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Asset Purchase Agreement

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Title:

Asset Purchase Agreement

Entities:

Photon Dynamics, Inc.

Date:

2002

Size:

117KB total

Price:

$62

ID:

#1215479

► Purchase & Sale ► Purchase ► Asset Purchase Agreements
► Technology ► Semiconductors

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ASSET PURCHASE AGREEMENT

made and entered into as of the 2^nd day July, 2002

BETWEEN

PHOTON DYNAMICS, INC.

and

ART ADVANCED RESEARCH TECHNOLOGIES INC.

ASSET PURCHASE AGREEMENT

PHOTON DYNAMICS, INC.
and
ART ADVANCED RESEARCH TECHNOLOGIES INC.

TABLE OF CONTENTS

ARTICLE 1DEFINITIONS AND PRINCIPLES OF INTERPRETATION			1
	1.1	Definitions	1
	1.2	Certain Rules of Interpretation	5
	1.3	Entire Agreement	5
	1.4	Applicable Law	5
	1.5	Tender	6
	1.6	Schedules	6
ARTICLE 2ACQUISITION TRANSACTIONS			6
	2.1	Purchase and Sale of the Purchased Assets	6
	2.2	Accounts	7
	2.3	Excluded Assets	7
	2.4	Assumed Liabilities	7
	2.5	Liabilities not assumed	7
	2.6	Place of Closing	7
ARTICLE 3PURCHASE PRICE, PAYMENT, ALLOCATION AND ESCROW			7
	3.1	Purchase Price	7
	3.2	Satisfaction of Purchase Price	7
	3.3	Allocation of Purchase Price	7
	3.4	GST and PST	8
	3.5	Escrow	8
ARTICLE 4VENDOR REPRESENTATIONS AND WARRANTIES			8
	4.1	Right to Sell	8
	4.2	Title to Purchased Assets	8
	4.3	Enforceability of Obligations	8
	4.4	Absence of Conflicting Agreements	8
	4.5	Non-Arm's Length Relationships	9
	4.6	Residence of the Vendor	9
	4.7	No Litigation	9
	4.8	Brokers	9
	4.9	Consents and Approvals	9
	4.10	Sufficiency of Assets to Conduct the ISIS Business	9
	4.11	Financial Statements	9
	4.12	Absence of Undisclosed Liabilities	10
	4.13	Absence of Changes or Unusual Transactions	10
	4.14	Warranties	10
	4.15	Fixed Assets and Expensed Equipment	10
	4.16	Inventories	10
	4.17	Accounts	10
	4.18	ISIS Business in Compliance with Law	10

	4.19	Restrictive Covenants	11
	4.20	Intellectual Property	11
	4.21	Environmental Matters	11
	4.22	Employment Matters	12
	4.23	Collective Agreements	12
	4.24	Customer and Supplier Relations	13
	4.25	Contracts	13
	4.26	Books and Records	13
	4.27	Location of the Assets	13
	4.28	Government Grants	13
	4.29	Full Disclosure	13
	4.30	No Material Default	13
	4.31	GST and PST Registrations	13
ARTICLE 5PURCHASER REPRESENTATIONS AND WARRANTIES OF THE PURCHASER			13
	5.1	Incorporation	14
	5.2	Due Authorization	14
	5.3	Enforceability of Obligations	14
	5.4	Absence of Conflicting Agreements	14
	5.5	Investment Canada	14
	5.6	Litigation	14
	5.7	GST and PST Registrations	14
ARTICLE 6NON-WAIVER AND SURVIVAL			14
	6.1	Non-Waiver	14
	6.2	Nature and Survival	14
ARTICLE 7COVENANTS			15
	7.1	Investigations	15
	7.2	Preserve Accuracy of Representations and Warranties	15
	7.3	Maintain the ISIS Business	15
	7.4	The Jerry Schlagheck Consulting Contract	16
	7.5	The Jean-Franois Delorme Consulting Contract	16
	7.6	Independent Contractor Agreements	16
	7.7	Transfer of Purchased Assets	16
	7.8	Transfer of Certification and Permit Registrations	16
	7.9	Files and Documents	16
	7.10	Financial StatementsCanada/US GAAP Reconciliation	16
	7.11	Risk of Loss	16
	7.12	Investment Canada	16
ARTICLE 8PURCHASER'S CONDITIONS PRECEDENT			16
	8.1	Truth and Accuracy of Representations Concerning the Vendor and the Purchased Assets at the Closing Time	17
	8.2	Performance of Obligations	17
	8.3	Receipt of Closing Documentation	17
	8.4	Full Acceptance of Offers of Employment	17
	8.5	Assignment of Each of the Independent Contractor Agreements	17
	8.6	Consents, Authorizations and Registrations	17
	8.7	No Injunction	17
	8.8	Non-Permitted Encumbrances	17

	8.9	Certain Deliveries	18
	8.10	Consents of Customers and Suppliers	18
	8.11	Delivery of Financial Statements	18
	8.12	No Material Adverse Effect	18
ARTICLE 9VENDOR'S CONDITIONS PRECEDENT			18
	9.1	Truth and Accuracy of Representations Concerning the Purchaser at the Closing Time	18
	9.2	Performance of Obligations	19
	9.3	Receipt of Closing Documentation	19
	9.4	Full Acceptance of Offers of Employment	19
	9.5	Consents, Authorizations and Registrations	19
	9.6	No Injunction	19
ARTICLE 10TERMINATION			19
	10.1	Termination Events	19
	10.2	Termination Procedures	19
	10.3	Effect of Termination	20
	10.4	Non-Exclusivity of Termination Rights	20
ARTICLE 11OTHER COVENANTS OF THE PARTIES			20
	11.1	Consent to Jurisdiction	20
	11.2	Vendor Non-CompetitionNon-Solicitation	20
	11.3	Vendor Confidentiality	21
	11.4	Purchaser Confidentiality	21
	11.5	Purchaser Non-Solicitation	21
	11.6	Financial StatementsConsequential Changes to Schedules	22
ARTICLE 12INDEMNIFICATION			22
	12.1	Indemnification by the Vendor	22
	12.2	Indemnification by the Purchaser	22
	12.3	Indemnification Procedures for Direct Claims	23
	12.4	Indemnification Procedures for Third Party Claims	24
ARTICLE 13GENERAL			25
	13.1	Public Notices	25
	13.2	Expenses	25
	13.3	Notices	25
	13.4	Assignment and Enurement	26
	13.5	Further Assurances	26
	13.6	Counterparts and Facsimile	26
	13.7	Construction	26
	13.8	Language	26

iii

THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered into as of the 2^nd day July, 2002 between Photon Dynamics, Inc., a California corporation, (the "Purchaser") and ART Advanced Research Technologies Inc., a corporation incorporated under the laws of the Province of Qubec (the "Vendor"). The Purchaser and the Vendor are referred to collectively herein as the "Parties" and individually as a "Party".

WHEREAS:

1. prior to the Closing Date, the Vendor conducted the ISIS Business as the ISIS Division from the Vendor's Plant; and

2. the Vendor has agreed to sell to the Purchaser, and the Purchaser has agreed to purchase from the Vendor the Purchased Assets on the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the mutual terms, covenants, agreements, representations and warranties made herein and the mutual benefits to be derived herefrom, the receipt and sufficiency of which are hereby acknowledged by each of the Parties, the Parties intending to be legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS AND PRINCIPLES OF INTERPRETATION

1.1 DefinitionsWhenever used in this Agreement, unless there is something inconsistent in the subject matter or context, the following words and terms shall have the meanings set out below:

"Accounts" means all outstanding and unpaid accounts receivable of the ISIS Business as at June 3, 2002 (save only that certain US$140,700 account payable to the Vendor by Solectron, Vendor purchase order no. DO-CLT-5854, which Solectron account shall remain the sole property of the Vendor) relating to the past sale of Inventory and provisions of services by the Vendor to customers of the ISIS Division whensoever made, and the benefit of all security (including, without limitation, cash deposits), guarantees and other collateral held by the Vendor in respect of such outstanding and unpaid accounts, including, without limitation, the accounts receivable of the Vendor listed in Schedule 4.17;

"Affiliate" shall have the meaning ascribed to it in the Business Corporations Act (Ontario);

"Agreement" means this Asset Purchase Agreement, including, without limitation, the Schedules, and all instruments supplementing or amending or confirming this Asset Purchase Agreement and references to "Article" or "section" mean and refer to the specified Article or section of this Agreement;

"Applicable Laws" means all applicable laws, by-laws, rules, regulations, orders, ordinances, protocols, codes, guidelines, policies, notices, directions and judgments or other requirements of any Governmental Authority, including, without limitation, without limitation, laws relating to products and employee and public health and safety;

"Arm's Length" means arm's length as defined in the Tax Act;

"Assumed Liabilities" means those obligations of the ISIS Division assumed by the Purchaser on Closing, being the warranty obligations referred to in section 2.4 and the obligations of the Vendor under the contracts designated in writing by the Purchaser pursuant to section 7.7 as part of the Contracts;

"Books and Records" means all books and records of the ISIS Business, including, without limitation, financial, operating and sales books, records, books of account, sales and purchase records, lists of suppliers with full up-to-date contact particulars, complete bill of material for all parts including, without limitation, description of all parts and date of last purchase for each part, complete assembly drawings for all parts and equipment, list of all Customers with full up-to-date contact particulars, ISIS Business reports, plans and projections and all other documents, files,

records, correspondence, and other data and information, financial or otherwise, relating to the ISIS Business howsoever stored, including, without limitation, stored on computer-related media;

"Business Day" means a day, other than a Saturday or Sunday, on which the principal commercial banks located in each of the Cities of Montreal, Qubec, Toronto, Ontario and San Jose, California are open for business during normal banking hours;

"Certificates and Permits" means all those certificates of approval (including, without limitation, all CSA, UL and CE certificates of approval) in respect of the equipment forming part of the Inventory or Fixed Assets and all other certificates, approvals, permits, licences and registrations which were immediately prior to Closing required by the Vendor to own the Purchased Assets or to conduct the ISIS Business;

"Claims" means any claim, demand, action, cause of action, damage, Losses, costs, liability or expense, including, without limitation, professional fees and all costs incurred in investigating or pursuing any of the foregoing or any proceeding relating to any of the foregoing;

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