Exhibit 2.3
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STOCK PURCHASE AGREEMENT
among:
Asyst Technologies, Inc.
a California corporation;
Palo Alto Technologies, Inc.
a California corporation;
and
The Shareholders and Optionholders of
Palo Alto Technologies, Inc.
___________________________
Dated as of August 27, 1999
___________________________
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Table Of Contents
Page
Section 1. Description of Transaction.................................................... 1
1.1 Sale and Purchase of Shares................................................... 1
1.2 Sale and Purchase of Vested Options........................................... 1
1.3 Purchase Price................................................................ 2
1.4 Closing; Closing Date......................................................... 2
1.5 Unvested Options.............................................................. 2
Section 2. Representations and Warranties of the Company, the
Shareholders and the Optionholders............................................ 4
2.1 Due Organization; No Subsidiaries; Etc........................................ 5
2.2 Articles of Incorporation and Bylaws; Records................................. 5
2.3 Capitalization, Etc........................................................... 6
2.4 Financial Statements.......................................................... 6
2.5 Absence of Changes............................................................ 7
2.6 Title to Assets............................................................... 8
2.7 Bank Accounts; Receivables.................................................... 9
2.8 Proprietary Assets............................................................ 9
2.9 Contracts..................................................................... 11
2.10 Liabilities................................................................... 13
2.11 Compliance with Legal Requirements............................................ 13
2.12 Governmental Authorizations................................................... 13
2.13 Tax Matters................................................................... 13
2.14 Employee and Labor Matters; Benefit Plans..................................... 15
2.15 Environmental Matters......................................................... 17
2.16 Insurance..................................................................... 17
2.17 Related Party Transactions.................................................... 18
2.18 Legal Proceedings; Orders..................................................... 18
2.19 Authority; Binding Nature of Agreement........................................ 18
2.20 Full Disclosure............................................................... 19
2.21 Non-Contravention; Consents................................................... 19
2.22 Title to Securities........................................................... 20
i.
Page
2.23 Authority; Binding Nature of Agreement........................................ 20
2.24 Shareholder Legal Proceeding.................................................. 20
Section 3. Representations and Warranties of Asyst....................................... 20
3.1 Authority; Binding Nature of Agreement........................................ 20
3.2 Acquisition of Company Common Stock and Company Preferred Stock............... 20
3.3 Valid Issuance................................................................ 20
Section 4. Certain Covenants of the Company and the Shareholders......................... 21
4.1 Access and Investigation...................................................... 21
4.2 Operation of the Company's Business........................................... 21
4.3 Notification; Updates to Disclosure Schedule.................................. 23
4.4 No Negotiation................................................................ 23
Section 5. Additional Covenants of the Parties........................................... 24
5.1 Filings and Consents.......................................................... 24
5.2 Public Announcements.......................................................... 24
5.3 Best Efforts.................................................................. 24
5.4 FIRPTA Matters................................................................ 24
5.5 General Release............................................................... 24
5.6 Registration on Form S-8...................................................... 24
5.7 Termination of 401(k) Plan.................................................... 24
Section 6. Conditions Precedent to Obligations of Asyst.................................. 24
6.1 Accuracy of Representations................................................... 25
6.2 Performance of Covenants...................................................... 25
6.3 Consents...................................................................... 25
6.4 Agreements and Documents...................................................... 25
6.5 No Material Adverse Change.................................................... 25
6.6 FIRPTA Compliance............................................................. 26
6.7 No Restraints................................................................. 26
6.8 No Legal Proceedings.......................................................... 26
6.9 Termination of 401(k) Plan.................................................... 26
ii.
Page
Section 7. Conditions Precedent to Obligations of the Company, the
Shareholders and the Optionholders............................................ 26
7.1 Accuracy of Representations................................................... 26
7.2 Performance of Covenants...................................................... 26
7.3 No Restraints................................................................. 26
7.4 No Legal Proceedings.......................................................... 27
Section 8. Termination................................................................... 27
8.1 Termination Events............................................................ 27
8.2 Termination Procedures........................................................ 27
8.3 Effect of Termination......................................................... 28
Section 9. Indemnification............................................................... 28
9.1 Survival of Representations, Etc.............................................. 28
9.2 Indemnification by Shareholders and Optionholders............................. 28
9.3 Threshold; Ceiling............................................................ 29
9.4 Claim Procedure............................................................... 29
9.5 Resolution of Conflicts....................................................... 30
9.6 Effect of Indemnity Agreements................................................ 31
9.7 Interest...................................................................... 31
9.8 Defense of Third Party Claims................................................. 31
9.9 Exercise of Remedies by Indemnitees Other Than Asyst.......................... 32
Section 10. Additional Post-Closing Obligations........................................... 32
10.1 Repayment of Certain Debt Obligations......................................... 32
10.2 Indemnification of Directors and Officers..................................... 33
10.3 Insurance Policies............................................................ 33
10.4 Piggyback Registrations....................................................... 33
Section 11. Miscellaneous Provisions...................................................... 34
11.1 Shareholders' Agent........................................................... 34
11.2 Further Assurances............................................................ 35
11.3 Fees and Expenses............................................................. 35
11.4 Attorneys' Fees............................................................... 36
iii.
Page
11.5 Notices....................................................................... 36
11.6 Confidentiality............................................................... 37
11.7 Time of the Essence........................................................... 37
11.8 Headings...................................................................... 37
11.9 Counterparts.................................................................. 37
11.10 Governing Law................................................................. 37
11.11 Successors and Assigns........................................................ 37
11.12 Remedies Cumulative; Specific Performance..................................... 37
11.13 Waiver........................................................................ 38
11.14 Amendments.................................................................... 38
11.15 Severability.................................................................. 38
11.16 Parties in Interest........................................................... 38
11.17 Entire Agreement.............................................................. 38
11.18 Construction.................................................................. 38
iv.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as of
August 27, 1999, by and among Asyst Technologies, Inc., a California corporation
("Asyst"); Palo Alto Technologies, Inc., a California corporation (the
"Company"); the shareholders of the Company (the "Shareholders") and the
optionholders of the Company (the "Optionholders"). Certain other capitalized
terms used in this Agreement are defined in Exhibit A.
Recitals
A. The Shareholders own a total of 9,626,775 shares of the common stock
of the Company ("Company Common Stock") and a total of 1,038,293 shares of the
Series A Preferred Stock of the Company ("Company Preferred Stock") which
constitute all of the outstanding capital stock of the Company.
B. The Optionholders own (i) vested options to purchase a total of
518,460 shares of the common stock of the Company ("Vested Options") and (ii)
unvested options to purchase a total of 169,940 shares of the common stock of
the Company ("Unvested Options").
C. The Shareholders wish to sell the Company Common Stock and the Company
Preferred Stock to Asyst on the terms set forth in this Agreement.
D. The Optionholders wish to sell the Vested Options to Asyst on the
terms set forth in this Agreement and to convert the Unvested Options into New
Asyst Options (as defined below) on the terms set forth in this Agreement.
Agreement
The parties to this Agreement agree as follows:
SECTION 1. Description of Transaction
1.1 Sale and Purchase of Shares. At the Closing, each Shareholder shall
sell, assign, transfer and deliver such Shareholder's respective shares of
Company Common Stock and shares of Company Preferred Stock to Asyst, and Asyst
shall purchase the Company Common Stock and the Company Preferred Stock from the
Shareholders, on the terms and subject to the conditions set forth in this
Agreement.
1.2 Sale and Purchase of Vested Options. At the Closing, each Optionholder
shall sell, assign, transfer and deliver such Optionholder's respective Vested
Options to Asyst, and Asyst shall purchase the Vested Options from the
Optionsholders, on the terms and subject to the conditions set forth in this
Agreement.
1.
1.3 Purchase Price.
(a) The purchase price for each share of Company Common Stock,
except for Affiliate Shares (as defined below), shall be $0.50 per share plus
the pro rata portion of the Earn-Out Payments in Section 1.6. The purchase price
for each Affiliate Share shall be $0.10 per share. "Affliliate Shares" are the
8,600,000 shares of Company Common Stock held by Xxxxx Xxxxxx and Xxxxxxx
Xxxxxx.
(b) The purchase price for each share of Company Preferred Stock
shall be either (i) $2.00 per share plus the pro rata portion of the Earn-Out
Payments in Section 1.6, or (ii) that number of shares of Asyst Common Stock
equal to $2.00 divided by the Designated Asyst Share Price, plus the pro rata
portion of the Earn-Out Payments in Section 1.6 payable in cash, at the option
of the holder of each share of Company Preferred Stock. The "Designated Asyst
Share Price" shall be the average of the closing prices of a share of Asyst
Common Stock as reported on the Nasdaq National Market for each of the ten (10)
consecutive tradings ending on the date immediately preceding the date hereof.
(c) The purchase price for each share of Company common stock subject
to Vested Options shall be $0.50 per share less the exercise prices per share of
Company common stock of $.10 plus the pro rata portion of the Earn-Out Payments
in Section 1.6.
(d) The repayment of certain obligations set forth in Section 10.1.
(e) The purchase price shall be paid in cash or shares of Asyst
Common Stock at the Closing except for the Earn-Out Payments in Section 1.6
which will be paid as set forth in Section 1.6.
1.4 Closing; Closing Date. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place at the offices
of Cooley Godward LLP, Five Xxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, once
all conditions to Closing are satisfied and/or waived, at such time and date as
the parties may designate upon not less than five days' prior notice to the
Company (the "Closing Date.")
(a) At the Closing:
(i) the Shareholders shall deliver to Asyst the stock
certificates representing the Company Common Stock and the Company Preferred
Stock, duly endorsed (or accompanied by duly executed stock powers), and Asyst
shall pay the purchase price;
(ii) the Optionholders shall deliver to Asyst the agreements
representing the Vested Options and the Unvested Options, duly endorsed, and
Asyst shall pay the purchase price;
(iii) the Shareholders shall execute and deliver to Asyst and
the Company a General Release substantially in the form of Exhibit B.
1.5 Unvested Options. At the Closing Date, each Unvested Option that is
then outstanding under the Company's 1997 Stock Option Plan shall be assumed by
Asyst in
2.
accordance with the terms (as in effect as of the date of this Agreement) of the
Company's 1997 Stock Option Plan. All rights with respect to Company Common
Stock under the Unvested Options shall thereupon be converted into rights with
respect to Asyst Common Stock. Accordingly, from and after the Closing Date, (a)
each Unvested Option assumed by Asyst may be exercised solely for shares of
Asyst Common Stock, (b) the number of shares of Asyst Common Stock subject to
each such assumed Unvested Option shall be equal to the current number of shares
subject to each assumed Unvested Option multiplied by the fraction equal to $.60
divided by the Designated Asyst Share Price, (c) the per share exercise price
for Asyst Common Stock issuable upon exercise of each such assumed Unvested
Option shall be equal to the current exercise price of each such Unvested Option
multiplied by the fraction equal to the Designated Asyst Share Price divided by
$.60, and (d) all restrictions on the exercise of each such assumed Unvested
Option shall continue in full force and effect, and the term, exercisability,
vesting schedule and other provisions of such Unvested Option shall otherwise
remain unchanged; provided, however, that each such assumed Unvested Option
shall, in accordance with its terms, be subject to further adjustment as
appropriate to reflect any stock split, reverse stock split, stock dividend,
recapitalization or other similar transaction effected by Asyst after the
Closing Date.
1.6 Earn-Out Payments.
(a) In addition to the consideration set forth in Section 1.3
above, Asyst shall distribute annually to the Shareholders and Optionholders
Earn-Out Payments (as defined below) in cash for each of the four fiscal years
ending on March 31, 2000, 2001, 2002 and 2003 (the "Earn-Out Period"). The
Earn-Out Payments shall be made within ninety (90) days following the end of
each fiscal year during the Earn-Out Period (the "Distribution Date").
(b) For purposes of this Agreement:
(i) "XXX Products" shall mean the products in the
semiconductor fab transport and transport-to-equipment loading field including,
but not limited to, the FasTrack product line and elevators.
(ii) "Threshold Revenue" shall be $1.0 million for the year
ending March 31, 2000, $8.0 million for the year ending March 31, 2001, $12.0
million for the year ending March 31, 2002, and $16.0 million for the year
ending March 31, 2003.
(iii) "Earn-Out Revenue" shall be the gross revenue of XXX
Products sold by Asyst for each fiscal year during the Earn-Out Period.
(iv) "Payout Ratio" shall be 10% for the year ending March
31, 2000, 8% for the year ending March 31, 2001, 7% for the year ending March
31, 2002, and 6% for the year ending March 31, 2003.
(v) "Earn-Out Payments" for each year during the Earn-Out
Period shall be the greater of (i) $0 or (ii) the product of (Earn-Out Revenue -
Threshold Revenue) multiplied by .2010 multiplied by the Payout Ratio.
3.
(c) On the Distribution Date, the Earn-Out Payments shall be paid to
each Shareholder and Optionholder on a pro rata basis except that Xxxxx Xxxxxx
and Xxxxxxx Xxxxxx shall not be eligible to receive Earn-Out Payments. The pro-
rata distribution of the Earn-Out Payments shall be based on the ratio of the
percentage of the ownership of Company Common Stock, Company Preferred Stock and
Vested Options held by each Stockholder or Optionholder, to the total ownership
of Company Common Stock, Company Preferred Stock and Vested Options, not
including any shares and options held by Xxxxx Xxxxxx and Xxxxxxx Xxxxxx.
(d) During the Earn-Out Period and for six (6) months thereafter,
the Shareholders' Agent shall have reasonable access to the financial books and
records of Asyst for the purpose of auditing the Earn-Out Payments. On the
Distribution Date, Asyst shall deliver to the Shareholders' Agent a statement
setting forth in reasonable detail (1) Earn-Out Revenue and (2) Earn-Out
Payments (the "Earn-Out Statement").
(e) If within thirty (30) days after Distribution Date, the
Shareholders' Agent has not given written notice to Asyst that it believes the
Earn-Out Payments are incorrect (the "Earn-Out Difference") and its reasons for
the Earn-Out Difference, the amount of the Earn-Out Payments shall be deemed
correct. If the Shareholders' Agent gives Asyst notice of the Earn-Out
Difference within such thirty (30) day period, the Shareholders' Agent and Asyst
will use their best efforts to settle the Earn-Out Difference within the
following thirty (30) days after the giving of such notice (the "Resolution
Period"). If the Earn-Out Difference is unresolved after the Resolution Period,
then the Earn-Out Difference shall be submitted for resolution to a national
public accounting firm satisfactory to the Shareholders' Agent and to Asyst (the
"Auditor"). The decision of the Auditor with respect to the Earn-Out Difference
shall be final and binding on the parties hereto (the "Auditor's Decision"). If
the Auditor's Decision results in any additional payments to the Stockholders
and Optionholders in excess of ten thousand dollars ($10,000) (the "Minimum
Earn-Out Discrepancy"), then Asyst shall be liable for the fees and expenses of
the Auditor. If the Auditor's Decision results in no additional payments or
payments below the Minimum Earn-Out Discrepancy, then the Stockholders and
Optionholders shall be liable for the Auditor's fees and expenses. Asyst shall
make any additional payments to the Stockholders and Optionsholders required in
order to comply with Auditor's Decision within twenty (20) days after the
Auditor's Decision is rendered.
SECTION 2. Representations and Warranties of the Company, the Shareholders and
the Optionholders
The Company, the Shareholders and the Optionholders jointly and
severally (except that as among the Shareholders and the Optionholders liability
will be several (in proportion to ownership of Company Common Stock, Company
Preferred Stock and Vested Options as of the Closing Date) and not joint and
except that the representations and warranties in Section 2.21(f), 2.22, 2.23
and 2.24 are made by each Shareholder and Optionholder severally) represent and
warrant subject to Section 9, to and for the benefit of the Indemnitees, as
follows, except as set forth in the Disclosure Schedule (references below to
particular parts of the Disclosure Schedule are intended to refer to, in
particular, sections in the Disclosure Schedule that reference the relevant
Sections of this Section 2).
4.
2.1 Due Organization; No Subsidiaries; Etc.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of California and has all
necessary power and authority: (i) to conduct its business in the manner in
which its business is currently being conducted; (ii) to own and use its assets
in the manner in which its assets are currently owned and used; and (iii) to
perform its obligations under all Company Contracts.
(b) The Company has not conducted any business under or otherwise
used, for any purpose or in any jurisdiction, any fictitious name, assumed name,
trade name or other name.
(c) The Company is not and has not been required to be qualified,
authorized, registered or licensed to do business as a foreign corporation in
any jurisdiction, except where the failure to be so qualified, authorized,
registered or licensed has not had and will not have a Material Adverse Effect
on the Company.
(d) Part 2.1 of the Disclosure Schedule accurately sets forth (i)
the names of the members of the Company's board of directors, (ii) the names of
the members of each committee of the Company's board of directors, and (iii) the
names and titles of the Company's officers.
(e) The Company does not own any controlling interest in any Entity
and the Company has never owned, beneficially or otherwise, any shares or other
securities of, or any direct or indirect equity interest in, any Entity. The
Company has never agreed and is not presently obligated to make any investment
in or capital contribution to any Entity. The Company has not guaranteed and is
not responsible or liable for any obligation of any of the Entities in which it
owns or has owned any equity interest.
2.2 Articles of Incorporation and Bylaws; Records. The Company has
delivered to Asyst accurate and complete copies of: (1) the Company's articles
of incorporation and bylaws, including all amendments thereto; (2) the stock
records of the Company; and (3) the minutes and other records of the meetings
and other proceedings (including any actions taken by written consent or
otherwise without a meeting) of the Shareholders of the Company, the board of
directors of the Company and all committees of the board of directors of the
Company. There have been no formal meetings or other proceedings of the
Shareholders of the Company, the board of directors of the Company or any
committee of the board of directors of the Company that are not fully reflected
in such minutes or other records. There has not been any violation of any of
the provisions of the Company's articles of incorporation or bylaws, and the
Company has not taken any action that is inconsistent in any material respect
with any resolution adopted by the Company's Shareholders, the Company's board
of directors or any committee of the Company's board of directors. The books of
account, stock records, minute books and other records of the Company are
accurate, up-to-date and complete in all material respects, and have been
maintained in accordance with prudent business practices.
5.
2.3 Capitalization, Etc.
(a) The authorized capital stock of the Company consists of fifteen
million (15,000,000) shares of Common Stock, of which nine million six hundred
twenty-six thousand seven hundred seventy-five (9,626,775) shares have been
issued and are outstanding as of the date of this Agreement and one million five
hundred thousand (1,500,000) shares of Preferred Stock, of which one million
thirty-eight thousand two hundred ninety-three (1,038,293) shares have been
issued and are outstanding as of the date of this Agreement. All of the
outstanding shares of Common Stock and Preferred Stock have been duly authorized
and validly issued, and are fully paid and non-assessable.
(b) The Company has outstanding options to purchase six hundred
eighty eight thousand four hundred (688,400) shares as of the date of this
Agreement ("Company Options"). Part 2.3 of the Disclosure Schedule accurately
sets forth, with respect to each outstanding Company Option as of the date of
this Agreement: (i) the name of the holder of such Company Option; (ii) the
total number of shares of Company Common Stock that are subject to such Company
Option; (iii) the number of shares of Company Common Stock with respect to which
such Company Option is immediately exercisable; and (iv) the exercise price per
share of Company Common Stock purchasable under such Company Option. The
Agreement and the other transactions contemplated by this Agreement will not
result in the acceleration of vesting of any Company Option.
(c) There is no: (i) outstanding subscription, option, call,
warrant or right (whether or not currently exercisable) to acquire any shares of
the capital stock or other securities of the Company; (ii) outstanding security,
instrument or obligation that is or may become convertible into or exchangeable
for any shares of the capital stock or other securities of the Company, or any
phantom stock or similar rights; (iii) Contract under which the Company is or
may become obligated to sell or otherwise issue any shares of its capital stock
or any other securities; or (iv) condition or circumstance that may give rise to
or provide a basis for the assertion of a claim by any Person to the effect that
such Person is entitled to acquire or receive any shares of capital stock or
other securities of the Company.
(d) All outstanding shares of Company Common Stock and of Company
Preferred Stock and all outstanding Company Options have been issued and granted
in compliance with (i) all applicable securities laws and other applicable Legal
Requirements, and (ii) all requirements set forth in applicable Contracts.
(e) The Company has never repurchased, redeemed or otherwise
reacquired any shares of capital stock or other securities of the Company. All
securities so reacquired by the Company were reacquired in compliance with (i)
the applicable provisions of the California General Corporation Law and all
other applicable Legal Requirements, and (ii) all requirements set forth in
applicable Contracts.
2.4 Financial Statements.
(a) The Company has delivered to Asyst the following financial
statements and notes (collectively, the "Company Financial Statements"):
6.
(i) The unaudited balance sheets of the Company as of
February 28, 1999, and February 28, 1998, and the related unaudited income
statements of the Company for the years then ended; and
(ii) the unaudited balance sheet of the Company as of June
30, 1999 (the "Unaudited Interim Balance Sheet"), and the related unaudited
income statement of the Company for the four months then ended.
(b) The Company Financial Statements are accurate and complete in
all material respects and present fairly the financial position of the Company
as of the respective dates thereof and the results of operations for the periods
covered thereby. The Company Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the period covered (except that the financial statements
referred to in Section 2.4(a)(ii) do not contain footnotes and are subject to
normal and recurring year-end audit adjustments).
(c) The Company Financial Statements contain adequate reserves for
all existing and reasonably foreseeable warranty claims.
2.5 Absence of Changes. Since June 30, 1999:
(a) there has not been any material adverse change in the
Company's business, condition, assets, liabilities, operations, financial
performance or prospects, and, to the best of the knowledge of the Company, no
event has occurred that will, or could reasonably be expected to, have a
Material Adverse Effect on the Company;
(b) there has not been any material loss, damage or destruction
to, or any material interruption in the use of, any of the Company's assets
(whether or not covered by insurance);
(c) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital
stock, and has not repurchased, redeemed or otherwise reacquired any shares of
capital stock or other securities;
(d) there has been no amendment to the Company's articles of
incorporation or bylaws, and the Company has not effected or been a party to any
Acquisition Transaction, recapitalization, reclassification of shares, stock
split, reverse stock split or similar transaction;
(e) the Company has not formed any subsidiary or acquired any
equity interest or other interest in any other Entity;
(f) the Company has not made any capital expenditure since June
30, 1999;
(g) the Company has not (i) entered into or permitted any of the
assets owned or used by it to become bound by any Contract that is or would
constitute a Material Contract (as defined in Section 2.9(a)), or (ii) amended
or prematurely terminated, or waived any material right or remedy under, any
such Contract;
7.
(h) the Company has not (i) acquired, leased or licensed any right or
other asset from any other Person, (ii) sold or otherwise disposed of, or leased
or licensed, any right or other asset to any other Person, or (iii) waived or
relinquished any right, in each case except for immaterial rights or other
immaterial assets acquired, leased, licensed or disposed of in the ordinary
course of business and consistent with the Company's past practices;
(i) the Company has not written off as uncollectible, or established
any extraordinary reserve with respect to, any account receivable or other
indebtedness (except for accounts receivable or other indebtedness not exceeding
$10,000 individually or $25,000 in the aggregate);
(j) the Company has not made any pledge of any of its assets or
otherwise permitted any of its assets to become subject to any Encumbrance,
except for pledges of immaterial assets made in the ordinary course of business
and consistent with the Company's past practices;
(k) the Company has not (i) lent money to any Person (other than
pursuant to routine travel advances made to employees in the ordinary course of
business), or (ii) incurred or guaranteed any indebtedness for borrowed money;
(l) the Company has not (i) established or adopted any Plans (as
defined in Section 2.15), (ii) paid any bonus or made any profit-sharing or
similar payment to, or increased the amount of the wages, salary, commissions,
fringe benefits or other compensation or remuneration payable to, any of its
directors, officers or employees, or (iii) hired any new employee;
(m) the Company has not changed any of its methods of accounting or
accounting practices in any respect;
(n) the Company has not made any Tax election;
(o) the Company has not commenced or settled any Legal Proceeding;
(p) the Company has not entered into any material transaction or
taken any other material action outside the ordinary course of business or
inconsistent with its past practices; and
(q) the Company has not agreed or committed to take any of the
actions referred to in clauses "(c)" through "(p)" above.
2.6 Title to Assets
(a) The Company owns, and has good, valid and marketable title to,
all assets purported to be owned by it, including: (i) all assets reflected on
the Unaudited Interim Balance Sheet; (ii) all assets referred to in Section
2.1(e), 2.7(b) and 2.8 and all of the Company's rights under the Material
Contracts (as defined in Section 2.9) and (iii) all other assets reflected in
the Company's books and records as being owned by the Company. All of said
assets are owned by the Company free and clear of any liens or other
Encumbrances, except for (x) any lien for
8.
current taxes not yet due and payable, and (y) minor liens that have arisen in
the ordinary course of business and that do not (in any case or in the
aggregate) materially detract from the value of the assets subject thereto or
materially impair the operations of the Company.
(b) The Company has good title to all assets that are material to the
business of the Company and that are being leased or licensed to the Company.
(c) All material items of equipment and other tangible assets owned
by or leased to the Company are adequate for the uses to which they are being
put, are in good condition and repair (ordinary wear and tear excepted) and are
adequate for the conduct of the Company's business in the manner in which such
business is currently being conducted.
(d) The Company does not own any real property or any interest in
real property.
2.7 Bank Accounts; Receivables.
(a) Part 2.7(a) of the Disclosure Schedule provides accurate
information with respect to each account maintained by or for the benefit of the
Company at any bank or other financial institution.
(b) Part 2.7(b) of the Disclosure Schedule provides an accurate and
complete breakdown and aging of all accounts receivable, notes receivable and
other receivables of the Company as of June 30, 1999. All existing accounts
receivable of the Company (including those accounts receivable reflected on the
Unaudited Interim Balance Sheet that have not yet been collected and those
accounts receivable that have arisen since June 30, 1999 and have not yet been
collected) (i) represent valid obligations of customers of the Company arising
from bona fide transactions entered into in the ordinary course of business, and
(ii) are current and are currently expected to be collected in full when due,
without any counterclaim or set off (net of an allowance for doubtful accounts
not to exceed $25,000 in the aggregate).
2.8 Proprietary Assets.
(a) Part 2.8(a)(i) of the Disclosure Schedule sets forth, with
respect to each Company Proprietary Asset registered with any Governmental Body
or for which an application has been filed with any Governmental Body, (i) the
title of such Proprietary Asset, and (ii) the names of the jurisdictions covered
by the applicable registration or application. Section 2.8(a)(ii) of the
Disclosure Schedule identifies each Proprietary Asset licensed to the Company by
any Person (except for any Proprietary Asset that is licensed to the Company
under any third party software license generally available to the public at a
cost of less than $10,000), and identifies the license agreement under which
such Proprietary Asset is being licensed to the Company. The Company has good,
valid and marketable title to all of the Company Proprietary Assets identified
in Parts 2.8(a)(i) of the Disclosure Schedule, free and clear of all liens and
other Encumbrances, and has a valid right to use all Proprietary Assets
identified in Part 2.8(a)(iii) of the Disclosure Schedule. The Company is not
obligated to make any payment to any Person for the use of any Company
Proprietary Asset. The Company has not developed jointly with any other Person
any Company Proprietary Asset with respect to which such other Person has any
rights.
9.
(b) The Company has taken all measures and precautions reasonably
necessary to protect and maintain the confidentiality and secrecy of all Company
Proprietary Assets (except Company Proprietary Assets whose value would be
unimpaired by public disclosure) and otherwise to maintain and protect the value
of all Company Proprietary Assets. The Company has not (other than pursuant to
license agreements identified in Part 2.9 of the Disclosure Schedule) disclosed
or delivered to any Person, or permitted the disclosure or delivery to any
Person of, (i) the source code, or any portion or aspect of the source code, of
any Company Proprietary Asset, or (ii) the object code, or any portion or aspect
of the object code, of any Company Proprietary Asset.
(c) To the best of the Company's knowledge after reasonable
investigation, none of the Company Proprietary Assets infringes or conflicts
with any Proprietary Asset owned or used by any other Person; except for
copyrights, for which such representation is made without limitation by the
Company's knowledge. To the best of the Company's knowledge after reasonable
investigation, the Company is not infringing, misappropriating or making any
unlawful use of, and the Company has not at any time infringed, misappropriated
or made any unlawful use of, or received any notice or other communication (in
writing or otherwise) of any actual, alleged, possible or potential
infringement, misappropriation or unlawful use of, any Proprietary Asset owned
or used by any other Person; except for copyrights, for which such
representation is made without limitation by the Company's knowledge. To the
best of the knowledge of the Company, no other Person is infringing,
misappropriating or making any unlawful use of, and no Proprietary Asset owned
or used by any other Person infringes or conflicts with, any Company Proprietary
Asset.
(d) Each Company Proprietary Asset conforms in all material respects
with any specification, documentation, performance standard, representation or
statement made or provided with respect thereto by or on behalf of the Company.
There has not been any claim by any customer or other Person alleging that any
Company Proprietary Asset (including each version thereof that has ever been
licensed or otherwise made available by the Company to any Person) does not
conform in all material respects with any specification, documentation,
performance standard, representation or statement made or provided by or on
behalf of the Company, and, to the best of the knowledge of the Company, there
is no basis for any such claim. The Company has established adequate reserves on
the Unaudited Interim Balance Sheet to cover costs associated with any
obligations that the Company may have with respect to the correction or repair
of programming errors or other defects in the Company Proprietary Assets.
(e) To the best of the Company's knowledge after reasonable
investigation, except for copyrights, for which such representation is made
without limitation by the Company's knowledge, the Company Proprietary Assets
constitute all the Proprietary Assets necessary to enable the Company to conduct
its business in the manner in which such business has been and is being
conducted. The Company has not licensed any of the Company Proprietary Assets to
any Person on an exclusive basis, and the Company has not entered into any
covenant not to compete or Contract limiting its ability to exploit fully any of
its Proprietary Assets or to transact business in any market or geographical
area or with any Person.
(f) All current and former employees of the Company have executed and
delivered to the Company an agreement (containing no exceptions to or exclusions
from the
10.
scope of its coverage) that is substantially identical to the form of
Confidential Information and Invention Assignment Agreement previously delivered
to Asyst, and all current and former consultants and independent contractors to
the Company have executed and delivered to the Company an agreement (containing
no exceptions to or exclusions from the scope of its coverage) that is
substantially identical to the form of Consultant Confidential Information and
Invention Assignment Agreement previously delivered to Asyst.
(g) To the knowledge of the Company, each computer program and other
item of software that is owned by the Company is Year 2000 Compliant. Each
computer program and other item of software that has been designed, developed,
sold, installed, licensed or otherwise made available by the Company to any
Person is Year 2000 Compliant. As used in this Section 2.8, "Year 2000
Compliant" means, with respect to a computer program or other item of software
(i) the functions, calculations, and other computing processes of the program or
software perform in a consistent and correct manner without interruption
regardless of the date on which the Processes are actually performed, whether
before, on, or after January 1, 2000; (ii) the program or software accepts,
calculates, compares, sorts, extracts, sequences, and otherwise processes date
inputs and date values, and returns and displays date values, in a consistent
and correct manner regardless of the dates used whether before, on, or after
January 1, 2000; (iii) the program or software accepts, stores, displays and
responds to date information in a manner that resolves any ambiguities as to
century in a defined, predetermined, and appropriate manner; and (iv) leap years
will be determined by the following standard (A) if dividing the year by 4
yields an integer, it is a leap year, except for years ending in 00, but (B) a
year ending in 00 is a leap year if dividing it by 400 yields an integer.
2.9 Contracts.
(a) Part 2.9 of the Disclosure Schedule identifies the following
company contracts, each of which, except for the Company contracts listed in
(i), (ii) and (iii) below, has a value in excess of $10,000 (collectively, the
"Material Contracts"):
(i) each Company Contract relating to the employment of, or the
performance of services by, any employee, consultant or independent contractor;
(ii) each Company Contract relating to the acquisition,
transfer, use, development, sharing or license of any technology or any
Proprietary Asset except for licenses for off the shelf software;
(iii) each Company Contract imposing any restriction on the
Company's right or ability (A) to compete with any other Person, (B) to acquire
any product or other asset or any services from any other Person, to sell any
product or other asset to or perform any services for any other Person or to
transact business or deal in any other manner with any other Person, or (C) to
develop or distribute any technology;
(iv) each Company Contract creating or involving any agency
relationship, distribution arrangement or franchise relationship;
(v) each Company Contract relating to the acquisition, issuance
or transfer of any securities;
11.
(vi) each Company Contract relating to the creation of any
Encumbrance with respect to any material asset of the Company;
(vii) each Company Contract involving or incorporating any
guaranty, any pledge, any performance or completion bond, any indemnity or any
surety arrangement;
(viii) each Company Contract creating or relating to any
partnership or joint venture or any sharing of revenues, profits, losses, costs
or liabilities;
(ix) each Company Contract relating to the purchase or sale of
any product or other asset by or to, or the performance of any services by or
for, any Related Party (as defined in Section 2.17);
(x) each Company Contract constituting or relating to a
Government Contract or Government Bid;
(xi) any other material Company Contract that was entered into
outside the ordinary course of business or was inconsistent with the Company's
past practices;
(xii) any other Company Contract that has a term of more than
60 days and that may not be terminated by the Company (without penalty) within
60 days after the delivery of a termination notice by the Company; and
(xiii) any other Company Contract that contemplates or involves
(A) the payment or delivery of cash or other consideration in an amount or
having a value in excess of $50,000 in the aggregate, or (B) the performance of
services having a value in excess of $50,000 in the aggregate.
(b) The Company has delivered to Asyst accurate and complete copies
of all written Contracts identified in Part 2.9 of the Disclosure Schedule,
including all amendments thereto. Part 2.9 of the Disclosure Schedule provides
an accurate description of the terms of each Company Contract that is not in
written form. Each Contract identified in Part 2.9 of the Disclosure Schedule is
valid and in full force and effect and is enforceable by the Company in
accordance with its terms, subject to (i) laws of general application relating
to bankruptcy, insolvency and the relief of debtors, and (ii) rules of law
governing specific performance, injunctive relief and other equitable remedies.
(c) The Company has not violated or breached, or committed any
default under, any Company Contract, and, to the best of the knowledge of the
Company, no other Person has violated or breached, or committed any default
under, any Company Contract.
(d) To the best of the knowledge of the Company, no event has
occurred, and no circumstance or condition exists, that (with or without notice
or lapse of time) will, or could reasonably be expected to, (A) result in a
violation or breach of any of the provisions of any Company Contract, (B) give
any Person the right to declare a default or exercise any remedy under any
Company Contract, (C) give any Person the right to accelerate the maturity or
performance of any Company Contract, or (D) give any Person the right to cancel,
terminate or modify any Company Contract.
12.
(e) Since December 31, 1998, the Company has not received any notice
or other communication regarding any actual or possible violation or breach of,
or default under, any Company Contract.
(f) The Company has not waived any of its material rights under any
Material Contract.
(g) No Person is renegotiating any amount paid or payable to the
Company under any Material Contract or any other material term or provision of
any Material Contract.
(h) The Contracts identified in Part 2.9 of the Disclosure Schedule
collectively constitute all of the Contracts necessary to enable the Company to
conduct its business in the manner in which its business is currently being
conducted.
2.10 Liabilities. The Company has no accrued, contingent or other
liabilities of any nature, either matured or unmatured (whether or not required
to be reflected in financial statements in accordance with generally accepted
accounting principles, and whether due or to become due), except for: (a)
liabilities identified as such in the "liabilities" column of the Unaudited
Interim Balance Sheet; (b) accounts payable or accrued salaries that have been
incurred by the Company since June 30, 1999 in the ordinary course of business
and consistent with the Company's past practices; (c) liabilities under the
Company Contracts identified in Part 2.10 of the Disclosure Schedule, to the
extent the nature and magnitude of such liabilities can be specifically
ascertained by reference to the text of such Company Contracts.
2.11 Compliance with Legal Requirements. The Company is, and has at all
times been, in compliance with all applicable Legal Requirements, except where
the failure to comply with such Legal Requirements has not had and will not have
a Material Adverse Effect on the Company. The Company has not received any
notice or other communication from any Governmental Body regarding any actual or
possible violation of, or failure to comply with, any Legal Requirement.
2.12 Governmental Authorizations. The Governmental Authorizations held by
the Company are valid and in full force and effect, and collectively constitute
all Governmental Authorizations necessary to enable the Company to conduct its
business in the manner in which its business is currently being conducted. The
Company is, and at all times since December 31, 1995 has been, in compliance
with the terms and requirements of the respective Governmental Authorizations
held by the Company. The Company has not received any notice or other
communication from any Governmental Body regarding (a) any actual or possible
violation of or failure to comply with any term or requirement of any
Governmental Authorization, or (b) any actual or possible revocation,
withdrawal, suspension, cancellation, termination or modification of any
Governmental Authorization.
2.13 Tax Matters.
(a) All Tax Returns required to be filed by or on behalf of the
Company with any Governmental Body with respect to any taxable period ending on
or before the Closing Date (the "Company Returns") (i) have been or will be
filed on or before the applicable due date (including any extensions of such due
date), and (ii) have been, or will be when filed, accurately
13.
and completely prepared in all material respects in compliance with all
applicable Legal Requirements. All amounts shown on the Company Returns to be
due on or before the Closing Date have been or will be paid on or before the
Closing Date, and no other Taxes are payable by the Company with respect to
items or periods covered by such Tax Returns (whether or not shown on or
reportable on such Tax Returns) or with respect to any period prior to the date
of this Agreement. The Company has withheld and paid over all Taxes required to
have been withheld and paid over, and complied with all information reporting
and backup withholding requirements, including maintenance of required records
with respect thereto, in connection with amounts paid or owing to any employee,
creditor, independent contractor, or other third party. There are no liens on
any of the assets of the Company with respect to Taxes, other than liens for
Taxes, not yet due and payable. The Company has delivered to Asyst accurate and
complete copies of all Company Returns that are open to review by the Internal
Revenue Service or other Governmental Body. The amount of the Company's
liability for unpaid Taxes for all periods ending on or before June 30, 1999
does not, in the aggregate, exceed the amount of the current liability accruals
for Taxes reflected on the Unaudited Interim Balance Sheet, and the amount of
the Company's liability for unpaid Taxes for all periods ending on or before the
Closing Date shall not, in the aggregate exceed the amount of the current
liability accruals for Taxes as such accruals are reflected on the Unaudited
Interim Balance Sheet, as adjusted for operations and transactions in the
ordinary course of business of the Company since the date of the Unaudited
Interim Balance Sheet in accordance with past custom and practice.
(b) No Company Return relating to income Taxes has ever been examined
or audited by any Governmental Body. There have been no examinations or audits
of any Company Return. The Company has delivered to Asyst accurate and complete
copies of all audit reports and similar documents (to which the Company has
access) relating to the Company Returns. No extension or waiver of the
limitation period applicable to any of the Company Returns has been granted (by
the Company or any other Person), and no such extension or waiver has been
requested from the Company.
(c) No claim or Proceeding is pending or has been threatened against
or with respect to the Company in respect of any Tax. There are no unsatisfied
liabilities for Taxes (including liabilities for interest, additions to tax and
penalties thereon and related expenses) with respect to any notice of deficiency
or similar document received by the Company with respect to any Tax (other than
liabilities for Taxes asserted under any such notice of deficiency or similar
document which are being contested in good faith by the Company and with respect
to which adequate reserves for payment have been established). There are no
liens for Taxes upon any of the assets of the Company except liens for current
Taxes not yet due and payable. The Company has not entered into or become bound
by any agreement or consent pursuant to Section 341(f) of the Code. The Company
has not been, and the Company will not be, required to include any adjustment in
taxable income for any tax period (or portion thereof) pursuant to Section 481
or 263A of the Code or any comparable provision under state or foreign Tax laws
as a result of transactions or events occurring, or accounting methods employed,
prior to the Closing.
(d) There is no agreement, plan, arrangement or other Contract
covering any employee or independent contractor or former employee or
independent contractor of the Company that, considered individually or
considered collectively with any other such Contracts, will, or could reasonably
be expected to, give rise directly or indirectly to the payment of any
14.
amount that would not be deductible pursuant to Section 280G or Section 162 of
the Code. The Company is not, and has never been, a party to or bound by any tax
indemnity agreement, tax sharing agreement, tax allocation agreement or similar
Contract.
2.14 Employee and Labor Matters; Benefit Plans.
(a) Part 2.14(a) of the Disclosure Schedule identifies each salary,
bonus, deferred compensation, incentive compensation, stock purchase, stock
option, severance pay, termination pay, hospitalization, medical, life or other
insurance, supplemental unemployment benefits, profit-sharing, pension or
retirement plan, program or agreement (collectively, the "Plans") sponsored,
maintained, contributed to or required to be contributed to by the Company for
the benefit of any employee of the Company ("Employee"), except for Plans which
would not require the Company to make payments or provide benefits having a
value in excess of $25,000 in the aggregate.
(b) The Company does not maintain, sponsor or contribute to, and, to
the best of the knowledge of the Company, has not at any time in the past
maintained, sponsored or contributed to, any employee pension benefit plan (as
defined in Section 3(2) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), whether or not excluded from coverage under specific
Titles or Subtitles of ERISA) for the benefit of Employees or former Employees
(a "Pension Plan").
(c) The Company maintains, sponsors or contributes only to those
employee welfare benefit plans (as defined in Section 3(1) of ERISA, whether or
not excluded from coverage under specific Titles or Subtitles of ERISA) for the
benefit of Employees or former Employees which are described in Part 2.14(c) of
the Disclosure Schedule (the "Welfare Plans"), none of which is a multi-employer
plan (within the meaning of Section 3(37) of ERISA).
(d) With respect to each Plan, the Company has delivered to Asyst:
(i) an accurate and complete copy of such Plan (including all
amendments thereto);
(ii) an accurate and complete copy of the annual report, if
required under ERISA, with respect to such Plan for the last two years;
(iii) an accurate and complete copy of the most recent summary
plan description, together with each Summary of Material Modifications, if
required under ERISA, with respect to such Plan, and all material employee
communications relating to such Plan;
(iv) if such Plan is funded through a trust or any third party
funding vehicle, an accurate and complete copy of the trust or other funding
agreement (including all amendments thereto) and accurate and complete copies
the most recent financial statements thereof;
(v) accurate and complete copies of all Contracts relating to
such Plan, including service provider agreements, insurance contracts, minimum
premium contracts, stop-
15.
loss agreements, investment management agreements, subscription and
participation agreements and recordkeeping agreements; and
(vi) an accurate and complete copy of the most recent
determination letter received from the Internal Revenue Service with respect to
such Plan (if such Plan is intended to be qualified under Section 401(a) of the
Code).
(e) The Company is not required to be, and, to the best of the
knowledge of the Company, has never been required to be, treated as a single
employer with any other Person under Section 4001(b)(1) of ERISA or Section
414(b), (c), (m) or (o) of the Code. The Company has never been a member of an
"affiliated service group" within the meaning of Section 414(m) of the Code. To
the best of the knowledge of the Company, the Company has never made a complete
or partial withdrawal from a multi-employer plan, as such term is defined in
Section 3(37) of ERISA, resulting in "withdrawal liability," as such term is
defined in Section 4201 of ERISA (without regard to subsequent reduction or
waiver of such liability under either Section 4207 or 4208 of ERISA).
(f) The Company does not have any plan or commitment to create any
additional Welfare Plan or any Pension Plan, or to modify or change any existing
Welfare Plan or Pension Plan (other than to comply with applicable law) in a
manner that would affect any Employee.
(g) No Welfare Plan provides death, medical or health benefits
(whether or not insured) with respect to any current or former Employee after
any such Employee's termination of service (other than (i) benefit coverage
mandated by applicable law, including coverage provided pursuant to Section
4980B of the Code, (ii) deferred compensation benefits accrued as liabilities on
the Unaudited Interim Balance Sheet, and (iii) benefits the full cost of which
are borne by current or former Employees (or the Employees' beneficiaries)).
(h) With respect to each of the Welfare Plans constituting a group
health plan within the meaning of Section 4980B(g)(2) of the Code, the
provisions of Section 4980B of the Code ("COBRA") have been complied with in all
material respects.
(i) Each of the Plans has been operated and administered in all
material respects in accordance with applicable Legal Requirements, including
but not limited to ERISA and the Code.
(j) Each of the Plans intended to be qualified under Section 401(a) of
the Code has received a favorable determination from the Internal Revenue
Service, and the Company is not aware of any reason why any such determination
letter should be revoked.
(k) Neither the execution, delivery or performance of this Agreement,
nor the consummation of the Transaction or any of the other transactions
contemplated by this Agreement, will result in any payment (including any bonus,
golden parachute or severance payment) to any current or former Employee or
director of the Company (whether or not under any Plan), or materially increase
the benefits payable under any Plan, or result in any acceleration of the time
of payment or vesting of any such benefits.
16.
(l) Part 2.14(l) of the Disclosure Schedule contains a list of all
salaried employees of the Company as of the date of this Agreement, and
correctly reflects, in all material respects, their salaries, any other
compensation payable to them (including compensation payable pursuant to bonus,
deferred compensation or commission arrangements), their dates of employment and
their positions. The Company is not a party to any collective bargaining
contract or other Contract with a labor union involving any of its Employees.
All of the Company's employees are "at will" employees.
(m) The Company is in compliance in all material respects with all
applicable Legal Requirements and Contracts relating to employment, employment
practices, wages, bonuses and terms and conditions of employment, including
employee compensation matters.
(n) The Company has good labor relations, and the Company has no
reason to believe that (i) the consummation of the Transaction or any of the
other transactions contemplated by this Agreement will have a material adverse
effect on the Company's labor relations, or (ii) any of the Company's employees
intends to terminate his or her employment with the Company.
2.15 Environmental Matters. The Company is in compliance in all material
respects with all applicable Environmental Laws, which compliance includes the
possession by the Company of all permits and other Governmental Authorizations
required under applicable Environmental Laws, and compliance with the terms and
conditions thereof. The Company has not received any notice or other
communication (in writing or otherwise), whether from a Governmental Body,
citizens group, employee or otherwise, that alleges that the Company is not in
compliance with any Environmental Law, and, to the best of the knowledge of the
Company and Shareholders, there are no circumstances that may prevent or
interfere with the Company's compliance with any Environmental Law in the
future. To the best of the knowledge of the Company, no current or prior owner
of any property leased or controlled by the Company has received any notice or
other communication (in writing or otherwise), whether from a Government Body,
citizens group, employee or otherwise, that alleges that such current or prior
owner or the Company is not in compliance with any Environmental Law. (For
purposes of this Section 2.15: (i) "Environmental Law" means any federal, state,
local or foreign Legal Requirement relating to pollution or protection of human
health or the environment (including ambient air, surface water, ground water,
land surface or subsurface strata), including any law or regulation relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Materials of Environmental Concern; and (ii) "Materials of Environmental
Concern" include chemicals, pollutants, contaminants, wastes, toxic substances,
petroleum and petroleum products and any other substance that is now or
hereafter regulated by any Environmental Law or that is otherwise a danger to
health, reproduction or the environment.)
2.16 Insurance. Part 2.16 of the Disclosure Schedule identifies all
insurance policies maintained by, at the expense of or for the benefit of the
Company and identifies any material claims made thereunder, and the Company has
delivered to Asyst accurate and complete copies of the insurance policies
identified on Part 2.16 of the Disclosure Schedule. Each of the insurance
policies identified in Part 2.16 of the Disclosure Schedule is in full force and
effect.
17.
The Company has not received any notice or other communication regarding any
actual or possible (a) cancellation or invalidation of any insurance policy, (b)
refusal of any coverage or rejection of any claim under any insurance policy, or
(c) material adjustment in the amount of the premiums payable with respect to
any insurance policy.
2.17 Related Party Transactions. No Related Party: (a) has had any direct
or indirect interest in any material asset used in or otherwise relating to the
business of the Company; (b) has been indebted to the Company; (c) has entered
into, or has had any direct or indirect financial interest in, any Contract,
transaction or business dealing involving the Company; (d) has competed,
directly or indirectly, with the Company; and (e) has any claim or right against
the Company (other than rights under company Options and rights to receive
compensation for services performed as an employee of the Company). (For
purposes of this section each of the following shall be deemed to be a "Related
Party": (i) each of the Shareholders; (ii) each Optionholder; (iii) each
individual who is, or who has at any time been, an officer or director of the
Company; (iv) each member of the immediate family of each of the individuals
referred to in clauses "(i)" through "(iii)" above; and (v) any trust or other
Entity (other than the Company) in which any one of the individuals referred to
in clauses "(i)" through "(iv)" above holds (or in which more than one of such
individuals collectively hold), beneficially or otherwise, a material voting,
proprietary or equity interest.)
2.18 Legal Proceedings; Orders.
(a) There is no pending Legal Proceeding, and (to the best of the
knowledge of the Company) no Person has threatened to commence any Legal
Proceeding: (i) that involves the Company or any of the assets owned or used by
the Company or any Person whose liability the Company has or may have retained
or assumed, either contractually or by operation of law; or (ii) that
challenges, or that may have the effect of preventing, delaying, making illegal
or otherwise interfering with, the Transaction or any of the other transactions
contemplated by this Agreement. To the best of the knowledge of the Company, no
event has occurred, and no claim, dispute or other condition or circumstance
exists, that will, or that could reasonably be expected to, give rise to or
serve as a basis for the commencement of any such Legal Proceeding.
(b) No Legal Proceeding has ever been commenced by or has ever been
pending against the Company.
(c) There is no order, writ, injunction, judgment or decree to which
the Company, or any of the assets owned or used by the Company, is subject. None
of the Shareholders is subject to any order, writ, injunction, judgment or
decree that relates to the Company's business or to any of the assets owned or
used by the Company. To the best of the knowledge of the Company, no officer or
other employee of the Company is subject to any order, writ, injunction,
judgment or decree that prohibits such officer or other employee from engaging
in or continuing any conduct, activity or practice relating to the Company's
business.
2.19 Authority; Binding Nature of Agreement. The Company has the absolute
and unrestricted right, power and authority to enter into and to perform its
obligations under this Agreement; and the execution, delivery and performance by
the Company of this Agreement have been duly authorized by all necessary action
on the part of the Company and its board of
18.
directors. This Agreement constitutes the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific performance,
injunctive relief and other equitable remedies.
2.20 Full Disclosure. This Agreement (including the Disclosure Schedule)
does not, and the Closing Certificate will not, (i) contain any representation,
warranty or information that is false or misleading with respect to any material
fact, or (ii) omit to state any material fact or necessary in order to make the
representations, warranties and information contained and to be contained herein
and therein (in the light of the circumstances under which such representations,
warranties and information were or will be made or provided) not false or
misleading.
2.21 Non-Contravention; Consents. Neither (1) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in this
Agreement, nor (2) the consummation of any of the Transactions contemplated by
this Agreement, will directly or indirectly (with or without notice or lapse of
time):
(a) contravene, conflict with or result in a violation of (i) any of
the provisions of the Company's articles of incorporation or bylaws, or (ii) any
resolution adopted by the Company's Shareholders, the Company's board of
directors or any committee of the Company's board of directors;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the transactions
contemplated by this Agreement or to exercise any remedy or obtain any relief
under, any Legal Requirement or any order, writ, injunction, judgment or decree
to which the Company, or any of the assets owned or used by the Company, is
subject;
(c) contravene, conflict with or result in a violation of any of the
terms or requirements of, or give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
that is held by the Company or that otherwise relates to the Company's business
or to any of the assets owned or used by the Company;
(d) contravene, conflict with or result in a violation or breach of,
or result in a default under, any provision of any Company Contract that is or
would constitute a Material Contract, or give any Person the right to (i)
declare a default or exercise any remedy under any such Company Contract, (ii)
accelerate the maturity or performance of any such Company Contract, or (iii)
cancel, terminate or modify any such Company Contract;
(e) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to any asset owned or used by the Company
(except for minor liens that will not, in any case or in the aggregate,
materially detract from the value of the assets subject thereto or materially
impair the operations of the Company); or
(f) result in the imposition or creation of any lien or other
Encumbrance upon or with respect to the Company Common Stock (except for minor
liens that will not, in any case or in the aggregate, materially detract from
the value thereof).
19.
The Company is not and will not be required to make any filing with or give any
notice to, or to obtain any Consent from, any Person in connection with (x) the
execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of the
Transaction or any of the other transactions contemplated by this Agreement.
2.22 Title to Securities. The sale and delivery of the Company Common
Stock, Company Preferred Stock and Vested Options as contemplated by this
Agreement are not subject to any preemptive right, right of first refusal, right
of first offer or similar right. Upon such sale, Asyst will acquire the Company
Common Stock, Company Preferred Stock and Vested Options free and clear of any
Encumbrance (other than restrictions on transferability expressly set forth in
applicable Federal or state securities laws).
2.23 Authority; Binding Nature of Agreement. Each of the Shareholders and
Optionholders has the absolute and unrestricted right, power and authority to
enter, into execute and deliver and to perform its obligations under this
Agreement. This Agreement constitutes the legal, valid and binding obligation of
each of the Shareholders and Optionholders enforceable against each of the
Shareholders and Optionholders in accordance with its terms, subject to (i) laws
of general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
2.24 Shareholder Legal Proceeding. There is no action, proceeding or
investigation pending or overtly threatened against any of the Shareholders or
Optionholders before any court or administrative agency that questions the
validity of the Agreement.
Section 3. Representations and Warranties of Asyst
Asyst represents and warrants to the Company, the Shareholders and
Optionholders as follows:
3.1 Authority; Binding Nature of Agreement. Asyst has the absolute and
unrestricted right, power and authority to perform its obligations under this
Agreement; and the execution, delivery and performance by Asyst of this
Agreement have been duly authorized by all necessary action by Asyst and its
boards of directors. No vote of Asyst's shareholders is needed to approve the
Transaction. This Agreement constitutes the legal, valid and binding obligation
of Asyst, enforceable against it in accordance with its terms, subject to (i)
laws of general application relating to bankruptcy, insolvency and the relief of
debtors, and (ii) rules of law governing specific performance, injunctive relief
and other equitable remedies.
3.2 Acquisition of Company Common Stock and Company Preferred Stock. Asyst
is not acquiring the Company Common Stock and the Company Preferred Stock with
the current intention of making a public distribution thereof.
3.3 Valid Issuance. Asyst Common Stock to be issued hereunder, if any,
will, when issued in accordance with the provisions of this Agreement, be
validly issued, fully paid and nonassessable.
20.
SECTION 4. Certain Covenants of the Company and the Shareholders
4.1 Access and Investigation. During the period from the date of this
Agreement through the Closing Date (the "Pre-Closing Period"), the Company
shall, and shall cause its Representatives to: (a) provide Asyst and Asyst's
Representatives with reasonable access to the Company's Representatives,
officers, and assets and to all existing books, records, Tax Returns, work
papers and other documents and information relating to the Company; and (b)
provide Asyst and Asyst's Representatives with copies of such existing books,
records, Tax Returns, work papers and other documents and information relating
to the Company, and with such additional financial, operating and other data and
information regarding the Company, as Asyst may reasonably request.
4.2 Operation of the Company's Business. During the Pre-Closing Period:
(a) the Company shall conduct its business and operations in the
ordinary course and in substantially the same manner as such business and
operations have been conducted prior to the date of this Agreement;
(b) the Company shall use reasonable efforts to preserve intact its
current business organization, keep available the services of its current
officers and employees and maintain its relations and good will with all
suppliers, customers, landlords, creditors, employees and other Persons having
business relationships with the Company;
(c) the Company shall keep in full force all insurance policies
identified in Part 2.16 of the Disclosure Schedule;
(d) the Company shall cause its officers to report regularly (but in
no event less frequently than weekly) to Asyst concerning the status of the
Company's business;
(e) the Company shall not declare, accrue, set aside or pay any
dividend or make any other distribution in respect of any shares of capital
stock, and shall not repurchase, redeem or otherwise reacquire any shares of
capital stock or other securities (except that the Company may repurchase
Company Common Stock from former employees pursuant to the terms of existing
restricted stock purchase agreements);
(f) the Company shall not sell, issue or authorize the issuance of (i)
any capital stock or other security, (ii) any option or right to acquire any
capital stock or other security, or (iii) any instrument convertible into or
exchangeable for any capital stock or other security;
(g) the Company shall not amend or waive any of its rights under, or
permit the acceleration of vesting under, (i) any provision of the 1997 Stock
Option Plan, (ii) any provision of any agreement evidencing any outstanding
Company Option, or (iii) any provision of any restricted stock purchase
agreement;
(h) neither the Company nor any of the Shareholders shall amend or
permit the adoption of any amendment to the Company's articles of incorporation
or bylaws, or effect or
21.
permit the Company to become a party to any Acquisition Transaction,
recapitalization, reclassification of shares, stock split, reverse stock split
or similar transaction;
(i) the Company shall not form any subsidiary or acquire any equity
interest or other interest in any other Entity;
(j) the Company shall not make any capital expenditure, except for
capital expenditures that, when added to all other capital expenditures made on
behalf of the Company during the Pre-Closing Period, do not exceed $5,000 per
month;
(k) the Company shall not (i) enter into, or permit any of the assets
owned or used by it to become bound by, any Contract that is or would constitute
a Material Contract, or (ii) amend or prematurely terminate, or waive any
material right or remedy under, any such Contract; in each case outside of the
Company's ordinary course of business;
(l) the Company shall not (i) acquire, lease or license any right or
other asset from any other Person, (ii) sell or otherwise dispose of, or lease
or license, any right or other asset to any other Person, or (iii) waive or
relinquish any right, except for assets acquired, leased, licensed or disposed
of by the Company pursuant to Contracts that are not Material Contracts;
(m) the Company shall not (i) lend money to any Person (except that
the Company may make routine travel advances to employees in the ordinary course
of business and may, consistent with its past practices, allow employees to
acquire Company Common Stock in exchange for promissory notes upon exercise of
Company Options), (ii) incur or guarantee any indebtedness for borrowed money,
or (iii) repay or forgive any indebtedness owed to any Related Party;
(n) the Company shall not (i) establish, adopt or amend any Plans,
(ii) pay any bonus or make any profit-sharing payment, cash incentive payment or
similar payment to, or increase the amount of the wages, salary, commissions,
fringe benefits or other compensation or remuneration payable to, any of its
directors, officers or employees, or (iii) hire any new employee whose aggregate
annual compensation is expected to exceed $100,000;
(o) the Company shall not change any of its methods of accounting or
accounting practices in any material respect;
(p) the Company shall not make any Tax election;
(q) the Company shall not commence or settle any material Legal
Proceeding;
(r) the Company shall not agree or commit to take any of the actions
described in clauses "(e)" through "(q)" above.
Notwithstanding the foregoing, the Company may take any action described in
clauses "(e)" through "(r)" above if Asyst gives its prior written consent to
the taking of such action by the Company, which consent will not be unreasonably
withheld (it being understood that Asyst's withholding of consent to any action
will not be deemed unreasonable if Asyst determines in
22.
good faith that the taking of such action would not be in the best interests of
Asyst or would not be in the best interests of the Company).
4.3 Notification; Updates to Disclosure Schedule.
(a) During the Pre-Closing Period, the Company shall promptly notify
Asyst in writing of:
(i) the discovery by the Company of any event, condition, fact or
circumstance that occurred or existed on or prior to the date of this Agreement
and that caused or constitutes an inaccuracy in or breach of any representation
or warranty made by the Company or any of the Shareholders in this Agreement;
(ii) any event, condition, fact or circumstance that occurs,
arises or exists after the date of this Agreement and that would cause or
constitute an inaccuracy in or breach of any representation or warranty made by
the Company or any of the Shareholders in this Agreement if (A) such
representation or warranty had been made as of the time of the occurrence,
existence or discovery of such event, condition, fact or circumstance, or (B)
such event, condition, fact or circumstance had occurred, arisen or existed on
or prior to the date of this Agreement;
(iii) any breach of any covenant or obligation of the Company or
any of the Shareholders; and
(iv) any event, condition, fact or circumstance that would make
the timely satisfaction of any of the conditions set forth in Section 6 or
Section 7 impossible or unlikely.
(b) If any event, condition, fact or circumstance that is required to
be disclosed pursuant to Section 4.3(a) requires any change in the Disclosure
Schedule, or if any such event, condition, fact or circumstance would require
such a change assuming the Disclosure Schedule were dated as of the date of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, then the Company shall promptly deliver to Asyst an update to the
Disclosure Schedule specifying such change. At Closing, if Asyst agrees to close
this Transaction after receiving the updates in this Section 4.3, then Asyst
shall be deemed to have waived the closing condition in Section 6.1 as to the
updates in this Section 4.3.
4.4 No Negotiation. During the Pre-Closing Period, neither the Company nor
any of the Shareholders shall, and the Company shall cause its Representatives
not to, directly or indirectly:
(a) solicit or encourage the initiation of any inquiry, proposal or
offer from any Person (other than Asyst) relating to a possible Acquisition
Transaction;
(b) participate in any discussions or negotiations or enter into any
agreement with, or provide any non-public information to, any Person (other than
Asyst) relating to or in connection with a possible Acquisition Transaction; or
23.
(c) consider, entertain or accept any proposal or offer from any
Person (other than Asyst) relating to a possible Acquisition Transaction.
Section 5. Additional Covenants of the Parties
5.1 Filings and Consents. As promptly as practicable after the execution
of this Agreement, each party to this Agreement (a) shall make all filings (if
any) and give all notices (if any) required to be made and given by such party
in connection with the Transaction and the other transactions contemplated by
this Agreement, and (b) shall use all commercially reasonable efforts to obtain
all Consents (if any) required to be obtained (pursuant to any applicable Legal
Requirement or Contract, or otherwise) by such party in connection with the
Transaction and the other transactions contemplated by this Agreement. The
Company shall (upon request) promptly deliver to Asyst a copy of each such
filing made, each such notice given and each such Consent obtained by the
Company.
5.2 Public Announcements. During the Pre-Closing Period, (a) neither
party shall (and neither party shall permit any of its Representatives to) issue
any press release or make any public statement regarding this Agreement or any
of the other transactions contemplated by this Agreement, without the other
parties' prior written consent, and (b) each party will consult with the other
party prior to issuing any press release or making any public statement
regarding such matters.
5.3 Best Efforts. During the Pre-Closing Period, (a) the Company and the
Shareholders shall use their best efforts to cause the conditions set forth in
Section 6 to be satisfied on a timely basis, and (b) Asyst shall use their best
efforts to cause the conditions set forth in Section 7 to be satisfied on a
timely basis.
5.4 FIRPTA Matters. At the Closing, (a) the Company shall deliver to
Asyst a statement (in such form as may be reasonably requested by counsel to
Asyst) conforming to the requirements of Section 1.897 - 2(h)(1)(i) of the
United States Treasure Regulations, and (b) the Company shall deliver to the
Internal Revenue Service the notification required under Xxxxxxx 0.000 - 0(x)(0)
xx xxx Xxxxxx Xxxxxx Treasury Regulations.
5.5 General Release. At the Closing, each of the Shareholders shall
execute and deliver to the Company a General Release in the form of Exhibit B.
5.6 Registration on Form S-8. Asyst will register the shares of Asyst
Common Stock to be issued upon the exercise of the assumed Unvested Options
pursuant to a Registration Statement on Form S-8 within 90 days of the Closing
Date.
5.7 Termination of 401(k) Plan. Prior to the Closing, the Company shall
terminate its 401(k) plan.
Section 6. Conditions Precedent to Obligations of Asyst
The obligations of Asyst to consummate the transactions contemplated by
this Agreement are subject to the satisfaction or waiver, at or prior to the
Closing, of each of the following conditions:
24.
6.1 Accuracy of Representations. Each of the representations and
warranties made by the Company, the Shareholders and the Optionholders in this
Agreement and in each of the other agreements and instruments delivered to Asyst
in connection with the transactions contemplated by this Agreement shall have
been accurate in all material respects as of the date of this Agreement (without
giving effect to any "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, contained or incorporated
directly or indirectly in such representations and warranties), and shall be
accurate in all material respects as of the Closing Date as if made at the
Closing Date (without giving effect to any update to the Disclosure Schedule and
without giving effect to any "Material Adverse Effect" or other materiality
qualifications, or any similar qualifications, contained or incorporated
directly or indirectly in such representations and warranties).
6.2 Performance of Covenants. All of the covenants and obligations that
the Company, the Shareholders and the Optionholders are required to comply with
or to perform at or prior to the Closing shall have been complied with and
performed in all material respects.
6.3 Consents. All Consents required to be obtained in connection with the
Transaction and the other transactions contemplated by this Agreement (including
the Consents identified in Part 2.21 of the Disclosure Schedule) shall have been
obtained and shall be in full force and effect.
6.4 Agreements and Documents. Asyst and the Company shall have received
the following agreements and documents, each of which shall be in full force and
effect:
(a) a Release substantially in the form of Exhibit B, executed by
each of the Shareholders and Optionholders ;
(b) confidential invention and assignment agreements, reasonably
satisfactory in form and content to Asyst, executed by all employees and former
employees of the Company and by all consultants and independent contractors and
former consultants and former independent contractors to the Company who have
not already signed such agreements (including the individuals identified in Part
2.9(f) of the Disclosure Schedule);
(c) a legal opinion of Xxxxxx Xxxxxxx Xxxxxxxx and Xxxxxx, a
Professional Corporation, dated as of the Closing Date, as set forth in
Exhibit C;
(d) a certificate executed by the chief executive officer of the
Company certifying that each of the representations and warranties set forth in
Section 2 is accurate in all respects as of the Closing Date as if made on the
Closing Date and that the conditions set forth in Sections 6.1, 6.2 and 6.3 have
been duly satisfied (the "Closing Certificate"); and
(e) written resignations of all directors of the Company, effective
as of the Closing Date.
6.5 No Material Adverse Change. There shall have been no material adverse
change not disclosed in the Disclosure Schedule in the business, condition,
assets, liabilities, operations or financial performance of the Company since
the date of this Agreement other than
25.
any loss of revenue (and any corresponding change in margins and profitability
of business) resulting from the public announcement of this Agreement.
6.6 FIRPTA Compliance. The Company shall have filed with the Internal
Revenue Service the notification referred to in Section 5.4(b).
6.7 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the
transactions contemplated by this Agreement shall have been issued by any court
of competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement enacted or deemed applicable to the Transactions contemplated by
this Agreement that makes consummation of the transactions contemplated by this
Agreement illegal.
6.8 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the transactions contemplated by this
Agreement or seeking to prohibit or limit the exercise by Asyst of any material
right pertaining to its ownership of stock of the Company.
6.9 Termination of 401(k) Plan. The Company shall have provided Asyst
with evidence, reasonably satisfactory to Asyst, as to the termination of the
Company's 401(k) plan.
Section 7. Conditions Precedent to Obligations of the Company, the
Shareholders and the Optionholders
The obligations of the Company to consummate the transactions contemplated
by this Agreement are subject to the satisfaction or waiver, at or prior to the
Closing, of the following conditions:
7.1 Accuracy of Representations. Each of the representations and
warranties made by Asyst in this Agreement shall have been accurate in all
material respects as of the date of this Agreement (without giving effect to any
materiality or similar qualifications contained in such representations and
warranties), and shall be accurate in all material respects as of the Closing
Date as if made at the Closing Date (without giving effect to any materiality or
similar qualifications contained in such representations and warranties).
7.2 Performance of Covenants. All of the covenants and obligations that
Asyst is required to comply with or to perform at or prior to the Closing shall
have been complied with and performed in all material respects.
7.3 No Restraints. No temporary restraining order, preliminary or
permanent injunction or other order preventing the consummation of the
transactions contemplated by this Agreement shall have been issued by any court
of competent jurisdiction and remain in effect, and there shall not be any Legal
Requirement enacted or deemed applicable to the transactions contemplated by
this Agreement that makes consummation of the transactions contemplated by this
Agreement illegal.
26.
7.4 No Legal Proceedings. No Person shall have commenced or threatened to
commence any Legal Proceeding challenging or seeking the recovery of a material
amount of damages in connection with the transactions contemplated by this
Agreement or seeking to prohibit or limit the exercise by the Shareholders of
any material right pertaining to the Agreement.
Section 8. Termination
8.1 Termination Events. This Agreement may be terminated prior to the
Closing:
(a) by Asyst if Asyst reasonably determines that the timely
satisfaction of any condition set forth in Section 6 has become impossible
(other than as a result of any failure on the part of Asyst to comply with or
perform any covenant or obligation of Asyst set forth in this Agreement);
(b) by the Company if the Company reasonably determines that the
timely satisfaction of any condition set forth in Section 7 has become
impossible (other than as a result of any failure on the part of the Company or
any of the Shareholders to comply with or perform any covenant or obligation set
forth in this Agreement or in any other agreement or instrument delivered to
Asyst);
(c) by Asyst at or after the Closing Date if any condition set forth
in Section 6 has not been satisfied by the Closing Date;
(d) by the Company at or after the Closing Date if any condition set
forth in Section 7 has not been satisfied by the Closing Date;
(e) by Asyst if the Closing has not taken place on or before August
31, 1999 (other than as a result of any failure on the part of Asyst to comply
with or perform any covenant or obligation of Asyst set forth in this
Agreement);
(f) by the Company if the Closing has not taken place on or before
August 31, 1999 (other than as a result of the failure on the part of the
Company or any of the Shareholders to comply with or perform any covenant or
obligation set forth in this Agreement or in any other agreement or instrument
delivered to Asyst); or
(g) by the mutual consent of Asyst and the Company.
8.2 Termination Procedures. If Asyst wishes to terminate this Agreement
pursuant to Section 8.1(a), Section 8.1(c) or Section 8.1(e), Asyst shall
deliver to the Company a written notice stating that Asyst is terminating this
Agreement and setting forth a brief description of the basis on which Asyst is
terminating this Agreement. If the Company wishes to terminate this Agreement
pursuant to Section 8.1(b), Section 8.1(d) or Section 8.1(f), the Company shall
deliver to Asyst a written notice stating that the Company is terminating this
Agreement and setting forth a brief description of the basis on which the
Company is terminating this Agreement.
27.
8.3 Effect of Termination. If this Agreement is terminated pursuant to
Section 8.1, all further obligations of the parties under this Agreement shall
terminate; provided, however, that: (a) neither the Company nor Asyst shall be
relieved of any obligation or liability arising from any prior breach by such
party of any provision of this Agreement; (b) the parties shall, in all events,
remain bound by and continue to be subject to the provisions set forth in
Section 11 and (c) the parties shall, in all events, remain bound by and
continue to be subject to Section 5.2.
Section 9. Indemnification
9.1 Survival of Representations, Etc.
(a) The representations and warranties made by the Company, the
Shareholders (including the representations and warranties set forth in Section
2 and the representations and warranties set forth in the Closing Certificate)
shall survive the Closing and shall expire on June 30, 2000; provided, however,
that if, at any time prior to June 30, 2000, any Indemnitee (acting in good
faith) delivers to the Shareholders' Agent (as defined in Section 11.1 below) a
written notice alleging the existence of an inaccuracy in or a breach of any of
the representations and warranties made by the Company and the Shareholders (and
setting forth in reasonable detail the basis for such Indemnitee's belief that
such an inaccuracy or breach may exist) and asserting a claim for recovery under
Section 9.2 based on such alleged inaccuracy or breach, then the claim asserted
in such notice shall survive June 30, 2000 until such time as such claim is
fully and finally resolved. All representations and warranties made by Asyst
shall survive the Closing and shall expire on June 30, 2000, provided, however,
that if, at any time prior to June 30, 2000, the Shareholders' Agent (acting in
good faith) delivers to Asyst a written notice alleging the existence of an
inaccuracy in or a breach of any of the representations and warranties made by
Asyst (and setting forth in reasonable detail the basis for the Shareholders'
Agent belief that such an inaccuracy or breach may exist) and asserting a claim
for recovery under Section 9.2 based on such alleged inaccuracy or breach, then
the claim asserted in such notice shall survive June 30, 2000 until such time as
such claim is fully and finally resolved.
(b) The representations, warranties, covenants and obligations of the
Company, the Shareholders and the Optionholders, and the rights and remedies
that may be exercised by the Indemnitees, shall not be limited or otherwise
affected by or as a result of any information furnished to, or any investigation
made by or knowledge of, any of the Indemnitees or any of their Representatives,
except as otherwise provided herein.
(c) For purposes of this Agreement, each statement or other item of
information set forth in the Disclosure Schedule or in any update to the
Disclosure Schedule shall be deemed to be a representation and warranty made by
the Company and the Shareholders in this Agreement.
9.2 Indemnification by Shareholders and Optionholders.
(a) From and after the Closing Date (but subject to Section 9.1(a)),
the Shareholders and Optionholders, severally but not jointly, shall hold
harmless and indemnify each of the Indemnitees from and against, and shall
compensate and reimburse each of the Indemnitees for, any Damages which are
directly or indirectly suffered or incurred by any of the
28.
Indemnitees or to which any of the Indemnitees may otherwise become subject
(regardless of whether or not such Damages relate to any third-party claim) and
which arise from or as a result of, or are directly or indirectly connected
with: (i) any inaccuracy in or breach of any representation or warranty set
forth in Section 2 or in the Closing Certificate (after giving effect to any
update to the Disclosure Schedule delivered by the Company to Asyst prior to the
Closing); (ii) any breach of any covenant or obligation of the Company or any of
the Shareholders (including the covenants set forth in Sections 4 and 5); or
(iii) any Legal Proceeding relating to any inaccuracy or breach of the type
referred to in clause "(i)" or "(ii)" above (including any Legal Proceeding
commenced by any Indemnitee for the purpose of enforcing any of its rights under
this Section 9).
(b) The Company, the Shareholders and the Optionholders acknowledge
and agree that, if the Company suffers, incurs or otherwise becomes subject to
any Damages as a result of or in connection with any inaccuracy in or breach of
any representation, warranty, covenant or obligation, then (without limiting any
of the rights of the Company as an Indemnitee) Asyst shall also be deemed, by
virtue of its ownership of the stock of the Company, to have incurred Damages as
a result of and in connection with such inaccuracy or breach.
9.3 Threshold; Ceiling.
(a) The Shareholders and Optionholders shall not be required to make
any indemnification payment pursuant to Section 9.2(a) for any inaccuracy in or
breach of any of their representations and warranties set forth in Section 2
until such time as the total amount of all Damages (including the Damages
arising from such inaccuracy or breach and all other Damages arising from any
other inaccuracies in or breaches of any representations or warranties) that
have been directly or indirectly suffered or incurred by any one or more of the
Indemnitees, or to which any one or more of the Indemnitees has or have
otherwise become subject, exceeds $75,000 in the aggregate. If the total amount
of such Damages exceeds $75,000, then the Indemnitees shall be entitled to be
indemnified against and compensated and reimbursed for the full amount of such
damages (and not merely the portion of such damages exceeding $75,000).
(b) The maximum liability of each Shareholder and Optionholder under
Section 9.2(a) for breaches of the representations and warranties set forth in
Section 2 shall be equal to the proceeds received under Section 1.3 by each
such Shareholder and Optionholder.
9.4 Claim Procedure. Upon delivery to the Shareholders' Agent in
accordance with Section 11.5 on or before the last day of the period set forth
in Section 9.1(a) above of a certificate signed by any officer of Asyst (an
"Officer's Certificate")
(a) stating that Asyst or the Company has paid or properly accrued or
reasonably anticipates that Asyst or the Company will have to pay or accrue
Damages in an aggregate stated amount, and stating that Asyst or the Company is
entitled to indemnity pursuant to this Agreement with respect to such amount,
and
(b) specifying the individual items of Damages included in the amount
so stated, the date each such item was paid or properly accrued, or the basis
for such anticipated liability;
29.
The Shareholders' Agent shall, subject to the provisions of Section 9.5 hereof,
deliver to Asyst as promptly as practicable, an amount sufficient to fully
indemnify Asyst or the Company against such Damages.
9.5 Resolution of Conflicts.
(a) No indemnity payment need be made if the Shareholders' Agent
shall object in a written statement to the claim made in the Officer's
Certificate, and such statement shall have been delivered to Asyst prior to the
expiration of such 30-day period.
(b) In case the Shareholders' Agent shall so object in writing to the
indemnity of Asyst or the Company in respect of any claim or claims made in any
Officer's Certificate, the Shareholders' Agent and Asyst (acting on its own
behalf or on behalf of the Company) shall attempt in good faith to agree upon
the rights of the respective parties with respect to each of such claims. If
the Shareholders' Agent and Asyst should so agree, the Shareholders and the
Optionholders Agent shall thereupon promptly pay the agreed upon amount of the
claim to Asyst.
(c) If no such agreement can be reached after good faith negotiation,
the claim shall be submitted to non-binding mediation under the rules then in
effect under the American Arbitration Association, or such other forum as the
parties may select. Each party shall have in attendance at such mediation
persons who have actual authority to bind the party to any settlement reached.
If the matter cannot be settled through mediation, then the claim shall be
submitted to binding arbitration under the following rules:
(i) Unless otherwise agreed by the parties, all such claims
shall be decided in San Jose, California by a single arbitrator, acting under
the Commercial Rules of the American Arbitration Association except as modified
herein. Either party may initiate the arbitration following failure of mediation
to resolve the issue by filing a demand for arbitration with the American
Arbitration Association, and simultaneously delivering a copy of such demand to
the other party.
(ii) Unless the parties agree to a mutually acceptable
arbitrator within thirty (30) days of a demand for arbitration, the arbitrator
shall be selected by the American Arbitration Association.
(iii) Unless otherwise agreed by the parties, the arbitrator
shall be a business attorney in practice for at least 10 years, with substantial
experience in the negotiating and drafting of business acquisition agreements.
(iv) It is the intent of the parties that the arbitration be
held in an efficient, economical and expeditious manner. Accordingly, the
parties shall meet in a pre-hearing conference as promptly as practicable after
selection of the arbitrator to establish the scope and extent of all discovery
and the schedule of the arbitration. Discovery shall be limited to that
necessary to resolve the disputed issues, in the judgment of the arbitrator. If
any party wishes to take discovery, including document productions,
interrogatories or depositions, a request to do so must be submitted to the
arbitrator in accordance with the procedures determined at the pre-hearing
conference. The arbitrator in his sole discretion may allow limited
30.
discovery, all of which must be completed within 20 business days of the
arbitrator's directive unless extended for good cause by the arbitrator.
(v) The arbitrator shall not be bound by rules of evidence or
judicial procedures regarding the conduct of the hearing and shall be obligated
to follow California substantive law.
(vi) The arbitrator's authority shall be limited to
determining whether the claim gives rise to a right to indemnification under the
provisions of this Section 9 and, if so, the amount of Damages as to such claim.
No other issue involving interpretation of this Agreement shall be submitted to
the arbitrator without the consent of both parties.
(vii) The decision of the arbitrator as to the validity and
amount of Damages and the amounts in (c) below shall, subject to the above
limitations, be binding and conclusive upon the parties of this Agreement. The
arbitrator shall issue such decision, including a brief statement of the reasons
for the award and the calculation of damages awarded, within 25 days after
completion of the arbitration hearing and deliver such decision to the Escrow
Agent.
(d) Judgment upon any award rendered by the arbitrators may be
entered in any court having jurisdiction. The non-prevailing party shall pay the
reasonable expenses (including attorneys' fees) of the prevailing party and the
arbitrator fees and administrative expenses associated with the arbitration
(which expenses and fees, in the event Asyst is the prevailing party, shall
constitute Damages).
9.6 Effect of Indemnity Agreements. Each Shareholder and Optionholder
agrees that its indemnity obligations as a Shareholder or Optionholder pursuant
to this Section 9 shall not be affected or limited by any indemnity obligations
or other rights or remedies it may have against the Company in connection with
any indemnity agreement or the indemnity provisions of the Company's Articles of
Incorporation or Bylaws. For example, an officer, director or other
representative of the Company will retain such rights to indemnity by the
Company as currently exist for liabilities incurred in such person's capacity as
an officer, director or representative of the Company, but payments made or
liabilities incurred by such person pursuant to this Section 9 strictly in his
or her capacity as a Shareholder or Optionholder will not be entitled to
indemnity by the Company.
9.7 Interest. Any Shareholder or Optionholder who is required to hold
harmless, indemnify, compensate or reimburse any Indemnitee pursuant to this
Section 9 with respect to any Damages shall also be liable to such Indemnitee
for interest on the amount of such Damages (for the period commencing as of the
date on which the Shareholders' Agent received the notice in Section 9.1 and
ending on the date on which the liability of the Shareholder and Optionholder to
such Indemnitee is fully satisfied by such Shareholder and Optionholder) at a
floating rate equal to the rate of interest publicly announced by Bank of
America, N.T. & S.A. from time to time as its prime, base or reference rate.
9.8 Defense of Third Party Claims. In the event of the assertion or
commencement by any Person of any claim or Legal Proceeding (whether against the
Company, against Asyst or against any other Person) with respect to which any of
the Shareholders or Optionholders may
31.
become obligated to hold harmless, indemnify, compensate or reimburse any
Indemnitee pursuant to this Section 9, Asyst shall have the right, at its
election, to proceed with the defense of such claim or Legal Proceeding on its
own. If Asyst elects not to proceed with the defense of such claim or Legal
Proceeding, the Shareholders and Optionholders shall defend such claim or legal
proceeding on their own; provided, that the Shareholders and Optionholders shall
not have the right to settle, adjust or compromise such claim or Legal
Proceeding without the consent of Asyst, such consent not to be unreasonably
withheld. If Asyst so proceeds with the defense of any such claim or Legal
Proceeding:
(a) all reasonable expenses relating to the defense of such claim or
Legal Proceeding shall be Damages to the extent that the Company, the
Shareholders or the Optionholders are determined to have breached this Agreement
entitling Asyst to indemnification pursuant to Section 9.2.;
(b) each Shareholder and Optionholder shall make available to Asyst
any documents and materials in his possession or control that may be necessary
to the defense of such claim or Legal Proceeding; and
(c) Asyst shall not have the right to settle, adjust or compromise
such claim or Legal Proceeding without the consent of the Shareholders' Agent;
provided, however, that such consent shall not be unreasonably withheld or
delayed.
Asyst shall give the Shareholders' Agent prompt notice of the commencement of
any such Legal Proceeding against Asyst or the Company; provided, however, that
any failure on the part of Asyst to so notify the Shareholders' Agent shall not
limit any of the obligations of the Shareholders or Optionholders under this
Section 9 (except to the extent such failure materially prejudices the defense
of such Legal Proceeding).
9.9 Exercise of Remedies by Indemnitees Other Than Asyst. No Indemnitee
(other than Asyst or any successor thereto or assign thereof) shall be permitted
to assert any indemnification claim or exercise any other remedy under this
Agreement unless Asyst (or any successor thereto or assign thereof) shall have
consented to the assertion of such indemnification claim or the exercise of such
other remedy.
Section 10. Additional Post-Closing Obligations
10.1 Repayment of Certain Debt Obligations. At the Closing Date, Asyst
shall pay to Xxxxx Xxxxxx the outstanding principal balance of $800,000 (plus
interest accrued through the date of payment), such amount representing payment
in full of the amount owed to Xxxxx Xxxxxx under the promissory notes dated
February 19, 1999, March 10, 1999, April 5, 1999, April 30, 1999, May 14, 1999,
June 11, 1999, July 9, 1999 and August 4, 1999, as represented by the Company
and the Shareholders in part 2.11 of the Disclosure Schedule. At the Closing,
Asyst shall pay to Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx and Flehr Xxxxxxx all
amounts due and owing to them, including reasonable fees and costs incurred in
connection with this transaction as set forth in Section 11.3. The amounts of
such outstanding balances as of June 30, 1999 are set forth in the Disclosure
Schedule.
32.
10.2 Indemnification of Directors and Officers. All rights to
indemnification existing in favor of the directors and officers of the Company
for acts and omissions occurring prior to the Closing Date, as provided in the
Company's articles of incorporation or bylaws (as in effect as of the date of
this Agreement) and as provided in any indemnification agreements between the
Company and said officers and directors (as in effect at the Closing Date),
shall survive the Transaction and shall be the obligation of and observed by
Asyst and the Company from and after the Closing Date.
10.3 Insurance Policies. To the extent possible without incurring
additional material expense (after taking into account any premiums saved as a
result of the discontinuance of the Company's insurance policies identified in
Part 2.16 of the Company Disclosure Schedule and in effect for a period of at
least six (6) months prior the date of this Agreement (the "Company Policies")),
Asyst shall use commercially reasonable efforts to cause its insurance policies
in effect on the date of this Agreement to be amended to provide a level of
coverage for the business and properties of the Company acquired in the
Transaction that is substantially equivalent to the level of coverage provided
by the Company Policies on the date of this Agreement.
10.4 Piggyback Registrations. Asyst shall notify all holders of
Registrable Securities in writing at least fifteen (15) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of Asyst (including, but not limited to, registration
statements relating to secondary offerings of securities of Asyst, but excluding
Asyst's Registration Statement on Form S-3 to be filed on or prior to August 16,
1999, and registration statements relating to employee benefit plans or with
respect to corporate reorganizations or other transactions under Rule 145 of the
Securities Act) and will afford each such holder an opportunity to include in
such registration statement all or part of such Registrable Securities held by
such holder. Each holder desiring to include in any such registration statement
all or any part of the Registrable Securities held by it shall, within fifteen
(15) days after the above-described notice from Asyst, so notify Asyst in
writing. Such notice shall state the intended method of disposition of the
Registrable Securities by such holder. If a holder decides not to include all
of its Registrable Securities in any registration statement thereafter filed by
Asyst, such holder shall nevertheless continue to have the right to include any
Registrable Securities in any subsequent registration statement or registration
statements as may be filed by Asyst with respect to offerings of its securities,
all upon the terms and conditions set forth herein.
(a) Underwriting. If the registration statement under which Asyst
gives notice under this Section 10.4 is for an underwritten offering, Asyst
shall so advise the holders of Registrable Securities. In such event, the right
of any such holder to be included in a registration pursuant to this Section
10.4 shall be conditioned upon such holder's participation in such underwriting
and the inclusion of such holder's Registrable Securities in the underwriting to
the extent provided herein. All holders proposing to distribute their
Registrable Securities through such underwriting shall enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by Asyst. Notwithstanding, if the underwriter
determines in good faith that marketing factors require a limitation of the
number of shares to be underwritten, the number of shares that may be included
in the underwriting shall be allocated, first, to Asyst; second, to the holders
on a pro rata basis based on the total number of
33.
Registrable Securities held by the holders; and third, to any shareholder of
Asyst (other than a holder) on a pro rata basis. No such reduction shall reduce
the securities being offered by Asyst for its own account to be included in the
registration and underwriting. If any holder disapproves of the terms of any
such underwriting, such holder may elect to withdraw therefrom by written notice
to Asyst and the underwriter, delivered at least ten (10) business days prior to
the effective date of the registration statement. Any Registrable Securities
excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the registration.
(b) Right to Terminate Registration. Asyst shall have the right to
terminate or withdraw any registration initiated by it under this Section 10.4
prior to the effectiveness of such registration whether or not any holder has
elected to include securities in such registration. The Registration Expenses
of such withdrawn registration shall be borne by Asyst in accordance with
Section 10.4(b) hereof.
(c) Expenses of Registration. Except as specifically provided
herein, all Registration Expenses incurred in connection with any registration,
pursuant to Section 10.4 herein shall be borne by Asyst. All Selling Expenses
incurred in connection with any registrations hereunder, shall be borne by the
holders of the securities so registered pro rata on the basis of the number of
shares so registered.
(d) Termination of Registration Rights. All registration rights
granted under this Section 10.4 shall terminate and be of no further force and
effect one (1) year after the Closing Date.
Section 11. Miscellaneous Provisions
11.1 Shareholders' Agent.
(a) The Shareholders and Optionholders hereby irrevocably appoint
Xxxx Xxxxxx as their agent, proxy and attorney-in-fact for purposes of this
Agreement (the "Shareholders' Agent"), and Xxxx Xxxxxx hereby accepts his
appointment as the Shareholders' Agent. Each of the Shareholders and
Optionholders hereby agrees that such agency and proxy are coupled with an
interest and are, therefore, irrevocable and shall survive the death,
incapacity, bankruptcy, dissolution or liquidation of any Shareholder or
Optionholder. Asyst shall be entitled to deal exclusively with the Shareholders'
Agent for all purposes of this Agreement, and shall be entitled to rely
conclusively (without further evidence of any kind whatsoever) on any document
executed or purported to be executed on behalf of any Shareholder or
Optionholder by the Shareholders' Agent, and on any other action taken or
purported to be taken on behalf of any Shareholder by the Shareholders' Agent,
as fully binding upon such Shareholder or Optionholder. If the Shareholders'
Agent shall die, become disabled or otherwise be unable to fulfill his
responsibilities as agent of the Shareholders and Optionholders, then the
Shareholders shall, within ten days after such death or disability, appoint a
successor agent and, promptly thereafter, shall notify Asyst of the identity of
such successor. Any such successor shall become the "Shareholders' Agent" for
purposes of this Agreement. If for any reason there is no Shareholders' Agent at
any time, all references herein to the Shareholders' Agent shall be deemed to
refer to the Shareholders and Optionholders.
34.
(b) Neither the Shareholders' Agent nor any agent employed by it
shall be liable to any Shareholder or Optionholder relating to the performance
of its duties under this Agreement for any errors in judgment, negligence,
oversight, breach of duty or otherwise except to the extent it is finally
determined in a court of competent jurisdiction by clear and convincing evidence
that the actions taken or not taken by the Shareholders' Agent constituted fraud
or were taken or not taken in bad faith. The Shareholders' Agent shall be
indemnified and held harmless by the Shareholders and Optionholders against all
expenses (including attorneys' fees), judgments, fines and other amounts paid or
incurred in connection with any action, suit, proceeding or claim to which the
Shareholders' Agent is made a party by reason of the fact that it was acting as
the Shareholders' Agent pursuant to this Agreement; provided, however, that the
Shareholders' Agent shall not be entitled to indemnification hereunder to the
extent it is finally determined in a court of jurisdiction by clear and
convincing evidence that the actions taken or not taken by the Shareholders'
Agent constituted fraud or were taken or not taken in bad faith. The
Shareholders' Agent shall be protected in acting upon any notice, statement or
certificate believed by it to be genuine and to have been furnished by the
appropriate person and in acting or refusing to act in good faith or any matter.
(c) A decision, act, consent or instruction of the Shareholders'
Agent shall be made in writing and shall constitute a decision of all the
Shareholders, and shall be final, binding and conclusive upon each of the
Shareholders and Optionholders, and Asyst and the Company may rely upon any
decision, act, consent or instruction of the Shareholders' Agent as being the
decision, act, consent or instruction of each and all of the Shareholders and
Optionholders. Asyst and the Company are hereby relieved from any liability to
any person for any acts done by them in accordance with such decision, act,
consent or instruction of the Shareholders' Agent.
11.2 Further Assurances. Each party hereto shall execute and cause to be
delivered to each other party hereto such instruments and other documents, and
shall take such other actions, as such other party may reasonably request (prior
to, at or after the Closing) for the purpose of carrying out or evidencing any
of the transactions contemplated by this Agreement.
11.3 Fees and Expenses. Each party to this Agreement shall bear and pay
all fees, costs and expenses (including legal fees and accounting fees) that
have been incurred or that are incurred by such party in connection with the
transactions contemplated by this Agreement, including all fees, costs and
expenses incurred by such party in connection with or by virtue of (a) the
investigation and review conducted by Asyst and its Representatives with respect
to the Company's business (and the furnishing of information to Asyst and its
Representatives in connection with such investigation and review), (b) the
negotiation, preparation and review of this Agreement (including the Disclosure
Schedule) and all agreements, certificates, opinions and other instruments and
documents delivered or to be delivered in connection with the transactions
contemplated by this Agreement, (c) the preparation and submission of any filing
or notice required to be made or given in connection with any of the
transactions contemplated by this Agreement, and the obtaining of any Consent
required to be obtained in connection with any of such transactions, and (d) the
consummation of the Transaction; provided, however, that, to the extent the
total amount of all such fees, costs and expenses incurred by or for the benefit
of the Company (including all such fees, costs and expenses incurred prior to
the date of this Agreement) in connection with the transaction exceeds $100,000
in the aggregate, such fees,
35.
costs and expenses shall be borne and paid by the Shareholders and Optionholders
and not by the Company.
11.4 Attorneys' Fees. If any action or proceeding relating to this
Agreement or the enforcement of any provision of this Agreement is brought
against any party hereto, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements (in addition to any other
relief to which the prevailing party may be entitled).
11.5 Notices. Any notice or other communication required or permitted to
be delivered to any party under this Agreement shall be in writing and shall be
deemed properly delivered, given and received when delivered (by hand, by
registered mail, by courier or express delivery service or by facsimile) to the
address or facsimile telephone number set forth beneath the name of such party
below (or to such other address or facsimile telephone number as such party
shall have specified in a written notice given to the other parties hereto):
if to Asyst:
Asyst Technologies, Inc
00000 Xxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxxxxx
Senior Vice President and Chief Financial Officer
with a copy to:
Xxxxxx Godward LLP
Five Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxx
if to the Company:
Palo Alto Technologies, Inc.
0000 Xxxxxxx Xxxxx, #X
Xxxxxxxx Xxxx, XX 00000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, a Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
36.
if to the Shareholder's Agent:
Xxxx Xxxxxx
0000 Xxxxxx Xxxxxx, X.X.
Xxxxxx Xxxxxx, XX 00000
11.6 Confidentiality. On and at all times after the Closing Date, each
Shareholder and Optionholder shall keep confidential, and shall not use or
disclose to any other Person, any non-public document or other non-public
information in such Shareholder's or Optionholder's possession that relates to
the business of the Company or Asyst.
11.7 Time of the Essence. Time is of the essence of this Agreement.
11.8 Headings. The underlined headings contained in this Agreement are
for convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the construction or
interpretation of this Agreement.
11.9 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
11.10 Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the internal laws of the State of California
(without giving effect to principles of conflicts of laws).
11.11 Successors and Assigns. This Agreement shall be binding upon: the
Company and its successors and assigns (if any); the Shareholders and
Optionholders and their respective personal representatives, executors,
administrators, estates, heirs, successors and assigns (if any); and Asyst and
its successors and assigns (if any). This Agreement shall inure to the benefit
of: the Company; the Shareholders; the Optionholders; Asyst; the other
Indemnitees; and the respective successors and assigns (if any) of the
foregoing. Asyst may freely assign any or all of its rights under this
Agreement (including its indemnification rights under Section 9), in whole or in
part, to any other Person without obtaining the consent or approval of any other
party hereto or of any other Person.
11.12 Remedies Cumulative; Specific Performance. The rights and remedies
of the parties hereto shall be cumulative (and not alternative). The parties to
this Agreement agree that, in the event of any breach or threatened breach by
any party to this Agreement of any covenant, obligation or other provision set
forth in this Agreement for the benefit of any other party to this Agreement,
such other party shall be entitled (in addition to any other remedy that may be
available to it) to (a) a decree or order of specific performance or mandamus to
enforce the observance and performance of such covenant, obligation or other
provision, and (b) an injunction restraining such breach or threatened breach.
37.
11.13 Waiver.
(a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no
single or partial exercise of any such power, right, privilege or remedy shall
preclude any other or further exercise thereof or of any other power, right,
privilege or remedy.
(b) No Person shall be deemed to have waived any claim arising out
of this Agreement, or any power, right, privilege or remedy under this
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such Person; and any such waiver shall not be applicable or have any
effect except in the specific instance in which it is given.
11.14 Amendments. This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of all of the parties hereto.
11.15 Severability. In the event that any provision of this Agreement, or
the application of any such provision to any Person or set of circumstances,
shall be determined to be invalid, unlawful, void or unenforceable to any
extent, the remainder of this Agreement, and the application of such provision
to Persons or circumstances other than those as to which it is determined to be
invalid, unlawful, void or unenforceable, shall not be impaired or otherwise
affected and shall continue to be valid and enforceable to the fullest extent
permitted by law.
11.16 Parties in Interest. Except for the provisions of Section 9, none of
the provisions of this Agreement is intended to provide any rights or remedies
to any Person other than the parties hereto and their respective successors and
assigns (if any).
11.17 Entire Agreement. This Agreement and the other agreements referred
to herein set forth the entire understanding of the parties hereto relating to
the subject matter hereof and thereof and supersede all prior agreements and
understandings among or between any of the parties relating to the subject
matter hereof and thereof.
11.18 Construction.
(a) For purposes of this Agreement, whenever the context requires:
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender shall
include the masculine and neuter genders; and the neuter gender shall include
the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be applied in the construction or interpretation of this Agreement.
38.
(c) As used in this Agreement, the words "include" and "including,"
and variations thereof, shall not be deemed to be terms of limitation, but
rather shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement
to "Sections" and "Exhibits" are intended to refer to Sections of this Agreement
and Exhibits to this Agreement.
39.
The parties hereto have caused this Agreement to be executed and delivered
as of the date hereof.
Asyst Technologies, Inc.
a California corporation
By:/s/ Xxxxxxx X. XxXxxxxxxx
------------------------------
Xxxxxxx X. XxXxxxxxxx
Senior Vice President,
Chief Financial Officer
/s/ Palo Alto Technologies, Inc.
/s/ Shareholders of Palo Alto
Technologies, Inc.
/s/ Option holders of Palo Alto
Technologies, Inc.
/s/ Shareholders' Agent of
Palo Alto Technologies, Inc.
Exhibit A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit B):
Acquisition Transaction. "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale, license, disposition or acquisition of all or a
material portion of the business or assets of the Company or any direct or
indirect subsidiary or division of the Company;
(b) the issuance, grant, disposition or acquisition of (i) any
capital stock or other equity security of the Company or any direct or indirect
subsidiary of the Company, (ii) any option, call, warrant or right (whether or
not immediately exercisable) to acquire any capital stock or other equity
security of the Company or any direct or indirect subsidiary of the Company, or
(iii) any security, instrument or obligation that is or may become convertible
into or exchangeable for any capital stock or other equity security of the
Company or any direct or indirect subsidiary of the Company; or
(c) any merger, consolidation, business combination, share exchange,
reorganization or similar transaction involving the Company or any direct or
indirect subsidiary of the Company;
provided, however, that (A) the grant of stock options by the Company to
its employees in the ordinary course of business will not be deemed to be an
"Acquisition Transaction" if such grant is made pursuant to the Company's
existing stock option plans and is consistent with the Company's past practices,
and (B) the issuance of stock by the Company to its employees upon the exercise
of outstanding stock options will not be deemed to be an "Acquisition
Transaction."
Agreement. "Agreement" shall mean the Stock Purchase Agreement to which
this Exhibit A is attached (including the Disclosure Schedule), as it may be
amended from time to time.
Asyst Company Stock. "Asyst Company Stock" shall mean the common stock of
Asyst.
Company Contract. "Company Contract" shall mean any Contract: (a) to which
the Company is a party; (b) by which the Company or any of its assets is or may
become bound or under which the Company has, or may become subject to, any
obligation; or (c) under which the Company has or may acquire any right or
interest.
Company Proprietary Asset. "Company Proprietary Asset" shall mean any
Proprietary Asset owned by or licensed to the Company or otherwise used by the
Company.
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including any Governmental Authorization).
A-1.
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan or legally binding commitment or undertaking of
any nature.
Damages. "Damages" shall mean any loss, damage, injury, decline in value
lost opportunity, liability, claim, demand, settlement, judgment, award, fine,
penalty, Tax, fee (including reasonable attorneys' fees), charge, cost
(including costs of investigation) or expense of any nature.
Disclosure Schedule. "Disclosure Schedule" shall mean the schedule (dated
as of the date of the Agreement) delivered to Asyst on behalf of the Company and
the Shareholders.
Encumbrance. "Encumbrance" shall mean any lien, pledge, hypothecation,
charge, mortgage, security interest, encumbrance, claim, infringement,
interference, option, right of first refusal, preemptive right, community
property interest or restriction of any nature (including any restriction on the
voting of any security, any restriction on the transfer of any security or other
asset, any restriction on the receipt of any income derived from any asset, any
restriction on the use of any asset and any restriction on the possession,
exercise or transfer of any other attribute of ownership of any asset).
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
Government Bid. "Government Bid" shall mean any quotation, bid or proposal
submitted to any Governmental Body or any proposed prime contractor or higher-
tier subcontractor of any Governmental Body.
Government Contract. "Government Contract" shall mean any prime contract,
subcontract, letter contract, purchase order or delivery order executed or
submitted to or on behalf of any Governmental Body or any prime contractor or
higher-tier subcontractor, or under which any Governmental Body or any such
prime contractor or subcontractor otherwise has or may acquire any right or
interest.
Governmental Authorization. "Governmental Authorization" shall mean any:
(a) permit, license, certificate, franchise, permission, clearance,
registration, qualification or authorization issued, granted, given or otherwise
made available by or under the authority of any Governmental Body or pursuant to
any Legal Requirement; or (b) right under any Contract with any Governmental
Body.
Governmental Body. "Governmental Body" shall mean any: (a) nation, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (b) federal, state, local, municipal, foreign or
other government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department,
A-2.
agency, commission, instrumentality, official, organization, unit, body or
Entity and any court or other tribunal).
Indemnitees. "Indemnitees" shall mean the following Persons: (a) Asyst; (b)
Asyst's current and future affiliates (including the Surviving Corporation); (c)
the respective Representatives of the Persons referred to in clauses "(a)" and
"(b)" above; and (d) the respective successors and assigns of the Persons
referred to in clauses "(a)", "(b)" and "(c)" above; provided, however, that the
Shareholders shall not be deemed to be "Indemnitees."
Legal Proceeding. "Legal Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), hearing, inquiry, audit,
examination or investigation commenced, brought, conducted or heard by or
before, or otherwise involving, any court or other Governmental Body or any
arbitrator or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state,
local, municipal, foreign or other law, statute, constitution, principle of
common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling
or requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.
Material Adverse Effect. A violation or other matter will be deemed to have
a "Material Adverse Effect" on the Company if such violation or other matter
(considered together with all other matters that would constitute exceptions to
the representations and warranties set forth in the Agreement or in the Closing
Certificate but for the presence of "Material Adverse Effect" or other
materiality qualifications, or any similar qualifications, in such
representations and warranties) would have a material adverse effect on the
Company's business, condition, assets, liabilities, operations, financial
performance or prospects.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Proprietary Asset. "Proprietary Asset" shall mean any: (a) patent, patent
application, trademark (whether registered or unregistered), trademark
application, trade name, fictitious business name, service xxxx (whether
registered or unregistered), service xxxx application, copyright (whether
registered or unregistered), copyright application, maskwork, maskwork
application, trade secret, know-how, customer list, franchise, system, computer
software, computer program, invention, design, blueprint, engineering drawing,
proprietary product, technology, proprietary right or other intellectual
property right or intangible asset; or (b) right to use or exploit any of the
foregoing.
Registrable Securities. "Registrable Securities" means Asyst Common Stock
received in consideration for Company Preferred Stock in connection with this
Agreement.
Registration Expenses. "Registration Expenses" shall mean all expenses
incurred by Asyst in complying with Section 10.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration (but excluding the compensation of regular employees of
Asyst which shall be paid in any event by Asyst).
A-3.
Representatives. "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors and representatives.
Securities Act. "Securities Act" shall mean the Securities Act of 1933,
as amended.
Selling Expenses. "Selling Expenses" shall mean all underwriting discounts
and selling commissions applicable to the sale.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax, ad
valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax, business
tax, withholding tax or payroll tax), levy, assessment, tariff, duty (including
any customs duty), deficiency or fee, and any related charge or amount
(including any fine, penalty or interest), imposed, assessed or collected by or
under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
A-4.
Exhibits Index
Exhibit A - Certain Definitions
Exhibit B - Form of General Release
Exhibit C - Form of legal opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
a Professional Corporation
i.
