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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
ACQUISITION OF
SEMY ENGINEERING, INC.
BY
XXXXXX AUTOMATION, INC.
AS OF
FEBRUARY 16, 2001
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TABLE OF CONTENTS
PAGE
ARTICLE 1. SALE AND TRANSFER OF THE COMPANY SHARES.........................................................1
1.1. PURCHASE OF COMPANY SHARES......................................................................1
1.2. DETERMINATION OF CLOSING NET BOOK VALUE; ADJUSTMENT OF THE PURCHASE PRICE.......................2
1.3. TAXES...........................................................................................4
ARTICLE 2. CLOSING.........................................................................................4
2.1. CLOSING.........................................................................................4
2.2. CLOSING OBLIGATIONS OF COMPANY AND PARENT.......................................................4
2.3. CLOSING OBLIGATIONS OF BUYER....................................................................5
2.4. OTHER DOCUMENTS; FURTHER ASSURANCES.............................................................6
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY............................................6
3.1. ORGANIZATION AND GOOD STANDING..................................................................6
3.2. AUTHORITY AND BINDING EFFECT....................................................................6
3.3. NO CONFLICT.....................................................................................7
3.4. CAPITALIZATION..................................................................................7
3.5. FINANCIAL STATEMENTS............................................................................7
3.6. BOOKS AND RECORDS...............................................................................8
3.7. OWNERSHIP OF ASSETS.............................................................................8
3.8. RETURNS AND REPORTS; TAXES......................................................................8
3.9. ACCOUNTS RECEIVABLE............................................................................10
3.10. NO UNDISCLOSED LIABILITIES.....................................................................11
3.11. NO MATERIAL CHANGE.............................................................................11
3.12. EMPLOYEE BENEFIT PLANS AND ERISA...............................................................13
3.13. COMPLIANCE WITH CONTRACTS AND LAWS.............................................................13
3.14. LEGAL PROCEEDINGS..............................................................................14
3.15. INSURANCE......................................................................................14
3.16. REAL AND PERSONAL PROPERTY AND LEASEHOLDS......................................................14
3.17. CONDITION AND SUFFICIENCY OF ASSETS............................................................17
3.18. ENVIRONMENTAL MATTERS..........................................................................17
3.19. EMPLOYEE MATTERS...............................................................................19
3.20. INTELLECTUAL PROPERTY..........................................................................19
3.21. GUARANTEES.....................................................................................21
3.22. CONTRACTS; MATERIAL CONTRACTS..................................................................21
3.23. CERTAIN PAYMENTS...............................................................................22
3.24. LARGE CUSTOMERS................................................................................22
3.25. PRODUCT WARRANTIES; PRODUCT LIABILITY..........................................................23
3.26. INVENTORIES....................................................................................23
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3.27. TRANSACTIONS WITH AFFILIATES...................................................................23
3.28. BROKERS........................................................................................24
3.29. OUTSTANDING INDEBTEDNESS.......................................................................24
3.30. DISCLOSURE.....................................................................................24
3.31. INVESTMENT MATTERS.............................................................................24
ARTICLE 4. BUYER'S REPRESENTATIONS AND WARRANTIES.........................................................24
4.1. AUTHORITY AND BINDING EFFECT...................................................................25
4.2. ORGANIZATION AND GOOD STANDING.................................................................25
4.3. NO CONFLICT....................................................................................25
4.4. APPROVALS......................................................................................25
4.5. INVESTMENT INTENT..............................................................................26
4.6. NO BROKERS.....................................................................................26
4.7. REPORTS AND FINANCIAL STATEMENTS...............................................................26
ARTICLE 5. COVENANTS......................................................................................26
5.1. FINANCIAL STATEMENTS...........................................................................27
5.2. NO IMPLIED REPRESENTATIONS OR WARRANTIES.......................................................27
5.3. EMPLOYEE BENEFITS..............................................................................27
5.4. SECTION 338(h)(10) ELECTION....................................................................27
5.5. TAX MATTERS....................................................................................27
ARTICLE 6. REGISTRATION...................................................................................29
6.1. REGISTRATION...................................................................................29
6.2. COOPERATION....................................................................................29
6.3. EXPENSES.......................................................................................29
6.4. BUYER INDEMNITY................................................................................30
6.5. PARENT INDEMNITY...............................................................................30
6.6. CONTRIBUTION...................................................................................31
6.7. NOTICE.........................................................................................31
ARTICLE 7. [RESERVED].....................................................................................32
ARTICLE 8. INDEMNIFICATION................................................................................32
8.1. SURVIVAL; RIGHT TO INDEMNIFICATION AFFECTED BY KNOWLEDGE.......................................32
8.2. INDEMNIFICATION AND PAYMENTS BY PARENT.........................................................32
8.3. INDEMNIFICATION AND PAYMENTS BY BUYER..........................................................33
8.4. TIME LIMITATIONS...............................................................................33
8.5. LIMITATIONS ON AMOUNT..........................................................................34
8.6. PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.............................................34
8.7. PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS...................................................35
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8.8. COSTS; DAMAGES; EXCLUSIVITY....................................................................35
ARTICLE 9. [RESERVED]......................................................................................36
ARTICLE 10. MISCELLANEOUS..................................................................................36
10.1. EXPENSES.......................................................................................36
10.2. PUBLIC ANNOUNCEMENT............................................................................36
10.3. NOTICES........................................................................................36
10.4. FURTHER ASSURANCES.............................................................................37
10.5. WAIVER.........................................................................................37
10.6. ENTIRE AGREEMENT AND MODIFICATION..............................................................38
10.7. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.............................................38
10.8. SEVERABILITY...................................................................................38
10.9. SECTION HEADINGS, CONSTRUCTION.................................................................38
10.10. GOVERNING LAW..................................................................................38
10.11. COUNTERPARTS...................................................................................38
10.12. REPRESENTATION BY COUNSEL; INTERPRETATION......................................................39
10.13. INCORPORATION OF EXHIBITS AND SCHEDULES........................................................39
10.14. ADDITIONAL INFORMATION.........................................................................39
ARTICLE 11. DEFINITIONS....................................................................................39
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT (this "AGREEMENT") is made and entered into as
of this 16th day of February, 2001, by and among Semitool, Inc., a Montana
corporation (hereinafter referred to as "PARENT"), SEMY Engineering, Inc., a
Delaware corporation and wholly-owned subsidiary of Parent (hereinafter referred
to as "COMPANY"), and Xxxxxx Automation, Inc., a Delaware corporation
(hereinafter referred to as "BUYER"). (Parent, Company and Buyer are hereinafter
referred to individually as a "PARTY," and collectively as the "PARTIES").
RECITALS
WHEREAS, Parent owns all of the outstanding shares of capital
stock of Company and is willing to sell the Company Shares to Buyer; and
WHEREAS, Buyer wishes to acquire all of the Company Shares for
$36,000,000 in cash and 73,243 shares of Buyer's common stock, $.01 par value
(the "BUYER SHARES");
AGREEMENT
NOW, THEREFORE, in consideration of the mutual premises and
the covenants, conditions, representations and warranties herein contained, the
Parties hereto agree as follows:
ARTICLE 1
SALE AND TRANSFER OF THE COMPANY SHARES
1.1. PURCHASE OF COMPANY SHARES.
Subject to the provisions of this Agreement, Parent agrees to
sell, and Buyer agrees to purchase, at the Closing, all the Company Shares for
an aggregate purchase price of the Buyer Shares plus $36,000,000 in cash,
subject to adjustment as provided in Section 1.2 hereof (collectively, the
"PURCHASE PRICE"), which Company Shares constitute, and will constitute at the
Closing, one hundred percent (100%) of the issued and outstanding capital stock
of the Company. The Purchase Price (as such amount may be adjusted as provided
in said Section 1.2), shall be paid by Buyer at the Closing as follows:
(1) $35,500,000 in cash to Parent at the Closing;
(2) the Buyer Shares; and
(3) the remaining portion of the Purchase Price (the
"HOLDBACK") shall be paid when, if and as provided in
accordance with the adjustment set forth in Section 1.2
hereof.
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1.2. DETERMINATION OF CLOSING NET BOOK VALUE; ADJUSTMENT OF
THE PURCHASE PRICE.
(a) Not later than forty-five (45) days after the Closing
Date, Parent shall prepare, at Parent's cost, and deliver to the Buyer (i) a
balance sheet of Company as of the Closing Date which will include, among other
things, a detailed statement of the inter-company account obligations to be
settled post Closing (the "CLOSING BALANCE SHEET") and (ii) a statement (the
"CLOSING STATEMENT") indicating the difference between the aggregate book value
of all the assets appearing on the Closing Balance Sheet and the aggregate book
value of all liabilities appearing thereon (the "CLOSING NET BOOK VALUE"). The
Closing Balance Sheet shall be audited by PricewaterhouseCoopers, LLP ("PWC")
(Seattle/Boise offices). The Closing Balance Sheet shall be prepared in
accordance with GAAP and shall fairly present the assets, liabilities and
Closing Net Book Value of Company on the Closing Date. One hundred percent of
the inventory shall be counted on a mutually agreed upon date that is on or
within five (5) business days of the Closing Date at which all parties or their
representatives may be present to observe. Parent will adjust any asset or
liability in any category on the Closing Balance Sheet identified as a result of
such audit in excess of $15,000, whether or not such asset or liability might be
material as defined under GAAP. The value of patents being transferred from
Parent to the Company pursuant to the Patent Assignment and License Agreement in
the form of Exhibit E hereto will not be included at a value higher on the
Closing Balance Sheet than the amount for patents in the Base Balance Sheet. The
cash on the Closing Balance Sheet shall equal or exceed all liabilities on the
Closing Balance Sheet relating to customer prepayments and deferred revenues
that have been collected. Notwithstanding the foregoing, the same accounting
principles, practices, procedures and policies that were used in preparing the
Base Balance Sheet shall be used in preparing the Closing Balance Sheet and the
calculation of Closing Net Book Value, including, in particular, inventory
reserves, warranty accruals, accounts receivable reserves, Parent allocations,
and revenue recognition, even if they may differ from GAAP. The Closing Balance
Sheet will not reflect any income or gain, or associated Tax liability, with
respect to, the Section 338(h)(10) Election. The Closing Balance Sheet shall
also be accompanied by all necessary and appropriate supporting work papers and
materials. If these supporting work papers and materials are materially
deficient or incomplete, the Review Period referenced in Section 1.2(b) hereof
shall not commence until such materials are made complete to give Buyer's
accountants sufficient time to complete their audit of the Closing Balance
Sheet. To the extent that the Closing Net Book Value differs from the comparable
net book value as derived from the Base Balance Sheet (the "BASE NET BOOK
VALUE"), then the Purchase Price shall be adjusted up or down on a dollar for
dollar basis by the amount of such difference as hereinafter set forth. The Base
Net Book Value equals $6,436,167.
(b) Following receipt of the Closing Balance Sheet and
supporting work papers and materials, Buyer and Buyer's accountants (PWC, Boston
office) will be afforded a period of forty-five (45) calendar days (the "REVIEW
PERIOD") to audit, at Buyer's cost, the Closing Balance Sheet. During such
Review Period, Buyer and Buyer's accountants will be afforded reasonable access
to any of Parent's employees involved in the preparation of the Closing Balance
Sheet and the records, work papers, trial balances and similar materials
prepared by Parent, Company or their accountants in connection with the
preparation of the audit
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and certification of the Closing Balance Sheet; provided, however, that Buyer
shall provide reasonable prior notice of any such investigation to Parent so as
not to unduly interfere with the operations of Parent. At or before the end of
the Review Period, Buyer will either (i) accept the Closing Balance Sheet and
the Closing Statement in their entirety, in which case the Closing Net Book
Value will be deemed to be as set forth on the Closing Statement, and the
Closing Balance Sheet and the Closing Statement shall become final, binding and
conclusive on the Parties, or (ii) deliver to Parent and Parent's accountants a
written notice in accordance with paragraph (d) of this Section 1.2 disputing
the Closing Balance Sheet or the Closing Statement.
(c) Within ten (10) days following the later of (x) the
date of the Closing Balance Sheet and the Closing Statement is accepted by Buyer
or (y) the final, binding and conclusive determination of any dispute with
respect to the Closing Balance Sheet or the Closing Statement as provided in
paragraph (d) of this Section 1.2:
(1) if the Closing Net Book Value is less
than the Base Net Book Value and such
difference is less than or equal to
$500,000, then Buyer shall pay to Parent
cash in an amount equal to (i) the Holdback
minus (ii) such difference;
(2) if the Closing Net Book Value is less
than the Base Net Book Value and such
difference is greater than $500,000, then
Parent shall pay to Buyer cash in an amount
equal to (i) the Base Net Book Value minus
(ii) the Closing Book Value minus (iii) the
Holdback;
(3) if the Closing Net Book Value is greater
than the Base Net Book Value, then Buyer
shall pay to Parent cash in an amount equal
to the sum of (i) the Holdback plus (ii)
such difference; and
(4) if the Closing Net Book Value and the
Base Net Book Value are equal, then Buyer
shall pay to Parent cash in an amount equal
to the Holdback.
(d) At the same time that payment is made under paragraph
(c), the appropriate party will pay to the other party the net amount owed by
Parent to Company or by Company to Parent with respect to inter-company
payments, including accrued taxes payable to Parent with respect to Tax
liability not previously paid directly to a taxing authority by the Company, but
not Tax liability arising from the Section 338(h)(10) election.
(e) In the event that any dispute shall arise as to the
manner of preparation or the accuracy of the Closing Balance Sheet or Closing
Statement prior to the expiration of the Review Period, Buyer shall provide
Parent with written notice of each disputed item. In the event of such a
dispute, Buyer and Parent shall attempt in good faith to reconcile their
differences as to such items within twenty (20) calendar days (the "RESOLUTION
PERIOD") of Parent's receipt of such notice, and any resolution by them as to
any disputed items shall be final, binding and conclusive on Parent and Buyer.
If Buyer and Parent are unable to reach a
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resolution with such effect within the Resolution Period, Buyer and Parent shall
submit the dispute to the Phoenix, Arizona office of Deloitte & Touche (the
"INDEPENDENT CPA"). The determination of such dispute by the Independent CPA
shall be final, binding and conclusive on the Parties. The fees and expenses of
the Independent CPA shall be assessed by the Independent CPA fifty percent (50%)
against the Parent and fifty percent (50%) against Buyer, and shall be paid by
each of them in those proportions.
1.3. TAXES.
Parent shall be solely responsible for all Taxes required by
any Governmental Authority in any relevant jurisdiction which arise out of or
result from the sale of the Company Shares.
ARTICLE 2.
CLOSING
2.1. CLOSING.
The purchase and sale (the "CLOSING") provided for in this
Agreement shall take place commencing at 10:00 a.m. local time on February 16,
2001 (the "CLOSING DATE"), at the office of Brown, Rudnick, Freed & Gesmer, Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other time and place
as Buyer and Parent shall agree upon.
2.2. CLOSING OBLIGATIONS OF COMPANY AND PARENT.
At the Closing Company and Parent will deliver or cause to be
delivered to Buyer:
(a) certificates representing the Company Shares, duly
endorsed (or accompanied by duly executed stock powers), for transfer to Buyer
with all signatures notarized;
(b) such other documents as may be required to effect a
valid transfer of the Company Shares by Parent, free and clear of any and all
Encumbrances under Article 8 of the Uniform Commercial Code of the States of
Arizona, Delaware, Massachusetts, Montana or otherwise;
(c) a release by Parent of certain liability of Company,
in substantially the form of Exhibit A (the "PARENT RELEASE"); and
(d) certificates executed by Parent and Company to the
effect that, except as otherwise stated in each such certificate, each of Parent
and Company has performed and complied with all of its obligations under this
Agreement which are to be performed or complied with by it prior to or on the
Closing;
(e) signed resignations of all directors and all officers
of Company dated as of the Closing Date;
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(f) a Noncompetition Agreement, executed by Parent, in
substantially the form of Exhibit C;
(g) all material waivers, approvals and authorizations
required to be obtained, and all filings required to be made, by Company, for
the authorization, execution and delivery of this Agreement, the consummation by
it of the transactions contemplated hereby and the continuation in full force
and effect of any and all material rights, documents, instruments or contracts
of the Company shall have been obtained and made, except that Parent's and
Company's sole responsibility with respect to consents or approvals required
under any contract shall be limited to contracts with the Selected Customers;
(h) an OEM agreement, executed by Parent, in
substantially the form of Exhibit D (the "OEM AGREEMENT") and in all manners
reasonably acceptable to Buyer that shall replace the current OEM agreement
between Company and Parent, dated October 1, 2000;
(i) a Patent Assignment and License Agreement, executed
by Company and Parent, in substantially the form of Exhibit E and in all manners
reasonably acceptable to Buyer providing for the license back of Intellectual
Property Assets specified therein (the "PATENT AGREEMENT"); and
(j) an opinion of Parent's and Company's counsel, in
substantially the form of Exhibits F-1 and F-2, respectively.
2.3. CLOSING OBLIGATIONS OF BUYER.
Buyer will deliver:
(a) $35,500,000;
(b) a certificate representing the Buyer Shares free and
clear of any and all Encumbrances;
(c) a certificate executed by Buyer to the effect that,
except as otherwise stated in such certificate, Buyer has performed and complied
with all of its obligations under this Agreement which are to be performed or
complied with by it prior to or on the Closing;
(d) a release by Company of certain liability of Parent
pursuant to that OEM agreement between Company and Parent, dated October 1,
2000, in substantially the form of Exhibit G (the "COMPANY RELEASE");
(e) the OEM Agreement and the Patent Agreement executed
by Buyer;
(f) an opinion of Buyer's counsel, in substantially the
form of Exhibit H; and
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(g) the Proprietary Information Agreement between Parent
and the Company.
2.4. OTHER DOCUMENTS; FURTHER ASSURANCES.
(a) At the Closing, each Party shall deliver to the other
or cause to be delivered to the other such other documents as may be required by
any ancillary agreement identified in Section 2.2 or 2.3.
(b) From time to time after the Closing, at the request
of any Party and without further consideration, such other Party shall execute
and deliver further instruments of transfer and assignment (in addition to those
delivered under Section 2.2) and take such other action as such Party may
reasonably require to consummate the transaction contemplated herein.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF PARENT AND COMPANY
Each of Parent and Company represents and warrants to Buyer
that, except as set forth on the Disclosure Schedule attached hereto, each of
which exceptions shall specifically identify the relevant subsection hereof to
which it relates and shall be representations and warranties as if made
hereunder:
3.1. ORGANIZATION AND GOOD STANDING.
Each of Company and Parent is a corporation duly authorized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, having full power and authority to carry on its business as it is
now being conducted and to own, lease and operate its assets and perform its
obligations under its contracts. Company has no subsidiaries and no stock or
other equity or ownership interest (whether controlling or not) in any
corporation, association, partnership, joint venture or other entity. Company is
duly qualified to do business as a foreign corporation and is in good standing
in every jurisdiction in which the character of the properties owned by it or in
which the transaction of its business requires it to qualify to do business and
in which the failure to be so qualified would have a material adverse effect on
Company. Attached as Part 3.1 of the Disclosure Schedule are correct and
complete copies of the Certificate of Incorporation and the bylaws of Company.
3.2. AUTHORITY AND BINDING EFFECT.
Each of Parent and Company has the full power, authority and
capacity to execute, deliver and perform this Agreement and all of the other
agreements, documents, instruments and certificates (the "TRANSACTION
DOCUMENTS") to be executed by Parent and Company and has taken all actions
necessary to secure and will have secured on or before the Closing all approvals
required in connection therewith. This Agreement constitutes, and each of the
Transaction Documents when executed and delivered pursuant hereto will
constitute, the legal, valid and binding obligation of Parent and Company,
enforceable against Parent and Company in accordance with its terms.
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3.3. NO CONFLICT.
Neither the execution and delivery of this Agreement or the
Transaction Documents by Parent or Company nor the consummation of the
transactions contemplated hereby or thereby will:
(a) Result (with or without notice or lapse of time) in
violation or breach of (i) any of the provisions of the certificate of
incorporation or bylaws of Parent or Company or any resolution adopted by the
board of directors or shareholders of Parent or Company; (ii) any federal, state
or local law, statute, ordinance, rule, treaty or decision or any court order to
which Parent or Company may be subject; or (iii) any of the provisions of those
contracts or agreements with the Selected Customers listed on Part 3.3(a) of the
Disclosure Schedule; or
(b) Result (with or without notice or lapse of time) in
the imposition or creation of any Lien upon or with respect to any of the assets
of Company.
3.4. CAPITALIZATION.
As of the date of this Agreement, the authorized equity
securities of Company consist of 1,000 shares of common stock, par value $.001
per share, of which 1,000 shares are issued and outstanding (the "COMPANY
SHARES"). Parent is and will be on the Closing Date the record and beneficial
owner and holder of the Company Shares, free and clear of all Liens or
Encumbrances. All of the Company Shares are duly authorized, validly issued,
fully paid and nonassessable. There are no contracts relating to the issuance,
sale, or transfer of any equity securities or other securities of the Company.
Except for the Company Shares, there are no outstanding debt securities, capital
stock, options, warrants, rights or other securities. There are no outstanding
or authorized subscriptions convertible or exercisable into, or exchangeable
for, capital stock of Company. No "phantom" stock, stock appreciation rights or
agreements or similar rights or agreements exist which are intended to confer on
any person rights similar to any rights accruing to shareholders.
3.5. FINANCIAL STATEMENTS.
For purposes of this Agreement: "FINANCIAL STATEMENTS" shall
mean (i) the unaudited balance sheets of Company as of September 30, 1999 and
September 30, 2000, and the related income statements for the three years ended
September 30, 2000, and statements of cash flows for the two years ended
September 30, 2000, and (ii) the unaudited balance sheet of Company (the "BASE
BALANCE SHEET") as of December 31, 2000 and the related income statement for the
three (3) months ended on such date (the "INTERIM FINANCIAL STATEMENTS"). True
and complete copies of such Financial Statements are attached hereto in Part 3.5
of the Disclosure Schedule, present fairly the financial condition of Company as
of their respective dates and the results of its operations and its cash flows
for the respective periods then ended and have, except as provided in the eighth
sentence of Section 1.2, been prepared in conformity with GAAP, except that such
Financial Statements do not include footnotes and such Interim Financial
Statements do not include footnotes or year end adjustments.
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3.6. BOOKS AND RECORDS.
(a) The books of account, minute books, stock record
books, and other records of Company are complete and correct and have been
maintained in accordance with sound business practices. At the Closing, all of
those books and records will be in the possession of Company.
(b) Part 3.6 of the Disclosure Schedule lists all bank
accounts and safe deposit boxes of Company and all persons authorized to sign
checks drawn on such accounts and to have access to such safe deposit boxes.
(c) Company's books, records and accounts fairly reflect
transactions and dispositions of assets by Company, and the system of internal
accounting controls of Company is sufficient to assure that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(d) The minute books and stock record books of Company,
as such materials have been previously provided to Buyer, represent the complete
and correct copies of the minute books and stock record books of Company,
including all recorded minutes of the board of directors and stockholder(s) of
Company, and have been maintained in accordance with sound business practices.
3.7. OWNERSHIP OF ASSETS.
Company has good, valid and marketable title to all of the
assets and properties that it purports to own, including all the assets and
properties reflected in the Base Balance Sheet and the Interim Balance Sheet
(other than those assets disposed of since the dates of such balance sheets in
the ordinary course of business) and all properties purchased or otherwise
acquired by Company since the date of the Base Balance Sheet, free and clear of
all Liens except as set forth in Part 3.7 of the Disclosure Schedule.
3.8. RETURNS AND REPORTS; TAXES.
Except as set forth on Part 3.8 to the Disclosure Schedule:
(a) For purposes of paragraphs (b), (d), and (f) of
this Section 3.8, the term "Company" shall include Company and each other
affiliated or related corporation or entity if Company has or could have any
liability for the Taxes of such corporation or entity, such as under Treas. Reg.
Section 1.1502-6 (or any similar provision of state, local, or foreign law), as
a transferee or successor, by contract or otherwise.
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(b) Company has timely filed or caused to be timely
filed, or will timely file or cause to be timely filed on or prior to the
Closing Date, all Returns required to be filed on or prior to the Closing Date
(taking into account any extension of time to file granted to or on behalf of
Company). All such Returns are correct and complete in all respects and no
Return of Company for which the statute of limitation is still open has ever
been audited. All Taxes for the respective periods covered by the Returns have
been, or prior to the Closing Date will be, timely paid.
(c) No taxes based upon income and/or equity have
been paid by Company directly to any taxing authority which are still accrued as
an intercompany payable on the Base Balance Sheet.
(d) Neither the Internal Revenue Service nor any
other taxing authority has asserted or, overtly, threatened to assert, or is now
asserting or threatening to assert, against Company any deficiency or claim for
additional Taxes. Neither Company nor Parent expects any authority to assess any
additional Taxes for any period for which Returns have been filed by Company.
Company has delivered to Buyer correct and complete copies of all pro forma
federal income tax returns of Company based on the consolidated returns of
Parent from 1996 through 1999.
(e) Company has withheld from its employees' or its
other payees' gross compensation or other payments, and has timely paid over to
appropriate governmental authorities, all Tax withholdings required by
applicable law.
(f) There are no waivers or extensions in effect of
the applicable statutory period of limitation for the assessment of Taxes of
Company for any taxable period, and Company currently is not the beneficiary of
any extension of time within which to file Returns.
(g) No written claim has ever been made by an
authority in a jurisdiction where Company does not file Returns that it is or
may be subject to taxation by that jurisdiction. Part 3.8 to the Disclosure
Schedule lists all of the jurisdictions in which Company has ever done business,
been authorized to do business, owned or leased property, had employees or
customers, employed capital, or solicited or made sales.
(h) There are no liens for Taxes (other than for
current Taxes not yet due and payable) on the assets of Company.
(i) Company is not a party to, or bound by, any
agreement providing for the allocation or sharing of Taxes.
(k) Company neither (i) has been a member of an
affiliated group filing a consolidated federal income tax return (other than a
group the common parent of which was Parent), nor (ii) has any liability for the
Taxes of any other person under Treas. Reg. ss. 1.1502-6 (or any similar
provision of state, local, or foreign law), as a transferee or successor, by
contract or otherwise.
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(l) Neither Parent nor Company has executed or
entered into any closing agreement pursuant to Section 7121 of the Code, or any
predecessor provision thereof, or any similar provision of state or local law.
(m) Parent is not a foreign person within the
meaning of, and no Tax is required to be withheld as a result of the transfers
contemplated by this Agreement pursuant to, Section 1445 of the Code.
(n) Company has not filed a consent pursuant to, or
agreed to the application of, Section 341(f) of the Code.
(o) Company has not made any payments, is not
obligated to make any payments, and is not a party to any agreement that could
obligate it to make any payments, the deductibility of which would be disallowed
(in whole or in part) under Section 280G of the Code.
(p) Company has disclosed on its federal income tax
returns all positions taken therein that could give rise to a substantial
understatement of federal income tax within the meaning of Section 6662 of the
Code.
(q) None of the assets owned by Company is property
that is required to be treated as owned by any other person pursuant to Section
168(f)(8) of the Internal Revenue Code of 1954, as amended, as in effect
immediately prior to the enactment of the Tax Reform Act of 1986, or is
"tax-exempt use property" within the meaning of Section 168(h) of the Code.
3.9. ACCOUNTS RECEIVABLE.
All accounts receivable, notes receivable, contracts
receivable and other receivables of Company that are reflected on the Base
Balance Sheet, and those to be reflected on the Closing Balance Sheet, will, as
of the Closing Date, represent (collectively, the "ACCOUNTS RECEIVABLE") valid
and enforceable obligations (i) arising from sales actually made or services
actually performed in the ordinary course of business (or if not so performed,
then reflected by an entry to the deferred revenue account or prepayment account
on the Company's Closing Balance Sheet), (ii) arising out of transactions with
unaffiliated parties (except for transactions with Parent or as disclosed on
Part 3.9 of the Disclosure Schedule) and (iii) subject to no setoff, defense or
counterclaim; provided, however, that Parent and Company make no representation
as to collectibility other than that allowances for doubtful accounts
receivables are determined in compliance with the methodology set forth Section
1.2. An accurate summary of the aging of the Accounts Receivable on December 31,
2000 is attached as Part 3.9 to the Disclosure Schedule. Since January 1, 1998,
there has not been a material change in the receivables aging practice of
Company.
3.10. NO UNDISCLOSED LIABILITIES.
There are no material liabilities of any nature with respect
to Company (whether known or unknown, absolute, accrued, contingent or
otherwise, and whether due or to become
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due), except for (i) liabilities or obligations reflected or reserved against on
the Financial Statements and (ii) current liabilities incurred in the ordinary
course of business since the date of the Financial Statements, consistent with
past practices, (none of which is a claim for breach of contract, breach of
duty, breach of warranty, tort or infringement of an intellectual property
right).
3.11. NO MATERIAL CHANGE.
Since the Base Balance Sheet Date, Company has conducted its
business only in the ordinary course, consistent with prior practices and,
whether or not in the ordinary course of business, and except for general
economic conditions and matters involving the industry in which Company
competes, there has not been any change in Company's financial condition,
working capital, earnings, reserves, properties, assets, liabilities, or
operations, which change, by itself or in conjunction with all other such
changes, whether or not arising in the ordinary course of business, has had a
material adverse effect on Company. Without limiting the generality of the
foregoing, except as disclosed on Part 3.11 to the Disclosure Schedule, since
the Base Balance Sheet Date there has not been:
(a) any Lien or Encumbrance placed on any of Company's
assets which remains in existence on the date hereof;
(b) any sale, lease or other disposition, or any
agreement or other arrangement for the sale or other disposition, of any of
Company's assets other than in the ordinary course of business;
(c) any capital expenditure or commitment in excess of
$10,000 with respect to any individual item or in excess of $25,000 with respect
to all such items, or any lease or agreement to lease any assets with an annual
rental in excess of $10,000 with respect to any individual item or in excess of
$25,000 with respect to all such items;
(d) any damage, destruction or loss, whether or not
covered by insurance, of any of Company's assets in excess of $25,000;
(e) any declaration, setting aside or payment of any
dividend on, or the making of any other distribution in respect of, the capital
stock of Company, direct or indirect redemption, purchase or other acquisition
by Company of its capital stock;
(f) any issuance, sale, disposition or Encumbrance of, or
authorization for issuance, sale, disposition or Encumbrance of, or grant or
issue of any options, warrants or rights to acquire with respect to, any shares
of Company's capital stock or any other of its securities or any security
convertible or exercisable into or exchangeable for any such shares or
securities, or any change in its outstanding securities or shares of capital
stock or its capitalization, whether by reason of a reclassification,
recapitalization, stock split, combination, exchange or readjustment of shares,
stock dividend or otherwise;
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(g) any material labor trouble or claim of unfair labor
practices involving Company;
(h) except in the ordinary course of business and
consistent with past practices, any payment of any bonuses, salaries or other
compensation to any director, officer, agent, consultant, sales representative
or employee of Company, or any change in the compensation or other amounts
payable or to become payable by Company to any of its or Parent's directors,
officers, employees, agents, consultants or sales representatives; or any grant
of any loans or severance or termination pay; or any entrance into or variation
of the terms of any employment agreement or similar contract;
(i) any change in any bonus, pension or profit sharing
payment, entitlement or arrangement made to or with any of such officers,
employees or agents; or adoption of or increase in, the benefits under any
Benefit Plan
(j) any change with respect to the senior management of
Company;
(k) any payment or discharge of a material Lien, claim,
obligation or liability of Company which was not shown on the Base Balance Sheet
or incurred in the ordinary course of business thereafter;
(l) any obligation or liability incurred by Company to
any of its or Parent's officers or directors or any loans or advances made by
Company to any of its or Parent's officers or directors, except normal
compensation and expense allowances payable to the Company's officers;
(m) any write-downs of the value of any inventory of
Company (including write-downs by reason of shrinkage or xxxx-down) or
write-offs as uncollectible of any notes or Accounts Receivable of Company,
except for write-downs or write-offs that are in the aggregate less than $10,000
incurred in the ordinary course of business;
(n) any disposal, sale, assignment, license or lapse of
any rights to the use of any trademark, tradename, patent, copyright, license or
disposal, sale, assignment, or license of or disclosure to any person other than
Buyer (including Parent) of any trade secret, technology, formula, process,
know-how or other confidential information not theretofore a matter of public
knowledge other than pursuant to confidentiality agreements or entry into any
settlement regarding the infringement of any Intellectual Property Assets;
(o) any change in any method of accounting or accounting
practice;
(p) any payment, discharge or satisfaction of any
material obligation or liability, absolute, accrued, contingent or otherwise,
whether due or to become due, except for any current liabilities, and the
current portion of any long term liabilities, shown on the Financial Statements
or the Interim Financial Statements (or not required as of the date thereof to
be shown thereon in accordance with GAAP) or incurred since the date of the most
recent balance sheet in the ordinary course of business consistent with past
practice;
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(q) any loan or advance to any Person other than travel
and other similar routine advances in the ordinary course of business consistent
with past practice; or
(r) any agreement, whether in writing or otherwise, to
take any action described in this Section 3.11.
3.12. EMPLOYEE BENEFIT PLANS AND ERISA.
(a) Except as set forth on Part 3.12 of the Disclosure
Schedule, Company does not have outstanding and is not a party to or subject to
any actual or contingent liability under: (i) any agreement, arrangement, plan
or policy, whether written or unwritten, that involves (A) any pension,
retirement, profit sharing, deferred compensation, bonus, stock option, stock
purchase, health, welfare, or incentive plan, or (B) welfare or "fringe"
benefits, including without limitation vacation, severance, disability, medical,
hospitalization, dental, life and other insurance, sick leave or other benefits
("Employee Benefit Plan"); or (ii) any employment, consulting, engagement, or
retainer agreement or arrangement ((i) and (ii) together the "PLANS" and each
item thereunder a "PLAN"). With respect to each written Plan, Company has
furnished to Buyer complete and accurate copies of each Plan described in Part
3.12 of the Disclosure Schedule, including all amendments thereto.
(b) Each Plan complies currently and has complied in the
past in all material respects with its terms, and, except as set forth on Part
3.12 of the Disclosure Schedule, with ERISA, or other Law applicable to any
Plan. There are no agreements or commitments of Parent or Company to create any
additional Plan not listed on Part 3.12 of the Disclosure Schedule. Except as
set forth on Part 3.12 of the Disclosure Schedule, there are no Plans for which
Company has any material liability whether actual or contingent, either for
funding, benefit payments, withdrawal or termination liability, or otherwise.
(c) Parent's board of directors has voted to fully vest
all employees of Company who participate in the Parent's qualified plan, within
the meaning of the Code Part 401(a), in their unvested account balances, if any.
Further, in accordance with Code Part 401(k)(10), Parent has caused the
administrator of such qualified plan to permit participant directed withdrawals
of their account balances, including any outstanding participant loan notes.
3.13. COMPLIANCE WITH CONTRACTS AND LAWS.
(a) Parent and Company are not in violation of their
respective Charter or Bylaws. Neither the ownership nor use of the Company's
assets nor the conduct of the Company's business constitutes (i) a material
default of or material breach of any contract to which either Parent or Company
is a party or by which either of Parent or Company is bound; or (ii) a material
violation of any Law, administrative order, arbitration award or judicial order
or other similar restriction applicable to Parent or Company, or their assets.
(b) Part 3.13 of the Disclosure Schedule sets forth a
complete list of all licenses, franchises, permits, rights, authorizations,
approvals and certificates of a Governmental Authority (the "LICENSES") used in
the operation of Company's business, together with
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applicable expiration dates. Company owns, possesses or lawfully uses in the
operation of its business all Licenses which are necessary to conduct its
business as now conducted or necessary to the ownership of its assets. All such
Licenses are now, and, will be at the Closing, valid and in full force and
effect, and transfer of ownership of Company will not cause such Licenses to
terminate. No Proceeding is pending or, overtly threatened seeking the
revocation or limitations of any Government Authorization.
3.14. LEGAL PROCEEDINGS.
Except as set forth on Part 3.14 of the Disclosure Schedule,
there is no pending lawsuit, action, claim, formal or informal investigation,
arbitration, litigation or other judicial, regulatory, administrative, or
dispute resolution proceeding (a "PROCEEDING") that has been commenced by or
against Company, which if adversely determined would have a material adverse
effect on Company, and no such Proceeding is overtly threatened. Parent and
Company are not subject to any order, injunction or decree relating to or
affecting Company's business and, to the knowledge of Company and Parent, there
is no set of facts or events which would reasonably be expected to form the
basis for such a claim, suit, action, investigation or proceeding the resolution
of which, if unfavorable to Parent or Company, would reasonably be expected to
have a material adverse effect on Company's business or Company's assets.
3.15. INSURANCE.
Company maintains insurance policies or is included in the
insurance policies of Parent as set forth on Part 3.15 of the Disclosure
Schedule. All of such policies are in full force and effect, Parent and Company
are not in default of any provision thereof, there is no ground for cancellation
or avoidance of any such policies, and all premiums due with respect to such
policies have been paid. The policies listed on Part 3.15 of the Disclosure
Schedule are sufficient to enable Company to comply with all requirements of
Laws and all agreements to which it is subject and, except as set forth on Part
3.15 of the Disclosure Schedule, there are no claims by or with respect to
Company or, to the extent that policies held by Parent include Company, Parent,
pending under any of said policies, or disputes with insurers. No notice of
cancellation or termination has been received with respect to any such policy.
Company has not been refused any insurance with respect to assets or operations,
nor has its coverage been limited by any insurance carrier with which it has
applied for any such insurance, with which it has carried insurance, or with
which Parent has carried insurance on behalf of Company. Buyer acknowledges that
as of the Closing Company will be removed from such policies and that Buyer
shall be responsible for obtaining replacement insurance, effective as of the
Closing.
3.16. REAL AND PERSONAL PROPERTY AND LEASEHOLDS.
(a) Part 3.16 of the Disclosure Schedule sets forth a
description of each parcel of real property owned by Company (the "OWNED REAL
PROPERTY"). Part 3.16 of the Disclosure Schedule sets forth a description of
each parcel of real property that is leased by Company (the "LEASED REAL
PROPERTY") and used in the operation of Company's business.
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(b) Title to the Owned Real Property is, and at Closing
shall be, good and marketable, fee simple absolute, free and clear of all Liens
and other matters affecting Company's title to or possession of such Owned Real
Property, excepting only such Liens and other matters that do not materially
interfere with or materially impair the current use of any of the Owned Real
Property, or materially reduce the value of any of the Owned Real Property (the
"PERMITTED ENCUMBRANCES").
(c) Company has delivered to Buyer a true and complete
copy of every lease and sublease to which Company is a tenant or subtenant and
each lease is, and at Closing shall be, in full force and effect and neither
Company nor, to the knowledge of Company or Parent, the landlord under any lease
is in default under any of the leases. To the best of Company's and Parent's
knowledge, there are no condemnation, environmental, zoning or other land use
regulation proceedings, either instituted or planned to be instituted, that
would detrimentally affect the use and operation of Company's Leased Real
Property for its intended purpose.
(d) Part 3.16 of the Disclosure Schedule sets forth a
listing of the machinery, equipment and other tangible personal property with an
original cost in excess of $25,000 used or owned by Company and a listing of all
leases under which Company leases any personal property as of the Closing Date
requiring annual rental payments in excess of $10,000, together with a
description of such property (collectively, the "MATERIAL PERSONAL PROPERTY").
All Material Personal Property is located at 0000 Xxxx Xxxxxxx Xx, Xxxxxxx, XX.
Except as set forth on Part 3.16 of the Disclosure Schedule, all of the assets
and properties of Company are reflected on the Financial Statements (except to
the extent not required to be so reflected by GAAP). The only intangible assets
and properties owned by Company or used in the conduct of its business are the
Intellectual Property Assets.
(e) To the knowledge of Company and Parent, all of the
foregoing agreements set forth on Part 3.16 of the Disclosure Schedule are
valid, subsisting and enforceable in accordance with their terms against the
parties thereto. Company is in compliance with all terms and conditions of such
agreements and no event has occurred nor does any circumstance exist that (with
or without notice or the passage of time or both) would constitute a material
violation or default under any such agreements and Company has not given or
received written notice of any alleged violation or of any default under any
such agreement.
(f) Company has delivered to Buyer all copies of any
inspection, engineering, soils, environmental or architectural notices, studies,
reports or plans in Company's possession or control that relate to the physical
condition or operation of the Owned Real Property or recommended improvements
thereto, including without limitation any such notices, studies, reports or
plans relating to Hazardous Materials in, on or beneath the Owned Real Property
or adjoining sites, storage tanks, sewer connections or septic systems.
(g) All water, waste disposal, sewer, gas, electric,
telephone, drainage and other utilities are connected pursuant to valid permits,
and Company has not received any notice that such utilities are inadequate to
service the Owned Real Property.
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(h) Company has obtained all licenses and permits,
required from all Government Authorities having jurisdiction over the Owned Real
Property or from private parties to assure vehicular and pedestrian access to
and from the Owned Real Property at all material access points.
(i) There are no material physical, structural, or
mechanical defects in the Owned Real Property or the structures located thereon,
including without limitation in the plumbing, heating, sprinkler systems, air
conditioning, roof, ventilation systems and electrical systems.
(j) To the best of Company's and Parent's knowledge,
there are no environmental, land use regulation or similar proceedings,
commenced or planned to be commenced, that would materially adversely affect the
value of the Owned Real Property or the use and operation of the Owned Real
Property for its intended purpose.
(k) There are no pending or overtly threatened, legal
proceedings or actions of any kind or character, or any claims or demands
relating thereto affecting the Owned Real Property or Company's interest
therein.
(l) There are no outstanding contracts made by Parent or
Company for the construction or repair of any improvements to the Owned Real
Property or Leased Real Property that have not been fully paid for.
(m) Neither Parent nor Company has received any written
notice from any insurance carrier of any defects or inadequacies in the Owned
Real Property or Leased Real Property, or in any portion thereof, that would
adversely affect the insurability thereof or the cost of such insurance, or that
requires corrective action. There are no pending insurance claims of Parent or
Company relating to the Owned Real Property or Leased Real Property.
(n) Set forth on Part 3.16 of the Disclosure Schedule is
a listing of all material improvements made to the Owned Real Property since its
acquisition by Company. To the knowledge of the Company, all such improvements
comply in all material respects to any and all requirements of any Governmental
Authority having jurisdiction over the Owned Real Property or of private
parties, including but not limited to any covenants applicable to the Owned Real
Property, or else Company has obtained valid and subsisting waivers of such
requirements or adequate approvals therefor, granted by the appropriate
Governmental Authority or private parties, including but not limited to any
approving agents or abutting property owners, which waivers and approvals are
set forth on Part 3.16 to the Disclosure Schedule. Except as set forth on Part
3.16 to the Disclosure Schedule, there are no assessments and/or non-compliance
expenses under any covenants applicable to the Owned Real Property that are due
and owing. Part 3.16 to the Disclosure Schedule sets forth a listing of all
properties the care for which Company is required to upkeep by any Governmental
Authority having jurisdiction over the Owned Real Property or private parties,
including but not limited to any landscaped buffers adjoining the Owned Real
Property.
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3.17. CONDITION AND SUFFICIENCY OF ASSETS
Company's physical assets other than Owned Real Estate, as a
whole, are structurally sound, are in reasonable operating condition and repair
(normal wear and tear excepted), and are adequate for the uses to which they are
being put, and are not in need of maintenance or repairs except for ordinary,
routine maintenance and repairs that are not material in nature or cost. Company
owns all the assets that are necessary for or used primarily in connection with
the SEMY Business and such assets have been sufficient for the continued conduct
of the SEMY Business through the Closing Date. The Owned Real Estate is in
reasonable operating condition and repair (normal wear and tear excepted) and is
adequate for the uses to which put, and to the knowledge of the Parent and
Company, there are no material structural defects in the building located on the
Owned Real Property.
3.18. ENVIRONMENTAL MATTERS.
To the knowledge of Company and Parent, except as set forth in
Part 3.18 of the Disclosure Schedule,
(a) All real property owned or leased, operated, or used
by Company ("ENVIRONMENTAL PROPERTY") at any time and all conditions on and
operation and uses of the Environmental Property (including without limitation
transportation and disposal of Hazardous Materials by or for Company) comply and
in the case of Owned Real Property at all times in the past complied, in all
material respects with all applicable Environmental Laws, and no Environmental
Property is in violation of any Environmental Law;
(b) Company is not and has never been subject to any
Proceeding and has not received or become subject to any written claim, notice,
complaint or request for information from any Governmental Authority or any
private party (i) alleging violation of or noncompliance with any Environmental
Law, (ii) asserting potential liability under any Environmental Law or (iii)
requesting investigation or clean-up of any site under any Environmental Law.
(c) Company has obtained and is in material compliance
with all necessary permits, registrations, approvals and licenses, and has made
all filings with and submissions to any government or other authority required
by any Environmental Law, and no deficiencies have been asserted by any such
government or authority with respect to such items.
(d) There has been no Release of any kind on, beneath,
above, or into the Environmental Property or into the environment surrounding
the Environmental Property by Company of any Hazardous Materials in violation of
any Environmental Law, which violation would have a material adverse effect on
Company. Company does not have any material Environmental, Health and Safety
Liabilities.
(e) No Hazardous Materials have ever been shipped by or
for Company to other sites or facilities for treatment, storage or disposal, and
Company has not received any notice that any sites or facilities to which any
such wastes have been shipped or sent
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to are subject to or threatened to become subject to any governmental response
action or clean up order;
(f) Neither Company, Parent nor any
predecessor-in-interest to Company has treated, stored for more than ninety (90)
days, disposed of or recycled any Hazardous Materials on the Environmental
Property; nor has anyone else treated, stored for more than ninety (90) days,
disposed of or recycled any of the foregoing on the Environmental Property;
(g) Hazardous Materials have been collected, managed,
recycled, shipped and disposed by Company and Parent in accordance with all
Environmental Laws;
(h) No underground tanks or other storage facilities for
Hazardous Materials have been located on the Environmental Property;
(i) All xxxxx, water discharges and other water
diversions and all air emission sources on the Environmental Property are
properly registered and/or permitted under, and copies of such permits have been
provided to Buyer and do not violate any applicable law;
(j) There are no asbestos containing materials,
capacitors, transformers or other equipment or fixtures containing PCBs located
at the Environmental Property;
(k) Company does not produce, purchase or use in its
products, or purchase or use any material, part, component or subassembly
incorporated into its products, containing any chemical or other material to
which local packaging and/or disclosure laws apply;
(l) There are no Liens under Environmental Laws on the
Environmental Property chargeable against the rights of Company with respect to
its business or on any of its assets and no government actions have been taken
or are in process which could subject the Environmental Property or Company's
assets to such Liens, and Company would not be required to place any notice or
restriction relating to Hazardous Materials at the Environmental Property in any
deed to such property;
(m) Company has made available to Buyer all environmental
audits, assessments or studies within its possession with respect to the
Environmental Property and the results of sampling and analysis of any asbestos,
air, soil, or water, including ground and surface water, undertaken by the
Company or Parent with respect to its facilities or the Environmental Property;
and
(n) Company is in compliance with all federal and state
worker safety laws and requirements, including, but not limited to applicable
requirements under the Occupational Safety and Health Act.
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3.19. EMPLOYEE MATTERS.
(a) Except as set forth in Part 3.19 of the Disclosure
Schedule, Company is not a party to any employment agreement with any employee.
To the knowledge of Company and Parent, no employee or former employee of
Company is in default under any term of any employment contract, agreement or
arrangement or noncompetition, nonsolicitation or nondisclosure arrangement.
Part 3.19 of the Disclosure Schedule attached hereto sets forth a true and
complete list of (i) employees of Company; and (ii) all technical and business
consultants and independent contractors retained by Company. Also shown on Part
3.19 of the Disclosure Schedule are the name and rate of compensation (including
all bonus compensation and other remunerative payments of any kind), service
credited for purposes of vesting and eligibility to participate under any plan
of any nature.
(b) Company has no collective bargaining agreements with
any labor union or other representative of employees. No strike, slowdown,
picketing or work stoppage or any other labor trouble or other occurrence,
event, or condition of a similar character (including without limitation any
organizational activity) is occurring or has occurred or been threatened within
the three (3) years immediately preceding the date of this Agreement.
(c) Except as set forth on Part 3.19 of the Disclosure
Schedule, Company has paid in full (or made provisions for payment in full) to
its employees, agents and contractors all wages, salaries, commissions, bonuses
and other direct compensation for all services performed by them. Company does
not have and will not have on the Closing Date, any contingent liability for
sick leave, vacation time, holiday pay, severance pay or similar items, whether
arising as a matter of law, labor agreement, or otherwise, other than as set
forth on the Base Balance Sheet or arising after the date thereof and set forth
on the Closing Balance Sheet. Except as set forth in Part 3.19 of the Disclosure
Schedule, the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not trigger any
severance pay obligation under any contract or at law.
3.20. INTELLECTUAL PROPERTY.
(a) Rights--Company (i) owns all right, title and
interest in and to each of the Intellectual Property Assets, free and clear of
all Encumbrances and Liens, or (ii) licenses or otherwise possesses legally
valid and enforceable rights to use each of the Intellectual Property Assets,
and, in each case of clause (i) or (ii), Company may transfer such rights as
contemplated by this Agreement. Except as set forth on Part 3.20(a) of the
Disclosure Schedule, Company has made all necessary filings and recordations to
protect and maintain its interest in the Intellectual Property Assets except
where the failure to so protect or maintain does not relate to a material
Intellectual Property Asset. Company has no written or oral agreements with
employees, contractors agents or consultants with respect to the ownership of
inventions, trade secrets or other works created by them as a result of which
any such employee, contractor, agent or consultant may have nonexclusive rights
to the portions of the Intellectual Property Assets so created by such
individual.
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(b) Agreements--Part 3.20(b) of the Disclosure Schedule
contains a true, correct and complete list, of all contracts relating to the
Intellectual Property Assets to which Company is a party or by which Company is
bound other than licenses issued by Company to customers in the conduct of the
SEMY Business and licenses received by Company to use business software used in
the business of Company. Each license of Intellectual Property Assets listed in
Part 3.20(b) of the Disclosure Schedule is valid, subsisting, and enforceable,
and shall continue in effect on its current terms upon consummation of the
transactions contemplated by this Agreement.
(c) Patents--(i) Part 3.20(c) of the Disclosure Schedule
contains a true, correct and complete list of all Patents; (ii) to the knowledge
of Company and Parent, all Patents are valid and subsisting; (iii) all Patent
maintenance fees, annuities and the like have been paid; (iv) to the knowledge
of Company and Parent, none of the Patents is infringed; and (v) none of the
patents has been overtly challenged or threatened in any way by any Person, and,
to the knowledge of Company and Parent, none of the products or technology used,
sold, offered for sale or licensed or proposed for use, sale, offer for sale or
license by Company infringes or is alleged to infringe any rights of any Person.
(d) Trademarks--(i) Part 3.20(d) of the Disclosure
Schedule contains a true, correct and complete list of all Marks; (ii) to the
knowledge of Company and Parent, all Marks are valid and subsisting; (iii) to
the knowledge of Company and Parent, none of the Marks is infringed; (iv) none
of the Marks has been overtly challenged or threatened in any way by any Person,
and, to the knowledge of Company and Parent, no claims exist against the use by
Company of any trademarks, service marks, trade names, or trade dress used in
the business of Company as currently conducted or as proposed to be conducted;
(v) except as set forth on Part 3.20(d)(v) of the Disclosure Schedules, all
materials encompassed by the Marks have been marked with appropriate trademark
and registration notices; and (vi) all uses of registered Marks are in
conformance with applicable statutory and common law so as not to compromise the
strength and integrity of the Marks.
(e) Copyrights--(i) Part 3.20(e) of the Disclosure
Schedule contains a true, correct and complete list of all registered
Copyrights; (ii) to the knowledge of Company and Parent, all the Copyrights
owned by Company, whether or not registered, are valid and enforceable; (iii) to
the knowledge of Company and Parent, none of the Copyrights is infringed or has
been challenged or threatened in any way; and (iv) to the knowledge of Company
and Parent, no claims exist against the use by Company of any writings or other
expressions used in the business of the as currently conducted or as proposed to
be conducted.
(f) Trade Secrets--Company has taken reasonable
precautions to protect the secrecy, confidentiality and value of its Trade
Secrets. To the knowledge of Company and Parent, the Trade Secrets have not been
used, divulged or appropriated either for the benefit of any Person (other than
Company or Parent) or to the detriment of Company. To the knowledge of Company
and Parent, none of the Trade Secrets is subject to any material adverse claim.
None of the Trade Secrets has been overtly challenged or threatened in any way.
Appropriate policies are in place to ensure the continued secrecy,
confidentiality and value of its
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Trade Secrets, including but not limited to appropriate confidentiality
provisions in agreements executed by all Persons potentially or actually having
access to Trade Secrets.
(g) No Restrictions--No Intellectual Property Asset is
subject to any outstanding order, Proceeding (other than pending applications
for patent, trademark registration or copyright registration) or stipulation
restricting in any manner the licensing thereof by Company. Company has not
entered into any agreement to indemnify any other person against any charge of
infringement of any Intellectual Property Asset.
(h) Nondisclosure--Except as set forth on Part 3.21(h) of
the Disclosure Schedule, employees, contractors, agents and consultants of
Company having access to Company Trade Secrets or other confidential information
have executed nondisclosure agreements to protect the confidentiality of such
Company Trade Secrets and other confidential information. To the knowledge of
Company and Parent, no employee, contractor, agent or consultant of Company has
made any unauthorized use of any Trade Secrets or other confidential information
of any other person in the course of their work for Company.
(i) Agency Conflicts--To the knowledge of Company and
Parent, no officer, employee, contractor, agent or consultant of Company is, or
is now expected to be, in violation of any term of any employment contract,
patent disclosure agreement, proprietary information agreement, noncompetition
agreement, nonsolicitation agreement, confidentiality agreement, or any other
similar contract or agreement or any restrictive covenant relating to the right
of any such officer, employee, contractor, agent or consultant to be employed or
engaged by Company because of the nature of the business conducted or to be
conducted by Company or relating to the use of Trade Secrets or proprietary
information of others, and to Company's and Parent's knowledge and belief, the
continued employment or retention of its officers, employees, contractors,
agents or consultants does not subject Company to any liability with respect to
any of the foregoing matters.
(j) Source Code Escrow--Company has not deposited, and is
not obligated to deposit, any source code regarding its products into any source
code escrows or similar arrangements and Company is not under any contractual or
other obligation to disclose the source code or any other material proprietary
information included in or relating to its products.
3.21. GUARANTEES.
Company is not a guarantor, indemnitor, surety or
accommodation party, and is not otherwise liable for any indebtedness of any
other person, firm or corporation, except as endorser of checks received and
deposited in the ordinary course of business.
3.22. CONTRACTS; MATERIAL CONTRACTS.
As used in this Section 3.22 the word "contract" means and
includes every written and oral agreement, contract, obligation, promise,
commitment or undertaking (whether express or implied) of any kind which is
legally enforceable by or against Company. Part 3.22 of the
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Disclosure Schedule sets forth a list of all Material Contracts, which means all
contracts to which Company is a party or by which it is bound, except (a) any
contract that does not require payment by any party thereto of more than
$75,000, (b) any contract that is terminable by Company upon ninety (90) days'
notice or less without the payment of any material penalty or material
termination fee, and (c) any contract entered into with Buyer or with any other
Person in connection with the transactions contemplated by this Agreement. Each
of the Material Contracts listed on Part 3.22 of the Disclosure Schedule is in
full force and effect, and Company has not committed any material breach or
default thereunder. No event has occurred or circumstance exists that (with or
without notice or the passage of time or both) would constitute a material
violation of or default under such Material Contract by Company or, to the
knowledge of Company or Parent, by the other party or parties thereto, and
Company has neither given nor received notice of any alleged violation of or
default under any such Material Contract. Neither the execution and delivery of
this Agreement by Parent or Company nor the consummation or performance by
Parent or Company of the transactions contemplated hereby will, directly or
indirectly, with or without notice or lapse of time or both give rise to a right
of termination, cancellation or acceleration or require the consent,
authorization or approval of or any notice to or filing with any third Person
under any contract with a Selected Customer. Except as set forth on Part 3.22 of
the Disclosure Schedule, to the knowledge of Company and Parent, Company is not
a party to any Material Contract or order for the sale of goods or the
performance of services which, if performed by Company in accordance with its
terms, could only be performed with a negative gross profit margin or which has
no reasonable likelihood of being performed within the time limits therein
provided.
3.23. CERTAIN PAYMENTS.
Neither Company nor any shareholder, director, officer, agent
or employee of Company, or to the knowledge of Company and Parent, any other
Person associated with or acting for or on behalf of Company, has directly or
indirectly (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback or other payment to any Person, private or public, regardless
of form, whether in money, property or services in violation of the Foreign
Corrupt Practices Act or any similar Law (i) to obtain favorable treatment in
securing business, (ii) to pay for favorable treatment for business secured, or
(iii) to obtain special concessions, or for special concessions already
obtained, for or in respect of Company or any affiliate of Company, (b)
established or maintained any fund or asset of Company that has not been
recorded in the consolidated books and records of Company.
3.24. LARGE CUSTOMERS.
Part 3.24 of the Disclosure Schedule sets forth a true,
complete and correct listing of the ten largest customers (the "LARGE
CUSTOMERS") of Company (based upon the amounts for which each such Customer was
invoiced during the fiscal year ended September 30, 2000). Except as set forth
on Part 3.24 of the Disclosure Schedule, since the date of the Base Balance
Sheet: (a) none of the individuals identified in the definition of knowledge in
Article 11 has been informed by a Large Customer or any distributor or sales
representative for the Company of (i) the complete termination of the Large
Customer's business relationship with Company, (ii) the
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cancellation or termination of a Large Customer's existing order with Company,
or (iii) a material change in the scope of the type of products to be ordered
from Company by the Large Customer; and (b) no Large Customer has been given
price cuts or discounts of more than 10% below the prices it historically has
been given.
3.25. PRODUCT WARRANTIES; PRODUCT LIABILITY.
Attached to Part 3.25 of the Disclosure Schedule are complete
and correct copies of the standard terms and conditions of sale or lease for
each of the material products or services of Company (containing applicable
guaranty, warranty and indemnity provisions). Except as required by Law or as
set forth in Part 3.25 of the Disclosure Schedule, or as set forth in such
standard terms and conditions, no product manufactured, sold, leased or
delivered by, or service rendered by or on behalf of, Company is subject to any
guaranty, warranty or other indemnity, express or implied, beyond such standard
terms and conditions. Except as set forth in Part 3.25 of the Disclosure
Schedule, there are no existing or overtly threatened claim, against Company for
services or merchandise which are defective or fail to meet any service or
product warranties other than in the ordinary course of business consistent with
past experience. Except as set forth in Part 3.25 of the Disclosure Schedule, no
claim has been asserted against Company since October 1, 1999 for renegotiation
or price redetermination of any completed business transaction. Company's
products are free from known significant defects and conform in all material
respects to the specifications, documentation and sample demonstration furnished
to Company's customers and made available to Buyer.
3.26. INVENTORIES.
(a) All inventories of Company (including without
limitations, demonstration inventories) reflected on the Base Balance Sheet are,
and those to be reflected on the Closing Balance Sheet will be, of a quantity
and quality normally salable in the ordinary course of business at commercially
reasonable prices consistent with Company's prior experience, except to the
extent of the obsolete inventory reserve in the amount shown on the Base Balance
Sheet or to be shown on the Closing Balance Sheet. All such inventories are
valued on a lower of cost or market basis and in accordance with Company's
normal valuation methods and policies, consistently applied. Purchase
commitments for raw materials and parts are not in excess of normal requirements
and none are at prices in excess of current market prices. Since the date of the
Base Balance Sheet, no inventory items have been sold or disposed of except
through sales in the ordinary course of business.
(b) The finished goods inventory on the Base Balance
Sheet Date, and as of the Closing, shall be valued at the lower of cost or
market price as determined in accordance with GAAP.
3.27. TRANSACTIONS WITH AFFILIATES.
No director or officer of Parent, or Company, or any member of
his or her immediate family or any other of his or her affiliates owns, or has
an ownership interest in, any corporation or other entity that is a party to, or
in any property that is the subject of, contracts,
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business arrangements or relationships of any kind with Company or is engaged in
competition with Company, except as set forth on Part 3.27 of the Disclosure
Schedule.
3.28. BROKERS.
Company has retained Wit SoundView Corporation as its broker
and Parent will directly pay Wit SoundView Corporation for any fees due it in
connection with the negotiation or consummation of this Agreement or any of the
transactions referenced herein. Except for Wit SoundView Corporation, no other
finder, broker, agent, or other intermediary, acting on behalf of Company or
Parent, is entitled to any commission, fee or other compensation or obligation
in connection with the negotiation or consummation of this Agreement or any of
the transactions referenced herein.
3.29. OUTSTANDING INDEBTEDNESS.
Part 3.29 of the Disclosure Schedule sets forth as of the date
hereof (a) the amount of all indebtedness for borrowed money of Company then
outstanding (including (i) the interest rate applicable thereto, (ii) any
Encumbrances or Liens which relate to such indebtedness and (iii) the name of
the lender or the other payee of each such indebtedness), and (b) the amount of
all lending and commitments to lend. Complete and accurate copies of all such
agreements have been delivered to Buyer.
3.30. DISCLOSURE.
No representation or warranty of Company in this Agreement
contains any untrue statement of a material fact or omits or will omit a
material fact necessary to make the statements contained therein not misleading.
3.31. INVESTMENT MATTERS.
(a) Parent is an "accredited investor" within the meaning
of Regulation D of the Securities Act.
(b) Parent will not sell, transfer or otherwise dispose
of any of the Buyer Shares unless (i) a registration statement filed with the
Securities and Exchange Commission pursuant to the Securities Act with respect
thereto is in effect or (ii) an exemption from such registration is available.
ARTICLE 4.
BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer hereby makes the following representations and
warranties to Parent, each of which is true and correct on the date hereof, each
of which shall be unaffected by any investigation heretofore or hereafter made
by Parent and each of which shall survive the Closing and the transactions
contemplated hereby:
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4.1. AUTHORITY AND BINDING EFFECT.
The execution, delivery and performance of this Agreement by
Buyer, and the consummation of the transactions contemplated hereby, have been
duly authorized by all necessary actions, and this Agreement is, and any
documents or instruments to be executed and delivered by Buyer pursuant hereto
will be legal, valid and binding obligations of Buyer enforceable against Buyer
in accordance with their terms. All of the Buyer Shares will be, when issued in
accordance with this Agreement, duly authorized, validly issued, fully paid,
nonassessable, free of all preemptive rights and issued in compliance with
applicable federal and state securities laws. Neither the Buyer Shares nor the
certificates therefor are subject to any restrictions under contract or Buyer's
organizational documents, although they will be issued subject to securities law
restrictions.
4.2. ORGANIZATION AND GOOD STANDING.
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own its property and operate its business as
and where it is now being conducted. Buyer has complete and unrestricted power
and authority to consummate the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby requires the consent or approval of or the
giving of notice to, registration, filing or recording with or the taking of any
other action by Buyer in respect of any Governmental Authority or any third
party.
4.3. NO CONFLICT.
(a) The execution and delivery of this Agreement and all
other agreements, instruments and documents contemplated hereby by Buyer and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or violate or constitute a material breach or default under the
articles of incorporation or bylaws of Buyer or any provision of any mortgage,
trust indenture, lien, lease, agreement, instrument, order, judgment, decree or
other restriction of any kind or character to which Buyer is subject.
(b) Neither the consummation nor the performance of the
transactions contemplated by this Agreement will directly or indirectly (with or
without notice or lapse of time), materially contravene, conflict with or result
in a material violation of, or cause Buyer or any person affiliated with Buyer
to suffer any material adverse consequence, under any Law .
4.4. APPROVALS.
No approval, authorization, consent, order or action of or
filing with, any person, entity or Governmental Authority is required in
connection with the execution, delivery and performance by Buyer of this
Agreement or the other agreements and transactions contemplated hereby.
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4.5. INVESTMENT INTENT.
Buyer is acquiring the Company Shares for its own account and
not with a view to distribute within the meaning of Section 2(11) of the
Securities Act of 1933.
4.6. NO BROKERS.
Neither Buyer nor anyone acting on its behalf has directly or
indirectly engaged the services of a broker or finder or other person who may be
entitled to any brokerage fee or commission in connection with the transactions
contemplated by this Agreement.
4.7. REPORTS AND FINANCIAL STATEMENTS.
Buyer has previously furnished to Parent complete and accurate
copies, as amended or supplemented, of its (a) Annual Report on Form 10-K for
the fiscal year 2000, as filed with the SEC, (b) proxy statement relating to the
meeting of its stockholders planned for February 28, 2001 and (c) all other
reports or registration statements, other than Registration Statements on Form
S-8, filed by the Buyer with the SEC since October 1, 2000 (such annual reports,
proxy statements, registration statements and other filings, together with any
amendments or supplements thereto, are collectively referred herein as the
"BUYER REPORTS"). The Buyer Reports constitute all of the documents filed or
required to be filed by Buyer with the SEC since October 1, 2000, other than any
Registration Statement on Form S-8. As of their respective dates, the Buyer
Reports did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The consolidated audited financial statements and consolidated
unaudited interim financial statements of Buyer included in the Buyer Reports
(together, the "BUYER FINANCIAL STATEMENTS") (i) comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, (ii) have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby (except as may be indicated by Form 10-Q under the Exchange Act
and subject to normal recurring year-end adjustments), (iii) fairly present the
consolidated financial condition, results of operations and cash flows of Buyer
and each of its subsidiaries as of the respective date thereof and for the
periods referred to therein, and (iv) are consistent in all material respects
with the books and records of Buyer. Buyer satisfies the issuer, transaction and
other requirements applicable to eligibility to use a Form S-3 Registration
Statement for the registration of the Buyer Shares under the Securities Act.
ARTICLE 5.
COVENANTS
Parent, Company and Buyer covenant and agree with one another
as follows:
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5.1. FINANCIAL STATEMENTS.
Parent shall have delivered to Buyer within ten (10) days of
the Closing the Financial Statements and the Interim Financial Statements and
any other financial information with respect to Company which would be required
in order for Buyer to prepare the pro forma financial information for the
periods since October 1, 1998.
5.2. NO IMPLIED REPRESENTATIONS OR WARRANTIES.
Buyer hereby acknowledges and agrees that Parent and Company
are not making any representation or warranty whatsoever, express or implied,
except those representations and warranties of Parent and Company explicitly set
forth in this Agreement or in the Disclosure Schedule or in any certificate
contemplated hereby and delivered by Company in connection herewith.
5.3. EMPLOYEE BENEFITS.
Company shall retain after the Closing the obligation and
responsibility to provide COBRA continuation coverage to any former employees of
Company who are receiving COBRA continuation coverage as of the Closing Date.
5.4. SECTION 338(h)(10) ELECTION.
At Buyer's election, Parent will join with Buyer in making an
election under section 338(h)(10) of the Internal Revenue Code of 1986, as
amended (and any corresponding elections under state, local, or foreign Tax law)
(collectively, the "SECTION 338(H)(10) ELECTION") with respect to the purchase
and sale of the Company Shares hereunder. Parent will pay any Tax attributable
to the making of the Section 338(h)(10) Election and will indemnify Buyer,
Company, and their affiliates against any penalty, interest or Tax resulting
from an Internal Revenue Service or State taxing authority disallowance, in
whole or in part, of a step-up in basis arising out of any failure of Parent to
file such forms as are provided by Buyer or pay such Tax. In the event Buyer
elects to have a Section 338(h)(10) Election made, Buyer shall prepare Internal
Revenue Service Form 8023 and any similar state, local, and foreign forms, and
shall furnish such forms to Parent. If any additions or changes are required to
these forms as a result of information that is first available after the Closing
Date, Buyer shall prepare amended or supplemental forms, which Buyer shall
furnish to Parent. Each of Parent and Buyer shall timely comply with all
applicable filing requirements with respect to all such forms, including the
attachment of Form 8023 (and any similar forms) to their respective applicable
Returns. Parent and Company each agree to prepare and file their Returns
consistently with Form 8023 as prepared by Buyer.
5.5. TAX MATTERS
(a) PREPARATION OF RETURNS. Parent shall file or cause to
be filed when due all Returns that are required to be filed by or with respect
to Company on or prior to the Closing Date. Buyer shall file or cause to be
filed when due all Returns that are required to be
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filed by or with respect to Company for periods subsequent to the Closing Date.
With respect to any Taxable period ending on or prior to the Closing Date for
which a Return is required to be filed after the Closing Date, Parent shall
prepare all such pro-forma Returns of Company and shall provide to Buyer, at
least thirty (30) business days prior to the due date, including any extensions,
for the filing thereof, such pro-forma Returns for Company as they will be
included in Parent's consolidated Returns, together with such Tax information
material relevant to such Returns, including schedules and work papers.
Following receipt of any pro-forma Returns prepared by Parent, if Buyer disputes
any of the information contained in such pro-forma Returns, Buyer shall promptly
notify Parent. The Parties shall cooperate to resolve promptly any such dispute
and Parent shall be responsible for their respective professional fees and
expenses incurred in connection therewith. In the event that the Parties are not
able to promptly resolve any such dispute, the dispute shall be resolved by the
following procedures: Buyer and Parent shall settle such dispute by retaining
the Independent CPA to resolve such dispute. The determination of the
Independent CPA will be set forth in writing and shall be issued within
forty-five (45) days of the date the Independent CPA is retained except that if
the due date for filing the Return after all extensions of right shall expire
before such date, the determination shall be made not later than the second
business day before the filing date. Any decision by the Independent CPA shall
be final and binding upon the parties, absent fraud or manifest error, and
judgment may be entered thereon, upon the application of either party, by any
court having competent jurisdiction. Each Party shall bear the cost of preparing
and presenting its case; and the fees and expenses of the Independent CPA will
be shared equally by Buyer and Parent.
(b) ASSISTANCE AND COOPERATION. After the Closing Date,
each of Parent and Buyer shall:
(1) assist (and cause their respective
affiliates and subsidiaries to assist) the other Party in
preparing Returns that such other Party is responsible for
preparing and filing;
(2) cooperate fully in preparing for any
audits of, or disputes with Tax authorities regarding, any
Returns of Company;
(3) make available to the other as
reasonably requested all information, records and documents
relating to Taxes of Company;
(4) provide timely notice to the other in
writing of any pending or threatened Tax audits or assessments
of Company for Taxable periods for which the other may have a
liability under this Agreement; and
(5) furnish the other with copies of all
correspondence received from any Tax authority in connection
with any Tax audit or information request with respect to any
such Taxable period.
(c) TRANSFER TAXES. Parent shall be liable for, and shall
timely pay, any and all gains, transfer, sales, use, recording, registration,
documentary, stamp, and other Taxes that may result from, or be incurred in
connection with, this Agreement. Parent shall, at
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its own expense, properly complete, sign, and timely file any and all required
Returns with respect to such Taxes ("TRANSFER TAX RETURNS") and, if required by
applicable law, Buyer and Company will join in the execution of any such
Transfer Tax Returns.
LIABILITY FOR TAXES AND RELATED MATTERS. Parent shall close the Taxable period
of Company as of the close of business on the Closing Date, unless such action
is prohibited by law. In any case where applicable law prohibits Company from
closing its Taxable year on the Closing Date then, for purposes of this Section
5.5(d), the determination of the Taxes of Company for the portion of the year or
period ending on, and the portion of the year or period beginning after, the
Closing Date shall be determined on the basis of an interim closing of the books
as of the close of business on the Closing Date, except that exemptions,
allowances or deductions that are calculated on an annual basis, such as the
deduction for depreciation, shall be ratably apportioned on a time basis (with
proper adjustment for additions or reductions of assets).
ARTICLE 6.
REGISTRATION
6.1. REGISTRATION.
Buyer shall use its best efforts to file with the Securities
and Exchange Commission ("SEC"), within 15 days after the Closing Date but in no
event more than 30 calendar days after the Closing Date, a registration
statement on Form S-3 (the "REGISTRATION STATEMENT") (or any successor short
form registration involving a similar amount of disclosure; or if then
ineligible to use any such form, then any other available form of registration
statement) for a public offering of all the Buyer Shares to be made on a
continuous basis pursuant to Rule 415 of the Securities Act and will use its
commercially reasonable efforts to cause such registration statement to become
effective (subject to review of such Registration Statement by the SEC) and
remain continuously effective until the Buyer Shares are eligible for sale
pursuant to Rule 144 promulgated under the Securities Act. Buyer may, upon
written notice to Parent, suspend use of the Registration Statement for a
reasonable period if Buyer in its reasonable judgment believes it may possess
material nonpublic information the disclosure of which at that point in time in
its reasonable judgment would have a material adverse effect on Buyer and its
subsidiaries taken as a whole.
6.2. COOPERATION.
Parent covenants and agrees that it shall provide to Buyer on
a timely basis such consents, representations and information and execute such
documents as may reasonably be required by Buyer in connection with such
Registration Statement.
6.3. EXPENSES.
Buyer shall pay all expenses of registration of the Buyer
Shares pursuant to Section 6.1, except brokerage and underwriting commissions,
Parent's legal and other advisory expenses and such other expenses as may be
required by law to be paid by Parent.
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6.4. BUYER INDEMNITY.
To the extent permitted by law, Buyer will indemnify and hold
harmless each of Parent, its officers and directors and each person, if any, who
controls Parent within the meaning of the Securities Act, against any costs or
expenses (including attorney's fees), judgments, fines, losses, claims, damages,
liabilities or amounts paid in settlement, joint or several, to which any of
them may become subject under the Securities Act or otherwise, insofar as such
costs or expenses (including attorney's fees), judgments, fines, losses, claims,
damages liabilities or amounts paid in settlement (or actions in respect
thereof) arise out of or are based upon any untrue or alleged untrue statement
of any material fact contained or expressly incorporated by reference in any
such Registration Statement, including any preliminary prospectus or final
prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse Parent and its officers and directors
and each such controlling person for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 6.4 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Buyer (which consent shall not be
unreasonably withheld) nor shall Buyer be liable in any such case for any such
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in connection with such Registration Statement,
preliminary prospectus, final prospectus or amendment or supplement thereto in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by Parent or any person controlling
Parent.
6.5. PARENT INDEMNITY.
To the extent permitted by law, Parent will indemnify and hold
harmless Buyer, its directors, its officers who have signed such Registration
Statement and each person, if any, who controls Buyer within the meaning of the
Securities Act against any losses, claims, damages or liabilities to which Buyer
or any such director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereto) arise out of or are based upon any
untrue or alleged untrue statement of any material fact contained or expressly
incorporated by reference in such Registration Statement, including any
preliminary prospectus or final prospectus contained therein or any amendment or
supplement thereto, or arise out of or based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in such Registration
Statement, preliminary prospectus, final prospectus or amendments or supplements
thereto, in reliance upon and in conformity with written information furnished
by Parent expressly for use in connection with such registration; and Parent
will reimburse any legal or other expenses reasonably incurred by Buyer or any
such director, officer and controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action. It
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is agreed that the indemnity agreement contained in this Section 6.5 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of the indemnifying
party (which consent shall not be unreasonably withheld).
6.6. CONTRIBUTION.
If the indemnification provided for in Sections 6.4 and 6.5
hereof is unavailable to a Person entitled to indemnification hereunder, then
each Person that would have been an indemnifying party hereunder will, in lieu
of indemnifying such indemnified party, contribute to the amount paid or payable
by such indemnified person for which indemnification is provided herein in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and such indemnified party, respectively, in connection with the
statements or omissions which resulted in the costs or expenses (including
attorney's fees), judgments, fines, losses, claims, damages, liabilities or
amounts paid in settlement underlying such indemnification obligations. Relative
fault will be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnifying party or such indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Buyer and Parent agree that it would not be just and
equitable if contribution pursuant to this Section 6.6 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to above in this Section 6.6. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) will be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
6.7. NOTICE.
Promptly after receipt by a party indemnified under this
Article 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against any indemnifying party
under this Article 6, notify the indemnifying party in writing of the
commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party desires, jointly with
any other indemnifying party similarly noticed, to assume the defense thereof
with counsel mutually satisfactory to the parties; provided, however that if the
defendants in any such action include both the indemnified party and the
indemnifying party and, under applicable standards of professional conduct, a
conflict on any significant issue between the positions of the indemnified party
and the indemnifying party exists, the indemnified party or parties shall have
the right to select one separate law firm, at the indemnifying party's or
parties' expense, to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or parties. The
failure to notify any indemnifying party promptly of the commencement of any
such action, shall not relieve such indemnifying party of any liability to the
indemnified party under this Article 6, except to the extent that such
indemnifying party is actually prejudiced thereby.
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ARTICLE 7.
[RESERVED]
ARTICLE 8.
INDEMNIFICATION
8.1. SURVIVAL; RIGHT TO INDEMNIFICATION AFFECTED BY KNOWLEDGE.
All representations, warranties, covenants and obligations in
this Agreement and any other certificate or document delivered pursuant to this
Agreement will survive the Closing.
8.2. INDEMNIFICATION AND PAYMENTS BY PARENT.
Parent will indemnify and hold harmless Buyer and its
officers, directors, employees and agents (collectively, the "BUYER INDEMNIFIED
PERSONS") for, and will pay to the Buyer Indemnified Persons the amount of, any
loss, liability, claim, damage, or expense (including costs of investigation and
defense and reasonable attorneys' fees), whether or not involving a third-party
claim (collectively, "DAMAGES"), resulting or arising from:
(a) any breach of any representation or warranty made by
Company or Parent (other than those in Section 3.4) in this Agreement or any
other certificate or document delivered by Company or Parent pursuant to this
Agreement;
(b) any breach or failure by Company or Parent to perform
or comply with any covenant or obligation of Company or Parent in this
Agreement;
(c) fraud or the intentional misrepresentation or breach
of warranty of Parent or Company;
(d) any breach of any representation or warranty made by
Company in Section 3.4;
(e) any liability, payment or obligation in respect of
any Taxes owing by any of Parent or its affiliates, including Company prior to
the Closing, of any kind or description (including interest and penalties with
respect thereto and including any Taxes relating to the Section 338(h)(10)
Election) for all periods, or portions thereof, up to and including the Closing
Date; or
(f) any Third Party Action (including a binding
arbitration or an audit by any taxing authority) that is instituted or
threatened against any of Buyer's Indemnified Persons.
For the purposes of this Article 8, any qualification of
Company's or Parent's representations and warranties by reference to the
materiality of matters stated therein, or words of similar effect, shall be
disregarded in calculating the amount of Damages.
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Notwithstanding anything contained herein to the contrary,
Damages shall not include any amount to the extent that Buyer was compensated
for that Damage by a decrease in the Purchase Price under the adjustment
provisions of Section 1.2. Damages shall not include any amount reflected as a
liability on the Closing Balance Sheet.
8.3. INDEMNIFICATION AND PAYMENTS BY BUYER.
Buyer will indemnify and hold harmless Parent and its
officers, directors, employees and agents (collectively, the "PARENT INDEMNIFIED
PERSONS") for, and will pay to the Parent Indemnified Persons the amount of any
Damages resulting or arising from:
(a) any breach of any representation or warranty made by
Buyer in this Agreement or any other certificate or document delivered by Buyer
pursuant to this Agreement;
(b) any breach or failure by Buyer to perform or comply
with any covenant or obligation of Buyer in this Agreement;
(c) fraud or the intentional misrepresentation or breach
of warranty of Buyer; or
(d) any Third Party Action that it is instituted or
threatened against any of Parent's Indemnified Persons.
For the purposes of this Article 8, any qualification of
Buyer's representations and warranties by reference to the materiality of
matters stated therein, or words of similar effect, shall be disregarded in
calculating the amount of Damages.
8.4. TIME LIMITATIONS.
(a) Parent will have no liability with respect to
Sections 8.2(a)-(b) and (f) (insofar as a claim under clause (f) relates to any
matter included under clauses (a)-(b)), unless on or before December 31, 2002, a
Buyer Indemnified Person notifies Parent of a claim, specifying the factual
basis of that claim in reasonable detail to the extent then known by the Buyer
Indemnified Person. A claim for indemnification or reimbursement under Sections
8.2(d) and (f) (insofar as a claim under clause (f) relates to any matter
included in clause(d)) may be made at any time. A claim for indemnification
under Section 8.2(c), (e) and (f) (insofar as a claim under clause (f) relates
to any matter included in clause (c) or (e)) may be made until the expiration of
the statute of limitations for such claim.
(b) Buyer will have no liability with respect to Sections
8.3(a)-(b) and (d) (insofar as a claim under clause (d) relates to any matter
included under clauses (a)-(b)), unless on or before December 31, 2002, Parent
Indemnified Person notifies Buyer of a claim specifying the factual basis of
that claim in reasonable detail to the extent then known by Parent Indemnified
Person. A claim for indemnification or reimbursement under Sections 8.3(c) and
(d) (insofar as a claim under clause (d) relates to any matter included in
clauses (c)) may be made at any time until the expiration of the statute of
limitations for such claim.
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8.5. LIMITATIONS ON AMOUNT.
(a) Parent will have no liability with respect to the
matters described in Section 8.2(a) and (f) (insofar as a claim under clause (f)
relates to any matter included in clauses (a)) until the total of all Damages
with respect to such matters exceeds $350,000, in which case Parent shall be
liable for all such Damages, including the initial $350,000, up to a maximum
aggregate liability of Parent with respect to the matters described in Section
8.2(a)-(b) and (f) (insofar as a claim under clause (f) relates to any matter
included in clauses (a)-(b)) of $7,000,000. The liability with respect to
matters described in Section 8.2(c)-(e) and (f) (insofar as a claim under clause
(f) relates to any matter included in clauses (c)-(e)) shall not be limited as
to amount.
(b) Buyer will have no liability with respect to the
matters described in Section 8.3(a) and (d) (insofar as a claim under clause (d)
relates to any matter included in clauses (a)) until the total of all Damages
with respect to such matters exceeds $350,000, in which case Buyer shall be
liable for all such Damages, including the initial $350,000, up to a maximum
aggregate liability of Buyer with respect to the matters described in Section
8.3(a)-(c) and (d) (insofar as a claim under clause (d) relates to any matter
included in clauses (a)-(c)) of $2,750,000.
8.6. PROCEDURE FOR INDEMNIFICATION - THIRD PARTY CLAIMS.
(a) Promptly after receipt by an Indemnified Person under
Sections 8.2 or 8.3 of notice of the commencement of any Proceeding against it,
such Indemnified Person will, if a claim is to be made against an Indemnified
Person under such Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the Indemnified Person
will not relieve the indemnifying party of any liability that it may have to any
Indemnified Person, except to the extent that the indemnifying party
demonstrates that the defense of such action is prejudiced by the Indemnified
Person's failure to give such notice.
(b) If any Proceeding referred to in Section 8.6(a) is
brought against an Indemnified Person and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will be
entitled to participate in such Proceeding and, to the extent that it wishes
(unless (i) the indemnifying party is also a party to such Proceeding and the
Indemnified Person determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide reasonable
assurance to the Indemnified Person of its financial capacity to defend such
Proceeding and provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to the
Indemnified Person and, after notice from the indemnifying party to the
Indemnified Person of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the Indemnified Person under this Section 8 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the Indemnified Person's in connection with
the defense of such Proceeding, other than reasonable costs of investigation. If
the indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement
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that the claims made in that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims may be effected
by the indemnifying party without the Indemnified Person's consent unless (A)
there is no finding or admission of any violation of Law or any violation of the
rights of any person and no effect on any other claims that may be made against
the Indemnified Person, and (B) the sole relief provided is monetary damages
that are paid in full by the indemnifying party; and (iii) the Indemnified
Person will have no liability with respect to any compromise or settlement of
such claims effected without its consent. If notice is given to an indemnifying
party of the commencement of any Proceeding and the indemnifying party does not,
within ten (10) days after the Indemnified Person's notice is given, give notice
to the Indemnified Person of its election to assume the defense of such
Proceeding, the indemnifying party will be bound by any determination made in
such Proceeding or any compromise or settlement effected by the Indemnified
Person.
(c) Notwithstanding the foregoing, if an Indemnified
Person determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the Indemnified Person may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
8.7. PROCEDURE FOR INDEMNIFICATION - OTHER CLAIMS.
A claim for indemnification for any matter not involving a
third-party claim may be asserted by notice to the party from whom
indemnification is sought.
8.8. COSTS; DAMAGES; EXCLUSIVITY.
(a) If any legal action or other Proceeding is brought
for the enforcement or interpretation of any of the rights or provisions of this
Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this Agreement,
the successful or prevailing party shall be entitled to recover reasonable
attorneys' fees and all other costs and expenses incurred in that action or
Proceeding, in addition to any other relief to which it may be entitled.
(b) In calculating the amount of Damages under Sections
8.2 and 8.3, such Damages shall be reduced by any tax benefits, insurance
proceeds or payments from any other parties that Buyer receives as a result of
the loss, liability, claim, damage or expense.
(c) The Parties acknowledge and agree that the sole
remedies of the Buyer Indemnified Persons against Parent and of the Parent
Indemnified Persons against Buyer for any matter arising out of the transaction
are set forth in this Article 8, and that except to the extent an Indemnified
Person has asserted a claim within the periods provided in Section 8.4, the
Indemnified Person shall have no remedy against the indemnifying party for
breach of any provision of this Agreement.
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ARTICLE 9.
[RESERVED]
ARTICLE 10.
MISCELLANEOUS
10.1. EXPENSES.
Except as otherwise expressly provided in this Agreement,
Parent will pay both its and Company's legal, accounting and other expenses
incurred prior to the Closing in connection with this Agreement and the
transactions contemplated herein and Buyer will pay its legal, accounting and
other expenses incurred prior to the Closing in connection with this Agreement
and the transactions contemplated herein. In the event of termination of this
Agreement, the obligation of Parent and Buyer to pay expenses will be subject to
any rights of such Party arising from a breach of this Agreement by another
Party.
10.2. PUBLIC ANNOUNCEMENT.
No Party shall issue any public announcement or similar
publicity with respect to this Agreement or the transactions contemplated by
this Agreement without giving prior written notice of such announcement or
similar publicity and giving the other the opportunity to comment thereon,
except as may be required by Law or by obligations pursuant to any listing
agreement with any securities exchange or NASDAQ. Parent and Buyer will consult
with each other concerning the means by which the Company's employees, customers
and suppliers and others having dealings with Company will be informed of the
transactions contemplated by this Agreement, and Buyer will have the right to be
present for any such communication.
10.3. NOTICES.
All notices, consents, waivers and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
telecopier (with written confirmation of receipt), provided that a copy is
mailed by registered mail, return receipt requested or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
Party may designate by notice to the other Parties):
If to Company:
Semitool, Inc.
000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
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with a copy to:
Xxxxx Xxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
If to Buyer:
Xxxxxx Automation, Inc.
00 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Brown, Rudnick, Freed & Gesmer
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No.: (000) 000-0000
10.4. FURTHER ASSURANCES.
The Parties agree (a) to furnish upon request to each other
such further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other Party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
10.5. WAIVER.
The rights and remedies of the Parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any Party
in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of such right, power or
privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the maximum
extent permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other Party; (b) no waiver that may be
given by a Party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
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10.6. ENTIRE AGREEMENT AND MODIFICATION.
This Agreement supersedes all prior agreements between the
Parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the Parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the Party to be charged with the amendment.
10.7. ASSIGNMENTS, SUCCESSORS, AND NO THIRD-PARTY RIGHTS.
Neither Party may assign any of its rights under this
Agreement without the prior written consent of the other Parties. Subject to the
preceding sentence, this Agreement will apply to, be binding in all respects
upon, and inure to the benefit of the successors and permitted assigns of the
Parties. Nothing expressed or referred to in this Agreement will be construed to
give any person other than the Parties to this Agreement any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the Parties to this Agreement and their
successors and assigns.
10.8. SEVERABILITY.
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
10.9. SECTION HEADINGS, CONSTRUCTION.
The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement. All words used in this Agreement will be construed
to be of such gender or number as the circumstances require. Unless otherwise
expressly provided, the word "including" does not limit the preceding words or
terms.
10.10. GOVERNING LAW.
This Agreement will be governed by the laws of the State of
Delaware without regard to conflicts of law principles.
10.11. COUNTERPARTS.
This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.
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10.12. REPRESENTATION BY COUNSEL; INTERPRETATION.
The Parties hereto each acknowledge that each Party to this
Agreement has been represented by counsel in connection with this Agreement and
the transactions contemplated by this Agreement. Accordingly, any rule of law,
or any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the Party that drafted it has no
application and is expressly waived.
10.13. INCORPORATION OF EXHIBITS AND SCHEDULES.
The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof.
10.14. ADDITIONAL INFORMATION.
Company and Parent make no representation or warranty to Buyer
except as specifically made in this Agreement. Without limitation, Company and
Parent make no representation or warranty to Buyer with respect to (a) the
information set forth in the Confidential Memorandum distributed by Wit
SoundView Corporation in connection with the transactions contemplated hereby,
(b) any financial projection or forecast relating to the Company, or (c) any
information or data provided to Buyer in connection with its due diligence
investigation of the Company. With respect to any such projection or forecast
delivered by or on behalf of Company and Parent to Buyer, Buyer acknowledges
that (i) there are uncertainties inherent in attempting to make such projections
and forecasts, (ii) it is familiar with such uncertainties, (iii) it is taking
full responsibility for making its own evaluation of the adequacy and accuracy
of such projections and forecasts so furnished to it and (iv) it shall have no
claim against Company or Parent with respect thereto.
ARTICLE 11.
DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings specified or referred to in this Section 1:
"AGREEMENT"--as defined in the recitals.
"ACCOUNTS RECEIVABLE"--as defined in Section 3.9.
"BASE BALANCE SHEET"--as defined in Section 3.5.
"BASE NET BOOK VALUE"--as defined in Section 1.2.
"BUYER"--as defined in the recitals.
"BUYER FINANCIAL STATEMENTS"--as defined in Section 4.7.
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"BUYER INDEMNIFIED PARTY"--as defined in Section 8.2.
"BUYER REPORTS"--as defined in Section 4.7.
"BUYER SHARES"--as defined in the recitals.
"CLOSING"--as defined in Section 2.1.
"CLOSING BALANCE SHEET"--as defined in Section 1.2.
"CLOSING DATE"--as defined in Section 2.1.
"CLOSING NET BOOK VALUE"--as defined in Section 1.2.
"CLOSING STATEMENT"--as defined in Section 1.2.
"CODE"--the Internal Revenue Code of 1986, as amended, or any
successor law.
"COMMISSION"--the United States Securities and Exchange
Commission.
"COMPANY"--as defined in the recitals.
"COMPANY RELEASE"--as defined in Section 2.3
"COMPANY SHARES"--as defined in Section 3.4.
"DAMAGES"--as defined in Sections 8.2 and 8.3, as applicable.
"DISCLOSURE SCHEDULE"--the disclosure schedule delivered by
Parent to Buyer concurrently with the execution and delivery of this Agreement.
"ENCUMBRANCE"--any mortgage, charge, claim, community property
interest, equitable interest, Lien, option, pledge, security interest, right of
first refusal or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income or exercise of any other attribute of
ownership; and the verb "Encumber" shall be construed accordingly.
"ENVIRONMENTAL CLAIM"--any accusation, allegation, notice of
violation, action, claim, Encumbrance, Lien, demand, abatement or other order or
direction (conditional or otherwise) by any Governmental Authority or any Person
for personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or for fines,
penalties or restrictions resulting from or based upon (i) the existence, or the
continuation of the existence, of a Release (including, without limitation,
sudden or non-sudden accidental or non-accidental Releases) of, or exposure to,
any Hazardous Material or other substance, clinical, material, pollutant,
contaminant, odor, audible noise, or other Release in, into or onto the
environment (including, without limitation, air, soil, surface water or
groundwater) at, in, by, from or related to the Facilities or any activities
conducted thereon; (ii) the environmental aspects of the
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transportation, storage, treatment or disposal of Hazardous Materials in
connection with the operation of the Facilities; or (iii) the violation, or
alleged violation, of any Environmental Laws, orders or Governmental Permits of
or from any Governmental Authority relating to environmental matters connected
with the Facilities.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES"--any cost,
damage, expense, liability, obligation or other responsibility arising from or
under any Environmental Law or Occupational Safety and Health Law and consisting
of or relating to: (a) any environmental, health or safety matter or condition
(including on-site or off-site contamination, generation, handling and disposal
of Hazardous Materials, occupational safety and health, and regulation of
chemical and Hazardous Materials); (b) fines, penalties, judgments, awards,
settlements, legal or administrative proceedings, damages, losses, litigation,
including civil and criminal claims, demands and responses, investigative,
remedial, response or inspection costs and expenses arising under Environmental
Law or Occupational Safety and Health Law; (c) financial responsibility under
Environmental Law or Occupational Safety and Health Law for cleanup costs or
corrective action, including any investigation, cleanup, removal, containment or
other remediation or response actions required by applicable Environmental Law
or Occupational Safety and Health Law and for any natural resource damages; or
(d) any other compliance, corrective, investigative or remedial measures
required under Environmental Law or Occupational Safety and Health Law. The
terms "removal," "remedial," and "response action," include the types of
activities covered by the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 et seq., as amended
("CERCLA").
"ENVIRONMENTAL LAW"--any Law concerning the environment, or
activities that might threaten or result in damage to the environment or human
health, or any Law that is concerned in whole or in part with the environment
and with protecting or improving the quality of the environment and human and
employee health and safety and includes, but is not limited to, CERCLA, the
Hazardous Materials Transportation Act (49 U.S.C.ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.), the Clean Water Act
(33 U.S.C. ss.1251 et seq.), the Clean Air Act (33 U.S.C.ss.7401 et seq.), the
Toxic Substances Control Act (15 U.S.C.ss.2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.ss.136 et seq.) and the
Occupational Safety and Health Act (29 U.S.C.ss.651 et seq.) ("OSHA"), as such
laws have been amended or supplemented, and the regulations promulgated pursuant
thereto, and any and all analogous state or local statutes, and the regulations
promulgated pursuant thereto.
"ENVIRONMENTAL PROPERTY"--as defined in Section 3.18.
"ERISA"--the Employee Retirement Income Security Act of 1974,
as amended, or any successor law.
"FINANCIAL STATEMENTS"--as defined in Section 3.5.
"GAAP"--generally accepted accounting principles, consistently
applied, except when applied to Company materiality standards shall be those
applicable to Parent and its consolidated group, including Company.
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"GOVERNMENTAL AUTHORITY"--any court, tribunal, authority,
agency, commission, bureau, department, official or other instrumentality of the
United States, any foreign country or any domestic, foreign, state, local,
county, city or other political subdivision.
"GOVERNMENTAL PERMIT"--any license, franchise, permit or other
authorization of any Governmental Authority.
"HAZARDOUS MATERIALS"--any substance, material or waste which
is regulated by Environmental Law, including, without limitation, any material
or substance which is defined as a "hazardous waste," "hazardous material,"
"hazardous substance," "extremely hazardous waste" or "restricted hazardous
waste," "subject waste," "contaminant," "toxic waste" or "toxic substance" under
any provision of Environmental Law, including but not limited to, petroleum
products, asbestos and polychlorinated biphenyls.
"HOLDBACK"--as defined in Section 1.1.
"INDEMNIFIED PERSONS" - means a Buyer Indemnified Person or a
Parent Indemnified Person, as the context requires.
"INDEPENDENT CPA"--as defined in Section 1.2.
"INTELLECTUAL PROPERTY ASSETS" means all worldwide
intellectual property rights including without limitation: (i) all trademarks,
service marks, trade names, common law trademarks, business names, Internet
domain names, trade dress, slogans, and the goodwill associated therewith, and
all registrations or applications therefor (collectively, "Marks"); (ii) all
patents, patent applications and inventions and discoveries that may be
patentable (collectively, "Patents"); (iii) all copyrights in both published
works and unpublished works, including training manuals, marketing and
promotional materials, internal reports, business plans and any other
expressions, mask works and software and videos, whether registered or
unregistered, and all registrations or applications in connection therewith
(collectively, "Copyrights"); and (iv) all trade secrets, know-how, confidential
information, customer lists, technical information, proprietary information,
technologies, processes and formulae, source code, algorithms, architecture,
structure, display screens and development tools, data, plans, drawings and blue
prints, whether tangible or intangible and whether stored, compiled, or
memorialized physically, electronically, photographically, or otherwise
(collectively, "Trade Secrets"); owned, used or licensed by the Parent or the
Company as licensee or licensor and that are used in or material to the conduct
of the SEMY Business as it is currently conducted or as proposed to be
conducted.
"INTERIM FINANCIAL STATEMENTS"--as defined in Section 3.5.
"KNOWLEDGE"--means, when used to qualify a representation or
warranty of Company and/or Parent, that such is being made or given only on the
basis of and to the extent of the actual knowledge of any of Xxxxxxx Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxxxxx, Xxxxx Xxxxx, Xxxxx
X. Xxxxx, Xx., Xxxxx Xxxxxxxx, Xxxx Xxxxxx, and Xxx Xxxxx, through a review of
the appropriate representation or warranty (and corresponding Part of the
Disclosure Schedule) of this Agreement by such person.
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"LARGE CUSTOMER(S)" - as defined in Section 3.24.
"LAW"--any federal, state, local or foreign law (including
common law), statute, code, ordinance, rule, regulation, treaty.
"LEASED REAL PROPERTY"--as defined in Section 3.16.
"LICENSE"--as defined in Section 3.13.
"LIEN"--any lien, pledge, hypothecation, levy, mortgage, deed
of trust, security interest, claim, lease, charge, option, right of first
refusal, easement, or other real estate declaration, covenant, condition,
restriction or servitude, transfer restriction under any shareholder or similar
agreement, encumbrance or any other restriction or limitation whatsoever.
"MATERIAL CONTRACT(S)" - as defined in Section 3.22.
"MATERIAL PERSONAL PROPERTY"--as defined in Section 3.16.
"OEM AGREEMENT"--as defined in Section 2.2.
"OCCUPATIONAL SAFETY AND HEALTH LAW"--any legal or
governmental requirement or obligation relating to safe and healthful working
conditions or to reduce occupational safety and health hazards, and any program,
whether governmental or private (including those promulgated or sponsored by
industry associations and insurance companies), designed to provide safe and
healthful working conditions.
"OWNED REAL PROPERTY"--as defined in Section 3.16.
"PATENT AGREEMENT"--as defined in Section 2.2.
"PARENT"--as defined in the recitals.
"PARENT INDEMNIFIED PARTY"--as defined in Section 8.3.
"PARENT RELEASE"--as defined in Section 2.2
"PARTY"--as defined in the recitals.
"PERMITTED ENCUMBRANCES"--as defined in Section 3.16.
"PERSON"--any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union or
other entity or governmental body or Governmental Authority.
"PLAN(S)"--as defined in Section 3.12.
"PROCEEDING"--as defined in Section 3.14.
"PURCHASE PRICE"--as defined in Section 1.1.
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"PWC"--as defined in Section 1.2.
"REGISTRATION STATEMENT"--as defined in Section 6.1.
"RELEASE"--any release, spill, effluent, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching, or
migration into the indoor or outdoor environment of any Hazardous Material
through or in the air, soil, surface water or groundwater.
"RESOLUTION PERIOD"--as defined in Section 1.2.
"RETURNS" --all returns, reports, statements, declarations,
forms, claims for refund, or other documents or information required to be filed
with a taxing authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
"REVIEW PERIOD"--as defined in Section 1.2.
"SEMY BUSINESS" means the business conducted by Company prior
to the Closing, of developing, marketing and implementing Advanced Process
Control (APC) solutions to the semiconductor manufacturing industry and includes
products that provide (i) a basis for operating decisions that improve yield,
reduce unscheduled downtime, increase uptime, provide maintenance planning, and
maximize process performance and (ii) automatic, continuous real-time data
collection from process equipment and the analytical applications to support
operating decisions by fab personnel. The "SEMY Business" includes two product
families, both specialized for the semiconductor industry: (i) Supervisory &
Automated Reliability, Availability, Maintainability Standard (ARAMS) Systems;
and (ii) Control Systems. For further illustration, the ARAMS systems feature
Advanced Process Control, including run to run control, fault detection and
statistical machine control, perform automatic data collection at sub-second
intervals for all tools in the fab, alert operating personnel to developing
abnormal conditions, allow time for process correction while product is still
recoverable - corrections can be done either manually by operating personnel or
automatically within engineering-defined safety parameters, manage scheduled
tool downtime with planning and enforcement capability for preventive
maintenance requirements, and perform automatic reporting of factors affecting
Overall Factory Efficiency. The Control Systems direct digital controllers for
diffusion furnaces through the use of patented state-of-the-art Model Based
Temperature Control technology, and their design extends the process capability
and useful life of existing furnaces.
"SEC"--as defined in Section 6.1.
"SECTION 338(h)(10) ELECTION"--as defined in Section 5.4.
"SECURITIES ACT"--the Securities Act of 1933, as amended.
"SELECTED CUSTOMERS" - means the customers listed on Part
3.3(a) of the Disclosure Schedule.
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"TAX" (including, with correlative meaning, the terms "Taxes"
and "Taxable") --shall include all federal, state, local, and foreign income,
profits, franchise, gross receipts, payroll, sales, employment, use, property,
environmental, withholding, excise, alternative minimum, value added, gains,
transfer, documentary, license, severance, stamp, and other taxes, duties, or
assessments of any nature whatsoever, together with all interest, penalties, and
additions imposed with respect to such amounts.
"THIRD PARTY ACTION" means any written assertion of a claim,
or the commencement of any action, suit, or proceeding, by a third party as to
which any Person believes it may be an Indemnified Person hereunder.
"TRANSACTION DOCUMENTS"--as defined in Section 3.2.
"TRANSFER TAX RETURNS"--as defined in Section 5.5.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
COMPANY: BUYER:
-------- ------
By: /s/ W. Xxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxx
-------------------- ----------------------------------
Name: W. Xxxxx Xxxxxxx Name: Xxxxx X. Xxxxxxxxx
-------------------- ----------------------------------
Title: President Title: Senior Vice President of Finance
-------------------- ----------------------------------
and Administration, and
----------------------------------
Chief Financial Officer
----------------------------------
PARENT:
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxx
-----------------------
Title: Senior Vice President,
-----------------------
Chief Financial Officer
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