or any successor
law.
"SECRET INFORMATION" -- as defined in Section 3.21(a).
"SELLERS" --collectively, Company Shareholder and Daifuku Japan.
"SELLERS' INDEMNIFIED PERSONS" -- Daifuku Japan and Company Shareholder
before and after the Effective Times of the Mergers and each of the Companies
only before the Effective Time of its Merger; and the Persons who are their
respective officers, directors, employees and agents in their capacities as such
during the same time periods.
"SPECIAL ACCOUNTS RECEIVABLE" -- as defined in Section 3.9.
"STOCK PORTION OF THE PURCHASE PRICE" --that portion of the Purchase Price
to be paid in Parent Shares pursuant to this Agreement.
"SUBSIDIARY" --with respect to any Person, any corporation, joint venture,
limited liability company, partnership, association or other business entity of
which more than 50% of the total voting power of stock or other equity entitled
to vote generally in the election of directors or managers or equivalent persons
thereof is owned or controlled, directly or indirectly, by such Person.
"SURVIVING CORPORATIONS" --as defined in Section 2.1(a).
"TARGET BOOK VALUE" --as defined in Section 2.8.
"TAX AUTHORITY" --as defined in Section 3.8(a).
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"TAXES" --as defined in Section 3.8(a).
"TERMINATION FEE" --as defined in Section 11.5(b).
"THIRD PARTY ACTION" --any written assertion of a claim, or the
commencement of any action, suit, or proceeding, by a third party as to which
any person believes it may be an Indemnified Person hereunder.
"TRADING DAY" -- any day on which the Nasdaq National Market is open for
business.
"TRANSACTION DOCUMENTS" --the Agreement of Merger and the other agreements,
documents or instruments executed and delivered by a party hereto as
contemplated under this Agreement.
"UBCA" --Utah Revised Business Corporation Act.
"WARN" --as defined in Section 3.18(d).
"YEAR 2000" --as defined in Section 3.27(a).
2. THE MERGER; CLOSING
2.1 THE MERGER
(a) Upon the terms and subject to the conditions set forth in this
Agreement, and in accordance with the UBCA and the DGCL, (i) ASI Merger Sub
shall be merged with and into ASI (the "ASI MERGER") and (ii) ASC Merger Sub
shall be merged with and into ASC (individually, the "ASC MERGER" and
collectively, with the ASI Merger, the "MERGERS"). Following the ASI Merger, the
separate corporate existence of the ASI Merger Sub shall cease, and ASI shall
continue as the surviving corporation of the ASI Merger under the name
"AutoSimulations, Inc." (the "ASI SURVIVING CORPORATION"). Following the ASC
Merger, the separate corporate existence of the ASC Merger Sub shall cease, and
ASC shall continue as the surviving corporation of the ASC Merger under the name
"Auto-Soft Corporation" (individually, the "ASC SURVIVING CORPORATION" and
collectively with ASI Surviving Corporation, the "SURVIVING CORPORATIONS").
(b) Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Article 11, the
closing of the transactions provided for in this Agreement (the "Closing") shall
be held at the offices of Brown, Rudnick, Freed & Gesmer, Xxx Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 as promptly as practicable (and in any event within
two business days) after the satisfaction or waiver of the conditions set forth
in Sections 8 and 9 of this agreement or at such other place, date and time as
may be fixed by mutual agreement of the parties (the "Closing Date"); provided,
however, that in no event shall the Closing Date be extended beyond March 31,
2000.
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2.2 EFFECTIVE TIME
As soon as practicable following the Closing and in any event no later than
two business days after the Closing, the parties hereto shall cause the Mergers
to be consummated by (i) filing agreements or certificates of merger (as to each
of the Mergers, the "AGREEMENT OF MERGER" and collectively, the "AGREEMENTS OF
MERGER") in such form as is required by and executed in accordance with the
relevant provisions of the UBCA and the DGCL, and (ii) making all other filings
or recordings required under the UBCA and the DGCL. Each of the Mergers shall
become effective at such time as the applicable Agreement of Merger, having
previously been duly filed with the Secretary of State of the State of Delaware,
is duly filed with the Secretary of State of the State of Utah or at such
subsequent time as ASC or ASI (as applicable), the applicable Merger Sub and
Parent shall agree, and shall be specified in the applicable Agreement of Merger
(the date and time each of the Mergers becomes effective being the "EFFECTIVE
TIME" for each such Merger).
2.3 EFFECTS OF THE MERGERS
At and after the applicable Effective Time, each of the Mergers will have
the effects set forth in this Agreement, the applicable Agreement of Merger and
the applicable provisions of the UBCA and the DGCL. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time of its
Merger, (i) all the assets, property, rights, privileges, powers and franchises
of ASI and ASI Merger Sub shall vest in ASI Surviving Corporation, and all
debts, liabilities and duties of ASI and ASI Merger Sub shall become the debts,
liabilities and duties of ASI Surviving Corporation, and (ii) all the assets,
property, rights, privileges, powers and franchises of ASC and the ASC Merger
Sub shall vest in ASC Surviving Corporation, and all debts, liabilities and
duties of ASC and the ASC Merger Sub shall become the debts, liabilities and
duties of the ASC Surviving Corporation.
2.4 ARTICLES OF INCORPORATION OF SURVIVING CORPORATIONS
Unless otherwise determined by Parent prior to the applicable Effective
Time, at the Effective Time of each of the Mergers, the articles of
incorporation of the applicable Company, as in effect immediately prior to the
Effective Time, shall be the articles of incorporation of the Surviving
Corporation into which it is merged pursuant hereto, unless and until thereafter
changed or amended in accordance with the UBCA.
2.5 BYLAWS OF SURVIVING CORPORATION
Unless otherwise determined by Parent prior to the applicable Effective
Time, at the Effective Time, the bylaws of each of the Companies, as in effect
immediately prior to the Effective Time, shall be the bylaws of the Surviving
Corporation into which it is merged pursuant hereto, unless and until thereafter
changed or amended in accordance with the UBCA.
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2.6 OFFICERS AND DIRECTORS OF SURVIVING CORPORATION
The officers of each of the Merger Subs immediately prior to the Effective
Time (which officers are identified in Section 2.6 of the Disclosure Schedule)
shall be the initial officers of the Surviving Corporation into which each is
merged pursuant hereto, each to hold office in accordance with the
Organizational Documents of such Surviving Corporation until the earliest of
their resignation or removal from office or their otherwise ceasing to be
officers or until their respective successors are duly elected and qualified.
The director of each of the Merger Subs immediately prior to the Effective Time
(which are identified in Section 2.6 of the Disclosure Schedule) shall be the
initial director of the Surviving Corporation into which it is merged pursuant
hereto.
2.7 CONVERSION OR CANCELLATION OF CAPITAL STOCK OF THE COMPANIES AND
PAYMENT OF PURCHASE PRICE
At the Effective Time of each Merger, by virtue of such Merger and without
any action on the part of any party hereto or any holder thereof:
(a) Subject to the provisions of this Section 2.7 and Sections 2.8, 2.9 and
2.10, each share of Company Capital Stock issued and outstanding immediately
prior to the applicable Effective Time (except for shares held in the Companies'
treasuries) shall be canceled and extinguished and automatically converted into
the right to receive, before reduction for the Escrow Amount, (A) cash, (B) the
Note, and (C) the number of shares of Parent Common Stock based on the Closing
Exchange Price each determined as follows: (i) in the case of ASI, (A) cash in
an amount equal to the $11,791,198.94, and (B) $6,987,377.15 payable under the
Note, (C) the number of shares of Parent Common Stock, rounded to the nearest
whole share (i.e., rounded up if the fractional share is .5 or greater), equal
to 6,987,377.15, divided by the Closing Exchange Price; and (ii) in the case of
ASC, (A) cash in an amount equal to $15,208,801.06, and (B) $9,012,622.89
payable under the Note, (C) the number of shares of Parent Common Stock, rounded
to the nearest whole share (i.e., rounded up if the fractional share is .5 or
greater), equal to $9,012,622.89 divided by the Closing Exchange Price.
(b) Each share of capital stock held in the treasury of each of the
Companies and each authorized but unissued share of capital stock of each of the
Companies shall cease to exist without payment of any consideration therefor.
(c) Each share of Merger Subs' Common Stock, $0.01 par value per share,
issued and outstanding immediately prior to the applicable Effective Time shall
be canceled and extinguished and automatically converted into one (1) validly
issued, fully paid and nonassessable share of Common Stock, no par value per
share, of the Surviving Corporation into which it is merged.
(d) The Company Shareholder shall also receive together with each share of
Parent Common Stock issued in the Mergers pursuant to this Section 2.7 an
associated preferred stock purchase right ("PARENT PURCHASE RIGHT") pursuant to
the Rights Agreement, as amended,
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between the Parent and the Rights Agent named therein. References herein to
Parent Common Stock shall be deemed to include the associated Parent Purchase
Rights.
2.8 ADJUSTMENT TO PURCHASE PRICE
(a) Promptly following the Closing, but in no event later than 60 days
after the Closing, the Companies shall prepare and deliver to the Parent and the
Company Shareholder a balance sheet for each of the Companies (each a "CLOSING
BALANCE SHEET") audited by Pricewaterhouse Coopers, LLP ("PWC"), independent
public accountants, prepared in accordance with this Section. The fees and
expenses of PWC shall be borne by Parent. Parent shall select the PWC partner
that will lead the audit team.
(b) In the event that the Net Tangible Book Value of ASC as shown on the
ASC Closing Balance Sheet is less than $9,186,859 then Company Shareholder shall
owe to Parent a dollar amount equal to the difference; and to the extent the Net
Tangible Book Value of ASC on the ASC Closing Balance Sheet is more than
$9,186,859 Parent shall owe to Company Shareholder a dollar amount equal to the
difference.
(c) In the event that the Net Tangible Book Value of ASI as shown on the
ASI Closing Balance Sheet is less than the Net Tangible Book Value on the ASI
Base Balance Sheet (reduced by the ASI dividend to Company Shareholder of
$96,410) by more than $50,000, then Company Shareholder shall owe to Parent a
dollar amount equal to such excess; and if the Net Tangible Book Value of ASI as
shown on the ASI Closing Balance Sheet exceeds the ASI Net Tangible Book Value
on the ASI Base Balance Sheet (reduced by the ASI dividend to Company
Shareholder of $96,410) by more than $50,000, then Parent shall owe to Company
Shareholder the amount of such excess.
(d) The net amount owed by one party to the other under paragraphs (b) and
(c) above shall be paid within ten (10) days following the later of (i) the date
of delivery of the Closing Balance Sheets to Parent and Company Shareholder, or
(ii ) the determination of any dispute with respect to the Closing Balance
Sheets as provided in paragraph (f) of this Section 2.8, by certified or bank
check or wire transfer of funds.
(e) For purposes of this Section 2.8 the term "Net Tangible Book Value"
shall mean the book value of all assets appearing on the balance sheet less the
book value of intangibles and the book value of all liabilities appearing
thereon. The Closing Balance Sheets shall fairly present the assets, liabilities
and Closing Net Tangible Book Value of each of the Companies as of close of
business on the Closing Date, determined in accordance with generally accepted
accounting principals, practices and methods of the United States ("GAAP") and
on a basis consistent with the preparation of the respective Base Balance
Sheets. The same accounting principles, practices, procedures and policies that
were used in preparing the Base Balance Sheet shall be used in preparing the
Closing Balance Sheets and the computational methods and assumptions used in
preparing the Base Balance Sheets shall be used in the preparation of the
Closing Balance Sheet and the calculation of Closing Book Values.
Notwithstanding anything else to the contrary
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herein, accruals and reserves will be made for all matters for which an accrual
or reserve would be appropriate under GAAP.
(f) If after the final Closing Balance Sheets have been prepared and
delivered to Parent and Company Shareholder, any dispute shall arise as to the
manner of preparation or the accuracy of the Closing Balance Sheets, the Parent
or the Company Shareholder may elect, by notice given at any time prior to their
receipt of the Closing Balance Sheets or within ten (10) days following such
receipt, to submit the dispute to an independent certified public accounting
firm of national standing (the "Independent CPA"). The determination of such
dispute by the Independent CPA shall be final and binding on the parties. All
fees and expenses of the Independent CPA charged or incurred in connection with
the determination of such dispute shall be borne equally between the Parent and
Company Shareholder.
2.9 SURRENDER OF CERTIFICATES
(a) At the Closing, Parent shall make available the Cash Portion of the
Purchase Price, the Note, and the aggregate number of shares of Parent Common
Stock issuable pursuant to Section 2.7 in exchange for the issued and
outstanding shares of Company Capital Stock, and the Company Shareholder shall
make available for surrender to the Parent the certificate or certificates (the
"CERTIFICATES") which immediately prior to the Effective Time evidenced all of
outstanding shares of Company Capital Common Stock. At the Effective Time of the
last to occur of the Mergers, the Purchase Price minus the Escrow Amount, (as
defined below), shall be delivered to the Company Shareholder and the
Certificates shall be delivered to the Parent.
(b) From and after the Effective Time of the Mergers, none of capital stock
of ASI and ASC shall be deemed to be outstanding, and holders of Certificates
shall cease to have any rights with respect thereto, other than the right to
receive cash, the Note and Parent Common Stock in accordance with this Article
II and the terms of the applicable Agreement of Merger. All shares of Parent
Common Stock issued upon the surrender for exchange of shares of Company Capital
Stock in accordance with the terms hereof shall be deemed to have been issued in
full satisfaction of all rights pertaining to such shares of Company Capital
Stock, and there shall be no further registration of transfers on the records of
the Surviving Corporations of shares of Company Capital Stock which were
outstanding immediately prior to the Effective Time of the Mergers.
(c) Company Shareholder represents and warrants that no amount of the
Purchase Price is required to be withheld for payment of taxes under U.S. or
state law.
2.10 ESCROW AMOUNT
(a) At the Effective Time, the Parent shall deliver to the Escrow Agent
appointed pursuant to the Escrow Agreement, cash, Parent Common Stock or a
combination thereof as specified by Company Shareholder with an aggregate value
of $8 Million (the value of such Parent Shares to be based upon the Closing
Exchange Price) ("ESCROW AMOUNT"). The Escrow Amount shall be held for a period
of two (2) years from the Closing and applied in accordance with the terms of
the Escrow Agreement substantially in the form attached hereto as EXHIBIT C.
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3. REPRESENTATIONS AND WARRANTIES CONCERNING THE COMPANY
Except as set forth on the disclosure schedule attached hereto (the
"Disclosure Schedule"), the Company Shareholder represents and warrants (and
Daifuku Japan represents and warrants with respect to Section 3.2(a) hereof) to
Parent and Merger Subs that the statements contained in this Section 3 are true
and correct. For purposes of this Article 3, if any item disclosed as an
exception to one representation or warranty in the Disclosure Statement fairly
indicates by its description that it is also an exception to another
representation or warranty, it shall be deemed disclosed in connection with that
other representation or warranty as well, whether or not listed as an exception
under that section as well. The Disclosure Schedule shall be initialed by the
parties and shall be arranged in paragraphs corresponding to the numbered and
lettered paragraphs contained in this Article 3.
3.1 ORGANIZATION AND GOOD STANDING
(a) Each of the Company Shareholder, the Companies and the Company
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation as listed on
Section 3.1 of the Disclosure Schedule, with full corporate power and authority
to conduct its business as it is now being conducted and where it is now being
conducted and to own or use the assets and properties that it purports to own or
use. Each of the Companies and the Company Subsidiaries is qualified to do
business as a foreign corporation under the Laws of each jurisdiction listed
next to its name on Section 3.1 of the Disclosure Schedule. None of them is
required to be licensed or qualified in any other state or jurisdiction by
either their ownership or use of assets or properties, or the nature of the
activities conducted by them, except where the failure to be so qualified will
not have a Material Adverse Effect. The Companies do not have, and have not had,
since December 1, 1996, any Subsidiaries other than for the Company
Subsidiaries. (b) The Company Shareholder has attached as Schedule 3.1(b) of the
Disclosure Schedule correct and complete copies of the Organizational Documents
of the Company Shareholder, the Companies and the Company Subsidiaries.
3.2 AUTHORITY; NO CONFLICT
(a) Each of Daifuku Japan and the Company Shareholder has the right, power,
authority and capacity to execute and deliver this Agreement and the Transaction
Documents to which it is a party, to consummate the transactions contemplated
hereby and thereby, and to perform its obligations hereunder and thereunder.
This Agreement and each Transaction Document to which it is a party has been
duly authorized, executed and delivered by each of Daifuku Japan and Company
Shareholder and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms.
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(b) At the Closing, each of the Companies shall have the right, power and
authority and capacity to execute and deliver each Transaction Document to which
it is a party, to consummate the Mergers and the other transactions contemplated
hereby and thereby, and to perform its obligations under each Transaction
Document to which it is a party. Upon the authorization and approval, execution
and delivery by each of the Companies of the Transaction Documents to which it
is a party, such Transaction Documents will each constitute legal, valid and
binding obligations of that Company, enforceable against it in accordance with
its terms.
(c) Neither the execution and delivery by the Company Shareholder of this
Agreement or any Transaction Documents to which it is a party, nor the execution
and delivery by either of the Companies of the Transaction Documents to which it
is a party, nor the consummation or performance by any of them of the Mergers or
any of the other transactions contemplated hereby or thereby will, directly or
indirectly (with or without notice or lapse of time or both):
(i) contravene, conflict with or result in a violation or breach of (A)
any provision of the Organizational Documents of the Company Shareholder, the
Companies or the Company Subsidiaries, (B) any resolution adopted by the board
of directors or the shareholders of the Company Shareholder, Companies or the
Company Subsidiaries, (C) any legal requirement or any Order, award, decision,
settlement or process to which any of Company Shareholder, the Companies or the
Company Subsidiaries or any of the assets or properties owned or used by either
of the Companies or the Company Subsidiaries may be subject, or (D) any
Governmental Permit which is held or used by any of the Company Shareholder, the
Companies or the Company Subsidiaries; excluding from clauses (C) and (D) any
contravention, conflict, violation or breach which would not, either
individually or in the aggregate, have a Material Adverse Effect on either of
the Companies or materially impair its ability to consummate the transactions
contemplated hereby;
(ii) result in a breach of or constitute a default, give rise to a right of
termination, cancellation or acceleration, create any entitlement to any payment
or benefit, or require the consent, authorization or approval of or any notice
to or filing with any third Person under any material Contract or any debt
instrument to which any of the Company Shareholder, the Companies or any of the
Company Subsidiaries is a party or to which any of their assets or properties
are bound, or require the consent, authorization or approval of or any notice to
or filing with any Governmental Authority (other than filings under the HSR Act)
to which any of the Company Shareholder, the Companies or the Company
Subsidiaries or their assets or properties is subject, except for any breaches,
defaults, rights of termination, cancellation or acceleration, entitlements,
consents, approvals, notices or filings which would not, either individually or
in the aggregate, have a Material Adverse Effect on either of the Companies or
materially impair either of the Companies' ability to consummate the
transactions contemplated hereby; or
(iii) result in the imposition or creation of any Encumbrance or Lien upon
or with respect to any of the assets or properties owned or used by either of
the Companies or any of the Company Subsidiaries.
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3.3 CAPITALIZATION
(a) The authorized capital of ASI consists of 5,000,000 shares of common
stock. The authorized capital of ASC consists of 941,176 shares of common stock.
As of the date hereof there are, and immediately prior to the Closing there will
be, 100 shares of common stock of ASI and 941,176 shares of common stock of ASC
outstanding. There are no options, warrants or similar rights to purchase any
shares of common stock of either of the Companies issued and outstanding. No
equity securities of either of the Companies are held in the treasuries of the
Companies. All of the outstanding equity securities of the Companies have been
duly authorized and validly issued and are fully paid and nonassessable. The
Company Shareholder directly owns, of record and beneficially, and has good,
valid and indefeasible title to and the right to transfer, all of the issued and
outstanding capital stock of the Companies, free and clear of any and all
Encumbrances and Liens of any kind or nature whatsoever. No "phantom" stock,
stock appreciation rights or agreements or similar rights or agreements exist
which are intended to confer on any Person rights similar to any rights accruing
to the Company Shareholder. There are no voting trusts or other Contracts or
understandings to which either of the Companies or the Company Shareholder is a
party with respect to the transfer, voting or registration of the capital stock
of either of the Companies. Except as set forth in Section 3.3 of the Disclosure
Schedule, there are no Contracts relating to the issuance, sale or transfer of
any equity securities or other securities of either of the Companies or any of
the Company Subsidiaries. Neither of the Companies nor any of the Company
Subsidiaries owns or has any Contract to acquire any equity securities or other
securities of any Person or any, direct or indirect, equity or ownership
interest in any other business, except for the Company Subsidiaries. No Person
has any preemptive rights with respect to any security of either of the
Companies or any of the Company Subsidiaries.
(b) Except as set forth on Section 3.3(b) of the Disclosure Schedule, each
of the Companies directly owns, of record and beneficially, and has good, valid
and indefeasible title to and the right to transfer all of the issued and
outstanding capital stock of the Company Subsidiaries identified on the attached
schedule as owned by it, free and clear of any and all Encumbrances and Liens of
any kind or nature whatsoever. There are no voting trusts, shareholder
agreements or any other Contracts or understandings to which either of the
Companies or any of the Company Subsidiaries is a party with respect to the
capital stock of the Company Subsidiaries. All of the outstanding capital stock
of the Company Subsidiaries has been duly authorized and validly issued and is
fully paid and nonassessable.
3.4 BOOKS, RECORDS AND ACCOUNTS
(a) The books of account and other records of each of the Companies and the
Company Subsidiaries, all of which have been made available to Parent, are true,
complete and correct in all material respects. The minute books of each of the
Companies and the Company Subsidiaries contain true, accurate and complete
records of all meetings held of, and corporate action taken by, the
shareholders, the board of directors, and committees of the board of directors
of each of the Companies and the Company Subsidiaries, respectively. The stock
books of the Companies and the Company Subsidiaries are true, complete and
correct.
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(b) The books, records and accounts of each of the Companies fairly and
accurately reflect their respective transactions and dispositions of assets, and
the system of internal accounting controls of each of the Companies is
sufficient to assure that: (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific authorization
as required by Section 13(b)(2) of the Exchange Act; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(c) At the Closing, all of such books, records and accounts will be in the
possession of the Companies.
3.5 FINANCIAL STATEMENTS
(a) For purposes of this Agreement: "FINANCIAL STATEMENTS" shall mean (i)
the audited consolidated balance of ASC as of March 31, 1997 and the related
income statements and statements of cash flow for the period from September 5,
1996 to Xxxxx 00, 0000, (xx) the audited consolidated balance sheet of ASI as of
March 31, 1997 and the related consolidated income statements and statements of
cash flow for the period November 26, 1996 through Xxxxx 00, 0000, (xxx) the
audited consolidated balance sheets of each of the Companies as of March 31,
1998 and March 31, 1999, and the related consolidated income statements and
statements of cash flows for the two years ended March 31, 1999 (iv) the audited
consolidated balance sheet of ASI as of September 30, 1999 and the related
consolidated income statements and statements of cash flows for the six months
ended September 30, 1999; and (v) the unaudited consolidated balance sheet of
ASC and the related consolidated income statements and statements of cash flows
for the six months ended September 30, 1999. The copies of such Financial
Statements attached as Section 3.5(a) to the Disclosure Schedule are true and
complete.
(b) The Financial Statements (i) have been prepared from the books and
records of the Companies in accordance with GAAP consistently applied during the
periods covered thereby, (ii) fully reflect all liabilities and, in the case of
the Financial Statements, the contingent liabilities of each of the Companies
(on a consolidated basis as to each), required to be reflected therein on such
basis as at the date thereof, and (iii) fairly present the financial position of
each of the Companies (on a consolidated basis as to each) as of the dates
thereof and the results of its operations (on a consolidated basis as to each)
for the periods indicated.
(c) In addition, the Companies have delivered copies of all letters of
independent auditors to management for fiscal years 1999, 1998 and 1997 and the
six months ended September 30, 1999.
3.6 NO UNDISCLOSED LIABILITIES
Except as set forth on Section 3.6 of the Disclosure Schedule, the
Companies and the Company Subsidiaries do not have any material liabilities or
obligations of any nature (whether
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known or unknown, absolute, accrued, contingent or otherwise, and whether due or
to become due), except for (i) liabilities or obligations reflected or reserved
against in the Financial Statements and (ii) current liabilities incurred in the
ordinary course of business since the date of the Financial Statements,
consistent with past practices, (none of which is a claim for breach of
contract, breach of duty, breach of warranty, tort or infringement of an
intellectual property right).
3.7 NO MATERIAL ADVERSE CHANGE
Since the date of their respective September 30, 1999 Financial Statements,
there has not been any change which has had a Material Adverse Effect with
respect to either Company and no event has occurred or circumstance exists that
could reasonably be expected to have a Material Adverse Effect on either of the
Companies, provided that a change in general economic or financial conditions
shall not be considered a Material Adverse Effect.
3.8 TAXES
(a) "TAXES" means all taxes, charges, fees, Encumbrances, Liens, customs,
duties or other assessments, however denominated, including any interest,
penalties, additions to tax or additional taxes that may become payable in
respect thereof, imposed by any national, regional, state or local government of
any country, or any agency or political subdivision of any such government (a
"TAX AUTHORITY"), which taxes shall include, without limiting the generality of
the foregoing, all income taxes, payroll and employee withholding taxes,
unemployment insurance, social security, sales and use taxes, excise taxes,
capital taxes, franchise taxes, gross receipt taxes, occupation taxes, real and
personal property taxes, value added taxes, stamp taxes, transfer taxes,
workers' compensation taxes, taxes relating to benefit plans and other
obligations of the same or similar nature.
(b) (i) Each of the Companies and the Company Subsidiaries has filed or
caused to be filed with the appropriate Taxing Authorities in a timely manner
all Tax returns, reports and forms ("RETURNS") required to be filed by them;
(ii) the information on such Returns is complete and accurate in all material
respects; (iii) each of the Companies and the Company Subsidiaries has paid in
full on a timely basis all Taxes or made adequate provision in the Financial
Statements for all Taxes (whether or not shown on any Return) required to be
paid by them; (iv) there are no Encumbrances or Liens for Taxes upon the assets
or properties of the Companies or the Company Subsidiaries other than for Taxes
not yet due and payable; and (v) no deficiencies for Taxes have been claimed,
proposed, or assessed by any Tax Authority or other Governmental Authority with
respect to either of the Companies or any of the Company Subsidiaries. Except as
set forth on Section 3.8 of the Disclosure Schedule, there are no pending or, to
the Companies' knowledge, threatened audits, investigations or claims for or
relating to any liability in respect of Taxes of either of the Companies or any
of the Company Subsidiaries.
(c) Except as set forth on Section 3.8 of the Disclosure Schedule, there
are no outstanding Contracts or waivers with respect to either of the Companies
extending the statutory period of
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limitation applicable to any Taxes, and neither of the Companies nor any of the
Company Subsidiaries has requested any extension of time within which to file
any Return, which has not yet been filed.
(d) (i) Each of the Companies and the Company Subsidiaries has made
provision for all Taxes payable by it and such provision is reflected on the
Financial Statements with respect to any period covered thereby as to Taxes
which are not payable prior to the date of such Financial Statements; (ii) the
provisions for Taxes with respect to each of the Companies (on a consolidated
basis as to each) for any period prior to the Closing (excluding any reserve for
deferred Taxes established to reflect timing differences between book and Tax
income) are adequate to cover all Taxes with respect to such period; (iii) each
of the Companies and the Company Subsidiaries has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, shareholder or other third
Person; (iv) all material elections with respect to Taxes made by the Companies
or the Company Subsidiaries as of the date hereof are set forth in Section 3.8
of the Disclosure Schedule; (v) there are no private letter rulings or
comparable determinations in respect of any Tax pending between either of the
Companies or any of the Company Subsidiaries and any Tax Authority, if such
ruling would affect either of the Companies or any of the Company Subsidiaries;
(vi) neither of the Companies nor any of the Company Subsidiaries has ever been
a member of an affiliated group within the meaning of Section 1504 of the Code,
or filed or been included in a combined, consolidated or unitary return of any
Person (other than with respect to the Company Shareholder, the Companies and
their respective Company Subsidiaries); (vii) neither of the Companies nor any
of the Company Subsidiaries is liable for Taxes of any other Person except with
respect to sales taxes, and neither of the Companies nor any of the Company
Subsidiaries is currently under any contractual obligation to indemnify any
Person with respect to Taxes, or a party to any tax sharing agreement or any
other agreement providing for payments by either of the Companies or any of the
Company Subsidiaries with respect to Taxes; (viii) neither of the Companies nor
any of the Company Subsidiaries is, or has been, a United States real property
holding corporation (as defined in Section 897(c)(2) of the Code), during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code; (ix)
neither of the Companies nor any of the Company Subsidiaries is a "collapsible
corporation" under Section 341 of the Code; (x) neither of the Companies nor any
of the Company Subsidiaries is a personal holding company within the meaning of
Section 542 of the Code; (xi) neither of the Companies nor any of the Company
Subsidiaries is a party to any joint venture, partnership or other arrangement
or Contract which could be treated as a partnership for Tax purposes; (xii)
neither of the Companies nor any of the Company Subsidiaries has agreed to or is
required, as a result of a change in method of accounting or otherwise, to
include any adjustment under Section 481 of the Code (or any corresponding
provision of state, local or foreign Law) in taxable income; (xiii) neither of
the Companies nor any of the Company Subsidiaries is a party to any Contract,
arrangement or plan that could result (taking into account the transactions
contemplated by this Agreement), separately or in the aggregate, in the payment
of any "excess parachute payments" within the meaning of Section 280G of the
Code; and (xiv) Section 3.8 of the Disclosure Schedule contains a list of all
jurisdictions to which any Tax is properly payable or in which any Return is
required to be filed by either of the Companies or any of the Company
Subsidiaries, and no written claim has
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been made since December 1, 1996 by any Tax Authority in any other jurisdiction
that any of the Companies or the Company Subsidiaries is subject to taxation in
such jurisdiction.
3.9 ACCOUNTS RECEIVABLE
(a) Except as set forth on Section 3.9 of the Disclosure Schedule, all
accounts receivable, notes receivable, contracts receivable, unbilled invoices
and other receivables (exclusive of costs and estimated earnings in excess of
xxxxxxxx on uncompleted contracts) of the Companies that are reflected on the
Financial Statements or on the accounts receivable ledger of the Companies or
the Company Subsidiaries as of the Closing Date (collectively, the "ACCOUNTS
RECEIVABLE") represent or will represent valid and enforceable obligations (i)
arising from sales actually made or services actually performed in the ordinary
course of business, (ii) arising out of transactions with unaffiliated parties
and (iii) subject to no setoff, defense or counterclaim where the basis for the
setoff, defense or counterclaim arose prior to the Closing. All Accounts
Receivable arising from either (i) sales to Daifuku Japan or any Affiliate of
Daifuku Japan, or (ii) contracts or projects constituting a part of the FADA
Business transferred to Company Shareholder (collectively, "Special Accounts
Receivable") will be collected at the full recorded amount thereof not later
than the later of (i) 60 days after invoice or (ii) 60 days after the Closing
Date, unless otherwise agreed with the customer. All other Accounts Receivable
are or will be collectible at the full recorded amount thereof not later than
the latest of (i) 90 days after the Closing Date, or (ii) the date on which the
Account Receivable is 60 days overdue, or (iii) 300 days after the date of
invoice (less any applicable reserves reflected in the Financial Statements
which were established in accordance with GAAP). A summary of the aging of the
Accounts Receivable of ASI as of November 30, 1999 and of ASC as of December 1,
1999 neither of which is materially inaccurate, is attached as Section 3.9 to
the Disclosure Schedule. Since April 1, 1999, there has not been a material
change in the Company's receivables aging practice. Parent will provide Company
Shareholder with monthly accounts receivable aging report for the Companies
promptly after Parent's monthly financial closing.
(b) However, notwithstanding the issues related to the Xxxxxx Siltronics
project disclosed in Section 3.9(b) of the Disclosure Schedule, the Company
Shareholder hereby guarantees (i) the collectibility of the costs and estimated
earnings in excess of xxxxxxxx, as reflected on the Closing Balance Sheet, for
incomplete contracts attributable to the Xxxxxx Siltronics project currently in
progress in Singapore, (ii) the collectibility of the difference between
$10,089,258 (minus approximately $961,000, the retention permitted with respect
to such Xxxxxx Siltronics project (the "Retention")) and amounts earned as of
the Closing Date on such Xxxxxx Siltronics project, and (iii) the collectibility
of 50% of the earned but unpaid Retention, if such Retention has been
unreasonably withheld by Xxxxxx Siltronics, provided that Parent shall use
commercially reasonable efforts to complete the Xxxxxx Siltronics project and
obtain a written acceptance for such project from Xxxxxx Siltronics. If Company
Shareholder pays funds to Parent in full accord and satisfaction of its
obligations pursuant to its guarantee under this Section 3.9(b), then any
amounts subsequently collected by Parent from Xxxxxx Siltronics in connection
with the obligations of Xxxxxx Siltronics referenced in this Section 3.9(b)
shall be remitted to Company Shareholder, less reasonable expenses Parent
directly incurred in
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collecting such amounts. Parent will provide Company Shareholder with monthly
status reports relating to the costs and estimated earnings in excess of
xxxxxxxx for the Xxxxxx Siltronics project promptly after Parent's monthly
financial closing. The Company Shareholder shall not guarantee the
collectibility of the costs and estimated earnings in excess of xxxxxxxx on
incomplete contracts other than those attributable to the Xxxxxx Siltronics
project.
3.10 TITLE TO PROPERTIES; ENCUMBRANCES
(a) Section 3.10 of the Disclosure Schedule contains a complete and
accurate list of all ownership, leasehold or other interests in real property
held by either of the Companies or any of the Company Subsidiaries. Section 3.10
of the Disclosure Schedule sets forth for each such property, the nature of the
interest held by the Company or Company Subsidiary, the owner of the real
estate, a brief description thereof (including approximate square footage), the
use made of such property and the approximate annual taxes associated with such
property. Each of the Companies has delivered or made available to Parent true,
correct and complete copies of all deeds, mortgages and Encumbrances or any
owned real estate and the real property leases to which it or any of the Company
Subsidiaries is party or pursuant to which any of them use or occupy any real
property.
(b) Also set forth on Section 3.10 of the Disclosure Schedule is a listing
of the machinery, equipment and other tangible personal property with an
original cost in excess of $25,000 used or owned by either of the Companies or
any of the Company Subsidiaries and a listing of all leases under which either
of the Companies or any of the Company Subsidiaries leases any personal property
as of the Closing Date requiring annual rental payments in excess of $10,000,
together with a description of such property and its location (collectively, the
"MATERIAL PERSONAL PROPERTY"). Except as set forth on Section 3.10 of the
Disclosure Schedule, all of the real and personal properties of the Companies
are reflected on the Financial Statements (except to the extent not required to
be so reflected by GAAP). The only intangible assets and properties owned by the
Companies or used in the conduct of its business are the Intellectual Property
Assets.
(c) All of the agreements required to be listed on Section 3.10 of the
Disclosure Schedule are valid, subsisting and enforceable in accordance with
their terms against the parties thereto. The Companies and the Company
Subsidiaries are in compliance with all terms and conditions of such agreements
and no event has occurred nor does any circumstance exist that (with or without
notice or the passage of time or both) would constitute a material violation or
default under any such agreements and none has been given or received written
notice of any alleged violation or of any default under any such agreement.
(d) Each of the Companies and Company Subsidiaries has good and marketable
title to all of the assets and properties, real and personal, tangible and
intangible, it owns or purports to own, and legal right to use all material
assets it otherwise uses in its business, including those reflected on its books
and records and in the Financial Statements (except for Accounts Receivable
collected and inventories, materials and supplies disposed of in the ordinary
course of business consistent with past practice after the date of the most
recent Financial Statements). Each of the
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Companies and Company Subsidiaries has a valid ownership, leasehold, license or
other interest in all of the other tangible assets or properties, real or
personal, which are used in the operation of its business. Except as set forth
on Section 3.10 of the Disclosure Schedule, all assets and properties owned,
leased or used by the each of the Companies and Company Subsidiaries are free
and clear of all Encumbrances, except for (i) liens for current Taxes not yet
due, (ii) workmen's, common carrier and other similar liens arising in the
ordinary course of business, none of which materially detracts from the value or
impairs the use of the asset or property subject thereto, or impairs the
operations of any of the Companies or the Company Subsidiaries, (iii)
Encumbrances or Liens disclosed in the Financial Statements and (iv)
Encumbrances and Liens on leased real estate which do not materially impair the
use of the property by the Companies or Company Subsidiaries for its present use
or currently contemplated uses.
(e) To the best of the Companies' knowledge, there are no condemnation,
environmental, zoning or other land use regulation proceedings, either
instituted or planned to be instituted, that would detrimentally affect the use
and operation of either of the Companies leased real property for its intended
purpose.
3.11 CONDITION AND SUFFICIENCY OF ASSETS
The Facilities and other assets and property owned or used by each of the
Companies and Company Subsidiaries are structurally sound, are in good operating
condition and repair (normal wear and tear excepted), and are adequate for the
uses to which they are being put, and none of such Facilities or other property
and assets owned or used by any of the Companies or Company Subsidiaries is in
need of maintenance or repairs except for ordinary, routine maintenance and
repairs that are not material in nature or cost. The Facilities and other assets
and property owned or used by any of the Companies or Company Subsidiaries are
sufficient for the continued conduct of its business after the Closing in
substantially the same manner as conducted prior to the Closing.
3.12 COMPLIANCE WITH LAWS; GOVERNMENTAL AUTHORIZATIONS.
(a) Except as set forth on Section 3.12(a) of the Disclosure Schedule, each
of the Companies and Company Subsidiaries is in compliance in all material
respects with all applicable Laws, licenses and Orders affecting the assets or
properties owned or used by it or its business or operations. Neither of the
Companies nor any Company Subsidiaries has been charged with violating, or to
its knowledge, threatened with a charge of violating, nor is either of the
Companies or any Company Subsidiaries under investigation with respect to a
possible violation of, any provision of any applicable Law, Order or license
relating to any of its or their assets or properties or any aspect of its or
their business.
(b) Section 3.12 of the Disclosure Schedule contains a complete and
accurate list of each Governmental Permit that is held by the Companies or the
Company Subsidiaries or that otherwise relates to the business of or to any of
the assets or properties owned or used by the Companies or the Company
Subsidiaries. Each Governmental Permit listed or required to be
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listed in Section 3.12 of the Disclosure Schedule is valid and in full force and
effect and is not subject to any Proceedings for suspension, modification or
revocation.
3.13 LEGAL PROCEEDINGS
(a) Except as set forth in Section 3.13 of the Disclosure Schedule, neither
of the Companies has received notice of, nor to its knowledge does there exist,
any Proceeding that has been commenced by or against it, any of the Company
Subsidiaries or any of the officers, directors, former officers or directors,
employees, shareholders or agents of either of the Companies or the Company
Subsidiaries (in their capacities as such) or that otherwise relates to the
business of, or any of the assets or properties owned or used by, either of the
Companies or any of the Company Subsidiaries.
(b) There is no Proceeding that challenges, or that may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated hereby.
(c) To the knowledge of the Companies, no Proceeding has been threatened.
3.14 ABSENCE OF CERTAIN CHANGES AND EVENTS
Except as set forth in Section 3.14 of the Disclosure Schedule, since the
date of their respective September 30, 1999 Financial Statements, each of the
Companies and the Company Subsidiaries has conducted its business only in the
ordinary course, consistent with past practice, and there has not been any:
(a) contingent liability incurred by either of the Companies or any of the
Company Subsidiaries as guarantor or otherwise with respect to the obligations
of others;
(b) declaration, setting aside, making or payment of any dividend or other
distribution or repurchase or payment in respect of shares of capital stock;
(c) issuance, sale, disposition or Encumbrance of, or authorization for
issuance, sale, disposition or Encumbrance of, or grant or issue of any options,
warrants or rights to acquire with respect to, any shares of its capital stock
or any other of its securities or any security convertible or exercisable into
or exchangeable for any such shares or securities, or any change in its
outstanding securities or shares of capital stock or its capitalization, whether
by reason of a reclassification, recapitalization, stock split, combination,
exchange or readjustment of shares, stock dividend or otherwise;
(d) obligation or liability incurred by either of the Companies or any of
the Company Subsidiaries other than obligations and liabilities incurred in the
ordinary course of business consistent with past practice (none of which is a
claim for breach of contract, breach of duty, breach of warranty, tort or
infringement of an intellectual property right);
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(e) Encumbrance of its assets or properties;
(f) (i) payment of any bonuses, salaries or other compensation except in
the ordinary course of business consistent with past practice or (ii) any
increase of more than $10,000 in the amount of any bonuses, salaries or other
compensation payable to any director, officer, consultant, agent, sales
representative or employee, or entry into or variation of any employment,
severance or similar Contract with any director, officer or employee;
(g) adoption of, or increase in the payments to or benefits under, any
Employee Benefit Plan;
(h) damage to or destruction of any asset or property, whether or not
covered by insurance which could reasonably be expected to have a Material
Adverse Effect on either of the Companies or its Subsidiaries, taken as a whole;
(i) termination of or receipt of notice of termination of any Contract or
transaction involving a total remaining commitment by or to either of the
Companies or its Subsidiaries of at least $25,000;
(j) entry into any Contract by either of the Companies or Subsidiaries of
more than $50,000;
(k) sale, lease or other disposition (other than in the ordinary course of
business consistent with past practice) of any asset or property;
(l) cancellation, compromise, release or waiver of any debt, claim or right
with a value to either of the Companies or its Subsidiaries in excess of
$10,000;
(m) creation, incurrence or assumption of any indebtedness for borrowed
money or capital lease or guarantee of any obligation in an aggregate amount in
excess of $10,000, except for endorsements of negotiable instruments for
collection in the ordinary course of business;
(n) discharge or satisfaction of any Encumbrance or Lien other than those
which are required to be discharged or satisfied during such period in
accordance with their original terms;
(o) payment, discharge or satisfaction of any material obligation or
liability, absolute, accrued, contingent or otherwise, whether due or to become
due, except for any current liabilities, and the current portion of any long
term liabilities, shown on the Financial Statements (or not required as of the
date thereof to be shown thereon in accordance with GAAP) or incurred since the
date of the most recent balance sheet in the ordinary course of business
consistent with past practice;
(p) loan or advance to any Person other than travel and other similar
routine advances in the ordinary course of business consistent with past
practice, or acquisition of any capital stock or
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other securities of or any ownership interest in, or a significant portion of
the assets of, any other business enterprise;
(q) capital investment or capital expenditure or capital improvement,
addition or betterment in amounts which exceed $10,000 in the aggregate or lease
or agreement to lease assets with an annual rental which exceeds $10,000 in the
aggregate;
(r) institution or settlement of any Proceeding before any Governmental
Authority relating to it or its assets or properties;
(s) except in the ordinary course of business consistent with past
practice, commitment to provide services or goods for an indefinite period or a
period of more than six (6) months;
(t) change in the method of accounting or the accounting principles or
practices used by either of the Companies in the preparation of the Financial
Statements except as required by GAAP;
(u) entry into other Contracts, except Contracts made in the ordinary
course of business consistent with past practice;
(v) amendment or other modification of any of the Organizational Documents
of either of the Companies or any of the Company Subsidiaries;
(w) transfer or grant of any rights or licenses under, or entry into any
settlement regarding the infringement of, any Intellectual Property Assets, or
entry into any licensing or similar agreements or arrangements, other than the
grant of non-exclusive licenses of software products to customers in the
ordinary course of business;
(x) agreement, whether oral or written, by either of the Companies or any
of the Company Subsidiaries to do any of the foregoing;
(y) change in the management or supervisory personnel of either of the
Companies or any of the Company Subsidiaries; or
(z) claim of unfair labor practices either of the Companies or any of the
Company Subsidiaries.
3.15 CONTRACTS; NO DEFAULTS
(a) Section 3.15(a) of the Disclosure Schedule contains a complete and
accurate list as of a recent date, and the Company Shareholder has delivered to
Parent true, correct and complete copies, of:
(i) each Contract involving payments reasonably anticipated to involve
more than at least $25,000 that involves performance of services or delivery of
goods or materials (including
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maintenance and support of customers) by either of the Companies or any of the
Company Subsidiaries;
(ii) each Contract involving payments of at least $25,000 that involves
performance of services or delivery of goods or materials to either of the
Companies or any of the Company Subsidiaries;
(iii) each Contract providing for the purchase of all or substantially all
of its requirements of a particular product from a supplier;
(iv) each Contract or plan, including, without limitation, any stock option
plan, stock appreciation right plan or stock purchase plan, any of the benefits
of which will be increased, or the vesting of benefits of which will be
accelerated, by the occurrence of any of the transactions contemplated by this
Agreement or the value of any of the benefits of which will be calculated on the
basis of any of the transactions contemplated by this Agreement;
(v) each Contract for joint marketing, teaming or development;
(vi) each Contract with any dealer, franchiser, original equipment
manufacturer, value-added reseller, or manufacturer's representative;
(vii) each Contract for the sale of its products not made in the ordinary
course of business;
(viii) each Contract with any sales agent or distributor of products of
either of the Companies or any of the Company Subsidiaries;
(ix) each Contract for a license (other than one listed on Section 3.21 of
the Disclosure Schedules) or franchise (whether as licensor or licensee or
franchisor or franchisee);
(x) each Contract involving any arrangement or obligation with respect to
the return of products other than on account of a defect in condition, or
failure to conform to the applicable Contract;
(xi) each Contract with the United States government;
(xii) each other Contract which is material to the assets or business of
either of the Companies and its Subsidiaries, considered as one enterprise;
(xiii) each lease, license and other Contract affecting any leasehold or
other interest in any real property or Material Personal Property (other than
those listed on Section 3.21 of the Disclosure Schedules) to which either of the
Companies or any of the Company Subsidiaries is a party;
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(xiv) each Contract to which either of the Companies or any of the Company
Subsidiaries is a party containing covenants that in any way purport to restrict
the business activity of either of the Companies or any of the Company
Subsidiaries or any of the employees of either of the Companies or any of the
Company Subsidiaries or limit the freedom of either of the Companies or any of
the Company Subsidiaries or any of the employees to engage in any line of
business or to compete with any Person or hire any Person;
(xv) each agreement between either of the Companies or any of the Company
Subsidiaries and an officer or director of either of the Companies or any of the
Company Subsidiaries or any affiliate of any of the foregoing;
(xvi) each power of attorney granted by either of the Companies or any of
the Company Subsidiaries that is currently effective and outstanding;
(xvii) each outstanding Contract for capital expenditures by either of the
Companies or any of the Company Subsidiaries in excess of $25,000;
(xviii) each agreement of either of the Companies or any of the Company
Subsidiaries under which any money has been or may be borrowed or loaned or any
note, bond, factoring agreement, indenture or other evidence of indebtedness has
been issued or assumed (other than those under which there remain no ongoing
obligations of either of the Companies or any of the Company Subsidiaries), and
each guaranty by either of the Companies or any of the Company Subsidiaries of
any evidence of indebtedness or other obligation, or of the net worth, of any
Person (other than endorsements for the purpose of collection in the ordinary
course of business);
(xix) each agreement of either of the Companies or any of the Company
Subsidiaries containing restrictions with respect to the payment of dividends or
other distributions in respect of its capital stock;
(xx) each stock purchase, merger or other agreement entered into since
December 1, 1996 pursuant to which either of the Companies or any of the Company
Subsidiaries acquired any material amount of assets (other than capital
expenditures), and all relevant documents and agreements delivered in connection
therewith;
(xxi) each material agreement to which either of the Companies or any of
the Company Subsidiaries is a party containing a change of control provision
applicable to the Merger;
(xxii) each agreement to which either of the Companies or any of the Company
Subsidiaries is a party having an indefinite term or a fixed term of more than
one (1) year which is not terminable at will or upon not more than thirty (30)
days' notice by the Companies or Company Subsidiaries without penalty;
(xxiii) each other agreement requiring payments by either of the Companies or
any of the Company Subsidiaries of more than $25,000 in the aggregate within any
twelve month period
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which includes any portion of the one year period ending on or beginning on the
Effective Date; and
(xxiv) each standard form of agreement pursuant to which either of the
Companies or any of the Company Subsidiaries provides services or goods to
customers.
(b) Each Contract identified or required to be identified in Section
3.15(a) of the Disclosure Schedule is in full force and effect and is valid and
enforceable against either of the Companies or any of the Company Subsidiaries
except as noted therein and, to the knowledge of the Company Shareholder and the
Companies against the other parties thereto in accordance with its terms.
(c) Each of the Companies and the Company Subsidiaries is in full
compliance in all material respects with all applicable terms and requirements
of each Contract under which either of the Companies or any of the Company
Subsidiaries has any obligation or liability or by which either of the Companies
or any of the Company Subsidiaries or any of the assets or properties owned or
used by either of the Companies or any of the Company Subsidiaries is or was
bound.
(d) To the knowledge of either of the Company Shareholder and the
Companies, each other Person that has or had any obligation or liability under
any Contract under which either of the Companies or any of the Company
Subsidiaries has any rights is in full compliance with all applicable terms and
requirements of such Contract.
(e) To the knowledge of the Company Shareholder and the Companies, no event
has occurred and no circumstance exists that (with or without notice or lapse of
time or both) is likely to result in a violation or breach of any Contract.
(f) Attached to Section 3.15(f) to the Disclosure Schedule is a true and
complete copy of the Integram License Agreement and Purchase Orders thereunder
(the "Purchase Orders"), which are the sole agreements between ASC and Integram
and which remain in full force and effect and have not been modified or amended
in any respect except for the modifications set forth in Section 3.15(f) of the
Disclosure Schedule.
3.16 INSURANCE
(a) Section 3.16 of the Disclosure Schedule describes all the insurance
policies of the Companies and the Company Subsidiaries (except policies relating
to Employee Benefit Plans listed on Section 3.19 of the Disclosure Schedule),
including type of coverage, term and premium. Each such policy is now in full
force and effect in accordance with its terms. There has been no default in the
payment of premiums on any of such policies, and to the best of the Companies'
knowledge there is no ground for cancellation or avoidance of any such policies,
or any increase in the premiums thereof, or for reduction of the coverage
provided thereby. True, correct and complete copies of all insurance policies
listed in Section 3.16 of the Disclosure Schedule have been previously furnished
to Parent.
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(b) The policies listed on Section 3.16 of the Disclosure Schedule (i) are
sufficient to enable the Companies and the Company Subsidiaries to comply with
all requirements of Laws and all agreements to which it is subject, (ii) will
remain in full force and effect through the respective expiration dates of such
policies provided that any further contractually specified premiums are paid,
and (iii) will not be adversely affected by, or terminate or lapse by reason of,
the transactions contemplated by this Agreement. Section 3.16 of the Disclosure
Schedule also sets forth all other insurance policies in effect at any time
during the three year period ended March 31, 1999 under which any of the
Companies or Company Subsidiaries currently may be entitled to give notice or
otherwise assert a claim.
(c) Except for amounts deductible under the policies of insurance described
on Section 3.16 of the Disclosure Schedule, neither the Companies nor the
Company Subsidiaries have since December 1, 1996 suffered any loss in excess of
$5,000 as a self-insurer of their businesses or assets.
(d) Except as set forth on Section 3.16 of the Disclosure Schedule, there
are no claims by or with respect to either of the Companies or any of the
Company Subsidiaries, pending under any of said policies, or any disputes with
insurers. No notice of cancellation or termination has been received with
respect to any such policy. Neither of the Companies nor any of the Company
Subsidiaries has been refused any insurance with respect to assets or
operations, nor has its coverage been limited by any insurance carrier with
which it has applied for any such insurance or with which it has carried
insurance. Neither the Company Shareholder nor either of the Companies has any
knowledge of any insurance carrier's insolvency or inability to perform its
obligations or pay any claims pursuant any of the insurance policies maintained
by either of the Companies or any of the Company Subsidiaries.
(e) Except as set forth on Section 3.16 of the Disclosure Schedule, none of
the Companies or the Company Subsidiaries has any current or prior insurance
policy which remains subject to a retrospective adjustment of the premiums
payable thereunder.
3.17 ENVIRONMENTAL MATTERS
(a) Each of the Companies and the Company Subsidiaries is in compliance in
all material respects with all applicable Environmental Laws, which compliance
includes, but is not limited to, the possession by each of all Governmental
Permits required under applicable Environmental Laws, and compliance in all
material respects with the terms and conditions thereof. Neither the Companies
nor any of the Company Subsidiaries has received notice of, and neither the
Companies nor any of the Company Subsidiaries, nor any predecessor of any of
them is the subject of, any Environmental Claim or Remedial Action. The
Companies and the Company Subsidiaries have no Environmental, Health and Safety
Liabilities. There are no circumstances or conditions related to either of the
Companies or any of the Company Subsidiaries, their operations or Company
Facilities that are reasonably likely to prevent or interfere with such
compliance or give rise to an Environmental Claim or Remedial Action in the
future.
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(b) There are no Environmental Claims that are pending or, to the knowledge
of the Company Shareholder or the Companies, threatened against either the
Companies or any of the Company Subsidiaries, their Facilities or against any
Person whose liability for any Environmental Claim either of the Companies or
any of the Company Subsidiaries has retained or assumed either contractually or
by operation of Law.
(c) Neither of the Companies nor any of the Company Subsidiaries, nor any
other Person acting on behalf of either of the Companies or any of the Company
Subsidiaries has disposed of, transported, stored, or arranged for the disposal
of any Hazardous Materials to, at or upon: (i) any location other than a site
lawfully permitted to receive such Hazardous Materials, (ii) any Facilities
except for the use of household cleaners and office products in the ordinary
course of business in compliance with applicable Environmental Laws, or (iii)
any site which, pursuant to CERCLA or any similar state Law, has been placed on
the National Priorities List, CERCLIS or their state equivalents. There has not
occurred during the period either of the Companies or any of the Company
Subsidiaries operated or possessed any Facility, nor is there presently
occurring, a Release, or threatened Release, of any Hazardous Materials on, into
or beneath the surface of, or adjacent to, any Facilities except for the use of
household cleaners and office products in the ordinary course of business in
compliance with applicable Environmental Laws.
3.18 EMPLOYEES
(a) Section 3.18 of the Disclosure Schedule contains a complete and
accurate list of the following information for each employee of the Companies
and each of the Company Subsidiaries: name; job title; base salary; bonus;
vacation accrued; service credited for purposes of vesting and eligibility to
participate under any employee benefit plan of any nature.
(b) To the knowledge of the Company Shareholder and the Companies, no
officer or employee of either of the Companies or any of the Company
Subsidiaries is a party to, or is otherwise bound by, any agreement or
arrangement, including any confidentiality, noncompetition, or proprietary
rights agreement, between such officer or employee and any other Person that
could adversely affect (i) the performance of his duties as an officer or
employee of either of the Companies or any of the Company Subsidiaries, or (ii)
the ability of either of the Companies or any of the Company Subsidiaries to
conduct its business.
(c) To the knowledge of the Company Shareholder or the Companies, no
employee of either of the Companies or any of the Company Subsidiaries is bound
by any agreement with any other Person that is violated or breached by such
employee performing the services he is performing for the Companies or Company
Subsidiaries.
(d) None of the Companies or Company Subsidiaries have had a "Plant
Closing" or a "Mass Layoff" within the meaning of the federal Workers Adjustment
and Retraining Notification Act of 1988 ("WARN") since December 1, 1996.
(e) The Companies and Company Subsidiaries have delivered to Parent or its
counsel prior to the date hereof true and complete copies of any employment
agreements and any
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procedures and policies relating to the employment of their employees and the
use of temporary employees and independent contractors by them (including
summaries of any procedures and policies that are unwritten).
(f) Section 3.18 of the Disclosure Schedule sets forth a true and complete
list of (i) all agreements with consultants who are individuals obligating
either of the Companies or any of the Company Subsidiaries to make annual cash
payments in an amount exceeding $25,000; and (ii) all agreements in excess of
$25,000 with respect to the services of independent contractors or leased
employees who are individuals or individuals doing business in a corporate form.
3.19 EMPLOYEE BENEFITS
(a) Except for the Employee Benefit Plans listed on Section 3.19 of the
Disclosure Schedule, the Companies and Company Subsidiaries (either individually
or collectively) do not maintain, have an obligation to contribute to or have
any actual or contingent liability with respect to any Employee Benefit Plan.
The Companies and Company Subsidiaries have delivered to Parent or its counsel
prior to the date hereof true and complete copies of (i) plan instruments and
amendments thereto for all Employee Benefit Plans (or written summaries of any
Employee Benefit Plans that are unwritten) and related trust agreements,
insurance and other contracts, summary plan descriptions, and summaries of
material modifications, and material communications distributed to the
participants of each Plan, (ii) to the extent annual reports on Form 5500 are
required with respect to any Employee Benefit Plan, the three most recent annual
reports and attached schedules for each Employee Benefit Plan as to which such
report is required to be filed and (iii) where applicable, the most recent (A)
opinion, notification and determination letters, (B) audited financial
statements, (C) actuarial valuation reports and (D) nondiscrimination tests
performed under the Code (including 401(k) and 401(m) tests) for each Employee
Benefit Plan.
(b) Except as set forth on Section 3.19(b) of the Disclosure Schedule,
neither of the Companies nor any of the Company Subsidiaries or any of their
ERISA Affiliates maintains or has ever maintained or contributes to or has ever
contributed to an Employee Benefit Plan subject to Title IV of ERISA (including
a multiemployer plan as defined in ERISA Section 3((37)) and no facts exist
under which any of them could incur any liability under Title IV of ERISA.
(c) With respect to each Employee Benefit Plan required to be listed on
Section 3.19 of the Disclosure Schedule, (i) no party in interest or
disqualified person (as defined in Section 3(14) of ERISA and Section 4975 of
the Code, respectively) has at any time engaged in a transaction which could
subject Parent, any of the Merger Subs or the Companies or Company Subsidiaries,
directly or indirectly, to a tax, penalty or liability for prohibited
transactions imposed by ERISA or the Code and (ii) no fiduciary (as defined in
Section 3(21) of ERISA) with respect to any Employee Benefit Plan, for whose
conduct either of the Companies or any of the Company Subsidiaries could have
any liability (by reason of indemnities or otherwise), has breached any of the
responsibilities or obligations imposed upon the fiduciary under Title I of
ERISA.
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(d) Each Employee Benefit Plan required to be listed on Section 3.19 of the
Disclosure Schedule which is a "welfare plan" within the meaning of Section 3(1)
of ERISA and which provides health, disability or death benefits is fully
insured and does not utilize a trust intended to be exempt from tax pursuant to
Section 501 of the Code and none of the Companies or the Company Subsidiaries is
obligated to directly pay any such benefits or to reimburse any third Person
payor for the payment of such benefits.
(e) Each Employee Benefit Plan required to be listed on Section 3.19 of the
Disclosure Schedule which is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA (a "PENSION PLAN") and which is subject to
Sections 201, 301 or 401 of ERISA has received a favorable determination letter
from the Internal Revenue Service covering all amendments required by the Tax
Reform Act of 1986 and prior legislation and there are no circumstances that are
likely to result in revocation of any such favorable determination letter.
Except as noted on Section 3.19 of the Disclosure Schedule, no Pension Plan has
assets other than securities listed on a public exchange, mutual fund shares
registered under federal law, publicly traded debt or government debt
instruments, or participant loans extended in accordance with Plan Terms. Each
Employee Benefit Plan required to be listed on Section 3.19 of the Disclosure
Schedule is and has been operated in material compliance with its terms and all
applicable Laws, Orders or governmental rules and regulations currently in
effect with respect thereto, and by its terms can be amended and/or terminated
at any time.
(f) Except as set forth on Section 3.19(f) of the Disclosure Schedule, with
respect to each Employee Benefit Plan, no event or omission has occurred, and
there exists no condition, claim, or set of circumstances in connection with
which Company or Company Subsidiaries could be subject to any liability, loss,
damages, taxes, penalties or expense.
(g) The consummation of the transactions contemplated by this Agreement
will not, alone or together with any other event, (i) entitle any employee or
former employee of either of the Companies or any of the Company Subsidiaries to
any payment, (ii) result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits or
compensation payable in respect of any employee or former employee or (iii)
result in any parachute payment under Section 280G of the Code, whether or not
such payment is considered reasonable compensation for services rendered.
(h) The Companies and the Company Subsidiaries will take all actions within
their control to ensure that all actions required to be taken by a fiduciary of
any Employee Benefit Plan in order to effectuate the transaction contemplated by
this Agreement shall comply with the terms of such Plan, ERISA and other
applicable Laws.
(i) No Employee Benefit Plan required to be listed on Section 3.19 of the
Disclosure Schedule provides benefits, including, without limitation, death or
medical benefits (through insurance or otherwise) with respect to any employee
or former employee of either of the Companies or any of the Company Subsidiaries
beyond their retirement or other termination of service other than (i) coverage
mandated by applicable Law, (ii) retirement or death benefits
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under any Pension Plan, (iii) disability benefits under any welfare plan that
have been fully provided for by insurance or otherwise, (iv) deferred
compensation benefits accrued as liabilities on the consolidated books of either
of the Companies or (v) benefits in the nature of severance pay.
(j) No Employee Benefit Plan required to be listed on Section 3.19 of the
Disclosure Schedule is a "multiple employer plan" as described in Section 3(40)
of ERISA or Section 413(c) of the Code.
(k) Neither of the Companies nor any of the Company Subsidiaries has
proposed, agreed to or announced any changes to any Employee Benefit Plan
required to be listed on Section 3.19 of the Disclosure Schedule that would
cause an increase in benefits under any such Employee Benefit Plan (or the
creation of new benefits or plans) or to change any employee coverage which
would cause an increase in the expense of maintaining any such plan.
3.20 LABOR RELATIONS
(a) No condition or state of facts or circumstances exists which could
materially adversely affect either of the Companies' or any of the Company
Subsidiaries' relations with its employees, including the consummation of the
transactions contemplated by this Agreement.
(b) Each of the Companies and the Company Subsidiaries is in compliance in
all material respects with all applicable Laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
and none of them is engaged in any unfair labor practice.
(c) No collective bargaining agreement with respect to the business of
either of the Companies or any of the Company Subsidiaries is currently in
effect or being negotiated. Neither of the Companies nor any of the Company
Subsidiaries has encountered any labor union or collective bargaining organizing
activity with respect to its employees since December 1, 1996. Neither of the
Companies nor any of the Company Subsidiaries has any obligation to negotiate
any such collective bargaining agreement, and, to the knowledge of the Company
Shareholder and the Companies, there is no indication that the employees of
either of the Companies or any of the Company Subsidiaries desire to be covered
by a collective bargaining agreement.
(d) There are no strikes, slowdowns, work stoppages or other labor troubles
pending or, to the knowledge of the Company Shareholder and the Companies,
threatened with respect to the employees of any of the Companies or the Company
Subsidiaries, nor has any of the above occurred or, to the knowledge of the
Companies or the Company Shareholder, been threatened.
(e) There is no representation claim or petition pending before the
National Labor Relations Board or any state or local labor agency and, to the
knowledge of the Companies or the Company Shareholder, no question concerning
representation has been raised or threatened respecting the employees of any of
the Companies or the Company Subsidiaries.
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(f) There are no complaints or charges against either of the Companies or
any of the Company Subsidiaries pending before the National Labor Relations
Board or any state or local labor agency and, to the knowledge of the Company
Shareholder and the Companies, no complaints or charges have been filed or
threatened to be filed against any of the Companies or the Company Subsidiaries
with any such board or agency.
(g) To the knowledge of the Company Shareholder and the Companies, no
charges with respect to or relating to the business of either of the Companies
or any of the Company Subsidiaries are pending before the Equal Employment
Opportunity Commission or any state or local agency responsible for the
prevention of unlawful employment practices.
(h) Section 3.20 of the Disclosure Schedule accurately sets forth all
unpaid severance which, as of the date hereof, is due or claimed, in writing, to
be due from any of the Companies or Company Subsidiaries to any Person whose
employment was terminated.
(i) Neither of the Companies nor any of the Company Subsidiaries has
received notice of the intent of any government body or Governmental Authority
responsible for the enforcement of labor or employment Laws to conduct an
investigation of either of the Companies or any of the Company Subsidiaries and
no such investigation is in progress.
(j) Neither of the Companies nor any of the Company Subsidiaries is and, to
the knowledge of the Company Shareholder and the Companies, no employee of the
Company is, in violation in any material respect of any employment agreement,
non-disclosure agreement, non-compete agreement or any other agreement regarding
an employee's employment with either of the Companies or any of the Company
Subsidiaries.
(k) Each of the Companies and Company Subsidiaries has paid all wages which
are due and payable to each of its employees and each of its independent
contractors.
(l) The Companies and Company Subsidiaries do not have and will not have at
the date of Closing, any contingent liabilities for monetary compensation for
sick leave, vacation, holiday pay, severance pay or similar items not set forth
in the Financial Statements, except for such obligations incurred in the
ordinary course of business since the date of their respective Interim Financial
Statement consistent with past practices.
(m) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not trigger any
severance pay obligation of either of the Companies or any of the Company
Subsidiaries under any Contract.
3.21 INTELLECTUAL PROPERTY
(a) As used herein, the term "INTELLECTUAL PROPERTY ASSETS" shall mean all
worldwide intellectual property rights which are (i) owned by any of the
Companies and Company Subsidiaries, or (ii) material to the conduct of the
business of one of the Companies or Company Subsidiaries as it is currently
conducted or as proposed to be conducted and are licensed or used
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in the business, including without limitation in both cases: (A) all trademarks,
service marks, trade names, common law trademarks, business names, Internet
domain names, trade dress, slogans, and the goodwill associated therewith, and
all registrations or applications therefor (collectively, "MARKS"); (B) all
patents and patent applications (collectively, "PATENTS"); (C) all copyrights in
both published works and unpublished works, including training manuals,
marketing and promotional materials, internal reports, business plans and any
other expressions, mask works and software, firmware and videos, whether
registered or unregistered, and all registrations or applications in connection
therewith (collectively, "COPYRIGHTS"); and (D) information which is considered
to be secret, confidential and proprietary, including all trade secrets,
know-how, confidential information, customer lists, technical information,
proprietary information, technologies, processes and formulae, source code,
object code, library functions, flow charts, algorithms, architecture,
structure, display screens and development tools, data, plans, drawings and blue
prints, whether tangible or intangible and whether stored, compiled, or
memorialized physically, electronically, photographically, or otherwise
(collectively, "SECRET INFORMATION").
(b) Rights--Each of the Companies and Company Subsidiaries, as applicable
(i) owns all right, title and interest in and to each of the Intellectual
Property Assets, free and clear of all Encumbrances and Liens, or (ii) licenses
or otherwise possesses legally valid and enforceable rights to use each of the
Intellectual Property Assets, and, in each case of clause (i) or (ii) the
Companies and Company Subsidiaries may transfer such rights as contemplated by
this Agreement. Each of the Companies and Company Subsidiaries has made all
necessary filings and recordations to protect and maintain its interest in the
Intellectual Property Assets except where the failure to so protect or maintain
does not relate to a material Intellectual Property Asset.
(c) Agreements--Section 3.21(c) of the Disclosure Schedule contains a true,
correct and complete list and summary description, including any royalties paid
or received by any of the Companies or Company Subsidiaries, of all Contracts
relating to the Intellectual Property Assets to which it is a party or by which
it is bound. Other than as set forth on Section 3.21(c) of the Disclosure
Schedule, neither of the Companies nor any of the Company Subsidiaries is, nor
will it be as a result of the execution and delivery of this Agreement or the
performance of its obligations hereunder, in breach or violation of any
agreement described on Section 3.21(c) of the Disclosure Schedule. Each license
of Intellectual Property Assets listed in Section 3.21(c) is valid, subsisting,
and enforceable, and shall continue in effect on its current terms upon
consummation of the transactions contemplated by this Agreement.
(d) Patents--(i) Section 3.21(d) of the Disclosure Schedule contains a
true, correct and complete list of all Patents; (ii) all Patents are valid and
subsisting and all maintenance fees, annuities and the like have been paid;
(iii) to the knowledge of the Company Shareholder and the Companies, none of the
Patents is infringed; and (iv) none of the Patents has been challenged or
threatened in any way by any Person, and none of the products or technology
used, sold, offered for sale or licensed or proposed for use, sale, offer for
sale or license by either of the Companies or any of the Company Subsidiaries
infringes or is alleged to infringe any rights of any Person.
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(e) Trademarks--(i) Section 3.21(e) of the Disclosure Schedule contains a
true, correct and complete list of all Marks; (ii) all Marks are valid and
subsisting; (iii) to the knowledge of the Company Shareholder and the Companies,
none of the Marks is infringed or diluted, (iv) none of the Marks has been
opposed, challenged or threatened in any way by any Person, and no claims exist
against the use by either of the Companies or any of the Company Subsidiaries of
any Marks; (v) all materials encompassed by the Marks have been marked with
appropriate trademark and registration notices; and (vi) all uses of registered
Marks are in conformance with applicable statutory and common law so as not to
compromise the strength, good will, and integrity of the Marks.
(f) Copyrights--(i) Section 3.21(f) of the Disclosure Schedule contains a
true, correct and complete list of all presently registered Copyrights; (ii) all
the Copyrights owned by either of the Companies or any of the Company
Subsidiaries which are material to the business of the Companies, whether or not
registered, are valid and enforceable; (iii) to the knowledge of the Company
Shareholder and the Companies, none of the Copyrights is infringed or has been
challenged or threatened in any way; (iv) no claims exist against the use either
of the Companies or any of the Company Subsidiaries of any writings or other
expressions used in the business of either of the Companies or any of the
Company Subsidiaries as currently conducted or as proposed to be conducted; and
(v) all works material to the business of the Companies encompassed by the
Copyrights have been marked with appropriate copyright notices.
(g) Secret Information--Each of the Companies and the Company Subsidiaries
has taken reasonable precautions to protect the secrecy, confidentiality and
value of its Secret Information. To the knowledge of the Companies or Company
Shareholder, the Secret Information has not been used, divulged or appropriated
either for the benefit of any Person (other than the Companies or Company
Subsidiaries) or to the detriment of the Companies or Company Subsidiaries. None
of the Secret Information is subject to any material adverse claim or, to the
knowledge of the Company Shareholder or the Companies, has been challenged or
threatened in any way. Reasonably appropriate policies are in place to protect
the continued secrecy, confidentiality and value of its Secret Information,
including but not limited to: appropriate marking of Secret Information as
"proprietary" and/or "confidential;" appropriate limiting of access to Secret
Information by employees on a "need-to-know" basis; and appropriate
confidentiality provisions in agreements executed by employees, contractors,
joint venturers and any and all Persons potentially or actually having access to
Secret Information.
(h) No Restrictions--To the knowledge of the Company Shareholder and the
Companies, no Intellectual Property Asset is subject to any outstanding Order,
Proceeding (other than pending applications for patent, trademark registration
or copyright registration) or stipulation restricting in any manner the
licensing thereof by the Companies or the Company Subsidiaries. Neither of the
Companies nor any Company Subsidiaries has entered into any agreement to
indemnify any other person against any charge of infringement of any
Intellectual Property Asset, other than (i) the distribution agreements listed
in Section 3.15(a)(viii) of the Disclosure Schedule and (ii) indemnification as
part of the sale or licensing of the products of the Companies in the ordinary
course of business.
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(i) Nondisclosure--All employees, contractors, agents and consultants of
the Companies and the Company Subsidiaries have executed a nondisclosure and
assignment of inventions agreement in the form attached as Section 3.21(i) of
the Disclosure Schedule to protect the confidentiality and to vest in the
Companies and the Company Subsidiaries exclusive ownership of such Intellectual
Property Assets. To the knowledge of the Company Shareholder, Companies, and the
Company Subsidiaries, no employee, contractor, agent or consultant of the
Companies and the Company Subsidiaries has used any trade secrets or other
confidential information of any other person in the course of their work for the
Companies or the Company Subsidiaries. To the knowledge of the Company
Shareholder, Companies and Company Subsidiaries, neither of the Companies nor
any of the Company Subsidiaries has written or oral agreements with employees,
contractors agents or consultants with respect to the ownership of inventions,
trade secrets or other works created by them as a result of which any such
employee, contractor, agent or consultant may have rights to the portions of the
Intellectual Property Assets so created by such individual.
(j) Agency Conflicts--To the knowledge of the Company Shareholder and the
Companies, no officer, employee, contractor, agent or consultant of the
Companies or the Company Subsidiaries is, or is now expected to be, in violation
of any term of any employment contract, patent disclosure agreement, proprietary
information agreement, noncompetition agreement, nonsolicitation agreement,
confidentiality agreement, or any other similar contract or agreement or any
restrictive covenant relating to the right of any such officer, employee,
contractor, agent or consultant to be employed or engaged by any of the
Companies or Company Subsidiaries because of the nature of the business
conducted or to be conducted by it or relating to the use of trade secrets or
proprietary information of others, and to the Company's knowledge and belief,
the continued employment or retention of its officers, employees, contractors,
agents or consultants does not subject any of the Companies or Company
Subsidiaries to any liability with respect to any of the foregoing matters.
(k) Source Code Escrow--Except as disclosed on Section 3.21 (k) of the
Disclosure Schedule, neither of the Companies nor any of the Company
Subsidiaries has deposited, or is obligated to deposit, any source code
regarding its products into any source code escrows or similar arrangements and
neither of the Companies nor any of the Company Subsidiaries is under any
contractual or other obligation to disclose the source code or any other
material proprietary information included in or relating to its products.
3.22 CERTAIN PAYMENTS
Neither of the Companies nor any of the Company Subsidiaries nor any
director, officer, agent or employee of any of the Companies or the Company
Subsidiaries, or to the knowledge of the Company Shareholder and the Companies,
any other Person associated with or acting for or on behalf of any of the
Companies or the Company Subsidiaries, has directly or indirectly (a) made any
contribution, gift, bribe, rebate, payoff, influence payment, kickback or other
payment to any Person, private or public, regardless of form, whether in money,
property or services in violation of the Foreign Corrupt Practices Act or any
similar Law (i) to obtain
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favorable treatment in securing business, (ii) to pay for favorable treatment
for business secured, or (iii) to obtain special concessions, or for special
concessions already obtained, for or in respect of any of the Companies or the
Company Subsidiaries or any Affiliate thereof, (b) established or maintained any
fund or asset of either of the Companies or any of the Company Subsidiaries that
has not been recorded in the consolidated books and records of the Companies.
3.23 RELATIONSHIPS WITH RELATED PERSONS
Except as disclosed on Section 3.23 of the Disclosure Schedule, no officer,
director or employee of any of the Sellers, the Companies or Company
Subsidiaries, nor any spouse or child of any of them or any Person associated
with any of them ("RELATED PERSON"), has any interest in any assets or
properties used in or pertaining to the business of either of the Companies or
any of the Company Subsidiaries. Since December 1, 1996 none of the officers,
directors or employees any of the Sellers, the Companies or Company Subsidiaries
nor any Related Person has owned, directly or indirectly, and whether on an
individual, joint or other basis, any equity interest or any other financial or
profit interest in a Person (other than less than two percent (2%) of the
outstanding capital stock of a Person subject to the reporting requirements of
the Exchange Act) that has (i) had business dealings with any of the Companies
or Company Subsidiaries, or (ii) engaged in competition with any of the
Companies or Company Subsidiaries. Except as disclosed on Section 3.23 of the
Disclosure Schedule, no officer, director or employee of any of the Sellers, the
Companies or Company Subsidiaries nor a Related Person is a party to any
Contract with, or has any claim or right against, or owes any amounts to, any of
the Companies or Company Subsidiaries.
3.24 BROKERS OR FINDERS
Except as set forth on Section 3.24 of the Disclosure Schedule, none of the
Companies nor Company Subsidiaries or any of their agents has incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or financial advisory services or other similar payment
in connection with this Agreement or the Transaction Documents or the
transactions contemplated hereby or thereby.
3.25 OUTSTANDING INDEBTEDNESS
Section 3.25 of the Disclosure Schedule sets forth as of November 30, 1999
(a) the amount of all indebtedness for borrowed money of either of the Companies
or any of the Company Subsidiaries then outstanding (including (i) the interest
rate applicable thereto, (ii) any Encumbrances or Liens which relate to such
indebtedness and (iii) the name of the lender or the other payee of each such
indebtedness), (b) the amount of all lending and commitments to lend and (c) the
amount of all guarantees or sureties of the Companies with respect to the
obligations of any Person. Complete and accurate copies of all such agreements
have been delivered to Parent.
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3.26 CUSTOMERS AND SUPPLIERS
Section 3.26 of the Disclosure Schedule lists every Material Customer or
Material Supplier of each of the Companies and the dollar amount of business
with that Person. Since April 1, 1998, neither of the Companies has experienced
any termination, cancellation, limitation or modification or change in any
business relationship with any Material Supplier or Material Customer, nor have
either of the Companies received written notice or otherwise had knowledge that
any Material Customer or Material Supplier intends to cease, or materially
reduce or change the terms of, doing business with either of the Companies or to
terminate any agreement with either of the Companies where such action has had
or would have a Material Adverse Effect on the business of that Company. For
purposes hereof, "Material Customers" means each of the 20 largest customers by
revenues during any of the last two fiscal years and "Material Suppliers" means
each of the 20 largest suppliers by purchases of goods or services during any of
the last two fiscal years.
3.27 YEAR 2000 COMPLIANCE
(a) For purposes of this Section, "Year 2000 Compliant" means that any
hardware, software or embedded system used in connection with a business is
designed to be used prior to, during, and after the calendar year 2000 without
material error relating to date data, provided that, when used in combination
with systems and programs of third parties, those third party systems and
programs are themselves year 2000 compliant. Specifically, such hardware,
software or embedded system:
(i) will not provide invalid or incorrect results as a result of date
data, specifically including date data which represents or references different
centuries or more than one century;
(ii) has been designed to ensure Year 2000 compatibility, including date
data century recognition, calculations which accommodate same century and
multicentury formulas and date values, and date data interface values that
reflect the century;
(iii) is designed to be used prior to, during and after the Year 2000, and
the systems will operate during each such time period without error relating to
date data specifically including any error relating to, or the product of, date
data which represents or references different centuries;
(iv) will allow manipulation of date data free of error over the range of
dates that the systems are expected to handle;
(v) will allow explicit century values to be correctly stored and passed
across all applicable interfaces (including user interfaces); and
(vi) will provide that all leap year values be correctly calculated and
processed across all applicable interfaces (including user interfaces).
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(b) Company Shareholder and the Companies have taken the following actions
with respect to the businesses and operations of the Companies and Company
Subsidiaries:
(i) they have established project teams within each company responsible
for addressing (A) software created by the Companies and Company Subsidiaries
and sold to customers, (B) hardware, software and embedded systems used for
internal business operations, (C) hardware, software and embedded systems used
by employees in performance of their duties, (D) other systems provided by third
parties such as facilities, and (E) problems with the supply chain, including
vendors, shippers, and others;
(ii) they have developed a detailed plan and timetable, including
development of contingency plans, to become Year 2000 Compliant with respect to
each of the areas listed in clause (i);
(iii) they have committed adequate resources to support and implement the
Year 2000 plans of the Companies and the Company Subsidiaries;
(iv) they have tested all products to determine if they are Year 2000
Compliant, and have documented the actions taken to test for such compliance and
to modify products which they have determined to make Year 2000 Compliant;
(v) after such testing and modification, they have advised customers which
releases or versions of their products are or are not Year 2000 Compliant; and
(vi) they have worked with customers whose products are not Year 2000
Compliant to assist those customers in developing a solution, through upgrade to
a newer version or release, custom modification or otherwise.
(c) Based upon actions described in paragraph (b) above:
(i) the products listed on Section 3.27(c)(i) of the Disclosure Schedule
are Year 2000 Compliant;
(ii) to the knowledge of the Company Shareholder and Companies, the
Companies and the Company Subsidiaries will be Year 2000 Compliant in all
material respects in a timely manner; and
(iii) there are no present complaints or disputes with customers or any
other parties concerning handling of issues related to making their products
Year 2000 Compliant.
3.28 PAYABLES
Since the date of the September 30, 1999 Financial Statements there has not
been a material adverse change in the amount of accounts payable or a material
adverse change in the
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delinquency of accounts payable of either of the Companies or any of the Company
Subsidiaries (either individually or in the aggregate).
3.29 INVENTORIES
(a) All inventories of raw materials, supplies, work in progress and
finished goods of the Companies and the Company Subsidiaries are of good, usable
and merchantable quality in all material respects and do not include obsolete or
discontinued items except to the extent reflected in the Financial Statements.
All such inventories are of such quality as to meet the quality control
standards of the Companies and the Company Subsidiaries and any applicable
governmental quality control standards, all such finished goods are saleable as
current inventories at the current prices of the Companies and the Company
Subsidiaries in the ordinary course of business, all such inventories are
recorded on the books at the lower of cost or market value determined in
accordance with GAAP and no write-down in inventory has been made or should have
been made except pursuant to GAAP during the past two years.
(b) Purchase commitments for raw materials and parts are not in excess of
normal requirements and none are at prices in excess of current market prices.
Since the date of the applicable September 30, 1999 Financial Statements, no
inventory items have been sold or disposed of except through sales in the
ordinary of business at prices no less than prevailing market prices.
3.30 PRODUCT WARRANTIES; PRODUCT LIABILITY
(a) Attached to Section 3.30 of the Disclosure Schedule are complete and
correct copies of the standard terms and conditions of sale or lease for each of
the products or services of the Companies and the Company Subsidiaries
(containing applicable guaranty, warranty and indemnity provisions). Except as
disclosed on Section 3.30 of the Disclosure Schedule, as required by Law or as
set forth in such standard terms and conditions, no product manufactured, sold,
leased or delivered by, or service rendered by or on behalf of, the Companies
and the Company Subsidiaries is subject to any guaranty, warranty or other
indemnity, express or implied, beyond such standard terms and conditions.
(b) Section 3.30 of the Disclosure Schedule sets forth the aggregate
expenses incurred by the Company's customer support and service functions in
fulfilling its obligations under its guaranty, warranty and right of return
provisions during the periods covered by the Financial Statements and the
Interim Financial Statements, and the Company Shareholder and the Companies know
of no reason why such expenses should significantly increase as a percentage of
sales in the future.
(c) Except as set forth in Section 3.30 of the Disclosure Schedule, there
are no existing or, to the knowledge of the Company Shareholder and the
Companies threatened, claims against either of the Companies or any of the
Company Subsidiaries for services or merchandise which are defective or fail to
meet any service or product warranties (including claims that a product is not
year 2000 Compliant) other than in the ordinary course of business consistent
with past
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experience. Except as set forth in Section 3.30 of the Disclosure Schedule, no
claim has been asserted against any of the Companies or Company Subsidiaries
since April 1, 1999 for renegotiation or price redetermination of any completed
business transaction.
(d) The Companies' or Company Subsidiaries' products are free from known
significant defects and, to the knowledge of the Company Shareholder and the
Companies, conform in all material respects to the specifications and
documentation furnished to the Companies' or Company Subsidiaries' customers.
3.31 FINANCIAL SERVICE RELATIONS AND POWERS OF ATTORNEY
All of the arrangements that the Companies or Company Subsidiaries have
with any bank depository institution or other financial services entity, whether
or not in their names, are completely and accurately described on Section 3.31
of the Disclosure Schedule, indicating with respect to each of such arrangements
the type of arrangement maintained (such as checking account, borrowing
arrangements, safe deposit box, etc.) and the current balance as of the date
reported, banking institution and person or persons authorized in respect
thereof. The Companies and Company Subsidiaries have no outstanding power of
attorney.
3.32 REGULATORY CORRESPONDENCE
The Companies have made available to the Parent true and correct copies of
any and all material correspondence from and to any federal, governmental or
regulatory agencies or bodies since April 1, 1997.
3.33 COMPANY ACTION
(a) Prior to the Closing, the Board of Directors of each of the Companies,
at a meeting duly called and held, or through an action by written consent, will
have (i) approved the Merger to which it is a party in accordance with the
provisions of the UBCA, (ii) approved the Transaction Documents to which each is
a party, (iii) authorized the execution and delivery of the Transaction
Documents to which it is a party, and (iv) directed that the Merger to which it
is a party be submitted to the Company Shareholder for its approval and resolved
to recommend that Company Shareholder vote in favor of the approval of that
Merger.
(b) At the Closing the Company Shareholder will have approved the Mergers
through an action by written consent in accordance with the provisions of the
UBCA.
3.34 DISCLOSURE
No representation or warranty of the Companies in this Agreement as
modified by statements in the Disclosure Schedule is inaccurate in any material
respect or to the knowledge of the Company Shareholder or the Companies omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.
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3.35 FADA BUSINESS
For purposes of Article 3, all references to ASC at the time of execution
of this Agreement or at the Closing shall be interpreted to refer to ASC as it
shall exist after the disposition of the FADA Business; provided that any matter
related to FADA Business which may give rise to any liability or loss,
contingent or otherwise, by ASC after the disposition of the FADA Business shall
be disclosed under the appropriate section of Article 3.
4. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBS
Parent and Merger Subs hereby, jointly and severally, represent and warrant
to the Companies and the Company Shareholder as follows:
4.1 ORGANIZATION AND GOOD STANDING
Each of the Merger Subs is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Each of Parent and Merger Subs has full corporate
power and authority to conduct its business as it is now being conducted and to
own or use the assets and properties that it purports to own or use. Each of
Parent and Merger Subs is duly qualified to do business as a foreign corporation
and is in good standing under the Laws of each state or other jurisdiction in
which either the ownership or use of the assets or properties owned or used by
it, or the nature of the activities conducted by it, requires such
qualification, except where the failure to be so qualified will not have a
Material Adverse Effect.
4.2 AUTHORITY; NO CONFLICT
(a) Parent and Merger Subs each has the right, power, authority and
capacity to execute and deliver this Agreement and the Transaction Documents to
which Parent or Merger Subs are a party, to consummate the Merger and the other
transactions contemplated hereby and thereby and to perform their respective
obligations under this Agreement and the Transaction Documents to which Parent
or Merger Subs are a party. This Agreement has been duly authorized and
approved, executed and delivered by Parent and Merger Subs and constitutes the
legal, valid and binding obligation of Parent and Merger Subs, enforceable
against them in accordance with its terms. Upon the execution and delivery by
Parent and Merger Subs of the Transaction Documents to which Parent or each of
the Merger Subs is a party, such Transaction Documents will constitute the
legal, valid and binding obligations of Parent and Merger Subs, enforceable
against them in accordance with their respective terms.
(b) Neither the execution and delivery of this Agreement or any Transaction
Document by Parent or Merger Sub nor the consummation or performance by Parent
or Merger Subs of the Merger or any of the other transactions contemplated
hereby or thereby, including issuance of the
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Parent Shares pursuant to this Agreement, will, directly or indirectly (with or
without notice or lapse of time or both):
(i) contravene, conflict with, or result in a violation or breach of
(A) any provision of the Organizational Documents of Parent or Merger Subs, (B)
any resolution adopted by the board of directors or the shareholders of Parent
or Merger Subs, (C) any legal requirement or any Order, award, decision,
settlement or process to which Parent or Merger Subs or any of the assets or
properties owned or used by them may be subject, or (D) any Governmental Permit
held by Parent or Merger Subs, excluding from clauses (C) and (D) any
contravention, conflict, violation or breach which would not, either
individually or in the aggregate, have a Material Adverse Effect or materially
impair or preclude the Parent's or the Merger Subs' ability to consummate the
Mergers or the transactions contemplated hereby;
(ii) result in a breach of or constitute a default, give rise to a
right of termination, cancellation or acceleration, create any entitlement to
any payment or benefit, or require the consent or approval of or any notice to
or filing with any third Person, under any material Contract to which Parent or
either of the Merger Subs is a party or by which their respective assets or
properties are bound, or require the consent or approval of or any notice to or
filing with any Governmental Authority (other than (A) filings and termination
of the waiting period pursuant to the HSR Act and (B) filings pursuant to
federal or state securities laws in connection with the sale of the Parent
Shares, all of which filings have been or will be made by the Parent) to which
either Parent, Merger Subs or their respective assets or properties are subject
except for any breaches, defaults, rights of termination, cancellation or
acceleration, entitlements, consents, approvals, notices or filings which would
not, either individually or in the aggregate, have a Material Adverse Effect or
materially impair or preclude the Parent's or the Merger Subs' ability to
consummate the Mergers or the transactions contemplated hereby; or
(iii) result in the imposition or creation of any Encumbrance or Lien
upon or with respect to any of the assets or properties owned or used by Parent
or Merger Subs except for any imposition or creation which would not, either
individually or in the aggregate, have a Material Adverse Effect or materially
impair or preclude the Parent's or the Merger Subs' ability to consummate the
Mergers or the transactions contemplated hereby.
4.3 CAPITALIZATION; PARENT SHARES
(a) The authorized capital stock of Parent consists of 1,000,000 shares of
preferred stock, $.01 par value per share, of which as of the date of this
Agreement no shares are issued or outstanding, and 21,500,000 shares of Parent
Common Stock, of which 12,637,600 shares were issued and outstanding as of
November 30, 1999. All of the authorized and issued capital stock of Merger Sub
is owned of record and beneficially by Parent.
(b) The Parent Shares issuable as a result of the Merger have been duly
authorized and at the Effective Time will be validly issued, fully paid and
nonassessable. Each share of Parent
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Common Stock to be issued at the Effective Time will be accompanied by one
Parent Purchase Right.
4.4 FILINGS WITH THE COMMISSION
(a) Parent has delivered or made available to the Company a true, correct
and complete copy of its Annual Report on Form 10-K for the year ended September
30, 1998 and Quarterly Reports on Form 10-Q for the quarters ended December 31,
1998, March 31, 1999 and June 30, 1999 (collectively, the "PARENT SEC REPORTS").
Each of the Parent SEC Reports has been timely filed pursuant to the Exchange
Act.
(b) Each of the Parent SEC Reports complied as to form in all material
respects with the requirements of the Exchange Act in effect on the date
thereof. Each of the Parent SEC Reports, when filed pursuant to the Exchange
Act, did not contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
(c) Each of the Parent financial statements (including the related notes)
included in the Parent SEC Report presents fairly, in all material respects, the
consolidated financial position and consolidated results of operations and cash
flows of Parent as of the respective dates or for the respective periods set
forth therein, all in conformity with GAAP consistently applied during the
periods involved except as otherwise noted therein, and subject, in the case of
any unaudited interim financial statements included therein, to normal year-end
adjustments and to absence of complete footnotes.
4.5 NO MATERIAL ADVERSE CHANGE
Since March 31, 1999, there has not been a change which has had a Material
Adverse Effect on Parent and its Subsidiaries, taken as a whole, and no event
has occurred or circumstance exists that could reasonably be expected to result
in a Material Adverse Effect on Parent and its Subsidiaries, taken as a whole,
provided that the effect of changes in general economic or financial conditions
shall not be considered a Material Adverse Effect.
4.6 LEGAL PROCEEDINGS
There is no pending Proceeding against Parent or either Merger Sub that
challenges, or that may have the effect of preventing, delaying, making illegal,
or otherwise interfering with, any of the transactions contemplated hereby, or
that otherwise could reasonably be expected to result in a Material Adverse
Effect on Parent and its Subsidiaries, taken as whole. To the knowledge of
Parent, no such Proceeding has been threatened.
4.7 BROKERS OR FINDERS
Neither Parent nor Merger Subs nor any of their agents has incurred any
obligation or liability, contingent or otherwise, for brokerage or finders' fees
or agents' commissions or
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financial advisory services or other similar payment in connection with this
Agreement or the Transaction Documents or the transactions contemplated hereby
or thereby.
5. COVENANTS OF SELLERS
The Company Shareholder hereby covenants and agrees that it will do or will
cause the Companies to perform the obligations of Sections 5.1-5.11 and Daifuku
Japan covenants and agrees to perform its obligations under Section 5.12:
5.1 NORMAL COURSE
From the date hereof until the Effective Time, the Companies shall, and
shall cause the Company Subsidiaries to: (a) maintain its corporate existence in
good standing; (b) maintain the general character of its business; (c) maintain
in effect all of its presently existing insurance coverage (or substantially
equivalent insurance coverage); (d) preserve intact in all material respects its
business organization, preserve its goodwill and the confidentiality of its
business know-how, exercise commercially reasonable efforts to keep available to
the Companies or the Company Subsidiaries the services of its current officers
and employees and preserve its present material business relationships with its
collaborators, licensors, customers, suppliers and other Persons with which the
Companies or the Company Subsidiaries has material business relations; and (e)
in all respects conduct its business only in the usual and ordinary manner
consistent with past practice, including performance of all Contracts. Nothing
in this Section 5.1 shall be deemed to prohibit the transfer by ASC of its FADA
Business to Company Shareholder in accordance with Section 8.4.
5.2 CONDUCT OF BUSINESS
From the date hereof until the Effective Time, the Company Shareholder
shall not permit the Companies or the Company Subsidiaries, except as
contemplated by this Agreement, to directly or indirectly, do, or propose to do,
any of the following without the prior written consent of Parent, which consent
shall not be unreasonably withheld:
(a) amend or otherwise modify its Organizational Documents;
(b) issue, sell, dispose of or Encumber or authorize the issuance, sale,
disposition or Encumbrance of, or grant or issue any option, warrant or other
right to acquire or make any agreement of the type referred to in Section 3.3
with respect to, any shares of its capital stock or any other of its securities
or any security convertible or exercisable into or exchangeable for any such
shares or securities, or alter any term of any of its outstanding securities or
make any change in its outstanding shares of capital stock or its
capitalization, whether by reason of a reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;
(c) Encumber any material assets or properties of the Companies or the
Company Subsidiaries;
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(d) declare, set aside, make or pay any dividend or other distribution to
any shareholder with respect to its capital stocks other than (i) the
distribution of the FADA Business contemplated by Section 5.1 hereof and (ii)
distributions of not more than 50% of net income of the Companies for the fiscal
year ended March 31, 1999 (or approximately $159,000) from the Companies to the
Company Shareholder provided that the effect of such distributions under clauses
(i) and (ii) shall be taken into account in calculating the Closing Net Tangible
Book Value and the purchase price adjustment in Section 2.8.
(e) redeem, purchase or otherwise acquire any capital stock or other
securities of the Companies or the Company Subsidiaries;
(f) increase the compensation or other remuneration or benefits payable or
to become payable to any director or officer of the Companies or the Company
Subsidiaries, or increase the compensation or other remuneration or benefits
payable or to become payable to any of its other employees or agents, except for
increases in salary and payment of performance bonuses in the ordinary course of
business consistent with past practice in either case as described in Section
5.2(f) of the Disclosure Schedule;
(g) adopt or (except as otherwise required by law) amend or make any
unscheduled contribution to any Employee Benefit Plan for or with employees, or
enter into any collective bargaining agreement;
(h) terminate or modify any Contract requiring future payments to or from
the Companies or the Company Subsidiaries, individually or in the aggregate, in
excess of $10,000, except for termination of Contracts upon their expiration
during such period in accordance with their terms;
(i) create, incur, assume or otherwise become liable for (A) any
indebtedness in an aggregate amount (among all of the Companies and the Company
Subsidiaries) in excess of $50,000, or (B) blanket inventory purchases in an
aggregate amount (among all of the Companies and the Company Subsidiaries) in
excess of $50,000 (for purposes of this part of Section 5.2(i), obligations or
liabilities that are paid, discharged or satisfied under Section 5.2(j) need not
be included in determining whether the foregoing maximum amounts have been
reached);
(j) pay, discharge or satisfy any obligation or liability, absolute,
accrued, contingent or otherwise, whether due or to become due, in an aggregate
amount (among any of the Companies and the Company Subsidiaries) in excess of
$50,000, except for liabilities incurred in the ordinary course of business
prior to the date hereof;
(k) guarantee or endorse any obligation or the net worth of any Person,
except for endorsements of negotiable instruments for collection in the ordinary
course of business;
(l) sell, transfer, lease or otherwise dispose of any of its assets or
properties, except in the ordinary course of business, consistent with past
practices and at arm's length; except as expressly contemplated by this
Agreement;
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(m) cancel, compromise, release or waive any material debt, claim or right;
(n) make any loan or advance to any Person other than travel and other
similar routine advances in the ordinary course of business and consistent with
past practice, or acquire any capital stock or other securities or any ownership
interest in, or substantially all of the assets of, any other business
enterprise;
(o) make any material capital investment or expenditure or capital
improvement, addition or betterment;
(p) change its method of accounting or the accounting principles or
practices utilized in the preparation of the Financial Statements, other than as
required by GAAP;
(q) institute or settle any Proceeding before any Governmental Authority
relating to it or its assets or properties;
(r) adopt a plan of dissolution or liquidation with respect to either of
the Companies or any Company Subsidiaries;
(s) enter into any Contract, except Contracts made in the ordinary course
of business consistent with past practices;
(t) make any new election with respect to Taxes or any change in current
elections with respect to Taxes, or settle or compromise any federal, state,
local or foreign Tax liability or agree to an extension of a statute of
limitations;
(u) take or omit to take any action that would constitute a material
violation of or material default under, or waive any rights under, any material
Contract; or
(v) enter into any commitment to do any of the foregoing, or any action
which would make any of the representations or warranties of the Companies
contained in this Agreement untrue or incorrect in any material respect (subject
to the knowledge and materiality limitations set forth therein) or cause any
covenant, condition or agreement of the Companies in this Agreement not to be
complied with or satisfied in any material respect.
5.3 CERTAIN FILINGS
The Company Shareholder shall cooperate, and shall cause the Companies and
the Company Subsidiaries to cooperate, with Parent with respect to all filings
with Governmental Authorities that are required to be made by the Companies to
carry out the transactions contemplated by this Agreement. The Company
Shareholder shall assist and cause the Companies to assist Parent and Merger
Subs in making all such filings, applications and notices as may be necessary or
desirable in order to obtain the authorization, approval or consent of any
Governmental Authority which may be reasonably required or which Parent may
reasonably request in connection with the consummation of the transactions
contemplated hereby. Without
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limiting the generality of the foregoing, Company Shareholder shall promptly and
in good faith respond to any requests for additional information and documents
and provide any further necessary information and make any further necessary
filings under the HSR Act.
5.4 NOTIFICATION OF CERTAIN MATTERS
The Company Shareholder shall promptly notify Parent of (i) the occurrence
or non-occurrence of any fact or event of which it or the Companies has
knowledge which would be reasonably likely (A) to cause any representation or
warranty of the Company Shareholder contained in this Agreement to be untrue or
incorrect in any material respect at any time from the date hereof to the
Effective Time or (B) to cause any covenant, condition or agreement of the
Company Shareholder in this Agreement not to be complied with or satisfied in
any material respect and (ii) any failure of the Company Shareholder to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder in any material respect; provided, however, that no
such notification shall affect the representations or warranties of the Company
Shareholder, or the right of Parent and Merger Subs to rely thereon, or the
conditions to the obligations of Parent and Merger Subs, or the remedies
available hereunder to Parent or Merger Subs. The Company Shareholder shall give
prompt notice to Parent of any notice or other communication from any third
Person alleging that the consent of such third Person is or may be required in
connection with the transactions contemplated by this Agreement.
5.5 NO SOLICITATION
(a) From the date hereof until the earlier of (i) December 31, 1999, (ii)
termination of this Agreement by Parent or (iii) the Effective Time, the Sellers
and the Companies shall not, nor shall any of them permit any, officer,
director, shareholder, employee or agent of the Sellers or the Companies or any
Company Subsidiaries to solicit or encourage, or furnish information to, or
engage in any discussion with, any person in connection with any proposal for a
merger or other business combination or for the acquisition of a substantial
equity interest in either of the Companies or a substantial portion of either
Company's assets (an "Alternative Acquisition").
5.6 CERTAIN SECTION 401 (K) PLANS
Prior to Closing, Company Shareholder will become a sponsoring employer of
each of the Companies' Section 401(k) plans ("401(k) Plans") and will assume all
responsibility for maintenance of the 401(k) Plans after Closing. Each of the
401(k) Plans' participants whose employment transfers to Parent's controlled
group of businesses (i) will be 100% vested in account balances in the 401(k)
Plans (ii) will be provided payment and direct rollover elections for balances
in the 401(k) Plans as soon as administratively possible after the Closing Date;
and (iii) will be permitted to transfer loans from the 401(k) Plans, if any, to
a qualified plan of Parent.
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5.7 SUBORDINATION
Upon the request of Parent, the Company Shareholder and Daifuku Japan shall
enter into a Subordination Agreement with ABN AMRO substantially in the form of
EXHIBIT H hereto related to line of credit to be entered into with said bank.
5.8 INTEGRAM LICENSE AGREEMENT ASSIGNMENT AND INDEMNITY
When Parent, ASC and Company Shareholder reach a mutually acceptable
agreement on the commitment of ASC resources in support of the Integram License
Agreement, Company Shareholder shall use commercially reasonable efforts to
cause the Integram License Agreement to be assigned from ASC to an Affiliate of
Company Shareholder. Company Shareholder shall indemnify Parent in accordance
with the provisions of Article 10 for all claims against ASC or Parent arising
out of the Integram License Agreement for (i) conduct of any party occurring
prior to the Closing Date and (ii) conduct of any Affiliate of Company
Shareholder occurring after the Closing Date.
5.9 ASC AUDITED FINANCIAL STATEMENTS
On or before December 31, 1999, Company Shareholder shall deliver to Parent
the audited consolidated balance sheet of ASC as of September 30, 1999 and
related consolidated income statements and statements of cash flows for the six
months ended September 30, 1999.
5.10 TITLE AND SURVEY
Company Shareholder shall deliver to Parent evidence of title and a survey
relating to the ASI real property located at 000 Xxxx Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxx, in form and substance reasonably acceptable to Parent and its counsel.
5.11 SECTION 3.15(a)(i) TO DISCLOSURE SCHEDULES
On or before December 31, 1999, Company Shareholder shall have delivered to
Parent updated disclosures for Section 3.15(a)(i) of the Disclosure Schedules
dated as of or after December 7, 1999.
5.12 ACTION TO ASSURE INDEMNITY
Daifuku Japan agrees that for a period of five years after the Closing
Date, it will assure that either (i) the Company Shareholder shall maintain
either a net worth or unencumbered assets of at least $9 million (i) less the
amount of any claims previously paid under Article 10, or (ii) if Company
Shareholder ceases to meet that test, an undertaking by Daifuku Japan to be
liable for indemnification claims under Article 10 up to a maximum of $9 million
less the amount of any claims previously paid under Article 10.
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6. COVENANTS OF PARENT AND MERGER SUBS
Each of Parent and Merger Subs, jointly and severally, hereby covenants and
agrees as follows:
6.1 CERTAIN FILINGS
The Parent and Merger Subs shall cooperate with the Company Shareholder and
the Companies with respect to all filings with Governmental Authorities that are
required to be made by Parent and Merger Subs to carry out the transactions
contemplated by this Agreement. The Parent and Merger Subs shall assist in
making all such filings, applications and notices as may be necessary or
desirable in order to obtain the authorization, approval or consent of any
Governmental Authority which may be reasonably required or which the Company
Shareholder and the Companies may reasonably request in connection with the
consummation of the transactions contemplated hereby. Without limiting the
generality of the foregoing, Parent and the Merger Subs hereto shall promptly
and in good faith respond to any requests for additional information and
documents and provide any further necessary information and make any further
necessary filings under the HSR Act.
6.2 NOTIFICATION OF CERTAIN MATTERS
Parent and Merger Subs shall promptly notify the Company Shareholder of (i)
the occurrence or non-occurrence of any fact or event of which Parent or Merger
Subs has knowledge which would be reasonably likely (A) to cause any
representation or warranty of Merger Subs or Parent contained in this Agreement
to be untrue or incorrect in any material respect at any time from the date
hereof to the Effective Time of the Mergers or (B) to cause any covenant,
condition or agreement of Merger Subs or Parent in this Agreement not to be
complied with or satisfied in any material respect and (ii) any failure of
Merger Subs or Parent to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder in any material
respect; provided, however, that no such notification shall affect the
representations or warranties of Merger Subs or Parent, or the right of the
Company Shareholder to rely thereon, or the conditions to the obligations of the
Company Shareholder, or the remedies available hereunder to the Company
Shareholder. Parent and Merger Subs shall give prompt notice to the Company
Shareholder of any notice or other communication from any third Person alleging
that the consent of such third Person is or may be required in connection with
the transactions contemplated by this Agreement.
7. ADDITIONAL COVENANTS
The parties, as applicable, hereby covenant and agree as follows:
7.1 PAYMENT OF FEES AND INTEREST
Each party is solely responsible for any and all fees and expenses incurred
by it in exercising its rights and complying with the terms and conditions of
this Agreement; provided,
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that, the Parent and the Company Shareholder shall bear equally any filing fees
associated with filing of notification(s) under the HSR Act in connection with
the consummation of the transactions contemplated by this Agreement.
7.2 ACCESS TO INFORMATION; CONFIDENTIALITY
Upon reasonable advance written notice, each party shall permit
representatives of the other to have access (at all reasonable times and in a
manner so as not to interfere with the normal business operations of the other
party) to all premises, properties, financial and accounting records, Contracts,
other records and documents, and personnel of or pertaining to such party, all
in accordance with and subject to the terms of the Confidentiality Agreements;
provided that the representatives of the Company Shareholder may have the access
to Parent permitted hereunder only in order to conduct customary due diligence
regarding the completeness of the Parent SEC Report, Registration Statement and
other information set forth herein as the Company Shareholder may reasonably
request. No investigation or examination by either party shall diminish, obviate
or constitute a waiver of the enforcement of any of the representations,
warranties, covenants or agreements of the other party under this Agreement.
7.3 REASONABLE BEST EFFORTS; FURTHER ACTION
(a) Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use its reasonable best efforts (exercised diligently and
in good faith) to take, or cause to be taken, all actions and to do, or cause to
be done, all other things reasonably necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement, to obtain in a timely manner all necessary
waivers, consents, authorizations and approvals and to effect all necessary
registrations and filings, and otherwise to satisfy or cause to be satisfied all
conditions precedent to its obligations under this Agreement.
(b) Notwithstanding any provision of this Agreement to the contrary, Parent
shall not be obligated to divest, abandon, license, dispose of, hold separate or
take similar action with respect to any portion of the business, assets or
properties (tangible or intangible) of Parent, any of its Subsidiaries or the
Companies in connection with seeking to obtain or obtaining any waiver, consent,
authorization or approval of any Person associated with the consummation of the
transactions contemplated hereby or otherwise.
(c) If, at any time after the Effective Time, any such further action is
necessary or desirable to carry out the purposes of this Agreement and to vest
the Surviving Corporations with full right, title and possession to all assets,
property, rights, privileges, powers and franchises of the Companies and Merger
Subs, the officers and directors of the Companies and Merger Subs immediately
prior to the Effective Time are fully authorized in the name of their respective
corporations or otherwise to take, and will take, all such lawful and necessary
or desirable action.
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8. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUBS
The obligations of Parent and Merger Subs under this Agreement to
consummate the Mergers and the other transactions contemplated hereby shall be
subject to the satisfaction, at or prior to the Effective Time, of each of the
following conditions:
8.1 DUE DILIGENCE REVIEW
Parent shall have completed a review of the assets and business of each of
the Companies which is satisfactory to the Parent in its sole discretion in all
respects. Such review shall include a review of all of the financial files and
records of each of the Companies, including, without limitation, review of the
financial information delivered pursuant to Section 3.5 hereof, the financial
projections of each of the Companies, any schedules to this Agreement, the
business and legal records and files of each of the Companies, including
customer files, correspondence, invoices, licenses and permits (provided that
Parent and Merger Subs shall refrain from contacting any customers or suppliers
of any of the Companies without the prior written approval of Company
Shareholder), full access to each of the Companies' physical properties and
appropriate personnel of each of the Companies, and all written materials
related to each of the Companies' Intellectual Property Assets.
8.2 REPRESENTATIONS AND WARRANTIES
The representations and warranties of the Company Shareholder contained in
this Agreement or in the Disclosure Schedule or any certificate delivered
pursuant hereto shall be complete and correct as of the date when made, shall be
deemed repeated at and as of the Closing Date as if made on the Closing Date and
shall then be complete and correct in all material respects (without giving
double effect for any materiality qualification contained in any representation
or warranty) , except (i) for changes permitted or contemplated by this
Agreement, and (ii) that to the extent the representations or warranties
expressly refer to status as of a time prior to the date of this Agreement or
the Closing Date, those representations or warranties shall have been correct as
of the stated date.
8.3 PERFORMANCE OF COVENANTS
The Company Shareholder and the Companies shall have taken all necessary
corporate or other actions to consummate the transactions contemplated hereby
and shall have performed and complied in all material respects with each
covenant, agreement and condition required by this Agreement or any Transaction
Document to be performed or complied with by them at or prior to the Effective
Time of each of the Mergers.
8.4 DISTRIBUTION OF FADA BUSINESS
ASC shall have distributed to the Company Shareholder the FADA Business
substantially as described in Exhibit A hereto.
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8.5 ADJUSTMENT OR DISPOSITION OF CERTAIN OBLIGATIONS OF COMPANIES.
(a) Company Shareholder and ASI shall have entered into an Agreement and
General Release with each of the employees of ASI listed on Schedule 8.5 hereto
pursuant to which such employees shall have agreed to remain in the employ of
ASI until approximately November 30, 2000 and Company Shareholder shall have
paid to them the aggregate amount of approximately $1.1 million.
(b) ASC and Lakeside Building Investment Group, L.L.C., a Utah limited
liability company ("Lakeside") shall have entered into a Second Amendment to
that certain Lease Agreement dated September 8, 1995 related to certain premises
at 0000 Xxxxxx Xxxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx substantially in the form
of EXHIBIT L.
(c) ASC shall have obtained the release of the guarantee by ASC of any
indebtedness owed by Lakeside Building Group LLC to First Security Bank of Utah
by Lakeside dated December 19, 1996.
(d) ASI shall have entered into an agreement with Xxxxxx Xxxxxx, the sole
minority shareholder of AutoSimulations Limited, for the purchase of all of such
shareholder's shares of AutoSimulations Limited for an aggregate purchase price
of not more than $50,000, to be paid by Parent and which amount shall not to be
considered a reduction in Net Tangible Book Value of ASI.
8.6 UPDATE CERTIFICATE
Parent and Merger Subs shall have received a certificate or certificates,
dated the Closing Date, signed by the Company Shareholder as to the matters set
forth in Sections 8.2 through 8.5.
8.7 NO GOVERNMENTAL OR OTHER PROCEEDING; ILLEGALITY
No Order of any Governmental Authority shall be in effect that restrains or
prohibits any transaction contemplated hereby or that would limit or affect
Parent's or Merger Subs' ownership or operation of the business or assets of the
Companies or the Company Subsidiaries. No Proceeding by any Governmental
Authority shall be pending or threatened against Parent, Merger Subs, Sellers,
or either of the Companies or any of the Company Subsidiaries or any director or
officer of any thereof, as such, that challenges the validity or legality, or
that restrains or seeks to restrain the consummation, of the transactions
contemplated hereby, or that limits or otherwise affects or seeks to limit or
otherwise affect Parent's or Merger Subs' right to own or operate the business
or assets of the Companies or the Company Subsidiaries, or that compels or seeks
to compel Parent or any of its Subsidiaries to divest, abandon, license, dispose
of, hold separate or take similar action with respect to any portion of the
business, assets or properties (tangible or intangible) of Parent or any of its
Subsidiaries (including the Surviving Corporations) or the Companies or the
Company Subsidiaries. No written advice shall have been received by Parent,
Merger Subs, the Sellers, the Companies or the Company Subsidiaries or by any of
their
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respective counsel from any Governmental Authority, and remain in effect,
stating that an action or Proceeding will, if either of the Mergers is
consummated or sought to be consummated, be filed seeking to invalidate or
restrain either of the Mergers or limit or otherwise affect Parent's or Merger
Subs' ownership or operation of the business or assets of the Companies or the
Company Subsidiaries. No Law or Order shall be enacted, entered, enforced or
deemed applicable to the Mergers or the other transactions contemplated hereby
which makes the consummation of either of the Mergers or the other transactions
contemplated hereby illegal, provided that such illegality shall not have arisen
from any wrongful act or omission by Parent or Merger Subs.
8.8 APPROVALS AND CONSENTS
All material waivers, approvals, authorizations or Orders required to be
obtained, and all filings required to be made, by the Companies, for the
authorization, execution and delivery of this Agreement, the consummation by it
of the transactions contemplated hereby and the continuation in full force and
effect of any and all material rights, documents, instruments or Contracts of
the Companies and the Company Subsidiaries shall have been obtained and made,
including, without limitation, the termination of the waiting period under the
HSR Act, and all consents or approvals of any Person which may be required under
any lease for real property to which either of Companies or any of the Company
Subsidiaries is a party. The Companies shall use reasonable commercial efforts
to obtain landlord consents and estoppel certificates reasonably satisfactory in
form and substance to Parent from the lessors/owners of the real property leased
by ASC in Salt Lake City, Utah, Gilbert, Arizona, Austin, Texas, and Rochester,
New York.
8.9 DELIVERY OF FINANCIAL INFORMATION
In addition to the financial statements delivered under Section 3.5 above,
the Companies, at their own cost, shall have delivered to Parent historical
financial statements and any other financial information with respect to the
Companies required by Item 7 of Form 8-K and Regulation S-X of the Securities
and Exchange Commission for a business acquisition required to be described in
answer to Item 2 of Form 8-K, including information required in order for Parent
to prepare the pro forma financial information required by Item 7 of Form 8-K.
The financial statements shall include, without limitation:
(i) Audited Consolidated Balance Sheets as of March 31, 1998 and March 31,
1999 and audited Consolidated Statements of Operations and Cash Flows for the
three years ending March 31, 1999 for each of the Companies; and
(ii) Unaudited Consolidated Balance Sheet as of September 30, 1999 and
unaudited Consolidated Statements of Operations and Cash Flows for the six
months ending September 30, 1999 for each of the Companies.
The audit reports included with the financial statements described in clause (i)
shall not be qualified or subject to modification.
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8.10 FAIRNESS OPINION
Parent's Board of Directors shall have received a written opinion from XX
Xxxxx Securities Corporation dated as of or prior to the Closing Date to the
effect that as of the date of such opinion the Purchase Price is fair, from a
financial point of view, to Parent.
8.11 OPINION OF COUNSEL
The Company Shareholder shall have delivered to Parent and Merger Subs one
or more opinions of its counsel dated the Closing Date and addressed to Parent
and Merger Subs which in the aggregate generally address the matters in EXHIBIT
B hereto.
8.12 ESCROW AGREEMENT
There shall have been executed and delivered to Parent an Escrow Agreement
in substantially the form attached hereto as EXHIBIT C with such modifications
thereto as may be required by the Escrow Agent and agreed to by the parties
hereto.
8.13 EMPLOYMENT, NONCOMPETITION, CONFIDENTIALITY AND PROPRIETARY
INFORMATION AGREEMENTS
(a) Each of the Key Employees shall have executed and delivered to Parent
an Executive Non-Competition and Proprietary Information Agreement substantially
in the form of EXHIBIT D or, in the case of Xx. Xxxxxx, a similar consulting
agreement.
(b) Sellers shall have executed and delivered to Parent a Non-Competition
and Proprietary Information Agreement substantially in the form of EXHIBIT E,
with such changes to the exhibits to that agreement as the parties may
negotiate.
8.14 OPERATING AGREEMENT
The Company Shareholder shall have executed and delivered to Parent an
operating agreement (including the various Exhibits incorporated therein by
reference) substantially in the form of EXHIBIT F hereto relating to access to
certain technologies, with such further changes thereto as the parties shall
negotiate in good faith (the "OPERATING AGREEMENT").
8.15 SHAREHOLDER AGREEMENT
The Company Shareholder and Daifuku Japan shall have executed and delivered
to Parent a Shareholder Agreement substantially in the form of Exhibit G hereto.
8.16 NASDAQ NATIONAL MARKET; RESET ELECTION
(a) The Parent Shares shall not equal or exceed 20% of the total
outstanding shares of Parent Common Stock; provided, however, that, if the
Parent Shares would otherwise equal or
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exceed 20% of the total outstanding shares of Parent Common Stock the Parent may
elect, in its sole discretion, to pay the aggregate amount of the Purchase Price
in cash (the "RESET ELECTION").
(b) If at any time after the date hereof the closing price per share of the
Parent's Common Stock on the Nasdaq National Market is less than $12.50, the
Parent may notify the Sellers that it desires to take such other actions as the
Company Shareholder or the Parent shall reasonably deem necessary or desirable
to permit the Parent to exercise the Reset Election. In addition, to the extent
that any terms of this Agreement are inconsistent with a Reset Election, such
terms shall be deemed to be modified to the limited extent necessary to
accommodate the Reset Election.
9. CONDITIONS TO OBLIGATIONS OF THE COMPANY SHAREHOLDER
The obligations of the Company Shareholder under this Agreement to cause
the consummation of the Mergers and the other transactions contemplated hereby
shall be subject to the satisfaction, at or prior to the Effective Time of each
Merger, of each of the following conditions:
9.1 REPRESENTATIONS AND WARRANTIES
The representations and warranties of Parent and Merger Subs contained in
this Agreement or in the Disclosure Schedule or any certificate delivered
pursuant hereto shall be complete and correct as of the date when made, shall be
deemed repeated at and as of the Closing Date as if made on the Closing Date and
shall then be complete and correct in all material respects (without giving
double effect for any materiality qualification contained in any representation
or warranty) except (i) for changes permitted or contemplated by this Agreement,
and (ii) that to the extent the representations or warranties expressly refer to
status as of a time prior to the date of this Agreement or the Closing Date,
those representations or warranties shall have been correct as of the stated
date.
9.2 PERFORMANCE OF COVENANTS
Each of Parent and Merger Subs shall have taken all necessary corporate
actions to consummate the transactions contemplated hereby and shall have
performed and complied in all material respects with each covenant, agreement
and condition required by this Agreement to be performed or complied with by
them at or prior to the Effective Time of each Merger.
9.3 UPDATE CERTIFICATE
The Company Shareholder shall have received a certificate or certificates,
dated the Closing Date, signed by Parent and Merger Subs as to the matters set
forth in Sections 9.1 and 9.2.
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9.4 NO GOVERNMENTAL OR OTHER PROCEEDING; ILLEGALITY
No Order of any Governmental Authority shall be in effect that restrains or
prohibits any transaction contemplated hereby. No Proceeding by any Governmental
Authority shall be pending or threatened against Company Shareholder, Daifuku
Japan or either of the Companies or any director or officer of any thereof, as
such, that challenge the validity or legality, or that restrains or seeks to
restrain the consummation, of the transactions contemplated hereby; and no
written advice from any Governmental Authority shall have been received by
Daifuku Japan, Parent, Company Shareholder, Merger Subs, either of the Companies
or any of the Company Subsidiaries or by any of their respective counsel, and
remain in effect, stating that an action or Proceeding will, if either of the
Mergers is consummated or sought to be consummated, be filed seeking to
invalidate or restrain either of the Mergers. No Law or Order shall be enacted,
entered, enforced or deemed applicable to either of the Mergers or the other
transactions contemplated hereby which makes the consummation of either of the
Mergers or the other transactions contemplated hereby illegal.
9.5 APPROVALS AND CONSENTS
All material waivers, approvals, authorizations or Orders required to be
obtained, and all filings required to be made, by the Parent and the Merger
Subs, for the authorization, execution and delivery of this Agreement, the
consummation by them of the transactions contemplated hereby, including, without
limitation, the termination of the waiting period under the HSR Act, shall have
been obtained and made.
9.6 OPINION OF COUNSEL
Parent and Merger Subs shall have delivered to the Company Shareholder an
opinion of Brown, Rudnick, Freed & Gesmer, dated the Closing Date and addressed
to the Company Shareholder, as to the matters set forth on EXHIBIT I hereto.
9.7 OPERATING AGREEMENT
The Parent and Surviving Corporations shall have executed and delivered to
the Company Shareholder the Operating Agreement.
9.8 REGISTRATION RIGHTS AGREEMENT
There shall have been executed and delivered to Company Shareholder a
registration rights agreement in substantially the form attached hereto as
EXHIBIT J, which grants to Company Shareholder certain registration rights with
respect to the Parent Shares.
9.9 RELEASES
Sellers shall have received from each of the Companies and their respective
officers and directors (other than those who will continue to be employees of
Sellers or their Affiliates after
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the Effective Time) releases in form attached hereto as EXHIBIT K releasing them
from any claims any of them may have or claim to have against the Sellers of any
nature whatsoever by reason of any matter occurring before the Effective Time,
other than (i) any claims arising out of this Agreement or any of the collateral
agreements entered into in connection with the transactions contemplated hereby,
or (ii) any obligation of any of them which the Company Shareholder has
expressly agreed to assume in connection herewith.
9.10 ASC COMMITMENT LETTER
Company Shareholder shall have received a letter from ASC committing ASC to
use commercially reasonable efforts to complete the Xxxxxx Siltronics project
and obtain an acceptance certificate referred to in Section 3.9(b) hereof.
10. INDEMNIFICATION
10.1 INDEMNIFICATION BY COMPANY SHAREHOLDER
(a) Subject to the limitations in paragraphs (b)-(d) below, the Company
Shareholder agrees to defend, indemnify and hold harmless Parent's Indemnified
Persons from and against all Losses directly or indirectly incurred by any of
them resulting from or arising out of:
(i) any breach of any of the representations or warranties (other than
those listed in clause (vii) below) made by the Company Shareholder in or
pursuant to this Agreement; provided that, for the purpose of this Section 10.1,
any qualification of such representations and warranties by reference to the
materiality of matters stated therein, and any limitations of such
representations and warranties as being "to the knowledge of" or "known to" or
words of similar effect, shall be disregarded in determining any inaccuracy,
untruth, incompleteness or breach thereof and in determining the amount of Loss;
(ii) any Proceeding required to be described on Section 3.13 of the
Disclosure Schedule, except to the extent of reserves with respect thereto on
the Financial Statements;
(iii) any breach of any covenant or agreement made by the Company
Shareholder in or pursuant to this Agreement;
(iv) any Taxes owing by any of the Sellers, Companies, or the Surviving
Corporations of any kind or description (including without limitations its
obligations to withhold taxes and interest and penalties with respect to any
Taxes) for periods, or portions thereof, up to and including the Closing Date,
except to the extent of reserves with respect thereto on the Financial
Statements;
(v) any Environmental, Health and Safety Liabilities on account of any
period prior to the Closing Date;
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(vi) any liability under any Employee Benefit Plan on account of any period
prior to the Closing Date;
(vii) any breach of any of the representations or warranties made by the
Company Shareholder and the Companies pursuant to Sections 3.2 or 3.3;
(viii) any liability or obligation of either Company which Company
Shareholder has expressly assumed or for which it has expressly agreed to be
responsible; or
(ix) any breach of the representations of Section 3.9(a) with respect to
Special Accounts Receivable; and
(x) any liability owed to Parent pursuant to Section 3.9(b).
(b) The Company Shareholder shall have no liability under paragraph (a)
unless one or more of the Parent's Indemnified Persons gives written notice to
it asserting a claim for Losses, including reasonably detailed facts and
circumstances pertaining thereto, during the period set forth below:
(i) for claims under clauses (i) through (iii) and (ix) of paragraph (a)
above, a period of two (2) years after the Closing Date;
(ii) for claims under clauses (iv) through (vi) of paragraph (a) above, for
so long as any claim may be made in respect of such matters under any applicable
statute of limitations, as it may be extended;
(iii) for claims under clauses (vii) and (viii) of paragraph (a) above,
without limitation as to time; and
(iv) for claims under clause (x) of paragraph (a) above, a period beginning
23 months after the Closing Date and ending five (5) years after the Closing
Date.
(c) Indemnification for claims under clauses (i) and (ii) of paragraph (a)
above and claims relating to Section 5.8 hereof in connection with the Integram
License Agreement shall be payable by Company Shareholder only if the aggregate
amount of all Losses thereunder by the Parent's Indemnified Persons shall exceed
$400,000, at which point Company Shareholder shall be responsible for all Losses
in excess of $200,000. Indemnification for claims under clause (x) of paragraph
(a) above shall be payable by the Company Shareholder only if the aggregate
amount of all Losses thereunder by the Parent's Indemnified Persons shall exceed
$150,000, at which point Company Shareholder shall be responsible for all Losses
in excess of such $150,000. Company Shareholder's aggregate liability for
indemnification under paragraph (a) above shall not exceed $9,000,000.
(d) The gross amount with respect to any claim for indemnification for
which Company Shareholder may be liable to Parent's Indemnified Persons pursuant
to this Article 10 shall be
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reduced by any insurance proceeds actually recovered by or on behalf of the
Parent's Indemnified Persons on account of such indemnifiable Losses. Parent's
Indemnified Persons shall exert their best efforts to recover upon any policies
of insurance insuring any indemnifiable Losses. Any amounts which are collected
by the Parent, ASC or ASI from a customer shall be credited to the oldest
Account Receivable of that customer, and any Accounts Receivable not collected
by any of them for which Company Shareholder actually indemnifies any Parent
Indemnified Person (after taking into account the $200,000 deductible amount)
shall be assigned by ASC or ASI to Company Shareholder for it to collect, and
any amount subsequently collected by Parent, ASC or ASI on account of any such
Accounts Receivable shall be remitted to Company Shareholder, it being
understood that the Parent, ASC and ASI shall have no further obligation to
undertake any collection efforts with respect thereto after the date of such
assignment.
(e) The Sellers' Indemnified Persons shall not be responsible for losses
arising out of the operation of the Surviving Corporations after the Closing
Date, except as provided in Section 5.8 hereof relating to claims arising out of
the Integram License Agreement for the conduct of any Affiliate of the Company
Shareholder.
10.2 INDEMNIFICATION BY PARENT
(a) Subject to the limitations set forth in paragraphs (b)-(d) below,
Parent agrees to defend, indemnify and hold harmless the Sellers' Indemnified
Persons from and against all Losses directly or indirectly sustained by any of
them caused by or arising out of:
(i) any breach of any of the representations or warranties made by Parent
or a Merger Sub in or pursuant to this Agreement;
(ii) any breach of any covenant or agreement made by Parent or a Merger Sub
in or pursuant to this Agreement; and
(iii) any liabilities expressly assumed by Parent.
(b) Indemnification for claims under clause (i) of paragraph (a) above
shall be payable by Parent only if the aggregate amount of all Losses hereunder
by the Sellers' Indemnified Persons shall exceed $400,000 at which point Parent
shall be responsible for all Losses in excess of $200,000. Parent's aggregate
liability for indemnification under paragraph (a) above shall not exceed
$8,000,000.
(c) The Parent shall have no liability under paragraph (a) unless one or
more of Sellers' Indemnified Persons gives written notice to Parent asserting a
claim for Losses, including reasonably detailed facts and circumstances
pertaining thereto, before the expiration of the period set forth below:
(i) for claims under clauses (i) and (ii) of paragraph (a), for a period
of two (2) years after the Closing Date; and
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(ii) for claims under clause (iii) of paragraph (a), without limitation as
to time.
(d) The gross amount with respect to any claim for indemnification for
which Parent may be liable to Sellers' Indemnified Persons pursuant to this
Article 10 shall be reduced by any insurance proceeds actually recovered by or
on behalf of the Sellers' Indemnified Persons on account of such indemnifiable
Losses. Sellers' Indemnified Persons shall exert their best efforts to recover
upon any policies of insurance insuring any indemnifiable Losses.
10.3 DEFENSE OF THIRD PARTY ACTIONS
(a) Promptly after the receipt of notice of any Third Party Action, any
person who believes that it may be an Indemnified Person will give notice to the
potential Indemnifying Person of such action. Any omission or delay in providing
such notice to the Indemnifying Person will not relieve the Indemnifying Person
of any liability hereunder unless such omission or delay was prejudicial to the
Indemnifying Person's defense of such Third Party Action, and will not relieve
the Indemnifying Person of any liability which the Indemnifying Person may have
other than pursuant to this Article 10.
(b) Upon receipt of a notice of a Third Party Action, the Indemnifying
Person shall have the right, at its option and at its own expense, to
participate in and be present at the defense of such Third Party Action, but not
to control the defense, negotiation or settlement thereof, which control shall
remain with the Indemnified Person, unless the Indemnifying Persons, makes the
election provided in paragraph (c) below.
(c) By written notice within thirty (30) days after receipt of a notice of
a Third Party Action, an Indemnifying Person may elect to assume control of the
defense, negotiation and settlement thereof, with counsel reasonably
satisfactory to the Indemnified Person, provided however, that the Indemnifying
Person agrees (i) to promptly indemnify the Indemnified Person for reasonable
expenses incurred to date, and (ii) to hold the Indemnified Person harmless from
and against any and all Losses caused by or arising out of any settlement of the
Third Party Action approved by the Indemnifying Person or any judgment in
connection with that Third Party Action. The Indemnifying Person shall not in
defense of the Third Party Action enter into any settlement which does not
include as a term thereof an unconditional release by the third party claimant
of the Indemnified Person or consent to entry of any judgment, except with the
consent of the Indemnified Person.
(d) Upon assumption of control of the defense of a Third Party Action under
paragraph (c) above, the Indemnifying Person will not be liable to the
Indemnified Person hereunder for any legal or other expenses subsequently
incurred in connection with the defense of the Third Party Action.
(e) If the Indemnifying Person does not elect to control the defense of a
Third Party Action under paragraph (c), the Indemnifying Person shall promptly
reimburse the Indemnified Person for reasonable expenses incurred by the
Indemnified Person in connection with the defense of such Third Party Action, as
and when the same shall be incurred by the Indemnified Person.
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(f) Any party who has not assumed control of the defense of a Third Party
Action shall have the duty to cooperate with the party which assumes such
defense.
10.4 MISCELLANEOUS
(a) Parent's Indemnified Persons shall be entitled to indemnification under
Section 10.1(a)(i) with respect to any matter giving rise to a Losses unless the
matter is expressly disclosed on the Disclosure Schedule, without regard to
whether the matter giving rise to the Losses may have been otherwise previously
disclosed to any such person. Parent's Indemnified Persons shall be entitled to
be indemnified under clauses (ii)-(iv) and (x) of Section 10.1(a) regardless of
any disclosure, whether on the Disclosure Schedule or otherwise.
(b) Nothing in this Article 10 shall be interpreted to limit in any manner
any remedy which any party may have at law or in equity based upon fraud or
other intentional torts.
10.5 PAYMENT OF INDEMNIFICATION
Claims for indemnification under this Article 10 shall be paid or otherwise
satisfied by Indemnifying Persons within thirty (30) days after notice thereof
is given by the Indemnified Persons. Any amount which may become due and payable
to any of the Parent's Indemnified Persons under Section 10.1(a) shall first be
paid or otherwise satisfied out of the Escrow Fund until the same has been
exhausted. Any claims by Sellers' Indemnified Persons may be satisfied by
whatever remedy is available at law or equity.
11. TERMINATION OF AGREEMENT
11.1 TERMINATION.
This Agreement shall not be terminated, nor the Mergers abandoned, except
in accordance with the provisions of this Article 11, strictly construed against
the party seeking such termination. This Agreement may be terminated and the
Mergers may be abandoned any time prior to the Effective Time of both Mergers:
(a) by mutual written consent of the Parent and Company Shareholder;
(b) by either the Parent or the Company Shareholder, if, without fault of
such terminating party, the Mergers shall not have been consummated on or before
March 31, 2000, unless such failure shall be due to a material breach of any
representation or warranty, or the nonfulfillment in a material respect, and
failure to cure such nonfulfillment, of any covenant or agreement contained
herein on the part of the party or parties seeking to terminate; and
(c) by Parent or the Company Shareholder if a Governmental Authority shall
have issued a nonappealable final Order or taken any other action having the
effect of permanently restraining, enjoining or otherwise prohibiting either of
the Mergers and the other transactions contemplated hereby (provided that the
right to terminate this Agreement under this Section 11.1 shall not be
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available to any party who has not complied with its obligations under this
Agreement if such noncompliance materially contributed to the issuance of any
such Order or the taking of such action).
11.2 TERMINATION BY THE PARENT.
This Agreement may be terminated and the Mergers may be abandoned by action
of the Board of Directors of the Parent, at any time prior to the Effective Time
of the Mergers, if:
(a) The Company Shareholder shall have failed to comply with any of the
covenants or agreements contained in this Agreement such that the closing
condition set forth in Section 8.3 would not be satisfied; provided, however,
that if such failure or failures are capable of being cured prior to the
Effective Time of the Mergers, such failure or failures shall not have been
cured within 15 days of delivery to the Company Shareholder of written notice of
such failure;
(b) there exists a breach of any representation or warranty of the
Companies or the Sellers contained in this Agreement such that the closing
condition set forth in Section 8.2 would not be satisfied; provided, however,
that if such breach or breaches are capable of being cured prior to the
Effective Time of the Mergers, such breach or breaches shall not have been cured
within 15 days of delivery to the Company Shareholder of written notice of such
breach; or
(c) Any of the parties enumerated in Section 5.5 engages in any of the
actions prohibited thereby.
11.3 TERMINATION BY THE COMPANY SHAREHOLDER.
This Agreement may terminated and the Mergers may be abandoned at any time
prior to the Effective Time, by Company Shareholder, if:
(a) the Parent or the Merger Subs shall have failed to comply with any of
the covenants or agreements contained in this Agreement such that the closing
condition set forth in Section 9.2 would not be satisfied; provided however,
that if such failure or failures are capable of being cured prior to the
Effective Time, such failure or failures shall not have been cured within 15
days of delivery to the Parent of written notice of such failure; or
(b) there exists a breach or breaches of any representation or warranty of
the Parent or the Merger Subs contained in this Agreement such that the closing
condition set forth in Section 9.1 would not be satisfied; provided however,
that if such breach or breaches are capable of being cured prior to the
Effective Time, such breach or breaches shall not have been cured within 15 days
of delivery to the Parent of written notice of such breach.
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11.4 PROCEDURE FOR TERMINATION.
In the event of termination and abandonment of the Mergers by the Parent or
the Company Shareholder pursuant to this Article 11, written notice thereof
shall forthwith be given to the other party.
11.5 EFFECT OF TERMINATION.
(a) In the event of termination of this Agreement in accordance with the
provisions of this Article 11, this Agreement shall forthwith become void and no
party to this Agreement shall have any further liability or obligation to any
other party; provided that:
(i) the obligations of the Confidentiality Agreements shall continue;
(ii) the provisions of paragraphs (b) below shall survive; and
(iii) nothing herein shall relieve any party from liability for any breach
of this Agreement.
(b) In the event that (i) either (A) the Mergers are not completed due to a
violation of Section 5.5 by any of the persons enumerated therein, or (B) the
Mergers are not completed on or prior to December 31, 1999 due to termination
under Section 11.2(a) or (b), and (ii) on or before September 30, 2000, either
of the Companies or any of their Affiliates sells the stock, assets or business
of either of the Companies in an Alternative Acquisition, then the Company,
prior to such sale being effected, shall pay the Parent by wire transfer of
immediately available funds to an account specified by the Parent a fee in the
amount of $2,000,000.
11.6 RIGHT TO PROCEED.
Anything in this Agreement to the contrary notwithstanding, if any of the
conditions specified in Article 8 hereof have not been satisfied, Parent shall
have the right to waive the satisfaction of any such condition as provided in
Article 8 and to proceed with the transactions contemplated hereby, however, it
shall be deemed to have waived any claim for indemnification arising out of any
condition which has been so waived. If any of the conditions specified in
Article 9 hereof has not been satisfied, the Company Shareholder shall have the
right to waive the satisfaction of any such condition as provided in Article 9
and to proceed with the transactions contemplated hereby.
12. GENERAL PROVISIONS
12.1 EXPENSES
Except as otherwise expressly provided in this Agreement, each party to
this Agreement will bear its respective fees, costs and expenses incurred in
connection with the preparation, execution, delivery and performance of this
Agreement, including all fees, costs and expenses of
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agents, representatives, counsel and accountants, except that (i) the parties
shall bear equally any fees associated with the filing of notification(s) under
the HSR Act, and (ii) Parent shall bear the first $5,000 of legal fees and
expenses of Utah legal counsel for the Sellers.
12.2 PUBLIC ANNOUNCEMENTS
Unless required by law, no party shall release a public announcement or
similar publicity with respect to this Agreement, the Closing, the Mergers or
the other transactions contemplated hereby without the prior written consent of
all of the other parties. Each party shall provide the other parties advance
copies of any release it proposes making. The parties shall keep this Agreement
and the transactions contemplated hereby strictly confidential and may not make
any disclosure of this Agreement or such transactions to any Person other than
its or their directors, officers, employees or agents who need to know such
information to enable the parties to comply with this Agreement, provided that
each such director, officer, employee or agent shall agree, for the benefit of
the parties, to maintain the confidentiality of such information as provided in
this Section 12.2. The parties will consult with each other concerning the means
by which the Companies' employees, customers and suppliers and other Persons
having dealings with the Companies or the Company Subsidiaries will be informed
of this Agreement, the Closing, the Merger and the other transactions
contemplated hereby, and representatives of Parent may at its option be present
for any such communication.
12.3 NOTICES
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by fax (with
written confirmation of receipt), provided that a copy is mailed by registered
mail, return receipt requested, or (c) when received by the addressee, if sent
by a nationally recognized overnight delivery service (receipt requested), in
each case to the appropriate addresses or fax numbers set forth below (or to
such other address, person's attention or fax number as a party may designate by
notice to the other parties given in accordance with this Section):
(a) If to Parent or Merger Subs:
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx
With a copy to:
Brown, Rudnick, Freed & Gesmer
One Financial Center
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Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxx, Esquire
(b) If to the Company Shareholder:
Daifuku America Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxx 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx Xxxxxx
With a copy to:
Masuda, Funai, Xxxxxx & Xxxxxxxx
Two Continental Towers
0000 Xxxx Xxxx
Xxxxx 000
Xxxxxxx Xxxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
12.4 JURISDICTION; SERVICE OF PROCESS
Any Proceeding seeking to enforce any provision of, or based on any right
arising out of, this Agreement may be brought against any of the parties in the
courts of the State of Delaware or any United States District Court of the State
of Delaware, and each of the parties consents to the jurisdiction of such courts
(and of the appropriate appellate courts) in any such Proceeding and waives any
objection to venue laid therein. Service of process or any other papers in any
such Proceeding may be made by registered or certified mail, return receipt
requested, pursuant to the provisions of Section 12.3.
12.5 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE
No failure or delay on the part of any party hereto in the exercise of any
right hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty, covenant or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights and
remedies existing under this Agreement are cumulative to, and not exclusive of,
any rights or remedies otherwise available.
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12.6 ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS
No party may assign any of its rights under this Agreement without the
prior written consent of the other parties except that Parent may assign any of
its rights, but not its obligations, under this Agreement to any direct
wholly-owned Subsidiary of Parent. Subject to the preceding sentence, this
Agreement will apply to, be binding in all respects upon, and inure to the
benefit of the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed to give any Person
other than the parties to this Agreement any legal or equitable right, remedy or
claim under or with respect to this Agreement or any provision of this
Agreement.
12.7 SEVERABILITY
(a) If any provision of this Agreement or the application of any such
provision to any party or circumstances shall be determined by any court of
competent jurisdiction to be invalid or unenforceable to any extent, the
remainder of this Agreement, or the application of such provision to such party
or circumstances other than those to which it is so determined to be invalid or
unenforceable, shall not be affected thereby, and each provision hereof shall be
enforced to the fullest extent permitted by law. If the final judgment of a
court of competent jurisdiction declares that any item or provision hereof is
invalid or unenforceable, the parties hereto agree that the court making the
determination of invalidity or unenforceability shall have the power, to reduce
the scope, duration or area of the term or provision, to delete specific words
or phrases and to replace any invalid or unenforceable term or provision with a
term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and
this Agreement shall be enforceable as so modified.
(b) The parties agree that the fees and other amounts provided in Section
11.5 are fair and reasonable in the circumstances. If a court of competent
jurisdiction shall nonetheless, by a final, non-appealable judgment, determine
that such amounts exceed the maximum amount permitted by law, then such amounts
shall be reduced to the maximum amount permitted by law in the circumstances, as
determined by such court of competent jurisdiction.
12.8 GOVERNING LAW
This Agreement will be governed by the internal laws of the State of
Delaware without regard to principles of conflict of laws.
12.9 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
will be deemed to be an original copy of this Agreement and all of which, when
taken together, will be deemed to constitute one and the same agreement.
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12.10 ENTIRE AGREEMENT AND MODIFICATION; SCHEDULES AND EXHIBITS
This Agreement and the Disclosure Schedule attached hereto, together with
all of the agreements which will be entered into pursuant to this Agreement
supersede all prior agreements, representations, warranties, understandings
(other than the Confidentiality Agreements), whether written or oral, between or
among the parties with respect to its subject matter and constitutes the entire
agreement among the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the Company
Shareholder and the Parent.
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IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
XXXXXX AUTOMATION, INC. DAIFUKU AMERICA CORPORATION
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Title:_______________________ Title:________________________
ASI MERGER CORP. DAIFUKU CO., LTD.
By:__________________________ By:___________________________
Name:________________________ Name:_________________________
Title:_______________________ Title:________________________
ASC MERGER CORP.
By:__________________________
Name:________________________
Title:_______________________
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Exhibits:
Exhibit A FADA Business
Exhibit B Opinion of Company's Counsel
Exhibit C Form of Escrow Agreement
Exhibit D Executive Non-Competition and Proprietary Information Agreement
Exhibit E Non-Competition and Proprietary Information Agreement
Exhibit F Operating Agreement
Exhibit G Shareholder Agreement
Exhibit H Subordination Agreement
Exhibit I Opinion of Parent's Counsel
Exhibit J Registration Rights Agreement
Exhibit K Form of Release
Exhibit L Form of Amendment of Salt Lake City Lease
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