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EXHIBIT 2.1
AMENDED AND RESTATED
MASTER TRANSACTION AGREEMENT
AMONG
INTERSIL HOLDING CORPORATION,
INTERSIL CORPORATION
AND
▇▇▇▇▇▇ CORPORATION
JUNE 2, 1999
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND RULES OF CONSTRUCTION .............................. 1
1.1 Definitions ............................................... 1
ARTICLE 2 SALE AND PURCHASE OF THE ASSETS .................................... 1
2.1 Transferred Assets ........................................ 1
2.2 Excluded Assets ........................................... 4
2.3 Assumption of Liabilities.................................. 6
2.4 Excluded Liabilities....................................... 8
2.5 Election to Transfer Assets Using Subsidiary............... 10
2.6 Election to Transfer United Kingdom Assets................. 10
ARTICLE 3 THE CLOSING ........................................................ 10
3.1 Place and Date ............................................ 10
3.2 Purchase Price ............................................ 11
3.3 Allocation of Purchase Price; Section 338(h)(10)
Elections................................................. 11
3.4 Deliveries ................................................ 12
3.5 Closing Balance Sheet...................................... 12
3.6 Post-Closing Purchase Price Adjustment..................... 13
3.7 Limitations................................................ 14
3.8 Consent of Third Parties; Further Assurances .............. 14
3.9 Shared Contracts........................................... 15
3.10 Apportionment at Closing Date; Customer Billing............ 15
3.11 Warranty Claims............................................ 16
3.12 Purchase Agreement for ▇▇▇▇▇▇ Malaysia..................... 16
3.13 Deferred Closing........................................... 16
3.14 Environmental Consents..................................... 16
3.15 Pennsylvania Indebtedness.................................. 16
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇ ........................... 17
4.1 Organization, Standing, Etc. of Business Entities.......... 17
4.2 Corporate Authorization; Enforceability ................... 17
4.3 Charters and Bylaws; Capitalization of Transferred
Subsidiaries .............................................. 18
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4.4 No Violations ............................................. 18
4.5 Governmental Authorizations and Consents .................. 18
4.6 Compliance with Other Instruments and Laws ................ 18
4.7 Baseline Financial Statements ............................. 19
4.8 Absence of Certain Changes or Events ...................... 19
4.9 Title to Transferred Assets ............................... 21
4.10 Year 2000 Readiness ....................................... 24
4.11 Assumed Contract Obligations .............................. 24
4.12 Litigation ................................................ 26
4.13 Licenses and Permits ...................................... 26
4.14 Environmental Compliance .................................. 26
4.15 Absence of Certain Business Practices ..................... 27
4.16 Personnel Matters ......................................... 27
4.17 Labor Matters ............................................. 28
4.18 Seller Benefit Plans....................................... 28
4.18.1 United States................................... 28
4.18.2 Non-U.S. Employee Benefit Plans................. 30
4.19 Insurance ................................................. 31
4.20 Powers of Attorney......................................... 31
4.21 Brokers ................................................... 31
4.22 Taxes...................................................... 32
4.23 Transferred Assets - General............................... 33
4.24 Personal Property.......................................... 33
4.25 Warranty Claims............................................ 33
4.26 Inventory.................................................. 34
4.27 Malaysian Activities....................................... 34
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF BUYER
AND PARENT ......................................................... 34
5.1 Organization and Standing of Buyer and Parent; Charter
and Bylaws ................................................ 34
5.2 Authorization ............................................. 35
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5.3 Enforceability ............................................ 35
5.4 Compliance with Other Instruments and Laws ................ 35
5.5 Governmental Authorizations and Consents .................. 35
5.6 Litigation ................................................ 36
5.7 Access..................................................... 36
5.8 Financial Capacity ........................................ 36
5.9 Brokers.................................................... 36
5.10 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976....... 36
ARTICLE 6 COVENANTS RELATING TO PERSONNEL ARRANGEMENTS........................ 36
6.1 Employees; Collective Bargaining Agreements;
Transferee Employees....................................... 36
6.2 Severance Obligations...................................... 37
6.3 Plans, Benefits and Policies............................... 38
6.4 Foreign Employees.......................................... 39
6.5 Commissions and Bonuses.................................... 40
ARTICLE 7 COVENANTS OF SELLERS ............................................... 40
7.1 Conduct of Business ....................................... 40
7.2 Non-Competition............................................ 42
7.3 Access..................................................... 43
7.4 Environmental Transfer Statutes ........................... 44
7.5 Title Insurance............................................ 44
7.6 Surveys.................................................... 45
7.7 Estoppel Certificates...................................... 45
7.8 Zoning Letters............................................. 45
7.9 Foreign Real Estate -- Due Diligence and Assurances........ 45
7.10 No Shop.................................................... 46
ARTICLE 8 COVENANTS OF BUYER AND PARENT ...................................... 46
8.1 Investigation ............................................. 46
8.2 Assistance with Respect to Excluded Assets ................ 46
8.3 Names and Logo ............................................ 46
8.4 Space Used by ▇▇▇▇▇▇ ESS................................... 46
8.5 Reimbursement and Indemnity for Certain Costs and
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Liabilities................................................ 47
ARTICLE 9 COVENANTS OF ALL PARTIES ........................................... 47
9.1 Commercially Reasonable Efforts ........................... 47
9.2 HSR Filing; Other Filings ................................. 47
9.3 Public Announcements ...................................... 48
9.4 Consents; Cooperation ..................................... 48
9.5 Communications with Customers and Suppliers ............... 48
9.6 Liability for Transfer Taxes............................... 49
9.7 Tax Matters................................................ 49
9.7.1 Tax Returns....................................... 49
9.7.2 Indemnity......................................... 50
9.7.3 Tax Liability..................................... 51
9.7.4 Tax Contests...................................... 51
9.7.5 Cooperation....................................... 52
9.7.6 Transfer Pricing Agreements and Related
Documentation..................................... 53
9.8 Tax Elections.............................................. 53
9.9 Confidentiality............................................ 53
9.10 Books and Records.......................................... 54
9.11 Ancillary Agreements....................................... 54
9.12 Obligations Concerning China Subsidiaries.................. 54
9.13 ▇▇▇▇▇▇ Lease............................................... 55
9.14 Ownership of Intersil Name................................. 56
ARTICLE 10 CONDITIONS TO OBLIGATIONS OF BUYER AND PARENT
TO CLOSE ........................................................... 56
10.1 Accuracy of Representations and Warranties ................ 56
10.2 Performance ............................................... 56
10.3 No Conflict ............................................... 57
10.4 Material Adverse Change.................................... 57
10.5 Certificate ............................................... 57
10.6 HSR Act ................................................... 57
10.7 Consents .................................................. 57
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10.8 Transfer Documents ........................................ 57
10.9 Transaction Documents...................................... 58
10.10 Resignations............................................... 58
10.11 Corporate Records.......................................... 58
10.12 Further Instruments........................................ 58
10.13 Sellers' Counsel Opinion................................... 58
10.14 Financing.................................................. 58
10.15 Environmental Transfer Statutes............................ 58
10.16 Possession................................................. 58
10.17 Working Capital Amount..................................... 58
10.18 Real Estate Matters........................................ 58
10.19 Real Property Agreements................................... 58
10.20 ▇▇▇▇▇▇ Advanced Technology (Malaysia) Sdn Bhd.............. 58
ARTICLE 11 CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇ TO CLOSE ....................... 59
11.1 Accuracy of Representations and Warranties ................ 59
11.2 Performance ............................................... 59
11.3 No Conflict ............................................... 59
11.4 Certificate ............................................... 60
11.5 HSR Act ................................................... 60
11.6 Consents .................................................. 60
11.7 Assumption Agreement ...................................... 60
11.8 Transaction Documents...................................... 60
11.9 Buyer's Counsel Opinion.................................... 60
11.10 Further Instruments........................................ 60
11.11 Financing.................................................. 60
11.12 Working Capital Amount..................................... 60
11.13 Royalty Agreement.......................................... 60
ARTICLE 12 TERMINATION ........................................................ 61
12.1 Right to Terminate Agreement .............................. 61
12.2 Effect of Termination ..................................... 61
ARTICLE 13 CERTAIN REMEDIES AND LIMITATIONS ................................... 62
13.1 Expiration of Representations, Warranties and Covenants ... 62
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13.2 Indemnity by ▇▇▇▇▇▇ ....................................... 62
13.3 Indemnity by Buyer and Parent.............................. 63
13.4 General Indemnification Procedures ........................ 63
13.5 Environmental Procedures................................... 65
13.6 Costs Related to Direct Claims............................. 67
13.7 Exclusivity ............................................... 67
13.8 No Set-Off................................................. 67
13.9 Retention of Records ...................................... 68
13.10 Notice as to Representations .............................. 68
13.11 Separate Indemnification for Taxes ........................ 68
13.12 Indemnification Payments as Purchase Price Adjustment...... 68
ARTICLE 14 MISCELLANEOUS ...................................................... 69
14.1 Material Adverse Effect ................................... 69
14.2 Disclaimer of Projections, Etc. ........................... 69
14.3 Expenses .................................................. 69
14.4 Compliance with Bulk Sales Laws............................ 69
14.5 Inconsistencies............................................ 69
ARTICLE 15 AGREEMENT CONVENTIONS............................................... 70
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SCHEDULES
Schedule Subject Matter
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2.1(a) Owned Fixed Assets
2.1(d) Equity Interests of Transferred Subsidiaries
2.1(t) Other Transferred Assets
2.2(t) Other Excluded Assets
2.3 Mountaintop, Pennsylvania Facility Debt
2.4 Other Excluded Liabilities
4.3 Capitalization of Transferred Subsidiaries
4.4 Seller Violations
4.5 Government Authorizations and Consents Required by Sellers
4.6 Compliance with Other Instruments and Laws
4.7 Financial Statements
4.8 Certain Changes and Events
4.9(a) Title to Transferred Assets Other than Real Estate
4.9(b) Title to and Duality of Real Estate
4.11 Contractual Obligations
4.12 Litigation
4.13 Licenses and Permits Exceptions
4.14 Environmental Compliance Exceptions
4.16(b) Disputes between Employees and Business Entities
4.16(c) Employee Policies and Manuals
4.17 Labor Orders and Disputes
4.18 Seller Benefit Plans
4.19 Insurance Policies
4.20 Powers of Attorney
4.22 Tax Matters
4.23 Exceptions to Transferred Assets
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Schedule Subject Matter
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4.24 Personal Property Operation Exceptions
4.25 Warranty Claims
5.5 Government Authorizations and Consents Required by Buyer
7.1 Covenants of Sellers
10.7 Consents That Are Conditions to Buyer's Obligations
11.6 Consents That Are Conditions to Sellers' Obligations
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EXHIBITS
A. Definitions and Rules of Construction
B. Agreement Conventions
C. Intellectual Property Agreement
D. Patent Assignment and Services Agreement
E. License Assignment Agreement
▇. ▇▇▇▇▇▇ Trademark License Agreement
G. Secondary Trademark Assignment and License Agreement
H. Transition Services Agreement
I. Subordinated Promissory Note
J. Indenture
K. Securities Purchase and Holders Agreement
L. Registration Rights Agreement
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AMENDED AND RESTATED MASTER TRANSACTION AGREEMENT
THIS AMENDED AND RESTATED MASTER TRANSACTION AGREEMENT (this "Master
Agreement") is entered into as of June 2, 1999, by and among INTERSIL
CORPORATION, a Delaware corporation ("Buyer"), INTERSIL HOLDING CORPORATION, a
Delaware corporation ("Parent"), and ▇▇▇▇▇▇ CORPORATION, a Delaware corporation
("▇▇▇▇▇▇").
RECITALS
WHEREAS, ▇▇▇▇▇▇, through the ▇▇▇▇▇▇ Semiconductor Sector (as defined in
Exhibit A), including the Transferred Subsidiaries, is engaged in the business
(the "Business", as defined in Exhibit A) of defining, designing, developing,
manufacturing and selling integrated circuits and other semiconductors and
related products and certain other activities related thereto;
WHEREAS, Parent, the direct parent of Buyer, owns directly all of the
stock of Buyer and desires to assist Buyer in acquiring the assets and
liabilities to be conveyed hereunder;
WHEREAS, Buyer and Parent wish to purchase and acquire from ▇▇▇▇▇▇, and
▇▇▇▇▇▇ wishes to sell, assign and transfer to Buyer and Parent, certain assets
of the Business, and Buyer and Parent have agreed to assume certain specified
liabilities of the Business, all for the purchase price, and upon the terms and
subject to the conditions, herein set forth; and
WHEREAS, following the closing of the transactions contemplated by this
Master Agreement, Buyer and ▇▇▇▇▇▇ will have certain ongoing business
relationships as set forth in the Ancillary Agreements (as defined in Exhibit
A).
NOW, THEREFORE, in consideration of the premises and of the
representations, warranties and covenants hereinafter set forth, and intending
to be legally bound hereby, the parties agree as follows:
ARTICLE 1
DEFINITIONS AND RULES OF CONSTRUCTION
1.1 DEFINITIONS. The definitions and rules of construction set forth in
Exhibit A are incorporated herein by reference.
ARTICLE 2
SALE AND PURCHASE OF THE ASSETS
2.1 TRANSFERRED ASSETS. Subject to and upon the terms and conditions
set forth in this Master Agreement, at the Closing, ▇▇▇▇▇▇ shall, or shall cause
the other Sellers to, sell, assign,
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transfer, convey and deliver to Buyer (or, as to certain assets selected by
Buyer, at Buyer's written request to ▇▇▇▇▇▇ five (5) Business Days prior to the
Closing Date, to Parent), and Buyer and Parent shall purchase and acquire from
each Seller, all right, title and interest of each Seller in and to all of the
properties, assets, contracts and rights constituting or primarily used or held
primarily for use in the Business (other than the Excluded Assets), wherever
such assets, properties and rights are located and whether such assets are real,
personal or mixed, tangible or intangible, matured or unmatured, known or
unknown, contingent or fixed, and whether or not any of such assets have any
value for accounting purposes or are carried or reflected on or specifically
referred to in Sellers' books or financial statements (collectively, the
"Transferred Assets"), including, without limitation, the assets listed below
(as listed below, the Transferred Assets include properties, contracts, rights
and assets owned by the Transferred Subsidiaries and all such properties,
contracts, rights and assets shall be transferred indirectly by transferring the
capital stock of the Transferred Subsidiaries):
(a) all of the Fixed Assets described on Schedule 2.1(a);
(b) all of the Owned Real Estate;
(c) the assets and rights conveyed pursuant to the terms of
the IP Transfer Agreements;
(d) all ownership interests in the Transferred Subsidiaries
listed on Schedule 2.1(d);
(e) all of the Assumed Contract Obligations, including those
under the Material Contracts listed on Schedule 4.11;
(f) all inventory, wherever located (including inventory in
transit), including, without limitation, all the raw materials, work in
process, recycled materials, finished products, supplies, and spare
parts located at the Manufacturing Facilities or elsewhere and
primarily used or held primarily for use in the conduct of the
Business, including items of the type and nature of the materials
identified as inventory in the Baseline Financial Statements;
(g) all of the furniture and office equipment, including
desks, tables, chairs, file cabinets and other storage devices,
communications equipment, computers and office supplies which are owned
or leased by a Seller and located at the Transferred Facilities or
elsewhere and that are primarily used or held primarily for use in the
conduct of the Business, or that are in transit to or temporarily
removed from a location specified above and which would otherwise be
included among the items identified above;
(h) all of the prepaid expenses and security deposits
reflected on the Audited Closing Balance Sheet;
(i) all of the Books and Records;
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(j) to the extent their transfer is permitted by Applicable
Law, all Governmental Approvals primarily used or held primarily for
use in the Transferred Facilities or the Business, including all
applications therefor;
(k) to the extent transferable, all rights under express or
implied warranties and licenses from Sellers' suppliers (including
manufacturers and distributors) with respect to the Transferred Assets
and any related claims, credits, rights of recovery and set-off with
respect to such items;
(l) all rights to causes of action, lawsuits, claims and
demands of any nature available to the Business Entities that relate
primarily to the Transferred Assets (it being understood that Buyer's
rights to causes of action, lawsuits, claims and demands in respect of
Patents and Intangible Property Rights are governed by the IP Transfer
Agreements) or the Assumed Liabilities;
(m) to the extent transferable, all guarantees, warranties,
indemnities and similar rights in favor of Sellers in connection with
the Transferred Assets and any related claims, credits, rights of
recovery and set-off with respect thereto;
(n) the Policies;
(o) all of the Leased Real Estate, except for the Retained
Leased Real Estate;
(p) all of the motor vehicles, whether or not licensed or
registered to operate on public highways, including automobiles,
trucks, self-propelled carts, and other motorized lifting, material
handling or transporting equipment and all spare parts, fuel and other
supplies, tools and other items used in the operation or maintenance
thereof which are owned or leased by a Seller and located at the
Transferred Facilities or elsewhere and which are primarily used or
held for use primarily in the conduct of the Business, or which are in
transit to or temporarily removed from a location specified above and
which would otherwise be included among the items described above;
(q) all rights of the Business Entities to any insurance
proceeds relating to the damage, destruction or impairment of assets or
other rights described in this Section 2.1 which would have been
Transferred Assets but for such damage, destruction or impairment prior
to the Closing;
(r) all assets (other than Excluded Assets) reflected in the
April 2, 1999 balance sheet which is included in the Baseline Financial
Statements, together with all replacements thereof, all expansions,
enhancements and modifications thereto and all assets (other than
Excluded Assets) of like character that have been or are acquired by
the Business Entities subsequent to such balance sheet date and on or
prior to the Closing Date, primarily for use in the Business, except to
the extent such assets have been disposed of in the ordinary course of
business on or after such date;
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(s) foreign currency ▇▇▇▇▇▇ related primarily to the
operations of the Business;
(t) all the items, if any, listed on Schedule 2.1(t);
(u) unrestricted cash on deposit in the United States, as of
the close of business on the Closing Date, in the amount of $2,000,000;
(v) [RESERVED]; and
(w) cash (to be transferred to Buyer at the time other assets
of ▇▇▇▇▇▇ Semiconductor GmbH (Germany) are transferred to Buyer) in
Germany in an amount equivalent to the amount accrued as of the Closing
Date, as reflected in the Audited Closing Balance Sheet, for all German
pension obligations including that disclosed on Schedule 4.18.2 and
unrestricted cash in the United States in an amount equivalent to the
amount accrued as of the Closing Date, as reflected in the Audited
Closing Balance Sheet, for obligations with respect to Transferred
Employees, whether based inside or outside the United States, under
▇▇▇▇▇▇' supplemental employee retirement plan.
In addition to the foregoing, Sellers shall sublease to Buyer all or
such portions of the Retained Leased Real Estate as Sellers and Buyer may
mutually agree in writing upon prior to the Closing (all of such subleased real
estate, the "Subleased Real Estate") under and pursuant to subleases in form and
substance mutually acceptable to Sellers and Buyer (collectively, the
"Subleases") and, except where specifically excluded, as used herein the term
"Transferred Assets" includes the Subleased Real Estate.
The assets to be acquired by Parent shall consist of the Intellectual
Property as may be specified in accordance with Section 2.1, and if the fair
market value of the Intellectual Property shall be less than ninety million
dollars ($90,000,000), with such difference in value being called the Parent
Additional Assets Value, the Parent will acquire additional Transferred Assets
having an aggregate fair market value equal to the Parent Additional Assets
Value. The assets acquired by Parent (other than certain Intellectual Property
determined by Parent) shall be transferred by Parent to Buyer as a capital
contribution immediately following the Closing, and Parent hereby directs that
▇▇▇▇▇▇ transfer at Closing such assets directly to Buyer on its behalf. All
other Transferred Assets shall be acquired directly by Buyer from ▇▇▇▇▇▇.
Buyer shall be permitted to have the acquisition of any Transferred
Subsidiary not formed or incorporated in a state of the United States to be made
by a wholly-owned subsidiary of Buyer incorporated under the laws of any
jurisdiction, including, but not limited to, the laws of Malaysia.
2.2 EXCLUDED ASSETS. Notwithstanding anything contained in Section 2.1
hereof to the contrary, the Transferred Assets do not include any of the
following (herein referred to collectively as the "Excluded Assets"):
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(a) except to the extent set forth in the IP Transfer
Agreements, the names and marks "▇▇▇▇▇▇" and "▇▇▇▇▇▇ Corporation" and
any name or ▇▇▇▇ derived from or including the foregoing, including all
corporate symbols or logos incorporating "▇▇▇▇▇▇" or "▇▇▇▇▇▇
Corporation";
(b) the rights in Intellectual Property, Intangible Property
Rights, License Agreements and Software Licenses not transferred,
assigned or licensed to Buyer in accordance with the terms of the IP
Transfer Agreements;
(c) all cash, and cash equivalents, and similar type
investments, such as certificates of deposit, treasury bills and other
marketable securities, as of the close of business on the Closing Date
including any such items remaining with any of the Transferred
Subsidiaries or with any of the other Transferred Assets as of the
Closing Date, but excluding the cash specified in Sections 2.1 (u) and
(w);
(d) intercompany receivables and payables arising from the
conduct of the Business prior to the Closing Date (which receivables
and payables shall be settled as of the Closing Date as provided in
Section 7.1(c));
(e) all books and records relating to or used in the business
of Sellers which are not primarily used or held primarily for use in
the conduct of Business;
(f) except for the Policies, all insurance policies maintained
by the Business Entities and all rights of action, lawsuits, claims and
demands, rights of recovery and set-off, and proceeds, under or with
respect to such insurance policies;
(g) all rights to causes of action, lawsuits, claims and
demands available to or being pursued by Sellers as of the Closing Date
to the extent they do not relate to the Business or they relate to
Excluded Assets or Excluded Liabilities;
(h) all claims against third parties for Losses suffered in
connection with Excluded Assets and Excluded Liabilities;
(i) all right, title and interest of the Business Entities in
and to and any claims for any refund, credit, rebate or abatement with
respect to Taxes of the Business for any period or portion thereof
prior to the Closing Date;
(j) any of Business Entities' right, title, estate or interest
in any of the Retained Leased Real Estate or the Retained Leases,
except for Buyer's right, title, estate and interest in the Subleased
Real Estate under the Subleases;
(k) all assets relating to Seller Benefit Plans, except as
specifically provided in Article 6;
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(l) to the extent owned or held, directly or indirectly, by
the Business Entities, all equity interests in, and debt if any of,
Guangzhou ▇▇▇▇▇▇ Telecommunications Company Ltd. and Anshan ▇▇▇▇▇▇
Broadcast Equipment Company Ltd.;
(m) the assets that are identified on Exhibit D to the
Transition Services Agreement;
(n) except to the extent provided under the Ancillary
Agreements following the Closing Date, the Transition Services Software
and services available to the Business Entities that are not primarily
used or held primarily for use in the Business as conducted prior to
the Closing Date;
(o) assets and rights primarily used or held primarily for use
in the Sellers' Suppression Business conducted primarily from Dundalk,
Ireland;
(p) assets and rights (including the right to occupy specified
premises in the Manufacturing Facility in Palm Bay, Florida under and
pursuant to a lease or other agreement or arrangement mutually
reasonably acceptable in form and substance to Buyer and Sellers)
primarily used or held primarily for use in the Sellers' Photomask
Business conducted primarily from Palm Bay, Florida;
(q) all rights to any royalty payments made pursuant to the
Retained License Agreements;
(r) the fabrication inventory in process with respect to
Suppression Products of the Sellers at the Findlay, Ohio facilities of
the Business;
(s) the value of assembly and testing services in process with
respect to Suppression Products of the Sellers on consignment for
assembly and testing at the Kuala Lumpur facilities of the Business;
(t) the assets listed on Schedule 2.2(t);
(u) ▇▇▇▇▇▇ corporate assets not primarily used in the Business
but which have been made available to the Business, and which are not
either (i) reflected on the Baseline Financial Statements, or (ii)
necessary to the day-to-day operations of the Business, such as, but
not limited to, the ▇▇▇▇▇▇ Customer Briefing Center; and
(v) all leases and subleases for property located in Milpitas,
California.
2.3 ASSUMPTION OF LIABILITIES. Subject to the terms and conditions set
forth herein, at the Closing, Buyer shall assume and agree to pay, honor,
perform and discharge when due all of the Liabilities and obligations relating
to the Transferred Assets (including the Transferred
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Subsidiaries) and the Business (other than the Excluded Liabilities), including,
without limitation, the following:
(a) all Liabilities and obligations of the Business Entities
arising and to be performed from and after the Closing Date under or
relating to the Assumed Contract Obligations;
(b) all Liabilities (other than Tax Liabilities and Retirement
Plan Accruals) and obligations of the Business Entities relating to or
arising out of the operation of the Business (i) as reflected in the
Baseline Financial Statements, (ii) as reflected in an identified
reserve reflected in the Baseline Financial Statements, or (iii) that
arise in the ordinary course of business between the date of the
Baseline Financial Statements and the Closing Date;
(c) all Liabilities and obligations relating to or arising out
of the conduct of the Business following the Closing Date;
(d) all warranty obligations of the Business Entities relating
to (i) products sold by the Business, whether before or after the
Closing Date, and (ii) the Assumed Contract Obligations;
(e) indebtedness related to the Transferred Facilities in
Mountaintop, Pennsylvania listed on Schedule 2.3 in the original
principal amount of $5,000,000;
(f) all Liabilities with respect to License Agreements
assigned under the terms of the License Assignment Agreement;
(g) all Liabilities related to foreign currency ▇▇▇▇▇▇
included in the Transferred Assets;
(h) all Tax liabilities for foreign Taxes of Sellers that are
foreign entities of the type reflected in the Baseline Financial
Statements and also reflected on the Audited Closing Balance Sheet up
to a maximum aggregate liability of $3,600,000 (the "Assumed
Pre-Closing Taxes");
(i) Liabilities for post-Closing performance of (excluding
Liabilities in the nature of indemnities for breaches of
representations, warranties or covenants) agreements entered into with
the consent of Buyer, such consent not to be unreasonably withheld,
conditioned or delayed, in connection with the disposition of the
Sellers' Suppression Business and the Sellers' Photomask Business;
(j) to the extent provided in Article 6, all Liabilities and
obligations of the Business Entities with respect to (i) severance
payments for Employees of the Business and (ii) accrued vacation of
Employees of the Business as reflected in the Final Closing Balance
Sheet;
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(k) reimbursement and similar obligations related to bonds or
letters of credit, if any, delivered in connection with the Transferred
Facilities or the conduct of the Business that will remain in effect
following the Closing Date in an aggregate amount not to exceed
$2,000,000 (the liabilities and obligations described in clauses (a)
through (k) are collectively referred to as the "Assumed Liabilities");
and
(l) all Liabilities with respect to European Severance
Accruals.
2.4 EXCLUDED LIABILITIES. Buyer and Parent shall not assume or in any
way be responsible for, and the Sellers shall remain responsible for and shall
pay, the following debts, claims, commitments, liabilities and obligations of
Sellers and the Business (the "Excluded Liabilities"):
(a) (i) all Tax liabilities (including those of the
Transferred Subsidiaries and those arising from the transactions
contemplated by Sections 7.1(c), 3.12, and 10.20), including penalties
and interest, in respect of taxable years ending on or prior to the
Closing Date or portions thereof ending on or prior to the Closing
Date, including Tax liabilities associated with the consummation of the
transactions contemplated by this Master Agreement (including any
liabilities associated with a Section 338(h)(10) Election, as defined
in Section 3.3), but excluding the Assumed Pre-Closing Taxes, Parent's
and Buyer's share of Transfer Taxes (as defined in Section 9.6), Taxes
incurred as a result of transfers made pursuant to Section 2.5 (other
than Sellers' share of Transfer Taxes with respect thereto, which shall
be Excluded Liabilities), and Taxes incurred as a result of transfers
among Parent, Buyer and their Affiliates, and (ii) Tax liabilities
arising pursuant to Treasury Regulation 1.1502-6 or any similar
provision of foreign, state or local law;
(b) except as provided in Sections 2.3(e) and 2.3(k),
indebtedness for borrowed money or negative cash balances relating to
the conduct of the Business for all periods prior to the Closing Date
including all debt secured by mortgages or deeds of trust on the Owned
Real Estate or on Sellers' leasehold estates in the Leased Real Estate;
(c) Liabilities to the extent related to the Excluded Assets;
(d) intercompany payables and receivables arising from the
conduct of the Business prior to the Closing Date;
(e) the Retirement Plan Accruals and obligations under, or
with respect to, any Seller Benefit Plan or collective bargaining
agreement, except as specifically provided in Article 6, or except as
accrued on the Audited Closing Balance Sheet with respect to the period
from July 3, 1999, to the Closing Date as regards profit sharing
contributions to be made to the ▇▇▇▇▇▇ Corporation Union Retirement
Plan or the ▇▇▇▇▇▇ Corporation Retirement Plan;
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(f) Liabilities arising out of any Business Entity's failure
or alleged failure to comply, prior to the Closing Date, with the rules
and regulations of any Governmental Authority;
(g) the Liabilities, if any, listed on Schedule 2.4;
(h) Environmental Liabilities to the extent not reflected in
the Baseline Financial Statements;
(i) Liabilities of any Business Entity or any of its
Affiliates (including, without limitation, any Environmental Liability)
incurred by any Business Entity or any of its Affiliates in connection
with the conduct of their businesses other than the Business;
(j) Liabilities of any Business Entity or any of its
Affiliates (other than obligations of Buyer or Parent under this Master
Agreement, the Ancillary Agreements and the Shareholders Agreement)
arising under this Master Agreement, the Ancillary Agreements or the
Shareholders Agreement;
(k) Liabilities of any Business Entity or any of its
Affiliates for indemnification of, or advancement of expenses or
payment of insurance proceeds to, any present or former director or
officer of (or other person serving in a fiduciary capacity at the
request of) any Business Entity or any of its Affiliates based upon an
actual or alleged breach of fiduciary duty of such person prior to the
Closing;
(l) Liabilities arising out of or relating to any business or
product line formerly owned or operated by any Business Entity or any
predecessor thereof but not currently so owned or operated, except for
those referred to in Section 2.3(i);
(m) Liabilities arising out of, or related to, any
indemnification or other provision under any contract or other
agreement pursuant to which any sale or disposition was made of any
business or product line formerly owned or operated by any Business
Entity or any predecessor thereof but not currently so owned or
operated, except for those referred to in Section 2.3(i);
(n) Liabilities of any Seller or any of its Affiliates arising
out of matters occurring, or obligations incurred, after the Closing;
(o) Liabilities of any Business Entity for any professional,
financial advisory or consulting fees and expenses incident to or
arising out of the negotiation, preparation, approval or authorization
of the Master Agreement, the Ancillary Agreements and the transactions
contemplated hereby or thereby, or any other proposed transaction for
the direct or indirect sale of the Business or any portion thereof,
including without limitation, the fees, expenses and disbursements of
Sellers' counsel and accountants (including accountants
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fees, expenses and disbursements in connection with the preparation of
the Baseline Financial Statements);
(p) Liabilities of any Business Entity or any of its
Affiliates arising out of any Shared Contract;
(q) Liabilities of any Business Entity or any of its
Affiliates arising during or related to periods prior to the Closing
Date to the extent the amount of such liability or obligation is
covered by a policy of insurance or other indemnity agreement
maintained by or for the benefit of any Business Entity or any of its
Affiliates, unless the rights under such policy of insurance or
indemnity agreement have been assigned to Buyer;
(r) Liabilities to which Buyer, any Transferred Assets or the
Business becomes subject that would not otherwise constitute an Assumed
Liability arising as a result of failure to comply with bulk sales laws
or any similar law;
(s) Taxes, expenses and any other Liabilities, if any, arising
from the transfers and transactions contemplated by Sections 7.1(c) and
9.12, subject in the case of Section 9.12 to the use, in accordance
with such section, of proceeds, if any, from the disposition of the
facility owned by ▇▇▇▇▇▇ Suzhou; and
(t) all Liabilities arising out of, resulting from or relating
to claims, whether founded upon negligence, strict liability in tort or
other similar legal theory (but not breach of warranty or infringement
or breach of Patents or Intangible Property Rights), seeking
compensation or recovery for or relating to injury to person or damage
to property arising out of the conduct of the Business prior to the
Closing Date.
2.5 ELECTION TO TRANSFER ASSETS USING SUBSIDIARY. Notwithstanding
Section 2.1 hereof, Buyer may, at Buyer's election, require ▇▇▇▇▇▇, prior to the
Closing Date, and conditioned upon the occurrence of the transactions
contemplated by this Master Agreement, to transfer any or all of the Transferred
Assets to a corporation duly and properly incorporated by ▇▇▇▇▇▇ in the state of
Delaware (or in another state mutually satisfactory to the parties) at least 5
days preceding the Closing Date, which corporation shall have only one class of
stock authorized, all the outstanding shares of which shall, at any time, have
been held solely by ▇▇▇▇▇▇, and which shall have no right, title or interest in
or to any assets, have assumed or become subject to any liabilities, or
conducted any business or operations (other than as is necessary to incorporate)
prior to such transfer. The stock of such corporation shall be a Transferred
Asset, and such corporation shall be a Transferred Subsidiary. At the election
of Buyer, Buyer and ▇▇▇▇▇▇ shall make an election under Section 338(h)(10) of
the Code (and any comparable election under any Tax law) with respect to such
corporation in accordance with the procedures set forth in Section 3.3.
2.6 ELECTION TO TRANSFER UNITED KINGDOM ASSETS. Sellers may elect, at
their sole discretion, to transfer the assets of ▇▇▇▇▇▇ Semiconductor Ltd. (UK)
in lieu of transferring the equity interest in such entity. In the event Sellers
so elect, Buyer shall designate the entity to
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which such assets shall be transferred and an appropriate portion of the
Purchase Price shall be allocated to such assets.
ARTICLE 3
THE CLOSING
3.1 PLACE AND DATE. The closing of the sale and purchase of the
Transferred Assets (the "Closing") and the assumption of the Assumed Liabilities
shall take place at 10:00 A.M. local time not later than the second Business Day
following the satisfaction or waiver of the conditions referred to in Articles
10 and 11 at the offices of Dechert Price & ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇, or such other place upon which the parties may agree. The day on which
the Closing actually occurs is sometimes referred to herein as the "Closing
Date."
3.2 PURCHASE PRICE. On the terms and subject to the conditions set
forth in this Master Agreement, upon the Closing, Parent and Buyer shall pay an
aggregate consideration to ▇▇▇▇▇▇, or another Seller as directed by ▇▇▇▇▇▇, of
U.S. $610,000,000 (as adjusted pursuant to Section 3.6, the "Purchase Price"),
in the following manner:
(a) Parent shall pay to ▇▇▇▇▇▇ U.S. $90,000,000 by a
subordinated promissory note of Parent substantially in the form attached hereto
as Exhibit I (the "Note"), and, if the value of the property transferred to
Parent shall exceed $90,000,000 (with such excess value being called the "Excess
Value"), then Parent shall pay to ▇▇▇▇▇▇ U.S. dollars in an amount equal to the
Excess Value by wire transfer of immediately available funds to an account, or
accounts, designated by ▇▇▇▇▇▇; and
(b) Buyer shall pay U.S. dollars in an aggregate amount equal
to $520,000,000 less the Excess Value, if any, to ▇▇▇▇▇▇ and the other Sellers,
as directed by ▇▇▇▇▇▇, which amount shall be paid by wire transfer of
immediately available funds to an account or accounts designated by ▇▇▇▇▇▇.
3.3 ALLOCATION OF PURCHASE PRICE; SECTION 338(H)(10) ELECTIONS.
(a) The parties shall allocate the aggregate consideration
received by Sellers with respect to the Transferred Assets other than the
Transferred Subsidiaries for which a Section 338(h)(10) Election (as defined in
Section 3.3(b) is made (each, an "Elected Subsidiary"), in accordance with
Section 1060 of the Code, as mutually agreed to by the parties pursuant to the
procedure described below. The parties shall allocate the consideration received
by Sellers with respect to each Elected Subsidiary among the assets of such
subsidiary in accordance with Section 338(h)(10) of the Code and the Treasury
Regulations promulgated thereunder, as mutually agreed to by the parties
pursuant to the procedure described below. Subject to the requirements of any
applicable Tax law or election, all such mutually agreed-to allocations shall be
used by each party in preparing any filings required pursuant to Section 1060 or
Section 338(h)(10) of the Code or any similar provisions of state or local law
and all relevant Income Tax Returns. Neither Buyer, Parent nor Sellers will take
any position before any taxing authority or in any judicial proceeding
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with respect to Income Taxes or other Taxes that is inconsistent with such
mutually agreed-to allocations without the prior written consent of the other
party, which consent shall not unreasonably be withheld. The parties shall
exercise commercially reasonable efforts to support such mutually agreed-to
reported allocations in any audit proceedings initiated by any taxing authority;
provided, however, that none of Sellers shall have any obligation to incur
unreasonable or extraordinary out-of-pocket expenses.
(b) At the election of Buyer (or, if relevant, Parent), Buyer
(or, if relevant, Parent) and Sellers shall make an election under Section
338(h)(10) of the Code (and any comparable election under any Tax law) for any
or all of the Transferred Subsidiaries for which such election is permissible (a
"Section 338(h)(10) Election"). If any Section 338(h)(10) Election is made,
Buyer (or, if relevant, Parent) and Sellers shall jointly execute IRS Form 8023
and all attachments required to be filed therewith as well as any other forms
required to be executed pursuant to any Tax law.
(c) With respect to the Transferred Assets other than the
Elected Subsidiaries, Buyer, Parent and Sellers shall report the consideration
allocated to such assets on IRS Form 8594 and all attachments required to be
filed therewith as well as on any other forms required to be executed pursuant
to any Tax law.
(d) Buyer and Parent, no later than 150 days after the Closing
Date, shall deliver to ▇▇▇▇▇▇ a statement reflecting (i) with respect to each
Elected Subsidiary, a proposed determination of the "MADSP" (as determined in
accordance with Treasury Regulation Section 1.338(h)(10)-1(f)) for the assets of
such subsidiary and a proposed allocation of such MADSP among such assets and
(ii) with respect to all other Transferred Assets, a proposed allocation of the
consideration received therefor (the "Allocation Statement"). If a Section
338(h)(10) Election is not made for a Transferred Subsidiary, the Allocation
Statement shall provide an allocation of a portion of the consideration to the
stock of such subsidiary. Within 30 days after receipt of the Allocation
Statement, ▇▇▇▇▇▇ shall deliver to Buyer and Parent a statement of proposed
changes with respect to such Allocation Statement (the "Statement of Changes").
If ▇▇▇▇▇▇ shall fail to deliver a Statement of Changes within such 30-day
period, ▇▇▇▇▇▇ shall be deemed to have accepted the Allocation Statement. If
▇▇▇▇▇▇ delivers a Statement of Changes, Buyer, Parent and ▇▇▇▇▇▇ shall attempt
in good faith to accommodate such changes, but if they are unable to do so
within 15 days after Buyer and Parent's receipt of the Statement of Changes,
final determination of the amounts set forth on the Allocation Statement shall
be made by the Independent Accounting Firm whose costs shall be borne 50% by
Buyer and Parent and 50% by ▇▇▇▇▇▇.
3.4 DELIVERIES. At the Closing, (a) Buyer shall deliver to, or as
directed by, ▇▇▇▇▇▇ the Purchase Price and the agreements, instruments of
assumption, opinions, certificates and other documents required to be delivered
by Buyer or Parent pursuant to Article 11 and (b) Sellers shall deliver to Buyer
the agreements, instruments of transfer, opinions, certificates and other
documents required to be delivered by Sellers pursuant to Article 10 and
possession of (i) all of the Real Estate except the Retained Leased Real Estate
and (ii) the Subleased Real Estate.
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3.5 CLOSING BALANCE SHEET.
(a) At least five Business Days prior to the Closing, ▇▇▇▇▇▇
shall prepare in good faith and deliver to Buyer an estimated unaudited balance
sheet (the "Estimated Closing Balance Sheet") of the Business as of the Closing
Date setting forth the Estimated Working Capital of the Business as of the
Closing Date, together with (i) a statement of the calculations and supporting
detail of Estimated Working Capital and (ii) a certificate signed by ▇▇▇▇▇▇ to
the effect that the Estimated Working Capital was determined in accordance
herewith. Buyer shall have the right to review any work papers relating to the
Estimated Closing Balance Sheet. The Estimated Closing Balance Sheet shall be
prepared in a manner consistent with the Baseline Financial Statements and the
terms of this Master Agreement and shall reflect ▇▇▇▇▇▇'▇ best estimate of the
Transferred Assets, Assumed Contract Obligations and other Assumed Liabilities
as of the Closing Date.
(b) In the event that the amount of Estimated Working Capital
of the Business as reflected on the Estimated Closing Balance Sheet is either
less or more than $189,900,000, then the amount of the cash portion of the
Purchase Price payable under Section 3.2(b) shall be reduced or increased, as
the case may be, by an amount equal to such difference. Any adjustment to the
Purchase Price made under this Section 3.5, or under Section 3.6, or otherwise
made under this Master Agreement shall first be applied against the portion of
the Purchase Price paid by the Buyer, with any excess being applied against the
portion paid by Parent.
(c) ▇▇▇▇▇▇ shall cause the cash portion of the Estimated
Closing Balance Sheet to be not less than $2,000,000, not including any cash in
the possession of any of the Transferred Subsidiaries as of the Closing Date.
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3.6 POST-CLOSING PURCHASE PRICE ADJUSTMENT.
(a) As promptly as practicable, but in no event later than 60
days following the Closing Date, Buyer shall cause to be prepared and delivered
to ▇▇▇▇▇▇ (i) an audited balance sheet of the Business as of the Closing Date
(the "Audited Closing Balance Sheet"), together with an audit report thereon by
Ernst & Young LLP, or another national accounting firm selected by the Buyer
(the "Buyer accountants"), prepared in accordance with GAAP, and (ii) a
statement based on such Audited Closing Balance Sheet setting forth in detail a
calculation of the Closing Date Working Capital. For purposes of this Agreement,
"Estimated Working Capital" and "Closing Date Working Capital" shall mean an
amount equal to (i) all accounts receivable plus inventory plus prepaid assets
plus the assets described in Section 2.1(w) plus, in the case of the calculation
of the Closing Date Working Capital, the assets described in Section 2.1(u), as
such constitute Transferred Assets, minus (ii) accounts payable and accrued
liabilities (other than accrued Tax Liabilities, the Retirement Plan Accruals
and any European Severance Accruals) including the liabilities referred to in
Sections 6.3(k) and 6.4, as such constitute Assumed Liabilities, in each case as
are accrued and reflected on the Estimated Closing Balance Sheet and the Audited
Closing Balance Sheet, respectively. Except as set forth below in this Section
3.6(a), the Audited Closing Balance Sheet shall be deemed to be and shall be
final, binding and conclusive on the parties hereto. The Audited Closing Balance
Sheet shall be deemed final for the purposes of this Section 3.6(a) upon the
earlier of (i) the failure of ▇▇▇▇▇▇ to notify Buyer of a dispute within 30 days
of the delivery of the Audited Closing Balance Sheet to ▇▇▇▇▇▇, (ii) the
resolution of all disputes, pursuant to Section 3.6(b), by ▇▇▇▇▇▇' accountants
and Buyer's accountants, and (iii) the resolution of all disputes, pursuant to
Section 3.6(b), by the Independent Accounting Firm.
(b) ▇▇▇▇▇▇ may dispute any amounts reflected on the Audited
Closing Balance Sheet delivered pursuant to Section 3.6(a), to the extent the
net effect of such disputed amounts would affect the Closing Date Working
Capital reflected on the Audited Closing Balance Sheet by more than $1,000,000,
but only on the basis that the amounts reflected on such statement are incorrect
or were not arrived at in accordance with GAAP consistently applied. In the
event of such a dispute, Buyer's accountants and ▇▇▇▇▇▇'▇ accountants shall
attempt to reconcile their differences, and any resolution by them as to any
disputed amounts shall be final, binding and conclusive on the parties hereto.
If Buyer's accountants and ▇▇▇▇▇▇'▇ accountants are unable to reach a resolution
within 60 days after the delivery of the Audited Closing Balance Sheet, Buyer's
accountants and ▇▇▇▇▇▇'▇ accountants shall submit the items remaining in dispute
for resolution to an independent accounting firm of international reputation
mutually acceptable to Buyer and ▇▇▇▇▇▇ (the "Independent Accounting Firm"),
which shall, within 30 days after such submission, determine and report to Buyer
and ▇▇▇▇▇▇ upon such remaining disputed items, and such report shall be final,
binding and conclusive on Buyer and ▇▇▇▇▇▇. The balance sheet resulting from
that report shall be the Audited Closing Balance Sheet. The fees and
disbursements of the Independent Accounting Firm shall be allocated between
Buyer and ▇▇▇▇▇▇ in the same proportion that the aggregate amount of such
remaining disputed items so submitted to the Independent Accounting Firm that is
unsuccessfully disputed by each such party as finally determined by the
Independent Accounting Firm bears to the total amount of such remaining disputed
items.
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(c) The Purchase Price adjustment shall be an amount equal to
the Closing Date Working Capital minus the Estimated Working Capital. If the
result is a positive number in excess of $1,000,000, then the Purchase Price
determined pursuant to Section 3.5(b) shall be adjusted upward in an amount
equal to the result obtained under this Section 3.6(c), and such amount shall be
paid in cash by wire transfer of immediately available funds by Buyer to ▇▇▇▇▇▇
as soon as practicable (but in no event more than 10 days) after such
determination. If the result obtained in this Section 3.6(c) is a negative
number in excess of $1,000,000, then the Purchase Price determined pursuant to
Section 3.5(b) shall be adjusted downward in an amount equal to the result
obtained under this Section 3.6(c), and such amount shall be paid by wire
transfer of immediately available funds by ▇▇▇▇▇▇ to Buyer as soon as
practicable (but in no event more than 10 days) after such determination.
3.7 LIMITATIONS. To the extent that a Liability is reflected on the
Audited Closing Balance Sheet, Buyer shall not have the right to also recover
under a claim for indemnification for such Liability pursuant to Article 9 or
Article 13 hereof.
3.8 CONSENT OF THIRD PARTIES; FURTHER ASSURANCES.
(a) From time to time following the Closing, Sellers shall
execute and deliver, or cause to be executed and delivered, to Buyer such
additional instruments of conveyance and transfer as Buyer may reasonably
request or as may be otherwise reasonably necessary to more effectively convey
or transfer to, and vest in, Buyer and put Buyer in possession of, any part of
the Transferred Assets. Nothing in this Master Agreement shall be construed as
an attempt or agreement to assign any asset, contract, lease, permit, license or
other right which would otherwise be included in the Transferred Assets but
which is by its terms or by law nonassignable without the consent of the other
party or parties thereto or any Governmental Authority unless such consent shall
have been given, or as to which all the remedies for the enforcement thereof
enjoyed by Sellers, any other Business Entity or the Business would not, as a
matter of law, pass to Buyer as an incident of the assignments provided for by
this Agreement (the "Non-Assignable Assets"). Sellers shall use their Best
Efforts to obtain such consent promptly. At such time as any Non-Assignable
Assets is properly assigned to Buyer, such Non-Assignable Asset shall become a
Transferred Asset. Following the Closing and until such time as such
Non-Assignable Assets may be properly assigned to Buyer, such Non-Assignable
Assets shall be held by Sellers in trust for Buyer and the covenants and
obligations thereunder shall be performed by Buyer in the name of Sellers and
all benefits and obligations existing thereunder shall be for the account of
Buyer. During such period, Sellers shall take or cause to be taken such action
in its name or otherwise as Buyer may reasonably request, at Buyer's expense, so
as to provide Buyer with the benefits of the Non-Assignable Assets and to effect
collection of money or other consideration to become due and payable under the
Non-Assignable Assets and Sellers shall promptly pay over to Buyer all money or
other consideration received by them (or their Affiliates) in respect of all
Non-Assignable Assets. Following the Closing, Sellers authorize Buyer, to the
extent permitted by Applicable Law and the terms of the Non-Assignable Assets,
at Buyer's expense, to perform all of the obligations and receive all of the
benefits under the Non-Assignable Assets and appoints Buyer their
attorney-in-fact to act in their name on its behalf (and on behalf of its
Affiliates) with respect thereto.
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(b) Notwithstanding anything in this Master Agreement to the
contrary, this Master Agreement shall not constitute an agreement by Sellers to
assign or delegate, or by Buyer to assume and agree to pay, perform or otherwise
discharge, any Non-Assignable Asset if an attempted assignment, delegation or
assumption thereof without the consent of a third Person (including, without
limitation, any Governmental Authority) thereto would constitute a breach
thereof unless and until such consent is obtained.
(c) Except as set forth in Section 3.8(a), Section 3.9 or as
provided in the Transition Services Agreement, to the extent reasonably
practicable, the Sellers shall perform all obligations and be entitled to all
the benefits under the Non-Assignable Assets; provided, however, that Sellers
shall be liable for the failure to perform any such obligation.
3.9 SHARED CONTRACTS. Subject to the terms of the Transition Services
Agreement, to the extent any Contracts relate both to the Business and to other
businesses of the Sellers ("Shared Contracts"), such Shared Contracts shall not
be assigned to Buyer. At Buyer's request, with respect to any Shared Contract,
the Sellers shall use Best Efforts to obtain the agreement of the other party or
parties to any Shared Contract to enter into a separate agreement with Buyer
with respect to the matters covered by such Shared Contract that relate to the
Business. Buyer shall be responsible for fulfilling the obligations under the
Shared Contracts related to or arising from benefits received by Buyer pursuant
to the Shared Contracts as contemplated by the Transition Services Agreement.
3.10 APPORTIONMENT AT CLOSING DATE; CUSTOMER BILLING.
(a) At the Closing, the parties shall make, without
duplication of adjustments reflected in the Audited Closing Balance Sheet,
customary closing adjustments with respect to the conveyance of the Transferred
Facilities as of the Closing Date and the usual adjustments relating to the
Business as of the Closing Date, including prepaid lease payments, security
deposits, rents, real estate taxes, local improvements charges, assessments
(special and ordinary), sewer impost charges, utility charges, water rents,
monthly maintenance charges, rebates and royalties, deposits and prepaid
expenses with any public utility or any municipal, governmental or other public
authority, wages and any other ongoing charges, and all such payments, taxes and
charges shall be apportioned and adjusted as of the Closing Date, and at the
Closing the net amount thereof shall be pro rata paid by ▇▇▇▇▇▇ to Buyer or paid
by Buyer to ▇▇▇▇▇▇, as the case may be. Any such apportionments and adjustments
shall be subject to correction for any errors or omissions that subsequently may
be discovered provided that the party discovering such error or omission
provides written notice of same to the other party. Such other party shall,
within 15 days after receipt of such notice, reimburse the party delivering such
notice for the full amount of such error or omission.
(b) In the event that ▇▇▇▇▇▇ or any of its Affiliates receives
payment after the Closing Date on invoices issued by Buyer relating to products
sold or services rendered on or after the Closing Date, ▇▇▇▇▇▇ will promptly
notify Buyer of such receipt and will promptly remit, or will cause such
Affiliate to promptly remit, such payment to Buyer. In the event that Buyer or
any Affiliate of Buyer receives payment after the Closing Date on invoices
issued by ▇▇▇▇▇▇ or any of its Affiliates relating to products sold or services
rendered prior to the Closing Date that have given rise to accounts
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receivable that are included in the Excluded Assets, Buyer will promptly notify
▇▇▇▇▇▇ of such receipt and will promptly remit, or will cause such Affiliate to
promptly remit, such payment to ▇▇▇▇▇▇.
3.11. WARRANTY CLAIMS. Except as expressly provided in Sections 2.3 and
2.4 and this Section 3.11, all of the obligations and liabilities of the
Business Entities with respect to any Products transferred to Buyer as part of
the Transferred Assets which are shipped or provided by Buyer on or after the
Closing shall be for the account of, and exclusively the obligation of Buyer.
Buyer shall assume the obligation to satisfy all warranty claims or liabilities
with respect to any products or services shipped or provided by the Business
Entities prior to the Closing.
3.12 PURCHASE AGREEMENT FOR ▇▇▇▇▇▇ MALAYSIA. On or prior to the Closing
Date, at ▇▇▇▇▇▇' request, Buyer will, or will cause a Subsidiary, to enter into
a separate Purchase Agreement (the "Malaysian Purchase Agreement") with HAS and
HSSM to purchase the stock of ▇▇▇▇▇▇ Malaysia on terms mutually acceptable to
Buyer, HAS and HSSM. The closing date for such purchase shall be the Closing
Date, or such other date as the parties shall agree. The purchase price for the
stock of ▇▇▇▇▇▇ Malaysia shall be paid in cash to HAS and HSSM and shall reduce
the cash portion of the Purchase Price to be paid to ▇▇▇▇▇▇ pursuant to Section
3.2.
3.13 DEFERRED CLOSING. The parties expect that the shares of ▇▇▇▇▇▇
Semiconductor (Taiwan) Ltd. and ▇▇▇▇▇▇ Semiconductor Y.H. (Korea) and the assets
of ▇▇▇▇▇▇ Semiconductor GmbH, the assets of ▇▇▇▇▇▇ ▇.▇. (Belgium), and the
assets of ▇▇▇▇▇▇ Semiconductor Design & Sales Pte. Ltd. (Singapore) may be
Non-Assignable Assets, as defined in Section 3.8, as of the Closing Date.
Sellers and Buyer shall, on the Closing Date, execute a deferred closing
agreement with respect to such assets containing provisions substantially the
same as Section 3.8, except that such agreement shall contain an absolute
obligation to complete the transfer of the shares of ▇▇▇▇▇▇ Semiconductor
(Taiwan) Ltd., the shares of ▇▇▇▇▇▇ Semiconductor Y.H. (Korea), the assets of
▇▇▇▇▇▇ Semiconductor GmbH (Germany), the assets of ▇▇▇▇▇▇ ▇.▇. (Belgium) and the
assets of ▇▇▇▇▇▇ Semiconductor Design and Sales Pte. Ltd. (Singapore), within
180 days of the Closing Date (each such closing a "Deferred Closing" and
collectively, the "Deferred Closings"). The Non-Assignable Assets shall be
considered Transferred Assets for purpose of calculating the Estimated Closing
Balance Sheet and the Audited Closing Balance Sheet. No adjustment shall be made
to the Purchase Price as a result of such assets being Non-Assignable Assets.
3.14 ENVIRONMENTAL CONSENTS. To the extent that environmental permits
are not obtained by the Closing Date, the parties agree to use Best Efforts to
obtain the transfer of such permits as promptly as possible following the
Closing Date.
3.15 PENNSYLVANIA INDEBTEDNESS. To the extent the indebtedness listed
on Schedule 2.3 is unable to be transferred to Buyer because the holder of such
debt does not consent to such transfer or because the merger of ▇▇▇▇▇▇
Semiconductor (Pennsylvania), Inc. into a limited liability company was a breach
of one or more of such loans, ▇▇▇▇▇▇ shall repay the debt in full, and Buyer
shall enter into a loan agreement, or agreements, with ▇▇▇▇▇▇ on substantially
the same terms and security as the indebtedness which could not be so
transferred, provided that, Buyer shall repay to ▇▇▇▇▇▇ the outstanding balance
of such loans (the "Replacement Loans") at the time the outstanding principal
balance of the Note is repaid if, and only if, the bonds issued by
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Buyer on the Closing Date have been repaid, and provided further, if the due
dates of such bonds are extended, the Buyer shall cause the terms governing such
bonds to be modified to permit the repayment of the Replacement Loans at the
time the Note is paid.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
Except as set forth in the Disclosure Schedule delivered to Buyer
contemporaneously herewith (the "Disclosure Schedule"), of which the Schedules
referred to below are a part, and in the documents and other materials
identified in the Disclosure Schedule, and subject to the limitations contained
in Article 13, ▇▇▇▇▇▇ represents and warrants to Buyer as set forth below as of
the date of this Master Agreement. This Article 4 does not apply to Transferred
Assets conveyed to Buyer through the IP Transfer Agreements, which include the
only representations and warranties of ▇▇▇▇▇▇ made with respect to such assets.
4.1 ORGANIZATION, STANDING, ETC. OF BUSINESS ENTITIES. Each Business
Entity (other than ▇▇▇▇▇▇ Semiconductor, LLC, ▇▇▇▇▇▇ Semiconductor (Ohio), LLC,
and ▇▇▇▇▇▇ Semiconductor (Pennsylvania), LLC) is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction where it is organized and has all requisite corporate power and
authority to carry on the Business as currently conducted by it and to own or
lease and to operate the properties of the Business used by it. Each Business
Entity (other than ▇▇▇▇▇▇ Semiconductor, LLC, ▇▇▇▇▇▇ Semiconductor (Ohio), LLC,
and ▇▇▇▇▇▇ Semiconductor (Pennsylvania), LLC) is qualified to do business and is
in good standing in each state of the United States in which the Business is
conducted that requires such qualification and where the failure to so qualify
would have a Material Adverse Effect on the Business. For the purposes of the
Transaction Documents, a "Material Adverse Effect on the Business" means any
material adverse change in, or material adverse effect on, the assets,
liabilities, business or operations of the Transferred Assets or the Business
taken as a whole.
4.2 CORPORATE AUTHORIZATION; ENFORCEABILITY.
(a) The execution, delivery and performance of this Master
Agreement and all other documents executed or to be executed pursuant to this
Master Agreement by any Seller, and the consummation of the transactions
contemplated hereby and thereby, have, or prior to the Closing will have, been
duly authorized by all necessary corporate action on the part of each Seller.
This Master Agreement and the Ancillary Agreements executed or to be executed by
a Seller have been, or will have been, at the time of their respective
executions and deliveries, duly executed and delivered by a duly authorized
officer of each such Seller.
(b) This Master Agreement and each Ancillary Agreement
executed or to be executed by a Seller constitutes, or at the time executed by a
Seller will constitute, the valid and legally binding obligation of each Seller,
enforceable in accordance with its terms, except as such enforceability may be
limited by equitable principles and by applicable bankruptcy, insolvency,
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reorganization, arrangement, moratorium or similar laws relating to or affecting
the rights of creditors generally.
4.3 CHARTERS AND BYLAWS; CAPITALIZATION OF TRANSFERRED SUBSIDIARIES.
Copies of the charters and bylaws and other organizational documents of the
Business Entities have been made previously available to Buyer, and each such
copy is true, correct and complete. Schedule 4.3 sets forth the authorized and
outstanding capital stock of the Transferred Subsidiaries. Except as set forth
on Schedule 4.3, none of the Transferred Subsidiaries has any outstanding
securities convertible into or exercisable for any shares of its capital stock,
nor does it have any outstanding rights to subscribe for or to purchase, or any
options for the purchase, or any arrangements providing for the issuance
(contingent or otherwise), of, or any calls against, commitments by or claims
against it of any character relating to, any shares of its capital stock or any
securities convertible into or exchangeable or exercisable for any shares of its
capital stock.
4.4 NO VIOLATIONS. The execution, delivery and performance of this
Master Agreement and the Ancillary Agreements executed or to be executed by
Sellers, and the consummation of the transactions contemplated hereby and
thereby, will not cause or result in any violation of or default under any
provision (a) of the charter or bylaws of any Business Entity, (b) except as set
forth on Schedule 4.4, of any mortgage, indenture, trust, lease, partnership or
other agreement or other instrument, permit, concession, grant, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to any Seller or the Business, the result of which, with respect to
items identified in clause (b), would (either individually or in the aggregate)
have a Material Adverse Effect on the Business or would have a Material Real
Estate Impairment.
4.5 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Except as set forth on
Schedule 4.5, no consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority are required to
be obtained or made by any Business Entity in connection with the execution,
delivery, performance, validity and enforceability of this Master Agreement or
any Ancillary Agreement, other than (a) a filing with the Federal Trade
Commission and the Department of Justice under the HSR Act, (b) if required, a
filing with the Committee on Foreign Investment in the United States under
Section 721 of Title VII of the United States Defense Production Act of 1950, as
amended by Section 5021 of the Omnibus Trade and Competitiveness Act of 1988,
and (c) other consents, licenses, approvals, authorizations, registrations or
declarations, where the failure to obtain such would not have a Material Adverse
Effect on the Business and would not cause a Material Real Estate Impairment.
4.6 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS. No Business Entity is
in violation of any term of its charter or bylaws or other charter documents or,
except as set forth on Schedule 4.6, any mortgage, indenture, instrument or
agreement relating to indebtedness for borrowed money or of any judgment, decree
or order which names such Business Entity, or of any term of any other Assumed
Contract Obligation which is among the Transferred Assets, which violation,
either individually or when aggregated with all other such violations, would
have a Material Adverse Effect on the Business or would have a Material Real
Estate Impairment. To Sellers' Knowledge, no Business Entity is in violation of
any Applicable Law applicable to the Business or any of the Transferred Assets,
which violation, either individually or when aggregated
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with all other such violations, would have a Material Adverse Effect on the
Business or would have a Material Real Estate Impairment. This Section 4.6 does
not apply to Environmental Laws.
4.7 BASELINE FINANCIAL STATEMENTS. ▇▇▇▇▇▇ has delivered to Buyer the
statement of the Transferred Assets and Assumed Liabilities and the related
statement of income of the Business (other than Excluded Assets) for the nine
months ended April 2, 1999 (the "Financial Statements Date") (such statements,
including the notes thereto, hereinafter being referred to as the "Baseline
Financial Statements"). The Baseline Financial Statements are included in
Schedule 4.7 and have been prepared in accordance with the accounting records
and policies of ▇▇▇▇▇▇ and with GAAP and present fairly in all material respects
the Transferred Assets and the Assumed Liabilities of the Business as of the
dates thereof and the results of its operations for the period then ended,
except (a) as set forth on Schedule 4.7 and (b) that the Baseline Financial
Statements do not contain all footnote disclosures required by GAAP. During the
last five fiscal years ended July 2, 1998, there has not been any material
change in the method of accounting or keeping of books of account or accounting
practices with respect to the Business, except as (i) required by GAAP or (ii)
described in ▇▇▇▇▇▇' annual reports on Form 10-K or 10-K/A for the five fiscal
years ended July 2, 1998 as filed with the Securities and Exchange Commission.
4.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
Schedule 4.8 as of the date of this Master Agreement, since the Financial
Statements Date, and except for activities related to the transactions
contemplated by this Master Agreement, each Business Entity has conducted its
operations related to the Business in the ordinary course of business, and
neither the Business nor the Transferred Assets have suffered a Material Adverse
Effect on the Business or a Material Real Estate Impairment. Without limiting
the generality of the foregoing, except as set forth on Schedule 4.8, since the
Financial Statements Date in each case as related to the Business:
(a) no Business Entity has or has entered into any agreement
to sell, lease, transfer, mortgage or assign or subject to any lien any
of the Transferred Assets, tangible or intangible, other than in the
ordinary course of business;
(b) no party (including any Business Entity) has, other than
in the ordinary course of business, accelerated, terminated, materially
modified, or canceled any contract, lease, sublease, license, or
sublicense (or series of related contracts, leases, subleases,
licenses, and sublicenses), involving more than $125,000 to which any
Business Entity is a party or by which the Transferred Assets are
bound;
(c) no Business Entity has made any commitment for any capital
expenditure (or series of related capital expenditures) outside the
ordinary course of business for an amount that exceeds $250,000;
(d) no Business Entity has made any capital investment in, any
loan to, or any acquisition of the securities or assets of any other
Person other than in the ordinary course of business;
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(e) no Business Entity has canceled, compromised, knowingly
waived or released any material right or claim (or series of related
rights and claims) under Material Contracts, outside the ordinary
course of business;
(f) no Business Entity has incurred, assumed, guaranteed or
discharged any obligation or liability, absolute, accrued, contingent
or otherwise, whether due or to become due, or any indebtedness for
borrowed money, except current liabilities for trade or business
obligations incurred in connection with the purchase of goods or
services in the ordinary course of business consistent with prior
practice;
(g) no Business Entity has received any notice of termination
of any Material Contract or any work order thereunder, lease or other
agreement which in any case or in the aggregate would reasonably be
expected to have a Material Adverse Effect on the Business, and there
has not been any change or, to the Sellers' Knowledge, any threat of
any change in any relation with, or any loss or, to the Sellers'
Knowledge, threat of loss of, any of the suppliers, distributors or
customers of the Business which, individually or in the aggregate, has
had or reasonably could be expected to have a Material Adverse Effect
on the Business;
(h) no Business Entity has suffered any damage to or
destruction or loss of any tangible assets (whether or not covered by
insurance), in any case or in the aggregate, in excess of $150,000;
(i) no Business Entity has made any material change in the
rate of compensation, commission, bonus or other direct or indirect
remuneration payable, or agreed to pay, conditionally or otherwise, any
material bonus, incentive, retention or other compensation, retirement,
welfare, fringe or severance benefit or vacation pay, to or in respect
of any Employee of the Business, other than increases and payments in
the ordinary course of business consistent with past practice in the
compensation payable to Employees of the Business;
(j) no Business Entity has encountered any labor union
organizing activity or had any actual or overtly threatened employee
strikes, work stoppages, slowdowns or lockouts and has not entered into
any material agreement or material negotiation with any labor union or
other collective bargaining representative of any Employee of the
Business; and
(k) no Business Entity has made a change in accounting method,
keeping of books of account or accounting practices, nor has any
Business Entity made any election for Tax purposes or for purposes of a
Tax Return (or had any such election made on its behalf) except as set
forth in Sections 4.22 and 10.20, or entered into any agreement,
arrangement or settlement with respect to Taxes.
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4.9 TITLE TO TRANSFERRED ASSETS.
(a) Personal Property. Except as set forth on Schedule 4.9(a),
and except for personal property subject to valid leases, each Business Entity
has good title to or other valid ownership rights in the Transferred Assets.
Except as set forth on Schedule 4.9(a), and except for personal property subject
to valid leases, the Transferred Assets are owned free and clear of all material
Liens except for Permitted Liens. This Subsection 4.9(a) does not apply to Real
Estate.
(b) Real Estate.
1. Owned Real Estate.
------------------
(i) Schedule 4.9(b) sets forth a list of all of the
real estate owned by any one or more of the Business Entities and used primarily
in the Business (such real estate, together with all beneficial, appurtenant
easements and other appurtenances thereto and with all buildings, structures and
other improvements thereon and all fixtures attached thereto or forming a part
thereof, is collectively referred to herein as the "Owned Real Estate"), and
includes the street address of each parcel of the Owned Real Estate. Except as
set forth on Schedule 4.9(b) and subject to any lease or other written agreement
executed prior to Closing pursuant to Section 8.4, each Business Entity has
good, valid, marketable and indefeasible fee simple title to, and is in actual,
exclusive possession of, its respective Owned Real Estate. The Sellers have
made, or at the request of Buyer will make prior to Closing, available to Buyer
true, correct and complete copies of all (i) legal descriptions, (ii) title
reports, title insurance policies and commitments therefor, (iii) surveys, (iv)
licenses, certificates of occupancy, plans, specifications and permits,
pertaining to the Owned Real Estate that are in the possession or control of any
of the Business Entities.
(ii) The Owned Real Estate is free and clear of all
Liens except for Permitted Liens.
(iii) To the Sellers' Knowledge, no portion of
any of the Owned Real Estate is subject to a special ad valorem tax valuation or
rate that will be lost as a result of the transfer to Buyer pursuant to the
provisions hereof.
(iv) The Owned Real Estate and the use thereof
by the Business Entities in connection with the Business as currently used and
consistent with past practice complies, in all material respects, with all
covenants, easements and restrictions of record affecting the Owned Real Estate.
(v) All construction of the facilities and
improvements located in Mountaintop, PA have been completed to the reasonable
satisfaction of the Business Entities in accordance with the appropriate
construction contracts, and there is not currently any ongoing construction at
any of the Owned Real Estate other than ordinary course maintenance and repair
and to Sellers' Knowledge no Business Entity has any claim for any construction
defect.
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2. Leased Real Estate.
-------------------
(i) Schedule 4.9(b) sets forth a list of all of
the leases or rights of occupancy pursuant to which any Business Entity leases
or subleases any real property or interest therein related to or used primarily
in the Business (collectively, as heretofore modified, amended or extended, the
"Leases"), including the identification of each of the lessors thereof and the
street addresses of all of the real estate demised under each of the Leases
(collectively, the "Leased Real Estate"). One or more of the Business Entities
is the lessee under all Leases, and no party other than one or more of the
Business Entities has any right to possession, occupancy or use of any of the
Leased Real Estate. True and correct copies of (i) leasehold title insurance
policies and commitments therefor, title reports, surveys, licenses,
certificates of occupancy, plans, specifications, permits and other documents,
pertaining to the Leased Real Estate that are in the possession or control of
any of the Business Entities, and (ii) each of the Leases, including all
amendments, modifications and extensions, and together with all subordination,
non-disturbance and/or attornment agreements related thereto have been, or at
the request of Buyer will be prior to Closing, made available by the Business
Entities to Buyer. Each of the Leases is valid and in full force and effect and
is binding and enforceable in accordance with its terms. Except as set forth on
Schedule 4.9(b), none of the Sellers has received any written notice of default
under any provision of any of the Leases. Except as set forth on Schedule
4.9(b), to the Sellers' Knowledge, none of the Business Entities and none of the
lessors under any of the Leases is in material default under any of the Leases
and no event has occurred that with notice, the passage of time or both would
constitute such a default.
(ii) Except as set forth in Schedule 4.9(b), the
Business Entities are in actual, exclusive possession of the Leased Real Estate.
The Business Entities have good, valid and indefeasible title to all the
leasehold estates conveyed under the Leases free and clear of all Liens, except
Permitted Liens.
(iii) Except as set forth in Schedule 4.9(b), the
basic rent, all additional rent and all other charges and amounts payable under
the Leases by the lessee thereunder have been paid to date. All work required to
be performed under the Leases by the lessors thereunder or by any of the
Business Entities has been performed in all material respects, and, to the
extent that any of the Business Entities is responsible for payment of such
work, has been fully paid for, whether directly to the contractor performing
such work or to such lessor as reimbursement therefor, except for items (i)
which any of the Sellers is disputing in good faith by appropriate action, and
(ii) are not reasonably expected to have a Material Adverse Effect on the
Business or cause a Material Real Estate Impairment.
(iv) Except as set forth on Schedule 4.9(b) or
reflected in the Baseline Financial Statements, there are no brokerage
commissions or finder's fees due from any of the Business Entities which are
unpaid with regard to any of the Leases or the Leased Real Estate, or which will
become due at any time in the future with regard to the Leases or the Leased
Real Estate, including with respect to the Existing Subleases.
(v) Except as set forth on Schedule 4.9(b), there
have been no acts of God, forces of nature, or other casualties which could
result in the termination of any of the Leases.
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(vi) Except as set forth on Schedule 4.9(b):
(i) no consent of any of the lessors under any of the Leases is required by
reason of any of the transactions contemplated by this Master Agreement; and
(ii) none of the rights of any of the Business Entities under any of the Leases
will be impaired by the consummation of the transactions contemplated by this
Master Agreement and all of such rights (other than those under the Retained
Leases) and all of Buyer's rights under the Subleases will be enforceable by the
Buyer after the Closing Date, to the same degree as by the Sellers prior to the
Closing Date without the consent or agreement of any other party (except in the
case of the Subleases, in which case Buyer shall have such rights as are
provided to it by the Subleases).
(vii) The use of the Leased Real Estate located in
the Triangle Research Park in North Carolina and the Leased Real Estate located
in Malaysia as currently used and consistent with past practice complies, in all
material respects, with the applicable Leases and with all covenants easements
and restrictions of record affecting such Leased Real Estate.
(viii) Except pursuant to the subleases and similar
agreements described on Schedule 4.11(l) (collectively, the "Existing
Subleases"), no portion of any of the Leased Real Estate has been leased or
subleased to any Person and no Person, other than one or more of the Transferred
Business Entities, has any right to use or occupy any portion of the Leased Real
Estate. All of the Existing Subleases are in full force and effect and, to
Sellers' Knowledge, no default or event or occurrence which with notice, the
passage of time or both would constitute a default, on the part of any party to
any Existing Sublease, has occurred. None of the Existing Subleases interferes
or grants rights which if exercised could reasonably be expected to interfere
with Seller's use of the affected Leased Real Estate or the conduct of the
Business thereon as currently conducted and as conducted consistent with past
practice, in a manner that has or could reasonably be expected to have a
Material Adverse Effect or a Material Real Estate Impairment.
3. General.
-------
(i) The water, gas, electricity and other
utilities serving the Owned Real Estate and the Leased Real Estate
(collectively, the "Real Estate") have been and are currently adequate to
service the normal operations conducted thereon consistent with past practice.
(ii) Each parcel of the Real Estate has physical
and, to the Sellers' Knowledge, legal vehicular and pedestrian access to and
from public roadways. To the Sellers' Knowledge, no fact or condition exists
which would result in the termination of the current access from the Real Estate
to any presently existing highways and roads adjoining or situated on the Real
Estate.
(iii) Except as set forth on Schedule 4.9(b),
no Business Entity has received any written or, to the Sellers' Knowledge, oral
notice or order from any Governmental Authority, insurance company which has
issued a policy with respect to any of the Real Estate or any board of fire
underwriters or other body performing similar functions or any other Person
which (x) relates to or alleges a violation of or nonconformity with any zoning,
building, safety, subdivision, wetlands or other similar law, code, rule,
regulation, ordinance, permit, license, certificate, covenant, restriction or
condition with respect to any of the Real Estate or the use thereof which
violation of nonconformity could reasonably be expected to have a Material Real
Estate Impairment, or (y) requests the performance of any material repairs,
alterations or other work that have not yet been cured or
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performed, as applicable. None of the Sellers have received any written notice
from any Governmental Authority or other Person of any condemnation action,
eminent domain proceeding or other similar proceeding concerning any of the Real
Estate. There is no pending condemnation, expropriation, eminent domain, or
similar proceeding affecting any of the Real Estate and, to the Sellers'
Knowledge, no such action, proceeding or litigation is threatened.
(iv) All of the buildings and improvements
situated upon the Real Estate are operable and in normal condition and repair,
subject to ordinary wear and tear and to the items set forth on Schedule 4.9(b).
(v) Other than: (x) the Owned Real Estate,
(y) the Leased Real Estate other than the Retained Leased Real Estate, and (z)
the Subleased Real Estate, no other real estate or rights, titles, estates or
interest therein is reasonably necessary to the conduct of the Business as
currently conducted and consistent with past practice.
4.10 YEAR 2000 READINESS. The ▇▇▇▇▇▇ Semiconductor Sector (a) has
conducted an assessment of its information system technologies, automated
manufacturing, billing and other operations for the purpose of identifying, and
(b) is engaged in an effort to mitigate (which is continuing in the ordinary
course of business), any significant disruption in operations that it
anticipates as a consequence of the Y2K Problem. Assuming the efforts to
mitigate are continued, with respect to the Transferred Assets, by Buyer in the
ordinary course of business after the Closing Date, the Transferred Assets are
not reasonably expected to experience any disruption in operations as a
consequence of the Y2K Problem that could reasonably be expected to have a
Material Adverse Effect on the Business or to have a Material Real Estate
Impairment. As used in this Section 4.10, the "Y2K Problem" means a
date-handling problem relating to the Year 2000 date change that would cause a
computer system, software or equipment to fail to correctly perform, process and
handle date-related data for the dates within and between the twentieth and
twenty-first centuries and all other centuries.
4.11 ASSUMED CONTRACT OBLIGATIONS. ▇▇▇▇▇▇ has made available to Buyer a
copy or description of all outstanding active Contracts constituting:
(a) All customer contracts and open purchase orders of the
Business with a reasonably expected value in excess of $250,000 per annum;
(b) All pending bids for customer contracts for Products with
a reasonably expected value in excess of $250,000 per annum;
(c) All contracts for the employment of any Person by a
Business Entity specific to the Business and providing for cash compensation
equal to or greater than $100,000 per annum;
(d) All collective bargaining agreements specific to the
Business;
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(e) All consulting agreements to which the Business Entities
are parties in connection with the conduct of the Business;
(f) All joint venture, teaming and similar arrangements to
which the Business Entities are parties in connection with the Business;
(g) All subcontracts, agreements and other arrangements
pursuant to which a third party processes products for the Business with
reasonably expected annual payments in excess of $250,000;
(h) All agreements for the purchase by a Business Entity of
raw materials or other supplies specific to the Business with a reasonably
expected value in excess of $250,000 per annum;
(i) All agreements for the purchase by a Business Entity of
equipment specific to the Business involving outstanding commitments in excess
of $500,000;
(j) All mortgages, indentures, notes and installment
obligations and other instruments and contracts specific to the Business and
relating to any borrowing of, or issuance of letters of credit for, an amount in
excess of $250,000 by one or more Business Entities;
(k) All guaranties of any obligation specific to the Business
in excess of $250,000 by a Business Entity (excluding any non-recourse
guaranties and any endorsement made in the ordinary course of business for
collection);
(l) All leases of real or personal property specific to the
Business under which a Business Entity is lessor;
(m) All leases of real property to be (i) assumed by Buyer and
(ii) subleased to Buyer;
(n) All leases of personal property specific to the Business
under which a Business Entity is lessee and is obligated to make payments of
more than $250,000 per annum;
(o) All agreements materially limiting the freedom of a
Business Entity to compete in the Business with any Person or other entity or in
any geographical area;
(p) All Contracts specific to the Business not otherwise
listed with a reasonably expected contract value in excess of $250,000 per annum
or $500,000 in the aggregate; and
(q) All distributor and sales agent agreements specific to the
Business.
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A list or description of each of the items described above (the "Material
Contracts") is set forth on Schedule 4.11, and Sellers have made available to
Buyer true copies of each of the Material Contracts. As of the date of this
Master Agreement, except as disclosed on Schedule 4.11, all Material Contracts
are valid, binding and enforceable against each Business Entity which is a party
thereto, and to the Sellers' Knowledge, the other parties thereto, in accordance
with their terms and are in full force and effect and, as to each Material
Contract, there does not exist thereunder any default on the part of any
Business Entity, and there does not exist any event, occurrence or condition,
including the consummation of the transactions contemplated hereunder, which
(after notice, passage of time, or both) would constitute a default thereunder
on the part of such Business Entity, which default has had or would have a
Material Adverse Effect on the Business. Except as disclosed on Schedule 4.11,
no Business Entity has received any written claim from any other party to any
Material Contract that any Business Entity has breached any obligations to be
performed by it thereunder, or is otherwise in default or delinquent in
performance thereunder, except any of the foregoing which could not reasonably
be expected to have a Material Adverse Effect on the Business.
4.12 LITIGATION. Except as set forth on Schedules 4.12 and 4.14, there
are no actions, suits, proceedings or governmental investigations pending
against any Business Entity or Transferred Asset or, to the Sellers' Knowledge,
threatened, involving the Business or the Transferred Assets, at law or in
equity or before any Governmental Authority (including, without limitation,
relating to the Management or Release of Hazardous Materials), or that have been
settled, dismissed or resolved on or since the Financial Statements Date, that
have had or would reasonably be expected to have a Material Adverse Effect on
the Business. As of the date of this Master Agreement, no Business Entity or
Transferred Asset is subject to any judgment, stipulation, order or decree
arising from any action, suit, proceeding or investigation that individually or
in the aggregate would reasonably be expected to have a Material Adverse Effect
on the Business or a Material Real Estate Impairment.
4.13 LICENSES AND PERMITS. Each Business Entity has all licenses,
certificates of occupancy, permits and other authorizations from Governmental
Authorities necessary for the conduct of the Business or the use, ownership or
occupancy of any of the Transferred Assets as conducted, used, owned or occupied
by the Business Entities prior to the date hereof and for the use, occupancy and
operation of the Transferred Assets (collectively "Permits") except where the
failure to have such Permits could not reasonably be expected to result in a
Material Adverse Effect on the Business or a Material Real Estate Impairment.
Except as set forth on Schedule 4.13, (a) each of said Permits is in full force
and effect, (b) the Business is in compliance with the terms, provisions and
conditions thereof, except where the failure to be so in compliance could not
reasonably be expected to result in a Material Adverse Effect on the Business or
a Material Real Estate Impairment, (c) there are no, and Sellers have not
received any written notice of any, outstanding violations, notices of
noncompliance, judgments, consent decrees, orders or judicial or administrative
actions, investigations or proceedings adversely affecting any of said Permits,
and (d) to the Sellers' Knowledge, no condition exists and no event has occurred
which (whether with or without notice, lapse of time or the occurrence of any
other event) would permit the suspension or revocation of any material Permits
other than by expiration of the term
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set forth therein. Sellers make no representation or warranty with respect to
the transferability of the Permits to Buyer.
4.14 ENVIRONMENTAL COMPLIANCE. Except as set forth in Schedule 4.14,
(a) the conduct of the Business complies in all material respects with all
Environmental Laws; (b) neither ▇▇▇▇▇▇ nor any of the Transferred Subsidiaries
Manage or have Managed Hazardous Materials in connection with the operations of
the Business in a manner which, to the Sellers' Knowledge, has caused, causes or
threatens to cause environmental conditions which give rise to liability under
Environmental Laws or under common law; and (c) with respect to the Real Estate
and the Business, neither ▇▇▇▇▇▇ nor any of the Transferred Subsidiaries has
received and, to the Sellers' Knowledge, no one else has received, any requests
for information, notices of claim, demands or other notifications that it or
they (or any of their predecessors) are or may be potentially responsible with
respect to any Remediation or other liability arising out of or resulting from
any Hazardous Materials Released or Managed at any property now or formerly
owned, operated or leased by ▇▇▇▇▇▇ or any of the Transferred Subsidiaries or
their predecessors, or at any other property, facility or off-site location to
which the Hazardous Materials Released or Managed by ▇▇▇▇▇▇ or any of the
Transferred Subsidiaries or any of their predecessors have been transported or
disposed of or have come to be located. "Environmental Laws" shall mean all
applicable foreign, Federal, state and local laws, ordinances and regulations
pertaining to air and water quality, Hazardous Materials, waste, disposal or
other environmental matters, including the Clean Water Act, the Clean Air Act,
the Federal Water Pollution Control Act, the Solid Waste Disposal Act, the
Resource Conservation Recovery Act, the Occupational Health and Safety Act, the
Comprehensive Environmental Response, Compensation, and Liability Act, and the
rules, regulations and ordinances of the cities and counties in which the
Business is located, the Environmental Protection Agency and all other
applicable Governmental Authorities, in each case as in effect on the Closing
Date.
4.15 ABSENCE OF CERTAIN BUSINESS PRACTICES. To the Sellers' Knowledge,
no Business Entity nor any officer, employee or agent of any Business Entity, or
any other Person acting on their behalf, has, directly or indirectly, since the
date of formation of such Business Entity, respectively, given, offered,
solicited or agreed to give, offer or solicit any contribution, gift, bribe,
rebate, payoff, influence payment, kickback or other payment, regardless of form
and whether in money, property or services, to any customer, supplier,
governmental employee or other Person who is or may be in a position to help or
hinder the Business in connection with the conduct of the Business (a) which
subjected or could reasonably be expected to have subjected a Business Entity to
any material damage or penalty in any civil, criminal or governmental litigation
or proceeding, (b) which, if not given in the past, could reasonably be expected
to have had a Material Adverse Effect on the Business, (c) which, if not
continued in the future, could not reasonably be expected to have a Material
Adverse Effect on the Business or subject a Business Entity to suit or penalty
in any private or governmental litigation or proceeding, (d) for any purposes
described in Section 162(c) of the Code, or (e) for the purpose of establishing
or maintaining any concealed fund or concealed bank account.
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4.16 PERSONNEL MATTERS.
(a) Sellers have heretofore provided to Buyer a list of all of
the employees for which Buyer will be responsible pursuant to Article 6 (such
employees, collectively, "Employees of the Business") and their respective job
titles, salaries, wages, and other compensation paid during calendar year 1998
as well as dates of employment, and date and amount of last salary increase.
(b) Except as set forth on Schedule 4.16(b), there are no
material employment related disputes, grievances, or disciplinary actions
pending or, to the Sellers' Knowledge, threatened, by or between any of the
Business Entities and any Employees of the Business.
(c) All currently effective personnel policies and manuals of
the Business Entities are listed on Schedule 4.16(c) and true, accurate, and
complete copies of all such written personnel policies and manuals have been
made available to Buyer.
4.17 LABOR MATTERS. This Section 4.17 does not extend to the subject
matter of Section 4.18. Except as set forth on Schedule 4.17, in relation to the
conduct of the Business:
(a) No Business Entity is obligated by, or subject to, any
order of the National Labor Relations Board or other labor board or
administration, or any unfair labor practice decision.
(b) No Business Entity is a party or subject to any pending
or, to Sellers' Knowledge, threatened labor or civil rights dispute or any other
labor or employment related law suit, controversy or grievance or any unfair
labor practice proceeding with respect to claims of, or obligations of, any
employee or group of employees. No Business Entity has during the last three
years received any notice that any labor representation petition or request is
pending or is threatened with respect to Employees of the Business.
(c) Each Business Entity is in compliance in all material
respects with all (i) Applicable Laws respecting employment and employment
practices, terms and conditions of employment and wages and hours and (ii)
collective bargaining agreements related to the Union Plants.
(d) To the Sellers' Knowledge, no Employees of the Business or
former employee of any Business Entity has any claim against any Business Entity
(whether under Applicable Law, pursuant to any employment agreement, or
otherwise) on account of, or for: (i) overtime pay, other than for the current
payroll period; (ii) wages or salary (excluding bonuses and amounts accruing
under any pension or profit-sharing plan, including but not limited to any
Benefit Arrangement (as such term is defined in Section 4.18.1)) for a period
other than the current payroll period; (iii) vacation, time off or pay in lieu
of vacation or time off, other than vacation or time off (or pay in lieu
thereof) earned in respect of the current or past fiscal year or accrued on the
Audited Closing Balance Sheet for Seller; or (iv) any other claim arising under
any law governing labor and employment matters, including without limitation,
discrimination claims.
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(e) To the Sellers' Knowledge, during the last three years,
there have been no strikes, work stoppages, work slowdowns or other such
concerted activities.
4.18 SELLER BENEFIT PLANS.
4.18.1 UNITED STATES.
(a) Schedule 4.18.1 lists and identifies (i) each
employee pension benefit plan, as defined in Section 3(2) of ERISA (a "Pension
Plan"); (ii) each employee welfare benefit plan, as defined in Section 3(1) of
ERISA (a "Welfare Plan"); and (iii) each compensation and employment
arrangement, including, but not limited to, any fringe benefit, incentive
compensation, stock option, stock purchase, bonus, severance, deferred
compensation, and supplemental executive compensation plan or employment
agreement (a "Benefit Arrangement"), that is maintained by a Business Entity for
Employees of the Business based in the United States (collectively, the "U.S.
Benefit Plans"). True and complete copies of all U.S. Benefit Plans have been
provided or made available to Buyer, including, but not limited to (i) each
Pension Plan and any related trust agreement (including all amendments to such
Pension Plan and trust) and its most recent summary plan description, any
determination letter issued by the Internal Revenue Service, and (ii) each
Welfare Plan and Benefit Arrangement and any related insurance contracts or
other funding arrangement, administrative services agreement and summary plan
description and the most recent annual reports on Form 5500 required to be filed
with the Internal Revenue Service in respect of any Pension Plan, Welfare Plan
and Benefit Arrangement. Except as specifically disclosed on Schedule 4.18, no
Business Entity maintains or contributes to any Welfare Plan that provides
benefits to employees after termination of employment other than as required by
Part 6 of Title I of ERISA.
(b) Except as disclosed on Schedule 4.18.1,
neither any Business Entity nor any ERISA Affiliate is obligated to contribute
to any multiemployer plan, as defined in Section 3(37) of ERISA nor has been
obligated to contribute to any multiemployer plan, at any time during the six
most recent calendar years preceding the year of this Master Agreement. As used
herein, the term "ERISA Affiliate" shall mean a (i) corporation which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as ▇▇▇▇▇▇, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the meaning
of Section 414(c) of the Code) with ▇▇▇▇▇▇, or (iii) member of the same
affiliated service group (within the meaning of Section 414(m) of the Code) as
▇▇▇▇▇▇, any corporation described in clause (i) above or any partnership or
trade or business described in clause (ii) above. With respect to any such
multiemployer plan, no Business Entity or ERISA Affiliate had incurred, or is
reasonably likely to incur, any withdrawal liability under Title IV of ERISA,
nor is any such plan in reorganization.
(c) Except for the Pension Plan of Choice
Microsystems, Inc., no Pension Plan is subject to Title IV of ERISA. No
liability under Subtitle C or D of Title IV of ERISA has been or is expected to
be incurred by any Business Entity or any ERISA Affiliate with respect to any
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
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currently or formerly maintained by ▇▇▇▇▇▇ or any ERISA Affiliate. All
contributions required to be made by any ERISA Affiliate to any employee benefit
plan subject to Section 412 of the Code or Section 302 of ERISA have been timely
made. No employee benefit plan subject to Section 412 of the Code sponsored,
maintained or contributed to by any ERISA Affiliate has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of the
Code or Section 302 of ERISA and no ERISA Affiliate has an outstanding funding
waiver.
(d) Each Pension Plan which is intended to be
qualified under Section 401(a) of the Code as currently in effect has been
determined by the Internal Revenue Service to be so qualified and each trust
related to any such Pension Plan has been determined to be exempt from federal
income tax under Section 501(a) of the Code. There have been no prohibited
transactions (as described in Section 406 or Section 4975 of the Code) with
respect to any Pension Plan for which there is any outstanding liability. No
material litigation or administrative or other proceedings involving the U.S.
Benefit Plans has occurred which would reasonably be expected to have a Material
Adverse Effect on the Business.
(e) Each U.S. Benefit Plan has been administered
in accordance with its terms and Applicable Law except where the failure to be
so administered either individually or in the aggregate with respect to all U.S.
Benefits Plans, would not have a Material Adverse Effect on the Business.
4.18.2 NON-U.S. EMPLOYEE BENEFIT PLANS.
(a) Except as set forth on Schedule 4.18.2, with
respect to all Employees of the Business whose employment is based outside of
the United States, none of the Business Entities presently maintains,
contributes to or has any liability under any material non-U.S. bonus, incentive
compensation, profit sharing, retirement, pension, group insurance, death
benefit, health, disability, stock option, stock purchase, savings, deferred
compensation, severance pay or termination pay (to the extent established and
formally communicated to employees), welfare or other employee benefit or fringe
benefit plan, program or arrangement, excluding any foreign government sponsored
or mandated plan, program or arrangement affecting such employees ("Government
Sponsored or Mandated Plans"). The plans, programs and arrangements set forth on
Schedule 4.18.2 are herein referred to as the "Non-U.S. Employee Benefit Plans."
(b) With respect to each of the Non-U.S. Employee
Benefit Plans, ▇▇▇▇▇▇ has made or will, prior to the Closing Date, make,
available to Buyer true and complete copies of:
(i) The plan documents, including any
related trust agreements or insurance contracts, including
amendments thereto, or a written summary of the terms and
conditions of the plan if there is no written plan document.
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(ii) With respect to any Non-U.S. Employee
Benefit Plan maintained primarily for the benefit of employees
of a Business Entity, the most recent actuarial valuations and
financial statements, if any.
(c) To the Sellers' Knowledge, the Non-U.S.
Employee Benefit Plans and Government Sponsored or Mandated Plans administered
by Sellers have been administered and are in material compliance with all
material requirements of Applicable Law and the terms of each such plan; any
Non-U.S. Employee Benefit Plan which is intended to be qualified under
Applicable Law or registered or approved by a Governmental Authority has been
determined to be so qualified, registered or approved by the appropriate
Governmental Authority; and to the Sellers' Knowledge, nothing has occurred
between the date of the last such determination and the Closing Date to cause
the appropriate Governmental Authority to revoke such determination or which
would materially adversely affect the continuing qualified, registered or
approved status of such Non-U.S. Employee Benefit Plan.
(d) All contributions (including premiums)
required by law or contract to have been paid or accrued, under or with respect
to the Non-U.S. Employee Benefit Plans and Government Sponsored or Mandated
Plans to the Closing Date (including periods from the first day of the then
current plan year to the Closing Date) will have been paid or accrued prior to
the Closing Date except to the extent failure to pay or accrue such
contributions individually or in the aggregate would not be reasonably expected
to have a Material Adverse Effect on the Business.
(e) The accrued benefits provided under each
Non-U.S. Employee Benefit Plan and Government Sponsored or Mandated Plans
providing retirement, severance or similar benefits (to the extent established
and formally communicated to employees), determined as of the Closing Date, will
not exceed the fair market value as of such date of the assets applicable to
such Non-U.S. Employee Benefit Plan or Government Sponsored or Mandated Plan, or
the book reserve, balance sheet reserve or other reserve with respect thereto as
of the Closing Date. Notwithstanding the foregoing, the only amounts so required
to be so funded or reserved shall be the amounts required to be funded, reserved
or provided for in conformity with generally accepted accounting principles in
the applicable country. For this purpose, "accrued benefits" means the present
value of all retirement, severance or similar benefits (as described above)
under a plan recognizing salary and service to Closing.
(f) There are no material pending or, to the
Sellers' Knowledge, threatened claims (other than routine claims for benefits),
investigations, litigation or other enforcement actions against Seller, the
Business Entities or any of their officers, directors, employees or agents, with
respect to any of the Non-U.S. Employee Benefit Plans, nor is there any other
liability with respect to such plans except those incurred in the normal course
of operation.
(g) No material improvement in the benefits accrued
or provided under the Non-U.S. Employee Benefit Plans will be made on or before
the Closing Date.
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4.19 INSURANCE. Schedule 4.19 contains a list of all material insurance
policies (excluding title insurance policies) maintained by or on behalf of or
covering any Seller that is specific to the Business (the "Policies"). Each
Business Entity has made available to Buyer copies of all current declaration
sheets relating to the Policies. Except as noted on Schedule 4.19, as of the
date of the Agreement, the Policies are in full force and effect, no notices of
cancellation or nonrenewal have been received by any Business Entity with
respect thereto, and all premiums due thereon have been paid.
4.20 POWERS OF ATTORNEY. Except as set forth on Schedule 4.20, none of
the Business Entities has given any irrevocable power of attorney (other than
such powers of attorney given in the ordinary course of business with respect to
routine matters or as may be necessary or desirable in connection with the
consummation of the transactions contemplated herein) to any person, firm, or
corporation for any purpose whatsoever with respect to the Business.
4.21 BROKERS. No agent, broker, Person or firm acting on behalf of
Sellers or their stockholders is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated herein.
4.22 TAXES. Except as set forth on Schedule 4.22:
(a) Each Business Entity has, except where failure to do so
would not have a Material Adverse Effect on the Business or a Material Real
Estate Impairment, (i) timely filed (or caused to be filed) all Tax Returns
required to be filed by it and each Tax Return is true, complete and accurate,
(ii) timely paid all Taxes shown thereon as due and owing, (iii) paid all other
Taxes which otherwise have become due and payable, and (iv) adequately provided
for, on its books of account and related records, liability for all other
current Taxes not yet due and payable.
(b) None of the Business Entities has received any written
notice of a material proposed adjustment, deficiency or underpayment in relation
to the Business, which notice has not been satisfied by payment or been
withdrawn, and there are no material claims that have been asserted or
threatened relating to Taxes related to the Business.
(c) Each of the Business Entities has withheld and paid all
Taxes required to be withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or third party in
relation to the Business.
(d) There are no liens with respect to Taxes upon the
Transferred Assets other than customary liens for current Taxes not yet due and
payable.
(e) As relates to the Business, none of the Business Entities
(i) has ever made any election under Treasury Regulation Section 301.7701-3(c)
to treat any of the Transferred Subsidiaries as other than an association,
except for entities organized in Malaysia, or (ii) has filed a consent under
Code Section 341(f) concerning collapsible corporations.
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(f) None of the Transferred Subsidiaries formed other than
under the laws of a state of the United States has ever owned a United States
real property interest within the meaning of Code Section 897(c).
(g) With respect to the Business Entities other than ▇▇▇▇▇▇
("Subsidiary Entities"): (i) no Subsidiary Entity has requested, nor has there
been granted with respect thereto, an extension of time within which to file a
Tax Return; (ii) no Subsidiary Entity is under audit, nor are any of such
entities aware of any material threatened or proposed audits of their Tax
Returns; (iii) no claim for Taxes (or request for Tax Returns) has ever been
made of a Subsidiary Entity in a jurisdiction where such entity does not file
Tax Returns; (iv) except as provided under Treas. Reg. Section 1.1502-6 (or any
similar provision of state, local or foreign law), none of the Subsidiary
Entities has any liability for or any obligation to pay Taxes of another or of
▇▇▇▇▇▇ as a transferee or successor, by contract or otherwise; (v) no Subsidiary
Entity has waived any statute of limitations in respect of Taxes or agreed to
any extension of time with respect to a Tax assessment or deficiency; (vi) no
Subsidiary Entity is a party to a closing agreement, or the subject of a private
ruling, concerning Taxes with any Governmental Authority; (vii) none of the
Subsidiary Entities is required to make any adjustment under Section 481 of the
Code (or any comparable provision of state, local or foreign law) by reason of a
change in accounting method; (viii) no Subsidiary Entity is a partner in any
entity considered to be a partnership for federal income tax purposes; (ix) no
Subsidiary Entity has ever entered into an advanced pricing agreement or any
other agreement, whether arising upon audit or otherwise, relating to Section
482 of the Code, and (x) none of the Subsidiary Entities has made any payments,
is obligated to make any payments, or is a party to any agreement, including
this Master Agreement, that could obligate it to make any payments that will not
be deductible under Code Section 280G.
(h) Except as disclosed on Schedule 4.22(h), ▇▇▇▇▇▇ has never
(with respect to the Business and relating to any taxable year subsequent to
fiscal 1993 ) entered into an advanced pricing agreement or any other agreement,
whether arising upon audit or otherwise, relating to Section 482 of the Code,
and ▇▇▇▇▇▇ has never (with respect to the Business) made any payments, is not
obligated to make any payments, and is not a party to any agreement, including
this Master Agreement, that could obligate ▇▇▇▇▇▇ to make any payments that will
not be deductible under Code Section 280G.
(i) With respect to the three year period ending with the
Closing Date, (i) ▇▇▇▇▇▇, ▇▇▇▇▇▇ Malaysia and their Affiliates in the United
States have taken the position, for Federal income tax purposes, that: (A) all
or substantially all of the sales made by ▇▇▇▇▇▇ Malaysia to ▇▇▇▇▇▇ do not
generate United States source income within the meaning of Code Section 861
through 865, and (B) ▇▇▇▇▇▇ Malaysia does not have an office or other fixed
place of business in the United States nor does ▇▇▇▇▇▇ Malaysia have any
employees or agents engaging in sales activities in the United States; and (ii)
there has not been any challenge to such positions taken by the Internal Revenue
Service.
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4.23 TRANSFERRED ASSETS - GENERAL. Except for the Excluded Assets and
except as set forth on Schedule 4.23, the Transferred Assets include (a) all of
the assets and rights of ▇▇▇▇▇▇ and the other Business Entities which were or
are material to the conduct of the Business as conducted by ▇▇▇▇▇▇ and the other
Business Entities during fiscal 1999, subject to such changes as have occurred
in the ordinary course of business since the end of ▇▇▇▇▇▇' fiscal 1998 and (b)
all assets that will be reflected on the Audited Closing Balance Sheet.
4.24 PERSONAL PROPERTY. Except as set forth on Schedule 4.24, to the
Sellers' Knowledge, the items of personal property included in the Transferred
Assets and presently and actively used in the operation of the Business are in
normal operating condition, free of any defects (except those resulting from
normal wear and operation) which individually or in the aggregate, reasonably
could be expected to have a Material Adverse Effect on the Business. Matters
within the scope of Section 4.10 are outside the scope of this Section 4.24.
4.25 WARRANTY CLAIMS. The Business Entities have paid (whether in
money, property or services) claims relating to breaches of express or implied
warranties (excluding claims founded upon negligence, strict liability in tort
or other similar legal theory) made with respect to products of the Business
▇▇▇▇▇▇' fiscal years 1998, 1997 and 1996 in amounts not in excess of 2.5% of
sales of the Business for such years, respectively. Except as set forth on
Schedule 4.25, there are no pending or, to the Sellers' Knowledge, threatened
claims for the breach of any express or implied warranty made with respect to
products of the Business, except for individual claims which involve claims for
money, property or services of less than $50,000.
4.26 INVENTORY. Except for inventory in the possession of sales agents
and distributors, in transit, and as disclosed prior to the Closing Date, all
inventory of the Business (other than Excluded Assets) is located at the
Transferred Facilities.
4.27 MALAYSIAN ACTIVITIES. To the best of the knowledge of ▇▇▇▇▇▇
Malaysia and ▇▇▇▇▇▇, with respect to the three year period ending with the
Closing Date, ▇▇▇▇▇▇ Malaysia and ▇▇▇▇▇▇, with respect to substantially all of
the sales made by ▇▇▇▇▇▇ Malaysia to ▇▇▇▇▇▇, represent that:
(a) title passage occurred from ▇▇▇▇▇▇ Malaysia to ▇▇▇▇▇▇
outside the United States;
(b) shipping was made by a freight forwarder located outside the
United States or, in any other situation, FOB at a location outside the United
States;
(c) all risk of loss passed from ▇▇▇▇▇▇ Malaysia to ▇▇▇▇▇▇
outside the United States;
(d) all insurance and shipping costs are borne by ▇▇▇▇▇▇;
(e) all governmental filing made in the United States reflect
the facts that ▇▇▇▇▇▇ is the importer of record to the United States; and
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(f) all documentation was consistence with the foregoing.
Furthermore, ▇▇▇▇▇▇ Malaysia and ▇▇▇▇▇▇ represent that ▇▇▇▇▇▇ Malaysia does not
have any leased or owned premises available for its use in the United States in
its own name nor does ▇▇▇▇▇▇ Malaysia have any employees on its payroll engaging
in sales activities in the United States.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
Buyer and Parent represent and warrant to ▇▇▇▇▇▇ as set forth below as
of the date of this Master Agreement:
5.1 ORGANIZATION AND STANDING OF BUYER AND PARENT; CHARTER AND BYLAWS.
Each of Buyer and Parent is a corporation duly organized, validly existing and
in good standing under the laws of Delaware and has all requisite corporate
power and authority to enter into this Master Agreement and the Ancillary
Agreements, to carry out the transactions contemplated hereby and thereby to
perform its obligations hereunder. Copies of the charter and bylaws or other
organizational documents of each of Buyer and Parent have been made available to
▇▇▇▇▇▇, and each such copy is true, correct and complete.
5.2 AUTHORIZATION. The execution, delivery and performance of this
Master Agreement and the Ancillary Agreements executed or to be executed by
Buyer and Parent pursuant to this Master Agreement, and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary corporate and other action on the part of Buyer and Parent. This
Master Agreement and the Ancillary Agreements executed or to be executed by
pursuant to this Master Agreement have been, or will have been, at the time of
their respective executions and deliveries, duly executed and delivered by a
duly authorized officer of Buyer and Parent, as the case may be.
5.3 ENFORCEABILITY. This Master Agreement and each Ancillary Agreement
constitutes, or when executed and delivered will constitute, the valid and
legally binding obligation of Buyer and Parent, enforceable in accordance with
its terms, except as such enforceability may be limited by equitable principles
and by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium or similar laws relating to or affecting the rights of creditors
generally.
5.4 COMPLIANCE WITH OTHER INSTRUMENTS AND LAWS. The execution, delivery
and performance of this Master Agreement and the Ancillary Agreements executed
or to be executed by Buyer and Parent pursuant to this Master Agreement, and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in any violation of or default under any provision (a)
of the charter or bylaws of Buyer or Parent, or (b) of any mortgage, indenture,
trust, lease, partnership or other agreement or other instrument, permit,
concession, grant, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Buyer or Parent or any of their
properties or assets, the result of which,
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with respect to items identified in clause (b) would (either individually or in
the aggregate) have a material adverse effect on the operations or financial
condition of Buyer or Parent and their subsidiaries, taken as a whole, or would
materially impair Buyer's or Parent's ability to consummate the transactions
contemplated hereby (a "Material Adverse Effect on Buyer").
5.5 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. Except as set forth on
Schedule 5.5, no consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority, bureau, agency
or commission, or any third party, are required to be obtained or made by Buyer
or Parent or their Affiliates in connection with the execution, delivery,
performance, validity and enforceability of this Master Agreement or the other
Ancillary Agreements, other than (a) a filing with the Federal Trade Commission
and the Department of Justice under the HSR Act, (b) a filing with the Committee
on Foreign Investment in the United States under Section 721 of Title VII of the
United States Defense Production Act of 1950, as amended by Section 5021 of the
Omnibus Trade and Competitiveness Act of 1988, and (c) other consents, licenses,
approvals, authorizations, registrations or declarations, where the failure to
obtain such would not have a Material Adverse Effect on Buyer. Neither Buyer nor
Parent is currently engaged in, or contemplating, any business transaction that
would be reasonably expected to hinder or delay the authorizations and consents
referred to in this Section 5.5.
5.6 LITIGATION. As of the date of this Master Agreement, no action,
suit, proceeding or governmental investigation is pending or, to the knowledge
of Buyer or Parent or their Affiliates, threatened, against Buyer or Parent or
their properties, at law or in equity or before any Governmental Authority that
seeks to question, delay or prevent the consummation of the transactions
contemplated hereby.
5.7 ACCESS. Buyer and Parent have received and reviewed the Baseline
Financial Statements and are acquainted with the Business. Buyer and Parent have
had an opportunity to review the assets, books, records and contracts of the
Business, and has been given the opportunity to meet with officers and other
representatives of ▇▇▇▇▇▇ for the purpose of investigating and obtaining
information regarding the operations of the Business and its financial and legal
affairs.
5.8 FINANCIAL CAPACITY. Buyer and Parent have heretofore provided to
▇▇▇▇▇▇ an accurate written explanation of the Financing. As used herein,
"Financing" shall mean the financing described in the "highly confident" and
commitment letters (the "Commitment Letters") received by Buyer from financing
sources providing for sufficient funds to pay the cash portion of the Purchase
Price, to pay expenses in connection with the purchase of the Transferred Assets
and to perform any necessary refinancing of existing indebtedness of the
Business; PROVIDED that, in the event that any portion of the Financing pursuant
to the Commitment Letters becomes unavailable, regardless of fault, Buyer may
obtain such portion of the Financing from other sources, on terms no less
favorable to Buyer than those applicable to the portion of the Financing which
has become unavailable; PROVIDED, FURTHER, that such new terms do not reduce
Buyer's equity to less than $90,000,000.
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5.9 BROKERS. No agent, broker, Person or firm acting on behalf of Buyer
or Parent or their stockholders is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties hereto, or from any Person
controlling, controlled by or under common control with any of the parties
hereto, in connection with any of the transactions contemplated hereby.
5.10 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ ANTITRUST IMPROVEMENTS ACT OF 1976. Parent is
not controlled by any other entity for purposes of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, and the implementing regulations
thereunder, 16 C.F.R. Parts ▇▇▇-▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇▇▇"). The total assets and
annual net sales of the person consisting of Parent and all entities it
controls, determined at the time of Closing in accordance with Section 801.11 of
the HSR Rules, are each less than $10 million.
ARTICLE 6
COVENANTS RELATING TO PERSONNEL ARRANGEMENTS
6.1 EMPLOYEES; COLLECTIVE BARGAINING AGREEMENTS; TRANSFEREE
EMPLOYEES.
(a) Buyer will recognize and engage in collective bargaining
with the labor unions which are the bargaining agents for the represented
employees at the Union Plants. Following the Closing, Buyer will continue in
effect the terms and conditions of employment for the represented employees at
the Union Plants, except as those terms and conditions may be modified pursuant
to the collective bargaining process. Sellers shall not agree to any
modification or change in the terms and conditions of employment for the
represented employees at the Union Plants prior to the Closing without Buyer's
written approval.
(b) Effective upon the Closing Date as of 11:59 p.m. Eastern
Daylight Savings Time, Sellers shall terminate the employment of the Employees
of the Business, other than the employees of the Transferred Subsidiaries, and
Buyer or one of its Subsidiaries shall offer employment to all employees whose
employment is so terminated effective as of the time of their termination of
employment with Sellers, including all employees who are not actively at work on
the Closing Date and who (i) are not actively at work and who have recall or
return-to-work rights under any collective bargaining agreement, or (ii) are not
actively at work due to short-term disability, military service or other
authorized leave of absence provided such employees return to work at the end of
any such authorized leave of absence or in the case of military leave, before
their statutory re-employment rights expire. In addition, Buyer shall offer
employment to all Employees of the Business who on the Closing Date are absent
from work due to a long-term disability and who notify Buyer within six months
of the date of disability that they have recovered from such long-term
disability. Each such offer shall be made on terms and conditions, including
compensation and benefits, substantially equivalent in the aggregate to those
provided by Sellers on the date hereof. All such employees who accept Buyer's
offer of employment and all employees of Transferred Subsidiaries shall be
referred to herein as "Transferee Employees." Except as otherwise provided
herein, Sellers shall be responsible for (by payment or accrual on the Final
Closing Balance Sheet) wages, salaries and benefits (including vacations) of
employees until they become Transferee Employees.
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6.2 SEVERANCE OBLIGATIONS. Buyer will be solely responsible for
obligations, if any, for severance pay for any Employees of the Business who do
not become Transferee Employees if Buyer did not offer employment to such
employees on substantially the same terms as such employees were employed by
Sellers. Notwithstanding anything in this Agreement to the contrary, Buyer shall
be responsible for severance pay to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, whether
termination of either or both of such individuals occurs before or after the
Closing Date. Buyer shall be solely responsible for any obligation for severance
pay for Employees of the Business who become Transferee Employees and are
subsequently terminated by Buyer. Buyer acknowledges that it has not informed
Sellers of any planned or contemplated decisions or actions by Buyer or one of
its subsidiaries that would require service of notice under the Warn Act. Buyer
agrees that it will be solely responsible for any liabilities created if either
it or any of its subsidiaries takes any action (other than as set forth in the
following sentence) which will cause the notice provision of the Warn Act to
become applicable to the transactions contemplated by this Agreement. Buyer
acknowledges that it has been informed by Seller that the closing of the 4"
wafer FAB of the plant located in Findlay, Ohio, and the terminations related
thereto, will require service of notice under the Warn Act and that the timing
of some of such terminations will require Buyer to provide certain of such
notices following the Closing Date.
6.3 PLANS, BENEFITS AND POLICIES.
(a) Except as otherwise provided herein, Buyer and its
Subsidiaries will, as of 12:00 a.m. Eastern Daylight Savings Time on the day
immediately after the Closing Date, adopt and provide for Transferee Employees
whose employment is based in the United States employment and benefit packages
(including, to the extent applicable, profit sharing and retirement plans,
medical, severance, and post-retirement benefits) equivalent to Buyer's
employment and benefit packages maintained for similarly situated employees of
Buyer.
(b) Buyer and its Subsidiaries will credit Transferee Employees
with service with Sellers (and predecessors of Sellers) for purposes of (i)
vesting for and eligibility to participate in any employee pension benefit plans
(as defined in Section 3(2) of ERISA), but not for benefit accruals; (ii) any
waiting periods, eligibility or pre-existing condition limitations for employee
welfare benefit plans (as defined in Section 3(1) of ERISA); and (iii)
eligibility and benefit computation for vacation and severance pay plans;
provided, however, that with respect to vacation plans for the remainder of
calendar year 1999 only, Buyer shall maintain vacation plans equivalent to, and
in lieu of, Sellers' vacation plans covering the Transferee Employees
immediately prior to the Closing Date (offset by vacation time used under
Sellers' vacation plans as of the Closing Date). Buyer shall credit Transferee
Employees with any amounts paid prior to the Closing Date under any Welfare Plan
that is a health plan toward the satisfaction of deductible amounts and
copayment minimums under the Buyer's corresponding welfare benefit plans.
(c) Effective as of 11:59 p.m. Eastern Daylight Savings Time on
the Closing Date, sponsorship of the ▇▇▇▇▇▇ Corporation Union Retirement Plan
shall be transferred to the Buyer and Buyer shall become the successor employer
under such plan and thereby shall assume all liabilities related to such plan.
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(d) ▇▇▇▇▇▇ and Buyer shall effectuate a trust-to-trust
transfer of the assets and liabilities of the ▇▇▇▇▇▇ Corporation Retirement Plan
in respect of the account balances of Transferee Employees to a defined
contribution plan established or maintained by Buyer or one of its Subsidiaries
(the "Buyer's Retirement Plan") as follows. As soon as administratively
practicable after the Closing Date, ▇▇▇▇▇▇ shall cause the account of each
Transferee Employee in the ▇▇▇▇▇▇ Corporation Retirement Plan to be valued and
assets equal in value to the amount credited each such Transferee Employee's
account under the ▇▇▇▇▇▇ Corporation Retirement Plan, determined without regard
to any vesting schedule, to be transferred to the trust maintained under Buyer's
Retirement Plan. Such transferred assets shall be in cash or, to the extent
mutually agreed upon by ▇▇▇▇▇▇ and Buyer, in kind, and shall also include any
promissory notes evidencing outstanding loan balances owed to the ▇▇▇▇▇▇
Corporation Retirement Plan by the Transferee Employees. Prior to, and as a
condition of, any transfer of assets from the ▇▇▇▇▇▇ Corporation Retirement Plan
to Buyer's Retirement Plan, each party shall provide the other with a copy of a
determination letter from the Internal Revenue Service, or other reasonably
satisfactory evidence, representations and relevant undertakings, including an
opinion of counsel, evidencing the tax-qualified status of its plan and the
tax-exempt status of the applicable plan's trust. As of the transfer date, and
contingent upon the transfer, Buyer shall be liable for the payment of benefits
accrued by and liabilities transferred in respect of the Transferee Employees
under the ▇▇▇▇▇▇ Corporation Retirement Plan.
(e) As soon as practicable after the Closing Date, ▇▇▇▇▇▇ and
Buyer shall take any action necessary to transfer the accounts of Transferee
Employees in the "cafeteria plan," as defined in section 125 of the Code,
maintained by a Seller to a cafeteria plan established or maintained by Buyer or
one of its subsidiaries.
(f) Except as otherwise provided herein, as of 11:59 p.m.
Eastern Daylight Savings Time on the Closing Date all Transferee Employees whose
employment is based in the United States shall cease participation in Seller
Benefit Plans.
(g) Sellers or the applicable employee benefit programs
administered by Sellers shall be responsible for benefits accrued or claims
incurred prior to the Closing with respect to Transferee Employees and their
eligible dependents in accordance with the provisions of the applicable Seller's
employee benefit program with respect to: (i) disability benefits, both
long-term and short-term, for disabilities that commenced before 11:59 p.m.
Eastern Daylight Savings Time on the Closing Date; (ii) benefits for
confinements covered under Seller's medical plans that commenced before 11:59
p.m. Eastern Daylight Savings Time on the Closing Date; (iii) health care
benefits for services rendered or materials received under Seller's medical
plans before 11:59 p.m. Eastern Daylight Savings Time on the Closing Date; and
(iv) worker's compensation benefits for disabilities resulting from an accident
or occurrence while employed by Seller or a Subsidiary of Seller or a
predecessor thereof which occurred prior to the Closing Date.
(h) After Closing, Buyer and Sellers will cooperate with each
other and provide each other such information as is required concerning
Transferee Employees in order to
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determine whether a Transferee Employee is entitled to compensation from either
party or benefits under any plan, program or arrangement sponsored or maintained
by either party.
(i) No provision in this Section 6.3 shall create any
third-party beneficiary rights in any employee or former employee (including any
beneficiary or dependent thereof) of ▇▇▇▇▇▇, any Business Entity or any of their
Affiliates.
(j) Nothing in this Section 6.3 shall be construed to
constitute an assumption by Parent or Buyer of any Retirement Plan Accruals.
(k) Notwithstanding the foregoing, Buyer shall assume any
obligation that ▇▇▇▇▇▇ has to any Transferred Employee, whether based inside or
outside of the United States, with respect to the ▇▇▇▇▇▇ supplemental employee
retirement plan.
6.4 FOREIGN EMPLOYEES. As of the Closing Date Buyer shall provide
benefit plans for Transferee Employees whose employment is based outside the
U.S. which are reasonably equivalent, in the aggregate, to those provided by
Sellers immediately prior to the Closing Date, subject to the right of Buyer and
its Subsidiaries to amend or terminate such benefit plans. Buyer shall assume
all obligations with respect to all German pension supplements including that
disclosed on Schedule 4.18.2.
6.5 COMMISSIONS AND BONUSES. Sellers and Buyer agree that Employees of
the Business who become Transferee Employees will continue under the applicable
commissions or bonus compensation policy of Seller through July 2, 1999. Buyer
shall use commercially reasonable efforts to cooperate with Sellers in preparing
the necessary sales and business performance data required to calculate such
commissions or bonuses for performance during such period. Payment of such
bonuses will be allocated between Sellers and Buyer on the basis of time of
ownership of the unit for the applicable period for which the bonus is being
paid. Sellers will use commercially reasonable efforts to forward such payments
to such Transferee Employees as soon as possible, and Sellers shall invoice
Buyer for its allocated share of such payments. Commissions with respect to
shipments prior to the Closing Date and which were not accrued for in the Final
Closing Balance Sheet will be paid by Sellers; all other commissions will be
paid by Buyer.
ARTICLE 7
COVENANTS OF SELLERS
7.1 CONDUCT OF BUSINESS.
(a) Except as set forth on Schedule 7.1 or as may be otherwise
expressly permitted by this Master Agreement or with the prior written consent
of Buyer in Buyer's sole discretion, from the date hereof and prior to the
Closing, ▇▇▇▇▇▇ will, and will cause each Business Entity to: (i) operate the
Business only in the ordinary course and substantially in accordance with past
practice and will use its reasonable efforts to not take any action inconsistent
with this Master
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Agreement or with the consummation of the Closing; (ii) use commercially
reasonable efforts to preserve intact the organization of the Business; (iii)
continue in full force and effect all existing insurance policies (or comparable
insurance) specific to the Business or the Transferred Assets; and (iv) except
for changes resulting from the ongoing reorganization of the sales distribution
organization of the ▇▇▇▇▇▇ Semiconductor Sector unrelated to the transactions
contemplated by this Master Agreement, use commercially reasonable efforts to
preserve each Business Entity's relationships with its suppliers, customers,
licensors and licensees and others having business dealings with any Business
Entity relating to the Business.
(b) Without limiting the generality of Section 7.1(a), and
except as may be otherwise expressly permitted by this Master Agreement or with
the prior written consent of Buyer, in Buyer's sole discretion, from the date
hereof through the Closing, ▇▇▇▇▇▇ shall not permit any Business Entity, with
respect to the Business, to:
(i) enter into, extend, materially modify or renew
any Contract in connection with the Business that would
increase or cause Buyer to be obligated to pay future payments
in excess of $400,000 per year, in the aggregate with other
such Contracts, or otherwise materially affect the rights or
obligations of any Business Entity under such Contract, except
in the ordinary course;
(ii) conduct the Business in a manner that departs
materially from the manner in which the Business was being
conducted prior to the date of this Master Agreement or take
any action or permit to occur any event set forth in Section
4.4;
(iii) sell, assign, transfer, convey, lease,
sub-lease, mortgage, pledge or otherwise dispose of or
encumber or allow the encumbrances of any of the Transferred
Assets or any interests therein or exercise any purchase
option or right of first refusal contained in any of the
Transferred Assets, except in the ordinary course of business
and, without limiting the generality of the foregoing, the
Business Entities may maintain and sell inventory consistent
with its past practices;
(iv) fail to maintain the Transferred Assets in
substantially their current state of repair, excepting normal
wear and tear, or fail to replace consistent with the Business
Entities' past practice inoperable, worn-out or obsolete or
destroyed Transferred Assets;
(v) intentionally do any other act or intentionally
fail to take any action which would cause any representation
or warranty of ▇▇▇▇▇▇ in this Master Agreement to be or become
untrue in any material respect;
(vi) make any material change in its accounting
methods except to the extent required by GAAP;
(vii) incur or assume any debt, obligation, trade
payable or liability for which the Business is liable (whether
absolute or contingent and whether or not
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currently due and payable), except in the ordinary course of
business or obligations under Material Contracts;
(viii) pay, directly or indirectly, any of the
Business Entities' liabilities as they relate to the Business
before the same became due in accordance with their terms or
defer the payment of any liabilities or change its payable
levels, in each case other than in the ordinary course of
business;
(ix) accelerate the collection, directly or
indirectly, of any of its accounts receivable other than in
the ordinary course of business or defer the collection of any
such accounts other than in the ordinary course of business;
(x) defer or delay the purchase of any inventory or
change its inventory levels, except in the ordinary course of
business;
(xi) other than in the ordinary course of business,
cancel any debts or waive any claims or rights of substantial
value;
(xii) sell, transfer, or otherwise dispose of any of
its Transferred Assets, other than in the ordinary course of
business at prices, on terms and in quantities consistent with
past practice;
(xiii) make any loan or advance other than in the
ordinary course of business;
(xiv) cancel, compromise, knowingly waive or lease
any material right or claim (or series of related rights and
claims) under Material Contracts, outside the ordinary course
of business;
(xv) make a change in accounting method, keeping of
books of account or accounting practices, or make any election
for Tax purposes or for purposes of a Tax Return (or have any
such election made on its behalf) except as set forth in
Sections 4.22 and 10.20, or enter into any agreement,
arrangement or settlement with respect to Taxes;
(xvi) make any change in the rate of compensation.
commission, bonus or other direct or indirect remuneration
payable, or agree to pay, conditionally or otherwise, any
bonus, incentive, retention or other compensation, retirement,
welfare, fringe or severance benefit or vacation pay, to or in
respect of any Employee of the Business, other than the
increases and payments in the ordinary course of business
consistent with past practice in the compensation payable to
Employees of the Business; or
(xvii) agree or otherwise become obligated to do any
of the foregoing.
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(c) Notwithstanding anything to the contrary contained herein,
but without limiting the effects of the representations and warranties set forth
in Sections 4.7 and 4.23, (i) at any time prior to the Closing, Sellers may
cause any asset of a Transferred Subsidiary that would not be included in the
Transferred Assets if the assets, rather than the stock, of such Transferred
Subsidiary were being conveyed hereunder, to be transferred to ▇▇▇▇▇▇ or one or
more of its Subsidiaries, and (ii) prior to the Closing, ▇▇▇▇▇▇ shall remove
from the books of each Subsidiary any intracompany receivable or intracompany
payable, so that at and after the Closing no Subsidiary shall owe, or have the
right to receive from, ▇▇▇▇▇▇ or any of its Subsidiaries any amount for goods,
services or cash advances or other extensions of credit provided prior to the
Closing.
7.2 NON-COMPETITION. For a period of five (5) years from the Closing
Date, ▇▇▇▇▇▇ shall not, and shall not permit any Affiliate of ▇▇▇▇▇▇ to, for its
own account or for the account of others, directly or indirectly (i) engage in
any Competing Business, or (ii) own, manage, operate, join, control or
participate in the ownership, management, operation or control of any person or
entity who or which at any relevant time during such period is engaged in any
Competing Business. Ownership of not more than 10% of the outstanding equity of
any company registered under Section 12 of the Securities Exchange Act of 1934
or ownership in any venture, partnership or other person or entity that does not
constitute an Affiliate of ▇▇▇▇▇▇ shall not be a violation of this Section 7.2.
(a) As used herein, "Competing Business" shall mean the
design, production, manufacture, assembly, testing, distribution, marketing or
sale for ▇▇▇▇▇▇' own account or for the account of others of any product that
has substantially the same specifications as any Products or the purchase for
resale or repackaging of any Products.
(b) For a period of one year from and after the Closing Date,
▇▇▇▇▇▇ will not and will cause its Affiliates not to, directly or indirectly,
solicit or attempt to solicit any person or entity who is or has been a
customer, supplier, licensor, licensee or business relation of the Business
prior to or during such period to cease its particular business relationship
with the Business.
(c) For a period of two years from the Closing Date with
respect to any director, officer, employee or agent, no party hereto will, and
the parties hereto will cause their respective Affiliates not to, directly or
indirectly, solicit or induce any person or entity who is a director, officer,
employee or agent of the other party or any of its Affiliates to terminate his,
her or its relationship with, or employment by, such entity. This Subsection
7.2(c) shall not prohibit the parties and their Subsidiaries from engaging in
general solicitations, in the form of newspaper, internet and similar
advertising and solicitations, and accepting inquiries and applications in
response thereto.
(d) This Section 7.2 shall not prevent Sellers or their
Affiliates from engaging in the activities contemplated by the Ancillary
Agreements or acquiring the capital stock or assets of any business that derives
less than fifteen percent (15%) of its consolidated revenues during the twelve
calendar months immediately preceding such acquisition from any Competing
Business, so long as ▇▇▇▇▇▇ uses commercially reasonable efforts to divest that
portion of the acquired business that is engaged in a Competing Business as soon
as commercially practicable.
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(e) The restrictive covenants contained in this Section are
covenants independent of any other provision of this Master Agreement and the
existence of any claim which any party to this Master Agreement may allege
against any other party to this Master Agreement, whether based on this Master
Agreement or otherwise, shall not prevent the enforcement of these covenants.
Each of ▇▇▇▇▇▇ and Buyer agrees that the other's remedies at law for any breach
or threat of breach of the provisions of this Section will be inadequate, and
that each party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Section and to enforce specifically the terms
and provisions hereof, in addition to any other remedy to which such party may
be entitled at law or equity. In the event of litigation regarding the covenant
not to compete, the prevailing party in such litigation shall, in addition to
any other remedies the prevailing party may obtain in such litigation, be
entitled to recover from the other party its reasonable legal fees and out of
pocket costs incurred by such party in enforcing or defending its rights
hereunder. The length of time for which this covenant not to compete shall be in
force shall not include any period of violation or any other period required for
litigation during which the party seeking to enforce this covenant seeks to
enforce this covenant. Should any provisions of this Section be adjudged to any
extent invalid by any competent tribunal, such provision will be deemed modified
to the extent necessary to make it enforceable.
7.3 ACCESS. Subject to reasonable notice and as permitted by law, each
Business Entity shall afford to Buyer and Parent and their respective officers,
employees, accountants, counsel and other agents and representatives full access
during normal business hours throughout the period prior to the Closing Date to
all of their officers, employees and properties and full access for inspection
and copying of all Books and Records, Contracts, commitments and any other
information relating to the Business and, during such period, each Business
Entity shall furnish promptly to Buyer and its representatives in relation to
the Business access to all other information concerning the business, properties
and personnel of the Business as Buyer may reasonably request. Each Business
Entity shall promptly upon request provide Buyer access to a true, complete and
correct copy of each written agreement or other instrument, together with all
amendments or clarifications thereto, and a true, complete and correct summary
of the terms and conditions of each oral agreement, identified in the Disclosure
Schedule. If access is restricted due to a term in the agreement or by
Applicable Law, each Business Entity shall use its Best Efforts to secure
consent from the other party(ies) to the agreement to provide such access prior
to Closing with sufficient time for Buyer review. Buyer will treat the documents
and other material and information referred to in this Section 7.3 in compliance
with Section 9.9.
7.4 ENVIRONMENTAL TRANSFER STATUTES. ▇▇▇▇▇▇ shall comply and cause each
of the Transferred Subsidiaries to comply, at ▇▇▇▇▇▇' sole cost and expense,
with all obligations, requirements or responsibilities under New Jersey's
Industrial Sites Recovery Act ("ISRA") or any similar foreign, state, federal,
or provincial statute, each as may be amended ("Environmental Transfer
Statute"), as may be imposed based on the execution and delivery of this Master
Agreement or the Ancillary Agreements or the consummation of the transactions
contemplated thereby. If Remediation is required at any property pursuant to any
Environmental Transfer Statute, whether before or after the Closing, ▇▇▇▇▇▇
shall carry out all such obligations, requirements or responsibilities, in form
and substance reasonably satisfactory to Buyer including, without limitation,
the execution of Remediation Agreement (as defined in ISRA) or similar document.
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7.5 TITLE INSURANCE. ▇▇▇▇▇▇ shall and shall cause the other
Business Entities to cooperate with Buyer and use their Best Efforts to assist
Buyer in obtaining, at Buyer's cost, good and valid, irrevocable ALTA title
insurance commitments (collectively, the "Title Commitments," and each a "Title
Commitment"), in final form, from one or more title insurance companies
reasonably acceptable to Buyer (collectively, the "Title Company"), irrevocably
committing the Title Company (subject only to the satisfaction of any industry
standard requirements contained in the Title Commitment and reasonably
acceptable to Buyer) to issuing ALTA form of title insurance policies insuring
good, valid, indefeasible fee simple title to the Owned Real Estate located in
the United States in Buyer and, at Buyers' request, similar or equivalent
insurance with respect to the Malaysian Facility, in all cases, in the
respective amounts that Buyer requests prior to Closing, subject to no Liens or
other exceptions to title other than Permitted Liens (collectively, the "Title
Policies") and insuring pedestrian and vehicular access to and from one or more
legally and physically open public rights of way satisfactory to Buyer, in its
sole but reasonable discretion. Each of the Title Commitments shall be effective
as of a date occurring not earlier than the date of this Master Agreement and
the effective dates of each of them shall be brought down to the time of the
Closing. Each such Title Policy shall include such endorsements thereto as may
reasonably be requested by Buyer. On or prior to the Closing Date, the Sellers
shall execute and deliver, or cause to be executed and delivered, to the Title
Company any affidavits, standard gap indemnities and similar documents
reasonably requested by the Title Company in connection with the issuance of the
Title Commitments or the Title Policies.
7.6 SURVEYS. Sellers shall cooperate with Buyer and use their Best
Efforts to assist Buyer in obtaining, at Buyer's cost, no later than fifteen
(15) days prior to Closing, as-built surveys of each parcel of the Owned Real
Estate located in the United States and, at Buyer's request, of the Malaysian
Facility (collectively, the "Surveys") in accordance with (a) the 1997 minimum
standard detail requirements for ALTA/ACSM Land Title Surveys, including,
without limitation, Table A items 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13 and such
additional or different Table A Items as Buyer may, in its discretion, require,
(b) with the Accuracy Standards (as adopted by ALTA and ACSM) of an Urban
Survey, and (c) local standards required by Buyer, in its discretion, dated
after the date hereof, and showing, without limiting the foregoing, with respect
to each parcel of the Owned Real Estate (and the Malaysia Facility, if
applicable), all easements and other appurtenances benefiting and all easements
and other encumbrances burdening such parcel. Each Survey shall be certified to
any lender providing financing to Buyer for the transactions contemplated
hereby, the Buyer, the Title Company and any other person reasonably requested
by Buyer and shall comply with any requirements imposed by the Title Company as
a condition to the removal of any survey exception from the general exceptions
to the Title Policy covering the Owned Real Estate shown on such survey.
7.7 ESTOPPEL CERTIFICATES. Promptly following execution of this Master
Agreement, the Sellers shall exercise their, and shall cause the other Business
Entities to cooperate with Buyer and to exercise their, Best Efforts to have
delivered to Buyer prior to the Closing any estoppel certificates and lessor
waivers reasonably determined by Buyer to be necessary to the completion of the
transactions contemplated by this Agreement, in forms reasonably acceptable to
Buyer and ▇▇▇▇▇▇ (the "Estoppel Certificates"), from each lessor under the
Leases.
7.8 ZONING LETTERS. Sellers shall, at the request of Buyer, reasonably
cooperate with Buyer in attempting to obtain building code and zoning code
compliance letters stating that each parcel
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of Owned Real Estate complies with the building and zoning codes applicable
thereto and otherwise in form and substance reasonably satisfactory to Buyer
from the Governmental Authorities having jurisdiction over such matters.
7.9 FOREIGN REAL ESTATE -- DUE DILIGENCE AND ASSURANCES. As set forth
on Schedule 4.9(b), some of each of the Owned Real Estate and the Leased Real
Estate is located outside of the United States of America (the "Foreign Owned
Real Estate" and the "Foreign Leased Real Estate," respectively and
collectively, the "Foreign Real Estate"). To the extent that Buyer reasonably
determines that with respect to the Foreign Leased Real Estate, the items
provided for in Sections 7.6 and 7.7 and with respect to the Foreign Owned Real
Estate, the items provided for in any of Sections 7.5, 7.6 and 7.8 are either
insufficient or not practical or desirable to be obtained, then ▇▇▇▇▇▇ shall use
its Best Efforts to help Buyer to obtain reasonable or locally customary due
diligence materials and assurances: (a) of the validity and marketability of the
Sellers' or Transferred Subsidiaries' fee or leasehold title to such Foreign
Real Estate, as appropriate, and (b) that Buyer or Transferred Subsidiaries,
from and after the Closing, shall be able to operate the subject Foreign Real
Estate and conduct the Business thereon as currently conducted and consistent
with past practice.
7.10 NO SHOP. During the period from the date hereof until the Closing
or until this Master Agreement is terminated in accordance with its terms,
▇▇▇▇▇▇ will not, and will not authorize or permit any of its officers,
directors, affiliates or representatives to, take, directly or indirectly, any
action with respect to the Business to initiate, assist, solicit, negotiate,
encourage, accept or otherwise pursue any offer or inquiry from any person or
entity (a) to engage in any Business Combination (as defined below) other than
the transactions contemplated by the Transaction Documents or (b) to reach any
agreement or understanding (whether or not such agreement or understanding is
absolute, revocable, contingent or conditional) for, or otherwise attempt to
consummate, any Business Combination other than the transactions contemplated by
the Transaction Documents. For purposes hereof, "Business Combination" means any
(i) merger, consolidation, sale of assets, business combination or similar
transaction to which ▇▇▇▇▇▇ or any or all of the Business Entities is a party
relating to any or all of the Business, its assets or any interest therein, or
(ii) any sale or other disposition of capital stock of or other equity interests
in any of ▇▇▇▇▇▇' Subsidiaries which comprise any portion of the Business or any
sale, dividend or other disposition of all or any material portion of the assets
and properties of any or all of the Business.
ARTICLE 8
COVENANTS OF BUYER AND PARENT
8.1 INVESTIGATION. In conducting their review of the Business, each of
Buyer and Parent shall conduct itself so as to not unreasonably interfere with
the Business or with the performance of any Business Entity's employees.
8.2 ASSISTANCE WITH RESPECT TO EXCLUDED ASSETS. Following the Closing
Date, upon request of ▇▇▇▇▇▇, Buyer and Parent will use their commercially
reasonable efforts to assist in connection with the collection of any royalties
with respect to any Retained License Agreements.
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To the extent Buyer or Parent receives payment in respect of such items
following the Closing Date, Buyer or Parent shall promptly pay such amounts to
▇▇▇▇▇▇.
8.3 NAMES AND LOGO. Promptly after the Closing Date, Buyer shall, or
shall cause its Subsidiaries to, amend the certificate of incorporation (or
other charter documents) of each Transferred Subsidiary whose name includes
▇▇▇▇▇▇, or any derivative thereof, to change the name of each such Subsidiary to
a name that does not include such name and is not confusingly similar therewith.
Within a reasonable time after the Closing Date, Buyer shall, or shall cause its
Subsidiaries to, revise product literature, change signage and stationery, and
discontinue the use of the logo "▇▇▇▇▇▇" except as permitted in the ▇▇▇▇▇▇
Trademark License Agreement.
8.4 SPACE USED BY ▇▇▇▇▇▇ ESS. Following the Closing Date, ▇▇▇▇▇▇ shall
be entitled to continue to occupy the space in the Manufacturing Facilities in
Palm Bay, Florida ("Palm Bay, Florida ▇▇▇▇▇▇▇▇") (▇▇▇▇▇▇▇▇ ▇▇) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, currently used by the ▇▇▇▇▇▇ electronic systems business on mutually
agreeable terms that shall provide for a pass-through equivalent to ▇▇▇▇▇▇ of
the costs of such occupancy and use, pursuant, in each case, to a written lease
or other written agreement executed by Buyer, or the appropriate Transferred
Subsidiary, and by ▇▇▇▇▇▇, or one of its Subsidiaries, at or prior to Closing
and in form and substance reasonably acceptable to each party thereto
(collectively, the "Leaseback Agreements").
8.5 REIMBURSEMENT AND INDEMNITY FOR CERTAIN COSTS AND LIABILITIES.
a. On or immediately after the Closing Date, Buyer shall
reimburse ▇▇▇▇▇▇ for all documented, third-party expenses and capital
contributions incurred or made after the date hereof by ▇▇▇▇▇▇ on Parent's or
Buyer's behalf in connection with the organization of direct or indirect
subsidiaries of Buyer or the organization or establishment of employee and
benefit plans of Parent or Buyer or similar organization expenses.
b. Buyer and Parent shall indemnify and hold Sellers harmless
from any cost or expense including Taxes or Transfer Taxes arising as a result
of the conversion of ▇▇▇▇▇▇ Semiconductor, Inc., and ▇▇▇▇▇▇ Semiconductor
(Ohio), Inc. into limited liability companies and from the merger of ▇▇▇▇▇▇
Semiconductor (Pennsylvania), Inc. into a limited liability company, except to
the extent otherwise provided in Section 3.15.
ARTICLE 9
COVENANTS OF ALL PARTIES
9.1 COMMERCIALLY REASONABLE EFFORTS. Subject to the terms and
conditions of this Master Agreement, each party agrees, both before and after
the Closing to use all commercially reasonable efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary or
desirable under Applicable Law and the terms of this Master Agreement to
consummate the transactions contemplated by this Master Agreement, including the
execution and delivery of any further instruments or documents of any kind which
are reasonably requested by a
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party or its counsel to any party signatory hereto in order to evidence or
facilitate the consummation of the transactions contemplated hereby.
9.2 HSR FILING; OTHER FILINGS.
(a) Not later than June 15, 1999, and pursuant to the applicable
requirements of the HSR Act and the rules and regulations thereunder, the
parties shall cause to be filed with the Federal Trade Commission and the
Antitrust Division of the Department of Justice all requisite documents and
notifications in connection with the transactions contemplated by this Master
Agreement. The parties shall diligently and expeditiously comply with the HSR
Act in connection with securing all necessary approvals or waivers thereunder
and shall each use its reasonable best efforts to obtain an early termination of
the applicable waiting period.
(b) The parties shall cooperate with one another (i) in
determining whether any other action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any Material Contracts, in
connection with the consummation of the transactions contemplated by this Master
Agreement and (ii) in taking such actions or making any such filings, in
furnishing such information as may be required in connection therewith, and in
seeking timely to obtain any such actions, consents, approvals or waivers.
9.3 PUBLIC ANNOUNCEMENTS. None of Buyer, Parent, the Business Entities
nor any of their Affiliates will issue any press release or make any public
statement with respect to this Master Agreement or the transactions contemplated
hereby, or disclose the existence of this Master Agreement to any Person or
entity, prior to the Closing and, after the Closing, will not issue any such
press release or make any such public statement without the prior consent of the
other party (which consent shall not be unreasonably withheld or delayed),
subject to any applicable disclosure obligations pursuant to Applicable Law
(including the parties' requirement to issue a press release promptly after the
execution of this Master Agreement and ▇▇▇▇▇▇'▇ obligation to file a Form 8-K
with the U.S. Securities and Exchange Commission), PROVIDED that the party
proposing to issue any press release or similar public announcement or
communication in compliance with any such disclosure obligations shall use
commercially reasonable efforts to consult in good faith with the other party
before doing so.
9.4 CONSENTS; COOPERATION. The parties will use their respective Best
Efforts, and ▇▇▇▇▇▇ will cause the other Business Entities to use their
respective Best Efforts:
(a) to obtain prior to the earlier of the date required (if so
required) or the Closing Date, all authorizations, consents, orders, permits or
approvals of, or notices to, or filings, registrations or qualifications with,
all Governmental Authorities and any other Person or entity that are required on
their respective parts, for the consummation of the transactions contemplated by
this Master Agreement;
(b) to defend, consistent with applicable principles and
requirements of law, any lawsuit or other legal proceeding, whether judicial or
administrative, whether brought
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derivatively or on behalf of third Persons (including Governmental Authorities)
challenging this Master Agreement or the transactions contemplated hereby;
(c) to furnish to each other such information and assistance as
may reasonably be requested in connection with the foregoing; and
(d) to reasonably assist each other as necessary with regard to
the determination of contract or order closeouts or other issues which affect
the Assumed Contract Obligations, to notify Buyer of additional disallowances or
potential adverse audit findings, and to consult and reach agreement with
respect to advanced coordination of negotiating positions, offers of compromise,
or final agreements or settlements, all such cooperation to be without charge to
both parties to this Master Agreement.
9.5 COMMUNICATIONS WITH CUSTOMERS AND SUPPLIERS. ▇▇▇▇▇▇ agrees, in
consultation with Buyer, to promptly notify suppliers and customers of the
Business of the consummation of the transactions contemplated by this Master
Agreement and to reasonably assist Buyer, at Buyer's expense, in making
arrangements with such customers for the payment of Buyer's accounts receivable
in a manner satisfactory to Buyer.
9.6 LIABILITY FOR TRANSFER TAXES.
(a) Parent and Buyer, on the one hand, and ▇▇▇▇▇▇, on the other
hand, shall share equally in the payment of all sales, use, value added,
documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license and other similar Taxes and fees (for the avoidance of doubt,
exclusive of any Income Taxes) ("Transfer Taxes") arising out of or in
connection with or attributable to the transactions contemplated by this Master
Agreement, except that Sellers shall pay any and all Transfer Taxes relating to
the China subsidiaries, as provided in Section 9.12. Each party hereto shall
prepare and timely file all Tax Returns required to be filed in respect of
Transfer Taxes that are the primary responsibility of such party under
Applicable Law, PROVIDED, HOWEVER, that such parties' preparation of any such
Tax Returns shall be subject to the other parties' approval which approval shall
not be unreasonably withheld, conditioned or delayed, and PROVIDED, FURTHER,
that if any value added tax is paid by the parties and such tax is subsequently
recovered, the recovery shall also be shared equally between Parent and Buyer,
in the one hand, and ▇▇▇▇▇▇ on the other.
(b) The Transferred Assets are composed of (i) assets as to which
the "isolated, casual or occasional sale" exemption or similar exemption from
Transfer Taxes is or may be applicable and (ii) other assets as to which other
exemptions from Transfer Taxes are or may be applicable. In order to obtain any
exemption or favorable tax rate, the parties shall, to the extent consistent
with Applicable Law, provide the other parties with any exemption or resale
certificate, permit, license or such other documentation as may be required by
any taxing authority to establish the right to such exemption or tax rate.
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9.7 TAX MATTERS.
9.7.1 TAX RETURNS.
(a) All tax sharing agreements, arrangements, policies and
guidelines, formal or informal, express or implied, that may exist between the
Transferred Subsidiaries, or between one or more of the Transferred Subsidiaries
and ▇▇▇▇▇▇ and/or any other Person, and any obligations thereunder, shall
terminate as of the Closing Date, and none of the Transferred Subsidiaries shall
have any liability thereunder for any and all amounts due in respect of periods
ending on or before the Closing Date.
(b) ▇▇▇▇▇▇ shall timely prepare and file (or cause to be
prepared and filed) all Tax Returns of the Transferred Subsidiaries for taxable
periods that end on or before the Closing Date and all other Tax Returns of the
Transferred Subsidiaries required to be filed on or before the Closing Date.
▇▇▇▇▇▇ shall timely pay (or cause to be paid) all Taxes shown as due and payable
on such Tax Returns.
(c) ▇▇▇▇▇▇ shall be the sole and exclusive agent of the
Transferred Subsidiaries in any and all matters relating to the U.S. Federal
income tax liability of the consolidated group of which ▇▇▇▇▇▇ is the common
parent (the "Seller Consolidated Group") for all consolidated return years.
▇▇▇▇▇▇ shall, inter alia, have the right with respect to any Federal
consolidated returns which it files (i) to determine (x) the manner in which
such returns shall be prepared and filed, including, without limitation, the
manner in which any item of income, gain, loss, deduction or credit shall be
reported, (y) whether any extensions of the due dates for filing of such returns
or of the applicable statutes of limitations may be requested and (z) the
elections that will be made by any member of Seller Consolidated Group, (ii) to
file and prosecute any claim for refund, and (iii) to determine whether any
refunds, to which Seller Consolidated Group may be entitled, shall be paid by
way of refund or credited against the tax liability of Seller Consolidated
Group. Prior to the Closing, ▇▇▇▇▇▇ will cause the Transferred Subsidiaries to
irrevocably appoint ▇▇▇▇▇▇ as agent and attorney-in-fact to take such action
(including the execution of documents) as ▇▇▇▇▇▇ may deem appropriate to effect
the foregoing.
(d) ▇▇▇▇▇▇ shall have the sole right (but not the obligation),
at its sole expense and for its sole benefit, to prepare and file or cause to be
prepared and filed any amended Tax Return, or claim for refund, and to prosecute
any claim for refund, with respect to any Taxes paid or payable by the
Transferred Subsidiaries with respect to periods ending on or prior to the
Closing Date.
(e) Buyer shall timely prepare and file (or cause to be
prepared and filed) all Tax Returns of the Transferred Subsidiaries for taxable
years or periods ending after the Closing Date and shall pay (or cause to be
paid) the Taxes shown to be due on any such return. Upon notification and
satisfactory documentation from Buyer at least fifteen days prior to the due
date of such return, ▇▇▇▇▇▇ shall pay to Buyer the Taxes paid with such return
that ▇▇▇▇▇▇ is liable for pursuant to Section 9.7.2(b) of this Master Agreement.
Following the Closing Date, Buyer shall not cause or permit any of the
Transferred Subsidiaries formed or incorporated in jurisdictions
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other than a state of the United States or in Malaysia to pay any dividend, or
make any other distribution, during the taxable year that includes the Closing
Date, that would affect the liability of Sellers for Taxes in respect of periods
prior to the Closing Date.
(f) Buyer shall have the sole right (but not the obligation),
at its sole expense and for its sole benefit (except as provided in Section
9.7.2(b) hereof), to prepare and file (or cause to be prepared and filed) any
amended Tax Return, or claim for refund, and to prosecute any claim for refund,
with respect to any Taxes paid or payable by the Transferred Subsidiaries with
respect to periods ending after the Closing Date.
9.7.2 INDEMNITY.
(a) ▇▇▇▇▇▇ hereby agrees to indemnify and hold the Transferred
Subsidiaries (and Buyer or any Affiliate thereof) harmless with respect to any
Tax Liability of Seller Consolidated Group where such Liability arises solely by
reason of any of the Transferred Subsidiaries being severally liable for any
Taxes of Seller Consolidated Group pursuant to Treas. Reg. ss. 1.1502-6 or any
similar provision of foreign, state or local law.
(b) ▇▇▇▇▇▇ shall indemnify and hold Buyer harmless from and
against, and pay and reimburse Buyer for, any and all Taxes of the Seller
Consolidated Group or any member thereof, or of any other Transferred Subsidiary
(other than Assumed Pre-Closing Taxes) for any taxable year or period ending on
or before the Closing Date and the portion of any such Taxes for any taxable
year or period ending thereafter that is attributable to the portion of such
year or period prior to and including the Closing Date, and ▇▇▇▇▇▇ shall be
entitled to all refunds of such Taxes.
(c) Buyer shall indemnify and hold ▇▇▇▇▇▇ harmless from and
against, and pay and reimburse ▇▇▇▇▇▇ for, any and all Taxes due by the
Transferred Subsidiaries or any affiliated group of which the Transferred
Subsidiaries become members after the Closing Date for any Taxable year or
period beginning on or after the Closing Date and the portion of any such Taxes
for any period beginning before and ending after the Closing Date that is
attributable to the portion of such year or period beginning after the Closing
Date, and Buyer shall be entitled to all refunds of such Taxes.
(d) Notwithstanding anything in this Master Agreement to the
contrary, all of indemnity obligations set forth in this Section 9.7.2 shall
terminate and expire, and shall cease to be of any force or effect, at 5:00 P.M.
(Florida time) thirty (30) days after the expiration of the applicable statutes
of limitation, including waivers and extensions thereof, and all liabilities
with respect to the obligations set forth in this Section 9.7.2 shall thereupon
be extinguished; provided, however, that to the extent a written notice
asserting any claim for indemnification hereunder shall have been given prior to
such date to the Tax Indemnitor, obligations relating to such claim shall
survive, until such claim is fully resolved.
9.7.3 TAX LIABILITY. Whenever it is necessary for purposes of
this Section 9.7 to determine the Tax Liability of the Transferred Subsidiaries
for a taxable year or period that begins before and ends after the Closing Date,
the determination shall be made by assuming that the
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entity had a Taxable year that ended at the close of the Closing Date and by
using the accounting practices and procedures previously used by ▇▇▇▇▇▇ in
preparing its Tax Returns, provided that (a) exemptions, allowances or
deductions that are calculated on an annual basis, such as the deduction for
depreciation, shall be apportioned on a time basis, (b) Taxes (other than income
taxes) that are determined based upon specific transactions (including but not
limited to value added, sales, and use Taxes) shall be allocated in accordance
with the timing of such specific transactions, and (c) responsibility for real
estate, personal property, license, franchise, doing business, and similar Taxes
(but not including any Taxes based on income) shall be pro rated as of the
Closing Date as set forth on the Final Closing Balance Sheet.
9.7.4 TAX CONTESTS.
(a) The party obliged to provide indemnification under this
Section 9.7 (the "Tax Indemnitor") shall assume and direct the defense or
settlement of any hearing, arbitration, suit or other proceeding (each a "Tax
Contest") commenced, filed or otherwise initiated or convened to investigate or
resolve the existence and extent of a liability with respect to which the Tax
Indemnitor would have an indemnification obligation under this Section 9.7 ("Tax
Indemnification Liability"). The party entitled to be indemnified under this
Section 9.7 (the "Tax Indemnified Party") shall have the right to participate,
as its own cost and expense, in the defense of such Tax Contest, it being
understood that the Tax Indemnitor shall control such Tax Contest.
(b) The Tax Indemnitor shall pay all out-of-pocket expenses
and other costs related to the Tax Indemnification Liability, including but not
limited to reasonable fees for attorneys, accountants, expert witnesses or other
consultants retained by the Tax Indemnitor and/or Tax Indemnified Party (other
than fees for attorneys, accountants, expert witnesses or other consultants
retained solely by the Tax Indemnified Party), and incurred at any time during
which the Tax Indemnitor is controlling and directing the Tax Contest in respect
of which such fees are incurred. To the extent that any such expenses and other
costs have been or are paid by a Tax Indemnified Party, the Tax Indemnitor shall
promptly reimburse the Tax Indemnified Party therefor.
(c) Any Tax Indemnified Party shall give written notice to the
Tax Indemnitor of any settlement proposed by the Taxing authority. The Tax
Indemnitor shall have the right, in its sole discretion, to settle any claim for
which indemnification has been sought under this Section 9.7; provided, however,
that the Tax Indemnitor shall not enter into any settlement, closing agreement
or other agreement with respect to any Tax liability with respect to the
Business, the Transferred Assets or the Transferred Subsidiaries without the
prior written consent of the Tax Indemnified Party (such consent not to be
unreasonably withheld or delayed) if such settlement, closing agreement or other
agreement will adversely affect Taxes payable by the Tax Indemnified Party for
taxable periods or portions thereof beginning on or after the Closing Date.
9.7.5 COOPERATION.
(a) ▇▇▇▇▇▇ and Buyer shall provide each other with such
assistance and documents, without charge and in a timely fashion, as may be
reasonably requested by either of
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them in connection with (i) the preparation of any Tax Return (including any
amended Tax Return), (ii) the conduct of any Tax Contest, or (iii) any other
matter that is the subject of this Master Agreement. Such assistance shall
include, without limitation: (i) the provision on demand of books, records, Tax
Returns, documentation or other information relating to any relevant Tax Return
("Tax Data"); (ii) the execution of any document that may be necessary or
reasonably helpful in connection with the filing of any Tax Return, or in
connection with any Tax Contest, including, without limitation, the execution of
powers of attorney and extensions of applicable statutes of limitations; and
(iii) the use of reasonable efforts to obtain any documentation from any
Governmental Authority or other Person that may be necessary or reasonably
helpful in connection with the foregoing. Such cooperation shall include,
without limitation, making their respective employees and independent auditors
reasonably available on a mutually convenient basis for all reasonable purposes,
including, without limitation, to provide explanations and background
information and to permit the copying of books, records, schedules, workpapers,
notices, revenue agent reports, settlement or closing agreements and other
documents containing the Tax Data ("Tax Documentation"). If either party
reasonably determines that the other party is not in compliance with this
Section, the party reaching such conclusion shall have the right to retain a
third party to obtain the necessary documentation and other assistance
contemplated by this Section at the expense of the party which is not in
compliance.
(b) ▇▇▇▇▇▇ and each other member of Seller Consolidated Group
and ▇▇▇▇▇▇' Affiliates, and Buyer and the Transferred Subsidiaries, shall retain
or cause to be retained the Tax Data, the Tax Documentation, all Tax Returns,
schedules and workpapers, and all material records or other documents relating
thereto, until one year after the expiration of all applicable statutes of
limitations (including any waivers or extension thereof) with respect to the
Taxable periods to which such Tax Returns and other documents relate or until
the expiration of any additional period that either Buyer or Seller, as the case
may be, may reasonably request in writing with respect to specifically
designated material records or documents; provided, however, that in the event
an audit, examination, investigation or other proceeding has been instituted
prior to the expiration date of an applicable statute of limitations, the Tax
Data and Tax Documentation relating thereto shall be retained until there is a
final determination thereof (and the time for any appeal has expired). After the
expiration of the time when the Tax Data and the Tax Documentation must be
retained pursuant to this Section 9.7.5(b), then any such material may be
destroyed. ▇▇▇▇▇▇ shall give Buyer not less than thirty (30) days prior written
notice before Tax Data or Tax Documentation in the possession or control of any
member of the Seller Consolidated Group or other ▇▇▇▇▇▇ Affiliate is destroyed
and shall give Buyer an opportunity to copy any such material during such thirty
(30) day period. Buyer shall give ▇▇▇▇▇▇ not less than thirty (30) days prior
written notice before any Tax Data or Tax Documentation in the possession or
control of Buyer or any Transferred Subsidiary is destroyed and shall give
▇▇▇▇▇▇ an opportunity to copy any such material during such thirty (30) day
period.
(c) In order to assist ▇▇▇▇▇▇ in the preparation of Sellers'
Tax Returns, Buyer will report to Seller on a calendar quarterly basis payments
made by Buyer on or after the Closing Date with respect to the accrued vacation
liability assumed by Buyer at Closing. Buyer and Seller agree that vacation is
taken on a FIFO basis. Such reports will be prepared on a FIFO basis every
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calendar quarter and for each two and a half month period after each calendar
year until the accrued vacation liability is extinguished.
9.7.6 TRANSFER PRICING AGREEMENTS AND RELATED DOCUMENTATION.
Sellers will supply Buyer with a copy of all closing or other agreements related
to the Business entered into with the Internal Revenue Service, the Malaysian
taxing authorities, or any other state, local or foreign taxing authorities
relating in whole or in part to Code Section 482 or any other comparable
transfer pricing provision set forth under state, local or foreign tax law that
arise from any transaction between (i) ▇▇▇▇▇▇ Malaysia or any other Business
Entity with (ii) any other Business Entity or with the Business, and Sellers
will use their Best Efforts to supply, with respect thereto, any supporting
documentation including, but not limited to, any transfer pricing or economic
studies obtained for, or in anticipation of, any such proceeding.
9.8 TAX ELECTIONS. No material new elections with respect to Taxes, or
any material changes in current elections with respect to Taxes, affecting the
Transferred Assets or the Transferred Subsidiaries for periods including the
Closing Date that will have a material adverse effect on Taxes as to which
▇▇▇▇▇▇ indemnifies Buyer under this Master Agreement shall be made after the
date of this Master Agreement, with respect to the taxable year which includes
the Closing Date, without the prior written consent of both ▇▇▇▇▇▇ and Buyer.
9.9 CONFIDENTIALITY.
(a) For a period of five years after the Closing Date, ▇▇▇▇▇▇
agrees that it will keep confidential all of Buyer's Proprietary Information and
Buyer and Parent agree that they will keep confidential all of Sellers'
Proprietary Information except that Buyer and Parent shall not be required to
keep confidential Proprietary Information relating to the Business and conveyed
to Buyer as part of the Transferred Assets; such Proprietary Information shall
include any Proprietary Information obtained in connection with the Ancillary
Agreements. The obligation of each party to keep such Proprietary Information
confidential shall not apply to any information which (i) is or becomes
available to such party from a source other than the other party (or any Person
who is bound by a confidentiality agreement with such other party with respect
to such information), (ii) is or becomes available to the public other than as a
result of disclosure by such party or its agents, or (iii) is required to be
disclosed under Applicable Law or judicial process; PROVIDED, HOWEVER, that if a
party is requested or becomes legally compelled (by oral questions,
interrogatories, requests for information or documents, subpoenas, civil
investigative demand or similar process) to disclose any of such information, to
the extent permitted by law, such party will provide the other party with prompt
written notice to, and will cooperate with, such other party so that such other
party may seek a protective order or other appropriate remedy; PROVIDED,
FURTHER, that in the event such other party waives compliance with the
provisions of this Section 9.9, such party shall disclose only that portion of
the confidential information which is legally required and will exercise its
Best Efforts to seek confidential treatment for such information.
Notwithstanding anything in this Section 9.9 to the contrary, in the event that
any such information is also subject to a limitation on disclosure or use
contained in another written agreement between Buyer and Seller which is more
restrictive than the limitation
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contained in this Section 9.9, then the limitation in such agreement shall
supersede this Section 9.9.
(b) Buyer acknowledges that, in obtaining copies of
personnel-related records, it understands that certain of this information is
confidential as a matter of state and/or federal law. Buyer further agrees to
maintain (and disclose, if at all) such information in compliance with
Applicable Law.
9.10 BOOKS AND RECORDS. Subject to the confidentiality provisions
hereof, ▇▇▇▇▇▇ shall have the right to retain copies of the Books and Records.
From and after the Closing and until the sixth anniversary thereof, (a) each
Seller agrees to grant to Buyer, upon reasonable notice and during normal
business hours, reasonable access to any books and records that pertain to the
Business, but which are not Books and Records, and (b) Buyer and Parent agree to
grant to ▇▇▇▇▇▇, upon reasonable notice and during normal business hours,
reasonable access to any Books and Records included in the Transferred Assets
that pertain to the operations of the Business on or prior to the Closing Date.
9.11 ANCILLARY AGREEMENTS. Following the Closing Date, ▇▇▇▇▇▇ and Buyer
will perform, or cause to be performed, their respective obligations under the
Ancillary Agreements.
9.12 OBLIGATIONS CONCERNING CHINA SUBSIDIARIES.
(a) On or prior to the Closing Date, ▇▇▇▇▇▇ Malaysia shall
transfer its beneficial interest, and agree to transfer its title, in the shares
of the China Subsidiaries to HAS. ▇▇▇▇▇▇ Malaysia shall enter into purchase
agreements (the "China Purchase Agreements") with HAS providing for such
transfers. The China Purchase Agreements shall provide that any Net Proceeds
realized from the ownership, sale, rental or other disposition of the assets or
stock of any of the China Subsidiaries shall be paid to HAS. For purposes of
this Section 9.12(a), Net Proceeds shall mean any proceeds realized from any
such ownership, sale, rental, or other disposition net of all of expenses and
other Liabilities associated with such ownership, sale, rental or other
disposition and net of all Taxes, including Transfer Taxes and taxes imposed by
the People's Republic of China and by the Republic of Malaysia, in connection
with such ownership, sale, rental or other disposition and in connection with
the distribution of the proceeds of such ownership, sale, rental or other
disposition to ▇▇▇▇▇▇ Malaysia and the further distribution to HAS.
(b) The China Purchase Agreements shall appoint HAS as ▇▇▇▇▇▇
Malaysia's exclusive agent for purposes of exercising ▇▇▇▇▇▇ Malaysia's rights
as a shareholder in any of the China Subsidiaries and selling the equity of, or
liquidating, any of the China Subsidiaries, as HAS shall, in its sole
discretion, determine. The China Purchase Agreements shall require ▇▇▇▇▇▇
Malaysia to cause each of the China Subsidiaries to appoint HAS as each China
Subsidiary's exclusive agent for purposes of selling or renting the assets of
such China Subsidiary, as HAS shall, in its sole discretion, determine. Buyer
shall cause ▇▇▇▇▇▇ Malaysia and each China Subsidiary to take any and all
actions reasonably requested by ▇▇▇▇▇▇, at ▇▇▇▇▇▇' expense, to support the
foregoing including any actions reasonably requested by ▇▇▇▇▇▇ in order to
distribute to ▇▇▇▇▇▇ Malaysia any proceeds realized from the sale or rental of
the assets of such China
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Subsidiary. Subject to the provisions of this Master Agreement, such proceeds
shall be for the account of HAS. ▇▇▇▇▇▇ agrees that, provided ▇▇▇▇▇▇ Malaysia
cooperates, it will use Best Efforts to arrange for and consummate the transfer
to HAS of title to the shares of Anshan ▇▇▇▇▇▇ and Guangzhou ▇▇▇▇▇▇ within six
months of the Closing Date. ▇▇▇▇▇▇ agrees that it will arrange for and
consummate the sale, liquidation or other disposition of all of the China
Subsidiaries or the assets thereof or the transfer to HAS of title to the shares
of such China Subsidiaries within two (2) years of the Closing Date.
(c) In connection with the power and authority to be granted
to HAS pursuant to the China Purchase Agreements and this Section 9.12, ▇▇▇▇▇▇
agrees to pay, and to indemnify, defend and hold harmless ▇▇▇▇▇▇ Malaysia and
Buyer from, all costs, losses, Liabilities, claims and expenses (excluding any
loss of investment value in the China Subsidiaries) related to, or in any way
resulting from, (i) the ownership or transfer by ▇▇▇▇▇▇ Malaysia of any China
Subsidiary, or (ii) the ownership or operation or transfer by any China
Subsidiary of its assets, including any Taxes incurred by ▇▇▇▇▇▇ Malaysia in
connection with such ownership, operation or transfer (including all Transfer
Taxes) and any contributions or payments ▇▇▇▇▇▇ Malaysia or Buyer is legally
obligated to make in connection with such ownership provided that any Taxes or
other expenses or Liabilities arising as a result of the sale of any China
Subsidiary or the distribution of funds from any China Subsidiary as a result of
liquidation or otherwise shall be paid, in the first instance, from such
proceeds or distributions. The indemnification obligations of ▇▇▇▇▇▇ under this
Section 9.12(c) shall be in addition to those obligations set forth in this
Master Agreement, including those set forth under Section 9.7.2 hereof, and
shall not, in any event, be considered indemnification obligations of Buyer
under this Master Agreement.
9.13 LATHAM LEASE. ▇▇▇▇▇▇ is the lessee under a certain Lease Agreement
dated November 18, 1992 with ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates, as lessor, as
amended by Amendments First through Seventh thereof dated January 8, 1993,
January 26, 1993, August 1, 1993, March 25, 1994, November 1, 1995, March 1,
1996 and January 1, 1998, respectively, for space in the building commonly known
as ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ of Colonie, County of Albany, NY (the
"Latham Lease"). Pursuant and subject to a certain Assignment and Assumption of
Lease (the "Latham Lease Assignment") dated as of November 2, 1998, ▇▇▇▇▇▇ has
assigned the ▇▇▇▇▇▇ Lease to Silicon Power Corporation, a Pennsylvania
Corporation. Buyer and Sellers agree that the ▇▇▇▇▇▇ Lease shall at Buyer's
election be (i) transferred to Buyer and constitute a Transferred Asset, or (ii)
retained by ▇▇▇▇▇▇ and constitute an Excluded Asset. If Buyer elects to have the
▇▇▇▇▇▇ Leased assigned to it, then (a) the ▇▇▇▇▇▇ Lease shall constitute one of
the Leases, (b) the real estate demised thereby shall constitute Leased Real
Estate, (c) Schedule 4.11(m) shall be deemed to include the ▇▇▇▇▇▇ Lease, (d)
the ▇▇▇▇▇▇ Lease and the ▇▇▇▇▇▇ Lease Assignment shall constitute Assumed
Contract Obligations, and (e) Schedule 4.11(l) shall be deemed to include the
▇▇▇▇▇▇ Lease Assignment. If Buyer does not elect to have the ▇▇▇▇▇▇ Lease
assigned to it, the ▇▇▇▇▇▇ Lease, the real estate demised thereby and the ▇▇▇▇▇▇
Assignment shall constitute Excluded Assets and Excluded Liabilities for all
purposes.
9.14 OWNERSHIP OF INTERSIL NAME. Parent and Buyer hereby acknowledge
and agree that the name "Intersil" is owned by ▇▇▇▇▇▇ until the Closing at which
time the ownership of such name shall pass to Parent and Buyer. ▇▇▇▇▇▇ agrees
that Parent and Buyer have a limited and
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nontransferable license to use such name in their respective corporate names.
Such license shall terminate in the event the Master Agreement is terminated.
Upon the occurrence of such event, Buyer and Parent shall have no further rights
in and to the name "Intersil" and shall promptly amend their respective charters
to remove such name from their respective corporate names."
ARTICLE 10
CONDITIONS TO OBLIGATIONS OF BUYER AND PARENT TO CLOSE
The obligations of Buyer and Parent to purchase the Transferred Assets
and otherwise consummate the transactions that are to be consummated at the
Closing are subject to the satisfaction, as of the Closing Date, of the
following conditions (any of which may be waived by Buyer and Parent, in their
sole discretion, in whole or in part):
10.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Sellers set forth in Article 4 shall be true and correct in
all material respects (or, for representations and warranties that have any
materiality qualifiers, in all respects) as of the date of this Master Agreement
and as of the Closing, as though made on and as of the Closing Date, except to
the extent that any of such representations and warranties refers specifically
to a date other than the Closing Date, in which case such representation or
warranty shall have been accurate in all material respects (or, for
representations and warranties that have any materiality qualifiers, in all
respects) as of such other date, and all representations and warranties of
Sellers contained in the Ancillary Agreements shall be true and correct in all
material respects (or, for representations and warranties that have any
materiality qualifiers, in all respects) at and as of the Closing Date.
10.2 PERFORMANCE. ▇▇▇▇▇▇ shall have, and shall have caused each
Business Entity to have, performed and satisfied in all material respects all
agreements, covenants and obligations required by this Master Agreement to be
performed by Buyer or Parent or any Business Entity on or before the Closing
Date.
10.3 NO CONFLICT. The transactions contemplated by this Master
Agreement and the consummation of the Closing shall not be illegal or prohibited
under any Applicable Law. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any court
of competent jurisdiction or any competent Governmental Authority or any other
legal restraint or prohibition preventing the transfer contemplated hereby or
the consummation of the Closing, or imposing Condition-Triggering Losses in
respect thereto, shall be in effect, and there shall be no pending or threatened
actions or proceedings by any Governmental Authority (or determinations by any
Governmental Authority) that result, or would reasonably be expected to result,
in Condition-Triggering Losses.
10.4 MATERIAL ADVERSE CHANGE. From the date of this Master Agreement,
no change that will have a Material Adverse Effect on the Business shall have
occurred.
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10.5 CERTIFICATE. Buyer shall have received from a duly authorized
officer of each Seller a certificate dated the Closing Date confirming that the
conditions in Sections 10.1 and 10.2 have been met.
10.6 HSR ACT. Any applicable waiting period under the HSR Act relating
to the transactions contemplated hereby shall have expired or been terminated.
10.7 CONSENTS. All approvals, consents, waivers and authorizations
required to be obtained by Sellers in connection with the transactions
contemplated by this Master Agreement that are identified on Schedule 10.7,
including without limitation any authorizations, consents, orders, permits,
approvals or notifications required under Environmental Laws necessary for the
operation of the Business, shall have been obtained and shall be in full force
and effect, except where the failure to obtain such consents did not and would
not reasonably be expected to result in Condition-Triggering Losses.
10.8 TRANSFER DOCUMENTS. ▇▇▇▇▇▇ shall, and shall have caused each
Seller to, have delivered to Buyer at the Closing all documents, certificates
and agreements necessary to transfer to Buyer title to the Transferred Assets
and, in the case of the Real Estate, good and marketable fee simple title to the
Owned Real Estate (or the practical equivalent with respect to the Malaysia
Facility) and good and valid leasehold title with respect to the Leased Real
Estate (other than the Retained Leased Real Estate) free and clear of any and
all Liens thereon, other than Permitted Liens, including, without limitation:
(a) bills of sale, limited warranty deeds, assignments and
general conveyances, in form and substance reasonably satisfactory to Buyer,
dated the Closing Date, with respect to the Transferred Assets other than
Transferred Assets owned by the Transferred Subsidiaries;
(b) certificates representing all of the outstanding equity of
the Transferred Subsidiaries accompanied by duly executed stock powers;
(c) assignments of all Assumed Contract Obligations and any
other agreements and instruments constituting Transferred Assets (other than
such Transferred Assets owned by the Transferred Subsidiaries), dated the
Closing Date, assigning to Buyer all of each Seller's right, title and interest
therein and thereto; and
(d) certificates of title to all owned motor vehicles, if any,
included in the Transferred Assets to be transferred to Buyer hereunder, duly
endorsed for transfer to Buyer as of the Closing Date.
10.9 TRANSACTION DOCUMENTS. The parties other than Buyer, Parent and
their respective Affiliates shall have entered into the Ancillary Agreements and
other Transaction Documents.
10.10 RESIGNATIONS. Sellers shall have delivered to Buyer the
resignations of the directors and officers of the Transferred Subsidiaries.
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10.11 CORPORATE RECORDS. Sellers shall deliver or otherwise make
available to Buyer the minute books and corporate records of the Transferred
Subsidiaries.
10.12 FURTHER INSTRUMENTS. Sellers shall deliver to Buyer such further
instruments of assignment, conveyance or transfer or other documents of further
assurance as Buyer may reasonably request.
10.13 SELLERS' COUNSEL OPINION. Buyer shall have received an opinion of
Sellers' counsel in form and substance reasonably acceptable to Buyer.
10.14 FINANCING. Buyer and Parent shall have secured the proceeds of
the Financing on terms satisfactory to Buyer and Parent, which terms may require
equity of $90,000,000.
10.15 ENVIRONMENTAL TRANSFER STATUTES. ▇▇▇▇▇▇ will have complied with
the requirements of Section 7.4 hereof and shall provide evidence of such
compliance in form and substance satisfactory to Buyer prior to the Closing.
10.16 POSSESSION. Sellers shall deliver possession of: (i) the Real
Estate, except for the Retained Leased Real Estate, and (ii) the Subleased Real
Estate, to Buyer.
10.17 WORKING CAPITAL AMOUNT. The parties shall have agreed on the
normalized working capital amount as contemplated by Section 3.5(b).
10.18 REAL ESTATE MATTERS. Buyer shall have received the Title
Policies.
10.19 REAL PROPERTY AGREEMENTS. Buyer or the appropriate Transferred
Subsidiary (with Buyer's approval) and Sellers shall have fully executed and
entered into all of the Subleases, the Malaysian Purchase Agreement, and the
Leaseback Agreements and there shall be no default under the Malaysian Purchase
Agreement.
10.20 ▇▇▇▇▇▇ ADVANCED TECHNOLOGY (MALAYSIA) SDN BHD. Sellers shall have
caused the ownership interests of ▇▇▇▇▇▇ Advanced Technology (Malaysia) Sdn Bhd
("▇▇▇▇▇▇ Malaysia") to have been sold to a Business Entity that is a domestic or
foreign corporation (at Buyer's sole discretion). Sellers shall be permitted in
their sole discretion to make the election under Treasury Regulation Section
301.7701-3(c) as to ▇▇▇▇▇▇ Malaysia and the current owners of its membership
interests at any time prior to the Closing Date, and Buyer and Parent hereby
consent to such election. If such election is made, it shall remain in full
force and effect as of the Closing Date. In the event Sellers do not make such
election, Buyer shall have the right, at its sole discretion, to make an
election under Section 338(g) of the Code with respect to ▇▇▇▇▇▇ Malaysia and
the current owners of its membership interest with Sellers bearing any costs
related to the making of such election. In addition, if mutually satisfactory to
both Buyer and Sellers, the consideration paid for ▇▇▇▇▇▇ Malaysia (and the
aggregate consideration to be paid Sellers pursuant to this Master Agreement)
shall be reduced by an amount equal to that amount that can be borrowed by
▇▇▇▇▇▇ Malaysia on or prior to the Closing Date, PROVIDED such borrowing shall
be used to redeem a portion of the ownership interests
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in ▇▇▇▇▇▇ Malaysia, with the balance of the ownership interests in ▇▇▇▇▇▇
Malaysia being sold to Buyer pursuant to the provisions of this Section 10.19
and this Master Agreement including Section 3.12.
ARTICLE 11
CONDITIONS TO OBLIGATIONS OF ▇▇▇▇▇▇ TO CLOSE
The obligation of ▇▇▇▇▇▇ to sell the Transferred Assets and otherwise
consummate the transactions that are to be consummated at the Closing is subject
to the satisfaction, as of the Closing Date, of the following conditions (any of
which may be waived by ▇▇▇▇▇▇, in its sole discretion in whole or in part):
11.1 ACCURACY OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties of Buyer and Parent set forth in Article 5 shall be true and
correct in all material respects (or, for representations and warranties that
have any, materiality qualifiers, in all respects) as of the date of this Master
Agreement and as of the Closing, as though made on and as of the Closing Date,
except to the extent that any of such representations and warranties refers
specifically to a date other than the Closing Date, in which case such
representation or warranty shall have been accurate in all material respects
(or, for representations and warranties that have any, materiality qualifiers,
in all respects) as of such other date, and all representations and warranties
of Buyer and Parent contained in the Ancillary Agreements shall be true and
correct in all material respects (or, for representations and warranties that
have any materiality qualifiers, in all respects) at and as of the Closing Date.
11.2 PERFORMANCE. Each of Buyer and Parent shall have performed and
satisfied in all material respects all agreements, covenants and obligations
required by this Master Agreement to be performed by Buyer or Parent on or
before the Closing Date.
11.3 NO CONFLICT. The transactions contemplated by this Master
Agreement and the consummation of the Closing shall not be illegal or prohibited
under any Applicable Law. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any court
of competent jurisdiction or any competent Governmental Authority or any other
legal restraint or prohibition preventing the transfer contemplated hereby or
the consummation of the Closing, or imposing damages in respect thereto, shall
be in effect, and there shall be no pending or threatened actions or proceedings
by any Governmental Authority (or determinations by any Governmental Authority)
that would reasonably be expected to have a material adverse effect on the
transactions contemplated by this Master Agreement.
11.4 CERTIFICATE. ▇▇▇▇▇▇ shall have received from duly authorized
officers of Buyer and Parent a certificate dated the Closing Date confirming
that the conditions in Sections 11.1, 11.2 and 11.3 have been met.
11.5 HSR ACT. Any applicable waiting period under the HSR Act relating
to the transactions contemplated hereby shall have expired or been terminated.
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11.6 CONSENTS. All approvals, consents, waivers and authorizations
required to be obtained by Buyer or Parent in connection with the transactions
contemplated by this Master Agreement that are identified on Schedule 11.6 shall
have been obtained and shall be in full force and effect, except where the
failure to obtain such consents did not and would not reasonably be expected to
have a material adverse effect on the transactions contemplated by this Master
Agreement.
11.7 ASSUMPTION AGREEMENT. ▇▇▇▇▇▇ shall have received from Buyer or
Parent, as appropriate, an Assumption Agreement, in substance and form
reasonably satisfactory to ▇▇▇▇▇▇, under which Buyer or Parent, as appropriate,
shall have assumed the Assumed Liabilities.
11.8 TRANSACTION DOCUMENTS. The parties other than ▇▇▇▇▇▇ and its
Affiliates shall have entered into the Ancillary Agreements and the other
Transaction Documents.
11.9 BUYER'S COUNSEL OPINION. ▇▇▇▇▇▇ shall have received the opinion of
counsel for Buyer and Parent in form and substance reasonably satisfactory to
▇▇▇▇▇▇.
11.10 FURTHER INSTRUMENTS. Buyer and Parent shall deliver to ▇▇▇▇▇▇
such further instruments of assumption or other documents of further assurance
as Sellers may reasonably request.
11.11 FINANCING. Buyer and Parent shall have secured the proceeds of
the Financing.
11.12 WORKING CAPITAL AMOUNT. The parties shall have agreed on the
normalized working capital amount as contemplated by Section 3.5(b).
11.13 ROYALTY AGREEMENT. The parties shall have entered into a mutually
acceptable agreement providing for the payment to ▇▇▇▇▇▇ Semiconductor Patents,
Inc., of a royalty equal to 2% of the revenue generated by the sales of prism
chip sets for a period of five years after the Closing Date.
ARTICLE 12
TERMINATION
12.1 RIGHT TO TERMINATE AGREEMENT. This Master Agreement may be
terminated prior to the Closing:
(a) by the mutual written agreement of ▇▇▇▇▇▇ and Buyer; or
(b) by written notice by either ▇▇▇▇▇▇ or Buyer at any time
after September 30, 1999 (the "Section 12.1 Date"), if the Closing shall not
have occurred on or prior to such date; PROVIDED, HOWEVER, that the right to
terminate this Master Agreement under this Section 12.1(b) shall not be
available to such party (i) unless such party is expressly entitled to refuse to
close the transactions contemplated by this Master Agreement under Article 10 or
11, as the case may be,
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or (ii) if the action of such party or any of its Affiliates has been a
principal cause of or resulted in the failure of the Closing to occur on or
before such date and such action or failure to act constitutes a breach of this
Master Agreement. Notwithstanding the foregoing, the Section 12.1 Date shall be
extended as follows: (i) if the Closing does not occur because one or more of
the representations and warranties in Article 4 is not true as of the Closing
Date, ▇▇▇▇▇▇ shall have thirty (30) days to cure such representation or warranty
and the Section 12.1 Date shall be extended until the expiration of such cure
period; (ii) if the Closing does not occur because it is enjoined by a court of
competent jurisdiction or is otherwise prevented as a consequence of court
proceedings, the Section 12.1 Date shall be extended until such injunction or
other court ruling preventing the Closing is vacated or becomes final and is
either nonappealable or the time for any such appeal has expired without an
appeal having been filed; and (iii) if the Closing does not occur because the
approval of the transaction under the HSR Act or foreign counterparts has not
been obtained or the waiting period pursuant to such act has not expired, the
Section 12.1 Date shall be extended until such approval is obtained or denied,
or such waiting period expires. In no event shall the Section 12.1 Date be
extended beyond December 31, 1999.
12.2 EFFECT OF TERMINATION. Upon the termination of this Master
Agreement pursuant to Section 12.1:
(a) Buyer and Parent shall promptly cause to be returned to
▇▇▇▇▇▇ all documents and information obtained from ▇▇▇▇▇▇ in connection with
this Master Agreement and the transactions contemplated by this Master Agreement
and all documents and information obtained in connection with Buyer's
investigation of the Business, including any copies made by or supplied to Buyer
or any of Buyer's agents of any such documents or information; and
(b) No party hereto shall have any obligation or liability to
the other party hereto, except that the parties hereto shall remain bound by the
provisions of this Section 12.2 and Sections 9.3, 9.5, 9.11 and Article 14 and
by the provisions of the Confidentiality Agreement between Citicorp Venture
Capital and Harris.
ARTICLE 13
CERTAIN REMEDIES AND LIMITATIONS
13.1 EXPIRATION OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
covenants set forth in this Master Agreement shall survive the Closing Date. All
of the representations and warranties of Seller set forth in this Master
Agreement and the Ancillary Agreements shall terminate and expire, and shall
cease to be of any force or effect, at 5:00 P.M. (Florida time) on the date that
is eighteen months after the Closing Date, and all liability with respect to
such representations and warranties shall thereupon be extinguished, except as
to matters with respect to which notice of a claim has been given prior to the
expiration of such eighteen month period, provided that the representations and
warranties of Seller set forth in (a) Section 4.18 and Section 4.22 shall
continue in full force and effect until 60 days after all applicable statutes of
limitations, including waivers and extensions, have expired with respect to the
matters addressed
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therein, (b) Sections 4.13, 4.14 and 4.15 shall survive until the fifth
anniversary of the Closing Date, and (c) Sections 4.1, 4.2, 4.3, and 4.9 shall
survive the Closing Date.
13.2 INDEMNITY BY ▇▇▇▇▇▇.
(a) Subject to the provisions of Section 13.1 relating to the
survival of representations and warranties and the other limitations contained
herein, from and after the Closing, ▇▇▇▇▇▇ agrees to indemnify, defend and hold
harmless Buyer, Parent and their respective Affiliates, officers, directors,
employees, representatives, agents and stockholders (collectively, "Buyer
Indemnitees") against the net amount of all claims, losses, settlements, fines,
liabilities, damages, deficiencies, costs and expenses, including, without
limitation, losses resulting from the defense, settlement and/or compromise of a
claim and/or demand and/or assessment, reasonable attorneys', accountants' and
expert witnesses' fees, interest, penalties, costs and expenses of
investigation, and the costs and expenses of enforcing the indemnification
provided hereunder, suffered, sustained, incurred or required to be paid by any
of Buyer Indemnitees (after deduction of the amount of any insurance proceeds
recoverable (less premiums paid for such period) and net of any tax benefit
actually realized) (hereafter individually a "Loss" and collectively "Losses")
and due to, based upon, arising out of or relating to: (i) any Excluded
Liability; (ii) any breach of any representation or warranty or any inaccuracy
of any representation made by ▇▇▇▇▇▇ in this Master Agreement or the Ancillary
Agreements; (iii) any breach of any covenant, agreement or obligation of ▇▇▇▇▇▇
contained in this Master Agreement or the Ancillary Agreements; and (iv) the
failure to have obtained any authorizations, consents, orders, permits,
approvals or notifications required under Environmental Laws prior to the
Closing; (v) any of the Deferred Closings which Losses would not have been
incurred if such Deferred Closing had occurred on the Closing Date; and (vi) the
acquisition of assets of each of ▇▇▇▇▇▇ ▇.▇. (Belgium), ▇▇▇▇▇▇ Semiconductor
GmbH (Germany) and ▇▇▇▇▇▇ Semiconductor Design & Sales Pte. Ltd. (Singapore)
which Losses would not have been incurred if, in lieu of such asset sale, a
stock sale was consummated. Notwithstanding the foregoing, damages shall
constitute Losses for the purpose of clauses (i) through (iv) of this Section
13.2 only to the extent of the direct damages incurred (excluding consequential
damages, whether or not foreseeable).
(b) Except as set forth below, ▇▇▇▇▇▇ shall not be required to
indemnify Buyer Indemnitees with respect to any claim for indemnification
resulting from or arising out of matters described in Section 13.2(a)(ii) unless
and until the aggregate amount of all such claims against Buyer Indemnitees
exceeds three percent (3%) of the Purchase Price (the "Threshold") and then
Buyer Indemnitees will be entitled to recover Losses in excess of the Threshold.
Claims thereafter may be asserted regardless of amount; PROVIDED, HOWEVER, that
the foregoing limitation shall not apply to a claim for indemnification to the
extent such claim is based upon a breach of a representation contained in
Sections 4.1, 4.2, 4.3, 4.9 or 4.22 hereof; and PROVIDED, FURTHER, that ▇▇▇▇▇▇'▇
maximum liability to Buyer Indemnitees under this Section 13.2 (not including
indemnification with respect to Excluded Liabilities, breaches of Section 7.2,
breaches of representations contained in Section 4.22, matters described in
Section 13.2(a)(v) and (vi), and as set forth in Sections 9.7 and 13.11) shall
not exceed fifteen percent (15%) of the Purchase Price in the aggregate.
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(c) Notwithstanding anything to the contrary set forth in this
Article 13, no limitation or condition on liability or indemnity shall apply to
any breach of a representation or warranty, if such breach of such
representation or warranty was untrue and the party making it had, at the time,
actual knowledge of such untruth.
13.3 INDEMNITY BY BUYER AND PARENT.
(a) Subject to the provisions of Section 13.1 relating to the
survival of representations and warranties and the other limitations contained
herein, from and after the Closing, Buyer and Parent jointly and severally agree
to indemnify, defend and hold harmless ▇▇▇▇▇▇ and its respective Affiliates,
officers, directors, employees, representatives, agents and stockholders
(collectively, "Seller Indemnitees") against the net amount of all claims,
settlements, fines, losses, liabilities, damages, deficiencies, costs and
expenses, including, without limitation, losses resulting from the defense,
settlement and/or compromise of a claim and/or demand and/or assessment,
reasonable attorneys', accountants' and expert witnesses' fees, interest,
penalties, costs and expenses of investigation, and the costs and expenses of
enforcing the indemnification provided hereunder, suffered, sustained, incurred
or required to be paid by any of Seller Indemnitees (after deduction of the
amount of any insurance proceeds recoverable (less premiums paid for such
period) and net of any tax benefit actually realized) (hereafter individually a
"Loss" and collectively "Losses") and due to, based upon, arising out of or
relating to: (i) all Assumed Liabilities; (ii) any breach of any representation
or warranty or any inaccuracy of any representation, made by Buyer or Parent in
this Master Agreement or the Ancillary Agreements; and (iii) any breach of any
covenant, agreement or obligation of Buyer and Parent contained in this Master
Agreement or the Ancillary Agreements. Notwithstanding the foregoing, damages
shall constitute Losses for the purpose of this Section 13.3 only to the extent
of the direct damages incurred (excluding consequential damages, whether or not
foreseeable).
13.4 GENERAL INDEMNIFICATION PROCEDURES.
(a) In the event that any party incurs or suffers any Losses
with respect to which indemnification may be sought by such party pursuant to
this Article 13, the party seeking indemnification (the "Indemnitee") must
assert the claim by giving written notice (a "Claim Notice") to the party from
whom indemnification is sought (the "Indemnifying Party"). The Claim Notice must
state the nature, basis and amount (if known) of the claim in reasonable detail
based on the information available to the Indemnitee and, if the Claim Notice is
being given with respect to a third party claim, it must be accompanied by a
copy of any written notice of the third party claimant. If the Claim Notice is
being given by reason of any third party claim, it shall be given in a timely
manner but in no event more than 30 days after the filing or other written
assertion of any such claim against the Indemnitee, but the failure of the
Indemnitee to give the Claim Notice within such time period shall not relieve
the Indemnifying Party of any liability for indemnification under this Article
13, except to the extent that the Indemnifying Party is prejudiced thereby. If
the amount of the claim is not known at the time the Claim Notice is given, the
Indemnitee shall also give notice of such amount to the Indemnifying Party at
such time as the amount of the claim is reasonably ascertainable. Each
Indemnifying Party to whom a Claim Notice is given shall respond to any
Indemnitee that has given a Claim Notice (a "Claim Response") within 30 days
(the "Response Period") after the date that the Claim Notice is received by
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Indemnifying Party. Any Claim Response shall specify whether or not the
Indemnifying Party given the Claim Response disputes the claim described in the
Claim Notice in whole or in part. If any Indemnifying Party fails to give a
Claim Response within the Response Period, such Indemnifying Party shall be
deemed not to dispute the claim described in the related Claim Notice. If any
Indemnifying Party elects not to dispute a claim described in a Claim Notice,
whether by failing to give a timely Claim Response or otherwise, then such claim
shall be conclusively deemed to be an obligation of such Indemnifying Party.
Subject to the applicable limitations set forth in this Article 13, if any
Indemnifying Party shall be obligated to indemnify an Indemnitee hereunder, such
Indemnifying Party shall pay to such Indemnitee within 30 days after the last
day of the applicable Response Period (or at such later time as the amount is
ascertainable) the amount to which such Indemnitee shall be entitled. If there
shall be a dispute as to the amount or manner of indemnification under this
Agreement, the Indemnifying Party and the Indemnitee shall resolve such dispute
as provided in Section 6 of Exhibit B to this Master Agreement. If any
Indemnifying Party fails to pay all or any part of any indemnification
obligation on or before the later to occur of (x) 30 days after the last day of
the applicable Response Period, and (y) if the Claim Notice relates to Losses
that have not been liquidated as of the date of the Claim Notice, the date on
which all or any part of such Losses shall have become liquidated and
determined, then the Indemnifying Party shall also be obligated to pay to the
Indemnitee interest on the unpaid amount for each day during which the
obligation remains unpaid at an annual rate of ten percent.
(b) The Indemnitee shall provide to the Indemnifying Party on
request all information and documentation reasonably necessary to support and
verify any Losses that the Indemnitee believes give rise to the claim for
indemnification hereunder and shall give the Indemnifying Party reasonable
access to all books, records and personnel in the possession or under the
control of the Indemnitee that would have bearing on such claim.
(c) Except as hereinafter provided, in the case of third party
claims for which indemnification is sought, the Indemnifying Party shall have
the option: (x) to conduct any proceedings or negotiations in connection
therewith, (y) to take all other steps to settle or defend any such claim
(provided that the Indemnifying Party shall not settle any such claim without
the consent of the Indemnitee (which consent shall not be unreasonably withheld,
it being understood that it shall not be unreasonable for the Indemnitee to
withhold its consent from any settlement which (1) commits the Indemnitee to
take, or to forbear to take, any action, or (2) does not provide for a complete
release of the Indemnitee by such third party)), and (z) to employ counsel to
contest any such claim or liability in the name of the Indemnitee or otherwise.
In any event, the Indemnitee shall be entitled to participate at its own expense
and by its own counsel (a "Voluntary Participation") in any proceedings relating
to any third party claim. The Indemnifying Party shall, within 45 days of
receipt of the Claim Notice, notify the Indemnitee of its intention to assume
the defense of the claim (a "Defense Notice"). Until the Indemnitee has received
the Defense Notice, the Indemnitee shall take reasonable steps to defend (but
may not settle) the claim. If the Indemnifying Party declines to assume the
defense of any such claim or fails to give a Defense Notice within 45 days after
receipt of the Claim Notice, the Indemnitee shall defend against the claim but
shall not settle such claim without the consent of the Indemnifying Party (which
consent shall not be unreasonably withheld). The expenses of all proceedings,
contests or lawsuits (other than those incurred in a Voluntary Participation)
with respect to claims as to which a party is entitled to indemnification under
this Article 13 shall represent indemnifiable Losses under this
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Agreement. Regardless of which party shall assume the defense of the claim, the
parties shall cooperate fully with one another in connection therewith.
Notwithstanding the foregoing, the Indemnifying Party shall not be entitled
(except with the consent of the Indemnitee) to take any of the actions referred
to in clauses (x), (y) or (z) of the first sentence of this subparagraph unless:
(a) the third party claim involves principally monetary damages; (b) the
Indemnifying Party shall have expressly agreed in writing that, as between the
Indemnifying Party and the Indemnitee, the Indemnifying Party shall be solely
obligated to satisfy and discharge such third party claim; and (c) the
Indemnifying Party has the financial capacity to take over the defense of such
claim.
13.5 ENVIRONMENTAL PROCEDURES.
(a) ▇▇▇▇▇▇ agrees to respond on Buyer's or the Transferred
Subsidiaries' behalf and defend Buyer Indemnitees with respect to Losses arising
from Environmental Liabilities, or, at ▇▇▇▇▇▇' option, reimburse Buyer's or the
Transferred Subsidiaries' for such Losses.
(b) With respect to any Environmental Liabilities for which
▇▇▇▇▇▇ is responsible to conduct Remediation under this Master Agreement on or
about any property owned, operated or leased by the Transferred Subsidiaries
after the Closing, ▇▇▇▇▇▇ shall be responsible for such Remediation to meet the
Minimum Cleanup Standard. For purposes of this Master Agreement, the "Minimum
Cleanup Standard" shall mean the least stringent standard acceptable under all
Environmental Laws (as such laws are in effect upon the completion of the
Remediation) and all Governmental Authorities with jurisdiction or, if no such
standard has been adopted, promulgated or imposed by the applicable Governmental
Authority or by Environmental Laws (as such laws are in effect upon the
completion of the Remediation) as of the date such Remediation is being
conducted, the standard to which the parties, in good faith agree; provided,
however, that in no event shall the Minimum Cleanup Standard at or below a
standard for which (i) Buyer or the Transferred Subsidiaries would be required
to impose or implement controls or restrictions which would impair the use of
the affected property as used as of the Closing Date, (ii) for which additional
Remediation would be required in the future to achieve and maintain compliance
with Environmental Laws or to meet the requirements of Governmental Authorities,
as such Environmental Laws and requirements exist as of the date of the
completion of the Remediation; or (iii) which does not fully resolve any
liability of Buyer Indemnitees and the Transferred Subsidiaries with respect to
such matter; provided, further, that with respect to any Remediation at any
property leased by the Transferred Subsidiaries, the Minimum Cleanup Standard
shall also meet the requirements of the landlord/lessor of such property.
(c) Remediation conducted by ▇▇▇▇▇▇ shall be conducted in a
manner which minimizes interference to the Transferred Subsidiaries after the
Closing Date, and if and to the extent various Remediation alternatives are
available, ▇▇▇▇▇▇ shall implement or pay for the implementation, as the case may
be, of such Remediation which imposes the least interruption, interference or
disruption (taking into account the cost effectiveness, regulatory and legal
constraints) unless (i) the Buyer Indemnitees and the Transferred Subsidiaries
consent to a different alternative, or (ii) ▇▇▇▇▇▇ indemnifies and reimburses
the Buyer and the Transferred Subsidiaries for all Losses arising from such
interruption, interference and disruption (including consequential damages
resulting therefrom).
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(d) With respect to Remediation performed by ▇▇▇▇▇▇, ▇▇▇▇▇▇
shall: (i) diligently and expeditiously perform or cause to be performed such
Remediation to completion; (ii) provide Buyer and the Transferred Subsidiaries
reasonable prior notice of ▇▇▇▇▇▇' access requirements and obtain Buyer's
consent before commencing or performing any Remediation (which consent shall not
be unreasonably withheld); (iii) keep Buyer and the Transferred Subsidiaries
reasonably informed of the progress of the on-site activities and provide Buyer
and the Transferred Subsidiaries with copies of any results of sampling and
analytical data (including any status reports of work in progress or reports
required to be submitted to any Governmental Authorities in connection with
conducting the Remediation); (iv) provide Buyer and the Transferred Subsidiaries
a reasonable opportunity to review and comment on any submittal to Governmental
Authorities and consider in good faith Buyer's and the Transferred Subsidiaries'
reasonable comments which must be expeditiously provided (and ▇▇▇▇▇▇
acknowledges that any comments, which relate to the interruption, interference,
or disruption with the operation of the Business, damage to the Property, the
safety of personnel, or compliance with Environmental Laws shall be deemed
reasonable); (v) provide Buyer and the Transferred Subsidiaries with the
opportunity to observe all of the activities undertaken by or on behalf of
▇▇▇▇▇▇ in implementing the Remediation; (vi) provide reasonable advance notice
to Buyer and the Transferred Subsidiaries of any meetings with any Governmental
Authorities concerning the Remediation and permit Buyer and the Transferred
Subsidiaries may attend such meetings; (vii) comply with all applicable
Environmental Laws and other laws and Buyer's and the Transferred Subsidiaries'
reasonable health and safety requirements; and (viii) promptly upon completion
of any on-site activities, restore any adversely affected portions of the
property to its predisturbed condition such that Buyer and the Transferred
Subsidiaries can continue the operation of the Business in the manner in which
such Business was conducted prior to the commencement of the on-site activities.
(e) ▇▇▇▇▇▇ shall indemnify, defend and hold harmless Buyer
Indemnitees and the Transferred Subsidiaries against any Losses asserted against
or incurred by the Buyer Indemnitees or the Transferred Subsidiaries arising out
of or relating to activities conducted by ▇▇▇▇▇▇ or its employees, agents,
contractors and their subcontractors in connection with the performance of the
Remediation or the fulfillment of ▇▇▇▇▇▇' obligations with respect to
Pre-Closing Environmental Claims, and the Buyer and the Transferred Subsidiaries
shall indemnify and hold harmless ▇▇▇▇▇▇ against any Losses to the extent
arising out of or relating to Buyer's or the Transferred Subsidiaries'
interference with or disruption of ▇▇▇▇▇▇' Remediation, or any Release caused by
Buyer or any Transferred Subsidiary after the Closing Date.
(f) With respect to any Remediation which commenced prior to
the Closing Date which is subject to any consent decree, administrative order or
other agreement with a Governmental Authority or other Person, Harris shall
remain the ordered and/or contracting party after the Closing. With respect to
the Palm Bay, Florida Facility, the parties agree that, without cost to Harris,
Buyer or Transferred Subsidiaries will continue to inspect and provide minor
maintenance at the same level as occurred prior to the Closing Date (PROVIDED
the cost to Buyer of such inspection and minor maintenance shall be DE MINIMIS)
and provide access for sampling events for Operable Unit 2 Remediation
activities in connection with the ▇▇▇▇▇▇ Corporation
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National Priorities List ("NPL") Site, and ▇▇▇▇▇▇ will continue to perform all
other activities, including all Remediation, sampling and analysis, and
reporting those results to any Governmental Authority (including, without
limitation, the United States Environmental Protection Agency). ▇▇▇▇▇▇ agrees,
without cost to Buyer or Transferred Subsidiaries, to continue to provide
treated groundwater from its Operable Unit 1 Remediation activities with the
▇▇▇▇▇▇ Corporation NPL Site, and Buyer and Transferred Subsidiaries agree to
accept such water for its production process. ▇▇▇▇▇▇ covenants and agrees that
such water will be of a quality such that it will be able to be used in the same
manner as such water was used prior to the Closing Date. Buyer and Transferred
Subsidiaries acknowledge that the volume of such water may decrease as the
Remediation activities at Operable Unit 1 proceed and both parties agree not to
change this arrangement without providing the other party at least six (6)
months' prior notice and agreeing to appropriate alternate arrangements for such
water.
13.6 COSTS RELATED TO DIRECT CLAIMS. Notwithstanding anything in this
Article 13 to the contrary, except as otherwise may be ordered by a court of
competent jurisdiction, Buyer Indemnitees and Seller Indemnitees shall bear
their own costs, including counsel fees and expenses, incurred in connection
with direct claims against Buyer, Parent and ▇▇▇▇▇▇, respectively, hereunder
that are not based upon claims asserted by third parties.
13.7 EXCLUSIVITY. The right of each party hereto to assert
indemnification claims and receive indemnification payments pursuant to this
Article 13 shall be the sole and exclusive right and remedy against the other
party exercisable by such party after the Closing with respect to any breach by
the other party hereto of any representation, warranty or covenant in this
Master Agreement or any Ancillary Agreement or failure to pay or perform any
Assumed Liability or Excluded Liability, as applicable, PROVIDED, HOWEVER, that
neither this Section 13.7 nor Section 6 of Exhibit B to this Master Agreement
shall prohibit the maintenance of actions to compel specific performance of the
parties' respective covenants in this Master Agreement.
13.8 NO SET-OFF. Neither Buyer nor Seller shall have any right to
set-off any indemnification obligations that either may have under this Article
13 against any other obligations or amounts due to Buyer or Seller, as
applicable, including, without limitation, under any other provisions of this
Master Agreement or under any other Transaction Document.
13.9 RETENTION OF RECORDS. From and after the date of this Master
Agreement, Buyer and ▇▇▇▇▇▇ shall preserve all books, records and other
documents, materials and information ("Representation Records") relevant to the
representations, warranties and covenants set forth in this Master Agreement for
a period of three years following the date of this Master Agreement or for such
longer period as the rights of the parties hereunder may exist. After Buyer and
▇▇▇▇▇▇ are no longer obligated to retain the Representation Records pursuant to
this Section 13.9, Buyer or ▇▇▇▇▇▇, as applicable, shall give the other party
not less than thirty (30) days prior written notice before destroying any
Representation Records and, if the other party so requests, shall deliver such
Representation Records to the other party instead of destroying such
Representation Records.
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13.10 NOTICE AS TO REPRESENTATIONS. Without limiting any of the other
obligations of the respective parties hereunder, if at any time after the date
of this Master Agreement Buyer or Parent shall have any reason to believe that
any representation or warranty made by ▇▇▇▇▇▇ hereunder may have been untrue,
Buyer or Parent, as the case may be, shall promptly provide ▇▇▇▇▇▇ written
notice to that effect, indicating the basis for Buyer's or Parent's belief that
such representation or warranty may have been untrue. For purposes of this
Article 13, ▇▇▇▇▇▇ shall not be deemed to have breached any representation or
warranty if Buyer or Parent, prior to the Closing Date, had actual knowledge of
the breach, or facts and circumstances constituting or resulting in a breach, of
such representation or warranty, and consummated, without written notice to
▇▇▇▇▇▇ of such breach and a reservation of its right, the purchase of the
Transferred Assets notwithstanding such knowledge.
13.11 SEPARATE INDEMNIFICATION FOR TAXES. Notwithstanding anything
contained in this Master Agreement to the contrary, indemnification for Tax
matters set forth in Section 9.7 shall be governed solely by the terms of
Section 9.7.2. To the extent any terms of this Article 13 and Section 9.7.2 are
deemed to be inconsistent with respect to any Tax matters, the terms of Section
9.7 shall govern such matter.
13.12 INDEMNIFICATION PAYMENTS AS PURCHASE PRICE ADJUSTMENT. Any
payments made by Buyer or Parent under this Article 13 shall be considered an
increase to the Purchase Price. Any payments made by ▇▇▇▇▇▇ under this Article
13 shall be considered a reduction of the Purchase Price.
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ARTICLE 14
MISCELLANEOUS
14.1 MATERIAL ADVERSE EFFECT. Any adverse change, event or effect that
is proximately caused by conditions affecting the United States or international
economy generally shall not be taken into account in determining whether there
has been or would be a Material Adverse Effect on the Business or a Material
Adverse Effect on Buyer (unless such conditions adversely affect the Business
Entities or Buyer, as the case may be, in a materially disproportionate manner).
Any adverse change, event or effect that is proximately caused by any industry
in which Buyer or the Business Entities competes shall not be taken into account
in determining whether there has been or would be a Material Adverse Effect on
Buyer or Material Adverse Effect on the Business (unless such conditions
adversely affect the Business Entities or Buyer, as the case may be, in a
materially disproportionate manner). Any adverse change, event or effect that is
proximately caused by the announcement or pendency of the sale of the Business
and the Transferred Assets shall not be taken into account in determining
whether there has been or would be a Material Adverse Effect on Buyer or a
Material Adverse Effect on the Business. Any adverse change, event or effect
that is proximately caused by any breach by Buyer or the Business Entities of
any covenant or obligation set forth in this Master Agreement shall not be taken
into account in determining whether there has been or would be a Material
Adverse Effect on the Business or Material Adverse Effect on Buyer,
respectively.
14.2 DISCLAIMER OF PROJECTIONS, ETC. The Business Entities make no
representation or warranty to Buyer except as specifically made in this Master
Agreement and the Ancillary Agreements. In particular, the Business Entities
make no representation or warranty to Buyer with respect to the contents of the
Business Entity management presentations to Buyer or the data room made
available to Buyer, including the certainty or accuracy of any financial
projection or forecast delivered by or on behalf of any Business Entity to
Buyer. Buyer acknowledges that (a) there are uncertainties inherent in
attempting to make such projections and forecasts, (b) it is familiar with such
uncertainties, (c) it is taking full responsibility for making its own
evaluation of the adequacy and accuracy of all such projections and forecasts so
furnished to it, and (d) it shall have no claim against Sellers with respect
thereto.
14.3 EXPENSES. If the purchase of the Transferred Assets is consummated
or if this Master Agreement is terminated, ▇▇▇▇▇▇ and Buyer shall pay their own
respective expenses and costs incidental to the preparation of this Master
Agreement, the performance and compliance with all agreements contained in this
Master Agreement to be performed or complied with by them and the consummation
of the transactions contemplated hereby, and none of such costs and expenses
shall be or become liabilities of the Transferred Subsidiaries or be considered
Assumed Liabilities.
14.4 COMPLIANCE WITH BULK SALES LAWS. The parties hereby expressly
waive compliance with any applicable bulk sales laws.
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14.5 INCONSISTENCIES. If there shall be any inconsistency between this
Master Agreement and any of the Transaction Documents other than the IP Transfer
Agreements, the provisions of this Master Agreement shall prevail. Nothing in
any of the Ancillary Documents (other than the IP Transfer Agreements) which
involve any agreement to convey, or the conveyance of, any of the Transferred
Assets or any agreement to assume, or the assumption of, any of the Assumed
Liabilities, shall be deemed to supercede, enlarge or modify any of the
obligations, agreements, covenants, or warranties of the Sellers contained in
the Master Agreement.
ARTICLE 15
AGREEMENT CONVENTIONS
The Agreement Conventions set forth in Exhibit B to this Master
Agreement are incorporated herein by reference.
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IN WITNESS WHEREOF, the parties hereto have duly caused this Master
Agreement to be executed as of the date first above written.
INTERSIL HOLDING CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: CEO
------------------------------------
INTERSIL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title: CEO
------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
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EXHIBIT A
DEFINITIONS AND RULES OF CONSTRUCTION
-------------------------------------
1. DEFINITIONS. The following terms, as used in any Transaction
Document, shall have the following meanings unless otherwise specifically
defined therein:
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise. For purposes of Section 7.2 of
the Master Agreement, the term "Affiliate" shall mean a Person that is
controlled by another Person, with "control" being defined for this purpose as
the right or ability to direct or cause the direction of the management and
policies of the Affiliate.
"Allocation Statement" has the meaning set forth in Section
3.3(d) of the Master Agreement.
"Ancillary Agreements" means collectively: (i) the IP Transfer
Agreements and the other agreements and documents the forms of which are
attached to the Master Agreement as Exhibits C through L; (ii) the Subleases;
(iii) the Malaysian Purchase Agreement; and (iv) the Leaseback Agreements.
"Anshan ▇▇▇▇▇▇"' means Anshan ▇▇▇▇▇▇ Broadcast Equipment Co.
Ltd., a Chinese company.
"Applicable Law" means all applicable provisions of all (a)
constitutions, treaties, statutes, laws (including the common law), rules,
regulations, ordinances, codes or orders of any Governmental Authority, (b)
Government Approvals and (c) orders, decisions, injunctions, judgments, awards
and decrees of, or agreements with, any Governmental Authority.
"Assumed Contract Obligations" means, collectively, all
obligations under Contracts (other than Contracts included in the definition of
Excluded Assets) (a) by which the Business Entities or any of their assets are
bound as of the date of the Master Agreement in relation to the conduct of the
Business and (b) that arise from the conduct of the Business between the date of
the Master Agreement and the Closing Date to the extent such obligations relate
to the Transferred Assets or the Assumed Liabilities. To the extent an Assumed
Contract Obligation is guaranteed by ▇▇▇▇▇▇ or an Affiliate of ▇▇▇▇▇▇, the
Assumed Contract Obligation shall include such guaranty.
85
"Assumed Liabilities" has the meaning set forth in Section 2.3
of the Master Agreement.
"Assumed Pre-Closing Taxes" has the meaning set forth in
Section 2.3(h) of the Master Agreement.
"Audited Closing Balance Sheet" has the meaning set forth in
Section 3.6(a) of the Master Agreement.
"Baseline Financial Statements" has the meaning set forth in
Section 4.7 of the Master Agreement.
"Benefit Arrangement" has the meaning set forth in Section
4.18.1(a) of the Master Agreement.
"Best Efforts" is defined to require that the obligated party
make a diligent, commercially reasonable and good faith effort to accomplish the
applicable objective. Such obligation, however, does not require any significant
expenditure of funds or the incurrence of any significant liability on the part
of the obligated party, nor the incurrence of any expenditure or liability which
is unreasonable in light of the related objective, nor does it require that the
obligated party act in a manner which would otherwise be contrary to prudent
business judgment or normal commercial practices in order to accomplish the
objective. The fact that the objective is not actually accomplished is no
indication that the obligated party did not in fact utilize its Best Efforts in
attempting to accomplish the objective.
"Books and Records" means the books and records of the
Business Entities, including without limitation all manuals, price lists,
mailing lists, supplier lists, lists of customers, sales and promotional or
packaging materials, purchasing materials, personnel records, manufacturing and
quality control records and procedures, research and development files,
equipment maintenance records, warranty information, Tax records and accounting
records (in each case, regardless of the media in which stored), in each case to
the extent primarily used or held for use in the Business, and with respect to
the Transferred Facilities, all building plans, blueprints, renderings or
surreys.
"Business" means the operations of the ▇▇▇▇▇▇ Semiconductor
Sector, including, but not limited to, the Transferred Subsidiaries and the
Transferred Facilities, which are engaged in the definition, design,
development, manufacture and sale of Products, but does not include the
Photomask Business or the Suppression Business.
"Business Day" means a day which is not a Saturday, a Sunday
or a statutory or civic holiday in the State of New York or any other day on
which the principal offices of either ▇▇▇▇▇▇ or Buyer are closed or become
closed prior to 2:00 p.m. local time whether in accordance with established
company policy or as a result of unanticipated events including adverse weather
conditions.
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"Business Entities" means ▇▇▇▇▇▇; the Transferred
Subsidiaries; ▇▇▇▇▇▇ Semiconductor Patents, Inc., a Delaware corporation; and
the other direct and indirect Subsidiaries of ▇▇▇▇▇▇ through which the Business
is conducted.
"Buyer" has the meaning set forth in the preamble to the
Master Agreement.
"Buyer Indemnitees " has the meaning set forth in Section
13.2(a) of the Master Agreement.
"China Subsidiaries" means ▇▇▇▇▇▇ Suzhou, Anshan ▇▇▇▇▇▇, and
Guangzhou ▇▇▇▇▇▇.
"Closing" means the closing of the transactions as
contemplated by Section 3.1 of the Master Agreement.
"Closing Date" has the meaning set forth in Section 3.1 of the
Master Agreement.
"Closing Date Working Capital" has the meaning set forth in
Section 3.6(a) of the Master Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Condition-Triggering Losses" means Losses that could be
reasonably expected to exceed, in the aggregate, three percent (3%) of the
Purchase Price.
"Consent" means any consent, approval, authorization, waiver,
permit, grant, franchise, concession, agreement, license, variance, exemption,
order or other licenses or permits of, registration, certificate, declaration or
filing with, or report or notice to, any Person, including, but not limited to,
any Governmental Authority.
"Contracts" means all legally binding agreements, contracts,
contractual rights, commitments, purchase orders, licenses, leases, warranty
rights, sales orders, and other instruments and arrangements.
"Copyrights" means any and all United States and foreign
copyright registrations and applications therefor and unregistered copyrights.
"Design Facilities" means the Leased Real Estate located in
North Branch, New Jersey, Raleigh and/or Durham, North Carolina and San Antonio,
Texas.
"Disclosure Schedule" has the meaning set forth in the
preamble to Article 4 of the Master Agreement.
"Elected Subsidiary" has the meaning set forth in Section
3.3(a) of the Master Agreement.
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"Employees of the Business" has the meaning set forth in
Section 4.16 of the Master Agreement.
"Encroachment" shall mean: (a) any encroachment onto the Real
Estate by any building or other improvement located upon any adjoining land or
right of way, and (b) any encroachment onto any adjoining land or right of way
by any building or other improvement constituting a part of the Real Estate.
"Environmental Laws" has the meaning set forth in Section 4.14
of the Master Agreement.
"Environmental Liabilities" means, regardless of whether any
of the following are contained in any disclosure schedule to this Master
Agreement, any Ancillary Agreement or otherwise disclosed to Buyer prior to the
Closing, any and all Losses to the extent not reflected in the Baseline
Financial Statements, including the notes thereto (including the costs and
expenses relating to Remediation), known or unknown, foreseen or unforeseen,
whether contingent or otherwise, fixed or absolute, present or future asserted
against or incurred by Buyer Indemnities or any Transferred Subsidiaries arising
out of or related to (a) the presence, Release, threat of Release, Management or
exposure to the extent occurring prior to the Closing Date (and the migration
thereof, regardless of when such migration occurs, and the post-Closing
consequences of such presence, Release, threatened Release, Management or
exposure) of or to Hazardous Materials at, on, in or under any Transferred
Assets, the Excluded Assets, or any property previously owned, operated or
leased by ▇▇▇▇▇▇, the Transferred Subsidiaries or any of their Affiliates or
predecessors or in connection with the operation of the Business, on-site or
off-site (including, without limitation, any post-Closing consequences and with
respect to the ▇▇▇▇▇▇ Corporation NPL Site in Palm Bay, Florida); (b) arising
from the pre-Closing off-site transportation, storage, treatment, recycling or
Release (including disposal) of Hazardous Materials Managed or Released by
▇▇▇▇▇▇, the Transferred Subsidiaries or any of their Affiliates or predecessors
or in connection with the operation of the Business; or (c) any violation of any
Environmental Law to the extent existing as of the Closing Date (including,
without limitation, any post-Closing consequences and costs and expenses for
pollution control equipment required to bring the Transferred Subsidiaries or
the Business into compliance with Environmental Laws and fines, penalties and
defense costs incurred for such reasonable time after the Closing as it takes
Buyer to come into compliance).
"Estimated Closing Balance Sheet" has the meaning set forth in
Section 3.5 of the Master Agreement.
"Estimated Working Capital" has the meaning set forth in
Section 3.6 of the Master Agreement.
"Exhibits" means the Exhibits to the Master Agreement.
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"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" has the meaning set forth in Section 4.18 of
the Master Agreement.
"European Severance Accruals" means any accruals for severance
obligations in respect of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇▇▇▇.
"Excess IP Value" has the meaning set forth in Section 3.2(a)
of the Master Agreement.
"Excluded Assets" has the meaning set forth in Section 2.2 of
the Master Agreement.
"Excluded Liabilities" has the meaning set forth in Section
2.4 of the Master Agreement.
"Financial Statements Date" has the meaning set forth in
Section 4.7 of the Master Agreement.
"Financing" has the meaning set forth in Section 10.14 of the
Master Agreement.
"Fixed Assets" means all machinery, equipment, tooling, molds,
fixtures, improvements, furniture, furnishings, similar capital items which are
owned or leased by Sellers and are primarily used or held for use in the conduct
of the Business, and other tangible personal property classified as fixed assets
in accordance with GAAP owned of leased by Sellers and primarily used or held
for use in the conduct of the Business.
"Foreign Leased Real Estate" has the meaning set forth in
Section 7.9 of the Master Agreement.
"Foreign Owned Real Estate" has the meaning set forth in
Section 7.9 of the Master Agreement.
"Foreign Real Estate" has the meaning set forth in Section 7.9
of the Master Agreement.
"GAAP" means United States generally accepted accounting
principles, consistently applied.
"Government Sponsored or Mandated Plans" has the meaning set
forth in Section 4.18.2(a) of the Master Agreement.
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"Governmental Approval" means any Consent of, with or to any
Governmental Authority.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, including, without limitation, any governmental authority,
quasi-governmental, agency, department, board, commission or instrumentality of
the United States, any state of the United States or any political subdivision
thereof, any tribunal or arbitrator(s) of competent jurisdiction and any
self-regulatory organization.
"Guangzhou ▇▇▇▇▇▇" means Guangzhou ▇▇▇▇▇▇ Telecommunications
Company Ltd., a Chinese company.
"▇▇▇▇▇▇" means ▇▇▇▇▇▇ Corporation, a Delaware corporation.
"▇▇▇▇▇▇ Malaysia" means ▇▇▇▇▇▇ Advanced Technology (Malaysia)
Snd. Bhd., a Malaysian corporation.
"▇▇▇▇▇▇ Patents" means and refers to all Patents owned as of
the Closing Date by Sellers, other than Patents Types 1 and 2.
"▇▇▇▇▇▇ Semiconductor Sector" means the unincorporated
business unit of ▇▇▇▇▇▇ that produces standard, custom and semi-custom
integrated circuits and discrete devices for analog, digital, mixed-signal, and
power control and protection applications.
"▇▇▇▇▇▇ Suzhou" means ▇▇▇▇▇▇ Semiconductor (Suzhou) Co. Ltd.,
a Chinese company.
"▇▇▇▇▇▇ Trademark License Agreement" means the ▇▇▇▇▇▇
Trademark License Agreement the form of which is attached to the Master
Agreement as Exhibit F.
"HAS" means ▇▇▇▇▇▇ Airport Systems (Malaysia) Sdn. Bhd., a
Malaysian corporation.
"Hazardous Materials" means any substance, material or waste
that is regulated by any foreign, state or local Governmental Authority or the
United States Government and any foreign Governmental Authority with
jurisdiction, including, without limitation, any material or substance that is
(a) defined as a "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste" or "restricted hazardous waste" under any provision
of any applicable law, (b) petroleum, (c) asbestos, (d) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
Section 1251, ET SEQ. (33 U.S.C. Section 1321), or listed pursuant to Section
307 of the Clean Water Act (33 U.S.C. Section 1317), (e) defined as a "hazardous
waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, ET SEQ. (42 U.S.C. Section 6903), or (f) defined as a
"hazardous substance" pursuant to
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Section 101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601, ET SEQ. (42 U.S.C. Section 9601).
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended.
"HSSM" means ▇▇▇▇▇▇ Solid State (Malaysia) Sdn. Bhd., a
Malaysian corporation.
"Income Tax" means any federal, state, local or foreign income
or franchise tax, including any interest, penalty, or addition thereto.
"Income Tax Return" means any Tax Return with respect to
Income Taxes.
"Indemnifying Party" has the meaning set forth in Section 13.4
of the Master Agreement.
"Indenture" means the Indenture dated as of the Closing Date,
between Parent and a trustee with respect to the Note which shall be
substantially in the form attached to the Master Agreement as Exhibit J.
"Independent Accounting Firm" has the meaning set forth in
Section 3.6 of the Master Agreement.
"Intangible Property Rights" means all rights in Technology
which (a) are owned by the Sellers, and (b) exist under laws respecting
Copyrights, Maskwork Rights, or Trade Secrets, but not Patents, trademark rights
or rights in Invention Disclosures.
"Intangible Property Rights Type 1" means all Intangible
Property Rights in Software Type 1 and Technology Type 1.
"Intangible Property Rights Type 2" means all Intangible
Property Rights in Software Type 2 and Technology Type 2.
"Intellectual Property" means Copyrights, Maskwork Rights,
Patents and Trade Secrets as defined herein.
"Invention Disclosures" means documented unpatented inventions
specific to the Business submitted to the Semiconductor Patent Organization as
of the Closing Date and owned by one or more of the Business Entities on which
no patent applications have been filed, including the inventions listed on
Schedule 2(b) to the Patent Assignment and Services Agreement.
"Inventory" means all inventory, wherever located (including
inventory in transit), including, without limitation, all the raw materials,
work in process, recycled materials, finished products, supplies, and spare
parts located at the premises of the Business Entities, or elsewhere and
primarily used or held for use in the conduct of the Business, including items
of the type and nature of
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the materials identified as inventory in the Baseline Financial Statements, and
any rights to the warranties received from suppliers and any related claims,
credits, rights of recovery and set-off with respect to such inventory.
"IP Agreement" means the Intellectual Property Agreement the
form of which is attached to the Master Agreement as Exhibit C.
"IP Transfer Agreements" means the IP Agreement and the
Ancillary Agreements the forms of which are attached to the Master Agreement as
Exhibits D through G.
"▇▇▇▇▇▇ Lease" has the meaning set forth in Section 9.13 of
the Master Agreement.
"▇▇▇▇▇▇ Lease Assignment" has the meaning set forth in Section
9.13 of the Master Agreement.
"Leaseback Agreements" has the meaning set forth in Section
8.4 of the Master Agreement.
"Leased Real Estate" has the meaning set forth in Section
4.9(b)(2) of the Master Agreement.
"Leases" has the meaning set forth in Section 4.9(b)(2) of the
Master Agreement.
"Liability" means, with respect to any Person, any liability
or obligation of such Person of any kind, character or description, whether
known or unknown, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, secured or unsecured, joint or several, due or to become due,
vested or unvested, executory, determined, determinable or otherwise and whether
or not the same is required to be accrued on the financial statements of such
Person or is disclosed on any Schedule to the Master Agreement.
"License Agreements" means agreements of one or more of the
Business Entities with third parties concerning Patents and/or Technology, which
agreements include rights flowing from third parties to a Business Entity, from
a Business Entity to third parties, or between the Business Entities and third
parties.
"License Assignment Agreement" means the License Assignment
Agreement the form of which is attached to the Master Agreement as Exhibit E.
"Licensed Software" means Software that is the subject of
Software Licenses.
"Licensed Software Type 1" means Licensed Software that is
specific to the Business.
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"Licensed Software Type 2" means Licensed Software other than
Licensed Software Type 1.
"Lien" means any mortgage, pledge, hypothecation, security
interest, title retention agreement, lease, sublease, occupancy agreement,
adverse claim or interest, title defect, easement, covenant, servitude,
restriction, Encroachment, burden, option, lien or right of first refusal or
other encumbrances or defects.
"Loss" has the meaning set forth in Section 13.2 of the Master
Agreement.
"Malaysia Facility" means the Owned Real Estate and the Leased
Real Estate located in Kuala Lumpur, Malaysia.
"Malaysian Purchase Agreement" has the meaning set forth in
Section 3.12 of the Master Agreement.
"Manage" means to use, possess, generate, treat, manufacture,
process, handle, store, recycle, transport or dispose of Hazardous Materials.
"Manufacturing Facilities" means the Owned Real Estate located
in Palm Bay, Florida; Findlay, Ohio; and Mountaintop, Pennsylvania; and the
Malaysia Facility.
"Mask" means an individual photolithographic plate, with a
corresponding Pellicle, capable of being used to manufacture one level or layer
of an integrated circuit wafer.
"Mask Set" means a set of Masks capable of being used to
manufacture an integrated circuit wafer.
"Maskwork Rights" means all rights in the United States and
foreign maskwork registrations and applications therefor covering Masks or Mask
Sets used in the manufacture of Products.
"Master Agreement" means the Master Transaction Agreement
dated June 2, 1999 among ▇▇▇▇▇▇, Buyer and Parent (including the Exhibits and
the Schedules), as the same from time to time may be amended, supplemented or
waived.
"Material Adverse Effect on the Business" has the meaning set
forth in Section 4.1, as limited by Section 14.1, of the Master Agreement.
"Material Adverse Effect on Buyer" has the meaning set forth
in Section 5.4, as limited by Section 14.1, of the Master Agreement.
"Material Contracts" has the meaning set forth in Section 4.11
of the Master Agreement.
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"Material Real Estate Impairment" shall mean: (a) a material
adverse effect upon the value of any one or more of the individual Principal
Premises so affected, or (b) a material impairment of the use of, or the conduct
of the Business at, any one or more of the individual Principal Premises so
affected, as compared to such use or conduct as of the date of the Master
Agreement and consistent with past practice.
"Non-Assignable Assets" has the meaning set forth in Section
3.8(a) of the Master Agreement.
"Non-U.S. Employee Benefit Plans" has the meaning set forth in
Section 4.18.2(a) of the Master Agreement.
"Note" has the meaning set forth in Section 3.2(a) of the
Master Agreement.
"Owned Real Estate" has the meaning set forth in Section
4.9(b)(1)of the Master Agreement.
"Parent" has the meaning set forth in the preamble to the
Master Agreement.
"Patent Assignment and Services Agreement" means the Patent
Assignment and Services Agreement the form of which is attached to the Master
Agreement as Exhibit D.
"Patents" means issued patents, including United States and
foreign patents and applications therefor, ▇▇▇▇▇ patents, patents of
importation, and divisions, reissues, continuations, continuations-in-part,
renewals and extensions of any of the foregoing; certificates of addition and
utility models and utility model applications; but does not include License
Agreements.
"Patents Type 1" means Patents owned by one or more of the
Business Entities that are specific to the Business as of the Closing Date.
"Patents Type 2" means Patents other than Patents Type 1 now
or hereafter owned by one or more of the Business Entities that are based on
inventions made prior to the Closing Date and are used in the Business as of the
Closing Date but are not specific to the Business.
"Pellicle" means a protective covering applied to the surface
of a photolithographic plate.
"Pension Plan" has the meaning set forth in Section 4.18.1 of
the Master Agreement.
"Permitted Liens" means (a) Liens for current taxes or
assessments or other governmental charges or levies which (i) are not yet due
and payable, or (ii) which are being contested in good faith and by appropriate
proceedings; (b) mechanics', carriers' or warehouseman's Liens arising in the
ordinary course of business (i) which do not in the aggregate
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materially adversely affect the value of the Transferred Assets or materially
impair their use in the operation of the Business; and (ii) the obligations
secured by which are (x) disclosed in the Baseline Financial Statements, and (y)
are not delinquent; (c) minor imperfections of title, conditions, easements and
reservations of rights, including easements or reservations of, or rights of
others for, rights of way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, Encroachments, covenants and restrictions, if any,
none of which, individually or in the aggregate, materially detracts from the
value of the affected property or impairs the use of such property or the
conduct of the Business thereon as it is currently being used and conducted and
as it has been used and conducted consistent with past practice; (d) zoning and
other restrictions under Applicable Law as to the use of the Real Estate which
do not, individually or in the aggregate, materially detract from the value of
the affected property or impair the use of such property or the conduct of the
Business thereon as it is currently being used and conducted and as it has been
used and conducted consistent with past practice; and (e) Liens listed on
Schedule 4.9 to the Master Agreement.
"Permits" has the meaning set forth on Schedule 4.13 of the
Master Agreement.
"Person" means any natural person, firm, partnership,
association, corporation, company, limited liability company, trust, business
trust, Governmental Authority or other entity.
"Photomask Business" means the operations of that portion of
the ▇▇▇▇▇▇ Semiconductor Sector, including, but not limited to, the right to
occupy space as contemplated by Section 2.2(p) of the Master Agreement, that is
in engaged in the definition, development, manufacture and sale of Photomask
Products and Mask inspection and re-pellicization services, but does not include
Maskwork Rights.
"Photomask Products" means Masks of various sizes (including
725" x .150", 6" x .250", 6" x .120", 5" x .090", and 4" x .090") and Mask Sets.
"Policies" has the meaning set forth in Section 4.19 of the
Master Agreement.
"Products" means all products produced as of the date of this
Agreement by the ▇▇▇▇▇▇ Semiconductor Sector including, without limitation,
discrete semiconductor devices, integrated circuits ("ICs"), and hybrid products
("HYBRIDs") but excluding Suppression Products and Photomask Products.
"Proprietary Information" means inventions, discoveries,
patentable subject matter, patents, patent applications, industrial models,
industrial designs, trade secrets, trade secret rights, software, works,
copyrightable subject matter, copyright rights and registrations, know-how and
show-how, whether or not protectible by patent, copyright or trade secret,
trademarks, trade names, service marks, emblems, logos, insignia and related
marks and registrations, specifications, technical manuals and data, blueprints,
drawings, proprietary processes, product information and development
work-in-process.
▇-▇▇
▇▇
"▇▇▇▇▇▇▇▇ ▇▇▇▇▇" has the meaning set forth in Section 3.2 of
the Master Agreement.
"Principal Premises" means each and all of the Manufacturing
Facilities and each and all of the Design Facilities.
"Real Estate" has the meaning set forth in Section 4.9(b)(3)
of the Master Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of the Closing Date among Parent and other stockholders,
including ▇▇▇▇▇▇, of the Buyer, which shall be substantially in the form
attached to the Master Agreement as Exhibit L.
"Release" means any spill, leak, discharge, disposal, pumping,
pouring, emitting, emptying, injecting, leaching, dumping or allow to escape or
presence of any Hazardous Materials.
"Remediation" means investigation, cleanup, remedial action or
other response action.
"Retained Leased Real Estate" means those Sales Offices that
are used as of the date of the Master Agreement in the Business and by other
business lines of ▇▇▇▇▇▇ or its Subsidiaries and that ▇▇▇▇▇▇ and is Subsidiaries
are to retain following the Closing.
"Retained Leases" means the Leases demising the Retained
Leased Real Estate.
"Retained License Agreements" has the meaning set forth in
Section 3(d) of the License Assignment Agreement.
"Retirement Plan Accruals" means (a) any obligation to make
contributions of any kind to the ▇▇▇▇▇▇ Corporation Retirement Plan for the
fiscal year ended July 2, 1999, (b) any obligation to make contributions of any
kind to the ▇▇▇▇▇▇ Corporation Union Retirement Plan for the fiscal year ended
July 2, 1999, (c) medical benefits for any ▇▇▇▇▇▇ retirees, and (d) any benefits
payable or liabilities accrued under any other Seller Benefit Plan to the extent
reflected in the accrual for "Retirement plan accruals" on the Audited Closing
Balance Sheet.
"Sales Offices" means the Leased Real Estate constituting
sales offices utilized, in whole or in part, by the Business as of the date of
the Master Agreement that are located in San Jose, California, USA; Vorhees, New
Jersey, USA; Hauppauge, Long Island, New York, USA; Huntsville, Alabama, USA;
Branchburg (North Branch/Somerville), New Jersey, USA; Detroit (Southfield),
Michigan, USA; Indianapolis (Carmel), Indiana, USA; Dallas, Texas, USA;
Brussels, Belgium; Munich (Haar), Germany; Stuttgart (Sindelfingen), Germany;
Paris, France; Milan, Italy; Camberly, United Kingdom; Singapore; Seoul, Korea;
Taipei, Taiwan; Kowloon, Hong Kong; Tokyo, Japan; Burlington, Massachusetts,
USA; Costa Mesa, California, USA; LaJolla, California, USA; and Schaumburg,
Illinois, USA.
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"Schedule" means the Schedules to the Master Agreement,
including but not limited to sections of the Disclosure Schedule.
"Secondary Trademark Assignment and License Agreement" means
the Secondary Trademark Assignment and License Agreement the form of which is
attached to the Master Agreement as Exhibit G.
"Section 338(h)(10) Election" has the meaning set forth in
Section 3.3(h) of the Master Agreement.
"Seller Benefit Plans" means Pension Plans, Welfare Plans,
Benefit Arrangements, and Non-U.S. Employee Benefit Plans.
"Seller Consolidated Group" has the meaning set forth in
Section 9.7.1(c) of the Master Agreement.
"Sellers" means HAS, HSSM and the Business Entities other than
the Transferred Subsidiaries.
"Seller Indemnitees" has the meaning set forth in Section 13.3
of the Master Agreement.
"Sellers' IP Knowledge" means (a) the actual knowledge of one
or more of the following individuals after reasonable inquiry: ▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇; and (b) matters
as to which ▇▇▇▇▇▇ or the ▇▇▇▇▇▇ Semiconductor Sector has received written
notice.
"Sellers' Knowledge" means the actual knowledge of one or more
of the following individuals after reasonable inquiry: ▇.▇. ▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇, ▇.▇. ▇▇▇▇, S.C. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Semiconductor Patent Organization" means the intellectual
property group of the ▇▇▇▇▇▇ Semiconductor Sector Legal Department.
"Shared Contracts" has the meaning set forth in Section 3.9 of
the Master Agreement.
"Shareholders Agreement" means the Securities Purchase and
Holders Agreement, dated as of the Closing Date, among ▇▇▇▇▇▇, Parent and
Management Investors (as such term is defined therein), and which shall be
substantially in the form attached to the Master Agreement as Exhibit K.
"Software" means the manifestation of computer programs and
databases in tangible or physical form, including, but not limited to magnetic
media, firmware, and
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documentation in the form of source code, object code or microcode; Software
includes, but is not limited to management information systems, computer aided
design and/or engineering programs, computer aided manufacturing programs,
CADBUS programs, machinery control programs, and personal computer programs, in
each case that is owned by or licensed to one or more of the Business Entities
and relevant to the Business. Software does not include any Technology or any
Intangible Property Rights.
"Software Licenses" means agreements of the Business Entities
with third parties concerning Software (other than Transition Services Software)
used in or on behalf of the Business, which agreements include rights flowing
from third parties to the Business Entities or from the Business Entities to
third parties.
"Software Type 1" means Software owned by one or more of the
Sellers that is specific to the Business. Software Type 1 does not include
Transition Services Software.
"Software Type 2" means Software owned by one or more of the
Sellers that is not specific to the Business, but is used in or for the benefit
of the operations of the Business. Software Type 2 does not include Transition
Services Software.
"Statement of Changes" has the meaning set forth in Section
3.3(d) of the Master Agreement.
"Subleased Real Estate" has the meaning set forth in Section
2.1 of the Master Agreement.
"Subleases" has the meaning set forth in Section 2.1 of the
Master Agreement.
"Subsidiary" means and refers to any corporation, association
or other business entity of which more than fifty (50) percent of the issued and
outstanding shares of capital stock or equity interests is owned or controlled,
directly or indirectly, by Sellers or Buyer, as the case may be, and in which
Sellers or Buyer, as the case may be, has the power, directly or indirectly, to
elect a majority of the directors.
"Suppression Business" means the operations of that portion of
the ▇▇▇▇▇▇ Semiconductor Sector, including but not limited to the facilities
located in Dundalk, Ireland, that are engaged in the definition, design,
development, manufacture and sale of the Suppression Products.
"Suppression Products" means transient voltage suppression
devices ("TVS") currently produced by ▇▇▇▇▇▇ Semiconductor Sector covering
applications in the 3.5 volts to 480,000 volts spectrum at the electronic
circuit board level and in power systems. These TVS devices are the following
types including custom flow versions of these types: (a) metal oxide varistors
("MOVs") assembled in various radial packages and disc form covering a voltage
range of 5.5 to 600v (family of products are CP, ▇▇/▇▇, ▇▇, ▇▇, ▇▇, ▇▇, ▇▇,▇▇.
LA "C" III, NA. UltraMOV, MA, PA, RA, ZA; (b) surface mountable multilayer
varistors ("MLs") chips used in
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standard industry sizes (0603, 0805, 1206, 1210, 1812, 2220) sold in the
following series: ML, MLE, AUML; through-hole and surface mount thyristor
protection devices; (c) SCR/Thyristors TVS used to protect Communication
circuits, sold under SURGECTOR trademark (SGT27x.x and SGTxxxxSC, SGTxxxSB
series) in TO-202 and DO-214AA industry standard packages; (d) AS series of High
Energy Metal-Oxide Arrestor blocks (3KV-4KV in 32mm, 42mm, 60mm diameters); (e)
SCR/diode arrays utilizing a patented structure used in 3v to 35v high speed
data line protection applications (p/n: SP720, SP721, SP723 and SP724).
"Surveys" has the meaning set forth in Section 7.6 of the
Master Agreement.
"Tax Contest" has the meaning set forth in Section 9.7.4(a) of
the Master Agreement.
"Tax Data" has the meaning set forth in Section 9.7.5(a) of
the Master Agreement.
"Tax Documentation" has the meaning set forth in Section
9.7.5(a) of the Master Agreement.
"Tax Indemnification Liability" has the meaning set forth in
Section 9.7.4(a) of the Master Agreement.
"Tax Indemnified Party" has the meaning set forth in Section
9.7.4(a) of the Master Agreement.
"Tax Indemnitor" has the meaning set forth in Section 9.7.4(a)
of the Master Agreement.
"Taxes" in the plural and "Tax" in the singular means all
Federal, state, local and foreign taxes, including income, gains, receipts,
profits, license, alternative minimum, employment (including Social Security,
withholding and state disability), excise, franchise, gross income, real or
personal property, ad valorem, sales, use, customs, duties, transfer and other
taxes, fees, assessments or charges of any kind, together with all interest,
additions to tax and penalties relating thereto.
"Tax Return" means any return, report, declaration, form,
claim for refund, information return, statement or other document relating to
Taxes, including any schedule or attachment thereto, and including any amendment
thereof.
"Technology" means the manifestation in tangible or physical
form of all types of technical information and data including, but not limited
to, inventions, works of authorship, know-how; product definitions and designs;
research and development, engineering, manufacturing, assembly, process, test,
quality control, procurement, and service specifications, procedures, standards,
and reports; maskworks; blueprints; drawings; materials specifications,
procedures, standards, and lists; catalogs; technical information and data
relating to marketing and
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sales activity; and formulae, in each case that is owned by or licensed to one
or more of the Business Entities and relevant to the Business. Technology does
not include any Software or any Intangible Property Rights.
"Technology Type 1" means Technology owned by Business
Entities and in the possession of the Business Entities as of the Closing Date
that (a) is specific to Products, and (b) is resident at the Facilities.
"Technology Type 2" means Technology owned by Business
Entities and in the possession of the Business Entities as of the Closing Date
that is either (a) specific to Products but not resident at the Facilities or
(b) not specific to, but is used in the operations of, the Business, whether
located at the Facilities or elsewhere.
"Title Company" has the meaning set forth in Section 7.5 of
the Master Agreement.
"Title Commitments" has the meaning set forth in Section 7.5
of the Master Agreement.
"Title Policies" has the meaning set forth in Section 7.5 of
the Master Agreement.
"Trade Secrets" means information relating to Technology or
Software that is considered to be proprietary information by the owner, is
maintained on a confidential or secret basis by the owner, and is not generally
known to other parties.
"Transaction Documents" means the Master Agreement, the
Ancillary Agreements, and the other documents and instruments contemplated by
the Master Agreement and the Ancillary Agreements to be delivered at the
Closing.
"Transfer Taxes" has the meaning set forth in Section 9.6 of
the Master Agreement.
"Transferred Assets" has the meaning set forth in Section 2.1
of the Master Agreement.
"Transferred Facilities" means the Manufacturing Facilities,
the Design Facilities, and the Sales Offices.
"Transferred Subsidiaries" means the following direct and
indirect Subsidiaries of ▇▇▇▇▇▇: ▇▇▇▇▇▇ Semiconductor, LLC (US), a Delaware
limited liability company; ▇▇▇▇▇▇ Semiconductor (Ohio), LLC, a Delaware limited
liability company; ▇▇▇▇▇▇ Semiconductor (Pennsylvania), LLC, a Delaware limited
liability company; Choice Microsystems, Inc., a Kansas corporation; ▇▇▇▇▇▇
Advanced Technology (Malaysia) Sdn. Bhd., a Malaysian corporation; ▇▇▇▇▇▇
Semiconducteurs SARL (France), a French corporation; ▇▇▇▇▇▇ Semiconductor S.r.l.
(Italy), an Italian corporation; ▇▇▇▇▇▇ Semiconductor China Ltd. (Hong Kong), a
Hong Kong corporation; ▇▇▇▇▇▇ Semiconductor (Taiwian) Ltd., a Taiwanese
corporation; ▇▇▇▇▇▇ ▇▇ (Japan), a Japanese corporation; ▇▇▇▇▇▇ Semiconductor
Y.H. (Korea), a Korean corporation; ▇▇▇▇▇▇ Semiconductor
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(Suzhou) Co. Ltd. (China), a Chinese corporation; Guangzhou ▇▇▇▇▇▇
Telecommunications Company, Ltd., a Chinese Corporation, and Anshan ▇▇▇▇▇▇
Broadcast Equipment Co., Ltd., a Chinese corporation.
"Transferee Employees" has the meaning set forth in Section
6.1(b) of the Master Agreement.
"Transition Services Agreement" means the Transition Services
Agreement the form of which is attached to the Master Agreement as Exhibit H.
"Transition Services Software" means Software utilized in the
delivery of the services referred to on Exhibit A to the Transition Services
Agreement.
"Union Plants" means the Mountaintop, Pennsylvania and
Findlay, Ohio plants of the Business.
"Warn Act" means the U.S. Workers' Adjustment Retraining
Notification Act, as amended.
"Welfare Plan" has the meaning set forth in Section 4.18.1(a)
of the Master Agreement.
2. RULES OF CONSTRUCTION. Unless the context otherwise requires: (a) a
term has the meaning assigned to it; (b) an accounting term not otherwise
defined has the meaning assigned to it in accordance with GAAP; (c) references
in the singular or to "him," "her," "it," "itself," or other like references,
and references in the plural or the feminine or masculine reference, as the case
may be, shall also, when the context so requires, be deemed to include the
plural or singular, or the masculine or feminine reference, as the case may be;
(d) the use of the word "including" shall mean including, without limitation,
with regard to the items listed thereafter; (e) provisions apply to successive
events and transactions; (f) references to Articles, Sections, Schedules and
Exhibits in a Transaction Document shall refer to Articles, Sections, Schedules
and Exhibits of that Transaction Document, unless otherwise specified; (g) the
headings in the Transaction Documents are for convenience and identification
only and are not intended to describe, interpret, define or limit the scope,
extent, or intent of the respective Transaction Documents or any provision
thereof; (h) the Transaction Documents shall be construed without regard to any
presumption or other rule requiring construction against the party that drafted
and caused the Transaction Documents to be drafted; (i) the use of the term
"specific" in relation to a subject means relating exclusively to that subject;
and (j) references to "commercially reasonable efforts" in the Transaction
Documents shall require the efforts that a prudent person desirous of achieving
a commercially reasonable result would use in similar circumstances to achieve a
result within a commercially reasonable time; and (k) references to
"commercially reasonable efforts" in the IP Transfer Agreements shall not
require the payment of more than nominal consideration or the granting or
surrendering of more than nominal rights.
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EXHIBIT B
AGREEMENT CONVENTIONS
---------------------
1. FURTHER ASSURANCES. Each party agrees, at any time and from time to
time after the Closing Date, upon reasonable request from the other party, to
do, execute, acknowledge and deliver, as appropriate, such further acts, deeds,
assignments, transfers, conveyances, assumptions, and powers of attorney as may
reasonably be required for (a) the better assigning, transferring, granting,
conveying, assuming, assuring and confirming to such other party, or its
successors and assigns, of any of the assets, properties or liabilities to be
assigned to it, or (b) the reassignment or return to Sellers of assets that may
have been inadvertently assigned, transferred or delivered to Buyer but should
not have been so assigned, transferred or delivered, in each case as provided in
the Transaction Documents.
2. NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under the Transaction Documents
shall be in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, (c) sent by next-day or overnight mail or
delivery or (d) sent by facsimile transmission or telegram. All such notices,
requests, demands, waivers and other communication shall be deemed to have been
received (i) if by personal delivery on the day after such delivery, (ii) if by
certified or registered mail, on the seventh business day after the mailing
thereof, (iii) if by next-day or overnight mail or delivery, on the day
delivered, (iv) if by facsimile or telegram, on the next business day following
the day on which such facsimile or telegram was sent, PROVIDED that a copy is
also sent by certified or registered mail.
If to Buyer or Parent:
Citicorp Venture Capital Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ("Chip") ▇▇▇▇▇▇, IV
with a copy to:
Dechert Price & ▇▇▇▇▇▇
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: G. ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
102
If to ▇▇▇▇▇▇ or Sellers, to:
▇▇▇▇▇▇ Corporation
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Squire, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇/▇▇▇▇ ▇. ▇▇▇▇▇
or, in each case, to such other address as may be specified in writing to the
other parties.
Any party may give any notice, instruction or communication in
connection with the Transaction Documents using any other means (including
personal delivery, telecopy or ordinary mail), but no such notice, instruction
or communication shall be deemed to have been delivered unless and until it is
actually received by the party to whom it was sent. Any party may change the
address to which notices, instructions, or communications are to be delivered by
giving the other parties to the Transaction Documents notice thereof in the
manner set forth in this Section 2.
3. ASSIGNMENT. The Transaction Documents may not be assigned by any
party thereto without the written consent of the other parties thereto,
PROVIDED, HOWEVER that Buyer may assign its rights under the Transaction
Documents as collateral security to any bona fide financial institution which is
engaged in financing in the ordinary course providing financing to consummate
the transactions contemplated hereby or any financial institution which is
engaged in financing in the ordinary course through whom such financing is
refunded, replaced, or refinanced and any of the foregoing financial
institutions may, in enforcing its rights in connection with such financing,
assign Buyer's rights or cause Buyer to assign its rights under the Transaction
Documents in connection with a sale of Buyer or Parent or the business in the
form then being conducted by Buyer substantially as an entirety; and PROVIDED,
FURTHER, Buyer may assign its rights under the Transaction Documents, in whole
or in part, but subject to all limitations contained in the Transaction
Documents, to one or more Subsidiaries of Buyer, PROVIDED that, in any such
case, Buyer gives Seller prior written notice of such assignment, and PROVIDED
FURTHER that any assignment by Buyer pursuant to this Section 3 shall not
release Buyer or Parent from any of their respective obligations under the
Master Agreement or any of the other Transaction Documents. Buyer and Parent may
engage in a PRO TANTO assignment of their rights under the Transaction
Documents, other than the IP Transfer Agreements, to a bona fide purchaser of a
Transferred
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Facility, subject to the prior written consent of ▇▇▇▇▇▇, which shall not be
unreasonably withheld, delayed or conditioned; provided however, that no such
consent shall be required for any assignment in connection with the sale,
conveyance, lease, sublease, assignment or other transfer of the Malaysia
Facility or any portion thereof or interest therein. No such assignment shall
relieve Buyer and Parent of their obligations under the Transaction Documents.
The Transaction Documents shall be binding upon and inure to the benefit of and
be enforceable by the successors, legal representatives and permitted assigns of
each party hereto. Notwithstanding that provided in this Section 3, Intersil
Corporation, as assignee of Licensee (as such term is defined in the ▇▇▇▇▇▇
Trademark License Agreement), may sublicense the Licensed Trademarks (as such
term is defined in the ▇▇▇▇▇▇ Trademark License Agreement) to Intersil Prism,
LLC ("Intersil Prism"), a limited liability company organized under the laws of
the State of Delaware, provided that in the event of any such sublicense,
Intersil Prism will be subject to the terms of the ▇▇▇▇▇▇ Trademark License
Agreement and shall not have the right to sublicense the Licensed Trademarks.
4. ENTIRE AGREEMENT; AMENDMENT; GOVERNING LAW; ETC. The Transaction
Documents (together with the Exhibits and Schedules thereto) embody the entire
agreement and understanding among the parties hereto with respect to the subject
matter thereof. The Transaction Documents may be amended, modified, waived,
discharged or terminated only by (and any consent hereunder shall be effective
only if contained in) an instrument in writing signed by the party against which
enforcement of such amendment, modification, waiver, discharge, termination or
consent is sought. The Transaction Documents shall be construed in accordance
with and governed by the laws of the State of New York as it applies to
contracts to be performed entirely within New York.
5. SEVERABILITY. The provisions of the Transaction Documents are
severable, and in the event that any one or more provisions are deemed illegal
or unenforceable the remaining provisions shall remain in full force and effect
unless the deletion of such provision shall cause the Transaction Documents to
become materially adverse to any party, in which event the parties shall use
Best Efforts to arrive at an accommodation which best preserves for the parties
the benefits and obligations of the offending provision.
6. DISPUTE RESOLUTION AND ARBITRATION. Subject only to Section 13.7 of
the Master Agreement, in the event that any dispute arises between the parties
pertaining to the subject matter of the Transaction Documents, and the parties,
through the senior management of Buyer and ▇▇▇▇▇▇, are unable to resolve such
dispute within a reasonable time through negotiations and mediation efforts by
senior executives of both parties, such dispute shall be resolved as set forth
in this Section 6.
(a) The procedures of this Section 6 may be initiated by a written
notice ("Dispute Notice") given by one party ("Claimant") to the other, but not
before thirty (30) days have passed during which the parties have been unable to
reach a resolution as described above. The Dispute Notice shall be accompanied
by (i) a statement of the Claimant describing the dispute in reasonable detail
and (ii) documentation, if any, supporting the Claimant's position on the
dispute. Within twenty (20) days after the other party's ("Respondent") receipt
of the Dispute Notice and accompanying materials, the parties shall submit the
dispute to non-binding mediation in the
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Washington, D.C. area under the rules of the American Arbitration Association.
All negotiations and mediation procedures pursuant to this paragraph (a) shall
be confidential and treated as compromise and settlement negotiations and shall
not be admissible in any arbitration or other proceeding.
(b) If the dispute is not resolved as provided in paragraph (a) within
sixty (60) days after the Respondent's receipt of the Dispute Notice, the
dispute shall be resolved by binding arbitration. In the event the dispute is to
be resolved pursuant to arbitration, each party shall appoint an arbitrator
within seventy-five (75) days after the Respondent's receipt of the Dispute
Notice, and the two arbitrators so chosen shall promptly appoint a third
arbitrator. If either party fails to name an arbitrator as aforesaid, such
arbitrator shall be designated by the American Arbitration Association in the
Washington, D.C. area. If any arbitrator becomes disabled, resigns or is
otherwise unable to discharge the arbitrator's duties, the arbitrator's
successor shall be appointed in the same manner as such arbitrator was
appointed.
(c) Except as otherwise provided in this Section 6, the arbitration
shall be conducted in accordance with the Commercial Rules of the American
Arbitration Association, which shall be governed by the United States
Arbitration Act.
(d) Any resolution reached through mediation and any award arising out
of arbitration (i) shall be binding and conclusive upon the parties; (ii) shall
be limited to a holding for or against a party, and affording such monetary
remedy as is deemed equitable, just and within the scope of the Transaction
Documents; (iii) may not include special, incidental, consequential or punitive
damages; (iv) may in appropriate circumstances include injunctive relief; and
(v) may be entered in court in accordance with the United States Arbitration
Act.
(e) Arbitration shall not be deemed a waiver of any right of
termination under the Transaction Documents, and the arbitrator is not empowered
to act or make any award other than based solely on the rights and obligations
of the parties prior to termination in accordance with the Transaction
Documents.
(f) The arbitrator may not limit, expand or otherwise modify the terms
of the Transaction Documents.
(g) The laws of the State of New York shall apply to any mediation,
arbitration, or litigation arising under the Transaction Documents.
(h) Each party shall bear its own expenses incurred in any mediation,
arbitration or litigation, but any expenses related to the compensation and the
costs of any mediator or arbitrator shall be borne equally by the parties to the
dispute.
(i) A request by a party to a court for interim measures necessary to
preserve a party's rights and remedies for resolution pursuant to this Section 6
shall not be deemed a waiver of the obligation to mediate or of the agreement to
arbitrate.
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(j) The parties, their representatives, other participants and the
mediator or arbitrator shall hold the existence, content and result of mediation
or arbitration in confidence.
7. NO OTHER DUTIES. The only duties and obligations of the parties are
as specifically set forth in the Transaction Documents, and no other duties or
obligations shall be implied in fact, law or equity, or under any principle of
fiduciary obligation.
8. RELIANCE ON COUNSEL AND OTHER ADVISORS. Each party has consulted
such legal, financial, technical or other experts as it deems necessary or
desirable before entering into the Transaction Documents. Each party represents
and warrants that it has read, knows, understands and agrees with the terms and
conditions of the Transaction Documents.
9. THIRD-PARTY RIGHTS. Except as expressly provided in Article 13 of
the Master Agreement with respect to Indemnitees, the parties do not intend to
confer any benefit hereunder on any Person other than the parties hereto and
their respective successors in interest.
10. EXHIBITS AND SCHEDULES. Each of the Exhibits and Schedules referred
to in the Transaction Documents and attached thereto is an integral part of the
Transaction Documents and is incorporated in the respective Transaction
Documents by this reference.
11. COUNTERPARTS. The Transaction Documents may be executed in several
counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
12. HEADINGS. The headings preceding the text of the sections and
subsections of the Transaction Documents are inserted solely for convenience of
reference, and shall not constitute a part of the Transaction Documents, nor
shall they affect the meaning, construction or effect of any of the Transaction
Documents.
B-5