Exhibit 10.1
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ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT ("Agreement") made as of the 12th day of
October, 2000, by and between AMERICAN MICROWAVE TECHNOLOGY, INC., a California
corporation (hereinafter called "Seller") and HERLEY INDUSTRIES, INC., a
Delaware corporation (hereinafter called "Buyer").
W I T N E S S E T H:
WHEREAS, Seller is engaged in the business of manufacturing and selling
radio frequency power amplifiers and desires to sell to Buyer its business unit
commonly referred to as medical /scientific unit ("Business Unit") and
substantially all of the Business Unit assets, as herein provided, and Buyer
desires to purchase the Business Unit and assets, all at the price and on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual representations,
covenants and warranties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE 1.
1.1 Purchase and Sale of Assets. Subject to the terms and conditions
hereof and based upon the representations, warranties, covenants and agreements
of the parties hereafter set forth, Buyer hereby agrees to purchase and accept
from Seller, and Seller agrees to sell, assign, transfer and convey to Buyer on
the Closing Date (as hereinafter defined) except as otherwise set forth in
Section 1.2 below and the Exhibits attached hereto, all of the assets used in or
related to the Business Unit, including without limitation, all of the Business
Unit related tangible and intangible assets, rights, interests and properties of
every kind and nature, wherever located and by whomever possessed, owned by
Seller as of the date hereof (together with any proceeds thereof or any payment
thereon which may be received by Seller subsequent to the date hereof), except
as otherwise specifically stated herein, free and clear of all security
interests, liens and encumbrances, including, without limitation, the following:
(a) All Business Unit related real property, machinery and other equipment,
telephone systems, vehicles, furniture, fixtures, computers and computer
software and fixed assets of Seller of any kind whatsoever, including
without limitation those Business Unit related assets reflected on the pro
forma Balance Sheet of Seller ("Balance Sheet") which reflects only
Business Unit related assets as described on Exhibit "A" attached hereto.
(b) All catalogues, shipping and office supplies, books of account and
other financial records necessary to or useful in the continued operation
of the Business Unit, customer lists and vendor lists, Business Unit
customer backlogs, telephone numbers and telephone directory listings, the
name AMT and any variation thereof, Business Unit patents, copyrights,
licenses and rights listed in Exhibit "B" attached hereto, all rights under
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any Business Unit contracts subject to consents required for assignment of
government contracts, licenses and permits, the Business Unit of Seller as
an operating business, and all Business Unit related intangible assets of
Seller of any kind whatsoever.
(c) All other Business Unit related assets property and rights of Seller of
any kind whatsoever, including, but not limited to, tax refunds, accounts
receivable and prepaid expenses.
(d) All Business Unit related inventories of supplies, merchandise,
packaging and promotional materials including raw material, works in
process and finished goods as attached in Exhibit H.
(e) All Business Unit related intellectual property rights.
The assets, property and rights to be transferred to Buyer by Seller
hereunder on the Closing Date are hereafter sometimes called the "Assets".
Notwithstanding the foregoing, it is expressly agreed that Seller shall be
entitled to use the name American Microwave Technology but not the name AMT in
connection with the assets and liabilities it retains.
1.2 Excluded Assets. The assets listed on Exhibit "E" are not
--------------- Assets and are excluded from the purchase
contemplated by this Agreement.
ARTICLE 2.
2.1 Payment of Purchase Price and Assumption of Liabilities.
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Subject to the terms and conditions set forth in this
Agreement, Buyer shall, in full consideration of the Assets to
be sold and assigned to Buyer:
(a) Pay to Seller or as otherwise directed by Seller the sum
of Five Million, Four Hundred Thousand Dollars ($5,400,000) by
cashier's check, bank check or wire transfer on the Closing Date.
(b) On the Closing Date, assume the following liabilities of
Seller and no others:
(i) Accounts payable as set forth in the attached Exhibit
"C", the aggregate of which shall not exceed $800,000.
(ii) Equipment lease obligations as set forth in the
attached Exhibit "D", the aggregate of which shall not exceed
$200,000.
(iii) All liabilities set forth in Exhibit "A" in an amount
not to exceed $1,153,191.
The liabilities and obligations to be assumed and referred to in (i)
through (iii) above are hereinafter termed the "Assumed Liabilities". Except as
expressly set forth in this Agreement, no liabilities or obligations of Seller
shall be assumed by Buyer.
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(c) Any provision of this Agreement to the contrary notwithstanding,
Buyer will not and does not assume the following liabilities and
obligations of Seller even if, to any extent, they were reflected in
the Financials set forth at Exhibit "F" and arose in connection with,
were incurred by or were related to the operation of the Business
Unit:
(i) liabilities or obligations of Seller to any officer, director or
stockholder of the Seller, whether or not owed to such person in his
capacity as such, any person affiliated with any of the foregoing or
any person related to or sharing a household with any of the foregoing
except liabilities for accrued wages and salaries reflected in the
Balance Sheet.
(ii) expenses incurred by the Seller in connection with the
transactions contemplated herein, including, without limitation, fees
and expenses of Seller's finder's fees to Decisionpoint, counsel and
accountants.
(iii) any obligation or liability of the Seller to the Buyer.
(iv) any foreign, federal, state o local tax based on income or
revenues or interest or penalties relating thereto, whether arising by
reason of the sale of the Assets as herein provided or by reason of
the existence or operations of the Seller prior to or after the date
hereof and any sales or use taxes incurred by Seller on or prior to
the Closing.
(v) to the extent not paid for under existing insurance policies
assigned to Buyer hereunder, workman's compensation claims against
Seller based on occurrences prior to the Closing Date.
(vi) to the extent not paid for under existing insurance policies
assigned to Buyer hereunder, liabilities to third parties for tort and
product liability claims made against Seller prior to the Closing Date
based upon occurrences prior to the Closing Date.
(vii) all obligations of Seller incurred after the date hereof other
than those incurred in the ordinary course of business.
(viii) all other liabilities or obligations of Seller to the extent
any of such liabilities or obligations constitute a breach of the
representations or warranties of Seller set forth in Article 3 hereof.
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(ix) obligations or liabilities of Seller with respect to any employee
option or benefit plan including, without limitation, any underfunding
or termination liability.
(x) liabilities or obligations of Seller in connection with its
failure to obtain, its failure to maintain in full force and effect or
its default under any approval, authorization, consent, certificate of
occupancy (or local equivalent), license, franchise, order or other
permit of any governmental or regulatory agency, whether federal,
state, local or foreign necessary to the operation of Seller's
business as presently conducted including, without limitation, the
construction, alteration, operation, use or occupancy of the premises
occupied by Seller, or any improvements thereon.
(xi) except to the extent provided in Section 2.1(c)(i) above or as
otherwise expressly provided herein or in any other document executed
in connection herewith, any liabilities to employees or former
employees of the Seller, and their beneficiaries, whether pursuant to
agreement or otherwise, including those for salaries, bonus and
employment benefits, fringe benefits, insurance, welfare, post
retirement medical, medical reimbursement, deferred compensation, sick
pay, termination, severance, stock option, stock purchase, accident,
disability, vacation, health, medical and worker's compensation
insurance or benefits.
(xii) any and all environmental liabilities arising out of or
resulting from any or all of the following conditions, which
hereinafter are collectively referred to as the "pre-closing liability
conditions": (A) the existence prior to the Closing Date of hazardous
materials upon, within or beneath any of the real property, or
migrating from such real property; (B) any violations of environmental
requirements premised upon, or arising out of any of the conditions
described in (A) above; (C) any violations of environmental
requirements pertaining to the use or operation of the real property
or any other of the Assets prior to the Closing Date, or the conduct
of operation of the business of the Seller prior to the Closing Date;
and (D) the existence of any underground storage tank (USTs) at the
real property.
(xiii) any other liabilities or obligations of Seller which are not
expressly assumed hereunder.
Notwithstanding the foregoing, Seller shall not have any liability or
responsibility whatsoever arising in any way from actions or inactions
of Buyer relative to the Assumed Liabilities, Assets or the Business
Unit purchased by Buyer hereunder after the Closing to the extent
Buyer's actions impair the Assets or Business Unit.
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ARTICLE 3.
3.1 Representations and Warranties of Seller.
------------------------------------------- Seller represents,
warrants and covenants as follows:
(a) Seller is a corporation duly organized, validly existing
and in good standing under the laws of the State of California. Seller
is not required by reason of its present ownership of property or
present operations to be qualified to do business in any other state.
Seller does not have any subsidiaries.
(b) Seller has corporate power to enter into and carry out this
Agreement and related documents, has no contractual or other
restriction upon its so doing and has properly secured the approval of
this Agreement by its Board of Directors and stockholders; and
Seller's executing officers are authorized thereby to execute this
Agreement, and such other documents as may be necessary to consummate
the transaction contemplated herein. The Agreement and related
documents to which Seller is a party executed on the Closing Date will
be valid and binding agreements of Seller, enforceable against Seller
in accordance with their terms.
(c) Attached hereto as Exhibit "F" are copies of the unaudited
financial statements of Seller for the year ended December 31, 1999
and unaudited financial statements for the period ended August 26,
2000, including the balance sheet of the Seller as at August 26, 2000,
and statement of operations and retained earnings, and. changes of
cash flows of the Seller, with appended notes to all such financial
statements, which are an integral part of such statements
(collectively the "Financials"). The Financials have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis and present fairly the financial position and results
of operations of Seller at the dates and for the periods specified.
(d) There has been no material change in the financial condition,
assets or liabilities of Seller as they relate to the Business Unit
and the Assets from August 26, 2000 to the date hereof, except for
changes which have occurred in the ordinary course of business, none
of which have been materially adverse.
(e) The only real property owned by Seller are real estate leases
as described in Exhibit "G" attached hereto. Aside from Exhibit "G",
the Seller neither owns nor has interest in or rights to any real
estate.
(f) Exhibit "A", attached hereto, includes a true and correct
list of all fixed assets owned by Seller used in the Business Unit and
a schedule of all leases of fixed assets used in the Business Unit and
personal property used in the Business Unit under which Seller is
lessee, all of which leases are valid and binding and not in default,
by either lessor or lessee thereunder.
(g) Seller has not received any notice from any governmental
authority that its real estate, or personal property within the Assets
violate the provisions of any building or
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similar code, nor does Seller have knowledge of any basis for
such a claim. Seller is conveying to Buyer all the equipment and
property previously required by Seller for the proper operation of its
Business Unit. Except with respect to government contracts and
governmental licenses and permits, no consent (except those which have
already been obtained) are necessary to transfer to the Buyer any of
the Assets, property or rights of the Business Unit, including any
leases or licenses of personal property or other rights.
(h) The Assets are and will be on the Closing Date owned by
Seller free and clear of any liens, encumbrances or restrictions,
except as specifically reflected in the Exhibit "J".
(i) From and after the date of this Agreement and until the
Closing Date, the Business Unit has been and will be operated in the
ordinary course consistent with past practices and there has not or
will not have been:
(i) any damage, destruction or loss, whether or not covered by
insurance, which has had, or will have, a material adverse effect on
the Business Unit;
(ii) any strike, picketing or similar labor trouble which has
had, or will have, a material adverse effect on the Business Unit;
(iii) any license, sale, transfer, mortgage or other disposition
of any Assets except in the ordinary course of business, or any
license, sale, assignment, transfer or other disposition of any
patent, copyright, trademark, license, franchise, know-how,
proprietary process, formula or other intangible asset used in the
Business Unit;
(iv) any change in the benefits or compensation payable or to
become payable to officers or employees in any form, including
bonuses, pension, severance, etc.;
(v) any loans, advances or capital contribution to or investment
in any person or entity;
(vi) any issuances or sale of any stock, bond or other corporate
security;
(vii) any material adverse change in the condition (financial or
otherwise) of the Business Unit.
(j) Seller has not received any notic from any governmental
agency with respect to any "alleged material violation" (i.e., an
alleged violation which would have a material adverse effect on the
Business Unit) by it of any applicable federal, state or local
environmental or health and safety statutes and regulations in
connection with the Business Unit, nor does Seller know of any basis
for any investigation or proceeding against it by any federal, state
or local environmental or health and safety enforcement agency
regarding such a violation in connection with the operation of the
Business Unit. To the best knowledge of Seller, neither Seller nor any
predecessor of Seller has been
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alleged to be in material violation of, or has been subject to
any administrative or judicial proceeding pursuant to such
environmental laws and regulations with respect to the Business Unit,
either now or at any time during the past three years, and so far as
Seller is aware, there are no such threatened or proposed violations
with respect to the Business Unit.
(k) The equipment and other personal property included within the
Assets taken as a whole, is in good operating condition in all
material respects, subject to normal wear and tear.
(l) Except as set forth in Exhibit "I ", there are no material
agreements or contracts to which the Business Unit of Seller is a
party or by which it is bound.
(m) With respect to government contracts or OEM subcontracts
included within the Assets, there are (i) no outstanding written cure
notices or show causes, (ii) any written notices of contract
termination or stop work orders, (iii) any written final decision
assessing a penalty or damages, (iv) any written assertion of a formal
claim based on violation of government cost accounting standards or
government pricing, or (v) any formal notice of proposed disallowance
of indirect cost claims, any subpoena or written notice signifying
government investigation.
(n) Seller is not aware of any fact or circumstance which would
have an adverse effect on the efforts of Seller and Buyer to obtain
novation agreements and to otherwise obtain all required consents.
(o) Seller is not in default or breach with respect to any
material obligation under any of its vendor, supplier or customer
contracts, including the government contracts relative to the Assets.
(p) All inventory within the Assets reflected on the balance
sheet at August 26, 2000 is, and on the Closing Date will be, of
usable quality, except as may be otherwise reserved for and reflected
on the Seller's financial statements.
(q) Seller has never had any labor trouble, by which is meant
employee strikes, work stoppages, slow downs or lock outs, or any
threats thereof. None of Seller's employees has ever been covered by a
collective bargaining agreement between Seller and any labor union.
(r) Exhibit "B", attached hereto contains a complete listing of
all patents, licenses, trademarks, trade names, brand names,
copyrights, logos, inventions, trade secrets, and other proprietary
information used or required by Seller in connection with the carrying
on and conduct of its Business Unit, none of which, to the best
knowledge of Seller, infringes the rights of others. Seller is the
sole owner of or has the exclusive right to use, for the life of the
proprietary rights, all patents, trademarks, service marks,
tradenames, copyrights, inventions, logos, trade secrets, etc. used in
the Business Unit.
(s) Seller has timely and properly filed all federal, state and
other tax returns
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and reports, statements and other documents which it is or has
been required to file, and has paid all taxes, including interest and
penalties, if any, which have become due pursuant to tax returns and
reports filed and pursuant to assessments received by it. Seller has,
to the date hereof, properly accrued, and will pay when due, all
federal, state and other tax liabilities of Seller.
(t) To the best of its knowledge, Seller has complied in all
material respects with all laws, rules, regulations, ordinances,
judgments, decrees and orders of federal, state and local authorities
and agencies applicable to its Business Unit, the violation of which
could result in liability to Seller of $2,000 or more. Seller has
substantially complied with all requirements under necessary permits,
authorizations, or licenses and has, as of the date hereof, secured
such permits, authorizations and licenses in connection with the
Assets. Notwithstanding the foregoing, Seller has fully disclosed to
Buyer the circumstances surrounding its ESOP, including the fact that
the Department of Labor has requested information about the ESOP.
(u) Except as set forth on Exhibit "K," there are no actions at
law or in equity pending or, to the best knowledge of Seller,
threatened against or adversely affecting Seller or any of the Assets,
and except as set forth on Exhibit "K," there are no proceedings
pending or, to the best knowledge of Seller, threatened against Seller
by or before any governmental board, department, commission or agency
involving the Assets.
(v) None of the real property nor to the best knowledge of the
Seller any real property previously owned or leased by Seller or any
of its predecessors have been used at any time in connection with the
Business Unit: (i) as a site for the storage or disposal of waste
(including, without limitation, as that term is used in the Resource
Conservation Recovery Act (the "Conservation Act") (42 U.S.C. 901 et
seq); (ii) so as to cause a violation of or to give rise to a removal
or restoration obligation or liability for the costs of removal or
restoration by others, or liability for damages to others, under any
statute, ordinance, order, decree, or under the common law of any
state, federal, municipal or other governmental entity, body or agency
having jurisdiction over any of the real property or any such
previously owned or leased property, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability
Act, as amended ("CERCLA") (42 U.S.C. 9601 et seq.), or any similar
Environmental Requirement, nor has any such violation, obligation or
liability been created by the removal by or at the request of the
Seller or, to the best knowledge of the Seller, any of its
predecessors of any waste from the real property or such leased or
previously owned or leased properties, the disposition of such removed
waste or by reason of the discontinuance of operations of any business
conducted at the real property or the previously owned or leased
properties or (iii) to the best knowledge of the Seller, for storage
of hazardous materials in USTs. Seller has delivered to Buyer true,
complete and correct copies or results of any reports, studies or
tests in the possession of or initiated by Sellers pertaining to the
existence of hazardous materials and other environmental concerns at
any part of the real property or any properties previously owned or
leased by Seller or any of its predecessors or concerning compliance
with or liability under laws relating to toxic waste and other
environmental matters in the operation of the business and properties
of the Seller or any of its predecessors.
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(w) Seller has no reason to believe that the accounts receivable
being conveyed to Buyer hereunder are uncollectible.
(x) Seller is not in default, or alleged to be in default, under
any agreement, instrument or obligation, which singly or in the
aggregate might have an adverse effect on the Seller's Business Unit.
There is no default by any party with whom the Seller has an agreement
which is of material importance to the Seller's Business Unit.
(y) Except with respect to government contracts, licenses and
permits for which consent is required, there is no material asset,
property or right used or required by the Buyer in the conduct of the
Business Unit which is not being conveyed, transferred, or assigned to
Buyer under this Agreement.
(z) Except as set forth on Exhibit "L", neither the execution and
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, violates any provision of the articles of
incorporation or by-laws of Seller; violates or is in conflict with or
constitutes a default (or an event which, with notice or lapse of
time, or both, would constitute a default) under, or results in the
termination of, or accelerates the performance required by, or excuses
performance by any person of any of its or their obligations under, or
causes the acceleration of the maturity of any debt or obligation
pursuant to, or results in, the creation or imposition of any lien or
encumbrance upon any of the Assets under any agreement or commitment
to which Seller is a party or by which any of its Assets is bound, or
to which any of the Assets of the Seller is subject; or violates any
statute, law, regulation, rule, judgment or order of any court or
other governmental body.
(aa) The insurance coverage of Seller is within industry
standards for the Assets and Business Unit.
(bb) Seller has not employed any broker, finder, investment
banker or financial advisor as to whom the Seller may have an
obligation to pay monies, or incurred any liability for any brokerage
fees or commissions or for any finders' investment banking or
financial advisory fees for which the Seller may be responsible in
connection with the transactions contemplated hereby except finder's
fees to Decisionpoint in the amount of $432,000.
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(cc) No representation or warranty made in this Agreement by the
Seller, nor any statement, schedule or certificate furnished or to be
furnished to the Buyer pursuant hereto, or in connection with the
transactions contemplated hereby, contains or will contain any untrue
statement of a material fact, or omits or will omit to state a
material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE 4.
4.1 Representations and Warranties of Buyer.
----------------------------------------- Buyer represents and
warrants to Seller that:
(a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware with corporate power to carry
on its business as now conducted. Buyer has corporate power to enter into and
carry out this Agreement, has no contractual or other restriction upon its so
doing, and has properly secured the approval of its Board of Directors to do so,
no other approval being required. Buyer's executing officers are authorized
thereby to execute this Agreement, and such other documents as may be necessary
to consummate the transactions contemplated herein.
(b) Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, violates any provision of
the certificate of incorporation or by-laws of Buyer; violates or is in conflict
with or constitutes a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or results in the termination of, or
accelerates the performance required by, or excuses performance by any person of
any of its or their obligations under, or causes the acceleration of the
maturity of any debt or obligation pursuant to, or results in the creation or
imposition of any lien or encumbrance upon any property or assets of Buyer under
any agreement or commitment to which Buyer is a party or by which any of its
property or assets is bound, or to which any of the property or assets of the
Buyer is subject; or violates any statute, law, regulation, rule, judgment or
order of any court or other governmental body.
(c) Buyer will use all reasonable efforts to release Seller from those
liabilities which Buyer has expressly agreed to assume under this Agreement.
(d) No representation or warranty made in this Agreement by the Buyer, nor
any statement, schedule or certificate furnished or to be furnished to the
Seller pursuant hereto, or in connection with the transactions contemplated
hereby, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading.
ARTICLE 5.
5.1 Operations of Business Unit Since August 26, 2000 . Since August
26, 2000, the Seller has adhered to the following restrictions:
(a) Seller has conducted the Business
Unit in the ordinary and usual course
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and has used its best efforts to maintain the Business Unit and the
goodwill thereof in accordance with its prior practice.
(b) Seller has maintained the Assets owned or leased by Seller in the same
condition as the same were on August 26, 2000, reasonable wear and tear excepted
and dispositions in the ordinary course of business, which dispositions have not
been material in the aggregate.
(c) Seller has not mortgaged, pledged or subjected to any lien or
encumbrance any of the Assets or suffered or permitted, any of the Assets to
become encumbered or subject to any lien.
(d) Seller has not made or declared any distribution, transfer or dividend
to its shareholders, or sold or disposed of, or made any offer, agreement or
contract relating to the sale or disposition of, any of the Assets acquired by
Seller since August 26 2000 (with the further exception of those which have been
disposed of in the ordinary course of business consistent with historical
practice).
(e) Except as otherwise disclosed to Buyer Seller has not incurred or
become liable for any obligation or liability except current liabilities
incurred in the ordinary course of business consistent with historical business
practices.
(f) Seller has not made increases in employees' salaries or benefits
subsequent to August 26, 2000 except for a $150,000 termination payment to Hans
Gregory Wood which is not being paid from the Business Unit Assets.
(g) Seller has paid or accrued all operating costs since August 26, 2000,
including but not limited to all wages and salaries as the same shall have
become due and payable, any premiums due on employee health insurance and other
insurance policies, utility bills, rents, all payments required for merchandise
and services received during such period, and all other expenses of the type
ordinarily and reasonably incurred by Seller's business since August 26, 2000.
ARTICLE 6.
6.1 Conditions to Obligation of Buyer to Close. The obligation of Buyer
to purchase the Assets and otherwise to consummate the transactions that are to
be consummated at the Closing is subject to the satisfaction, on or before the
Closing Date, of the following conditions (any of which may be waived by Buyer
in whole or in part):
(a) All required consents shall have been duly obtained or obviated, except
where (i) the failure to obtain any such required consents would not reasonably
be expected to subject Buyer to any material penalty or loss, including loss of
partial revenue, or (ii) such required consent relates to an assigned contract
or a related assumed liability, as to which the parties will proceed pursuant to
Article 8.
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(b) The representations and warranties of Seller set forth in Article 3
shall be true and correct in all material respects on the Closing Date.
(c) Seller shall have complied with and performed, in all material
respects, all obligations required by this Agreement to be complied with or
performed by Seller on or before the Closing Date.
(d) Seller shall have delivered to Buyer a certificate, dated as of the
Closing Date, to the effect that the conditions set forth in Sections (b) and
(c) pursuant to this Article 6 have been satisfied.
(e) Buyer shall have entered into an employment agreement with Hans Gregory
Wood, in conformity with the form of agreement annexed hereto as Exhibit "M".
(f) Seller shall have fully complied with the provisions of any so-called
Bulk Sales Laws applicable to the conveyance to Buyer of the Assets.
ARTICLE 7.
7.1 Conditions to Obligation of Seller to Close. The obligation of
Seller to sell the Assets to Buyer and otherwise to consummate the transactions
that are to be consummated at the Closing is subject to the satisfaction, on or
before the Closing Date, of the following conditions (any of which may be waived
by Seller in whole or in part):
(a) All required consents shall have been duly obtained or obviated, except
where (i) the failure to obtain any such required consents would not reasonably
be expected to subject Seller to a material penalty or loss or (ii) such
required consent relates to an assigned contract or a related assumed liability,
as to which the party will proceed pursuant to Article 8.
(b) The representations and warranties of Buyer set forth in Article 4 and
the representations and warranties of Buyer set forth in the other instruments
shall be true and correct in all material respects on the Closing Date.
(c) Buyer shall have complied with and performed, in all material respects,
all obligations required by this Agreement to be complied with or performed by
Buyer on or before the Closing Date.
(d) Buyer shall have delivered to Selle a certificate dated as of the
Closing Date, to the effect that the conditions set forth in Sections (b) and
(c) of this Article 7 above have been satisfied.
(e) Buyer shall have entered into an Employment Agreement with Hans Gregory
Wood, in conformity with the form of agreement annexed hereto as Exhibit "M".
ARTICLE 8.
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8.1 Best Efforts to Obtain Consents.
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(a) Where required, Seller and Buyer shall notify Seller's customers and
suppliers that Seller's obligations under its contracts, including government
contracts, will, after the closing, be performed by Buyer. Prior to the Closing,
Seller will use its best efforts to obtain the consents of any parties to the
contracts which require such consent to be obtained prior to transfer of the
contracts to Buyer ("Pre-closing Consents"). Seller and Buyer will cooperate and
use their best reasonable efforts to obtain (i) novation agreements to the
extent required by law to each government contract ("Novation Contracts ") as
soon as reasonably possible, (ii) any security clearances, licenses or similar
permits required to operate any facility or conduct any portion of the Business
Unit, and (iii) all other consents, approvals, novations, and waivers necessary
to convey to Buyer any of the Assets which are not required by law or by
contract to be obtained prior to the Closing Date. (All Novation Contracts and
other consents, security clearances, permits, approvals and waivers described in
(i), (ii) and (iii) above are hereinafter referred to as "Post-closing Consents
".).
(b) To the extent that the assignment by Seller and the assumption by Buyer
of any contracts included within the Assets shall require the consent or
approval of any third party, this Agreement shall not constitute an assignment
and/or assumption thereof if such attempted assignment or assumption would
constitute a breach thereof.
(c) Until (i) any Novation Contract legally required with respect to any
government contract has been executed and delivered and (ii) Seller and Buyer
have obtained any Post-closing Consents necessary to convey to Buyer any
contract not requiring a Novation Contract pursuant to Section 1 of this Article
8 above, Buyer on behalf of Seller, from and after the Closing Date, shall
assume and perform (as a subcontractor to Seller in the case of government
contracts) and Buyer shall assume and perform, for the benefit of the issuer
thereof or other party or parties thereto, the liabilities, responsibilities and
obligations of Seller thereunder (other than the liabilities, responsibilities
and obligations of Seller under Section (d) of this Article 8.
(d) Until Seller and Buyer have obtained any Novation Contracts or
Post-closing Consents necessary to convey to Buyer any contracts, including
government contracts pursuant to Section (a) of this Article 8, Seller from and
after the Closing Date will (i) promptly transmit to Seller's government
contract customers, Seller's invoices based upon the invoices submitted by Buyer
to Seller pursuant to Section (e) of this Article 8, (ii) receive payments
tendered to Seller by such government contract customers and promptly remit such
payments to Buyer, (iii) enforce for the benefit of Buyer all rights of Seller
under any government contract, and (iv) take any other reasonable actions
necessary to allow Buyer to perform its obligations and derive its benefits as a
subcontractor under the government contracts.
(e) From and after the Closing Date and until the applicable Post-closing
Consents are obtained, Buyer shall take all reasonable action necessary to allow
Seller to perform its obligations under the government contracts, including but
not limited to
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promptly submitting invoices to Seller for such payments or reimbursements
as are appropriate in accordance with the respective terms of such government
contracts.
ARTICLE 9.
9.1 The Closing.
-----------
(a) The Closing hereunder shall take place at the offices of McAndrews,
Allen & Matson on October 12, 2000 at 9:00 a.m, (the "Closing Date").
(b) On the Closing Date, (a) Seller shall transfer the Assets to Buyer by
good and sufficient deeds, bills of sale, assignments and other documents and
instruments of conveyance reasonably satisfactory to counsel for Buyer; and (b)
Buyer shall deliver to Seller the cash payment payable on the Closing Date (by
cashier's check or wire transfer) and duly executed instrument or instruments
reasonably satisfactory to counsel for Seller evidencing the assumption by Buyer
of the Assumed Liabilities.
(c) Seller shall furnish to Buyer, on the Closing Date, the Exhibits.
(d) Except as otherwise provided in Articl 8, Seller shall have received on
or prior to the Closing Date, all required consents of third parties to the
consummation of the transactions provided for herein, including consents to the
assignment of the material contracts, leases and agreements addressed above in
Section 6.1.
(e) Seller shall furnish to Buyer on the Closing Date resolutions duly
adopted and carried by its directors authorizing the execution, delivery and
performance of this Agreement and evidence of shareholder approval of the sale
of the Business Unit certified by its secretary.
(f) Seller shall furnish to Buyer, on the Closing Date, an opinion of
counsel for Seller in form and substance reasonably satisfactory to counsel for
Buyer to the effect that:
(i) Seller is a corporation duly organized, existing and in good
standing under the laws of the State of California, with corporate
power to enter into and perform this Agreement and transfer the Assets
as provided for herein.
(ii) This Agreement has been duly authorized, executed and
delivered by Seller and constitutes its legal, valid and enforceable
obligation in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally.
(iii) The carrying out of the transactions provided for herein
will not violate any charter or by law of Seller nor, to counsel's
knowledge, any corporate restriction, agreement, or arrangement to
which Seller is a party or to which it is
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subject.
(iv) The bills of sale and other documents of conveyance and
transfer delivered to Buyer by Seller on the Closing Date have been
duly authorized, executed and delivered by Seller and are adequate
under the laws of California to effect such conveyance and transfer.
(g) Buyer shall furnish to Seller, on the Closing Date, an opinion of
counsel for Buyer in form and substance reasonably satisfactory to counsel
for Seller to the effect that:
(i) Buyer is a corporation duly organized, existing and in good
standing under the laws of the State of Delaware with corporate power
to enter into and perform this Agreement.
(ii) This Agreement has been duly authorized, executed and
delivered by Buyer and constitutes the legal, valid and enforceable
obligation in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally.
(iii) This Agreement and the carrying out of the transactions
herein provided for will not violate any charter or to our knowledge
other corporate restrictions, agreements or arrangements to which
Buyer is subject.
ARTICLE 10.
10.1 Survival of Representations and Warranties of Seller, and
Indemnification.
---------------
(a) The representations, covenants and warranties of Seller
contained in this Agreement or any Exhibit attached hereto or any
certificate delivered pursuant hereto shall survive the Closing Date
for two years.
(b) Notwithstanding any investigation of Seller or the Assets or
Business Unit which is made by or on behalf of Buyer prior to the
Closing Date, Seller shall indemnify, defend, and hold harmless Buyer
against any loss, expense (including reasonable cost of investigation
and legal fees), or other damage resulting from (i) any material
breach by Seller of any of their warranties, representations or
agreements contained herein, (ii) any action or claim which is brought
or asserted by third parties against Buyer or any successor arising
out of the conduct of Seller (except the Assumed Liabilities expressly
assumed by Buyer pursuant to Article 2 hereof) or on account of the
non-compliance by Buyer with the provisions of any so-called Bulk
Sales Law applicable to the conveyance to Buyer of the Assets, (iii)
any failure by Seller to perform any covenant, undertaking or
obligation hereunder, or (iv) any liability arising as a result of any
of the proceedings listed on Exhibit "K"; to the extent any such claim
or claims exceed in the aggregate $50,000.
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(c) If any action or claim shall be brough or asserted against
Buyer or any successor in respect of which indemnity may be sought
from Seller pursuant to paragraph 10.1 (b) of this Article 10, Buyer
shall timely notify Seller and Seller shall assume the defense
thereof, including the employment of counsel reasonably satisfactory
to Buyer, and the payment of all expenses. Buyer shall have the right
to employ separate counsel in any such action and participate in the
defense thereof, but the fee and expenses of such counsel shall be at
the expense of Buyer unless (i) the employment thereof shall have been
specifically directed by Seller, or (ii) Seller shall have elected not
to assume the defense and employ counsel. For the purpose of this
section, notice given within thirty (30) days after the occurrence
giving rise to the right of indemnification shall be "timely" but
notice given later than such thirty (30) days shall not terminate a
party's right to indemnification unless the party receiving such
notice can demonstrate that its rights have been adversely affected in
a material fashion by such allegedly untimely notice.
(d) The indemnity liability of the Seller herein shall not exceed
the amount of the purchase price to be paid by Buyer under Article 2
hereof.
10.2 Survival of Representations and Warranties of Buyer, and
Indemnification.
---------------
(a) The representations and warranties of Buyer contained in this
Agreement or any Exhibit attached hereto or any certificate delivered
pursuant hereto shall survive the Closing Date for two years.
(b) Notwithstanding any investigation of Buyer which is made by
or on behalf of Seller prior to the Closing Date, Buyer shall
indemnify, defend, and hold harmless Seller against any loss, expense
(including reasonable cost of investigation and legal fees), or other
damage resulting from (i) any breach by Buyer of any of its
warranties, representations or agreements contained herein, (ii) any
failure by Buyer to perform any covenant, undertaking or obligation
hereunder, or (iii) any action or claim brought or asserted, by third
parties against Seller which relates to the Assets or the conduct of
the Business Unit by Buyer after the Closing Date; to the extent any
such claim or claims exceed in the aggregate $50,000.
(c) If any action or claim shall be brough or asserted against
Seller or any successor in respect of which indemnity may be sought
from Buyer pursuant to paragraph 10.2(b) of this Article 10. Seller
shall timely notify Buyer and Buyer shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to Seller,
and the payment of all expenses. Seller shall have the right to employ
separate counsel in any such action and participate in the defense
thereof, but the fee and expenses of such counsel shall be at the
expense of Seller unless (i) the employment thereof shall have been
specifically directed by Buyer, or (ii) Buyer shall have elected not
to assume the defense and employ counsel. For the purpose of this
section, notice given within thirty (30) days after the occurrence
giving rise to the right of indemnification shall be "timely" but
notice given later than such thirty (30) days shall not terminate a
party's right to indemnification unless the party receiving such
notice can demonstrate that its rights have been adversely affected
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in a material fashion by such allegedly untimely notice.
ARTICLE 11
11.1 Covenants and Agreements Pertaining to the Period Subsequent to
---------------------------------------------------------------------
Closing.
-------
(a) After the Closing:
(i) Seller shall indemnify Buyer from, and use its best
efforts to promptly discharge or cause to be discharged as
they become due, all debts, obligations and liabilities of
Seller other than the Assumed Liabilities
(ii) Buyer shall indemnify Seller from, and promptly
discharge, or cause to be discharged as they become due, the
Assumed Liabilities and those liabilities arising out of the
conduct of the Business Unit by Buyer after the Closing
Date.
(b) Upon the request of either Buyer o Seller, the other party
will execute and deliver to the requesting party all such instruments
and documents of further assurance or otherwise, and will do any and
all such acts and things as may reasonably be required to carry out
the obligations of such party hereunder and to consummate the
transactions contemplated hereby.
(c) Seller and its representatives shall, upon reasonable notice
and at reasonable times, have access to Seller's records which have
been left in the possession of Buyer for the purpose of winding up its
affairs and filing and paying its tax obligations.
(d) From and after the date hereof, the Seller and its officers
and directors will, and Seller will cause its officers and directors
to, hold in a fiduciary capacity for the benefit of Buyer all
confidential information, knowledge, and data relating to or
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concerned with the Business Unit and shall not divulge, and shall
cause such officers and directors not to divulge, any such
confidential information, knowledge, or data to any person, firm or
corporation other than Buyer.
(e) Buyer will not assign, transfer or convey the Business Unit
to any third party without requiring such third party to assume the
obligations of Buyer hereunder. Such assignment, transfer or
conveyance will not release or modify any of the obligations of Buyer
under this Agreement.
(f) Buyer will be entitled, for a period of five (5) months after
the Closing, to use Seller's leased premises in Anaheim, California
without additional cost to Buyer. Should Buyer continue to use or
otherwise occupy such premises after the five (5) month period, Buyer
shall pay to Seller $12,500 per month, and pro rated for any portion
of a month.
ARTICLE 12.
12.1 Miscellaneous.
-------------
(a) Any notices, approvals or other communications provided for
herein to be given hereunder by any party to another shall be deemed
validly and properly given or made if in writing and delivered
personally or sent by overnight or certified mail, return receipt
requested, postage prepaid, as follows:
If to Seller: American Microwave Technology, Inc.
c/o Edgewater Private Equity Fund II, LP
2 Corporate Plaza
Newport Beach, CA 92660
Attention: Robert G. Allison
With a copy to: McAndrews Allen & Matson
1301 Dove Street, Ste 1020
Newport Beach, CA 92660
Attention: Stephanie E. Allen, Esq.
If to Buyer: Herley Industries, Inc.
10 Industry Drive
Lancaster, Pennsylvania 17603
Attention: Mr. Lee N. Blatt
Chairman of the Board
With a copy to: Blau, Kramer, Wactlar, & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
Attention: David H. Lieberman, Esq.
Either of the parties hereto may give notice to the other at any
time by the methods specified above of a change in the address at
which, or the persons to whom, notices addressed to it are to be
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delivered in the future, and such notice shall be deemed to amend this paragraph
until superseded by a later notice of the same type. Any notice given by mail as
aforesaid shall be conclusively deemed to have been received by a party hereto
and be effective on the third business day after the day on which mailed to the
address set forth above.
(a) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors
and assigns.
(b) This Agreement may be executed in one or more
counterparts, each of which shall constitute an original hereof.
(c) This Agreement may be modified, amended or supplemented
only by mutual written agreement of the Seller and the Buyer.
Each amendment, modification or supplement shall be in writing
signed by the party or parties to be charged.
(d) This Agreement, the Exhibits hereto and the other
documents delivered hereto constitute the entire agreement of the
parties in respect of the subject matter hereof and supersedes
all prior statements or agreements among the parties in respect
of such subject matter.
(e) Article headings used in this Agreement are for
convenience only and shall not affect the construction of this
Agreement.
(f) Whenever in this Agreement it is provided that a party
hereto shall deliver an agreement or other instrument to the
other of them, such agreement or instrument shall be in form
reasonably satisfactory to counsel for the party to which-the
same is to be delivered.
(g) In the event of litigation to enforce this Agreement,
the prevailing party shall receive an award of reasonable
attorney's fees and costs.
(h) This Agreement shall be construed and interpreted
according to the laws of the State of Delaware without regard to
its conflicts of laws provisions.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
executed by their duly authorized officers and their corporate seals to be
affixed and attested by their respective Secretaries as of the day, month and
year first above written.
AMERICAN MICROWAVE TECHNOLOGY, INC.
By: /s/ James P. Burra
--------------------
James P. Burra
Interim Chairman of the Board
HERLEY INDUSTRIES, INC.
By: /s/ Myron Levy
---------------------
Myron Levy, President
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