<PAGE>
EXHIBIT 2.1
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
BETWEEN
APPLIED MATERIALS, INC.
AND
BROOKS AUTOMATION, INC.
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TABLE OF CONTENTS
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Page
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ARTICLE 1 PURCHASE OF ASSETS
1
1.1
Purchase and Sale
1
1.2
Excluded Assets
2
1.3
Assumption of
Liabilities
3
1.4
Purchase Price
3
1.5
Closing
3
1.6
Net Asset Value
Adjustment
5
1.7
Seller's Option to
Transfer Leases through Subleases
6
1.8
Limitation on
Assignment of Acquired Assets
7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF SELLER
7
2.1
Organization; Good
Standing
8
2.2
Capitalization
8
2.3
Authority Relative to
this Agreement
8
2.4
Title to Shares
8
2.5
No Conflict; Required
Filings and Consents
8
2.6
Compliance with Law
9
2.7
Financial Information
9
2.8
No Undisclosed
Liabilities
10
2.9
Title to Assets;
Absence of Liens and Encumbrances
10
2.10
Condition of Assets
10
2.11
Compliance with Environmental Laws
10
2.12
Litigation
11
2.13
Taxes
11
2.14
Employment Matters
12
2.15
Labor Relations
13
2.16
Contracts
14
2.17
Insurance
15
2.18
Leased Real Property
16
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2.19
Intellectual Property
16
2.20
Warranty and Product Liability Claims
17
2.21
Absence of Certain Developments
17
2.22
Brokers or Finders
18
2.23
Sufficiency of Acquired Assets
18
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF BUYER
19
3.1
Organization and
Qualification
19
3.2
Authority Relative to
this Agreement
19
3.3
No Conflict, Required
Filings and Consents
19
3.4
Financial Ability to
Perform
20
3.5
Brokers
20
ARTICLE 4 COVENANTS
20
4.1
Access to Information
20
4.2
Conduct of Business
20
4.3
Further Assurances;
Maintenance of Representations and Warranties 22
4.4
Announcements
22
4.5
Efforts to Consummate
22
4.6
Employees
22
4.7
HSR Act
25
4.8
Business Records
25
4.9
Tax Matters
25
4.10
US Lease Agreements
30
4.11
Taiwan Sublease Agreement
30
4.12
Transition Services Agreement
30
4.13
Patent License Agreement
30
4.14
Software License Agreement; Supply Relationship Agreement
30
4.15
Escrow Agreement
31
4.16
Noncompetition and Nonsolicitation
31
4.17
Exclusivity
31
4.18
Attorney-Client Privilege
32
4.19
Intercompany Receivables and Payables
32
4.20
Required Consents
32
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4.21
Confidentiality
32
4.22
Foreign Matters
33
4.23
Use of "Brooks"
34
ARTICLE 5 CONDITIONS PRECEDENT TO CLOSING
34
5.1
Conditions to
Obligations of Buyer
34
5.2
Conditions to
Obligations of Seller
35
ARTICLE 6 TERMINATION
36
6.1
Termination by Mutual
Consent
36
6.2
Termination by Buyer
36
6.3
Termination by Seller
36
6.4
Effect of Termination
36
ARTICLE 7 INDEMNIFICATION; NATURE OF REPRESENTATIONS AND WARRANTIES
37
7.1
Escrow Fund
37
7.2
Indemnities
37
7.3
Limitations on
Indemnification
37
7.4
Procedures Regarding
Indemnification Claims
38
7.5
Exclusive Remedy
39
7.6 Only Representations and
Warranties, etc
39
7.7
Tax Treatment
40
7.8
No Right of Set-Off
40
ARTICLE 8 DEFINITIONS; CERTAIN RULES OF CONSTRUCTION
40
8.1
Definitions
40
8.2
Certain Rules of
Construction
47
ARTICLE 9 MISCELLANEOUS
47
9.1
Time is of the Essence
47
9.2
Waivers and Amendments
47
9.3
Cumulative Rights and
Remedies
47
9.4
Notices
47
9.5
Expenses
49
9.6
Miscellaneous
49
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9.7
Choice of Law
50
9.8
Consent to
Jurisdiction
50
9.9
WAIVER OF JURY TRIAL
51
9.10
Severability
51
9.11
Assignability
51
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<PAGE>
LIST OF SCHEDULES
Schedule 1.1(b)
Leases
Schedule 1.1(d)
Intellectual Property
Schedule 1.1(j)
Transferred Companies
Schedule 1.2 Excluded
Assets
Schedule 5.1(e)
Required Consents
Seller Disclosure Schedule
LIST OF EXHIBITS
Exhibit 1.5(a)
Bill of Sale
Exhibit 1.5(b)
Assignment and Assumption Agreement
Exhibit 1.5(c)
Trademark Assignment Agreement
Exhibit 1.5(d)
Patent License Agreement
Exhibit 1.5(e)
Software License Agreement
Exhibit 1.5(f)
Patent Assignment Agreement
Exhibit 1.5(g)
Assignment and Assumption of Lease
Exhibit 1.5(h)
Transition Services Agreement
Exhibit 1.5(i)
US Lease Agreement
Exhibit 1.5(j)
Taiwan Sublease Key Terms
Exhibit 1.5(k)
Supply Relationship Key Terms
Exhibit 4.9(b)
Allocation of Purchase Price
Exhibit 7.1 Form of
Escrow Agreement
Exhibit 8
Sample Net Asset Value Calculation
<PAGE>
ASSET PURCHASE AGREEMENT
THIS
AGREEMENT is made as of November 3, 2006 by and between Applied
Materials, Inc., a Delaware corporation ("BUYER"), and Brooks
Automation, Inc.,
a Delaware corporation ("SELLER").
WHEREAS,
Seller and the Subsidiaries are operating the business (the
"BUSINESS") of developing, selling, supplying, installing,
maintaining and
supporting the software applications listed on Annex A hereto;
and
WHEREAS,
Buyer wishes to purchase and assume from Seller, and Seller
wishes to sell and assign to Buyer, all of the assets (other than
the Excluded
Assets as defined below) and certain of the liabilities of the
Business;
NOW,
THEREFORE, in consideration of the premises and the mutual
promises
hereinafter set forth, the parties agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
1.1
Purchase and Sale. Upon and subject to the terms and conditions
hereof, at the Closing (as hereinafter defined), Seller shall, and
shall cause
the Subsidiaries (other than the Transferred Companies) to, sell,
transfer and
assign to Buyer or Buyer's designee, and Buyer shall, or shall
cause its
designee to, purchase and acquire from Seller and the Subsidiaries
(other than
the Transferred Companies), all of Seller's and the Subsidiaries'
(other than
the Transferred Companies') right, title and interest in and to all
of the
assets used primarily in or held primarily for use in connection
with the
Business, wherever located and of whatever nature, whether real,
personal or
mixed, tangible or intangible, except the Excluded Assets
(collectively, the
"ACQUIRED ASSETS"), which the parties agree in the case of each of
Seller and
each Subsidiary constitute a going concern and including the
following tangible
and intangible assets:
(a) all assets of Seller or any Subsidiary other than a
Transferred
Company (each such Subsidiary, a "RETAINED SUBSIDIARY") included
within the Net
Asset Value of the Business as of the Closing (whether or not
included in the
Net Asset Value as finally determined pursuant to Section 1.6);
(b) all rights of Seller or any Retained Subsidiary under each
lease
or sublease listed on Schedule 1.1(b) (the "LEASES");
(c) all tangible personal property (such as computers, equipment
and
furniture) of Seller or any Retained Subsidiary and interests
therein used
primarily in or held for use primarily in connection with the
Business (such
tangible personal property excluding any Excluded Assets, "FIXED
ASSETS");
(d) all Intellectual Property of Seller or any Retained
Subsidiary
owned or held under license by Seller or any Retained Subsidiary
that is used
primarily in or held for use primarily in connection with, or
primarily related
to or necessary for, the operation of the
<PAGE>
Business, wherever located (such Intellectual Property excluding
any Excluded
Assets, the "ACQUIRED INTELLECTUAL PROPERTY"), including all of the
Intellectual
Property of Seller or any Retained Subsidiary identified on
Schedule 1.1(d) and
including all rights of Seller or any Retained Subsidiary under the
license
agreements pursuant to which Seller licenses Intellectual Property
from another
Person listed on Schedule 1.1(d) (the "TRANSFERRED LICENSE
AGREEMENTS"), and the
goodwill associated therewith;
(e) all tangible embodiments of the Acquired Intellectual
Property,
including all rights of Seller or any Retained Subsidiary to the
products and
services of the Business listed on Annex A, including with respect
to any
software product listed thereon, the underlying software and all
related source
code, object code, media files, specifications, designs and
technical
documentation;
(f) all customer, distributor, supplier and mailing lists of
Seller
or any Retained Subsidiary relating primarily to or used primarily
in the
Business;
(g) all rights of Seller or any Retained Subsidiary under any
contracts, purchase orders, instruments and other agreements (other
than the
Leases and agreements pursuant to which Seller or any Retained
Subsidiary
licenses Intellectual Property from another Person) relating
primarily to or
used primarily in the Business, including the Contracts set forth
on Section
2.16 of the Seller Disclosure Schedule (all such contracts in this
subsection
(g), together with the Transferred License Agreements, being herein
referred to
as the "CONTRACTS");
(h) all claims,
causes of action, choses in action, rights of
recovery, rights of set off and rights of recoupment of Seller or
any Retained
Subsidiary that arose primarily from the operation of Business,
other than in
respect of Taxes;
(i) all business and financial records (other than Tax records
of
Seller or any Retained Subsidiary), books (other than the corporate
minute books
of Seller or any Retained Subsidiary), ledgers (other than the
corporate stock
ledger of Seller or any Retained Subsidiary), files, plans,
documents,
correspondence, lists, plats, architectural plans, drawings,
notebooks,
specifications, creative materials, advertising and promotional
materials,
marketing materials, studies, reports, equipment repair,
maintenance or service
records, in each case of Seller or any Retained Subsidiary and
relating
primarily to the Acquired Assets described above, whether written
or
electronically stored or otherwise recorded;
(j) all shares of capital stock in, and evidences of
indebtedness
of, all Subsidiaries listed on Schedule 1.1(j) (such Subsidiaries
and their
subsidiaries, including for avoidance of doubt, Brooks Automation
(Canada) Inc.,
the "TRANSFERRED COMPANIES"); and
(k) all goodwill associated with the Business or the Acquired
Assets, together with the right to represent to third parties that
Buyer is the
successor to the Business.
1.2
Excluded Assets. Notwithstanding anything in this Agreement to
the
contrary, there shall be excluded from the Acquired Assets to be
sold, assigned,
transferred, conveyed and delivered to Buyer hereunder the assets
set forth on
Schedule 1.2 (collectively, the "EXCLUDED ASSETS").
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1.3
Assumption of Liabilities. Upon and subject to the terms and
conditions hereof, at the Closing (as hereinafter defined), Buyer
shall, or
shall cause its designee to, assume and satisfy or perform when due
the
following specified liabilities of Seller or a Retained Subsidiary
(the "ASSUMED
LIABILITIES"), but no others:
(a) all liabilities of Seller or any Retained Subsidiary
included
within the Net Asset Value of the Business, and
(b) subject to clause "(iv)" of the following paragraph, all
liabilities and obligations (including indemnity, warranty and
similar
obligations where the obligation pertains in whole or in part to
pre-Closing
conduct) of Seller or any Retained Subsidiary under the Leases,
Contracts and
Transferred License Agreements, except for liabilities or
obligations arising
from any breach or default occurring on or prior to the
Closing.
Regardless of any disclosure made to Buyer, Buyer is not assuming,
and shall not
be deemed to have assumed, any liabilities or obligations of Seller
or any
Retained Subsidiary other than the Assumed Liabilities specifically
described
above including but not limited to any liability of Seller for
Taxes except as
provided in Section 4.9(d) hereof (all such Liabilities other than
the Assumed
Liabilities, collectively, the "EXCLUDED LIABILITIES"). Without
limiting the
generality of the foregoing, the Excluded Liabilities shall
specifically
include: (i) any legal, investment banking and other advisory costs
and expenses
incurred or accrued by or on behalf of Seller or its Affiliates in
connection
with the transactions contemplated by this Agreement, (ii) any
liabilities
resulting from, caused by or arising out of, directly or
indirectly, actions
pending on or prior to the Closing or facts or conditions existing
on or prior
to the Closing Date relating to Intellectual Property infringement
or violation
of any law, (iii) any liability arising out of the matter described
on Section
2.20 of the Seller Disclosure Schedule and (iv) any liability or
obligation
under any contracts, purchase orders, instruments or other
agreements entered
into by Seller or any Subsidiary after the date of this Agreement
and prior to
the Closing in violation of any covenant contained in this
Agreement. No
assumption by Buyer of any Assumed Liabilities shall relieve or be
deemed to
relieve Seller from any obligation or liability under this
Agreement with
respect to any representations or warranties made by Seller to
Buyer.
1.4
Purchase Price. The total purchase price for the Acquired Assets
(the
"PURCHASE PRICE") shall be (a) $ 125,000,000.00 in cash and (b) the
assumption
by Buyer of the Assumed Liabilities. Upon and subject to the terms
and
conditions hereof, Buyer shall, at the Closing, pay the cash
portion of the
Purchase Price, less the Escrow Amount, by wire transfer of
immediately
available funds to an account or accounts designated by Seller not
less than one
Business Day prior to the Closing.
1.5
Closing.
(a) The closing (the "CLOSING") shall be held at the offices of
Ropes & Gray LLP, One International Place, Boston,
Massachusetts, at 10:00 a.m.
as promptly as practicable (and in any event within two Business
Days) after
satisfaction or waiver of the conditions set forth in Section 5
capable of
satisfaction prior to the Closing or on such other date as Buyer
and Seller
mutually agree (the "CLOSING DATE").
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(b) At the Closing, Seller shall deliver or cause to be delivered
to
Buyer, properly executed and acknowledged, if appropriate:
(i) a Bill of Sale substantially in the form of Exhibit 1.5(a)
(the "BILL OF SALE"),
(ii) an Assignment and Assumption Agreement substantially in
the form of Exhibit 1.5(b) (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT"),
(iii) an Assignment of Trademarks, Trademark Applications and
Goodwill substantially in the form of Exhibit 1.5(c) (the
"TRADEMARK
ASSIGNMENT AGREEMENT"),
(iv) a Patent License Agreement substantially in the form of
Exhibit 1.5(d) (the "PATENT LICENSE AGREEMENT"),
(v) a Software License Agreement substantially in the form of
Exhibit 1.5(e) (the "SOFTWARE LICENSE Agreement"),
(vi) an Assignment of Patents and Patent Applications
substantially in the form of Exhibit 1.5(f) (the "PATENT
ASSIGNMENT
AGREEMENT"),
(vii) an Assignment and Assumption of Lease substantially in
the form of Exhibit 1.5(g) with respect to each Lease (each, an
"ASSIGNMENT AND ASSUMPTION OF LEASE"), provided that, with the
parties' mutual written agreement, an Assignment and Assumption
of
Lease may include more than one Lease,
(viii) a Transition Services Agreement substantially in the
form of Exhibit 1.5(h) (the "TRANSITION SERVICES AGREEMENT"),
(ix) lease agreements for the each of the Chelmsford and
Phoenix locations substantially in the form of Exhibit 1.5(i)
(the
"US LEASE AGREEMENTS"),
(x) the Escrow Agreement,
(xi) a sublease agreement containing the terms set forth on
Exhibit 1.5(j) (the "TAIWAN SUBLEASE AGREEMENT"),
(xii) a supply relationship agreement containing the terms set
forth on Exhibit 1.5(k) (the "SUPPLY RELATIONSHIP AGREEMENT"
and,
collectively with this Agreement, the Bill of Sale, Assignment
and
Assumption Agreement, Trademark Assignment Agreement, Patent
License
Agreement, Software License Agreement, Patent Assignment
Agreement,
Assignment and Assumption of Lease, Transition Services
Agreement,
the US Lease Agreements, the Escrow Agreement, and the Taiwan
Sublease Agreement the "TRANSACTION DOCUMENTS") and (xiii) all
certificates and other instruments evidencing equity or debt
interests of Seller or
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any Retained Subsidiary in the Transferred Companies, accompanied
by
transfer powers executed in blank; and
(c) At the Closing, Buyer shall deliver or cause to be delivered
to
Seller, properly executed and acknowledged, if appropriate:
(i) the Assignment and Assumption Agreement,
(ii) the Patent License Agreement,
(iii) the Software License Agreement,
(iv) each Assignment and Assumption of Lease,
(v) the Transition Services Agreement,
(vi) the US Lease Agreements,
(vii) the Taiwan Sublease Agreement,
(viii) the Escrow Agreement, and
(ix) the Supply Relationship Agreement.
1.6 Net
Asset Value Adjustment.
(a) Net Asset Value Statement. As promptly as possible and in
any
event within 45 days after the Closing Date, Buyer will prepare or
cause to be
prepared, and will provide to Seller, a written statement setting
forth in
reasonable detail its determination of the Net Asset Value as of
the Closing
(the "NET ASSET VALUE STATEMENT"). The Net Asset Value Statement
will be
prepared in accordance with GAAP (with respect to each account
included within
Net Asset Value) and consistently with the calculation set forth on
Exhibit 8
hereto.
(b) Dispute Notice. The Net Asset Value Statement will be
final,
conclusive and binding on the parties unless Seller provides a
written notice (a
"DISPUTE NOTICE") to Buyer no later than 20 days after delivery of
the Net Asset
Value Statement setting forth in reasonable detail (a) any item on
the Net Asset
Value Statement which Seller believes has not been prepared in
accordance with
GAAP or consistently with the sample calculation of Net Asset Value
attached
hereto as Exhibit 8 and (b) the correct amount of such item in
accordance with
GAAP and Exhibit 8. Any item or amount to which no dispute is
raised in the
Dispute Notice will be final, conclusive and binding on the
parties.
(c) Resolution of Disputes. Buyer and Seller will attempt to
resolve
the matters raised in a Dispute Notice in good faith. In the event
such matters
are not resolved within five Business Days after delivery of the
Dispute Notice,
either Buyer or Seller may provide written notice to the other that
it elects to
submit the disputed items to KPMG or another national accounting
firm that is
independent with respect to each of Buyer and Seller and has no
conflict of
interest with either (the "NET ASSET VALUE ARBITRATOR"). The Net
Asset Value
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<PAGE>
Arbitrator will promptly, in accordance with the Commercial
Arbitration Rules of
the American Arbitration Association, review only those items and
amounts
specifically set forth and objected to in the Dispute Notice and
resolve the
dispute with respect to each such specific item and amount in
accordance with
GAAP and consistent with the calculation of Net Asset Value
attached hereto as
Exhibit 8. The fees and expenses of the Net Asset Value Arbitrator
will be
shared equally by Seller and Buyer, and the decision of the Net
Asset Value
Arbitrator with respect to the items of the Net Asset Value
Statement submitted
to it will be final, conclusive and binding on the parties. Each of
the parties
to this Agreement agrees to use its commercially reasonable efforts
to cooperate
with the Net Asset Value Arbitrator and to cause the Net Asset
Value Arbitrator
to resolve any dispute no later than thirty Business Days after
selection of the
Net Asset Value Arbitrator.
(d) Adjustment Payment. Promptly, and in any event no later than
the
fifth Business Day after final determination of the Net Asset Value
in
accordance with this Section 1.6:
(i) if the Net Asset Value amount determined pursuant to this
Section 1.6 exceeds the Net Asset Value Target, then Buyer will
pay
to Seller such excess by wire transfer of immediately available
funds; and
(ii) if the Net Asset Value amount determined pursuant to this
Section 1.6 is less than the Net Asset Value Target, then an
amount
equal to such shortfall will be paid by Seller to Buyer by wire
transfer of immediately available funds.
1.7
Seller's Option to Transfer Leases through Subleases.
Notwithstanding
any provision of this Agreement to the contrary, Seller may elect,
by providing
written notice to Buyer at any time prior to the Closing, to
transfer any one or
more of the Leases through a sublease rather than an assignment of
lease;
provided, however, that Buyer shall not, as a result thereof, incur
any
additional cost or expense, or otherwise be obligated for any rent
in excess of
the rent provided for under the applicable Lease. If Seller makes
this election
with respect to any Lease, then Seller or the applicable Subsidiary
shall
sublease substantially all of the applicable premises for
substantially all of
the remaining term under the applicable Lease, except, however,
Seller may
retain the minimum rights under the applicable Lease that it
reasonably deems
necessary in order for the transfer to be respected as a sublease
(with an
appropriate and equitable adjustment to the rent, operating costs
and other
expenses thereunder).
1.8
Accounts Receivable Adjustment. If any of the accounts
receivable
included within the Net Asset Value of the Business at the Closing
(the "CLOSING
DATE RECEIVABLES") are not collected in full on or prior to the six
month
anniversary of the Closing Date (the "POST-CLOSING COLLECTION
PERIOD"), then
Buyer, at its option, shall have the right to transfer the
uncollected balance
of any one or more of such uncollected Closing Date Receivables
back to Seller.
Buyer may exercise this option by delivering written notice to
Seller at any
time within thirty (30) days after the expiration of the
Post-Closing Collection
Period, which notice shall specify in reasonable detail each of the
uncollected
Closing Date Receivables to be so transferred back to Seller and
the individual
balances thereof (such uncollected Closing Date Receivables, as so
specified,
are referred to herein as the "UNCOLLECTED RECEIVABLES" and the
aggregate
balance thereof is referred to herein as the "UNCOLLECTED
RECEIVABLES BALANCE").
In such event, the
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Purchase Price shall be reduced on a dollar-for-dollar basis by the
full amount
of the Uncollected Receivables Balance. Seller shall promptly
refund the full
amount of the Uncollected Receivables Balance to Buyer by wire
transfer of
immediately available funds, and Buyer shall, thereafter, take such
actions as
are necessary to transfer all right, title and interest in the
Uncollected
Receivables back to Seller. The parties acknowledge and agree that,
during the
Post-Closing Collection Period, Buyer shall use commercially
reasonable efforts
to collect the Closing Date Receivables in the ordinary course of
business and
consistent with the Buyer's collection practices with respect to
its other
customers. Buyer, in connection with the collection of any
Uncollected
Receivables transferred back to Seller, shall consult with, and
reasonably
cooperate with, Seller, as applicable, in the collection thereof,
and Buyer
shall provide such technical assistance and support as Seller may
reasonably
request in furtherance of the collection of such Uncollected
Receivables at
Seller's expense.
1.9
Limitation on Assignment of Acquired Assets. Anything in this
Agreement to the contrary notwithstanding, this Agreement shall not
constitute
an agreement to assign any Acquired Asset or any right thereunder
as to which
the transfer or attempted assignment, without obtaining any consent
of, or other
action by, any third party or any governmental authority, would
constitute a
breach or in any way adversely affect the rights of Buyer or Seller
or any of
their respective Affiliates thereunder or subject any of the
foregoing to civil
or criminal liability. Seller and Buyer will use their reasonable
efforts (but
without any payment of money) to obtain the consent of the other
parties to any
such Acquired Asset or any claim or right or any benefit arising
thereunder for
the assignment thereof to Buyer as Buyer may reasonably request. If
such consent
is not obtained, or if an attempted assignment thereof would be
ineffective or
would adversely affect the rights of Seller or its Affiliates
thereunder so that
Buyer would not in fact receive all such rights, Seller and Buyer
will cooperate
in an arrangement reasonably acceptable to both parties under which
Buyer would
obtain the benefits and assume the obligations thereunder in
accordance with
this Agreement in the same manner as if such Acquired Asset were
transferred to
Buyer at the Closing, including subcontracting, sub-licensing, or
sub-leasing to
Buyer, or under which Seller would enforce for the benefit of
Buyer, with Buyer
assuming Seller's obligations, any and all rights of Seller or its
Affiliates
against a third party thereto (with any out-of-pocket incremental
costs or
expenses associated with such arrangements up to $100,000 in the
aggregate to be
borne by Seller). Seller will promptly pay to Buyer when received
all monies
received by Seller under any Acquired Asset or any claim or right
or any benefit
arising thereunder, except to the extent the same represents an
Excluded Asset
and with respect to products to be supplied and services to be
performed after
the Closing, to the extent Buyer has provided such products or
performed such
services. Seller will continue to use its reasonable efforts to
obtain any such
required consent or approval (to the extent any such required
consent or
approval is reasonably likely to be obtained on commercially
reasonable terms),
and promptly upon receipt of such consent will transfer and assign
such Acquired
Asset and such rights therein to Buyer without the payment by Buyer
of any
additional consideration.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
In order
to induce Buyer to enter into and perform this Agreement and to
consummate the transactions contemplated hereby, Seller represents
and warrants
to Buyer that, except as set
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forth in the written disclosure schedule delivered on or prior to
the date
hereof by Seller to Buyer that is arranged in sections
corresponding to those
contained in this Section 2 (the "SELLER DISCLOSURE SCHEDULE"):
2.1
Organization; Good Standing. Each of the Transferred Companies
and
Seller is a corporation or other organization duly organized,
validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or
other organization and has the requisite corporate or other
organizational power
and authority necessary to own, lease and operate its properties
and to carry on
its business as it is now being conducted. Each of the Transferred
Companies (to
the extent applicable) and, with respect to the Business Seller, is
duly
qualified or licensed as a foreign corporation or other
organization to do
business, and is in good standing, in each jurisdiction where the
character of
its properties owned, leased or operated by it or the nature of its
activities
makes such qualification or licensing necessary, except for such
failures to be
so duly qualified or licensed and in good standing that would not,
individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect. A
true and complete list of each of the Transferred Companies,
together with its
jurisdiction of organization, its authorized capitalization and the
percentage
of its outstanding equity owned by Seller or any Subsidiary, is set
forth in
Section 2.1 of the Seller Disclosure Schedule. No Transferred
Company has any
equity interest in any other Person, other than as described in
Section 2.1 of
the Seller Disclosure Schedule.
2.2
Capitalization. The authorized equity interests of each
Transferred
Company are set forth in Section 2.1 of the Seller Disclosure
Schedule, and all
such equity interests as are outstanding were validly issued, fully
paid and
nonassessable. There are no options, warrants or other rights,
agreements,
arrangements or commitments of any character existing on the date
hereof
obligating Seller or any Transferred Company to issue or sell any
shares of
capital stock of, or other equity interests in, any Transferred
Company. There
are no obligations, contingent or otherwise, of any Transferred
Company to
repurchase, redeem or otherwise acquire any of its equity
interests.
2.3
Authority Relative to this Agreement. Seller has all necessary
corporate power and authority to execute and deliver this Agreement
and to
perform its obligations hereunder and to consummate the
transactions
contemplated hereby to be consummated by it at the Closing. The
execution and
delivery of this Agreement by Seller and the consummation by Seller
of the
transactions contemplated hereby to be consummated by it at the
Closing have
been duly and validly authorized by all necessary corporate action
on the part
of Seller. This Agreement has been duly and validly executed and
delivered by
Seller, and assuming the due authorization, execution and delivery
by Buyer,
constitutes a legal, valid and binding obligation of Seller,
enforceable against
Seller in accordance with its terms.
2.4 Title
to Shares. Seller or a Subsidiary is the sole record and
beneficial owner of, and has good and marketable title to, all of
the equity
interests in each Transferred Company free and clear of any Lien,
except for
restrictions on transfer imposed by applicable securities laws.
2.5 No
Conflict; Required Filings and Consents.
-8-
<PAGE>
(a) The execution and delivery of this Agreement by Seller does
not,
and the performance of this Agreement by Seller and the
consummation by Seller
of the transactions contemplated hereby to be consummated by it at
the Closing
will not, (i) conflict with or violate the Charter of Seller, (ii)
conflict with
or violate the Charter of any Transferred Company, (iii) violate
any federal,
state, local or foreign law, rule, regulation, order, judgment or
decree
(collectively, "LAWS") in effect as of the date hereof and
applicable to the
Business, any Acquired Asset or any Transferred Company or by which
any of the
Acquired Assets is bound, or (iv) result in any breach of or
constitute a
default (or an event that with notice or lapse of time or both
would become a
default) under, or give to third parties any rights of termination,
amendment,
acceleration or cancellation of, or result in the creation of a
Lien on, any
Acquired Assets or the properties or assets of any Transferred
Company pursuant
to, any note, bond, mortgage, indenture, contract, agreement,
lease, license,
permit, franchise or other instrument or obligation required to be
listed on
Section 2.16 of the Seller Disclosure Schedule.
(b) The execution and delivery of this Agreement by Seller does
not,
and the performance of this Agreement by Seller at the Closing will
not, based
solely on information regarding Seller, the Transferred Companies
and the
Business and without regard to any presence or contacts of Buyer in
any country,
require any consent, approval, authorization or permit of, or
filing with or
notification to, any federal, state, local or foreign governmental
or regulatory
authority to be obtained or made by Seller or any Transferred
Company except (i)
for compliance with applicable disclosure requirements, if any,
under the
Exchange Act and compliance with the pre-merger notification
requirements of the
HSR Act, or (ii) for such consents, approvals, authorizations,
permits, filings
or notifications as shall have been obtained or made at or prior to
Closing.
(c) No consent, approval, waiver or other action by any Person
(other than any governmental or regulatory authority referred to in
(b) above)
under any Lease, Transferred License Agreement or Contract required
to be listed
on Section 2.16 of the Seller Disclosure Schedule is required or
necessary for
the execution, delivery and performance by Seller of each
Transaction Document
to which Seller is a party, or for the consummation of the
transactions
contemplated hereby or thereby (each such consent, approval, waiver
or other
action is referred to herein as a "REQUIRED CONSENT").
2.6
Compliance with Law. With respect to the Business, neither Seller
nor
any Subsidiary is in default or violation of any Law applicable to
Seller or
such Subsidiary or by which any of their respective properties is
bound, except
for any such defaults or violations which have not had and would
not,
individually or in the aggregate, reasonably be expected to have a
Material
Adverse Effect. Notwithstanding the generality of the foregoing,
the provisions
of this Section 2.6 shall not apply to any Laws referred to, or
applicable to
the matters of a type referred to, in any of Sections 2.11
(Environmental
Matters), 2.13 (Taxes) or 2.14 (Employment Matters).
2.7
Financial Information. The following financial information
regarding
the Business (including the Transferred Companies) is included in
Section 2.7 of
the Seller Disclosure Schedule: (a) the unaudited combined
statement of net
assets (including the net assets of like tenor of the Transferred
Companies) to
be transferred to Buyer in the transactions contemplated hereby (as
if such
transactions closed on September 30, 2006) (the "MOST RECENT
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<PAGE>
BALANCE SHEET") and (b) the statement of operations for the
Business for the
fiscal year ended September 30, 2006 ((a) and (b) collectively, the
"FINANCIAL
STATEMENTS"). The Financial Statements (i) present fairly in all
material
respects the combined net assets (including the net assets of like
tenor of the
Transferred Companies) to be transferred to Buyer in the
transactions
contemplated hereby (as if such transactions closed on September
30, 2006) and
the results of operations of the Business as of September 30, 2006
and for the
year then ended and (ii) were prepared in accordance with United
States
generally accepted accounting principles ("GAAP"), applied on a
consistent basis
throughout the periods covered thereby; provided, however, that the
statement of
net assets includes only the assets and liabilities to be included
within the
Acquired Assets and Assumed Liabilities and the Financial
Statements also lack a
cash flow statement, a statement of changes in stockholders equity
and
footnotes.
2.8 No
Undisclosed Liabilities. Except as disclosed in the Financial
Statements, the Transferred Companies do not have any liabilities,
except: (a)
liabilities set forth on or reflected in the Financial Statements,
(b) (i)
contractual liabilities and (ii) other liabilities that are not
material, in
each case that were incurred prior to the date of the Most Recent
Balance Sheet
and not required under GAAP to be reflected on the Most Recent
Balance Sheet,
(c) liabilities incurred since the date of the Most Recent Balance
Sheet in the
Ordinary Course of Business and (d) liabilities with respect to
matters
disclosed in this Agreement (including matters disclosed in the
Seller
Disclosure Schedule).
2.9 Title
to Assets; Absence of Liens and Encumbrances. Seller or a
Subsidiary has the full right to sell, transfer and assign all of
the Fixed
Assets to Buyer. Seller or a Subsidiary has good, valid and
marketable title to,
or in the case of leased or subleased Fixed Assets, valid and
subsisting
leasehold interests in, the Fixed Assets, free and clear of all
Liens. Each
Transferred Company has good, valid and marketable title to, or in
the case of
leased or subleased tangible personal property, valid and
subsisting leasehold
interests in, the tangible personal property of such Transferred
Company, free
and clear of all Liens.
2.10
Condition of Assets. The Fixed Assets and the tangible personal
property held by the Transferred Companies are in reasonable
working order,
operating condition and state of repair, ordinary wear and tear
excepted, and
are in a condition adequate and suitable for the conduct of the
Business. No
written notice has been received by Seller or a Subsidiary from any
insurance
company that has issued a policy with respect to the Acquired
Assets or the
tangible personal property of any Transferred Company claiming any
defects or
deficiencies or requesting the performance of any repairs,
alterations or other
work relating to the Acquired Assets or the tangible personal
property of any
Transferred Company.
2.11
Compliance with Environmental Laws. The Transferred Companies
and
(with respect to the Business) Seller and the Retained
Subsidiaries: (i) have
obtained all material permits and approvals which are required to
be obtained
under all Environmental Laws; (ii) are in compliance in all
material respects
with all terms and conditions of such required permits and
approvals, and also
are in compliance in all material respects with all other
limitations,
restrictions, conditions, standards, prohibitions, requirements,
obligations,
schedules and timetables contained in applicable Environmental
Laws; and (iii)
have not since January 1, 2004 received written notice of any past
or present
violations of any Environmental Laws by Seller or a Subsidiary or
any event,
condition, circumstance, activity, practice, incident, action or
plan
-10-
<PAGE>
which is reasonably likely to interfere with or prevent continued
compliance
with or which would give rise to any common law or statutory
liability, or
otherwise form the basis of any claim, action, suit or proceeding,
against
Seller or a Subsidiary based on or resulting from the manufacture,
processing,
distribution, use, treatment, storage, disposal, transport or
handling, or the
emission, discharge or release into the environment, of any
pollutant,
contaminant or hazardous or toxic material or waste.
2.12
Litigation. There is no material action, suit, proceeding or
investigation pending or, to Seller's Knowledge, threatened
against, Seller or a
Subsidiary pertaining to the Business, any Acquired Assets or any
Transferred
Company, at law, in equity or otherwise, before or by any court or
governmental
agency. Neither the Business nor the Acquired Assets are subject to
any order,
writ, injunction, decree or judgment of any court or governmental
agency to
which Seller or a Subsidiary was a party.
2.13
Taxes.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean
taxes payable to any federal, state, provincial, local or foreign
taxing or
regulatory authority (other than taxes, fees and charges payable by
Buyer
pursuant to Section 4.9(d)), including (i) income, franchise,
profits, gross
receipts, ad valorem, net worth, value added, goods and services,
sales, use,
service, real or personal property, capital, capital stock,
license, payroll,
withholding, employment, social security, workers' compensation,
unemployment
compensation, Canada Pension Plan contributions, employment
insurance premiums,
utility, severance, production, excise, stamp, occupation,
premiums, windfall
profits, transfer and gains taxes, and (ii) interest, penalties,
surcharges,
additional taxes and additions to tax imposed with respect thereto;
and "Tax
Returns" shall mean returns, reports, and information statements,
returns and
reports with respect to Taxes required to be filed with the
Internal Revenue
Service (the "IRS") or any other federal, state, provincial, local
or foreign
taxing authority, including, without limitation, consolidated,
combined and
unitary tax returns.
(b) All material Tax Returns required to be filed by or which
include the Business or any Transferred Company have been timely
filed (giving
effect to valid extensions), and all material Taxes due and payable
with respect
to such Tax Returns relating to the Business or any Transferred
Company (whether
or not shown as due thereon) have been paid. Each of Seller and
each Transferred
Company has collected and withheld, and remitted all material Taxes
required to
have been collected, withheld and remitted in connection with
amounts paid or
owing to any employee, non-resident person, independent contractor,
creditor,
stockholder, or other third party in connection with the Business
and has
complied in all material respects with associated reporting
requirements. No
Transferred Company has any liability for unpaid Taxes of any
Person under
Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local
or foreign tax law) and Seller has no such liability for which
Buyer or a
Transferred Company could be liable.
(c) There are no outstanding Liens for material Taxes (other
than
Permitted Encumbrances) upon the Acquired Assets or the assets of
any
Transferred Company.
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<PAGE>
(d) There is no pending action, suit, proceeding, assessment or
reassessment or audit concerning any material Tax of any
Transferred Company.
Section 2.13 of the Seller Disclosure Schedule lists all federal,
state,
provincial, local, and foreign income Tax Returns filed with
respect to any
Transferred Company for taxable periods ended on or after September
30, 2002,
indicates those income Tax Returns that have been audited, and
indicates those
income Tax Returns that currently are the subject of audit. Seller
has made
available to Buyer correct and complete copies of all income Tax
Returns of each
Transferred Company for taxable periods ended on or after September
30, 2002 and
all examination reports, and statements of deficiencies assessed
against or
agreed to by any Transferred Company with respect to the Business
since
September 30, 2002.
(e) No Transferred Company has waived any statute of limitations
in
respect of Taxes or agreed to any extension of time with respect to
any income
Tax assessment or deficiency. No Transferred Company is a party to
any income
Tax allocation or sharing agreement with respect to the Business
which will
remain in effect after the Closing, other than pursuant to
commercial contracts
not primarily related to Taxes.
(f) The unpaid Taxes of the Transferred Companies (i) did not, as
of
the date of the Most Recent Balance Sheet, exceed by any material
amount the
reserve for Tax liability (rather than any reserve for deferred
Taxes
established to reflect timing differences between book and Tax
income) set forth
on the face of the Most Recent Balance Sheet and (ii) will not
exceed by any
material amount that reserve as adjusted for operations and
transactions through
the Closing Date in accordance with the past custom and practice of
the
Transferred Companies in filing their Tax Returns.
(g) Seller is a non-resident of Canada as defined in the Income
Tax
Act (Canada) ("CANADIAN ITA").
(h) Each of 1325949 Ontario Inc. and Brooks Automation
(Canada),
Inc. (each a "CANADIAN TRANSFERRED COMPANY" and collectively the
"CANADIAN
TRANSFERRED COMPANIES") is a registrant for purposes of Part IX of
the Excise
Tax Act (Canada). Neither Canadian Transferred Company is required
to be a
registrant for purposes of the Quebec Sales Tax Act. The shares of
each Canadian
Transferred Company are not "taxable Quebec property" within the
meaning of the
Quebec Taxation Act.
(i) Brooks Automation (Malaysia) Sdn Bhd ("BROOKS MALAYSIA")
has
been since its formation, and will remain, a "disregarded entity"
for U.S.
federal income tax purposes.
2.14
Employment Matters.
(a) Section 2.14 of the Seller Disclosure Schedule lists each
Employee Plan and each International Plan. With respect to each
Employee Plan
Seller has made available to Buyer a true and complete copy of each
of the
following, together with all amendments: (i) the Employee Plan (or,
where a
Employee Plan has not been reduced to writing, a summary of its
material terms),
and (ii) the most recent summary plan description or similar
summary and any
employee handbook referencing the Employee Plan.
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<PAGE>
(b) None of the Employee Plans is or has been a pension plan
(within
the meaning of Section 3(2) of ERISA) that is subject to Section
412 of the Code
or Title IV of ERISA or a multiemployer plan (within the meaning of
Section
3(37) or 4001(a)(3) of ERISA) that is subject to Title IV of ERISA.
None of the
Acquired Assets and none of the assets of any Transferred Company
is subject to
a Lien arising under Section 412 of the Code, Section 302 of ERISA
or Title IV
of ERISA, nor has any event occurred that could reasonably be
expected to give
rise to any such Lien.
(c) Each Employee Plan that is intended to be qualified under
Section 401(a) of the Code is the subject of a favorable
determination or
opinion letter from the IRS. Except as required by law, no Employee
Plan
provides medical or dental coverage following retirement or other
termination of
employment.
(d) Each Employee Plan has been administered in all material
respects in accordance with its terms and applicable Law, and all
contributions
(including salary reduction contributions), premiums and other
payments that are
due to be made have been timely made to or with respect to each
such Employee
Plan.
(e) Except as set forth on Section 2.14(e) of the Seller
Disclosure
Schedule, no Business Employee will accrue or become entitled to
receive
additional benefits, services, accelerated rights to payment of
benefits or
accelerated vesting arising out of a Contract or a binding
agreement or
arrangement with a Transferred Company, including the right to
receive any
parachute payment as defined in Section 280G of the Code, or become
entitled to
severance, termination allowance or other similar payment from
Buyer as a result
of this Agreement and the transactions contemplated hereby.
(f) Seller has (or has caused its Subsidiaries to have)
performed
all material obligations required with respect to each
International Plan. Each
International Plan has been maintained in compliance, in all
material respects,
with its terms and with any applicable Law. All material payments
(including
premiums due) and all employer and employee contributions required
to have been
collected in respect of each International Plan have been paid when
due, or if
applicable, accrued on the balance sheet of Seller and its
Affiliates.
2.15 Labor
Relations. Section 2.15 of the Seller Disclosure Schedule sets
forth a list of (a) each employee of Seller or a Subsidiary
primarily relating
to the Business and each Employee of a Transferred Company (all
such employees,
the "BUSINESS EMPLOYEES") and the salary or wage rate and bonus
potential for
such Business Employee; and (b) each other Person who is currently
performing
any material services to or on behalf of Seller or any Retained
Subsidiary for
the Business who is classified as a "consultant" or "independent
contractor" to
the Business (the "OTHER PERSONNEL"). There currently is no
existing dispute or
controversy between Seller or a Subsidiary and any Business
Employee that has
had, or would, individually or in the aggregate, reasonably be
expected to have,
a Material Adverse Effect. Seller does not anticipate that its
relationship or
the relationship of a Subsidiary with any Business Employee will
have, or would,
individually or in the aggregate, reasonably be expected to have, a
Material
Adverse Effect. To Seller's Knowledge, Seller and each Subsidiary
are in
compliance in all material respects with all employment agreements
and all other
agreements or understandings, whether oral or written, with all
past, present
and prospective employees of Seller or a Subsidiary
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<PAGE>
primarily related to the Business. Seller and each Retained
Subsidiary (with
respect to the Business) and each Transferred Company have, to
Seller's
Knowledge, complied in all material respects with all applicable
Laws respecting
employment and employment practices, terms and conditions of
employment, wages
and hours and other Laws related to employment. Neither Seller nor
any Retained
Subsidiary (with respect to any Business Employees) nor any
Transferred Company
is in arrears in the payment of wages, withholding or social
security Taxes,
unemployment insurance premiums or other similar obligations.
2.16
Contracts. Section 2.16 of the Seller Disclosure Schedule contains
a
true and complete list of all Contracts and all contracts, leases,
purchase
orders, instruments or other agreements of a Transferred Company
whether written
or oral, in each case of the types described below that are
currently in effect
as of the date of this Agreement:
(a) all outstanding offers of employment primarily related to
the
Business (other than those pursuant to which the aggregate base
compensation to
be paid by Seller or a Subsidiary to the offeree is less than
$75,000 per year),
and all employment and consulting agreements primarily related to
the Business
other than statutory employment agreements of employees outside of
the United
States that are required by applicable Law and that do not provide
for more
generous severance than the Seller's severance policy, which is
disclosed on
Section 2.14 of the Seller Disclosure Schedule;
(b) under which Seller or any Subsidiary is obligated to make
any
severance or retention payment which would become payable by reason
of this
Agreement and the transactions contemplated hereunder or for which
Buyer would
be obligated to make any severance or retention payment after the
Closing Date
which would become payable by reason of this Agreement and the
transactions
contemplated hereunder, but in any case other than statutory
employment
agreements of employees outside of the United States that are
required by
applicable Law;
(c) to sell (including, without limitation, options) or lease
(as
lessor) any property or asset included within the Acquired Assets
or the assets
of any Transferred Company, except in the Ordinary Course of
Business;
(d) pursuant to which Seller or a Subsidiary leases any
tangible
personal property with annual lease payments in excess of $25,000
per year;
(e) with suppliers, manufacturers, distributors or providers of
goods or services to the Business (excluding licenses to
off-the-shelf
software), that individually involve liabilities in excess of
$100,000;
(f) plans or programs pursuant to which payments, or an
acceleration
of or increase in benefits, may be required upon or after a change
of control of
the Business or otherwise upon the consummation of the transactions
contemplated
hereby;
(g) pursuant to which Seller or a Subsidiary agrees not to
compete
in any line of business which is part of the Business, now or at
any time in the
future with any Person or in any geographical area;
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<PAGE>
(h) which contain commitments of suretyship, guaranty or
indemnification (other than guarantees and indemnities provided in
connection
with the purchase, sale or lease of materials, supplies, utilities,
products or
other personal property or the rendition of services in the
Ordinary Course of
Business);
(i) which provide for the grant of a security interest in the
Acquired Assets or the assets of any Transferred Company;
(j) which provide for the extension of credit, constitute a Lien
or
pledge of any properties or relate to the borrowing or lending of
funds (other
than credit extended in connection with the purchase, lease or sale
of
materials, supplies, utilities, products or other personal property
or the
rendition of services in the Ordinary Course of Business);
(k) any material agency, dealer, distributor, sales
representative,
marketing or similar agreement;
(l) any material partnership agreement, joint venture agreement
or
other similar agreement, in each case that involves a sharing of
profits,
losses, costs or liabilities with another Person;
(m) any license or services agreement with an end user customer
of
the Business that was among the top 20 revenue-generating customers
of the
Business for the nine months ended June 30, 2006 under which the
Business earned
revenue during the fiscal year ended September 30, 2006; and
(n) all material
Intellectual Property licenses, sublicenses and
other material agreements with respect to Acquired Intellectual
Property or any
Intellectual Property of any Transferred Company, other than
licenses of
software in the Ordinary Course of Business to end user
customers.
Seller has made available to Buyer a true, complete and correct
copy of (i) each
of the contracts described above, and each of the Leases and
Transferred License
Agreements, each as in effect on the date hereof, and (ii) all
amendments and
supplements thereto and all waivers thereunder. Neither Seller nor
any
Subsidiary nor, to Seller's Knowledge, any other party is in
material default
under, or in material breach or violation of, nor has an event
occurred that
(with or without notice, lapse of time or both) would constitute a
material
default by Seller or any Subsidiary or, to Seller's Knowledge, any
other party
under, any Contract described above in this Section 2.16,
Transferred License
Agreement, Lease or any contract, lease, purchase order, instrument
or other
agreement of a Transferred Company described above in this Section
2.16. Neither
Seller nor any Subsidiary has any Outstanding Indebtedness or
capitalized lease
obligations relating primarily to the Business or is a guarantor or
otherwise
liable for any liability of any other Person relating primarily to
the Business.
2.17
Insurance. Seller and its Subsidiaries have obtained and
currently
maintain the insurance described in Section 2.17 of the Seller's
Disclosure
Schedule with respect to the Acquired Assets or the assets of any
Transferred
Company. To Seller's Knowledge, all such insurance policies are in
full force
and effect and there is no basis for cancellation thereof.
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<PAGE>
2.18
Leased Real Property.
(a) Section 2.18 of the Seller Disclosure Schedule sets forth
all
leases and subleases with respect to which any Transferred Company
leases or
subleases real property. Seller or a Subsidiary has a valid
leasehold interest
in the Leased Real Property, free and clear of all Liens, other
than Permitted
Encumbrances. Neither Seller nor any Subsidiary has entered into
any lease,
license, concession or other agreement granting to any Person other
than Seller,
a Subsidiary or Buyer the right of use or occupancy of any portion
of the Leased
Real Property.
(b) Each Lease and each lease listed on Section 2.18 of the
Seller
Disclosure Schedule (collectively the "ACQUIRED LEASES") (i) is
valid and in
full force and effect, and (ii) is enforceable in accordance with
its terms.
Neither Seller nor any Subsidiary has received any notice of
material default
under any Acquired Lease that remains uncured, and to Seller's
Knowledge, no
event has occurred that with notice, lapse of time, or both would
become a
material default under any Acquired Lease.
2.19
Intellectual Property.
(a) Section 2.19(a) of the Seller Disclosure Schedule sets forth
all
registered Intellectual Property which has been issued to any
Transferred
Company and each pending application for registration any
Transferred Company
has made. All maintenance payments and other payments or fees due
and payable on
and prior to the Closing Date for each such registration or
application and for
registration or application of the registered Acquired Intellectual
Property or
any registered Intellectual Property of any Transferred Company
have been made.
No third party has challenged the validity or enforceability of any
registered
Acquired Intellectual Property or any registered Intellectual
Property of any
Transferred Company and, to Seller's Knowledge, no third party has
infringed or
misappropriated any such Acquired Intellectual Property or
registered
Intellectual Property of any Transferred Company.
(b) In their conduct of the Business, to Seller's Knowledge,
neither
Seller nor any Subsidiary, to Seller's Knowledge has infringed
or
misappropriated any Intellectual Property rights of third parties.
To Seller's
Knowledge, there are no claims (threatened or pending) (i)
challenging the
validity, enforceability, effectiveness or ownership by Seller or
any Subsidiary
of any of the Acquired Intellectual Property or the Intellectual
Property of any
Transferred Company or (ii) to the effect that the use,
reproduction,
modification, manufacture, distribution, licensing, sublicensing,
sale of the
products or the Business, or any other exercise of rights in any of
the Acquired
Intellectual Property or the Intellectual Property of any
Transferred Company by
Seller or any Subsidiary, infringes on any Intellectual
Property.
(c) Except as disclosed in 2.19(c) of the Seller Disclosure
Schedule: (i) the material Intellectual Property of any Transferred
Company, and
the other material Intellectual Property that is used primarily in
or held for
use primarily in connection with, or that is primarily related to
or necessary
for, the operation of the Business, including the Intellectual
Property
identified on Schedule 1.1(d), but excluding the Intellectual
Property licensed
to Seller or any of its Subsidiaries under a valid license
agreement, is owned
solely by Seller or a Subsidiary free and clear of any Liens; and
(ii) the
material Intellectual Property that is used primarily in or held
for use
primarily in connection with, or is primarily related to or
necessary for, the
operation of
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the Business, and that is licensed to Seller or any of its
Subsidiaries under a
valid license agreement, is, to the Seller's Knowledge, rightfully
used and
authorized for use by Seller or its Subsidiaries and theirs
successors pursuant
to a valid and enforceable license, provided, however, that the
representations
and warranties contained in this Section 2.19(c), as such
representations and
warranties relate to infringement of the Intellectual Property of
any Person
other than Seller and its Subsidiaries, are made only to the
Seller's Knowledge.
(d) Neither Seller nor any of its Subsidiaries is in violation
of
any material license, sublicense or other agreement to which it or
any of its
Subsidiaries is a party or is otherwise bound, relating to any the
Acquired
Intellectual Property or the Intellectual Property of any
Transferred Company.
(e) Seller has taken commercially reasonable measures
consistent
with industry practice to protect the proprietary nature of the
Acquired
Intellectual Property and the Intellectual Property of any
Transferred Company
and to maintain in confidence all trade secrets and confidential
information
owned or used by Seller or any Subsidiary in the Business. Without
limitation,
such reasonable measures have included Seller requiring its
employees and
consultants to enter into non-disclosure and intellectual property
assignment
agreements to the extent that such employees or consultants have
worked with the
Acquired Intellectual Property and the Intellectual Property of any
Transferred
Company.
(f) Except as set forth on Section 2.19(f) of the Seller
Disclosure
Schedule, none of the material software developed for, or used in,
the Business
is subject to any "Copyleft" or other obligation or condition
(including any
obligation or condition under any "open source" license) that
could: (i) require
the Seller or its Subsidiaries to release any of the material
source code of
such Business software to the public; or (ii) otherwise impose any
material
limitation, restriction or condition on the distribution of such
Business
software.
2.20
Warranty and Product Liability Claims. To Seller's Knowledge,
each
product licensed and each service performed by Seller or a
Subsidiary in the
conduct of the Business with respect to which the applicable
warranty (or in the
case of a Law, statute of limitations) has not expired has been
delivered or
performed in substantial conformity with all applicable Laws and
all express and
implied warranties.
2.21
Absence of Certain Developments. From the date of the Most
Recent
Balance Sheet to the date hereof, the Business has been conducted
in the
Ordinary Course of Business and:
(a) neither Seller nor any Transferred Company has amended its
Charter;
(b) no Transferred Company has become liable in respect of any
guarantee or has incurred, assumed or otherwise become liable in
respect of any
Outstanding Indebtedness;
(c) neither Seller nor any Subsidiary has permitted any of the
Acquired Assets or the assets of any Transferred Company to become
subject to a
Lien other than a Permitted Encumbrance;
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(d) there has been no loss, destruction, damage or eminent
domain
taking (in each case, whether or not insured) affecting any
Acquired Asset or
asset of a Transferred Company, except as would not reasonably be
expected to
have, individually or in the aggregate, a Material Adverse
Effect;
(e) neither Seller nor any Subsidiary has increased the
compensation
payable or paid, whether conditionally or otherwise, to any
Business Employee
other than in the Ordinary Course of Business;
(f) other than in the Ordinary Course of Business, neither
Seller
nor any Subsidiary has entered into any contractual obligation
providing for the
employment or consultancy of any Business Employee, on a full-time,
part-time,
consulting or other basis or otherwise providing compensation or
other benefits
to any Business Employee;
(g) except in the Ordinary Course of Business, no Transferred
Company has made any change in financial accounting or financial
accounting
practices or made any material Tax election;
(h) neither Seller nor any Subsidiary has terminated or closed
any
facility, business or operation, in each case which primarily
relates to the
Business;
(i) Seller has not written up or written down any of the
Acquired
Assets or the assets of any Transferred Company;
(j) Seller has not entered into any contractual obligation to do
any
of the things referred to elsewhere in this Section 2.21;
(k) other than in the Ordinary Course of Business, Seller has
not
disposed of any assets which primarily relate to the Business in
excess of
$100,000; and
(l) no event or circumstance has occurred which has had, or is
reasonably likely to have, individually or in the aggregate, a
Material Adverse
Effect.
2.22
Brokers or Finders. No agent, broker, investment banker,
financial
advisor or other firm or person is or will be entitled to any
brokers' or
finder's fee or any other commission or similar fee in connection
with any of
the transactions contemplated by this Agreement, except Credit
Suisse Securities
(USA) LLC, whose fees and expenses will be paid by Seller in
accordance with the
agreement with such firm.
2.23
Sufficiency of Acquired Assets. The Acquired Assets together with
the
property and assets of the Transferred Companies constitute all of
the property
and assets (tangible and intangible) used or held for use primarily
in the
conduct of the Business by Seller or any of its Subsidiaries as it
is conducted
as of the date hereof except for the Excluded Assets, and, together
with the
services, occupancy and other rights to be provided to Buyer
pursuant to the
Transition Services Agreement, the patents licensed pursuant to the
Patent
License Agreement, the real and personal property leased pursuant
to the US
Lease Agreements and the Taiwan Sublease Agreement are adequate in
all material
respects for Buyer to conduct the Business as currently
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conducted by Seller and its Subsidiaries (it being understood,
however, that the
representations and warranties contained in this Section 2.23, as
such
representations and warranties relate to infringement by Seller of
the
Intellectual Property of any Person other than Seller and its
Subsidiaries, are
made only to the Seller's Knowledge).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer
represents and warrants to Seller as follows, except as set forth
in
the written disclosure schedule delivered on or prior to the date
hereof by
Buyer to Seller that is arranged in sections corresponding to those
contained in
this Article 3 (the "BUYER DISCLOSURE SCHEDULE") as follows:
3.1
Organization and Qualification. Buyer is a corporation duly
organized,
validly existing and in good standing under the laws of the
jurisdiction of its
incorporation.
3.2
Authority Relative to this Agreement. Buyer has all necessary
corporate power and authority to execute and deliver this Agreement
and to
perform its obligations hereunder and to consummate the
transactions
contemplated hereby. The execution and delivery of this Agreement
by Buyer and
the consummation by Buyer of the transactions contemplated hereby
have been duly
and validly authorized by all necessary corporate action on the
part of Buyer,
and no other corporate proceedings on the part of Buyer are
necessary to
authorize this Agreement or to consummate the transactions
contemplated hereby.
This Agreement has been duly and validly executed and delivered by
Buyer and,
assuming the due authorization, execution and delivery by Seller,
constitutes a
legal, valid and binding obligation of Buyer enforceable against
Buyer in
accordance with its terms.
3.3 No
Conflict, Required Filings and Consents.
(a) The execution and delivery of this Agreement by Buyer does
not,
and the performance of this Agreement by Buyer will not, and the
consummation of
the transactions contemplated hereby will not, (i) conflict with or
violate the
Charter of Buyer, (ii) conflict with or violate any Laws applicable
to Buyer or
by which its properties are bound or affected, or (iii) result in
any breach of
or constitute a default (or an event which with notice or lapse of
time or both
would become a default) under, or give to others any rights of
termination,
amendment, acceleration or cancellation of, or result in the
creation of a Lien
on any of the properties or assets of Buyer pursuant to, any note,
bond,
mortgage, indenture, contract, agreement, lease, license, permit,
franchise or
other instrument or obligation to which Buyer is a party or by
which Buyer or
its properties are bound or affected, except in any such case for
any such
conflicts, violations, breaches, defaults or other occurrences that
would not
reasonably be likely to materially delay or prevent the
consummation of the
transactions contemplated hereby.
(b) The execution and delivery of this Agreement by Buyer does
not,
and the performance of this Agreement by Buyer will not require any
consent,
approval, authorization or permit of, or filing with or
notification to, any
federal, state, local or foreign governmental or regulatory
authority to be
obtained or made by Buyer, except (i) for the pre-merger
notification
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requirements of the HSR Act and other applicable non-U.S. antitrust
laws, and
(ii) where the failure to obtain such consents, approvals,
authorizations or
permits, or to make such filings or notifications, would not
reasonably be
likely to delay or prevent the consummation of the transactions
contemplated
hereby.
3.4
Financial Ability to Perform. Buyer has cash funds sufficient as
and
when needed to pay
