TABLE OF CONTENTS

 

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ARTICLE I DEFINITIONS			1
	1.1	Certain Definitions	1
ARTICLE II PURCHASE AND SALE OF ASSETS			8
	2.1	Purchase and Sale of Assets	8
	2.2	Assumption of Liabilities	10
	2.3	Closing	12
	2.4	Post-Closing Purchase Price Adjustments	13
	2.5	Prorations	15
	2.6	Taxes	16
	2.7	Nontransferable Assets	16
	2.8	Taking of Necessary Action; Further Action	17
	2.9	Allocation of Purchase Price Consideration	17
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER			17
	3.1	Organization, Qualification, and Corporate Power	18
	3.2	Authorization	18
	3.3	No Conflicts	18
	3.4	Consents	18
	3.5	Legal Compliance	18
	3.6	Tax Matters	19
	3.7	Title of Properties; Absence of Liens and Encumbrances; Condition of Equipment	19
	3.8	Intellectual Property	20
	3.9	Contracts	20
	3.10	Power of Attorney	21
	3.11	Insurance	21
	3.12	Litigation	21
	3.13	Employees	21
	3.14	Labor Matters	21
	3.15	Environment, Health and Safety	22
	3.16	Fees	23
	3.17	Complete Copies of Materials	23
	3.18	Board Approval	23
	3.19	Inventories	23
	3.20	Facility and Tangible Personal Property	24
	3.21	Sufficiency of Purchased Assets	24
	3.22	Operations Permits	24
	3.23	ISO Certifications and Non-Governmental Certifications	24
	3.24	Suppliers	24

 

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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PARENT AND BUYER			25
	4.1	Organization, Qualification, and Corporate Power	25
	4.2	Authorization	25
	4.3	No Conflicts	25
	4.4	Consents	26
	4.5	Purchase Price	26
ARTICLE V PRE-CLOSING COVENANTS			26
	5.1	Operation of Business	26
	5.2	Access to Information	28
	5.3	Notice of Developments	28
	5.4	No Solicitation	29
	5.5	Reasonable Efforts	29
	5.6	Notices and Consents	29
	5.7	Employee Matters	29
	5.8	Confidentiality	30
ARTICLE VI OTHER AGREEMENTS AND COVENANTS			30
	6.1	Additional Documents and Further Assurances	30
	6.2	Inventory Put and Call; Covenant to Purchase Inventory	30
	6.3	Repurchase of Inventory and Equipment Under Certain Circumstances	32
	6.4	Consigned Inventories	33
ARTICLE VII CONDITIONS TO THE CLOSING			34
	7.1	Conditions to Parent’s and Buyer’s Obligation to Close	34
	7.2	Conditions to Seller’s Obligations	36
ARTICLE VIII SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS			37
	8.1	Representations, Warranties and Covenants	37
ARTICLE IX INDEMNIFICATION			37
	9.1	Indemnification by Seller	37
	9.2	Indemnification by Buyer and Parent	38
	9.3	Notice and Opportunity to Defend	39
	9.4	Remedies	40
	9.5	Certain Limitations	40
	9.6	Environmental Covenants	41
	9.7	Escrow	41
ARTICLE X TERMINATION			42
	10.1	Termination of the Agreement	42
	10.2	Effect of Termination	43

 

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ARTICLE XI MISCELLANEOUS			43
	11.1	Press Releases and Public Announcements	43
	11.2	No Third-Party Beneficiaries	43
	11.3	Entire Agreement and Modification	43
	11.4	Amendment	43
	11.5	Waivers	43
	11.6	Successors and Assigns	44
	11.7	Counterparts	44
	11.8	Headings	44
	11.9	Notices	44
	11.10	Governing Law	45
	11.11	Severability	46
	11.12	Expenses	46
	11.13	Construction	46
	11.14	Seller Disclosure Letter	46
	11.15	Attorneys’ Fees	46
	11.16	Further Assurances	46
	11.17	Time of Essence	46
	11.18	Consent to Jurisdiction	47
	11.19	Schedules and Exhibits	47

 

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EXHIBITS

Exhibit A –Transition Services Agreement

Exhibit B – Employee Secondment Agreement

Exhibit C – Facility Transfer Agreement

Exhibit D – Supply Agreement

 

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ASSET PURCHASE AND SALE AGREEMENT

 

THIS ASSET PURCHASE AND SALE AGREEMENT (this “ Agreement ”) is made and entered into as of December 23, 2005, by and among Sanmina-SCI Corporation, a Delaware corporation (“ Parent ”) , Sanmina-SCI Systems Singapore Pte. Ltd., a company incorporated in Singapore and a wholly-owned subsidiary of Parent (“ Buyer ”) and Adaptec Manufacturing (S) Pte. Ltd., a company incorporated in Singapore (“ Seller ”).  Parent, Buyer and Seller are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties .”

RECITALS

 

A.             Seller is engaged the Business at the facility listed on Schedule A (the “ Facility ”).  For purpose of this Agreement, the “ Business ” means the printed circuit board assembly manufacturing and storage system manufacturing currently conducted by Seller using the Purchased Assets at the Facility, which Business will be transferred to Buyer pursuant to this Agreement.

 

B.             Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, on the terms and subject to the conditions set forth herein, the Purchased Assets of Seller described herein, and Seller desires Buyer to assume the Assumed Liabilities, which Buyer would agree to assume on the terms and subject to the conditions set forth herein.

 

C.             The Board of Directors of each of Parent, Buyer and Seller believes it is in the best interests of its respective corporation and shareholders that the transactions contemplated hereby be consummated and, in furtherance thereof, has approved this Agreement and the transactions contemplated hereby.

 

D.             Parent, Buyer and Seller desire to make certain representations, warranties, covenants and other agreements in connection with the transactions contemplated hereby.

NOW, THEREFORE, in consideration of the covenants and representations set forth herein, and for other good and valuable consideration, the parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

1.1            Certain Definitions .  As used in this Agreement, the following terms have the following meanings (terms defined in the singular to have a correlative meaning when used in the plural and vice versa).  Certain other terms are defined in the text of this Agreement.

 

(a)            “ Actions or Proceeding ” means any action, suit, proceeding, or arbitration.

 

 

(b)            “ Affiliate ” means any Person that directly or indirectly, through one of more intermediaries, controls or is controlled by or is under common control with the Person specified.  For purposes of this definition, control of a Person means the power, direct or indirect, to direct or cause the direction of the management and policies of such Person whether by voting power, Contract or otherwise and, in any event and without limitation of the previous sentence, any Person owning ten percent (10%) or more of the voting securities of another Person shall be deemed to control that Person.

 

(c)            “ Assets ” of any Person means all assets and properties of every kind, nature, character and description (whether real, personal or mixed, whether tangible or intangible, whether absolute, accrued, contingent, fixed or otherwise and wherever situated), including the goodwill related thereto, operated, owned or leased by such Person, including without limitation, accounts and notes receivable, chattel paper, documents, instruments, general intangibles, real estate, equipment, inventory and goods.

 

(d)            “ Assumed Liabilities ” has the meaning set forth in Section 2.2(b).

 

(e)            “ Books and Records ” of any Person means all files, documents, instruments, papers, books and records relating to the business, operations, condition of (financial or other), results of operations and Assets of such Person, including without limitation financial statements, Tax Returns, budgets, reliability and cost data, pricing guidelines, ledgers, journals, deeds, title policies, minute books, stock certificates and books, stock transfer ledgers, Contracts, Permits, customer lists, computer files and programs, retrieval programs, operating data and plans and environmental studies and plans.

 

(f)             “ Business Day ” shall mean a day other than Saturday and Sunday or any day on which banks located in the Republic of Singapore or the State of California are authorized or obligated to close.

 

(g)            “ Closing Fixed Asset and Inventories Statement ” means the statement of Closing Net Asset Value of Fixed Assets and Inventories based on the unaudited pro forma balance sheet in respect of the Business as of the Closing Date, prepared in accordance with generally accepted accounting principles as consistently applied by Seller in Seller’s preparation of its periodic financial statements in each of the three quarters which precede the Closing Date (other than the omission of notes and normal reoccurring adjustments).

 

(h)            “ Closing Date ” means the date which is two (2) business days following the satisfaction or, if permitted pursuant to the terms of Article VII hereof, waiver of the conditions to Closing set forth in Article VII hereof, or at such other place and such other time or date as the parties hereto shall mutually agree.

 

(i)             “ Closing Documents ” means all those documents, deeds and other instruments which are required by the Definitive Agreements or by operation of law for the consummation of the purchase and sale of the Purchased Assets pursuant to this Agreement and the Ancillary Agreements and the other transactions contemplated thereby (the “ Transaction ”).

 

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(j)             “ Closing Net Asset Value ” shall mean the following:

 

(i)             an amount equivalent to the standard cost of Inventories as of November 4, 2005 on the books of Seller on the Closing Date and, to the extent Inventories did not have standard cost on the books of Seller as of November 4, 2005, standard cost as of the Closing Date; plus

 

(ii)            an amount equivalent to the net book value of Fixed Assets on the books of Seller as of the Closing Date.

 

(k)            “ Critical Employees ” shall mean the mean the Employees identified on Schedule 5.7 hereto.

 

(l)             “ Definitive Agreements ” means this Agreement, the Ancillary Agreements and the other the binding, detailed and definitive agreements to be executed between the Parties in respect of the Transaction.

 

(m)           “ Employee ” means each employee or consultant of Seller, including without limitation Transferred Employees, who is employed in connection with the Business.

 

(n)            “ Employee Secondment Agreement ” shall mean that certain agreement substantially in the form attached as Exhibit B hereto pursuant to which certain employees of Seller engaged in the Business will be seconded to Buyer.

 

(o)            “ Employment Liabilities ” shall mean any and all claims, debts, liabilities, commitments and obligations, whether fixed, contingent or absolute, matured or unmatured, liquidated or unliquidated, accrued or unnaccrued, known or unknown, whenever or however arising, including all costs and expenses relating thereto arising under law, rule, regulation, permit, action or proceeding before any governmental authority, order or consent decree or any award of any arbitrator of any kind relating to any benefit plan, employment agreement or otherwise relating to an Employee and his or her employment with Seller.

 

(p)            “ Escrow Agreement ” shall mean the escrow agreement in the form reasonably agreed upon by Buyer, Seller and Citibank, N.A. (or such other escrow agent as Seller and Buyer shall agree), as escrow agent (the “ Escrow Agent ”).

 

(q)            “ Excluded Liabilities ” has the meaning set forth in Section 2.2(c).

 

(r)             “ Execution Date ” means the date of the signing and execution of the Definitive Agreements.

 

(s)            “ Expensed Items ” means supplies and similar consumable material on hand at the Facility that are related to and of a nature customarily used in the Business (other than such supplies and materials associated with any Excluded Assets).

 

(t)             “ Facility ” means the facility used in the operation of the Business and located at the location set forth on Exhibit A, including all leasehold and facility improvements thereto and fixtures.

 

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(u)            “ Facility Transfer Agreement ” means the agreement substantially in the form attached as Exhibit C hereto pursuant to which ownership of the Facility will be transferred to Buyer.

 

(v)            “ Fixed Assets ” means all items of plant, equipment, machinery, tools, furniture and furnishings, office materials and supplies and other fixed assets listed or described in Schedule 1.1(v) as of the Closing Date, provided, however , that as defined herein Fixed Assets shall not include any of the Excluded Assets and the Facility, including the Facility, leasehold improvements and fixtures or any buildings or other structures, information technology systems (other than Purchased IT Systems) or custom equipment, including but not limited to custom, Business-specific test fixtures, that can only be used in the Business and is not readily adaptable to alternative uses and including equipment utilized by the ASIC and desktop software group engineering teams of Seller that are located at the Facility.

 

(w)           “ Governmental Body ” means any:

 

(i)             nation, province, state, county, city, town, village, district, or other jurisdiction of any nature;

 

(ii)            federal, provincial, state, local, municipal, foreign, or other government;

 

(iii)           governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal);

 

(iv)           multi-national organization or body; or

 

(v)            body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature.

 

(x)             “ GST Tax Amount ” shall mean an amount equal to Singapore Goods and Services Tax (“ GST ”) that may be chargeable in respect of the sale of the Purchased Assets under this Agreement.

 

(y)            “ Indebtedness ” of any Person means all monetary obligations of such Person (i) for borrowed money, (ii) evidenced by notes, bonds, debentures or similar instruments, (iii) for the deferred purchase price of goods or services (other than trade payables or accruals incurred in the ordinary course of business), (iv) under capital leases or (v) in the nature of guarantees of the obligations described in clauses (i) through (iv) above of any other Person.

 

(z)             “ Intellectual Property ” means any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) United States and foreign patents and utility models and applications therefor and all reissues, divisions, reexaminations, renewals, extensions, provisionals, continuations and continuations-in-part thereof (“ Patents ”); (ii) inventions (whether patentable or not), improvements, trade secrets, proprietary information, know-how, and any rights in technology, invention disclosures,

 

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technical data and customer lists, and all documentation relating to any of the foregoing; (iii) copyrights, copyright registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv) domain names, uniform resource locators (“ URLs ”), other names and locators associated with the Internet, and applications or registrations therefor (“ Domain Names ”); (v) industrial designs and any registrations and applications therefor; (vi) trade names, logos, common law trademarks and service marks, trademark and service mark registrations, related goodwill and applications therefor throughout the world (“ Trademarks ”); (vii) all rights in databases and data collections; (viii) all moral and economic rights of authors and inventors, however denominated; and (ix) any similar or equivalent rights to any of the foregoing (as applicable).

 

(aa)          “ Inventories ” means all good production ready inventories of raw materials and work in process listed on Schedule 1.1(aa) as of the Closing Date.  Schedule 1.1(aa) shall include Inventories which, based on firm, non-cancelable customer purchase orders or customer forecasts, which Seller believes will be used in products to be delivered to Seller within the six (6) month period following the Closing Date.  For purposes of Section 6.2 hereof, the term “Inventories” shall also include material, components and other supplies acquired by Seller pursuant to purchase orders or other Assigned Contracts assumed by Sellers hereunder as of the Closing Date.  Inventories shall not include finished goods.

 

(bb)          “ Law ” means any law, statute, rule, regulation, ordinance, extension order, or other pronouncement having the effect of law of the United States, any foreign country or any U.S., Singapore or foreign state, county, city or other political subdivision or of any Governmental Body.

 

(cc)          “ Liability ” means any Indebtedness, obligation or other liability of a Person (whether absolute, accrued, contingent, fixed or otherwise, or whether due or to become due).

 

(dd)          “ Lien ” means any mortgage, pledge, lien, charge, claim, security interest, adverse claims of ownership or use, restrictions on transfer, defect of title or other encumbrance of any sort, other than (a) mechanic’s, materialmen’s, and similar liens with respect to any amounts not yet due and payable, and (b) customary liens for Taxes not yet due and payable.

 

(ee)          “ Material Adverse Effect ” means with respect to (i) Parent or Buyer, any material adverse change in the business, operations, assets (including intangible assets), liabilities (contingent or otherwise), results of operations or financial performance or condition (financial or otherwise) of such Party, which is material to Parent and Buyer, taken as a whole, and (ii) with respect to Seller, any material adverse change in the business, operations, assets (including intangible assets), liabilities (contingent or otherwise), results of operations or financial performance or condition (financial or otherwise) of such Party which is material to the Business taken as a whole; provided, however , that in determining whether a Material Adverse Effect has occurred, any effect to the extent attributable to the following shall not be considered:  (a) changes in laws, rules or regulations of general applicability or interpretations thereof by governmental entities, and (b) any effects resulting from the announcement of this Agreement in accordance with this Agreement.

 

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(ff)            “ Multiemployer Plan ” shall mean any “Pension Plan” which is a “multiemployer plan,” as defined in Section 3(37) of ERISA.

 

(gg)          “ Order ” means any writ, judgment, decree, injunction, administrative order, directive or similar order or directive of any Governmental Body (in each such case whether preliminary or final).

 

(hh)          “ Permit ” shall mean the licenses, permits, authorizations, registrations, certificates, variances, approvals, consents and franchises and similar rights obtained from governments and any Governmental Body, and any pending applications relating to the foregoing.

 

(ii)            “ Person ” means any individual, corporation (including any non-profit corporation), company, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, labor union, Governmental Body or other entity.

 

(jj)            “ Preliminary Fixed Asset and Inventories Statement ” means the statement of Preliminary Net Asset Value of Fixed Assets and Inventories based upon Seller’s good faith estimate of the unaudited pro forma balance sheet in respect of the Business as of the Closing Date prepared in accordance with generally accepted accounting principles as consistently applied by Seller in Seller’s preparation of its periodic financial statements in each of the three quarters which precede the Closing Date (other than the omission of notes and normal reoccurring adjustments).

 

(kk)          “ Preliminary Net Asset Value ” shall mean the following:

 

(i)             an amount equivalent to the standard cost of Inventories as of November 4, 2005 on the books of Seller on the Closing Date and, to the extent Inventories did not have standard cost on the books of Seller as of November 4, 2005, standard cost as of the Closing Date; plus

 

(ii)            an amount equivalent to the net book value of Fixed Assets on the books of Seller as of the Closing Date

 

(ll)            “ Purchased IT Systems ” are those systems set forth on Schedule 1.1(ll) .

 

(mm)        “ Purchase Order ” means all material, components and other supplies to be acquired by Seller pursuant to purchase orders listed on Schedule 1.1(mm) which are not Inventory or Expensed Items.  Schedule 1.1(mm) shall include purchase orders for material, components and other supplies which, based on firm, non-cancelable customer purchase orders or customer forecasts, Seller reasonably believes will be used in products to be delivered to Seller within the six (6) month period following the Closing Date after taking into account the Inventory set forth on Schedule 1.1(aa) .

 

(nn)          “ Purchase Price ” means an amount equal to the Preliminary Net Asset Value (as adjusted pursuant to Section 2.4) (the “ Preliminary Net Asset Value Amount ”) plus the purchase price of the Facility (the “ Facility Purchase Price ”) of $9.5 million.

 

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(oo)          “ Representatives ” means, with respect to a Person, that Person’s officers, directors, employees, accountants, counsel, investment bankers, financial advisors, agents and other representatives.

 

(pp)          “ Seller’s Retained Environmental Liabilities ” means any liability, obligation, judgment, penalty, fine, cost or expense, (including reasonable attorneys’ fees and environmental consultant costs) of any kind or nature, or the duty to indemnify, defend or reimburse any Person (an “ Environmental Liability ”) with respect to: (i) the presence on or before the Closing Date of any Hazardous Material in the soil, groundwater, surface water, air or building materials of any Business Facility (other than any Hazardous Material in Inventory Fixed Asset and Expenses Items), or known by Seller to be migrating to any Business Facility as of the Closing Date (“ Pre-Existing Contamination ”); (ii) the migration at any time prior to or after the Closing Date of Pre-Existing Contamination to any other real property, or the soil, groundwater, surface water, air or building materials thereof; (iii) the exposure of any Person to Pre-Existing Contamination or to Hazardous Materials in the course of or as a consequence of any activities of the operation of the printed circuit board assembly manufacturing and storage system manufacturing business conducted by Seller in Singapore prior to the Closing, without regard to whether any health effect of the exposure has been manifested as of the Closing Date; (iv) the violation of any Environmental Laws by the Seller or its agents, employees, predecessors in interest, contractors, invitees or licensees prior to the Closing Date or in connection with the operation of the Business prior to the Closing Date; (v) any actions or proceedings brought or threatened by any third party with respect to any of the foregoing that they existed as of the Closing Date and (vi)  Section 1.1(pp)(iv) to the extent it continues during the six (6) month period following the Closing Date; provided, however, that to the extent Buyer becomes aware of any of the foregoing during the six (6) month period following the Closing Date and such liability arises from Buyer’s continued operation of the Business, Buyer shall promptly notify and confer with Seller and shall take reasonable steps to mitigate and if appropriate remediate such noncompliance provided that Seller shall reimburse Buyer for reasonable costs incurred therefore.  For the avoidance of doubt, such remediation costs shall be included in Seller’s Retained Environmental Liabilities.  The foregoing notwithstanding, an Environmental Liability shall not be considered a Seller’s Retained Environmental Liability to the extent it arises from Buyer’s negligent actions.

 

(qq)          “ Subsidiaries ” means any and all corporations, partnerships, joint ventures, associations and other entities controlled by the applicable Person directly or indirectly through one or more intermediaries.

 

(rr)            “ Supply Agreement ” means that certain Supply Agreement attached hereto as Exhibit D entered into by Buyer and Seller as of the date hereof relating to the provision of manufacturing services by Buyer.

 

(ss)          “ Transferred Employee ” means any Employee or other individual currently providing services to Seller who becomes an employee of Buyer as a result of the Secondment Agreement.

 

(tt)            “ Transition Services Agreement ” means that certain Transition Services Agreement substantially in the form attached hereto as Exhibit A to be entered into by Buyer and

 

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Seller in substantially the same form at the Closing with respect to the provision of certain transition services with respect to the Business following the Closing Date.

 

ARTICLE II

PURCHASE AND SALE OF ASSETS

 

2.1            Purchase and Sale of Assets .

 

(a)            Purchase and Sale of Assets Purchase and Sale .  Upon the terms and subject to the conditions set forth herein, at the Closing (as defined in Section 2.3(a) hereof), Buyer shall purchase from Seller, and Seller shall irrevocably sell, convey, transfer, assign and deliver to Buyer, the Purchased Assets (as defined in Section 2.1(b) hereof), free and clear of all Liens (other than Permitted Liens).  All payment amounts expressed in this Agreement are in U.S. dollars.

 

(b)            Definition of Purchased Assets .  For all purposes of and under this Agreement, the term “ Purchased Assets ” shall mean, refer to and include all of Seller’s right, title and interest in and to all of the following tangible and intangible assets, properties and rights to the extent owned, used or held for use by Seller as of the Closing (but specifically excluding the Excluded Assets (as defined in Section 2.1(c) hereof)):

 

(i)             the Fixed Assets, the Inventories, Purchased IT Systems, the Expensed Items and the other tangible personal property used in connection with the Business, and listed on Schedule 2.1(b)(i) hereto (the “ Tangible Personal Property ”);

 

(ii)            all rights of Seller in, to or under (A) the leases or subleases of Tangible Personal Property listed on Schedule 2.1(b)(ii)(A) as to which Seller is the lessor or sublessor, and (B) the leases of Tangible Personal Property listed on Schedule 2.1(b)(ii)(B) as to which Seller is the lessee or sublessee, together with any options to purchase the underlying property (the leases and subleases described in subclauses (A) and (B) hereof, the “ Personal Property Leases ”);

 

(iii)           all Books and Records of Seller solely relating to the Purchased Assets and necessary for the conduct of the Business at the Closing, other than Books and Records of Seller concerning trade secrets or other confidential information of Seller, privileged information, internal financial statements and related information or records; and files and records of Employees or related human resource matters prior to the Closing (the “ Seller Records ”);

 

(iv)           all rights under any contracts, indentures, mortgages, instruments, Liens, guaranties or other agreements of Seller set forth on Schedule 2.1(b)(iv) and the Purchase Orders, other than the Excluded Agreements (the “ Assigned Contracts ”);

 

(v)            all Permits (including applications therefor) used in the conduct of the Business set forth in Schedule 2.1(b)(v) (the “ Assumed Permits ”);

 

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(vi)           all prepaid expenses listed in Schedule 2.1(b)(vi) , and all prepaid expenses made following the date hereof and prior to the Closing that relate exclusively to the Business (the “ Prepaid Expenses ”); and

 

(vii)          all security deposits deposited by or on behalf of Seller as lessee or sublessee under the leases for the Personal Property Leases (the “ Security Deposits ”).

 

The foregoing notwithstanding, the definition of “Purchased Assets” shall not include “Expensed Items” for purposes of the representations and warranties set forth in Article III of this Agreement.

 

(c)            Definition of Excluded Assets .  Notwithstanding anything to the contrary set forth in this Section 2.1 or elsewhere in this Agreement, the term “ Purchased Assets ” shall not mean, refer to or include the following (collectively, the “ Excluded Assets ”) to the extent owned, used or held for use by Seller as of the Closing:

 

(i)             Cash, cash equivalents, investments in cash, securities or otherwise and all Seller bank accounts;

 

(ii)            all refunds of Taxes with respect to Taxes paid or accrued by Seller and not reimbursed or paid by Buyer;

 

(iii)           all claims, actions, deposits, prepayments, refunds, causes of action, choses in action, rights of recovery, rights of set off, and rights of recoupment of any kind or nature (including any such item relating to Taxes) to the extent attributable to the Excluded Agreements, Excluded Assets or the Excluded Liabilities;

 

(iv)           all rights of Seller under this Agreement and Ancillary Agreement, or any other agreement, certificate, instrument or other document executed and delivered by Seller or Buyer in connection with the Transaction or any side agreement between Seller and Buyer entered into on or after the date hereof;

 

(v)            all Books and Records of Seller which relate to the Taxes, Excluded Agreements or Excluded Assets; provided, however , Seller agrees that it shall provide Buyer with copies of, or reasonable access to, such Books and Records to the extent that any such Books and Records (i) relate to any of the Business, the Purchased Assets or Assumed Liabilities; and (ii) do not reflect confidential information or privileged materials;

 

(vi)           all accounts receivable and all notes, bonds and other evidences of Indebtedness, and all security agreements related thereto, including any rights with respect to any third party collection procedures or any other Actions or Proceedings which have been commenced in connection therewith;

 

(vii)          all Intellectual Property of Seller, including the trade name Adaptec and derivatives thereof and logos associated therewith and all related trademarks and service marks, and software licenses.

 

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(viii)         all assets other than Purchased Assets, including but not limited to land, buildings, leasehold improvements, information technology systems, hardware and software (and other related intellectual property) and custom equipment including specifically custom test fixtures specific to the Business and including equipment and assets utilized by the ASIC and desktop software group engineering teams of Seller.

 

(ix)            all capital stock, options and other securities of Seller, and all corporate minutes and stock books of account of Seller, blank stock certificates, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals and other documents relating to the organization, maintenance and existence of Seller as a corporation;

 

(x)             all agreements and contracts to which Seller is a party or is bound or to which its assets are subject that are not Assigned Contracts; and

 

(xi)            all assets or rights that relate to the Employee Plans of Seller, all Books and Records relating to the Employees of Seller as of the Closing.

 

2.2            Assumption of Liabilities .

 

(a)            Assumption .  Upon the terms and subject to the conditions set forth herein, at the Closing, Buyer shall assume from Seller, and Seller shall irrevocably convey, transfer and assign to Buyer, all of the Assumed Liabilities (as defined in Section 2.2(b) hereof).  Buyer shall not assume any liabilities of Seller pursuant hereto, other than the Assumed Liabilities.

 

(b)            Definition of Assumed Liabilities .  For all purposes of and under this Agreement, the term “ Assumed Liabilities ” shall mean, refer to and include the following Liabilities of Seller (but specifically excluding the Excluded Liabilities (as defined in Section 2.2(c) hereof)):

 

(i)             all Liabilities under Assumed Permits arising after the Closing Date; and

 

(ii)            all Liabilities related to the Purchased Assets or the operation of the Business to the extent arising from or related to any facts or circumstances occurring after the Closing Date;

 

(iii)           all Liabilities relating to Employees that are hired by Buyer or Parent for actions that occur after the date of hire.

 

(c)            Definition of Excluded Liabilities .  Notwithstanding anything to the contrary set forth in this Section 2.2 or elsewhere in this Agreement, the term “ Assumed Liabilities ” shall not mean, refer to or include the following (collectively, “ Excluded Liabilities ”):

 

(i)             all Liabilities relating to agreements not assumed by Buyer (the “ Excluded Agreements ”);

 

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(ii)            any and all Liabilities or obligations of Seller arising from the breach by Seller of any term, covenant or provisions of any of the Assigned Contracts prior to the Closing;

 

(iii)           subject to Section 2.6 , all Liabilities for Taxes of Seller or Taxes attributable to the ownership or operation of the Purchased Assets for any taxable period (or portion of any period) ending on or prior to the Closing Date and, including, without limitation, all liabilities for Taxes attributable to the Transaction;

 

(iv)           all Liabilities relating to options, warrants and other rights to purchase or otherwise acquire shares of capital stock of Seller or any Affiliate of Seller;

 

(v)            all Liabilities to shareholders of Seller or any Affiliate of Seller in their capacity as such;

 

(vi)           all Liabilities of Seller under the Definitive Agreements or any other certificate, instrument or other agreement entered into by the Parties in connection with the Transaction;

 

(vii)          except as set forth in Section 2.2(b), all Employment Liabilities and all Liabilities arising under or with respect to any Pension Plan;

 

(viii)         Seller’s Retained Environmental Liabilities;

 

(ix)            all Liabilities for legal, accounting, audit and investment banking fees, brokerage commissions, and any other expenses incurred by the Seller in connection with the Transaction;

 

(x)             all Liabilities for or related to Indebtedness of Seller, on its own behalf or on behalf of other Persons, to banks, financial institutions or other Persons with respect to borrowed money, and including any accrued interest payable in respect thereof;

 

(xi)            all Liabilities that are attributable to any of the Excluded Assets;

 

(xii)           all Liabilities of Seller with respect to accounts payable;

 

(xiii)          all Liabilities of Seller for injury to or death of persons (including, without limitation, workers’ compensation claims) or damages to or destruction of properties or assets, arising from the sale or distribution of products distributed, or business services provided, by Seller on or before the Closing Date, whether or not any such liability arises before or after the Closing Date, including, without limitation, liability for consequential and punitive damages in connection with the foregoing; and

 

(xiv)         all Liabilities other than Assumed Liabilities.

 

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2.3            Closing .

 

(a)            The consummation of the purchase and sale of the Purchased Assets (the “ Closing ”) shall take place at such place as Buyer and Seller mutually agree, at 10:00 A.M. local time, on the Closing Date unless otherwise mutually agreed by Buyer and Seller.  The Closing shall be deemed to be effective as of 12:01 A.M., local time, at the place where the Purchased Assets are located on the applicable Closing Date (the “ Closing Time ”).

 

(b)            As soon as practicable following the date hereof and at all times until the Closing of the purchase by Buyer of all of the Purchased Assets listed or described in Section 2.1(b), Buyer and Seller shall cooperate in good faith to (i) formulate and effect a plan and closing schedule for the transfer of the Purchased Assets and the Business to Buyer pursuant to this Agreement, and (ii) identify the Purchased Assets to be purchased by Buyer pursuant to this Agreement at the Closing, and (iii) identify the Assumed Liabilities to be assumed by Buyer pursuant to this Agreement at the Closing.

 

(c)            At least five (5) Business Days prior to the Closing Date, Seller shall furnish to Buyer the Preliminary Fixed Asset and Inventories Statement indicating the Preliminary Net Asset Value as of such date.  Buyer shall have been given full access to the relevant records and working papers used by Seller to prepare the Preliminary Fixed Asset and Inventories Statement.  The Preliminary Fixed Asset and Inventories Statement shall be reasonably acceptable to Buyer; provided, however , that the Preliminary Fixed Asset and Inventories Statement shall be deemed to be reasonably acceptable to Buyer if prepared in accordance with the terms of this Agreement.

 

(d)            At the Closing, on the terms and subject to the conditions set forth in this Agreement, as full payment for the transfer of the Purchased Assets by Seller to Buyer, Parent and/or Buyer shall pay to Seller the Purchase Price (as defined below) and the GST Tax Amount by wire transfer of immediately available funds in United States dollars to such account or accounts as Seller may direct by written notice delivered to Buyer by Seller at least two (2) Business Days prior to the applicable Closing Date, subject to Section 2.3(f) below with respect to the Escrow.

 

(e)            At the Closing, and simultaneously with the payment of the Purchase Price and the GST Tax Amount payable in connection therewith pursuant to Section 2.3(d), (i) Seller shall assign and transfer to Buyer good and valid title in and to the Purchased Assets (free and clear of all Liens, other than Permitted Liens) by delivery of (A) a General Assignment and Bill of Sale in form and substance reasonably acceptable to Buyer and Seller (the “ General Assignment ”), duly executed by Seller; (B) the Facility Transfer Agreement duly executed by Seller; and such other instruments of conveyance, assignment and transfer as Buyer shall reasonably request, in form and substance reasonably acceptable to Buyer and Seller, as shall be effective to vest in Buyer good and valid title to the applicable Purchased Assets as contemplated by this Agreement (the General Assignment and the other instruments being collectively referred to herein as the “ Assignment Instruments ”); and (ii) Buyer shall assume from Seller the due payment, performance and discharge of the Assumed Liabilities by delivery of (A) an Assumption Agreement in form and substance reasonably acceptable to Seller and Buyer (the “ Assumption Agreement ”), duly executed by Buyer and (B) such other instruments of

 

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assumption as Seller shall reasonably request, in form and substance reasonably acceptable to Seller and Buyer, as shall be effective to cause Buyer to assume the Assumed Liabilities as and to the extent provided in Section 2.2(b) (the Assumption Agreement and such other instruments referred to in clause (ii)(B) being collectively referred to herein as the “ Assumption Instruments ”).  At the Closing, there shall also be delivered to Seller and Buyer the certificates and other contracts, documents and instruments required to be delivered pursuant to Article VII hereof.

 

(f)             Escrow .  At the Closing, ten percent (10%) of the Purchase Price being paid under Section 2.3(d) above shall be paid to the Escrow Agent to be held and administered by the Escrow Agent in escrow as security for the indemnification obligations of Seller for Damages under Article IX (the “ Escrow ”) pursuant to the terms of the Escrow Agreement; provided that to the extent the Purchase Price is adjusted pursuant to Section 2.4, (i) upward, then ten percent of such Increase Amount payable by Buyer under Section 2.4(f)(i) shall be paid into Escrow and held pursuant to the Escrow Agreement, or (ii) downward, then ten percent (10%) of such Decrease Amount will be paid by the Escrow Agent to Buyer.  In addition, to the extent that Buyer and/or Parent exercises its Put Right under Sections 6.2 or 6.3 of the Purchase Agreement, and the Seller purchases certain Unused Inventories or Inventories from the Buyer and/or Parent, all or a portion of the purchase price of such Unused Inventories or Inventories shall be paid by the release of an amount equal to such purchase price of such inventories (calculated in accordance with Sections 6.2 and 6.3) from the Escrow Account to the Buyer and/or Parent (the “ Inventory Escrow Amount ”); provided, however, that the Inventory Escrow Amount shall not exceed ten (10%) percent of the portion of the Purchase Price paid for the Inventories as determined in Section 1.1(j)(i).  Any amounts then held in Escrow and not previously paid in respect of any claims for indemnification under Article IX or, released in connection with Seller’s purchase of Inventory under Sections 6.2 or 6.3, or subject to any pending claims under Article IX, shall be released to Seller not more than five (5) days after the twelve month anniversary of the Closing (the “ Escrow Release Date ”).  Any amounts earned in respect of the Escrow shall be considered a part of the Escrow and held pursuant to the Escrow Agreement.

 

2.4            Post-Closing Purchase Price Adjustments .

 

(a)            Preparation of Closing Net Asset Value Statement .  As soon as reasonably practicable after the Closing Date (within thirty five (35) days if commercially reasonable but, in any event, not later than forty-five (45) days after the Closing Date), Seller shall prepare and deliver to Buyer at Seller’s expense an unaudited Closing Fixed Asset and Inventories Statement indicating the Closing Net Asset Value as of the Closing Date (the “ Closing Net Asset Value Statement ”).  The date Seller delivers the Closing Net Asset Value Statement shall be referred to as the “ Notice Date ”.  Buyer shall reasonably cooperate with Seller’s finance organization in order to enable the preparation of the Closing Fixed Asset and Inventories Statement.

 

(b)            Verification .  As soon as reasonably practicable after the Notice Date (but not later than thirty (30) days after the Notice Date), Buyer shall verify (i) that the Fixed Assets and the Inventories stated in the Preliminary Fixed Asset and Inventories Statement and the statement of the Preliminary Net Asset Value accurately reflect the Fixed Assets and Inventories delivered to Buyer as part of the Purchased Assets at the Closing and (ii) that the Closing Net

 

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Asset Value is accurately reflected on the Closing Fixed Asset and Inventories Statement (the “ Verification ”).  Seller shall reasonably cooperate with Buyer in order to enable Buyer to perform the Verification.

 

(c)            Review of Preliminary Closing .  Buyer shall be given full access, during regular business hours, to the relevant records and working papers used by Seller to prepare the Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement and to review the results of the Verification in relation to the Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement.  If Buyer believes that any changes are required to be made to the Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value (including but not limited to changes based on differences between the Closing Fixed Asset and Inventories Statement the results of the Verification) (a “ Material Uncertainty ”), Buyer shall, within the later of seventy-five (75) days following the Closing Date or thirty (30) days following the receipt by it of the Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement (the “ Dispute Period ”), give written notice to Seller (a “ Dispute Notice ”) of any such proposed change or Material Uncertainty, describing the change or Material Uncertainty and the basis for the change or Material Uncertainty in reasonable detail.  The Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement shall be binding and conclusive upon, and deemed accepted by, Buyer unless Buyer shall have timely delivered a Dispute Notice to Seller during the Dispute Period.

 

(d)            Disputes .  Disputes between Buyer and Seller relating to the Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement that cannot be resolved by them through negotiation within thirty (30) days after receipt by Seller of a Dispute Notice shall be referred to an independent accounting firm reasonably agreed upon by the Parties for arbitration (the “ Independent Accountant ”) with respect to the Dispute Notice.  The Independent Accountant will be instructed to select, in its discretion, the individuals within its organization who will have primary responsibility for this matter and to reach a determination within forty-five (45) days from the date of referral.  The Independent Accountant determination hereunder shall be limited to determining the Closing Net Asset Value.  The Independent Accountant will not have the authority alter or vary this Agreement.  The decision of the Independent Accountant will be final and binding upon the Parties.  The engagement of the Independent Accountant shall be paid one-half by Seller and one-half by Buyer.  The Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement as adjusted by the Independent Accountant in accordance with this Section 2.4(d), shall be final and binding on the parties.  It is understood and agreed that the decision of the Independent Accountant shall not be subject to judicial review by any court or tribunal under any circumstances whatsoever and the Parties hereby expressly waive any right to appeal or otherwise seek judicial review of any decision of the Independent Accountant under this Section 2.4(d).

 

(e)            Final Closing Fixed Asset and Inventories Statement .  The Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement shall become final with respect to all or any portion thereof, and binding upon Buyer and Seller upon the earlier of (i) the failure by Buyer to timely object to all or any portion thereof during the Dispute Period, (ii) an agreement between Buyer and Seller with respect thereto, or (iii) the decision by the Independent Accountant with respect to any disputed matters pursuant to Section 2.4(d).  The

 

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Closing Fixed Asset and Inventories Statement and the Closing Net Asset Value Statement as finally determined under this Section 2.4, shall be referred to herein as the “ Final Closing Fixed Asset and Inventories Statement ” and the “ Final Closing Net Asset Value ,” respectively.

 

(f)             Adjustment to the Closing Net Asset Value .  The Preliminary Net Asset Value Amount paid at the Closing shall be subject to adjustment pursuant to the following provisions of this Section 2.4(f):

 

(i)             If the Final Closing Net Asset Value as reflected in the Final Closing Fixed Asset and Inventories Statement is less than the Preliminary Net Asset Value as reflected in the applicable Preliminary Fixed Asset and Inventories Statement, then the Final Closing Net Asset Value shall be decreased on a dollar-for-dollar basis by an amount (the “ Decrease Amount ”) equal to the amount by which the Final Closing Net Asset Value as reflected in the Final Closing Fixed Asset and Inventories Statement is less than the Preliminary Net Asset Value as reflected in the Preliminary Fixed Asset and Inventories Statement, and the Decrease Amount shall be payable ninety percent (90%) from Seller to Buyer and ten percent (10%) released from the Escrow by the Escrow Agent to Buyer in immediately available funds pursuant to Section 2.4(g).  In the event of a Decrease Amount, there shall be a corresponding adjustment to the GST Tax Amount.

 

(ii)            If the Final Closing Net Asset Value as reflected in the Final Closing Fixed Asset and Inventories Statement is greater than the Preliminary Net Asset Value as reflected in the Preliminary Fixed Asset and Inventories Statement, then the Final Closing Net Asset Value shall be increased on a dollar-for-dollar basis by an amount (the “ Increase Amount ”) equal to the amount by which the Final Closing Net Asset Value as reflected in the Final Closing Fixed Asset and Inventories Statement is greater than the Preliminary Net Asset Value as reflected in the Preliminary Fixed Asset and Inventories Statement, and ninety percent (90%) of the Increase Amount shall be payable by Buyer to Seller in immediately available funds pursuant to Section 2.4(g), and ten percent (10%) of the Increase Amount shall be payable by Buyer to the Escrow Agent to be held in Escrow pursuant to the Escrow Agreement.  In the event of an Increase Amount, there shall be a corresponding adjustment to the GST Tax Amount.

 

(g)            Payments of Adjustment Amount .  As soon as practicable (but not more than ten (10) Business Days) after all or any portion of a Closing Net Asset Value shall become final and binding pursuant to Section 2.4(e) hereof, Buyer or Seller, as the case may be, shall make the payment contemplated by Section 2.4(f) in respect of all or such portion of such Closing Net Asset Value that has become final and binding (it being the intention of the parties that the payment of all undisputed amounts set forth in the Final Closing Fixed Asset and Inventories Statement that become final and binding pursuant to Section 2.4(e) shall not be contingent upon the resolution of any disputed amounts set forth in such Final Closing Fixed Asset and Inventories Statement ).

 

2.5            Prorations .  The following prorations relating to the Purchased Assets and the ownership and conduct of the Business shall be made as of the Closing Date, with Seller liable to the extent such items relate to any time period up to the Closing Date, and Buyer liable to the extent such items relate to periods beginning at and immediately after the applicable Closing Date:

 

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(a)            Governmental property or similar taxes or levys on or with respect to the Purchased Assets;

 

(b)            rents, additional rents, operating expense pass throughs, Taxes and other items payable by Seller under any personal property leases; and

 

Except as otherwise agreed by the parties, the net amount of all such pro rations will be settled and paid on the Closing Date.

 

2.6            Taxes .  Buyer and Seller shall bear equally any sales, use, value-added, gross receipts, excise, registration, stamp duty or other similar taxes or governmental fees arising out of the transfer of the Purchased Assets to Buyer pursuant hereto (“ Transfer Taxes ”); provided Buyer shall pay GST that may be chargeable in respect of the sale of the Purchased Assets under this Agreement subject to Seller issuing and delivering to Buyer a tax invoice relating to such GST and provided that GST is chargeable or payable with respect to the sale of the Purchased Assets under this Agreement and such sale is not considered by the relevant tax authorities in Singapore to be a sale of a business as a going concern.  To the extent permitted by applicable law, Parent, Buyer and Seller shall cooperate in minimizing Transfer Taxes.

 

(a)            Straddle Period Taxes .  In the case of any real or personal property taxes or any similar ad valorem taxes attributable to the Purchased Assets for which Taxes are reported on a Tax Return covering a period commencing before the Closing and ending thereafter (a “ Straddle Period Tax ”), any such Straddle Period Taxes shall be prorated between Buyer and Seller on a per diem basis.  The party required by law to file a Tax Return with respect to Straddle Period Taxes shall do so within the time period prescribed by law.

 

(b)            Tax Returns .  To the extent relevant to the Business or the Purchased Assets, each party shall (i) provide the other with such assistance as may reasonably be required in connection with the preparation of any Tax Return and the conduct of any audit or other examination by any governmental authority or in connection with judicial or administrative proceedings relating to any liability for Taxes and (ii) retain and provide the other with all records or other information that may be relevant to the preparation of any Tax Returns, or the conduct of any audit or examination, or other proceeding related to Taxes.

 

2.7            Nontransferable Assets .  To the extent that any Purchased Asset or Assumed Liability to be sold, conveyed, assigned, transferred, delivered or assumed to or by Buyer pursuant hereto, or any claim, right or benefit arising thereunder or resulting therefrom, is not capable of being sold, conveyed, assigned, transferred or delivered without the approval, consent or waiver of the issuer thereof or the other party thereto, or any third person (including a Governmental Body), or if such sale, conveyance, assignment, transfer or delivery or attempted sale, conveyance, assignment, transfer or delivery would constitute a breach or termination right thereof or a violation of any law, decree, order, regulation or other governmental edict, except as expressly otherwise provided herein, this Agreement shall not constitute a sale, conveyance, assignment, transfer or delivery thereof, or an attempted sale, conveyance, assignment, transfer or delivery thereof absent such approvals, consents or waivers.  If any such approval, consent or waiver shall not be obtained, or if an attempted assignment of any such Purchased Asset or the assumption of any Assumed Liability by Buyer would be ineffective so that Buyer would not in

 

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fact receive all such Purchased Assets or assume all such Assumed Liabilities pursuant hereto, Seller, Buyer and Parent shall cooperate in a mutually agreeable arrangement and use reasonable diligent efforts to provide Buyer with the benefits and assume the obligations of such Purchased Assets and Assumed Liabilities in accordance with this Agreement, including subcontracting, sub-licensing, or sub-leasing to Buyer, or under which Seller, at Buyer’s expense, would enforce for the benefit of Buyer, with Buyer assuming all of Seller’s obligations thereunder, any and all rights of Seller against a third party thereto; provided that in no event shall Seller be required to make a cash payment to a third-party (other than as required under any agreement with such third-party) or to Buyer or Parent solely in connection with its obligations under this Section 2.6.  Buyer and Parent agree to reasonably cooperate with Seller and supply relevant information to such party or parties or such third-party in order to assist Seller in its obligations under this Section 2.6.

 

2.8            Taking of Necessary Action; Further Action .  From time to time after the Closing Date, at the request of any Party hereto and at the expense of such Party, the Parties hereto shall execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation and take such action as Parent or Buyer may reasonably determine is necessary to transfer, convey and assign to Buyer, and to confirm Buyer’s title to or interest in the Purchased Assets pursuant to this Agreement, to put Buyer in actual possession and operating control of such Purchased Assets as contemplated by this Agreement and to assist Buyer in exercising all rights with respect thereto.

 

2.9            Allocation of Purchase Price Consideration .  The sum of the Purchase Price and the Assumed Liabilities (except to the extent that such Assumed Liabilities are not required to be capitalized for income tax purposes) shall be allocated among the Purchased Assets as of the Closing Date in accordance with Schedule 2.9 , which shall be delivered by Buyer three (3) business days prior to the Closing Date and shall be reasonably acceptable to the Seller.  Any subsequent adjustments to the sum of the Purchase Price and Assumed Liabilities (except to the extent that such Assumed Liabilities are not required to be capitalized for income tax purposes) shall be reflected by Buyer in the allocation hereunder in a manner consistent with Section 1060 of the Code and the regulations thereunder.  For all Tax purposes, Purchaser and Seller agree to report the transactions contemplated in this Agreement in a manner consistent with the terms of this Agreement, including the allocation under Schedule 2.9 , and that none of them will take any position inconsistent therewith in any Tax Return, in any refund claim, in any related litigation, or other related dispute.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Subject to such exceptions as are specifically disclosed in the disclosure letter supplied by Seller to Parent and Buyer (the “ Seller Disclosure Letter ”), Seller hereby represents and warrants to Parent and Buyer that the statements contained in this Article III are true and correct as of the date of this Agreement and will be true and correct as of the Closing (as though made at the Closing ); provided , that the representations and warranties made as of a specified date will be true and correct as of such date.

 

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3.1            Organization, Qualification, and Corporate Power .  Seller is a corporation duly organized and validly existing under the laws of Singapore.  Seller has all necessary corporate power and authority to enter into this Agreement and all agreements and instruments delivered pursuant hereto (the “ Ancillary Agreements ”), to carry out its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby.  Seller is duly licensed or qualified to do business and are in good standing in each jurisdiction in which the properties owned or leased by them or the operation of the Business makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified would not (i) adversely affect the ability of Seller to carry out its obligations under, and to consummate the transactions contemplated by, this Agreement and the Ancillary Agreements and (ii) result in a Material Adverse Effect on the Business or the Purchased Assets.

 

3.2            Authorization .  The execution and delivery of this Agreement and the Ancillary Agreements by Seller, the performance by Seller of its obligations hereunder and thereunder and the consummation by Seller of the transactions contemplated hereby and thereby have been duly authorized by all requisite action on the part of Seller and its subsidiaries and no other corporate proceedings on the part of Seller are necessary to authorize this Agreement or the Ancillary Agreements, or to consummate the transactions contemplated hereby and thereby.  This Agreement and the Ancillary Agreements to which Seller is a party have been duly and validly executed and constitute the valid and legally binding obligations of Seller, enforceable against Seller in accordance with their respective terms and conditions, except as such enforceability may be limited by principles of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.  Except as set forth in Section 3.2 of the Seller Disclosure Letter, Seller does not own and has never owned any subsidiaries.

 

3.3            No Conflicts .  Neither the execution and the delivery of this Agreement and the Ancillary Agreements by Seller nor the consummation of the Transaction will (A) violate any material constitution, Law, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which Seller is subject, (B) violate or conflict with any provision of the charter documents, bylaws or organizational documents of the Seller, or (C) conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice or consent under, any Assigned Contract or any Assumed Permit (or result in the imposition of any Lien upon any of the Purchased Assets).

 

3.4            Consents .  Except as set forth in Section 3.4 of the Seller Disclosure Letter, no consent, waiver, approval, order, license, permit, certificates, filing or authorization of, or registration, declaration or filing with, any Governmental Body or any third party is required by or with respect to Seller in connection with the execution and delivery of this Agreement or the consummation of the Transaction, except for such consents, waivers, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable securities laws.

 

3.5            Legal Compliance .  The Business as being conducted by Seller has been and at the Closing will be in material compliance with all applicable Laws (including without limitation rules, regulations, codes, plans, injunctions, judgments, orders, extension orders, decrees, rulings,

 

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and charges thereunder).  No Action, or to the knowledge of Seller, investigation, charge, complaint, claim, demand, notice or inquiry, is pending, or to the knowledge of Seller, is threatened against Seller by any Governmental Body alleging any failure to so comply in any material respect.  Seller has all material Permits that are n