EXHIBIT 2.3
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
Execution Copy
PURCHASE AND SALE AGREEMENT
AMONG
NEW FOCUS, INC.
("the Seller")
and
ENDWAVE CORPORATION
("the Buyer")
and
BOOKHAM TECHNOLOGY PLC
("the Parent")
July 21, 2004
ARTICLE I STOCK PURCHASE....................................................................... 1
1.1 Sale and Transfer of Stock........................................................... 1
1.2 Purchase Price....................................................................... 1
1.3 The Closing.......................................................................... 1
1.4 Post-Closing Adjustment.............................................................. 2
1.5 Escrow............................................................................... 4
1.6 Further Assurances................................................................... 4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER......................................... 5
2.1 Organization, Qualification and Corporate Power...................................... 5
2.2 Capitalization....................................................................... 6
2.3 Authority............................................................................ 6
2.4 Noncontravention..................................................................... 7
2.5 Financial Statements................................................................. 8
2.6 Absence of Certain Changes........................................................... 8
2.7 Undisclosed Liabilities; Major Suppliers............................................. 8
2.8 Tax Matters.......................................................................... 8
2.9 Tangible Personal Property........................................................... 10
2.10 Owned Real Property.................................................................. 11
2.11 Leased Real Property................................................................. 11
2.12 Intellectual Property................................................................ 11
2.13 Contracts............................................................................ 11
2.14 Litigation........................................................................... 13
2.15 Employment Matters................................................................... 13
2.16 Employee Benefits.................................................................... 13
2.17 Environmental Matters................................................................ 14
2.18 Legal Compliance..................................................................... 16
2.19 Permits.............................................................................. 16
2.20 Brokers' Fees........................................................................ 16
2.21 Receivables; Major Customers......................................................... 16
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE BUYER.......................................... 17
3.1 Organization......................................................................... 17
3.2 Authority............................................................................ 17
3.3 Noncontravention..................................................................... 17
3.4 Litigation........................................................................... 18
3.5 Investment Intent.................................................................... 18
3.6 Financing............................................................................ 18
3.7 Solvency............................................................................. 18
3.8 Due Diligence by the Buyer........................................................... 19
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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ARTICLE IV INDEMNIFICATION...................................................................... 19
4.1 Indemnification by the Seller........................................................ 19
4.2 Indemnification by the Buyer......................................................... 20
4.3 Claims for Indemnification........................................................... 20
4.4 Survival............................................................................. 21
4.5 Limitations.......................................................................... 21
4.6 Treatment of Indemnification Payments................................................ 23
ARTICLE V TAX MATTERS.......................................................................... 23
5.1 Preparation and Filing of Tax Returns; Payment of Taxes.............................. 23
5.2 Tax Indemnification.................................................................. 24
5.3 Allocation of Certain Taxes.......................................................... 25
5.4 Refunds and Carrybacks............................................................... 25
5.5 Cooperation on Tax Matters; Tax Audits............................................... 26
5.6 Termination of Tax Sharing Agreements................................................ 26
5.7 Scope of Article V................................................................... 26
ARTICLE VI EMPLOYEE MATTERS..................................................................... 27
6.1 Employment........................................................................... 27
6.2 Cessation of Business Benefit Plan Participation; 401(k) Plan Matters................ 27
6.3 Employment Related Liabilities....................................................... 27
6.4 Compensation; Employee Benefits; Severance Plans..................................... 27
6.5 Welfare Plans........................................................................ 28
6.6 No Hiring or Solicitation of Employees............................................... 28
ARTICLE VII OTHER POST-CLOSING COVENANTS......................................................... 29
7.1 Access to Information; Record Retention; Cooperation................................. 29
7.2 Non-Competition...................................................................... 30
7.3 Financial Statements................................................................. 31
ARTICLE VIII MISCELLANEOUS....................................................................... 31
8.1 Press Releases and Announcements..................................................... 31
8.2 No Third Party Beneficiaries......................................................... 32
8.3 Action to be Taken by Affiliates..................................................... 32
8.4 Entire Agreement..................................................................... 32
8.5 Succession and Assignment............................................................ 32
8.6 Notices.............................................................................. 32
8.7 Amendments and Waivers............................................................... 33
8.8 Severability......................................................................... 34
8.9 Expenses............................................................................. 34
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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8.10 Attorneys' Fees...................................................................... 34
8.11 Specific Performance................................................................. 34
8.12 Governing Law........................................................................ 34
8.13 Construction......................................................................... 34
8.14 Waiver of Jury Trial................................................................. 35
8.15 Incorporation of Exhibits and Schedules.............................................. 35
8.16 Counterparts and Facsimile Signature................................................. 35
Disclosure Schedule
Exhibit A - Form of Transition Facility Agreement
Exhibit B - Escrow Agreement
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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TABLE OF DEFINED TERMS
DEFINED TERM SECTION
------------ -------
8-K Financial Statements 7.3
10-Q Financial Statements 7.3
Adjusted Purchase Price 1.4(g)
Affiliate 3.7
Affiliated Group 2.8(a)
Affiliated Period 2.8(a)
Agreed Amount 4.3(b)
Agreement Preliminary Statement
Balance Sheet Date 2.5
Buyer Preliminary Statement
Buyer Dispute Notice 1.4(b)
Buyer Material Adverse Effect 3.3(b)
Buyer Plans 6.4
CERCLA 2.17(a)(iii)
Claimed Amount 4.3(b)
Claim Notice 4.3(b)
Closing 1.3(a)
Closing Balance Sheet 1.4(a)
Closing Date 1.3(a)
Code 2.8(c)
Company Introduction
Company Benefit Plans 2.16(a)
Company Contracts 2.13(a)
Company Employees 2.15(a)
Company Material Adverse Effect 2.1(a)
Company Properties 2.17(a)(vii)
Confidentiality Agreement 8.4
Damages 4.1
Designated Intellectual Property 2.12(a)
Disclosure Schedule Article II
Employee Benefit Plan 2.16(a)
Environment 2.17(a)(ii)
Environmental Law 2.17(a)(iv)
Environmental Matters 2.17(a)(v)
ERISA 2.16(a)
Escrow Agent 1.2
Escrow Agreement 1.3(b)(iv)
Escrow Amount 1.2
Facility Agreement 1.3(b)(iii)
Final Closing Balance Sheet 1.4(b)
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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DEFINED TERM SECTION
------------ -------
Final Post-Closing Adjustment Amount 1.4(b)
Financial Statements 2.5
GAAP 1.4(a)
Governmental Entity 2.4(b)
Income Taxes 5.1(a)
Indemnified Party 4.3(a)
Indemnifying Party 4.3(a)
Information 7.1(a)
Initial Purchase Price 1.2
Liability 2.7(a)
Materials of Environmental Concern 2.17(a)(iii)
Most Recent Balance Sheet 2.5
Multiemployer Plan 2.16(a)
Neutral Accountants 1.4(c)
New Buyer Employees 6.4
Noncompetition Party 7.2
Noncompetition Period 7.2
Off-Site Liabilities 2.17(a)(vi)
Parent Preliminary Statement
Parties Preliminary Statement
Permits 2.19
Post-Closing Adjustment Amount 1.4(a)
Purchase Price 1.2
Release 2.17(a)(i)
Restricted Business 7.2
Security Interest 2.2(c)
Seller Preliminary Statement
Seller Dispute Notice 1.4(b)
Seller's 401(k) Plan 6.2
Stock Introduction
Subsidiary 7.2
Tax Audit 5.5(b)
Taxes 2.8(a)
Taxing Authority 5.5(a)
Tax Reserves 5.1(a)
Tax Returns 2.8(a)
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
v
PURCHASE AND SALE AGREEMENT
This PURCHASE AND SALE AGREEMENT (the "Agreement") is entered into as of
July 21, 2004 among New Focus, Inc., a Delaware corporation (the "Seller"),
Endwave Corporation, a Delaware corporation (the "Buyer"), and, solely for
purposes of Sections 4.5(a)(iv), 6.6 and 7.2, Bookham Technology plc, a public
limited company registered in England and Wales (the "Parent"). The Seller and
the Buyer are referred to together herein as the "Parties."
INTRODUCTION
1. JCA Technology, Inc., a California corporation and a wholly owned
subsidiary of the Seller (the "Company"), is engaged, among other matters, in
the business of the design and manufacture of RF amplifier modules for defense
applications.
2. The Buyer desires to purchase from the Seller, and the Seller
desires to sell to the Buyer, all of the outstanding shares of capital stock of
the Company (the "Stock") upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Parties agree as
follows:
ARTICLE I
STOCK PURCHASE
1.1 Sale and Transfer of Stock. On the basis of the representations,
warranties, covenants and agreements set forth in this Agreement, at the Closing
(as defined in Section 1.3(a)), the Seller shall sell, convey, assign, transfer
and deliver to the Buyer, and the Buyer shall purchase and acquire from the
Seller, the Stock.
1.2 Purchase Price. The aggregate consideration for the sale and
transfer of the Stock shall be U.S. $6,000,000 (the "Purchase Price"). At the
Closing the Buyer shall pay to the Seller in cash in immediately available funds
U.S. $5,500,000 (the "Initial Purchase Price") and shall deliver the remaining
U.S. $500,000 of the Purchase Price (the "Escrow Amount") to U.S. Bank National
Association (the "Escrow Agent") in accordance with the provisions of Section
1.5.
1.3 The Closing.
(a) Time and Location. The closing of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx LLP in Boston, Massachusetts commencing
at 12:01 a.m., local time, on the date hereof (the "Closing Date").
(b) Actions at the Closing. At the Closing:
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(i) the Seller shall deliver to the Buyer certificate(s)
evidencing all of the Stock, duly endorsed in blank or with stock powers duly
executed by the Seller;
(ii) the Buyer shall pay to the Seller the Initial Purchase
Price in cash by wire transfer of immediately available funds into an account
designated by the Seller;
(iii) the Parties shall execute a Transition Facility
Agreement in substantially the form attached hereto as Exhibit A (the "Facility
Agreement");
(iv) the Seller, the Buyer and the Escrow Agent shall execute
an Escrow Agreement in substantially the form attached hereto as Exhibit B (the
"Escrow Agreement");
(v) the Seller shall cause each of the directors and
officers of the Company to resign from their positions as directors and officers
of the Company, except as may be otherwise agreed in writing by the Buyer;
(vi) the Buyer shall deliver to the Escrow Agent the Escrow
Amount in accordance with Section 1.5; and
(vii) the Parties shall execute and deliver to each other a
cross-receipt evidencing the transactions referred to subsections (i)-(v) above.
1.4 Post-Closing Adjustment. The Purchase Price set forth in Section 1.2
shall be subject to adjustment after the Closing Date as follows:
(a) Within 60 days after the Closing Date, the Buyer shall prepare
and deliver to the Seller a balance sheet of the Company (the "Closing Balance
Sheet") as of the Closing Date. The Closing Balance Sheet shall be prepared on a
basis consistent with the accounting methods, treatments, principles and
procedures historically applied by the Company and used in the preparation of
the Most Recent Balance Sheet (as defined below) and in accordance with United
States generally accepted accounting principles as in effect on the Balance
Sheet Date ("GAAP"). The closing adjustment amount shall be calculated as
-$235,000 plus the accounts receivable of the Company (including prepaid
expenses, allowances for doubtful accounts and allowances for sales returns)
minus the accounts payable of the Company (excluding inter-company payables) and
minus the accrued compensation and benefits of the Company (each as reflected on
the Closing Balance Sheet and in each case as determined on the basis set forth
in this Section 1.4(a)), and is referred to herein as the "Post-Closing
Adjustment Amount." If the Buyer fails to deliver the Closing Balance Sheet
within 60 days after the Closing Date, then the Buyer's rights and obligations
to deliver such Closing Balance Sheet shall terminate, and the Seller may (but
shall not be obligated to) elect to prepare a closing balance sheet (in
accordance with this Section 1.4(a)), in which case such balance sheet shall be
deemed the "Closing Balance Sheet." In the event that the Buyer fails to deliver
the Closing Balance Sheet within 60 days of the Closing Date, the Seller's
reasonable costs and expenses of preparing such Closing Balance Sheet shall be
paid by the Buyer. Failure by the Buyer to deliver to the Seller the Closing
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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Balance Sheet shall be deemed to be the Buyer's waiver of any claim for, or
entitlement to, any decrease in and adjustment to the Purchase Price pursuant to
Section 1.4(f).
(b) If the Seller, in good faith, disputes the Post-Closing
Adjustment Amount as shown on the Closing Balance Sheet prepared by the Buyer,
the Seller shall deliver to the Buyer within 30 days after receiving the Closing
Balance Sheet a notice setting forth the basis for such dispute and a statement
of what the Seller believes is the correct Closing Balance Sheet (determined on
the basis set forth in Section 1.4(a)) and the correct Post-Closing Adjustment
Amount and describing in reasonable detail the basis for such belief (the
"Seller Dispute Notice"). If the Buyer, in good faith, disputes the Post-Closing
Adjustment Amount as shown on the Closing Balance Sheet prepared by the Seller
(if any), the Buyer shall deliver to the Seller within 30 days after receiving
the Closing Balance Sheet a notice setting forth the basis for such dispute and
a statement of what the Buyer believes is the correct Closing Balance Sheet
(determined on the basis set forth in Section 1.4(a)) and the correct
Post-Closing Adjustment Amount and describing in reasonable detail the basis for
such belief (the "Buyer Dispute Notice"). The Parties shall use reasonable
efforts to resolve such dispute for a period of 30 days after the delivery of
the Seller Dispute Notice or the Buyer Dispute Notice, as the case may be. If
the Parties resolve such dispute, the Post-Closing Adjustment Amount agreed to
by the Parties shall be deemed to be the "Final Post-Closing Adjustment Amount"
and the Closing Balance Sheet agreed to by the Parties shall be deemed to be the
"Final Closing Balance Sheet."
(c) If the Parties do not reach a final resolution within 30 days
after the Seller has given the Seller Dispute Notice or the Buyer has given the
Buyer Dispute Notice, as the case may be, unless the Parties mutually agree to
continue their efforts to resolve such differences, PricewaterhouseCoopers LLP
or such other firm as the Parties shall agree (the "Neutral Accountants") shall
resolve such dispute in the manner provided below. The Parties shall each be
entitled to make a presentation to the Neutral Accountants, pursuant to
procedures to be agreed to among the Parties and the Neutral Accountants,
advocating the merits of the position espoused by such Party; and the Neutral
Accountants shall be required to resolve the dispute between the Parties and
determine the Post-Closing Adjustment Amount within 15 business days thereafter.
The Post-Closing Adjustment Amount determined by the Neutral Accountants shall
be deemed to be the Final Post-Closing Adjustment Amount and the Closing Balance
Sheet, as adjusted to reflect such determination, shall be deemed to be the
Final Closing Balance Sheet. Such determination by the Neutral Accountants shall
be conclusive and binding upon the Parties, absent fraud or manifest error.
Nothing herein shall be construed to authorize or permit the Neutral Accountants
(i) to determine any questions or matters whatsoever under or in connection with
this Agreement except for the resolution of the dispute between the Parties
regarding the Post-Closing Adjustment Amount, (ii) to resolve any such dispute
by making an adjustment to the Closing Balance Sheet that is outside of the
range defined by the respective amounts proposed by the Parties in the Closing
Balance Sheet prepared by the Buyer and the Seller Dispute Notice, or the
Closing Balance Sheet prepared by the Seller and the Buyer Dispute Notice, as
the case may be, or (iii) to apply any accounting methods, treatments,
principles or procedures other than as described in Section 1.4(a).
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(d) The Seller and the Buyer shall share equally the fees and
expenses of the Neutral Accountants; provided, however, that if the Neutral
Accountants determine that one Party has adopted a position or positions with
respect to the Closing Balance Sheet that is frivolous or clearly without merit,
the Neutral Accountants may, in their discretion, assign a greater portion of
any such fees and expenses to such Party.
(e) Failure of the Seller to deliver a Seller Dispute Notice or
the Buyer to deliver a Buyer Dispute Notice, as the case may be, within 30 days
after receiving the Closing Balance Sheet shall constitute acceptance of the
Post-Closing Adjustment Amount set forth on the Closing Balance Sheet, whereupon
such Post-Closing Adjustment Amount shall be deemed to be the Final Post-Closing
Adjustment Amount and the Closing Balance Sheet shall be deemed to be the Final
Closing Balance Sheet. Delivery by the Seller of a Seller Dispute Notice shall
constitute final and binding acceptance by the Seller of all portions of the
Closing Balance Sheet other than those specifically identified in the Seller
Dispute Notice as being subject to a good faith dispute. Delivery by the Buyer
of a Buyer Dispute Notice shall constitute final and binding acceptance by the
Buyer of all portions of the Closing Balance Sheet other than those specifically
identified in the Buyer Dispute Notice as being subject to a good faith dispute.
(f) If the Post-Closing Adjustment Amount (or if disputed, the
Final Post-Closing Adjustment Amount) is a negative number, then the Seller
shall pay to the Buyer an amount equal to the absolute value of the Post-Closing
Adjustment Amount (or if disputed, the Final Post-Closing Adjustment Amount). If
the Final Post-Closing Adjustment Amount (or if disputed, the Final Post-Closing
Adjustment Amount) is a positive number, then the Buyer shall pay to the Seller
an amount equal to the Post-Closing Adjustment Amount (or if disputed, the Final
Post-Closing Adjustment Amount). Any such payment shall be made along with
interest at the rate of 4% per annum, compounded monthly, from the Closing Date,
and shall be made by wire transfer or other delivery of immediately available
funds, within five business days after the date on which the Final Post-Closing
Adjustment Amount is determined pursuant to this Section 1.4, to an account
designated by the receiving Party within two business days after such
determination date.
(g) For purposes of this Agreement, "Adjusted Purchase Price"
means the Purchase Price plus, if applicable, the amount of any payment required
to be made by the Buyer to the Seller pursuant to the second sentence of Section
1.4(f) or minus, if applicable, the amount of any payment required to be made by
the Seller to the Buyer pursuant to the first sentence of Section 1.4(f).
1.5 Escrow. On the Closing Date, the Buyer shall deposit the Escrow
Amount with the Escrow Agent for the purpose of securing the post-closing
obligation of the Seller set forth in Section 7.3 of this Agreement. The Escrow
Amount shall be held by the Escrow Agent under the Escrow Agreement pursuant to
the terms thereof. The Escrow Amount shall be held as a trust fund and shall not
be subject to any lien, attachment, trustee process or any other judicial
process of any creditor of any party, and shall be held and disbursed solely for
the purposes and in accordance with the terms of the Escrow Agreement.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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1.6 Further Assurances. At any time and from time to time after the
Closing Date, as and when requested by either Party hereto and at such Party's
expense, the other Party shall promptly execute and deliver, or cause to be
executed and delivered, all such documents, instruments and certificates and
shall take, or cause to be taken, all such further or other actions as are
necessary to evidence and effectuate the transactions contemplated by this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer that the statements
contained in this Article II are true and correct as of the date hereof, except
as set forth in the Disclosure Schedule provided by the Seller to the Buyer on
the date hereof (the "Disclosure Schedule"). The Disclosure Schedule shall be
arranged in sections and subsections corresponding to the numbered and lettered
sections and subsections contained in this Article II. The disclosures in any
section or subsection of the Disclosure Schedule shall qualify (a) the
corresponding sections or subsections in this Article II and (b) other sections
and subsections in this Article II to the extent it is reasonably clear from a
reading of the disclosure that such disclosure is applicable to such other
sections and subsections. The inclusion of any information in the Disclosure
Schedule shall not be deemed to be an admission or acknowledgment, in and of
itself, that such information is required by the terms hereof to be disclosed,
is material to the Company, has resulted in or would result in a Company
Material Adverse Effect (as defined in Section 2.1), or is outside the ordinary
course of business. For purposes of this Agreement, the phrase "to the knowledge
of the Seller" or any phrase of similar import shall mean and be limited to the
[*] of the [*]. [*] of [*] in the [*] to [*] of a [*] or [*] if [*] in [*] would
[*] be [*] to [*] or [*] of such [*] or other [*] in the [*] of [*] his [*] to
the [*] or the [*].
2.1 Organization, Qualification and Corporate Power.
(a) The Company. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of California
and is duly qualified to conduct business under the laws of each jurisdiction
where the character of the properties owned, leased or operated by it or the
nature of its activities makes such qualification necessary, except for any such
failure to be qualified that would not reasonably be expected to result in a
Company Material Adverse Effect (as defined below), which jurisdictions are set
forth in the Disclosure Schedule. The Company has all requisite corporate power
and authority to carry on the business in which it is now engaged and to own and
use the properties now owned and used by it. For purposes of this Agreement,
"Company Material Adverse Effect" means any [*], [*] or [*] that is [*] to the
[*], [*], [*] or [*] of [*] of the Company as a whole (other than [*], [*] or
[*] that are the [*] of [*] the [*] as a whole or that are the [*] of [*] the
[*] or [*] in which the Company [*] and that do not [*] the Company). The
Company has no subsidiaries.
(b) The Seller. The Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Seller has all requisite corporate power and authority to carry on the
business in which it is now engaged and to own and use the properties now used
by it.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(c) Charter and Corporate Records. The Seller has made available
to the Buyer correct and complete copies of the corporate charter and bylaws of
the Company (each as amended to date), the minute books (containing the records
of meetings of the stockholders and the board of directors) and the stock record
books of the Company, all of which are correct and complete in all material
respects. The Company is not in default under or in violation of any provision
of its corporate charter or bylaws.
2.2 Capitalization.
(a) The capitalization of the Company is set forth on the
Disclosure Schedule. All of the issued and outstanding shares of Stock are duly
authorized, validly issued, fully paid and nonassessable. There are no
outstanding or authorized options, warrants, rights, agreements or commitments
to which the Company is a party or which are binding upon the Company providing
for the issuance, disposition or acquisition of any shares of capital stock of
the Company. There are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the Company. There are no agreements,
voting trusts or proxies with respect to the voting, or registration under the
Securities Act of 1933, as amended, of the Company.
(b) At the Closing, the Buyer will acquire from the Seller good
and marketable title to the Stock, free and clear of any mortgage, pledge,
security interest, encumbrance, charge or other similar lien, contractual
restriction or covenant, option or other adverse claim (whether arising by
contract or by operation of law), other than (i) applicable securities law
restrictions and (ii) those arising by action of the Buyer.
(c) For purposes of this Agreement, "Security Interest" means any
mortgage, pledge, security interest, encumbrance, charge or other similar lien
(whether arising by contract or by operation of law), other than (i) mechanic's,
materialmen's, landlord's and similar liens, (ii) liens arising under worker's
compensation, unemployment insurance, social security, retirement and similar
legislation, (iii) liens on goods in transit incurred pursuant to documentary
letters of credit, in each case arising in the ordinary course of business, (iv)
liens for Taxes not yet due and payable, (v) liens for Taxes which are being
contested in good faith and by appropriate proceedings, (vi) liens relating to
capitalized lease financings or purchase money financings that have been entered
into in the ordinary course of business, (vii) liens arising solely by action of
the Buyer, and (viii) liens which do not materially and adversely impair the use
or value of the Stock, in each such case only to the extent such liens,
individually or in the aggregate, would not reasonably be expected to result in
a Company Material Adverse Effect.
2.3 Authority. The Seller and the Parent have all requisite corporate
power and authority to execute and deliver this Agreement and to perform their
respective obligations hereunder, and the Seller has all requisite power and
authority to execute and deliver the Facility Agreement and the Escrow Agreement
and to perform its obligations thereunder. The execution and delivery by the
Seller and the Parent of this Agreement and the execution and delivery by the
Seller of the Facility Agreement and the Escrow Agreement and the consummation
by the Seller and the Parent of the transactions contemplated hereby and thereby
have been validly authorized
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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by all necessary corporate action on the part of the Seller and the Parent. This
Agreement, the Facility Agreement and the Escrow Agreement have been validly
executed and delivered by the Seller and, assuming this Agreement, the Facility
Agreement and the Escrow Agreement constitute the valid and binding obligations
of the Buyer, constitute valid and binding obligations of the Seller,
enforceable against the Seller in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium or other similar laws relating to or affecting the
rights of creditors generally and by equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses. This Agreement
has been validly executed and delivered by the Parent and, assuming this
Agreement constitutes the valid and binding obligation of the Buyer, constitutes
a valid and binding obligation of the Parent, enforceable against the Parent in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws relating to or affecting the rights of creditors generally and by
equitable principles, including those limiting the availability of specific
performance, injunctive relief and other equitable remedies and those providing
for equitable defenses.
2.4 Noncontravention. Neither the execution and delivery by the Seller
of this Agreement, the Facility Agreement or the Escrow Agreement, nor the
execution and delivery by the Parent of this Agreement, nor the consummation by
the Seller and the Parent of the transactions contemplated hereby or thereby,
will:
(a) conflict with or violate any provision of the charter or
bylaws of the Company, the Seller or the Parent;
(b) require on the part of the Company, the Seller or the Parent
any filing with, or any permit, authorization, consent or approval of, any
court, arbitrational tribunal, administrative agency or commission or other
governmental or regulatory authority or agency (a "Governmental Entity"), except
for any filing, permit, authorization, consent or approval which if not obtained
or made would not reasonably be expected to result in a Company Material Adverse
Effect;
(c) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create in any party the right to terminate or
modify, or require any notice, consent or waiver under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indebtedness or Security Interest to
which the Company, the Seller or the Parent is a party or by which the Company,
the Seller or the Parent is bound or to which any of their respective assets is
subject, except for (i) any conflict, breach, default, acceleration or right to
terminate or modify that would not reasonably be expected to result in a Company
Material Adverse Effect or (ii) any notice, consent or waiver the absence of
which would not reasonably be expected to result in a Company Material Adverse
Effect; or
(d) violate any order, writ, injunction or decree specifically
naming, or statute, rule or regulation applicable to, the Company, the Seller or
the Parent or any of their respective
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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properties or assets, except for any violation that would not reasonably be
expected to result in a Company Material Adverse Effect.
2.5 Financial Statements. The Disclosure Schedule includes copies of the
following financial statements of the Company: (a) the unaudited balance sheets
and statements of operations as of and for the fiscal years ended December 29,
2002 and December 28, 2003 and (b) the unaudited balance sheet (the "Most Recent
Balance Sheet") and statement of operations for the six-month period ended July
3, 2004 (the "Balance Sheet Date") (collectively, the "Financial Statements").
The Financial Statements fairly present, in all material respects, the financial
condition and results of operations of the Company as of the respective dates
thereof and for the periods referred to therein in accordance with such
methodologies; provided, however, that the Financial Statements (i) do not
provide any information below the line item for "research and development," (ii)
exclude selling, general and administrative expenses, (iii) are subject to
year-end adjustments and do not include footnotes and (iv) include certain
allocations of corporate expenses according to methodologies which may be
subject to revision.
2.6 Absence of Certain Changes. Except as contemplated by this
Agreement, between the Balance Sheet Date and the date of this Agreement, there
have not been any changes in the financial condition or results of operations of
the Company, except for any changes that did not have and would not reasonably
be expected to result in a Company Material Adverse Effect.
2.7 Undisclosed Liabilities; Major Suppliers.
(a) To the knowledge of the Seller, the Company does not have any
Liability (as defined below), except for (a) liabilities shown in the
"liabilities" section of the Most Recent Balance Sheet, (b) accounts payable
that have arisen since the Balance Sheet Date in the ordinary course of business
and (c) contractual and other liabilities which are not required by GAAP to be
reflected on a balance sheet. For purposes of this Agreement, "Liability" means
any debt, enforceable obligation or other liability that would reasonably be
expected to result in Damages to the Company and/or the Buyer in excess of
$25,000.
(b) The Disclosure Schedule accurately identifies, and provides an
accurate statement of the amounts paid to, each supplier that received more than
$100,000 from the Company in either of its last two completed fiscal years.
2.8 Tax Matters.
(a) The Company has filed or had filed on its behalf all material
Tax Returns (as defined below) that it was required to file (separately or as
part of an Affiliated Group (as defined below)) and all such Tax Returns were
correct and complete to the extent they relate to the Company, except for any
error or omission that would not reasonably be expected to result in a Company
Material Adverse Effect. The Company is not and has never been a member of an
Affiliated Group, other than a group the common parent of which is Seller.
Seller has properly filed on a timely basis all Income Tax Returns that it was
required to file with respect to any
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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Affiliated Period (as defined below) and all such Tax Returns were true, correct
and complete in all respects to the extent they relate to the Company, except
for any error or omission that would not reasonably be expected to result in a
Company Material Adverse Effect. The Company has paid (or had paid on its
behalf) all Taxes (as defined below) that are shown to be due and payable on any
such Tax Returns to the extent they relate to the Company. The unpaid Taxes of
the Company for Tax periods through the date of the Most Recent Balance Sheet do
not exceed the accruals and reserves for Taxes set forth on the Most Recent
Balance Sheet, and all Taxes attributable to the period commencing on the day
following the Balance Sheet Date and continuing through the Closing Date have
arisen in the ordinary course of business, except in each case for any Taxes
that would not reasonably be expected to result in a Company Material Adverse
Effect. The Company (i) does not have any actual or potential liability under
Treasury Regulations Section 1.1502-6 (or any comparable or similar provision of
federal, state, local or foreign law), as a transferee or successor, pursuant to
any contractual obligation, or otherwise for any Taxes of any person other than
the Company, and (ii) is not a party to or bound by any Tax indemnity, Tax
sharing, Tax allocation or similar agreement. All Taxes that the Company is or
was required by law to withhold or collect have been duly withheld or collected
and, to the extent required, have been paid to the proper Governmental Entity,
except for any such Taxes with respect to which the failure to withhold, collect
or pay would not reasonably be expected to result in a Company Material Adverse
Effect. There are no liens for Taxes (other than liens for Taxes not yet due and
payable and liens for Taxes which are being contested in good faith and by
appropriate proceedings) upon any of the assets of the Company. For purposes of
this Agreement, "Taxes" means all taxes, including without limitation income,
gross receipts, ad valorem, value-added, excise, real property, personal
property, sales, use, transfer, withholding, employment, social security charges
and franchise taxes imposed by the United States of America or any state, local
or foreign government, or any agency thereof, or other political subdivision of
the United States or any such government, and any interest, penalties,
assessments or additions to tax resulting from, attributable to or incurred in
connection with any tax or any contest or dispute thereof. For purposes of this
Agreement, "Tax Returns" means all reports, returns, declarations, statements,
forms or other information required to be supplied to a Taxing Authority (as
defined in Section 5.4(a)) in connection with Taxes. For the purposes of this
Agreement, "Affiliated Group" shall mean a group of corporations with which the
Company or any subsidiary has filed (or was required to file) consolidated,
combined, unitary or similar Tax Returns. For the purposes of this Agreement,
"Affiliated Period" shall mean any period in which the Company or any subsidiary
was part of an Affiliated Group.
(b) The Seller has made available to the Buyer (i) complete and
correct copies of all federal income Tax Returns of the Company and any
Affiliated Group (but, in the case of any such Affiliated Group, only the
portions of such Tax Returns relating to the Company) relating to Taxes for all
taxable periods for which the applicable statute of limitations has not yet
expired and (ii) complete and correct copies of all private letter rulings,
revenue agent reports, information document requests, notices of proposed
deficiencies, deficiency notices, protests, petitions, closing agreements,
settlement agreements, pending ruling requests and any similar documents
submitted by, received by or agreed to by or on behalf of the Company or, to the
extent related to the income, business, assets, operations, activities or status
of the Company, submitted by, received by or agreed to by or on behalf of any
Affiliated Group, and relating to
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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Taxes for all taxable periods for which the statute of limitations has not yet
expired. The federal income Tax Returns of the Seller, the Company and each
other member of an Affiliated Group have been audited by the Internal Revenue
Service or are closed by the applicable statute of limitations for all taxable
years through the taxable year specified in Section 2.8(b) of the Disclosure
Schedule. No examination or audit of any Tax Return of the Seller or the Company
or any other member of an Affiliated Group with respect to an Affiliated Period
by any Governmental Entity is currently in progress or, to the knowledge of the
Seller, threatened or contemplated. None of the Seller or the Company nor any
other member of an Affiliated Group has been informed by any jurisdiction in
writing or, to the knowledge of the Seller, verbally that the jurisdiction
believes that the Seller or the Company or any other member of an Affiliated
Group was required to file any Tax Return that was not filed. None of the Seller
or the Company nor any other member of an Affiliated Group has (i) waived any
statute of limitations with respect to Taxes or agreed to extend the period for
assessment or collection of any Taxes, (ii) requested any extension of time
within which to file any Tax Return, which Tax Return has not yet been filed, or
(iii) executed or filed any power of attorney with any Taxing Authority.
(c) None of the assets of the Company: (i) is property that is
required to be treated as being owned by any other person pursuant to the
provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954;
(ii) is "tax-exempt use property" within the meaning of Section 168(h) of the
Internal Revenue Code of 1986, as amended (the "Code"); (iii) directly or
indirectly secures any debt the interest on which is tax exempt under Section
103(a) of the Code; or (iv) is subject to a lease under Section 7701(h) of the
Code or under any predecessor section.
(d) There are no inclusions of income or exclusions of deductions
in connection with installment sales or open transactions, closing agreements
with Taxing Authorities, intercompany transactions or excess loan accounts, or
changes in accounting methods under Section 481 of the Code (or in each case any
similar adjustments under any provision of the Code or the corresponding
foreign, state or local Tax laws) that are required to be taken into account by
the Company in any period ending after the Closing Date by reason of any such
transaction, agreement or change in any taxable period ending on or before the
Closing Date.
(e) The Company: (i) is not a "consenting corporation" within the
meaning of Section 341(f) of the Code, and none of the assets of the Company is
subject to an election under Section 341(f) of the Code; or (ii) has never been
a United States real property holding corporation within the meaning of Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(l)(A)(ii) of the Code.
(f) The Company has not distributed to its stockholders or
security holders stock or securities of a controlled corporation, nor has stock
or securities of the Company been distributed, in a transaction to which Section
355 of the Code applies (i) in the two years prior to the date of this Agreement
or (ii) in a distribution that could otherwise constitute part of a "plan" or
"series of related transactions" (within the meaning of Section 355(e) of the
Code) that includes the transactions contemplated by this Agreement.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(g) The Company is not a party to any agreement, contract,
arrangement or plan that has resulted in or would result, separately or in the
aggregate, in the payment of any "excess parachute payment" within the meaning
of Section 280G of the Code (or any similar provision of any corresponding
foreign, state or local Tax laws).
2.9 Tangible Personal Property. The Company has good title to, a valid
leasehold interest in or a valid license or right to use, all of the material
tangible personal property reflected on the Most Recent Balance Sheet (other
than property sold, consumed or otherwise disposed of in the ordinary course of
business since the Balance Sheet Date), free and clear of all Security
Interests.
2.10 Owned Real Property. The Company does not own any real property.
2.11 Leased Real Property. The Company does not lease any real property.
2.12 Intellectual Property.
(a) The Disclosure Schedule lists all patents, patent
applications, registered trademarks, trademark applications, domain names and
copyright registrations that are owned by the Company or licensed for use by the
Company (other than copyrights in commercially-available administrative, office,
finance, accounting, worker productivity and similar software programs). To the
knowledge of the Seller, the Company owns, or is licensed or otherwise possesses
valid rights to use, the intellectual property described in or covered by such
patents, patent applications, registered trademarks, trademark applications,
domain names and copyright registrations, any designs of RF amplifier modules
for defense applications manufactured and sold by the Company and any other
intellectual property rights necessary for the conduct of the Company's business
as it is currently conducted (the "Designated Intellectual Property").
(b) The Company has not been named in any pending suit, action or
proceeding which involves a claim of infringement of any patents, trademarks,
trade names, trade secrets, service marks or copyrights of any third party and,
to the Seller's knowledge, no such suit, action or proceeding has been
threatened against the Company. To the Seller's knowledge, the Company is not
infringing any patents, trademarks, trade names, trade secrets, service marks or
copyrights of any third party.
(c) The Company has performed in all material respects the
obligations required to be performed by it under the terms of any agreement
pursuant to which the Company has rights in any Designated Intellectual
Property, and neither the Company nor, to the knowledge of the Seller, any third
party is in material default under any such agreement.
(d) Other than rights and licenses granted to customers,
resellers, distributors, OEMs and manufacturers in the ordinary course of
business, the Company has not granted to any third party any license or right to
the commercial use of any of the Designated Intellectual Property, except for
such licenses or rights to commercial use that would not reasonably be likely to
result in a Company Material Adverse Effect.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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2.13 Contracts.
(a) The Disclosure Schedule lists all of the following contracts,
agreements or other enforceable obligations (written or verbal) to which the
Company is a party or by which the Company is bound as of the date of this
Agreement (the "Company Contracts"):
(i) any agreement (or group of related agreements with the
same party) for the lease of personal property from or to third parties
providing for lease payments the remaining unpaid balance of which is in excess
of [*];
(ii) any agreement (or group of related agreements with the
same party) for the purchase of products or services by the Company under which
the undelivered balance of such products and services is in excess of [*];
(iii) any agreement (or group of related agreements with the
same party) which involves a payment to be made to the Company in excess of [*];
(iv) any agreement for the acquisition by the Company of any
operating business, whether by merger, stock purchase or asset purchase;
(v) any agreement establishing a partnership or joint
venture;
(vi) any agreement (or group of related agreements with the
same party) under which it has created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) indebtedness or under which it has imposed a
Security Interest on any of its material assets, tangible or intangible,
relating to the Company;
(vii) any agreement that prohibits the Company from freely
engaging in business anywhere in the world;
(viii) any agreement with the Company's executive officers or
directors pertaining to compensation, indemnification or otherwise;
(ix) any agreement with any of the Company's non-officer
employees providing annual base annual compensation at a rate in excess of [*];
(x) severance, "stay pay" or termination agreement with any
officer or other employee of the Company; and
(xi) any other agreement, contract or other obligation that
is or which would reasonably be expected to be material to the operations or
financial condition of the Company;
provided, however, that no agreement referred to in clauses (i) through (xi)
above need be disclosed unless the Company currently has, or may in the future
have, any rights or obligations thereunder.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(b) The Seller has made available to the Buyer a complete and
accurate copy of each Company Contract. Each Company Contract is a valid and
binding obligation of the Company and, to the knowledge of the Seller, of each
other party thereto, except for any such failure to be valid and binding that
would not reasonably be expected to result in a Company Material Adverse Effect.
Neither the Company nor, to the knowledge of the Seller, any other party to any
Company Contract is in breach or default and, to the knowledge of the Seller, no
event has occurred which, with notice or lapse of time or both, would constitute
a breach or default under any Company Contract, except for any such breach or
default that would not reasonably be expected to be material to the operations
or financial condition of the Company.
2.14 Litigation. The Disclosure Schedule lists, as of the date of this
Agreement, each (a) judgment, order, decree, stipulation or injunction of any
Governmental Entity specifically naming the Company, (b) pending action, suit or
proceeding by or before any Governmental Entity to which the Company is a party
and that is known to the Seller and (c) threatened action, suit or proceeding by
or before any Governmental Entity that is known to the Seller and would
reasonably be expected to result in a Liability.
2.15 Employment Matters.
(a) The Disclosure Schedule contains a list, as of the date of
this Agreement, of all employees of the Company (the "Company Employees"). The
information previously provided by the Seller to the Buyer with respect to the
position, annual rate of compensation and bonus of each Company Employee is
accurate in all material respects. Each current Company Employee has entered
into a confidentiality and assignment of inventions agreement with the Company,
a copy or form of which has previously been made available to the Buyer. Section
2.15(a) of the Disclosure Schedule contains a list of all Company Employees who
are a party to a non-competition agreement with the Company; copies of such
agreements have previously been made available to the Buyer. The Disclosure
Schedule lists all employment contracts between the Buyer and each Company
Employee; except as specifically set forth in such contracts, all Company
Employees are employed by the Company on an "at-will" basis.
(b) To the knowledge of the Seller, the Company is not a party to
or bound by any collective bargaining agreement and has not experienced any
strikes or collective bargaining disputes. In addition, to the knowledge of the
Seller, the Company has not experienced any employee grievances or claims of
unfair labor practices that have had or would reasonably be expected to result
in a Company Material Adverse Effect.
2.16 Employee Benefits.
(a) The Disclosure Schedule contains a complete and accurate list
of all material Employee Benefit Plans (as defined below) maintained, or
contributed to, by the Company (the "Company Benefit Plans"). For purposes of
this Agreement, "Employee Benefit Plan" means (i) any "employee pension benefit
plan" (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) other than a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) (a "Multiemployer Plan"),
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(ii) any "employee welfare benefit plan" (as defined in Section 3(1) of ERISA),
and (iii) to the extent applicable to more than one employee, any other written
or oral plan, agreement or arrangement involving compensation, including without
limitation insurance coverage, severance benefits, disability benefits, deferred
compensation, bonuses, stock options, stock purchase, phantom stock, stock
appreciation or other forms of incentive compensation or post-retirement
compensation, or fringe benefits, but excluding any Employee Benefit Plan
required to be maintained or contributed to under foreign law (as to which the
Seller has described such Employee Benefit Plan in the Disclosure Schedule).
Complete and accurate copies of all Company Benefit Plans and all material
related trust agreements, insurance contracts and summary plan descriptions have
been made available to the Buyer.
(b) The Company Benefit Plans that are intended to be qualified
under Section 401(a) of the Code have received determination letters from the
Internal Revenue Service to the effect that such Company Benefit Plans are
qualified and the plans and the trusts related thereto are exempt from federal
income Taxes under Sections 401(a) and 501(a), respectively, of the Code, or the
period for obtaining such a determination letter has not yet closed.
(c) The Company has never maintained or been required to
contribute to any Employee Benefit Plan subject to Title IV of ERISA or to any
Multiemployer Plan.
(d) No act or omission has occurred and no condition exists with
respect to any Company Benefit Plan that would subject the Company or the Buyer
to any fine, penalty, Tax or liability of any kind imposed under ERISA or the
Code (other than liabilities for benefits accrued under Company Benefit Plans
for Company Employees and their beneficiaries), except for any fine, penalty,
Tax or liability that would not reasonably be expected to result in a Company
Material Adverse Effect.
(e) Except as would not reasonably be expected to result in a
Company Material Adverse Effect, there are no unfunded obligations under any
Company Benefit Plan providing welfare benefits after termination of employment
to any Company Employee (or to any beneficiary of any such employee), excluding
continuation of health coverage required to be continued under Section 4980B of
the Code or other similar applicable laws.
2.17 Environmental Matters.
(a) For purposes of this Agreement, the following terms have the
meanings provided below.
(i) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping, or
disposing of Materials of Environmental Concern into the Environment (including,
without limitation, (i) the abandonment or discarding of barrels, containers,
and other closed receptacles containing any Materials of Environmental Concern
or (ii) the release of Materials of Environmental Concern in or into any well,
pit, pond, lagoon, impoundment, ditch, landfill or pipeline).
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(ii) "Environment" means any surface water, ground water,
drinking water supply, land surface, soil or subsurface strata, or ambient air.
(iii) "Materials of Environmental Concern" means any hazardous
substance, pollutant or contaminant, as those terms are defined under the
federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), solid waste and hazardous waste, as those terms are
defined in the Federal Resource Conservation and Recovery Act (as in effect on
the date of this Agreement) and oil, petroleum and petroleum products, or any
other substance that is listed, defined, designated or classified as hazardous,
radioactive or toxic or a pollutant or contaminant under any Environmental Law.
(iv) "Environmental Law" means any foreign, federal, state,
provincial, or municipal statute, rule, regulation or binding requirement or
order in effect prior to or on the Closing Date and relating to the protection
of the Environment or occupational health and safety, including, without
limitation, any statute, rule, regulation or binding requirement or order
pertaining to (A) the presence, manufacture, processing, use, treatment,
storage, disposal, transportation, handling or generation of Materials of
Environmental Concern; (B) air, water and noise pollution; (C) groundwater and
soil contamination; or (D) the Release or threat of Release of Materials of
Environmental Concern to the Environment.
(v) "Environmental Matters" means any legal obligation or
liability arising under Environmental Law.
(vi) "Off-Site Liabilities" means Environmental Matters
resulting from any transportation, treatment, storage, disposal or Release, or
the arrangement therefor, in connection with the Business of any Materials of
Environmental Concern, to or at any property, location, site or facility other
than a Business Property.
(vii) "Company Properties" means that portion of the property
located at 0000 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx which is leased to the
Seller and used by the Company in the conduct of its business, and such
properties that are being or in the past have been used by the Company in the
conduct of its business.
(b) To the knowledge of the Seller, except as described or
identified in the Disclosure Schedule or in a document listed in the Disclosure
Schedule:
(i) the Company and its operations are in compliance with
all applicable Environmental Laws, except for any failures to comply with
Environmental Laws that, individually or in the aggregate, would not reasonably
be expected to result in a Company Material Adverse Effect;
(ii) there is no pending or, to the knowledge of the Seller,
threatened civil or criminal litigation, written notice of violation or formal
administrative proceeding, investigation or claim relating to any Environmental
Law involving any of the Company Properties, except for any such litigations,
notices, proceedings, investigations or claims that,
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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individually or in the aggregate, would not reasonably be expected to result in
a Company Material Adverse Effect;
(iii) the Company has and within the past five years has had
all permits, licenses and approvals required under Environmental Law to operate
its business, except for any such permits, licenses or approvals the absence of
which, individually or in the aggregate, would not reasonably be expected to
result in a Company Material Adverse Effect;
(iv) no Materials of Environmental Concern have been Released
by the Company except in compliance with all applicable Environmental Law,
except for any such Releases that, individually or in the aggregate, would not
reasonably be expected to result in a Company Material Adverse Effect; and
(v) to the knowledge of the Seller, the Company is not
liable or potentially liable for any response cost or natural resource damages
under Section 107(a) of CERCLA, or under any other so-called "superfund" or
"superlien" law or similar legal requirement, and the Company is not liable or
potentially liable for any Off-Site Liabilities.
(c) The Seller and Buyer agree that the only representations and
warranties of the Seller herein as to any Environmental Matters or any other
obligation or liability with respect to Materials of Environmental Concern are
those contained in this Section 2.17. Without limiting the generality of the
foregoing, the Buyer specifically acknowledges that the representations and
warranties contained in Sections 2.14, 2.18 and 2.19 do not relate to
Environmental Matters.
2.18 Legal Compliance. The Company is in compliance with all applicable
laws (including rules and regulations thereunder) of any federal, state or
foreign government, or any Governmental Entity, currently in effect, except for
such instances of noncompliance that, individually or in the aggregate, would
not reasonably be expected to have a Company Material Adverse Effect. None of
the Company, the Seller or the Parent has received written notice of any
material pending or threatened action, suit, proceeding, hearing, investigation,
claim, demand or notice alleging any failure by the Company to so comply.
2.19 Permits. The Disclosure Schedule lists all permits, licenses,
franchises or authorizations from any Governmental Entity held by the Company,
the absence of which would reasonably be expected to result in a Company
Material Adverse Effect (collectively, the "Permits"). To the knowledge of the
Seller, (a) each Permit listed in the Disclosure Schedule is in full force and
effect and the Company is not in violation of or default under any Permit and
(b) no suspension or cancellation of any such Permit has been threatened in
writing, except for any violation, default, suspension or cancellation that
would not reasonably be expected to result in a Company Material Adverse Effect.
2.20 Brokers' Fees. Neither the Seller nor the Company has any liability
or obligation to pay any fees or commissions to any broker, finder or agent with
respect to the transactions contemplated by this Agreement.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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2.21 Receivables; Major Customers.
(a) The breakdown and aging of accounts receivable, notes
receivable and other receivables of the Company as of the Balance Sheet Date as
set forth in Section 2.21(a) of the Disclosure Schedule is accurate and complete
in all material respects. All existing accounts receivable of the Company as of
the Closing Date arose in the ordinary course of business consistent in all
material respects with past practice, represent valid obligations of customers
of the Company and are collectible without, to the knowledge of the Seller, any
counterclaim or setoff.
(b) The identification and breakdown of the revenues received from
each customer that accounted for more than $250,000 of the gross revenues of the
Company in the two most recently completed fiscal years as set forth in Section
2.21(b) of the Disclosure Schedule is accurate and complete in all material
respects.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller that the statements
contained in this Article III are true and correct as of the date hereof. For
purposes of this Agreement, the phrase, "to the knowledge of the Buyer" or any
phrase of similar import shall mean and be limited to the actual knowledge of
the following individuals: Xxxxxx X. Xxxxxx, Xx., Xxxx Xxxxxxxx and Xxxxxxxx
Xxxxxxx.
3.1 Organization. The Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware.
3.2 Authority. The Buyer has all requisite corporate power and authority
to execute and deliver this Agreement, the Facility Agreement and the Escrow
Agreement and to perform its obligations hereunder and thereunder. The execution
and delivery by the Buyer of this Agreement, the Facility Agreement and the
Escrow Agreement and the consummation by the Buyer of the transactions
contemplated hereby and thereby have been validly authorized by all necessary
corporate action on the part of the Buyer. This Agreement has been, and the
Facility Agreement and the Escrow Agreement will be, validly executed and
delivered by the Buyer and, assuming this Agreement, the Facility Agreement and
the Escrow Agreement constitute the valid and binding obligation of the Seller
and this Agreement constitutes the valid and binding obligation of the Parent,
constitute or will constitute a valid and binding obligation of the Buyer,
enforceable against the Buyer in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium or other similar laws relating to or affecting
the rights of creditors generally and by equitable principles, including those
limiting the availability of specific performance, injunctive relief and other
equitable remedies and those providing for equitable defenses.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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3.3 Noncontravention. Neither the execution and delivery by the Buyer of
this Agreement, the Facility Agreement or the Escrow Agreement, nor the
consummation by the Buyer of the transactions contemplated hereby or thereby,
will:
(a) conflict with or violate any provision of the charter or
bylaws of the Buyer;
(b) require on the part of the Buyer any filing with, or permit,
authorization, consent or approval of, any Governmental Entity, except for any
filing, permit, authorization, consent or approval which if not obtained or made
would not reasonably be expected to result in a material adverse effect on the
ability of the Buyer to consummate the transactions contemplated by this
Agreement (a "Buyer Material Adverse Effect");
(c) conflict with, result in a breach of, constitute (with or
without due notice or lapse of time or both) a default under, result in the
acceleration of obligations under, create in any party any right to terminate or
modify, or require any notice, consent or waiver under, any contract, lease,
sublease, license, sublicense, franchise, permit, indenture, agreement or
mortgage for borrowed money, instrument of indenture or Security Interest to
which the Buyer is a party or by which the Buyer is bound, except for (i) any
conflict, breach, default, acceleration or right to terminate or modify that
would not reasonably be expected to result in a Buyer Material Adverse Effect or
(ii) any notice, consent or waiver the absence of which would not reasonably be
expected to result in a Buyer Material Adverse Effect; or
(d) violate any order, writ, injunction or decree specifically
naming, or statute, rule or regulation applicable to, the Buyer or any of its
properties or assets, except for any violation that would not reasonably be
expected to result in a Buyer Material Adverse Effect.
3.4 Litigation. There are no actions, suits, claims or legal,
administrative or arbitratorial proceedings pending against, or, to the Buyer's
knowledge, threatened against, the Buyer which would adversely affect the
Buyer's performance under this Agreement or the consummation of the transactions
contemplated by this Agreement.
3.5 Investment Intent. The Buyer is acquiring the Stock for investment
for its own account and not with a view to the distribution of any part thereof.
The Buyer acknowledges that the Stock has not been registered under U.S. federal
or any applicable state securities laws or the laws of any other jurisdiction
and cannot be resold without registration under such laws or an exemption
therefrom. The Buyer further acknowledges that (a) it has such knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of an investment in the Stock, (b) it can bear the economic
risk of an investment in the Stock for an indefinite period of time and (c) it
has had the opportunity to conduct an independent due diligence review of the
Company and its business.
3.6 Financing. The Buyer has sufficient sources of financing in order to
consummate the transactions contemplated by the Agreement and to fulfill its
obligations hereunder, including
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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without limitation payment to the Seller of the Initial Purchase Price and
delivery to the Escrow Agent of the Escrow Amount at the Closing.
3.7 Solvency. Immediately after giving effect to the transactions
contemplated by this Agreement and the closing of any financing to be obtained
by the Buyer or any of its Affiliates (as defined below) in order to effect the
transactions contemplated by this Agreement, the Buyer shall be able to pay its
debts as they become due and shall own property having a fair saleable value
greater than the amounts required to pay its debts (including a reasonable
estimate of the amount of all contingent liabilities). Immediately after giving
effect to the transactions contemplated by this Agreement and the closing of any
financing to be obtained by the Buyer or any of its Affiliates in order to
effect the transactions contemplated by this Agreement, the Buyer shall have
adequate capital to carry on its business. No transfer of property is being made
and no obligation is being incurred in connection with the transactions
contemplated by this Agreement and the closing of any financing to be obtained
by the Buyer or any of its Affiliates in order to effect the transactions
contemplated by this Agreement with the intent to hinder, delay or defraud
either present or future creditors of the Buyer. For the purpose of this
Agreement, "Affiliate" shall have the meaning assigned to it in Rule 12b-2 of
the Securities Exchange Act of 1934.
3.8 Due Diligence by the Buyer. The Buyer acknowledges that it has
conducted to its satisfaction an independent investigation of the financial
condition, results of operations, assets, liabilities, properties and projected
operations of the Company and, in making its determination to proceed with the
transactions contemplated by this Agreement, the Buyer has relied solely on the
results of its own independent investigation and the representations and
warranties of the Seller set forth in Article II, including the Disclosure
Schedule. Such representations and warranties by the Seller constitute the sole
and exclusive representations and warranties of the Seller to the Buyer in
connection with the transactions contemplated hereby, and the Buyer acknowledges
and agrees that the Seller is not making any representation or warranty
whatsoever, express or implied, beyond those expressly given in this Agreement,
including any implied warranty as to condition, merchantability or suitability
as to any of the assets of the Company, and it is understood that the Buyer
takes the Company, its assets and its business as is and where is (subject to
the benefit of the representations and warranties set forth in this Agreement).
The Buyer further acknowledges and agrees that any cost estimates, projections
or other predictions that may have been provided to the Buyer or any of its
employees, agents or representatives are not representations or warranties of
the Seller or any of its Affiliates. The Buyer has no knowledge that any of the
representations and warranties of the Seller in this Agreement is not true and
correct, and the Buyer has no knowledge of any errors in, or omissions from, the
Disclosure Schedule.
ARTICLE IV
INDEMNIFICATION
4.1 Indemnification by the Seller. Subject to the terms and conditions
of this Article IV, from and after the Closing, the Seller shall indemnify the
Buyer in respect of, and hold the Buyer harmless against, any and all
liabilities, monetary damages, fines, fees, penalties, costs and expenses
(including without limitation reasonable attorneys' fees and expenses,
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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including any fees and expenses incurred in defending any third-party claim for
which the Indemnifying Party (as defined below) is ultimately determined to be
responsible for indemnifying the Indemnified Party (as defined below) pursuant
to this Article IV) (collectively, "Damages") incurred or suffered by the Buyer
or any Affiliate thereof resulting from or constituting:
(a) any breach of a representation or warranty of the Seller
contained in this Agreement;
(b) any failure by the Seller to perform any covenant or agreement
contained in this Agreement; or
(c) (1) the presence of any Materials of Environmental Concern in
connection with the operation of the business of the Company at any site owned,
leased, occupied or controlled by the Company at any time prior to the date of
this Agreement, or at any site owned, leased, occupied or controlled by the
Seller or the Parent or any of their respective Affiliates in connection with
the business of the Company, (2) the generation, transportation, importation,
use, treatment, storage, or Release of any Materials of Environmental Concern by
or on behalf of the Company at any time prior to the date of this Agreement, or
by or on behalf of the Seller or the Parent or any of their respective
Affiliates in connection with the business of the Company, or (3) the failure of
the Company or any of its Affiliates to comply with Environmental Law prior to
the Closing Date.
4.2 Indemnification by the Buyer. Subject to the terms and conditions of
this Article IV, from and after the Closing, the Buyer shall indemnify the
Seller in respect of, and hold the Seller harmless against, any and all Damages
incurred or suffered by the Seller or any Affiliate thereof resulting from or
constituting:
(a) any breach of a representation or warranty of the Buyer
contained in this Agreement; or
(b) any failure by the Buyer to perform any covenant or agreement
contained in this Agreement.
4.3 Claims for Indemnification.
(a) Third-Party Claims. All claims for indemnification made under
this Agreement resulting from, related to or arising out of a third-party claim
against an Indemnified Party (as defined below) shall be made in accordance with
the following procedures. A person entitled to indemnification under this
Article IV (an "Indemnified Party") shall give prompt written notification to
the person from whom indemnification is sought (the "Indemnifying Party") of the
commencement of any action, suit or proceeding relating to a third-party claim
for which indemnification may be sought or, if earlier, upon the assertion of
any such claim by a third party. Such notification shall include a description
in reasonable detail (to the extent known by the Indemnified Party) of the facts
constituting the basis for such third-party claim and
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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the amount of the Damages claimed. Within 30 days after delivery of such
notification, the Indemnifying Party may, upon written notice thereof to the
Indemnified Party, assume control of the defense of such action, suit,
proceeding or claim with counsel reasonably satisfactory to the Indemnified
Party. If the Indemnifying Party does not assume control of such defense, the
Indemnified Party shall control such defense. The party not controlling such
defense may participate therein at its own expense; provided that if the
Indemnifying Party assumes control of such defense and the Indemnified Party
reasonably concludes, based on advice from counsel, that the Indemnifying Party
and the Indemnified Party have conflicting interests with respect to such
action, suit, proceeding or claim, the reasonable fees and expenses of counsel
to the Indemnified Party solely in connection therewith shall be considered
"Damages" for purposes of this Agreement; provided, however, that in no event
shall the Indemnifying Party be responsible for the fees and expenses of more
than one counsel for all Indemnified Parties. The Party controlling such defense
shall keep the other Party advised of the status of such action, suit,
proceeding or claim and the defense thereof and shall consider recommendations
made by the other Party with respect thereto. The Indemnified Party shall not
agree to any settlement of such action, suit, proceeding or claim without the
prior written consent of the Indemnifying Party. The Indemnifying Party shall
not agree to any settlement of such action, suit, proceeding or claim that does
not include a complete release of the Indemnified Party from all liability with
respect thereto or that imposes any liability or obligation on the Indemnified
Party without the prior written consent of the Indemnified Party.
(b) Procedure for Claims. An Indemnified Party wishing to assert a
claim for indemnification under this Article IV shall deliver to the
Indemnifying Party a written notice (a "Claim Notice") which contains (i) a
description and the amount (the "Claimed Amount") of any Damages incurred by the
Indemnified Party, (ii) a statement that the Indemnified Party is entitled to
indemnification under this Article IV and a reasonable explanation of the basis
therefor, and (iii) a demand for payment in the amount of such Damages. Within
30 days after delivery of a Claim Notice, the Indemnifying Party shall deliver
to the Indemnified Party a written response in which the Indemnifying Party
shall: (I) agree that the Indemnified Party is entitled to receive all of the
Claimed Amount (in which case such response shall be accompanied by a payment by
the Indemnifying Party to the Indemnified Party of the Claimed Amount, by check
or by wire transfer), (II) agree that the Indemnified Party is entitled to
receive part, but not all, of the Claimed Amount (the "Agreed Amount") (in which
case such response shall be accompanied by a payment by the Indemnifying Party
to the Indemnified Party of the Agreed Amount, by check or by wire transfer), or
(III) contest that the Indemnified Party is entitled to receive any of the
Claimed Amount. If the Indemnifying Party in such response contests the payment
of all or part of the Claimed Amount, the Indemnifying Party and the Indemnified
Party shall use good faith efforts to resolve such dispute. If such dispute is
not resolved within 60 days following the delivery by the Indemnifying Party of
such response, the Indemnifying Party and the Indemnified Party shall each have
the right to submit such dispute to a court of competent jurisdiction.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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4.4 Survival.
(a) The representations and warranties of the Seller and the Buyer
set forth in this Agreement shall survive the Closing and continue until the
one-year anniversary of the Closing Date, at which time they shall expire.
Notwithstanding the foregoing, (i) the representations and warranties of the
Seller contained in Sections 2.1, 2.2 and 2.3 and of the Buyer contained in
Sections 3.1 and 3.2 shall survive the Closing without limitation and (ii) the
representations and warranties of the Seller contained in Sections 2.8 and 2.17
shall expire upon the occurrence of the Closing.
(b) If an indemnification claim is properly asserted in writing
pursuant to Section 4.3 prior to the expiration as provided in Section 4.4(a) of
the representation or warranty that is the basis for such claim, then such
representation or warranty shall survive until, but only for the purpose of, the
resolution of such claim.
4.5 Limitations.
(a) Notwithstanding anything to the contrary contained in this
Agreement, the following limitations shall apply to indemnification claims under
this Agreement:
(i) the Seller shall be liable with respect to claims under
this Article IV for only that portion of the aggregate Damages related to such
claims, considered together, which exceeds [*];
(ii) the aggregate liability of the Seller for all Damages
under this Article IV shall not exceed an amount equal to [*];
(iii) the Buyer shall not be entitled to make any claim for
indemnification with respect to any matter to the extent the Purchase Price has
been adjusted to reflect such matter pursuant to Section 1.4, and the amount of
any Damages for which a Party is entitled to indemnification as provided under
this Article IV shall be calculated net of any accruals, reserves or provisions
therefor reflected in the Final Closing Balance Sheet; and
(iv) effective as of the Closing, (A) the Buyer hereby waives
(on its own behalf and that of each of its subsidiaries, including the Company)
any claim the Company may have against Seller or any of its Affiliates as of the
Closing Date; and (B) the Parent hereby waives (on its own behalf and that of
each of its subsidiaries) any claim the Parent or any of its subsidiaries may
have against the Company. In releasing claims unknown to the Parties at present,
each Party is waiving all rights and benefits under Section 1542 of the
California Civil Code, and any law or legal principle of similar effect in any
jurisdiction: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH
THE DEBTOR."
(b) In no event shall any Indemnifying Party be responsible or
liable for any Damages or other amounts under this Article IV that are
consequential, in the nature of lost
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
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profits, diminution in the value of property, special or punitive or otherwise
not actual damages. Seller and Buyer shall (and shall cause their respective
Affiliates to) use reasonable commercial efforts to pursue all legal rights and
remedies available in order to minimize the Damages for which indemnification is
provided to it under this Article IV.
(c) The amount of Damages recoverable by an Indemnified Party
under this Article IV with respect to an indemnity claim shall be reduced by the
amount of any payment actually received by such Indemnified Party (or an
Affiliate thereof), with respect to the Damages to which such indemnity claim
relates, from any insurance carrier. If an Indemnified Party (or an Affiliate)
receives any insurance payment in connection with any claim for Damages for
which it has already received an indemnification payment from the Indemnifying
Party, it shall pay to the Indemnifying Party, within 30 days of receiving such
insurance payment, an amount equal to the excess of (A) the amount previously
received by the Indemnified Party under this Article IV with respect to such
claim plus the amount of the insurance payments received, over (B) the amount of
Damages with respect to such claim which the Indemnified Party has become
entitled to receive under this Article IV. In no event shall this Section 4.5(c)
require an Indemnified Party to make any insurance claims.
(d) Except with respect to claims for equitable relief, including
specific performance, made with respect to breaches of any covenant or agreement
contained in this Agreement, or claims involving the commission of actual fraud
by the Indemnifying Party, the rights of the Indemnified Parties under this
Article IV and Article V shall be the sole and exclusive remedies of the
Indemnified Parties and their respective Affiliates with respect to claims
covered by Article IV or Article V or otherwise relating to the transactions
that are the subject of this Agreement. Without limiting the generality of the
foregoing, in no event shall any Party, its successors or permitted assigns be
entitled to claim or seek rescission of the transactions consummated by this
Agreement. In addition, notwithstanding anything to the contrary set forth
herein, the sole and exclusive remedy of the Buyer for any breach by the Seller
of its obligations under Section 7.3 of this Agreement shall be as provided in
the Escrow Agreement.
(e) To the extent any representation or warranty of the Seller in
Article II is, to the knowledge of the Buyer on or prior to the Closing Date,
untrue or incorrect, the Buyer shall have no rights to indemnification under
this Article IV by reason of such untruth or inaccuracy.
4.6 Treatment of Indemnification Payments. All indemnification payments
made under this Agreement shall be treated by the Parties as an adjustment to
the Adjusted Purchase Price.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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ARTICLE V
TAX MATTERS
5.1 Preparation and Filing of Tax Returns; Payment of Taxes.
(a) The Seller shall be responsible for the preparation and filing
of (i) all Tax Returns for the Seller for all periods, (ii) all Tax Returns for
any Income Taxes (as hereinafter defined) of the Company for all taxable periods
that end on or before the Closing Date and (iii) all other Tax Returns of the
Company required to be filed (taking into account extensions) prior to the
Closing Date. For purposes of this Agreement, "Income Taxes" shall mean any
Taxes imposed upon or measured by net income. The Seller shall make or cause to
be made all payments required with respect to any such Tax Returns. The Buyer
shall promptly reimburse the Seller for the amount of any such Taxes paid by the
Seller (i) to the extent such Taxes are attributable (as determined under
Section 5.3 hereof) to periods following the Closing Date and (ii) to the extent
of any reserves for Taxes on the Final Closing Balance Sheet (the "Tax
Reserves").
(b) The Buyer shall be responsible for the preparation and filing
of all other Tax Returns for the Company after the Closing Date. The Buyer shall
make all payments required with respect to any such Tax Returns; provided,
however, that the Seller shall promptly reimburse the Buyer to the extent any
payment the Buyer is required to make relates to the operations of the Company
for any period ending (or deemed pursuant to Section 5.3(b) to end) on or before
the Closing Date to the extent such portion of the payment exceeds the amount of
the Tax Reserves as adjusted for payments pursuant to Section 5.1(a) and this
Section 5.1(b).
(c) Any Tax Return to be prepared and filed for taxable periods
beginning before the Closing Date and ending after the Closing Date shall be
prepared on a basis consistent with the last previous similar Tax Return, and
the Buyer shall consult with the Seller concerning each such Tax Return and
report all items with respect to the period ending on the Closing Date in
accordance with the instructions of the Seller; provided, however, that if the
Buyer is advised by counsel that the filing of any Tax Return and the reporting
on such Tax Return of any item in accordance with the instructions of the Seller
may subject the Buyer to any penalties or fines, the Buyer may file such Tax
Return without regard to the Seller's instructions relating to such item. The
Buyer shall provide the Seller with a copy of each proposed Tax Return (and such
additional information regarding such Tax Return as may reasonably be requested
by the Seller) at least 20 days prior to the filing of such Tax Return.
(d) The Buyer and the Seller shall each be responsible for the
payment of 50% of any transfer, sales, use, stamp, conveyance, value added,
recording, registration, documentary, filing and other non-income Taxes and
administrative fees (including, without limitation, notary fees) arising in
connection with the consummation of the transactions contemplated by this
Agreement.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(e) The Buyer shall be responsible for the payment of any and all
Taxes attributable to the acts or omissions of the Buyer or the Buyer's
Affiliates occurring from and after the Closing.
5.2 Tax Indemnification.
(a) The Seller shall indemnify and hold harmless the Buyer, the
Company, and any successors thereto or Affiliates thereof in respect of and
against (i) Damages resulting from, relating to, or constituting any failure to
perform any covenant or agreement set forth in this Article V, and (ii) without
duplication, the following Taxes to the extent such Taxes exceed the Tax
Reserves:
(A) Any Taxes for any taxable period ending (or deemed
pursuant to Section 5.3(b) to end) on or before the Closing Date due and payable
by the Company; and
(B) Any Taxes for any taxable period ending (or deemed
pursuant to Section 5.3(b) to end) on or before the Closing Date for which the
Company has any liability under Treasury Regulations Section 1.1502-6 or under
any comparable or similar provision of state, local or foreign laws, as a
transferee or successor, or pursuant to any contractual obligation.
(b) The Buyer shall indemnify and hold harmless the Seller in
respect of and against (i) the failure to perform any covenant or agreement set
forth in this Article V, and (ii) without duplication, the following Taxes:
(A) Any and all Taxes due and payable by the Company
for any taxable period beginning (or deemed pursuant to Section 5.3(b) to begin)
after the Closing Date;
(B) 50% of any transfer, sales, use, stamp,
conveyance, value added, recording, registration, documentary, filing and other
non-income Taxes and administrative fees (including, without limitation, notary
fees) arising in connection with the consummation of the transactions
contemplated by this Agreement whether levied on the Buyer, the Seller, the
Company, or any of their respective Affiliates;
(C) The Tax Reserves; and
(D) Any and all Taxes attributable to the acts or
omissions of the Buyer or the Buyer's Affiliates occurring from and after the
Closing.
5.3 Allocation of Certain Taxes.
(a) The Buyer and the Seller agree that if the Company or the
Seller is permitted but not required under applicable foreign, state or local
Tax laws to treat the Closing Date as the last day of a taxable period, the
Buyer and the Seller shall treat such day as the last
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day of a taxable period. The Buyer and the Seller agree that they will treat the
Company as if it ceased to be part of the affiliated group of corporations of
which the Seller is a member within the meaning of Section 1504 of the Code, and
any comparable or similar provision of state, local or foreign laws or
regulations, as of the close of business on the Closing Date.
(b) Any Taxes for a taxable period beginning before and ending
after the Closing Date shall be paid by the Buyer or its Affiliates and the
portion of any such Taxes allocable to the portion of such period ending on the
Closing Date shall be deemed to equal (i) in the case of Taxes that (A) are
based upon or related to income or receipts or (B) imposed in connection with
any sale or other transfer or assignment of property, the amount which would be
payable if the taxable year ended with the Closing Date, and (ii) in the case of
other Taxes imposed on a periodic basis (including property Taxes), the amount
of such Taxes for the entire period multiplied by a fraction the numerator of
which is the number of calendar days in the period ending with the Closing Date
and the denominator of which is the number of calendar days in the entire
period. For purposes of the provisions of Section 5.1, each portion of such
period shall be deemed to be a taxable period (whether or not it is in fact a
taxable period).
5.4 Refunds and Carrybacks.
(a) The Seller shall be entitled to any refunds (including any
interest paid thereon) or credits of Taxes with respect to the Company
attributable to taxable periods ending (or deemed pursuant to Section 5.3(b) to
end) on or before the Closing Date.
(b) The Buyer and/or its Affiliates, as the case may be, shall be
entitled to any refunds (including any interest paid thereon) or credits of
Taxes with respect to the Company attributable to taxable periods beginning (or
deemed pursuant to Section 5.3(b) to begin) after the Closing Date.
(c) The Buyer shall forward to or reimburse the Seller for any
such refunds (including any interest paid thereon) or credits due the Seller
after receipt thereof, and the Seller shall promptly forward to the Buyer or
reimburse the Buyer for any such refunds (including any interest paid thereon)
or credits due the Buyer after receipt thereof.
(d) The Buyer and the Seller agree that, with respect to any Tax,
the Company shall not carry back any item of loss, deduction or credit which
arises in any taxable period ending after the Closing Date to any taxable period
ending on or before the Closing Date.
5.5 Cooperation on Tax Matters; Tax Audits.
(a) The Buyer and the Seller and their respective Affiliates shall
cooperate in the preparation of all Tax Returns for any Tax periods for which
one Party could reasonably require the assistance of the other Party in
obtaining any necessary information. Such cooperation shall include, but not be
limited to, furnishing prior years' Tax Returns or return preparation packages
to the extent related to the Company illustrating previous reporting practices
or containing historical information relevant to the preparation of such Tax
Returns,
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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and furnishing such other information within such party's possession requested
by the party filing such Tax Returns as is relevant to their preparation. Such
cooperation and information also shall include without limitation provision of
powers of attorney for the purpose of signing Tax Returns and defending audits
and promptly forwarding copies of appropriate notices and forms or other
communications received from or sent to any applicable governmental authority
responsible for the imposition of Taxes (the "Taxing Authority") which relate to
the Company, and providing copies of all relevant Tax Returns to the extent
related to the Company, together with accompanying schedules and related
workpapers, documents relating to rulings or other determinations by any Taxing
Authority and records concerning the ownership and Tax basis of property, which
the requested party may possess. The Buyer and the Seller and their respective
Affiliates shall make their respective employees and facilities available on a
mutually convenient basis to explain any documents or information provided
hereunder.
(b) The Seller shall have the right, at its own expense, to
control any audit or examination by any Taxing Authority ("Tax Audit"), initiate
any claim for refund, contest, resolve and defend against any assessment, notice
of deficiency, or other adjustment or proposed adjustment relating to any and
all Taxes for any taxable period ending on or before the Closing Date with
respect to the Company. The Buyer shall have the right, at its own expense, to
control any other Tax Audit, initiate any other claim for refund, and contest,
resolve and defend against any other assessment, notice of deficiency, or other
adjustment or proposed adjustment relating to Taxes with respect to the Company;
provided that, with respect to (i) any state, local or foreign Taxes for any
taxable period beginning before the Closing Date and ending after the Closing
Date and (ii) any item the adjustment of which may cause the Seller to become
obligated to make any payment pursuant to Section 5.1(a) hereof, the Buyer shall
consult with the Seller with respect to the resolution of any issue that would
affect the Seller, and not settle any such issue, or file any amended Tax Return
relating to such issue, without the consent of the Seller. Where consent to a
settlement is withheld by the Seller pursuant to this Section 5.5(b), the Seller
may continue or initiate any further proceedings at its own expense, provided
that any liability of the Buyer, after giving effect to this Agreement, shall
not exceed the liability that would have resulted had the Seller not withheld
its consent.
5.6 Termination of Tax Sharing Agreements. All Tax sharing agreements or
similar arrangements with respect to or involving the Company shall be
terminated prior to the Closing Date and, after the Closing Date, the Buyer and
its Affiliates shall not be bound thereby or have any liability thereunder.
5.7 Scope of Article V. Any claim by any Party relating to a breach by
the other Party of its obligations under this Article V shall be pursued in
accordance with the procedures for indemnification claims, and shall otherwise
be subject to the terms and conditions, set forth in Article IV. Notwithstanding
the foregoing or any other term or condition of Article IV, (a) claims for a
breach of an obligation under this Article V may be made by a party at any time
prior to the 60th day after the expiration of the statute of limitations
applicable to the Tax matter to which the claim relates and (b) to the extent
there is any inconsistency between the terms of Article IV and this Article V
with respect to the allocation of responsibility between the Seller and the
Buyer for Taxes relating to the Company, the provisions of this Article V shall
govern.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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ARTICLE VI
EMPLOYEE MATTERS
6.1 Employment. The Buyer shall offer (or cause the Company to continue)
employment, on an "at-will" basis (except, in the case of continued Company
employment, to the extent otherwise provided in any agreement referenced in
Section 2.15(a) of the Disclosure Schedule), commencing on the Closing Date to
all Company Employees, including those on vacation, military leave, leave of
absence (whether paid or unpaid), disability or layoff, on the terms set forth
in Section 6.4. Nothing in the foregoing sentence will limit the Buyer's ability
to terminate the employment of any Company Employee at any time after the
Closing (except to the extent otherwise provided in any agreement referenced in
Section 2.15(a) of the Disclosure Schedule).
6.2 Cessation of Business Benefit Plan Participation; 401(k) Plan
Matters. Effective as of the Closing, all Company Employees who participate in
any defined contribution plan qualified under Section 401 of the Code sponsored
by the Seller or the Parent (the "Seller's 401(k) Plan") shall cease to
participate in said plan. The Buyer shall establish, if it does not already
maintain, a salary deferral plan qualified under Section 401 of the Code which
shall accept direct or indirect rollovers by Company Employees of their vested
interest in the Seller's 401(k) Plan.
6.3 Employment Related Liabilities. The Buyer shall assume liability for
and shall pay directly to the appropriate Company Employee (or reimburse the
Parent or Seller, as appropriate, for amounts that any of them pay to any such
Company Employee) any amounts to which any Company Employee becomes entitled as
a result of, or in connection with (a) the sale of the Company hereunder, (b)
the Buyer's failure to offer employment or to employ Company Employees in
accordance with Section 6.1 or applicable local law, (c) the employment of any
Company Employee on or after the Closing Date, (d) any change or proposed change
to the remuneration, benefits, terms and conditions of employment, or the
working conditions of any Company Employee after the Closing Date and (e) the
termination of employment of any Company Employee on or after the Closing Date.
Notwithstanding the foregoing, neither the Buyer nor the Company shall have any
liability under any Company Benefit Plan after the Closing, except with respect
to the agreements and plans set forth on Schedule 6.3, which the Parties agree
will not be affected by the Closing.
6.4 Compensation; Employee Benefits; Severance Plans. The Buyer will [*]
for [*] with [*], up to a [*] of [*], under all the [*] in effect immediately
prior to the Closing Date with respect to [*] of the [*)] including, without
limitation [*], to all [*] who accept the [*] of [*] or who [*] as [*] of the
[*] on the [*] (collectively, [*], to the same extent such [*] was [*] under [*]
of [*] in which the [*] prior to the [*]; provided, however, that there shall be
no [*] of [*] as a result of such [*]. The Seller shall cause all severance pay
plans, programs and practices in effect immediately prior to the Closing Date
with respect to any Company Employee to be terminated effective as of the
Closing, other than such plans, programs and practices set forth on Schedule
6.3. None of the provisions of this Agreement, including this Section 6.4, shall
affect the Buyer's or the Company's employment of the Company Employees on an
"at-will" basis
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(except to the extent otherwise provided in any agreement referenced in Section
2.15(a) of the Disclosure Schedule).
6.5 Welfare Plans. With respect to any Buyer Plan that is an "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA) or any plan directly
or indirectly maintained or contributed to by the Buyer providing similar
benefits to an "employee welfare benefit plan" (as defined in Section 3(1) of
ERISA), the Buyer shall, to the extent permitted by its insurance carriers, (a)
cause to be waived any pre-existing condition limitations or actively-at-work
requirements and (b) give effect, in determining any deductible and maximum
out-of-pocket limitations, to claims incurred and amounts paid by, and amounts
reimbursed to, such New Buyer Employees with respect to similar plans maintained
by the Seller or any of its Affiliates for such New Buyer Employees immediately
prior to the Closing Date. The Buyer shall make appropriate arrangements to
allow the use by New Buyer Employees of any amounts available under any
cafeteria plan or flexible spending account (as defined in Section 125 of the
Code) which was maintained by the Seller or any of its Affiliates for such New
Buyer Employees; provided, however, that the Seller and its Affiliates shall be
required to transfer to the Buyer the dollar amount of such available amounts
under such cafeteria plan or flexible spending account.
6.6 No Hiring or Solicitation of Employees. The Seller and the Parent
each agrees that during the period commencing on the Closing Date and continuing
until the first anniversary of the Closing Date, they shall not, and shall not
permit any of their Affiliates or Subsidiaries to: (a) hire any employee of the
Buyer or its Affiliates or Subsidiaries (including the Company), or (b)
knowingly directly or indirectly, personally or through others, encourage,
induce, attempt to induce, solicit or attempt to solicit (on the Seller's or the
Parent's own behalf or on behalf of any other person or entity) any employee of
the Buyer or its Affiliates or Subsidiaries (including the Company) to leave his
or her employment with the Buyer or any Subsidiary (including the Company) or
Affiliate of the Buyer, it being understood that any advertisement for job
positions of a general nature shall not be a violation hereof. The Buyer agrees
that during the period commencing on the Closing Date and continuing until the
first anniversary of the Closing Date, the Buyer shall not, and shall not permit
any of its Affiliates or Subsidiaries (including the Company) to: (a) hire any
employee of the Seller or the Parent or their Affiliates or Subsidiaries, or (b)
knowingly directly or indirectly, personally or through others, encourage,
induce, attempt to induce, solicit or attempt to solicit (on the Buyer's own
behalf or on behalf of any other person or entity) any employee of the Seller or
the Parent or their Affiliates or Subsidiaries to leave his or her employment
with the Seller or the Parent or any Subsidiary or Affiliate of the Seller or
the Parent, it being understood that any advertisement for job positions of a
general nature shall not be a violation hereof.
ARTICLE VII
OTHER POST-CLOSING COVENANTS
7.1 Access to Information; Record Retention; Cooperation.
(a) Access to Information. Subject to compliance with contractual
obligations and applicable law and regulations regarding classified information
and security clearance,
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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following the Closing, each Party shall afford to each other Party and to such
Party's authorized accountants, counsel and other designated representatives
during normal business hours in a manner so as to not unreasonably interfere
with the conduct of business (i) reasonable access and duplicating rights to all
non-privileged records, books, contracts, instruments, documents,
correspondence, computer data and other data and information (collectively,
"Information") within the possession or control of such Party relating to the
Company and its business and (ii) reasonable access to the personnel of such
Party. Requests may be made under this Section 7.1(a) for financial reporting
and accounting matters, preparing financial statements, preparing, reviewing and
analyzing the Closing Balance Sheet, resolving any Disputes under Section 1.4,
preparing and filing of any Tax Returns, prosecuting any claims for refund,
defending any Tax claims or assessments, preparing securities law or securities
exchange filings, prosecuting, defending or settling any litigation,
Environmental Matter or insurance claim, performing obligations under this
Agreement, and all other proper business purposes.
(b) Preparation of the Seller Financial Statements. Without
limitation of the provisions of Section 7.1(a), following the Closing, the Buyer
shall provide to the Seller all information relating to the Company reasonably
required for the Seller to prepare the 8-K Financial Statements (as defined
below), the 10-Q Financial Statements (as defined below) and the financial
statements of the Seller and its Affiliates. In connection with the preparation
of (i) the Closing Balance Sheet, the 8-K Financial Statements and the 10-Q
Financial Statements and (ii) such financial statements, the Buyer shall provide
the Seller (and its auditors) with reasonable access to the Company, its
financial management and any accountant's work papers, and all financial books,
accounts and records relating to the Company and its business. In addition, the
Buyer shall provide to the Seller and the Seller's auditors all consents,
management representation letters, engagement letters and similar documentation
reasonably requested by the Seller or the Seller's auditors in connection with
the preparation of the 8-K Financial Statements and the 10-Q Financial
Statements.
(c) Reimbursement. A party making Information or personnel
available to another party under Section 7.1 shall be entitled to receive from
such other party, upon the presentation of invoices therefor, payments for such
amounts relating to supplies, disbursements and other out-of-pocket expenses, as
may reasonably be incurred in making such Information or personnel available;
provided, however, that no such reimbursements shall be required for the salary
or cost of fringe benefits or similar expenses pertaining to employees of the
providing party.
(d) Retention of Records. Except as may otherwise be required by
law or agreed to in writing by the Seller and Buyer, each of Seller and Buyer
shall use reasonable commercial efforts to preserve, until six years after the
Closing Date, all Information in its possession or control pertaining to the
Company prior to the Closing. Notwithstanding the foregoing, in lieu of
retaining any specific Information, either Party may offer in writing to the
other Party to deliver such Information to the other Party, and if such offer is
not accepted within 90 days, the offered Information may be disposed of at any
time.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(e) Confidentiality. Each of Seller and Buyer shall hold, and
shall use reasonable commercial efforts to cause its respective Affiliates,
consultants and advisors to hold, in strict confidence all Information
concerning the other furnished to it by the other or their representatives
pursuant to this Section 7.1 (except to the extent that such Information (i) is
or becomes generally available to the public other than as a result of any
action or inaction by the receiving party, (ii) was within the possession of the
receiving party prior to it being furnished to the receiving party by or on
behalf of the disclosing party pursuant hereto, provided that the source of such
information was not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to any person or
entity with respect to such information, or (iii) is or becomes available on a
non-confidential basis to the receiving party from a source other than the
disclosing party, provided that the source of such information was not bound by
a confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to any person or entity with respect to such
information), and each Party shall not release or disclose such Information to
any other person, except its auditors, attorneys, financial advisors, bankers
and other consultants and advisors, unless compelled to disclose such
Information by judicial or administrative process or by other requirements of
law or so as not to violate the rules of any stock exchange; provided, however,
that in the case of disclosure compelled by judicial or administrative process,
the receiving party shall (to the extent permitted by applicable law) notify the
disclosing party promptly of the request and the documents requested thereby so
that the disclosing party may seek an appropriate protective order or other
appropriate remedy. If, in the absence of a protective order or other remedy or
the receipt of a waiver hereunder, a Party is, in the written opinion of its
counsel, compelled to disclose any Information to any tribunal or other entity
or else stand liable for contempt or suffer other censure or penalty, such Party
may so disclose the Information without liability hereunder; provided, however,
that, such Party gives written notice to the other Party of the information to
be disclosed (including copies of the relevant portions of the relevant
documents) as far in advance of its disclosure as is practicable, uses all
reasonable efforts to limit any such disclosure to the precise terms of such
requirement and cooperates with the disclosing party to obtain an appropriate
protective order or other reliable assurance that confidential treatment will be
accorded to such information by the tribunal or other entity.
7.2 Non-Competition. During the period commencing on the Closing Date
and continuing until the third anniversary of the Closing Date (the
"Noncompetition Period"), the Parent shall not (and shall cause each
Noncompetition Party (as defined below) not to), directly or indirectly develop
any business, division or enterprise that manufactures or sells RF amplifer
modules for defense applications competitive with the RF modules made available
for sale by the Buyer for such applications on the Closing Date (the "Restricted
Business"). Notwithstanding the foregoing, no Noncompetition Party shall be
prohibited from:
(a) continuing to sell products or services that are made
available for sale by any Noncompetition Party as of the date hereof, or selling
products or services to an entity that is engaged in the Restricted Business, so
long as the products sold by the Noncompetition Party are not RF amplifier
modules for defense applications;
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(b) purchasing products or services from, or otherwise engaging in
a subcontracting or commercial relationship (other than a subcontracting or
commercial relationship primarily relating to the manufacturing or sale of RF
modules for defense applications) with an entity which is engaged in the
Restricted Business;
(c) performing its obligations under this Agreement and the
Facility Agreement or otherwise taking actions in connection with the completion
or sale of the Company;
(d) merging with, purchasing or otherwise acquiring or owning any
entity which is engaged in the Restricted Business; or
(e) acquiring or owning less than 5% (by voting power) of the
outstanding capital stock of any publicly-traded company which is engaged in the
Restricted Business;
For purposes of the Agreement, "Noncompetition Party" means the Parent and any
Subsidiary of the Parent while (but only while) such entity is a Subsidiary of
the Parent and "Subsidiary" means any corporation, partnership, trust, limited
liability company or other non-corporate business enterprise in which the Parent
(or another Subsidiary) holds stock or other ownership interests representing
more than 50% of the voting power of all outstanding stock or ownership
interests of such entity; provided, however, Noncompetition Party shall not
include any party with which the Parent merges or any party that purchases or
otherwise acquires the Parent, and the Buyer hereby acknowledges that the terms
of this Section 7.2 shall not be binding upon any party to any such merger,
purchase or acquisition.
7.3 Financial Statements. Subject to the Buyer's compliance with the
provisions of Section 7.1(a) or Section 7.1(b) above, within 60 days following
the Closing Date, the Seller shall prepare and deliver to the Buyer audited
financial statements of the Company for the fiscal year ended December 28, 2003
and unaudited financial statements for the six months ended July 3, 2004 (the
"8-K Financial Statements") and unaudited financial statements of the Company
for each of the four quarters in the four-quarter period ended July 3, 2004 (the
"10-Q Financial Statements"). The Seller shall deliver drafts of such financial
statements to the Buyer in preliminary, unaudited form as soon as practicable
after the Closing Date. The Buyer and the Seller shall each be responsible for
the payment of 50% of the costs and expenses incurred by the Seller in
connection with the preparation of the 8-K Financial Statements and the 10-Q
Financial Statements; provided, however, that the portion of such fees and
expenses for which the Buyer shall be responsible pursuant to this sentence
shall not exceed $75,000.
ARTICLE VIII
MISCELLANEOUS
8.1 Press Releases and Announcements. No Party shall issue (and each
Party shall cause its Affiliates not to issue) any press release or public
disclosure relating to the subject matter of this Agreement without the prior
written approval of the other Party; provided, however, that either Party (and
any Affiliate of such Party) may make any public disclosure it
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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believes in good faith is required by law, regulation or stock exchange or
NASDAQ National Market listing requirement (in which case the disclosing Party
shall advise the other Party and the other Party shall, if practicable, have the
right to review such press release or announcement prior to its publication).
8.2 No Third Party Beneficiaries. This Agreement shall not confer any
rights or remedies upon any person other than the Parties and their respective
successors and permitted assigns and, to the extent specified herein, their
respective Affiliates.
8.3 Action to be Taken by Affiliates. The Parties shall cause their
respective Affiliates to comply with all of the obligations specified in this
Agreement to be performed by such Affiliates. Prior to the Closing, the Company
will be deemed, for purposes of this Agreement, to be an Affiliate of the Seller
and not of the Buyer. Following the Closing, the Company will be deemed, for
purposes of this Agreement, to be an Affiliate of the Buyer and not of the
Seller.
8.4 Entire Agreement. This Agreement (including the documents referred
to herein) and the Confidentiality Agreement (as defined below) constitute the
entire agreement between the Buyer and the Seller with respect to the subject
matter hereof. This Agreement supersedes any prior agreements or understandings
among the Buyer, on the one hand, and the Seller, on the other hand, and any
representations or statements made by or on behalf of the Seller or any of its
Affiliates to the Buyer, whether written or oral, with respect to the subject
matter hereof, other than the Confidentiality Agreement. The Confidentiality
Agreement, insofar as it covers information relating to the Company, shall
terminate effective as of the Closing, but shall remain in effect insofar as it
covers other information disclosed thereunder. For the purposes of this
Agreement, "Confidentiality Agreement" means the confidentiality agreement by
and between the Parent and the Buyer dated as of May 15, 2004.
8.5 Succession and Assignment. Neither Party may assign either this
Agreement or any of its rights, interests, or obligations hereunder without the
prior written approval of the Seller (in the case of an assignment by the Buyer)
or the Buyer (in the case of an assignment by any Seller), which written
approval shall not be unreasonably withheld or delayed. Notwithstanding the
foregoing, this Agreement, and all rights, interests and obligations hereunder,
may be assigned, without such consent, to any entity that acquires all or
substantially all of a Party's business or assets. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors and permitted assigns.
8.6 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly delivered four business
days after it is sent by registered or certified mail, return receipt requested,
postage prepaid, or one business day after it is sent for next business day
delivery via a reputable nationwide overnight courier service, in each case to
the intended recipient as set forth below:
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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If to the Buyer: Copy to:
Endwave Corporation Xxxxxx Godward LLP
000 Xxxxxxx Xxxxxx Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000 Telecopy: 000-000-0000
Attention: Xxxxxxxx X. Xxxxxxx Attention: Xxxxx X. Xxxxxxx, Esq.
If to the Seller or the Parent: Copies to:
Bookham Technology plc Xxxxxx Xxxxxx Xxxxxxxxx
0-00 Xxxxxx Xxxx Xxx Xxxx xxx Xxxx XXX
Xxxxxx, Xxxxxxx, X0X 0X0 00 Xxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
Phone: 000-000-0000 Phone: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
Attn: Xxxxxx Xxxxxx, Esq. Attn: Xxxx X. Xxxxxxx, Esq.
and
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx
XX00 0XX
Xxxxxx Xxxxxxx
Phone: 000-00-0000-000-000
Fax: 000-00-0000-000-000
Attn: Xxxxxx Xxxxx, Esq.
Any Party may give any notice, request, demand, claim, or other communication
hereunder using any other means (including personal delivery, expedited courier,
messenger service, telecopy, telex, ordinary mail, or electronic mail), but no
such notice, request, demand, claim or other communication shall be deemed to
have been duly given unless and until it actually is received by the party for
whom it is intended. Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other Parties notice in the manner herein set forth.
8.7 Amendments and Waivers. The Parties may mutually amend or waive any
provision of this Agreement at any time. No amendment or waiver of any provision
of this Agreement shall be valid unless the same shall be in writing and signed
by the Parties and, to the extent that Section 7.2 is amended or modified, the
Parent. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation or breach of
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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warranty or covenant hereunder or affect in any way any rights arising by virtue
of any prior or subsequent such occurrence.
8.8 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the body 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,
or 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.
8.9 Expenses. Except as otherwise specifically provided to the contrary
in this Agreement and the Escrow Agreement, each of the Parties shall bear its
own costs and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated hereby. The
Seller shall bear any costs and expenses (including legal fees and expenses)
incurred by the Company in connection with this Agreement and the transactions
contemplated hereby.
8.10 Attorneys' Fees. In the event that any suit or action is instituted
to enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party its reasonable fees, costs
and expenses in connection with such suit or action, including without
limitation, such reasonable fees and expenses of attorneys and accountants,
which shall include, without limitation, all fees, costs and expenses of any
successful appeals.
8.11 Specific Performance. Each Party acknowledges and agrees that the
other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each Party agrees that the other Party may
be entitled to an injunction or injunctions to prevent breaches of the
provisions of this Agreement and to enforce specifically this Agreement and the
terms and provisions hereof in any action instituted in any court of the United
States or any state thereof having jurisdiction over the Parties and the matter.
8.12 Governing Law. This Agreement and any disputes hereunder shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without giving effect to any choice or conflict of law provision or
rule (whether of the State of Delaware or any other jurisdiction) that would
cause the application of laws of any jurisdiction other than those of the State
of Delaware.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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8.13 Construction.
(a) The language used in this Agreement shall be deemed to be the
language chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party.
(b) Any reference to any federal, state, local, or foreign statute
or law shall be deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise.
(c) The section headings contained in this Agreement are inserted
for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(d) Any reference herein to an Article, section or clause shall be
deemed to refer to an Article, section or clause of this Agreement, unless the
context clearly indicates otherwise.
(e) All references to "$", "Dollars" or "US$" refer to currency of
the United States of America.
8.14 Waiver of Jury Trial. To the extent permitted by applicable law,
each Party hereby irrevocably waives all rights to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to this Agreement or the transactions contemplated
hereby or the actions of any Party in the negotiation, administration,
performance and enforcement of this Agreement.
8.15 Incorporation of Exhibits and Schedules. The Exhibit and Schedules
identified in this Agreement are incorporated herein by reference and made a
part hereof.
8.16 Counterparts and Facsimile Signature. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument. This Agreement
may be executed by facsimile signature.
[Remainder of page intentionally left blank]
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-36-
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first above written.
SELLER:
NEW FOCUS, INC.
By: /s/Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: President
BUYER:
ENDWAVE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx Xx.
-------------------------------------
Name: Xxxxxx X. Xxxxxx Xx.
Title: Chief Executive Officer
The undersigned hereby enters into this
Agreement solely for purposes of
agreeing to be bound by the provisions of
Sections 4.5(a)(iv), 6.6 and 7.2 hereof.
BOOKHAM TECHNOLOGY PLC
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Chief Executive Officer
[Signature page to Purchase and Sale Agreement]
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-37-
Execution Copy
TRANSITION FACILITY AGREEMENT
This TRANSITION FACILITY AGREEMENT (this "Agreement") is made this 21st
day of July, 2004, by and between Endwave Corporation, a Delaware corporation
("Acquirer"), and New Focus, Inc., a Delaware corporation ("Seller").
WHEREAS, Acquirer and Seller are parties to a Purchase and Sale Agreement
dated as of July 21, 2004 (the "Purchase and Sale Agreement"), pursuant to which
Seller has agreed to sell its wholly-owned subsidiary, JCA Technology, Inc. (the
"Company"), to Acquirer for cash; and
WHEREAS, in connection with the Purchase and Sale Agreement, Seller has
agreed to permit Acquirer to occupy and use certain premises leased by Seller
and to provide Acquirer certain services for the periods and on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
1. THE FACILITY
1.1 Use of Facility. Subject to the provisions of this Agreement, including
Schedule A attached hereto, Seller shall make that portion of Seller's leased
property located at 0000 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, which is used on
the date hereof in the conduct of the business of the Company (such portion
referred to herein as the "Facility"), available to Acquirer for the continued
operation of the business of the Company from the date hereof until the
expiration or termination of this Agreement in accordance with Section 5 hereof.
1.2 Acquirer's Acknowledgment. Acquirer acknowledges that Seller has informed
Acquirer as follows: (i) the [*] is [*] to a [*] dated as of [*], as amended
(the "[*]"), by and between [* as successor to [*], as [*] ("[*]"), and Seller,
as [*]; (ii) a copy of the [*] has been delivered to [*]; and (iii) Seller has
not [* or [*] the [*] or [*] of [*] to this [*].
1.3 Insurance. Prior to or simultaneously upon using or occupying the
Facility, Acquirer shall deliver to Seller evidence that the Facility is covered
by the Acquirer's current comprehensive general liability insurance including
personal injury and that Seller has been added as a beneficiary to such coverage
with respect to the Facility. Acquirer shall maintain in effect with respect to
any period Acquirer occupies or uses the Facility such comprehensive general
liability insurance.
2. SERVICES
2.1 General. During the term of this Agreement, Seller (or an Affiliate of
Seller designated by Seller for this purpose) shall provide, or cause such
designated Affiliate to provide, the services (individually, a "Service" and
collectively, the "Services") set forth in Schedule B attached hereto.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
2.2 Level of Services. The Services shall be substantially similar in scope,
quality and nature to those provided by Seller to the Company prior to the date
hereof and shall in no event be higher than the levels at which such services
were provided by Seller to the Company prior to the date hereof.
3. PAYMENT; EXPENSES
3.1 Acquirer's Payment. In consideration for access to and use of the Facility
and for the Services, Acquirer shall pay Seller in cash in immediately available
funds U.S. $50,000 per month until this Agreement expires or terminates in
accordance with Section 5 of this Agreement; provided, however, if Acquirer
occupies or uses the Facility for any portion of a month, Acquirer shall pay
Seller (in the manner provided in this Section 3) an amount equal to: (i) the
total number of days in such portion of a month, divided by the total days in
such month, (ii) multiplied by [*]. All payments to be made by Acquirer
hereunder for each month (or any portion thereof) during the term of this
Agreement shall be paid by Acquirer to Seller no later than ten (10] days
following the end of such month. Any amount payable under this Section 3 that is
not paid when due shall bear interest from and after the date on which such
payment first became overdue at a monthly rate equal to the lesser of (i) ten
percent (10%) or (ii) the maximum rate permitted under applicable law. Acquirer
agrees to pay on demand all costs of collection, including reasonable attorneys'
fees, incurred by Seller in collecting any such amounts.
3.2 Operating Expenses. All electric, gas and telephone utility expenses
incurred in operating and maintaining the Facility that are in excess of 110% of
the current electric, gas and telephone utility usage rates of the Seller shall
be the obligation of the Acquirer.
4. INDEMNIFICATION AND LIMITATION OF LIABILITY
4.1 Indemnification by Acquirer. Acquirer shall indemnify and hold Seller and
its Affiliates harmless against any and all liabilities, damages, fines,
penalties, costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) (collectively, "Damages") arising from (i) the
material breach by Acquirer of any of its obligations hereunder, (ii) the use of
the Facility during the term of this Agreement (including, without limitation,
the Common Areas as defined in Schedule A hereto) by Acquirer, the Company or
their respective agents, contractors, licensees or invitees in a manner
inconsistent with this Agreement or the Prime Lease, (iii) injury to or death of
any person, or damage to or loss of any property, on or about the Facility, in
connection with the use or occupancy thereof or (iv) injury to or death of any
employee of Acquirer or the Company or any of Acquirer's or the Company's
agents, contractors, licensees or invitees, or damage to or loss of any
property, on or about the Common Areas, or on adjoining sidewalks, streets or
ways, in connection with the use or occupancy of any thereof.
4.2 Defense. If notified promptly in writing of any action brought against
Seller or its Affiliates based on a claim described in Section 4.1 above,
Acquirer shall defend such action at its expense and pay all costs and damages
finally awarded in such action or settlement which are attributable to such
claim. Acquirer shall have sole control of the defense of any such action and
all negotiations for its settlement or compromise, provided that such settlement
or compromise
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
2
includes an unconditional release of Seller and its Affiliates from all Damages
with respect to such claim or action in form and substance reasonably
satisfactory to Seller. Seller shall reasonably cooperate with Acquirer in the
defense of such claim or action, and may be represented, at Seller's expense, by
counsel of Seller's selection.
4.3 Limitation of Liability. The maximum liability of Seller to Acquirer
hereunder shall be limited to the amount of any payments actually made by
Acquirer to Seller pursuant to Section 3.1 above.
5. TERM AND TERMINATION
5.1 Term. Unless earlier terminated in accordance with Section 5.2 below, this
Agreement shall be in effect from the date hereof until October 21, 2004 (the
"Termination Date").
5.2 Termination.
(a) This Agreement may be terminated prior to the Termination Date by
either party if the other party (the "Defaulting Party") has
materially breached its obligations under this Agreement and if the
Defaulting Party has not cured such default within ten (10) days
following the date on which the other party (the "Notifying Party")
has given written notice specifying the facts constituting the
default. Notwithstanding the foregoing sentence, this Agreement
shall not be terminated due to a default by the Defaulting Party if
such default is directly attributable to a breach of this Agreement
by the Notifying Party.
(b) This Agreement may be terminated prior to the Termination Date by
Acquirer at any time upon thirty (30) days prior written notice to
Seller.
(c) Upon termination of this Agreement for any reason, all rights and
obligations of the parties under this Agreement shall cease and be
of no further force or effect, except that the provisions of Section
4 of this Agreement, and Acquirer's obligations arising prior to any
termination or expiration of this Agreement, shall survive any such
termination or expiration.
6. GENERAL
6.1 Assignment. Neither party shall assign any of its rights or obligations
hereunder without the prior written consent of the other party. This Agreement
shall inure to the benefit of and be binding upon any successors or permitted
assigns of the parties.
6.2 Force Majeure. No party shall bear any responsibility or liability for any
Damages arising out of any delay, inability to perform or interruption of its
performance of its obligations under this Agreement due to any acts or omissions
of the other party hereto or for events beyond its reasonable control including,
without limitation, acts of God, acts of governmental authorities, acts of the
public enemy or due to war, riot, flood, civil commotion, insurrection, labor
difficulty,
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
3
severe or adverse weather conditions, lack of or shortage of electrical power,
malfunctions of equipment or software programs, or any other cause beyond the
reasonable control of such party.
6.3 Applicable Law and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware, without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
laws of any jurisdiction other than the State of Delaware.
6.4 Relationship of the Parties. Neither party hereto shall be considered an
employee, employer, agent, principal, partner or joint venturer of the other by
reason of this Agreement.
6.5 Entire Agreement; Amendment. This Agreement (including Schedule A and
Schedule B attached hereto and made a part hereof) constitutes the entire
agreement between Seller and Acquirer with respect to the subject matter hereof.
No provision of this Agreement may be amended or waived except by a written
agreement signed by the parties hereto.
6.6 No Waiver. No delay or omission on the part of either party to this
Agreement in requiring performance by the other party or in exercising any right
hereunder shall operate as a waiver of any provision hereof or of any right or
rights hereunder; and the waiver, omission or delay in requiring performance or
exercising any right hereunder on any one occasion shall not be construed as a
bar to or waiver of such performance or right, or of any right or remedy under
this Agreement, on any future occasion.
6.7 Notices. All notices, requests, demands, claims and other communications
hereunder shall be in writing. Any notice, request, demand, claim or other
communication hereunder shall be deemed duly delivered four business days after
it is sent by registered or certified mail, return receipt requested, postage
prepaid, or one business day after it is sent for next business day delivery via
a reputable nationwide overnight courier service, in each case to the intended
recipient as set forth below:
If to Acquirer: Copy to:
Endwave Corporation Xxxxxx Godward LLP
000 Xxxxxxx Xxxxxx Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000 Fax: 000-000-0000
Attention: Xxxxxxxx X. Xxxxxxx Attention: Xxxxx X. Xxxxxxx, Esq.
If to Seller: Copies to:
New Focus, Inc. Xxxxxx Xxxxxx Xxxxxxxxx
c/o Bookham Technology plc Xxxx and Xxxx LLP
0-00 Xxxxxx Xxxx Xxx 60 State Street
Ottawa, Ontario, K2K 2B5 Xxxxxx, XX 00000
Canada Phone: 000-000-0000
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
4
Phone: 000-000-0000 Fax: 000-000-0000
Fax: 000-000-0000 Attn: Xxxx X. Xxxxxxx, Esq.
Attn: Xxxxxx Xxxxxx, Esq.
and
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx
XX00 0XX
Xxxxxx Xxxxxxx
Phone: 000-00-0000-000-000
Fax: 000-00-0000-000-000
Attn: Xxxxxx Xxxxx, Esq.
Any party may give any notice, request, demand, claim, or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, ordinary mail, or electronic
mail), but no such notice, request, demand, claim or other communication shall
be deemed to have been duly given unless and until it actually is received by
the party for whom it is intended. Any party may change the address to which
notices, requests, demands, claims and other communications hereunder are to be
delivered by giving the other party notice in the manner herein set forth.
6.8 Section Headings. Section headings are for descriptive purposes only and
shall not control or alter the meaning of this Agreement.
6.9 Severability. If any provision of this Agreement shall for any reason be
held illegal or unenforceable, such provision shall be deemed separable from the
remaining provisions of this Agreement and shall in no way affect or impair the
validity or enforceability of the remaining provisions of this Agreement.
6.10 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
6.11 Facsimile Signature. This Agreement may be executed by facsimile
signature.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
5
IN WITNESS WHEREOF, Seller and Acquirer have duly executed this Agreement
as of the day and year first above written.
SELLER ACQUIRER
By: ______________________________ By: _______________________________
Name: ____________________________ Name: _____________________________
Title: ___________________________ Title: ____________________________
[Signature page to Transition Facility Agreement]
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
6
SCHEDULE A
FACILITY PROVISIONS
1. RIGHT TO USE THE FACILITY.
1.1 FACILITY. Acquirer shall have the right to use the Facility, subject to
the provisions of the Prime Lease and this Agreement, including this Schedule A,
and shall comply in all material respects with the terms of the Prime Lease.
1.2 COMMON AREAS. Acquirer's right to use the Facility shall include a
non-exclusive right to use such common areas as may exist with respect to the
Facility, which includes parking areas and sidewalks (collectively referred to
as the "Common Areas").
2. USE.
2.1 CHANGES TO FACILITY. Acquirer shall not make any alterations or
improvements to the Facility without the prior written consent of Seller.
2.2 SELLER RIGHT TO ALTER. Seller reserves the right, at any time, and from
time to time, to make alterations, additions, repairs or improvements to or in
any part of the premises adjoining the Facility, provided that any such
alterations shall be conducted in a manner and at such times as shall not
unreasonably affect Acquirer's use of the Facility.
2.3 USE OF FACILITY. Acquirer may use the Facility for the conduct of the
business and operations of the Company as conducted and operated on the date
hereof, but may not make any other use of the Facility.
3. MAINTENANCE; COMPLIANCE WITH LAWS.
3.1 MAINTENANCE. Acquirer shall not cause or permit any damage to the Facility
and shall maintain the Facility in a clean, safe and sanitary condition,
reasonable wear and tear excluded. Acquirer shall not permit or suffer any
injury, waste or nuisance in or to the Facility.
3.2 COMPLIANCE WITH LAWS. Acquirer shall comply with all applicable laws
relating to Acquirer's use and occupancy of the Facility.
4. UTILITIES AND SERVICES. Seller shall use reasonable efforts to cause the
Landlord of the Facility to furnish to or for the benefit of the Facility the
utilities and services that the Landlord is obligated to provide under the Prime
Lease.
5. INSURANCE. Acquirer shall carry and maintain at all times during the term
of this Agreement, at Acquirer's expense, policies of insurance in compliance
with the requirements for Tenant's Insurance under the Prime Lease.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
7
SCHEDULE B
Human resource services
Information system services
Telecommunications and network services
Financial transactions, reporting and analysis for ongoing operations
Quality assurance support and management
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
8
Execution Copy
ESCROW AGREEMENT
This Escrow Agreement is entered into as of July 21, 2004, by and among
Endwave Corporation, a Delaware corporation (the "Buyer"), New Focus, Inc., a
Delaware corporation (the "Seller"), and U.S. Bank National Association (the
"Escrow Agent").
WHEREAS, the Buyer, the Seller and Bookham Technology plc have entered
into a Purchase and Sale Agreement (the "Purchase Agreement") pursuant to which
the Buyer has purchased all of the outstanding shares of capital stock of JCA
Technology, Inc., a California corporation and a wholly owned subsidiary of the
Seller;
WHEREAS, the Purchase Agreement provides that an escrow fund will be
established to secure certain post-closing obligations of the Seller; and
WHEREAS, the parties hereto desire to establish the terms and conditions
pursuant to which such escrow fund will be established and maintained;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Escrow.
(a) Escrow Fund. Simultaneously with the execution of this
Agreement, the Buyer shall deposit with the Escrow Agent, by wire transfer of
immediately available funds, the sum of $500,000, pursuant to Section 1.5 of the
Purchase Agreement. The Escrow Agent hereby acknowledges receipt of such sum.
Such sum, together with any interest earned thereon, is referred to herein as
the "Escrow Fund." The Escrow Fund shall be held as a trust fund and shall not
be subject to any lien, attachment, trustee process or any other judicial
process of any creditor of any party hereto. The Escrow Fund shall be invested
in accordance with Section 3. The Escrow Agent agrees to hold the Escrow Fund in
an escrow account subject to the terms and conditions of this Agreement.
(b) Post-Closing Covenant of the Seller. The Seller has agreed in
Section 7.3 of the Purchase Agreement to prepare and deliver to the Buyer the
8-K Financial Statements and the 10-Q Financial Statements (each as defined in
the Purchase Agreement) within 60 days of the closing date of the transactions
contemplated by the Purchase Agreement. The Escrow Fund shall be security for
such post-closing obligation of the Seller, subject to the limitations, and in
the manner provided, in this Agreement.
(c) Transferability. The interest of the Seller in the Escrow Fund
shall not be assignable or transferable, other than by operation of law. Notice
of any such assignment or transfer by operation of law shall be given to the
Escrow Agent and the Buyer, and no such assignment or transfer shall be valid
until such notice is given.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
2. Disbursement.
(a) Disbursement by Escrow Agent. The Escrow Agent shall disburse
the Escrow Fund only in accordance with (i) a written instrument delivered to
the Escrow Agent that is executed by both the Buyer and the Seller and that
instructs the Escrow Agent as to the disbursement of some or all of the Escrow
Fund, (ii) an order of a court of competent jurisdiction, a copy of which is
delivered to the Escrow Agent by either the Buyer or the Seller, that instructs
the Escrow Agent as to the disbursement of some or all of the Escrow Fund or
(iii) the provisions of Section 2(b) hereof.
(b) Disbursement in Connection with Delivery of Financial
Statements.
(i) On the date five business days after the receipt by the
Escrow Agent of a written notice from the Seller, with a copy to the Buyer
delivered no later than the date such notice is delivered to the Escrow Agent,
that the Seller has delivered the 8-K Financial Statements and the 10-Q
Financial Statements to the Buyer on or prior to September 19, 2004, the Escrow
Agent shall distribute to the Seller all of the Escrow Fund. Notwithstanding the
foregoing, if within three business days following the receipt by the Escrow
Agent of such written notice the Escrow Agent receives a written notice from the
Buyer, with a copy to the Seller delivered no later than the date such notice is
delivered to the Escrow Agent, disputing that the Seller has delivered the 8-K
Financial Statements and the 10-Q Financial Statements to the Buyer on or prior
to September 19, 2004, the Escrow Agent shall retain the Escrow Fund and shall
disburse the same only in accordance with the terms of Section 2(a)(i) or
Section 2(a)(ii) hereof.
(ii) On the date five business days after the receipt by the
Escrow Agent of a written notice from the Buyer, with a copy to the Seller
delivered no later than the date such notice is delivered to the Escrow Agent,
that the Seller has failed to deliver the 8-K Financial Statements and the 10-Q
Financial Statements to the Buyer on or prior to September 19, 2004, the Escrow
Agent shall distribute to the Buyer all of the Escrow Fund. Notwithstanding the
foregoing, if within three business days following the receipt by the Escrow
Agent of such written notice the Escrow Agent receives a written notice from the
Seller, with a copy to the Buyer delivered no later than the date such notice is
delivered to the Escrow Agent, disputing that the Seller has failed to deliver
the 8-K Financial Statements and the 10-Q Financial Statements to the Buyer on
or prior to September 19, 2004, the Escrow Agent shall retain the Escrow Fund
and shall disburse the same only in accordance with the terms of Section 2(a)(i)
or Section 2(a)(ii) hereof.
(c) Method of Disbursement. Any distribution of the Escrow Fund to
the Seller shall be made by mailing a check to the Seller at the Seller's
address set forth in Section 8(e) or by wire transfer pursuant to instructions
provided in writing by the Seller to the Escrow Agent. Any distribution of the
Escrow Fund to the Buyer shall be made by mailing a check to the Buyer at the
Buyer's address set forth in Section 8(e) or by wire transfer pursuant to
instructions provided in writing by the Buyer to the Escrow Agent. The Escrow
Agent shall be entitled to deduct from any distribution any fees payable by the
party receiving such distribution pursuant to Section 4.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
-2-
3. Investment of Escrow Fund.
(a) Permitted Investments. Any monies held in the Escrow Fund
shall be invested by the Escrow Agent, to the extent permitted by law and as
directed by the Seller, in (i) obligations issued or guaranteed by the United
States of America or any agency or instrumentality thereof, (ii) obligations
(including certificates of deposit and bankers' acceptances) of domestic
commercial banks which at the date of their last public reporting had total
assets in excess of $500,000,000, (iii) commercial paper rated at least A 1 or P
1 or, if not rated, issued by companies having outstanding debt rated at least
AA or Aa and (iv) money market mutual funds invested exclusively in some or all
of the securities described in the foregoing clauses (i), (ii) and (iii). Absent
receipt of specific written investment instructions from the Seller, the Escrow
Agent shall invest the Escrow Fund in a U.S. Bank Money Market Account. The
Escrow Agent shall have no liability for any investment losses, including
without limitation any market loss on any investment liquidated prior to
maturity in order to make a payment required hereunder.
(b) Tax Reporting. The parties hereto agree that, for tax
reporting purposes, all interest or other income earned from the investment of
the Escrow Fund or any portion thereof in any tax year (i) to the extent such
interest or other income is distributed by the Escrow Agent to any person or
entity pursuant to the terms of this Agreement during such tax year, shall be
reported as allocated to such person or entity, and (ii) otherwise shall be
reported as allocated to the Seller.
(c) Certification of Tax Identification Number. The parties hereto
agree to provide the Escrow Agent with a certified tax identification number by
signing and returning a Form W-9 (or Form W-8, in the case of non-U.S. persons)
to the Escrow Agent prior to the date on which any income earned on the
investment of the Escrow Fund is credited to such Escrow Fund. The parties
hereto understand that, in the event their tax identification numbers are not
certified to the Escrow Agent, the Internal Revenue Code, as amended from time
to time, may require withholding of a portion of any interest or other income
earned on the investment of the Escrow Fund.
4. Fees and Expenses. The Buyer, on the one hand, and the Seller, on
the other hand, shall each (a) pay one-half of the fees of the Escrow Agent for
the services to be rendered by the Escrow Agent hereunder, which are set forth
on Attachment A hereto, and (b) reimburse the Escrow Agent for one-half of its
reasonable expenses (including reasonable attorney's fees and expenses) incurred
in connection with the performance of its duties under this Agreement.
5. Limitation of Escrow Agent's Liability.
(a) Limitation on Liability. In performing any duties under this
Escrow Agreement, the Escrow Agent shall not be liable to any party to this
Agreement for consequential damages (including, without limitation, lost
profits), losses or expenses, except to the extent attributable to gross
negligence or willful misconduct on the part of the Escrow Agent. The Escrow
Agent shall not incur any liability for (i) any act or failure to act made or
omitted in good faith or (ii) any action taken or omitted in reliance upon any
instrument, including any
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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written statement or affidavit provided for in this Agreement, that the Escrow
Agent shall in good faith believe to be genuine, nor will the Escrow Agent be
liable or responsible for forgeries, fraud or impersonations. In addition, the
Escrow Agent may consult with legal counsel in connection with the Escrow
Agent's duties under this Agreement and shall be fully protected in any act
taken, suffered or permitted by it in good faith in accordance with the advice
of counsel. The Escrow Agent is not responsible for determining and verifying
the authority of any person acting or purporting to act on behalf of any party
to this Agreement.
(b) Indemnification. The Buyer and the Seller and their respective
successors and assigns agree to each indemnify and hold harmless the Escrow
Agent from 50% of any and all losses, claims, damages, liabilities and expenses,
including reasonable costs of investigation, counsel fees, including allocated
costs of in-house counsel and disbursements that may be imposed on the Escrow
Agent or incurred by the Escrow Agent in connection with the performance of his
or her duties under this Agreement, including but not limited to any litigation
arising from this Agreement or involving its subject matter, except to the
extent such losses, claims, damages, liabilities or expenses are attributable to
gross negligence or willful misconduct on the part of the Escrow Agent.
6. Termination. This Agreement shall terminate upon the disbursement by
the Escrow Agent of all of the Escrow Funds in accordance with this Agreement;
provided that the provisions of Section 5 shall survive such termination.
7. Successor Escrow Agent. In the event the Escrow Agent becomes
unavailable or unwilling to continue in its capacity herewith, the Escrow Agent
may resign and be discharged from its duties or obligations hereunder by
delivering a resignation to the parties to this Escrow Agreement, not less than
60 days' prior to the date when such resignation shall take effect. The Seller
may appoint a successor Escrow Agent without the consent of the Buyer so long as
such successor is a bank with assets of at least $500 million, and may appoint
any other successor Escrow Agent with the consent of the Buyer, which shall not
be unreasonably withheld. If, within such notice period, the Seller provides to
the Escrow Agent written instructions with respect to the appointment of a
successor Escrow Agent and directions for the transfer of any Escrow Fund then
held by the Escrow Agent to such successor, the Escrow Agent shall act in
accordance with such instructions and promptly transfer such Escrow Fund to such
designated successor. If no successor Escrow Agent is named as provided in this
Section 7 prior to the date on which the resignation of the Escrow Agent is to
properly take effect, the Escrow Agent may apply to a court of competent
jurisdiction for appointment of a successor Escrow Agent.
8. General.
(a) Entire Agreement. Except for those provisions of the Purchase
Agreement referenced herein, this Agreement constitutes the entire agreement
among the parties and supersedes any prior understandings, agreements or
representations by or among the parties, written or oral, with respect to the
subject matter hereof.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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(b) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties named herein and their respective
successors and permitted assigns.
(c) Counterparts and Facsimile Signature. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument. This
Agreement may be executed by facsimile signature.
(d) Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) Notices. All notices, instructions and other communications
hereunder shall be in writing. Any notice, instruction or other communication
hereunder shall be deemed duly delivered four business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
business day after it is sent for next business day delivery via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:
If to the Buyer: Copy to:
Endwave Corporation Xxxxxx Godward LLP
000 Xxxxxxx Xxxxxx Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Telecopy: 000-000-0000 Telecopy: 000-000-0000
Attention: Xxxxxxxx X. Xxxxxxx Attention: Xxxxx X. Xxxxxxx, Esq.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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If to the Seller: Copies to:
Bookham Technology plc Xxxxxx Xxxxxx Xxxxxxxxx
0-00 Xxxxxx Xxxx Xxx Xxxx xxx Xxxx XXX
Xxxxxx, Xxxxxxx, X0X 0X0 00 Xxxxx Xxxxxx
Xxxxxx Xxxxxx, XX 00000
Phone: 000-000-0000 Phone: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
Attn: Xxxxxx Xxxxxx, Esq. Attn: Xxxx X. Xxxxxxx, Esq.
and
Bookham Technology plc
00 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx
XX00 0XX
Xxxxxx Xxxxxxx
Phone: 000-00-0000-000-000
Fax: 000-00-0000-000-000
Attn: Xxxxxx Xxxxx, Esq.
If to the Escrow Agent:
U.S. Bank, National Association
Xxx Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Phone: 000-000-0000
Fax: 000-000-0000
Any party may give any notice, instruction or other communication hereunder
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail or electronic mail), but no such notice,
instruction or other communication shall be deemed to have been duly given
unless and until it actually is received by the party to whom it is intended.
Any party may change the address to which notices, instructions, or other
communications hereunder are to be delivered by giving the other parties notice
in the manner set forth in this Section.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Delaware or any other jurisdiction) that would cause the application of
laws of any jurisdiction other than those of the State of Delaware.
(g) Amendments and Waivers. This Agreement may be amended only
with the written consent of the Buyer, the Escrow Agent and the Seller. No
waiver of any right or remedy hereunder shall be valid unless the same shall be
in writing and signed by the party
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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giving such waiver. No waiver by any party with respect to any condition,
default or breach of covenant hereunder shall be deemed to extend to any prior
or subsequent condition, default or breach of covenant hereunder or affect in
any way any rights arising by virtue of any prior or subsequent such occurrence.
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
ENDWAVE CORPORATION
By: ________________________________
Name:
Title:
NEW FOCUS, INC.
By: ________________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION
By: ________________________________
Name:
Title:
[Signature page to Escrow Agreement]
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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Attachment A
CERTAIN CONFIDENTIAL INFORMATION IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
