ASSET PURCHASE AGREEMENT, dated as of October 1, 1996, by and between
SGS-THOMSON MICROELECTRONICS, INC., a Delaware corporation (the
"Seller"), and MICRO ACQUISITION CORP., a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Microsemi Corporation, a
Delaware corporation ("Microsemi"),
W I T N E S S E T H:
WHEREAS, the Seller desires to sell and transfer to the Purchaser, and
the Purchaser desires to purchase and assume from the Seller, certain
assets and liabilities, all as more specifically provided herein;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and
conditions set forth herein, the Seller and the Purchaser agree as
follows:
ARTICLE I
Definitions
1 Certain Definitions. As used in this Agreement, the following
terms have the respective meanings set forth below.
1 "Affiliate" means, with respect to any Person, any other Person
who directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
Person. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise, and the terms "controlled"
and "controlling" have meanings correlative thereto.
2 "Agreement" means this Asset Purchase Agreement.
3 "Assumed Liabilities" means:
(i) the obligation to fill Purchase Orders from customers of the Unit
received and entered by the Seller in the Backlog as of the Closing Date
which are assigned to the Purchaser at the Closing ;
(ii) the obligation to pay suppliers for goods or services received by
the Purchaser after the Closing Date pursuant to Purchase Orders placed
by the Unit prior to the Closing Date to the extent that such Purchase
Orders are not Excluded Assets and are specifically listed on Schedule
1.1.36(ix) of Purchase Orders assigned to and accepted by the Purchaser
at the Closing as updated to the Closing Date;
(iii) the obligations of the Seller and its successors under Contracts
other than Purchase Orders, if any, assigned to and assumed by the
Purchaser which are listed on Schedule 1.1.36(ix) included in the
Purchased Assets; and
(iv) product liability for Purchased Inventory other than finished
goods as of the Closing Date.
4 "Authorizations" has the meaning ascribed to such term in Section
5.11.
5 "Backlog" means certain agreed upon backlog as listed on Schedule
1.1.36(iv) with an estimated value as set forth on such Schedule, as
updated to the Closing Date.
6 "Backlog Inventory" means the part of the Inventory that is for
the production of parts and quantities in the Backlog, which, subject to
change in the normal course of business to the Closing Date, will be
included in the Purchased Inventory as of the Closing Date, and will be
identified in Schedule 5.9 and valued therein, as updated to the Closing
Date.
7 "Business Day" means a day, other than a Saturday or Sunday, on
which commercial banks in Texas and California are open for the general
transaction of business.
8 "Closing" has the meaning ascribed to such term in Section 4.5.
9 "Closing Date" has the meaning ascribed to such term in Section
4.5.
10 "Code" means the Internal Revenue Code of 1986, as amended.
11 "Encumbrances" has the meaning ascribed to such term in Section
5.6.
12 "Environmental Audit" means an investigation of the Facilities and
the public records relating to the real property adjacent thereto to be
conducted prior to the Closing Date, the scope of which is mutually
agreed upon, conducted by an environmental consultant the identity of
which is mutually agreed upon by the parties to be comprised of the
Environmental Assessment Report dated August 2, 1996 and the September
20, 1996 proposal as agreed to by the Purchaser.
13 "Environmental Claims" means (a) any judicial or administrative
enforcement actions, proceedings, claims, orders (including consent
orders and decrees), directives, notices (including notices of
inspection, notices of abatement, notices of non-compliance or violation
and notices to comply), requests for information or investigation
instituted or threatened by any governmental authority pursuant to any
Environmental Law; or (b) any suits, arbitrations, legal proceedings,
actions or claims instituted, made or threatened that relate to any
damage, contribution, cost recovery, compensation, loss or injury
resulting from the Release or threatened Release (whether sudden or non-
sudden or accidental or non-accidental) of, or exposure to, any
Regulated Substances, or the violation or alleged violation of any
Environmental Law, or the generation, manufacture, use, storage,
transportation, treatment, or disposal of Regulated Substances.
14 "Environmental Condition" shall mean each of the following:
(A) any environmental or other condition within the jurisdiction of,
or regulated by, any Environmental Law or which could form the basis of
an Environmental Claim, that has existed or exists as of the Closing
Date or which arises after the Closing Date on account of actions or
omissions occurring on or prior to the Closing Date;
(B) the generation, use, manufacture, treatment, storage,
transportation, or disposal of Regulated Substances on or prior to the
Closing Date;
(C) the Release of Regulated Substances on or prior to the Closing
Date or which occurs after the Closing Date on account of actions or
omissions occurring on or prior to the Closing Date; or
(D) any violation of any Environmental Law based, in whole or in part,
on the acts or omissions of Seller or any predecessor operator or owner
of the Facility at any time on or prior to the Closing Date or the
operation of the Facilities on or prior to the Closing Date;
in, at, on, to, from, under, above or related to or otherwise in
connection with the Facilities and whether or not such conditions,
claims, actions, inactions, occurrences, or matters have been previously
disclosed to the Purchaser or are described, listed or referred to in
any Schedule attached hereto.
15 "Environmental Laws" means any and all present and future federal,
state and local laws, statutes, orders, ordinances, rules, regulations,
plans, policies or decrees and the like relating to (i) environmental
matters, including without limitation those relating to fines,
injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the unlawful Release or
threatened Release of Regulated Substances, (ii) the generation, use,
storage, transportation, treatment, or disposal of Regulated Substances,
or (iii) occupational safety and health, industrial hygiene, land use or
the protection of human, plant or animal, health or welfare, in any
manner applicable to Seller, the Business or the Facilities, including
without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. '9601 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. '1801 et seq.), the Resource
Conservation and Recovery Act (42 ▇.▇.▇ '▇▇▇▇ et seq.), the Federal
Water Pollution Control Act (33 ▇.▇.▇ '▇▇▇▇ et seq.), the Clean Air Act
(42 U.S.C. ' 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
' 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. ' 651
et seq.) and the Emergency Planning and Community Right-to-Know Act (42
U.S.C. '11001 et seq.), each as amended or supplemented from time to
time, and any analogous present or future local, state or federal
statutes and regulations, and all rules and regulations promulgated
under each of the foregoing.
16 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
17 "Excess Inventory" means that portion of the Related Inventory of
the Unit that is not Purchased Inventory and may be purchased after the
Closing Date pursuant to the option as provided in Section 7.11.
18 "Excluded Assets" is defined as follows:
(i) Excess Inventory;
(ii) Unrelated Inventory; and
(iii) a GCA stepper model 6300 machine.
19 "Excluded Liabilities" means any and all liabilities or
obligations other than the Assumed Liabilities.
20 "Execution Date" is defined as the date first set forth in this
Agreement.
21 "Facilities" means any and all real property (including without
limitation, all soil, groundwater or surface water, buildings, fixtures
or other improvements located thereon, under or adjacent to the
properties and buildings thereon) previously or now owned, leased or
operated by Seller or any prior owner, lessee or operator of real
property at the location commonly known as ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, in
Montgomeryville Industrial Center (Plan in Plan Book A-9 page 49),
situated in the Township of ▇▇▇▇▇▇▇▇▇▇, County of ▇▇▇▇▇▇▇▇▇▇,
Commonwealth of Pennsylvania.
22 "Governmental Authority" means any national, federal, state,
provincial, county, municipal or local government, foreign or domestic,
or the government of any political subdivision of any of the foregoing,
or any entity, authority, agency, ministry or other similar body
exercising executive, legislative, judicial, regulatory or
administrative authority or functions of or pertaining to government,
including any authority or other quasi-governmental entity established
to perform any of such functions.
23 "Inventory" means any and all inventory, including raw material
inventories, warehouse stock, parts, inventories, material, supplies,
work-in-progress and finished products, packaging and shipping materials
of the Unit.
24 "Inventory Value" means the aggregate dollar amount of Purchased
Inventory valued in accordance with the method set forth in Section 4.2.
25 "Letter of Intent" shall have the meaning ascribed to such term in
Section 11.7.
26 "Licensed Proprietary Rights" means Seller's (a) patents, patent
registrations, and patent applications set forth in Schedule 1.1.26,
together with (b) copyrights, copyright registrations, and copyright
applications, used any time prior to the Closing Date in the manufacture
of the Products or Related Products, and (c) technology, inventions,
product drawings, trade secrets, know-how, customer lists, manufacturing
processes, process data, product designs, bills of materials and other
proprietary information or rights to the extent derived from or used in
the manufacture of the Products or Related Products prior to the Closing
Date identified in Schedule 1.1.26; and permits, licenses or other
agreements to or from third parties regarding the foregoing and listed
on Schedule 1.1.26 hereof.
27 "Non-Disclosure Agreement" is defined in Section 7.1.
28 "Operative Documents" means (i) in the case of the Seller, the
▇▇▇▇ of Sale, the License, the deed, assignment, and all instruments and
any other documents to be executed and delivered by the Seller necessary
for the conveyance of the Purchased Assets to the Purchaser or which
this Agreement expressly provides are to be executed and delivered by
the Seller and (ii) in the case of the Purchaser, the Note, the License
Agreement and other documents which this Agreement expressly provides
are to be executed and delivered by the Purchaser.
29 "PADEP" shall mean the Pennsylvania Department of Environmental
Protection or any successor Governmental Agency having jurisdiction or
regulatory oversight authority over the Facilities.
30 "Person" means an individual, partnership, corporation, joint
stock company, unincorporated organization or association, trust or
joint venture, or a governmental agency or political subdivision
thereof.
31 "Products" are defined as the radio frequency semiconductor
products listed on Schedule 5.5.
32 "Purchase Orders" means (a) all outstanding purchase orders
received from customers and listed in Backlog; and (b) all outstanding
purchase orders issued by Seller for the Unit to suppliers of the Unit
listed in Schedule; provided, however, that the term "Purchase Orders"
shall not include any purchase order approved or issued by the Seller
for goods received prior to the Closing Date and entered by the Seller
in the Inventory or which is not consistent with pricing in the prior
two year period, or any purchase order received from a customer of the
Unit, if payment for which has been received prior to the Closing Date
or which is related to a distribution stocking order or other order
outside the ordinary course that is not consistent with pricing in the
prior two year period.
33 "Purchase Price" has the meaning ascribed to such term in Section
4.2.
34 "Purchased Assets" means all right, title and interest in and to
the following property which is specified below:
(i) the Facilities presently owned by Seller as identified in Schedule
1.1.36(i) ;
(ii) all machinery and equipment (including spare parts) and business
machines, forklift trucks, and other vehicles, furniture, fixtures,
supplies, capital improvements in process, die cast, molds, tools and
all other tangible personal property employed in the manufacture of the
Products (excluding one (1) GCA stepper model 6300 machine) reflected on
Schedule 1.1.36(ii) hereof;
(iii) all Purchased Inventory located in the Facilities as of the
Closing Date to be identified in the manner required in Section 4.2
(collectively "Purchased Inventory");
(iv) all easements, rights of way, servitudes, leases, permits,
licenses or options related to the Facilities used or held by the
Seller, if any, reflected on Schedule 1.1.36(iv) hereto;
(v) all Purchased Proprietary Rights identified on Schedule 1.1.36(v);
(vi) all Backlog identified on Schedule 1.1.36(vi);
(vii) all authorizations, consents, approvals, licenses, orders,
permits, exemptions of, filings or registrations with, any Governmental
Authority (the extent assignable), and all correspondence relating
thereto including those shown on Schedule 1.1.36(vii);
(viii) cash to the extent of an amount equal to the Seller's after-
tax profit margin from the sale of the Products shipped by Seller on or
prior to the Closing Date in fulfillment of Purchasing Orders received
by Seller after July 12, 1996 as shown on Schedule 1.1.36(viii);
(ix) all rights under any Purchase Orders placed by the Unit prior to
the Closing Date to the extent specifically listed on Schedule
1.1.36(ix) or other assignable Contracts as listed in Schedule
1.1.36(ix); and
(x) its employment restrictive covenants and obligations of (i)
present and former employees of the Unit at a time within one year
before the Closing Date, and (ii) agents, representatives, and
independent contractors of the Unit, to the extent assignable as shown
as Schedule 1.1.36(x);
(xi) all records, files and correspondence, relating to the Purchased
Assets or Assumed Liabilities to the extent available (excluding books
of account, tax returns, accounting and personnel records which shall be
excluded assets);
(xii) all operating and training manuals, catalogs, quotations, bids,
sales and promotional materials, correspondence, research and
development records, prototypes, lists of present and former customers
and suppliers, customer information including a 5-year sales history, to
the extent available relating to the Products;
(xiii) (with the consent of such employees) the personnel,
employment and other records of the employees listed on Schedule 7.10;
and
(xiv) the net operating profits of the Unit for the period from the
Execution Date to the Closing Date calculated pursuant to the terms of
Schedule 1.1.34(xiv).
35 (a) "Proprietary Rights" means the combination of all Licensed
Proprietary Rights and all Purchase Proprietary Rights, and (b)
"Purchased Proprietary Rights" shall mean all mask sets of the Products
or Related Products.
36 (a) "Purchased Inventory" means Related Inventory, including all
Backlog Inventory and a part of the other Related Inventory as
determined as of the Closing Date in the manner described in Section
4.2, and (b) "Purchase Inventory Value" shall mean the Inventory Value
of the Purchase Inventory as set forth in Schedule 4.2, and as
determined in the manner set forth in Section 4.2.
37 "Related Inventory" means Inventory of the Products or the Related
Products.
1.1.39 "Related Products" are identified in Schedule 1.1.39.
38 "Regulated Substances" means (i) any chemical, material or
substance now defined as or included in the definition of "hazardous
substance," "hazardous waste," "hazardous material," "extremely
hazardous waste," "restricted hazardous waste," "infectious waste,"
"toxic substance," or any other formulations intended to define, list or
classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity or other words of similar import under any
applicable Environmental Laws or publications promulgated pursuant
thereto, and any other chemical, material or substance, exposure to
which is prohibited, or regulated by any governmental authority or
Environmental Law, or which is reasonably likely to pose a hazard to the
health and safety of the owners, occupants or any other persons in the
vicinity of the Facilities, (ii) any oil, petroleum or petroleum derived
substance, (iii) any drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil,
natural gas or geothermal resources, (iv) any radioactive materials, (v)
asbestos in any form which is or could become friable, (vi) urea
formaldehyde foam insulation, (vii) polychlorinated biphenyls, on (viii)
pesticides
39 "Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching, or migration of Regulated Substances into the indoor
or outdoor environment (including without limitation, the abandonment or
disposal of any storage tanks, barrels, containers or other closed
receptacles containing any Regulated Substance), or into or out of the
Facilities, including the movement of any Regulated Substances through
the air, soil, surface water, or groundwater of the Facilities.
40 "Unit" means the operating unit of the Seller manufacturing the
Products at the Facilities.
41 "Unrelated Inventory" means Inventory that is not Related
Inventory, and none of which is to be transferred to Purchaser.
Section 2 Interpretation. Unless otherwise indicated to the contrary
herein by the context or use thereof: (i) the words, "herein,"
"hereto," "hereof" and words of similar import refer to this Agreement
as a whole and not to any particular Section or paragraph hereof; (ii)
words importing the masculine gender shall also include the feminine and
neutral genders, and vice versa; and (iii) words importing the singular
shall also include the plural, and vice versa.
ARTICLE II
Purchase and Sale of Assets
Section 1 Assets Acquired. Subject to the terms and conditions of
this Agreement, the Seller agrees to sell, assign, convey, transfer and
deliver to the Purchaser on the Closing Date, and the Purchaser agrees
to purchase and acquire from the Seller on the Closing Date, all of the
Purchased Assets and the Seller and the Purchaser agree to execute a
License Agreement in the form of Exhibit A for Seller to license to the
Purchaser on and after the Closing Date all of the Licensed Assets.
Section 2 Assets Excluded. Notwithstanding anything to the contrary
contained in this Agreement, the Purchaser will not purchase and acquire
or obtain any right or license to, any of the Excluded Assets, and the
Excluded Assets are specifically excluded from the assets to be sold,
assigned, licensed or and transferred to the Purchaser pursuant to this
Agreement.
ARTICLE III
Assumption of Liabilities and Limitation
Section 1 Liabilities Assumed. The Purchaser agrees to assume the
Assumed Liabilities from the Seller as of the Closing.
Section 2 Limitations. EXCEPT FOR THE OBLIGATIONS SET FORTH IN
SECTION 3.1, THE PURCHASER SHALL NOT ASSUME OR DISCHARGE ANY DEBTS,
OBLIGATIONS, LIABILITIES OR COMMITMENTS OF THE SELLER WHETHER ACCRUED
NOW OR HEREAFTER, WHETHER FIXED OR CONTINGENT, AND WHETHER KNOWN OR
UNKNOWN.
ARTICLE IV
Purchase Price; Method of Payment; Allocation
Section 1 Purchase Price. The purchase price payable at the closing
hereunder (the "Purchase Price") shall equal the sum of the following:
1 The sum of (i) Nine Hundred Thousand Dollars ($900,000) plus (ii)
the Inventory Value of the Purchase Inventory (the "Purchased Inventory
Value") in accordance with the procedure set forth in Section 4.2 which
shall be paid by wire transfer to Seller's designated bank account on
the Closing Date; plus
2 Seven Hundred Thousand Dollars ($700,000), evidenced by an
interest free promissory note in the form of Exhibit B hereto (the
"Note"), and payable in two installments of Two Hundred Thousand Dollars
($200,000) due on or before January 15, 1997 and January 15, 1998,
respectively, and one final installment of Three Hundred Thousand
Dollars ($300,000) due on or before January 15, 1999; plus
3 The lesser of Three Hundred Thousand Dollars ($300,000), or the
Seller's actual cost, for acquiring and installing three (3) radio
frequency test benches at the Facility on or before October 30, 1996.
Seller may acquire and install used or refurbished test benches upon
notice to the Purchaser. This payment thereof shall constitute
liquidated damages and fully satisfy every obligation to pay any cost or
expense related to or arising from the expansion or extension of the
Unit's resources.
Section 2 Calculation of the Purchased Inventory Value. If the value
of the Purchased Inventory shown on Schedule 4.2 is less than
$1,050,000, then the Purchased Inventory Value shall be equal to such
valuation. If the value of the Purchased Inventory shown on Schedule
4.2 is equal to or greater than $1,050,000 but less than or equal to
$1,150,000, then the Purchased Inventory Value shall be $1.1 Million.
The Purchaser shall have no obligation with regard to any Inventory in
excess of $1,150,000 and it shall become Excess Inventory.
Section 3 Bulk Sales Compliance. The Purchaser waives any compliance
with the provisions and procedures of Article 6 of the Uniform
Commercial Code as currently enacted in Pennsylvania (the "Bulk Sales
Law"), and any similar laws applicable to the transactions contemplated
hereby, but the Seller nevertheless represents and warrants that the
Purchased Assets will be transferred to the Purchaser free and clear of
any Encumbrances or transferee liability that may be imposed by the Bulk
Sales Law or such similar laws.
Section 4 Allocation of the Purchase Price. The Purchase Price shall
be allocated as set forth in Exhibit C hereto. The Purchaser and the
Seller shall use such allocation in filing their respective Internal
Revenue Service Forms 8594.
Section 5 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place by fax (with originals to follow
by overnight delivery) among the Seller, Purchaser, and their respective
representatives on one or more days from October 23, 1996 through
October 25, 1996, or at such other time and place as is mutually agreed
by the Purchaser and the Seller, subject to satisfaction of the
conditions set forth in Article VIII. The time and date of the Closing
is herein called the "Closing Date."
ARTICLE V
Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as follows:
Section 1 Organization and Qualification of the Seller. The Seller is
a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full power and authority
to own or lease its property and assets and to carry on the business of
the Unit as presently conducted, and is duly qualified to do business as
a foreign corporation and is in good standing in the Commonwealth of
Pennsylvania and in each jurisdiction where the failure to be so
qualified would have a material adverse effect on the business,
financial condition, or operations of the Unit (a "Material Adverse
Effect").
Section 2 Authorization. The Seller has full corporate power and
authority to execute and deliver this Agreement and each of the other
Operative Documents to be executed and delivered by it and to perform
its obligations hereunder and thereunder, all of which have been duly
authorized by all requisite corporate action on the part of the Seller.
Each of this Agreement and each of the other Operative Documents to be
executed and delivered by it has been or, at the time of delivery will
be, duly authorized, executed and delivered by the Seller and
constitutes or, at the time of delivery will constitute, a valid and
binding agreement of the Seller, enforceable against the Seller in
accordance with its terms.
Section 3 Non-contravention. Neither the execution and delivery of
this Agreement and each of the other Operative Documents to be executed
and delivered by it, nor the performance by the Seller of its
obligations hereunder and thereunder, will (i) contravene any provision
contained in the Seller's Certificate of Incorporation or by-laws, (ii)
violate or result in a breach (with or without the lapse of time, the
giving of notice or both) of or constitute a default under (A) any
contract, agreement, commitment, indenture, mortgage, lease, pledge,
note, license, permit or other instrument or obligation or (B) any
judgment, order, decree, law, rule or regulation or other restriction of
any Governmental Authority, in each case to which the Seller is a party
or by which it is bound or to which any of the Purchased Assets are
subject, (iii) result in the creation or imposition of any lien, claim,
charge, encumbrance, equity, restriction or right on or affecting any of
the Purchased Assets, or (iv) result in the acceleration of, or permit
any Person to accelerate or declare due and payable prior to its stated
maturity, any Assumed Liability.
Section 4 No Consents. Except as set forth in Schedule 5.4, no notice
to, filing with, or authorization, registration, consent or approval of
any Governmental Authority or other Person is necessary for the
execution, delivery or performance of this Agreement or any of the other
Operative Documents or the consummation of the transactions contemplated
hereby or thereby by the Seller.
Section 5 The Purchased Assets. The Purchased Assets constitute all
of the rights properties and assets (tangible or intangible) which were
necessary for the manufacture of the Products by Seller prior to the
Closing Date. No third party owns or has any interest by lease, license
or otherwise in any of the Purchased Assets. The documents of transfer
to be executed and delivered by the Seller at the Closing will be
sufficient to convey good and marketable title to the Purchased Assets
to the Purchaser, free and clear of all Encumbrances, other than Assumed
Liabilities.
Section 6 Personal Property. Except as disclosed in Schedule 5.6, the
Seller has good and marketable title to (or valid leasehold or
contractual interests in) all personal property comprising the Purchased
Assets, free and clear of any lien, claim, charge, mortgage, security
interest, equity or other encumbrance (collectively, "Encumbrances").
Section 7 Real Property. Schedule 5.7(a) to this Agreement contains a
complete and accurate legal description of the real property portion of
the Facilities owned by Seller. Schedule 5.7(b) to this Agreement
contains a description of all buildings, fixtures and other improvements
of the Facilities owned by Seller. Prior to the Closing Date, Seller
shall have delivered to Purchaser a true and correct copy of an owner's
policy of title insurance, together with any surveys, delivered or
issued to the Seller in connection with such title policy. The zoning
of the Facilities permits Seller to manufacture the Products. To the
Seller's knowledge, the Facilities are in good operating condition and
fit for their present use in the ordinary course of business (subject to
normal wear and tear) with no known structural or other defects that
could interfere with the conduct of normal operations of such facilities
and are suitable for the purposes for which they are currently being
used by Seller. To our knowledge, the title policy identifies all
Encumbrances on the Facilities.
Section 8 No Condemnation. Neither the whole nor any part of the real
property or the improvements thereon is subject to any governmental
decree or order to be sold nor have any proceedings for the
condemnation, expropriation or other taking of all or any portion of
such real property or improvements been instituted or, to the Seller's
best knowledge, threatened by any Governmental Authority, with or
without payment therefor.
Section 9 Inventory. Schedule 5.9 sets forth a true and complete
listing of all Related Inventory. Except as specifically disclosed on
Schedule 5.9, all of the Purchased Inventory consist of items which are
good and merchantable and of a quantity and quality usable in the
regular and ordinary course of the Business consistent with past
practices. The Seller has good and marketable title to all of such
Purchased Inventory, free and clear of any Encumbrances, other than
Encumbrances in favor of the Purchaser.
Section 10 Absence of Certain Developments. To the Seller's knowledge,
except as set forth in Schedule 5.10, since February 1, 1996, the Seller
has conducted the business of the Unit in the ordinary and usual course
consistent with past practices and has not (i) sold, leased, transferred
or otherwise disposed of any of the Backlog Inventory or the Related
Inventory (other than dispositions in the ordinary course of business
consistent with past practices), (ii) terminated or amended in any
material respect any contract or lease affecting the Unit to which the
Seller is a party or to which it is bound or to which Purchased Assets
are subject, (iii) suffered any material loss, damage or destruction of
Purchased Assets whether or not covered by insurance, (iv) incurred any
liabilities (other than in the ordinary course of business, none of
which, individually or in the aggregate, are material), (v) incurred,
created or suffered to exist any Encumbrances on the Purchased Assets
other than those listed on Schedule 5.6 or as identified in the title
policy as to the Facilities or created in the ordinary course of
business, none of which, individually or in the aggregate, are material,
(vi) increased, directly or indirectly the compensation to become
payable by Purchaser after the Closing Date to any of the officers or
employees listed in Schedule 7.10, (vii) suffered any labor dispute,
strike or other work stoppage, (viii) except as contemplated in this
Agreement, made or obligated itself to make any capital expenditures
affecting the Unit in excess of $50,000 individually or in the
aggregate, (ix) entered into any contract or other agreement affecting
the Unit requiring the Seller to make payments in excess of $50,000 per
annum, individually or in the aggregate, other than in the ordinary
course of business consistent with past practices, or (x) suffered any
other event, fact or circumstance which has resulted in a Material
Adverse Effect as of the Execution Date.
Section 11 Governmental Authorizations; Licenses, Etc. To the Seller's
knowledge, after appropriate inquiry, and except as set forth on
Schedule 5.11, the Unit has been operated in compliance with all
applicable laws, rules, regulations, codes, ordinances, orders, policies
and guidelines of any applicable Governmental Authorities, including but
not limited to, those related to: fire, safety, labeling of products,
pricing, sales or distribution of products, antitrust, trade regulation,
trade practices, sanitation, land use, employment or employment
practices, energy and similar laws and all laws, rules, regulations and
guidelines administered or promulgated by PADEP, except for violations
which, individually or in the aggregate, would not have a Material
Adverse Effect as defined in Section 5.1. Except as set forth on
Schedule 5.11, the Seller has and as of the Closing Date will have all
permits, licenses, approvals, certificates and other authorizations, and
has made all notifications, registrations, certifications and filings
with all Governmental Authorities, necessary or advisable for the
operation of the Unit as currently conducted by the Seller, except for
those which, individually or in the aggregate would have a Material
Adverse Effect. Except as set forth on Schedule 5.11, there is no
action, case or proceeding pending or, to the Seller's best knowledge,
threatened by any Governmental Authority with respect to (i) any alleged
violation by the Unit, Seller or its predecessors or agents of any law,
rule, regulation, code, ordinance, order, policy or guideline of any
Governmental Authority, or (ii) any alleged failure by the Seller or its
predecessors or agents to have any permit, license, approval,
certification or other authorization required in connection with the
operation of the Unit. Except as set forth on Schedule 5.11, no notice
of any violation of such laws has been received by the Seller or any of
the directors, officers, employees or other agents of the Seller, and
the Seller has not received any notice that the Products or the Related
Products are not in compliance with, or do not meet the standards of,
all applicable laws. Schedule 5.11 sets forth a true and complete list
of all permits, licenses, approvals, certificates, registrations and
other authorizations relating to the Unit (the "Authorizations")
including without limitation in respect of the Products. Such
Authorizations are in full force and effect and the Seller has received
no notification of the suspension or cancellation of any thereof.
Except as specifically disclosed in Schedule 5.11, the Seller has no
grounds to believe that any of the Authorizations listed on Schedule
5.11 will not be transferable to the Purchaser. Schedule 5.11 includes
a true and complete list of all Standard Industrial Classification (SIC)
Codes applicable to the Unit or the Purchased Assets.
Section 12 Litigation. Except as set forth in Schedule 5.12, there are
no lawsuits, actions, proceedings, claims, orders or, to the Seller's
knowledge, investigations by or before any Governmental Authority
pending or, to the Seller's best knowledge, threatened against the
Seller relating to the Unit, the Purchased Assets, the Assumed
Liabilities or any product alleged to have been manufactured or sold by
the Unit or seeking to enjoin the transactions contemplated hereby and,
except as set forth in Schedule 5.12, there are no facts or
circumstances known to the Seller that could result in a claim for
damages or equitable relief which, if decided adversely, could,
individually or in the aggregate, have a Material Adverse Effect.
Section 13 Taxes. To the Seller's knowledge, all federal, state,
county, local and foreign tax returns and reports of the Seller required
to be filed which relate to or affect the Unit or the Purchased Assets
have been duly filed. All federal, state, county, local, foreign and
any other taxes (including all income, withholding and employment
taxes), assessments (including interest and penalties), fees and other
governmental charges with respect to the employees, properties, assets,
income or franchises of the Seller as they relate to or affect the Unit
or the Purchased Assets have been paid or duly provided for, or are
being contested in good faith by appropriate proceedings, prior to the
Execution Date as disclosed on Schedule 5.13.
Section 14 Insurance. To the Seller's knowledge, at all times prior to
the Closing Date, the Seller has maintained appropriate and adequate
insurance policies covering the Purchased Assets and all aspects of the
Unit.
Section 15 Environmental Matters. To the Seller's knowledge, after a
review of all applicable laws, available records and backup documents,
except as set forth on Schedule 5.15, (i) the Facilities are being and
have been operated by the Seller in compliance with all Environmental
Laws, (ii) since the Facilities were acquired by Seller, the Facilities
did not contain any Regulated Substance other than as permitted under
applicable Environmental Laws, (iii) the Seller has, and at all times
has had, all permits, licenses and other approvals and authorizations
required under applicable Environmental Laws for its operation of the
Facilities, (iv) the Seller has not received any notice from any
Governmental Authority that the Seller or any of its Affiliates may be a
potentially responsible party in connection with any waste disposal site
or facility used, directly or indirectly, by or otherwise related to the
Facilities, (v) no reports have been filed, or have been required to be
filed, by the Seller concerning the release of any Regulated Substance
or the violation of any Environmental Law on or at the Facilities, (vi)
no Regulated Substance has been unlawfully disposed of, transferred,
released or transported from the Facilities since the facilities were
acquired by Seller, other than as permitted under applicable
Environmental Law pursuant to appropriate regulations, permits or
authorizations, (vii) there have been no environmental investigations,
studies, audits, tests, reviews, or other analyses conducted by or which
are in the possession of the Seller or any Affiliate of the Seller
relating to the Facilities, except to the extent that true and correct
copies thereof have been delivered to the Purchaser prior to the date
hereof and identified on Schedule 5.15(vii), (viii) there are no
underground storage tanks on, in or under any of the Facilities and no
underground storage tanks have been closed or removed from such
Facilities, (ix) the Seller has not presently incurred, and the
Facilities are not presently subject to, any liabilities (fixed or
contingent) relating to any Environmental Claim in connection with the
Facilities, (x) all documents filed by or on behalf of the Seller or any
predecessor or subsidiary of the Seller with any Governmental Authority
pursuant to any Environmental Law in connection with the Facilities were
true, correct and complete and did not omit to state any fact required
to be stated therein or necessary to make the statements therein not
misleading, (xi) to Seller's knowledge, all Environmental Laws in
existence at the time the Facilities were acquired by Seller were
complied with, and (xii) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigations or other
proceedings pending or threatened against the Seller or any predecessor
or subsidiary of the Seller with respect to the Facilities relating to
any Environmental Claim, and neither the Seller nor any predecessor or
subsidiary of the Seller has received any notices, demand letters or
requests for information, arising out of, in connection with, or
resulting from, a violation, or alleged violation, of any Environmental
Law.
Section 16 Employee Matters. (a) Schedule 7.10 contains a true and
correct list of the employees currently employed by the Seller in the
conduct of the business of the Unit that Purchaser shall employ pursuant
to Section 7.10, including any agreement concerning such employees and a
description of the rate and nature of all current compensation payable
by the Seller to each employee.
(b) (i) The Seller has not entered into any collective bargaining
agreements with respect to the above-mentioned employees, (ii) to the
Seller's knowledge and except as set forth on Schedule 5.16, there are
no written personnel policies applicable to such employees generally,
other than a policy manual and employee manuals, which are identified on
Schedule 5.16, (iii) to the Seller's knowledge, there is no labor
strike, dispute, slowdown or work stoppage or lockout pending or, to the
best of the Seller's knowledge, threatened against or affecting the Unit
and during the past three years there has been no such action, (iv) to
the Seller's best knowledge, no union organization campaign is in
progress with respect to any of such employees, and no question
concerning representation exists respecting such employees, (v) to the
Seller's knowledge and except as set forth on Schedule 5.16, there is no
unfair labor practice, charge or complaint applicable to such employees
pending or, to the Seller's best knowledge, threatened against the
Seller, and (vi) to the Seller's best knowledge, the Seller has not
entered into any agreement, arrangement or understanding restricting its
ability to terminate the employment of any or all of such employees at
any time, for any lawful or no reason, without penalty or liability.
Section 17 Proprietary Rights.
(a) Except as disclosed in Schedule 5.17, to the Seller's knowledge
the Seller owns and possesses all right, title and interest in, and upon
consummation of the transactions contemplated hereby, the Purchaser will
hold a valid and enforceable license for, all of the Proprietary Rights.
The Seller has taken all necessary or desirable action to protect the
Proprietary Rights, and the transactions contemplated by this Agreement
will have no Material Adverse Effect on the Seller's right, title and
interest in the Proprietary Rights under license, royalty or other
agreements relating to the Proprietary Rights.
(b) To the Seller's knowledge, no claim by any third party contesting
the validity, enforceability, use or ownership of any Proprietary Right
has been made, is currently pending or is threatened. As of the
Execution Date, the Seller has not received any notice of, nor is it
aware of any fact which indicates a likelihood of, any infringement or
misappropriation by, or conflict with, any third party with respect to
any of the Proprietary Rights. As of the Execution Date, the Seller has
not infringed, misappropriated or otherwise conflicted with any rights
of any third parties which would have a Material Adverse Effect.
Section 18 Contracts. To the Seller's knowledge, (a) Schedule 5.18
describes all material contracts, agreements, leases, commitments,
instruments, plans, permits or licenses, whether written or oral, with
respect to the Unit to which the Seller is a party or is otherwise
bound, of the types described below to the extent that they relate to
the operation of the Unit prior to the Execution Date (the "Unit's
Contracts"):
(i) all agreements, commitments, purchase orders, sale confirmations
or other similar agreements for the purchase by the Seller of raw
materials, machinery, equipment or other personal property, products or
services, other than those that are for amounts not to exceed $5,000;
(ii) all agreements, commitments, purchase orders, sale confirmations
or other similar agreements;
(iii) all capitalized leases, pledges, conditional sale or title
retention agreements concerning the Purchased Assets;
(iv) all employment agreements and commitments and all consulting or
severance agreements or arrangements concerning the employees listed in
Schedule 7.10;
(v) all agreements relating to the consignment or lease or personal
property (whether the Seller is lessee, sublessee, lessor or sublessor),
other than such agreements that provide for annual payments of less than
$5,000;
(vi) all agreements (other than the agreements as contained herein)
prohibiting the Seller from freely engaging in the business of the Unit
in any geographic area;
(vii) all agreements to provide rebates to customers of the Unit; and
(viii) all distribution, sales agency and other similar agreements
relating to the marketing, sale or distribution of Products by the Unit.
(b) Except for novations or consents that are required as disclosed in
Schedule 5.18, all of the Assigned Contracts which are intended to be
assigned to the Purchaser hereunder are fully assignable to the
Purchaser by the Seller without the consent of any third party. All
consents of third parties required for the assignment of such Assigned
Contracts have been obtained or will have been obtained prior to or on
the Closing Date.
(c) Except as disclosed in Schedule 5.18, to the Seller's knowledge,
the Seller is not in default, nor has the Seller given or received
notice of any default or claimed, purported or alleged default, or facts
that, with notice or lapse of time, or both, would constitute a default
(or give rise to a termination right) on the part of any party in the
performance of any obligation to be performed under any of the Unit's
Contracts which would have a Material Adverse Effect on Seller's
operation of the Unit.
(d) To the best of Seller's knowledge, the Seller has not violated the
Truth in Negotiations Act or the False Claims Act or any other law
regulating government contracts or failed to comply with the applicable
requirements of the Federal Cost Accounting Standards with respect
thereto which would have a Material Adverse Effect.
(e) True and complete copies of all written Assigned Contracts,
including any amendments thereto, have been delivered to the Purchaser
and such documents constitute the legal, valid and binding obligation of
the Seller and, to the best of the Seller's knowledge after due inquiry,
each other party purportedly obligated thereunder.
Section 19 Customers and Suppliers. Schedule 1.1.31 sets forth a
complete list of the Backlog. Schedule 5.19 sets forth a list of (a)
the fifteen (15) largest customers currently of the Unit in terms of
gross sales and (b) the fifteen (15) largest suppliers of the Unit in
terms of purchases, in each case during approximately the 18-month
period ending within a reasonable time prior to the Execution Date.
Except as set forth on Schedule 5.19, to the Seller's knowledge, since
February 1, 1996 (a) no customer has notified or otherwise indicated to
the Seller that it will stop, or decrease the rate of, its purchases of
materials, products or services from the Unit, and no customer has
ceased or materially decreased its purchases of any such materials,
products or services from the Seller; and (b) no supplier of the Unit
has notified or otherwise indicated to the Seller that it will stop, or
decrease the rate of or, other than publicly announced generally
applicable price increases, materially increase the cost of, its supply
of materials, products or services used by the Unit, and no supplier has
ceased, materially decreased the rate of, or materially raised the cost
of, any such materials, products or services. Except as set forth in
Schedule 5.19, to the Seller's knowledge, the Unit is not a party to any
material contract or commitment to purchase products from any supplier,
other than contracts or commitments that are terminable at will by the
Seller in its sole discretion, without cost or penalty.
Section 20 Equipment. To the knowledge of the Seller, and except as
disclosed on Schedule 5.20, all machinery, equipment, furniture,
fixtures and other personal property used in the Business is in good
operating condition and fit for operation in the ordinary course of
business used in the way the Seller had used the same (subject to normal
wear and tear) with no known material defects that have interfered with
the conduct by the Seller of normal operations of such equipment,
furniture, fixtures and other personal property. The Seller disclaims
any implied warranty of fitness for a particular purpose or
merchantability as to the Purchased Assets that are equipment and goods
or other assets that are subject to Article 2 of the Pennsylvania
Uniform Commercial Code, and the Purchaser expressly acknowledges that
such equipment and goods or other assets are purchased and sold "AS IS"
and "WHERE IS" and without warranty except as expressly contained in
this Agreement.
Section 21 Brokers. The Seller has not retained any broker, finder,
investment banker or financial advisor in connection with this Agreement
or any of the transactions contemplated hereby that would be entitled to
a broker's, finder's, investment banker's, financial adviser's or
similar fee in connection therewith payable by the Purchaser.
Section 22 Disclosure. No representation or warranty made by the
Seller in this Agreement, any Schedule, any Exhibit or any certificate
delivered, or to be delivered, by or on behalf of the Seller pursuant
hereto contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading. Other than that
Seller has offered "last-time buys" on discontinued products, there is
no fact which the Seller has not disclosed to the Purchaser in writing
which the Seller presently believes has or may have a Material Adverse
Effect on the properties, assets, business, operations, financial
condition or prospects of the Seller or the Unit as of the Execution
Date or on the ability of the Seller to perform its obligations under
this Agreement or the other Operative Documents to be executed and
performed by it.
ARTICLE VI
Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as follows:
Section 1 Organization and Qualification of the Purchaser. The
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has full corporate
power and authority to own or lease its property and assets and to carry
on its business as presently conducted and is duly qualified to do
business as a foreign corporation as is in good standing in the
Commonwealth of Pennsylvania.
Section 2 Authorization. The Purchaser has full corporate power and
authority to execute and deliver this Agreement and each of the other
Operative Documents to be executed and delivered by it and to perform
its obligations hereunder and thereunder, all of which have been duly
authorized by all requisite corporate action on the part of the
Purchaser. Each of this Agreement and each of the other Operative
Documents to be executed and delivered by it has been or, at the time of
delivery will be, duly authorized, executed and delivered by the
Purchaser and constitutes or, at the time of delivery will constitute, a
valid and binding agreement of the Purchaser, enforceable against the
Purchaser in accordance with its terms.
Section 3 Non-contravention. Neither the execution and delivery of
this Agreement and each of the other Operative Documents to be executed
and delivered by it, nor the performance by the Purchaser of its
obligations hereunder and thereunder, will (i) contravene any provision
contained in the Purchaser's Certificate of Incorporation or by-laws,
(ii) violate or result in a breach (with or without the lapse of time,
the giving of notice or both) of or constitute a default under (A) any
contract, agreement, commitment, indenture, mortgage, lease, pledge,
note, license, permit or other instrument or obligation or (B) any
judgment, order, decree, law, rule or regulation or other restriction of
any Governmental Authority, in each case to which the Purchaser is a
party or by which it is bound or to which any of its assets as of the
Execution Date are subject, (iii) result in the creation or imposition
of any lien, claim, charge, encumbrance, equity, restriction or right on
or affecting any of its assets as of the Execution Date, or (iv) result
in the acceleration of, or permit any Person to accelerate or declare
due and payable prior to its stated maturity, any material liability of
the Purchaser as of the Execution Date.
Section 4 No Consents. Except as set forth in Schedule 6.4, no notice
to, filing with, or authorization, registration, consent or approval of
any Governmental Authority or other Person is necessary for the
execution, delivery or performance of this Agreement and the other
Operative Documents or the consummation of the transactions contemplated
hereby and thereby by the Purchaser.
Section 5 Litigation. Except as set forth in Schedule 6.5, there are
no lawsuits, actions, proceedings, claims, orders or, to the Purchaser's
knowledge, investigations by or before any Governmental Authority
pending or, to the Purchaser's best knowledge, threatened against the
Purchaser relating to it or seeking to enjoin the transactions
contemplated hereby and, except as set forth in Schedule 6.5, there are
no facts or circumstances known to the Purchaser that could result in a
claim for damages or equitable relief which, if decided adversely,
could, individually or in the aggregate, have a Material Adverse Effect
on the Purchaser.
Section 6 Absence of Certain Developments; Taxes. The Purchaser was
recently incorporated and has conducted no business activities.
Section 7 Brokers. The Purchaser has not retained any broker, finder,
investment banker or financial advisor in connection with this Agreement
or any of the transactions contemplated hereby that would be entitled to
a broker's, finder's, investment banker's, financial adviser's or
similar fee in connection therewith payable by the Seller.
Section 8 Disclosure. No representation or warranty made by the
Purchaser in this Agreement, any Schedule, any Exhibit or any
certificate delivered, or to be delivered, by or on behalf of the
Purchaser pursuant hereto contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not
misleading. There is no fact which the Purchaser has not disclosed to
the Seller in writing which the Purchaser presently believes has or may
have a Material Adverse Effect on the properties, assets, business,
operations, financial condition or prospects of the Purchaser or its
business as of the Execution Date or on the ability of the Purchaser to
perform its obligations under this Agreement or the other Operative
Documents to be executed and performed by it.
ARTICLE VII
Covenants and Agreements
Section 1 Access and Information. Prior to the Closing, the Purchaser
has made and shall be entitled to make or cause to be made such
investigations of the Unit, and the financial and legal condition of the
Purchased Assets, as the Purchaser deems necessary or advisable, and the
Seller has cooperated and shall cooperate with any such investigations.
In furtherance of the foregoing, but not in limitation thereof, prior to
the Closing Date the Seller shall permit the Purchaser and its agents
and representatives or cause them to be permitted to have full and
complete access to the premises, books and records of the Unit upon
reasonable notice during regular business hours and shall furnish such
existing financial and operating data, projections, forecasts, and other
data relating to the Unit as the Purchaser shall reasonably request from
time to time relating to the truth of representations or warranties,
and/or performance of covenants or conditions provided in this
Agreement. Prior to the Closing, the Purchaser shall not use any
information obtained pursuant to this Section 7.1 for any purpose
unrelated to the consummation of the transactions contemplated by this
Agreement and, if such transactions are not consummated, it will hold
all information and documents obtained pursuant to this Section 7.1 in
confidence in accordance with the Non-Disclosure Agreement dated January
9, 1996 between the Seller and Microsemi ("Non-Disclosure Agreement"),
assigned to and assumed by the Purchaser prior to the Execution Date,
unless and until such time as such information or documents otherwise
become publicly available or as it is advised by counsel that any such
information or document is required by law to be disclosed. In the
event that this Agreement is terminated, the Purchaser will deliver to
the Seller all documents so obtained by it and any copies thereof in
possession of the Purchaser or its agents and representatives or, at the
option of the Purchaser, the Purchaser shall cause all of such documents
and all of such copies to be destroyed and shall certify the destruction
thereof to the Seller. Upon the Closing, the Non-Disclosure Agreement
shall be terminated automatically pursuant to this Section 7.1.
No investigation by the Purchaser or any of its agents or
representatives heretofore or hereafter made shall modify or otherwise
affect any representations and warranties of the Seller, which shall
survive any such investigation and the consummation of the transactions
contemplated hereby.
Section 2 Affirmative Covenants. Prior to the Closing, except as
otherwise expressly provided herein,
(a) the Seller shall:
(i) conduct the business of the Unit only in the ordinary and regular
course of business consistent with past practices and for the benefit,
to the extent it has net operating profit, of the Purchaser;
(ii) keep in full force and effect its corporate existence and all
material rights and the Proprietary Rights;
(iii) use of its reasonable efforts to retain those employees listed in
Schedule 5.16 and preserve its present relationships with customers,
suppliers, contractors, distributors and such employees, and continue to
compensate such employees consistent with past practices;
(iv) maintain the Proprietary Rights so as not to affect adversely the
validity or enforcement thereof; maintain the other Purchased Assets in
customary repair, order and condition and maintain insurance reasonably
comparable to that in effect on the Execution Date; and in the event of
any casualty, loss or damage to any of the Purchased Assets, either
repair or replace such assets with assets of comparable quality or, in
the Seller's discretion, subject to the provisions of Section 11.13,
transfer consideration to the Purchaser at Closing equal to the full
repair cost or replacement cost of such assets;
(v) maintain the books, accounts and records related to the Unit
consistent with past practices;
(vi) use its reasonable efforts to obtain all authorizations, consents,
waivers, approvals or other actions necessary or desirable to consummate
the transactions contemplated hereby and to cause the other conditions
to the Purchaser's obligation to close to be satisfied; and
(vii) promptly inform the Purchaser in writing of any material breach of
or change in the representations and warranties contained in Article V
hereof which become known to the Seller (without obligation to
investigate) in the ordinary course of its business; and
(b) the Purchaser shall:
(i) review the operation of the Unit through its authorized
representative, who shall be resident at the Facility during normal
business hours prior to the Closing. Purchaser's resident
representative shall be advised on and requested to approve in writing
all operational management decisions concerning the Unit outside the
ordinary course of operations;
(ii) keep in full force and effect its corporate existence;
(iii) use its reasonable efforts to obtain authorizations, consents,
waivers, approvals or take other actions as described in this Agreement
as necessary to consummate the transactions contemplated hereby and to
cause the other conditions to the Seller's obligation to close to be
satisfied; and
(iv) promptly inform the Seller in writing of any material breach of or
change in the representations and warranties contained in Article VI
hereof which become known to the authorized representative mentioned
above (without obligation to investigate) in the ordinary course of his
or her responsibilities.
Section 3 Negative Covenants. Prior to the Closing, without the prior
written consent of the Purchaser, which shall not be unreasonably
withheld, or as otherwise expressly provided herein, the Seller will
not:
(a) enter into any contract, agreement or commitment which, if entered
into prior to the date of this Agreement, would cause any representation
or warranty of the Seller to be untrue or be required to be disclosed on
one or more Schedules referred to in Article V; or
(b) take or omit to be taken any action, or permit its Affiliates to
take or to omit to take any action, which could reasonably be expected
to have a Material Adverse Effect.
Section 4 Closing Documents. The Seller shall, prior to or on the
Closing Date, execute and deliver, or cause to be executed and delivered
to the Purchaser, the documents or instruments described in Section 8.2.
The Purchaser shall, prior to or on the Closing Date, execute and
deliver, or cause to be executed and delivered, to the Seller, the
documents or instruments described in Section 8.3.
Section 5 Post Closing Access and Assistance. (a) After the Closing,
upon request the Seller and its representatives shall be permitted
reasonable access, during normal business hours, to make inspection of
the books and records of the Seller (if any) transferred to the
Purchaser hereunder so long as such records are maintained by the
Purchaser in accordance with its customary records retention policy and
to make copies thereof as is reasonably necessary (but excluding
attorney work product or other privileged communications). The Seller
shall pay the Purchaser's out-of-pocket costs and expenses in connection
with satisfying such requests.
(b) After the Closing, upon request the Purchaser and its
representatives shall be permitted reasonable access, during normal
business hours, to make inspection of the books and records (if any) of
the Seller which may be retained by the Seller relating to the Unit and
the Purchased Assets so long as such records are retained by Seller in
accordance with its customary records retention policy and to make
copies thereof as is reasonably necessary (but excluding attorney work
product or other privileged communications). The Purchaser shall pay
the Seller's out-of-pocket costs and expenses in connection with
satisfying such requests.
(c) The Seller, as licensor, and the Purchaser, as licensee, shall
cooperate in effectuating the License Agreement, which shall govern the
relationship between the parties regarding the license of the
Proprietary Rights. The Seller shall cooperate with the Purchaser in
preparing and providing instruments and related documents necessary or
reasonably requested by the Purchaser to register the Proprietary Rights
in all countries of the world where Seller has such protection and the
transfer thereof is permitted or required, which instruments shall be in
registrable form in such countries in which any rights included within
the Proprietary Rights are registered or under application as of the
Closing Date. The Purchaser shall be responsible for filing and
recordation of such instruments and documents and for paying any fees or
other charges in connection therewith. Except to the extent otherwise
provided in the License Agreement, the Seller shall be responsible
following the Closing for paying all of the costs and expenses in
accordance with the License Agreement in preparing, filing, registering,
prosecuting, defending and maintaining all such Proprietary Rights and
the rights and interests associated therewith. The Purchaser shall use
reasonable efforts to cooperate with the Seller in connection therewith.
Section 6 Transfer and Property Taxes. (a) The Purchaser shall pay
the real property sales tax. The Purchaser shall prepare and file the
required tax returns and other required documents with respect to the
taxes and fees required to be paid by it pursuant to the preceding
sentence and shall promptly provide the Seller with evidence of the
payment of such taxes and fees. Without limiting the foregoing, each of
the parties shall promptly provide the other party with a copy of its
Internal Revenue Service Form 8594 filed in connection with this
transaction.
(b) The Seller shall (i) prepare and file all tax returns reporting
the income attributable to the Purchased Assets or the operation of the
Business for all periods ending prior to or on the Closing Date, (ii)
prepare and file all income tax returns reporting the income of the
Seller arising on the Closing Date from the sale to the Purchaser of the
Purchased Assets and the assumption by the Purchaser of the Assumed
Liabilities, (iii) be responsible for the conduct of all tax
examinations relating to the tax returns referred to in (i) and (ii)
above, and (iv) pay all taxes attributable to the Purchased Assets or
the operation of the Business due with respect to the tax returns
referred to in (i) and (ii) above. The Purchaser shall prepare and file
all tax returns reporting the income attributable to the ownership of
the Purchased Assets and the operation of the Business for all periods
beginning on or after the first calendar day following the Closing and
shall be liable for and pay all taxes due in respect of such tax
returns.
(c) All personal property, motor vehicle (including road use) and ad
valorem taxes, and all other taxes, charges or assessments levied or
imposed upon the Purchased Assets by any Governmental Authority, for the
taxable year beginning before and ending on or after the Closing Date
shall be apportioned and pro rated on a per diem basis between the
Purchaser and the Seller as of 11:59 p.m. on the Closing Date (the
"Adjustment Time"). The Seller shall pay or cause to be paid, on or
prior to the Closing Date, all ad valorem taxes and any other taxes and
assessments against the Purchased Assets for all periods ending prior to
the Closing Date. The Purchaser shall pay all ad valorem taxes and any
other taxes and assessments against the Purchased Assets for all periods
beginning on or after the first calendar day following the Closing Date.
If the Closing Date shall occur before the tax rate for the year of
Closing is fixed by the appropriate taxing authority, the apportionment
of any such taxes shall be upon the basis of the tax rate for the
preceding year applied to the latest assessed valuation and shall be
readjusted promptly after such tax rates are known. Such obligation to
readjust shall survive the Closing.
Section 7 Use of the Seller's Name and Logo. (a) The Purchaser shall
be permitted to continue to use all purchased packaging materials (e.g.,
boxes) regardless of whether such materials bear the Seller's name
and/or logo, but only until such materials have been used.
(b) As to any finished goods Inventory bearing Seller's logo
manufactured by the Seller, the Purchased Inventory may be resold by the
Purchaser bearing Seller's logo, and Purchaser may indicate that such
Purchased Inventory was manufactured by the Seller, but only until
either the second anniversary of the Closing or until the Purchased
Inventory is sold, and Excess Inventory that may be purchased by
Purchaser pursuant to Section 7.11 may be resold by the Purchaser
bearing Seller's logo, and Purchaser may indicate that such Excess
Inventory was manufactured by the Seller only until either the fourth
anniversary of the Closing or until the Excess Inventory is sold, as the
case may be.
Section 8 Non-Competition and Confidentiality Agreement. For a period
of three (3) years after the Closing Date, neither the Seller nor its
Affiliates will, directly or indirectly, anywhere in the continental
United States engage in the design, development, assembly or marketing
of the Products or the Related Products in the military, aerospace or
other high-reliability markets. The Seller shall not at any time after
the Closing use for its own benefit or divulge or convey to any third
party, any Confidential Information (as hereinafter defined) relating to
the Unit except in the defense or assertion of any claims related
thereto as required by applicable laws, rules and regulations. For
purposes of this Agreement, Confidential Information consists of all
information, knowledge or data currently held by the Unit and relating
exclusively to the Unit including, without limitation, customer and
supplier lists, formulae, trade know-how, processes, secrets, consultant
contracts, pricing information, marketing plans and product development
plans to the extent not in the public domain or otherwise publicly
available or used by the Seller or its Affiliates in their own
businesses and which relate to products other than those of the Unit.
Information which enters the public domain or is publicly available
loses its confidential status hereunder so long as neither the Seller
nor its Affiliates directly or indirectly wrongfully causes such
information to enter the public domain following the Closing Date.
Without limiting the generality of Section 11.4, the provisions of this
Section 7.8 shall inure to the benefit of any permissible subsequent
transferee of the Unit or any substantial portion thereof, provided that
this Agreement is assigned to such transferee by written agreement,
which shall have been first approved by the Seller and such transferee
continues to conduct the business of the Unit as acquired hereunder and
as the same develops in the normal course of business. In the event
that the Seller merges, consolidates or otherwise combines the Seller
with transfers, sells or disposes of the Proprietary Rights whether in
one transaction or a series of related transactions, the Seller or the
Affiliate party to such transaction, as the case may be, shall use
reasonable efforts to procure from any purchaser or other transferee of
all or any substantial portion of its remaining assets, as the case may
be, a written agreement to comply with the provisions of this Section
7.8 Agreement, including this paragraph, as if such successor, purchaser
or other transferee were a party hereto. Notwithstanding any term or
provision herein or elsewhere, this Section Agreement shall not apply to
or restrict any successor or transferee of the Seller in the conduct of
any business conducted by such successor or transferee prior to becoming
a successor or transferee of the Seller or an Affiliate of the Seller or
acquired from any unrelated party by such successor or transferee at any
time after such entity became a successor or transferee of the Seller or
an Affiliate of the Seller.
Section 9 Efforts; Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto shall use its
reasonable efforts to take, or cause to be taken, all action, and to do,
or cause to be done, all things reasonably necessary, proper or
advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. Each of the
Seller and the Purchaser will use their respective best efforts to
obtain consents of all Governmental Authorities and third parties
necessary to the consummation of the transactions contemplated by this
Agreement. In the event that at any time after Closing any further
action is necessary to carry out the purposes of this Agreement, the
Seller or the proper directors or officers of the Seller or the
Purchaser, as the case may be, shall take all such action without any
further consideration therefor.
Section 10 Employment of the Seller's Employees.
(a) The Purchaser shall offer employment to those employees currently
involved in the Unit's operations and maintenance of the Facility and
listed on Schedule 7.10, at the present rate of cash compensation of
such employees as disclosed in Schedule 5.16 hereto and as represented
and warranted by Seller in Section 5.16 or, in the Purchaser's sole
discretion and judgment in any instance, better rate of cash
compensation as such employees are presently employed under, provided
such employees are still employed by the Seller through the Closing Date
and have not breached the terms of their employment. The Seller shall
continue to bear sole responsibility for the payment of all salaries and
other benefits of any kind earned or accrued (whether or not vested or
deemed vested at such time) by such employees prior to the Closing Date.
The Seller shall terminate all such employees at the Closing Date, and
the Purchaser shall engage such employees as of the following Business
Day. The Purchaser shall be under no obligation to establish or
continue, under the same or different terms or conditions, any employee
benefit arrangement for any of the Seller's employees, whether or not
disclosed in Schedule 5.16 hereto, or as to which all benefits prior to
the termination by Seller are not fully paid or provided for by Seller.
The Purchaser shall offer such other benefits as Microsemi customarily
offers in the sole discretion of the Purchaser. The terms of such
employment (other than the starting rate of cash compensation) shall be
in the Purchaser's sole discretion.
(b) The Purchaser may but shall have no obligation to offer employment
to or to employ any of the Seller's employees located at the Facility
other than those listed on Schedule 7.10. Upon approval of Seller, the
Purchaser may discuss the possibility of an offer of employment with the
employees of Seller other than those listed on Schedule 7.10. The terms
of such employment shall be in the Purchaser's sole discretion.
Section 11 Disposition of Unrelated Inventory Excess Inventory
Following Closing. The Seller will arrange to effect a prompt
relocation, within 30 days immediately following the Closing, of the
Unrelated Inventory to such location(s) outside the Facilities as the
Seller may designate, and the Seller will arrange that all Related
Inventory will be relocated to the Facilities on or prior to the Closing
Date. The Purchaser or Microsemi shall have the option for a three (3)
year period following the Closing Date, to purchase from time to time,
any or all of the Excess Inventory at a cash price equal to fifty
percent (50%) of the Inventory Value, specifically valued as set forth
on Schedule 5.9 and on terms comparable to those that shall apply to
Purchased Inventory to be transferred to Purchaser on the Closing Date.
Such Excess Inventory may be located in the Facility pursuant to
arrangements that are to be mutually agreed. The Seller shall retain
the right to sell such Excess Inventory, provided, it shall notify
Microsemi of any offers to purchase Excess Inventory and the Purchaser
or Microsemi shall notify the Seller of its intent to purchase the
specified Excess Inventory at the cost identified above or the price
offered by a third party, whichever is less, within five (5) Business
Days after such notice. Three years following the Closing Date, the
Seller shall have the right to dispose of any remaining Excess Inventory
which Microsemi has not purchased or the Seller has not sold, in any
manner it chooses without notice to the Purchaser or Microsemi.
Section 12 Obligation of the Seller to Purchase Wafers. For the period
from the closing Date to eighteen (18) months following the Closing
Date, the Seller shall purchase approximately 2,000 Radio Frequency
probed wafers from the Purchaser, which wafers shall be produced at the
Facility, and selected by the Seller. The Purchaser shall have the
right to substitute up to 650 other mutually acceptable wafers if
Purchaser so chooses in its sole discretion. The wafer price shall be
equal to the Purchaser's actual production costs at the Facility plus an
additional ten percent (10%).
ARTICLE VIII
Conditions to Closing
Section 1 Mutual Conditions. The respective obligations of each party
to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to Closing of the conditions that
(a) no Governmental Authority of competent jurisdiction shall have (i)
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgement, decree, injunction or other order which is in
effect; or (ii) commenced or threatened any action or proceeding, which
in either case would prohibit consummation of the transactions
contemplated by this Agreement, and (b) no suit or other action or
procedure shall have been initiated seeking to prevent or delay the
consummation of the transactions contemplated hereby and by the other
Operative Documents.
Section 2 Conditions to the Purchaser's Obligations. The obligations
of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment prior to or at Closing of
each of the following conditions:
(a) All representations and warranties made by the Seller in this
Agreement and the Schedules delivered by the Seller to the Purchaser
pursuant hereto shall be true, correct and complete in all material
respects on the date hereof and as of the Closing Date as though such
representations and warranties were made as of the Closing Date, and the
Seller shall have duly performed or complied with all of the covenants,
obligations and conditions to be performed or complied with by it under
the terms of this Agreement on or prior to or at Closing.
(b) There shall have been no material damage, destruction or loss to,
or any other material or adverse change in, the Purchased Assets,
regardless of insurance coverage which have not been remedied by Seller
in accordance with Section 7.2.
(c) All authorizations, consents, waivers, approvals or other actions
legally required in connection with the execution, delivery and
performance of this Agreement and each of the other Operative Documents,
by the Seller and the consummation by the Seller of the transactions
contemplated hereby and thereby shall have been obtained and shall be in
full force and effect; the Seller shall have obtained any
authorizations, consents, waivers, approvals or other actions required
to prevent a material breach or default by the Seller under any contract
to which the Seller is a party or for the continuation of any agreement
to which the Seller is a party and which relates and is material to the
Purchased Assets or the Unit, and all authorizations, consents, waivers,
approvals or other actions necessary to permit the Purchaser to operate
the business of the Unit in compliance with all applicable laws
immediately after the Closing shall have been obtained and shall be in
full force and effect.
(d) Purchaser shall be satisfied in its sole discretion with the
reported results of the Environmental Audit and the Environmental
Condition of the Facilities.
(e) Prior to or at Closing, the Seller shall have delivered to the
Purchaser all instruments of assignment, transfer and conveyance
identified herein and such other closing documents as shall be requested
by the Purchaser in form and substance acceptable to the Purchaser's
counsel, including the following:
(i) such instruments of sale, transfer, assignment, conveyance and
delivery (including all vehicle titles), in form and substance
reasonably satisfactory to counsel for the Purchaser (including without
limitation the Note, the ▇▇▇▇ of Sale set forth as Exhibit D, the
Assignment and Assumption Agreement set forth as Exhibit E, and the
License Agreement, as are required in order to transfer to the Purchaser
good and marketable title to the Purchased Assets, free and clear of all
Encumbrances except as provided herein, and a valid perpetual fully-paid
license for all of the Proprietary Rights;
(ii) the Purchaser shall have received from the Seller title insurance
policies, dated as of the Closing Date, issued at Seller's expense,
insuring the fee simple title of the Purchaser to all the real property
of the Facilities, subject only to (1) the lien, if any, of current real
property taxes, payment of which is not delinquent; (2) objections and
exceptions noted in these title insurance policies that have been
approved in writing by the Purchaser. Liability coverage under those
title insurance policies shall be at least equal to $700,000; and (3)
existing rights, easements and customary exclusions listed in the title
policy as of the Closing Date.
(iii) a certificate of the Seller over the signature of the President or
a Vice President of the Seller, dated the Closing Date, to the effect
that (1) the person signing such certificate is familiar with the
Agreement and (2) the conditions specified in Section 8.2(a), (b) and
(c) have been satisfied;
(iv) a certificate of the Secretary or Assistant Secretary of the
Seller, dated the Closing Date, as to the incumbency of any officer of
the Seller executing this Agreement, each other Operative Document and
each other document related thereto and covering such other matters as
the Purchaser may reasonably request;
(v) a certified copy of (1) the Certificate of Incorporation and by-
laws of the Seller and all amendments thereto and (2) the resolutions of
the Seller's Board of Directors authorizing the execution, delivery and
consummation of this Agreement and each other Operative Document and the
transactions contemplated hereby and thereby;
(vi) resolutions of the Seller demonstrating that the transactions
contemplated by this Agreement have been approved by the Board of
Directors of Seller; and
(vii) such other documents or instruments as the Purchaser reasonably
requests to effect the transactions contemplated hereby.
Section 3 Conditions to the Seller's Obligations. The obligations of
the Seller to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment at or prior to the Closing of each
of the following conditions:
(a) All representations and warranties made by the Purchaser in this
Agreement shall be true, correct and complete in all material respects
on the date hereof and as of the Closing Date as though such
representations and warranties were made as of the Closing Date, and the
Purchaser shall have duly performed or complied with all of the
covenants, objections and conditions to be performed or complied with by
it under the terms of this Agreement on or prior to or at Closing.
(b) All authorizations or approvals or other action required in
connection with the execution, delivery and performance of this
Agreement, and each of the other Operative Documents by the Purchaser of
the transactions contemplated hereby and thereby shall have been
obtained and shall be in full force and effect.
(c) Prior to or at Closing, the Purchaser shall have delivered to the
Seller such closing documents as shall be reasonably requested by the
Seller in form and substance reasonably acceptable to the Seller's
counsel, including the following:
(i) the Note and the License Agreement executed by the Purchaser and
dated the Closing Date;
(ii) the Unconditioned Guaranty of Microsemi in the form of Exhibit F;
(iii) a certificate of the Purchaser and Microsemi over the signature of
its President or a Vice President of the Purchaser, dated the Closing
Date, to the effect that (1) the person signing such certificate is
familiar with this Agreement and (2) the conditions specified in Section
6.3(a) and (b) have been satisfied;
(iv) a certificate of the Secretary or Assistant Secretary of the
Purchaser and Microsemi, dated the Closing Date, as to the incumbency of
any officer of the Purchaser and Microsemi executing this Agreement or
any document related thereto and covering such other matters as the
Seller may reasonably request;
(v) a certified copy of (1) the Certificate of Incorporation and by-
laws of the Purchaser and Microsemi and all amendments thereto and (2)
the resolutions of the Purchaser's and Microsemi's respective Boards of
Directors authorizing the execution, delivery and consummation of this
Agreement and the transactions contemplated hereby;
(vi) the Purchase Price, as set forth in Section 4.1; and
(vii) such other documents or instruments as the Seller reasonably
requests to effect the transactions contemplated hereby, including such
evidence as the Seller shall request.
ARTICLE IX
Termination
Section 1 Termination. This Agreement may be terminated at any time
prior to Closing as follows:
(a) a mutual consent of the Seller and the Purchaser;
(b) by either the Seller or the Purchaser if the other party hereto
shall breach in any material respect any of its representations,
warranties or obligations contained in this Agreement;
(c) by the Purchaser or the Seller if any authorization, consent,
waiver or approval required for the consummation of the transactions
contemplated hereby shall impose any condition or requirement, which
condition or requirement the Purchaser or the Seller determines, in its
good faith judgment, to be materially burdensome or to deny to the
Purchaser or the Seller in any material respect the benefits intended to
be obtained by the Purchaser or the Seller pursuant to the transactions
contemplated by this Agreement;
(d) by the Purchaser, in the event that the conditions to its
obligations set forth in Article VIII hereof have not been satisfied or
waived on or before the Closing Date;
(e) by the Seller, in the event that the conditions to its obligations
set forth in Article VIII hereof have not been satisfied or waived on or
before the Closing Date; and
(f) by either party if the transactions contemplated by this Agreement
shall not have been consummated on or before October 31, 1996 (or such
later date as may be mutually agreed upon in writing by the parties
hereto).
Section 2 Effect of Termination. If this Agreement is terminated
pursuant to Section 9.1 hereof, all rights and obligations of the Seller
and the Purchaser hereunder shall terminate and no party shall have any
liability to the other party, except for obligations of the parties
hereto in Sections 7.1, 10.2, 10.3, 11.2 and 11.9, which shall survive
the termination of this Agreement, and except nothing herein will
relieve any party from liability for any breach of any representation,
warranty, agreement or covenant contained herein prior to such
termination.
ARTICLE X
Survival of Representations and Warranties; Indemnification
Section 1 Survival of Representations and Warranties. The
representations and warranties provided for in this Agreement shall
survive the Closing and remain in full force and effect, subject to the
following terms:
(a) Sections 5.1; 5.2; 5.3; 5.4; 5.5; 5.6; 5.7; 5.13; 5.15 and 5.17
shall survive without limit.
(b) Sections 5.8; 5.9; 5.10; 5.11; 5.12; 5.14; 5.16; 5.18; 5.19; 5.21
and 5.22 shall survive until December 31, 1997 or longer to the extent
that an applicable statute of limitations period gives a third party
recourse for claims arising from or in connection with the subject of
the Section.
(c) Section 5.20 shall survive for thirty (30) days after the Closing
Date.
Section 2 Indemnification.
(a) The Seller shall indemnify and hold harmless the Purchaser, its
Affiliates, officers, directors, employees, agents and representatives,
and any Person claiming by or through any of them, against and in
respect of any and all claims, costs, expenses, damages, liabilities,
losses or deficiencies (including, without limitation, counsel's fees
and other costs and expenses incident to any suit, action or proceeding)
(the "Damages") arising out of, resulting from or incurred in connection
with (i) any inaccuracy in any representation or the breach of any
warranty made by the Seller in this Agreement other than in Section
5.15, (ii) the breach by the Seller of any covenant or agreement to be
performed by it hereunder other than in Section 5.15, and (iii) any
liability or obligation which is not an Assumed Liability, including
without limitation, to any former employee of Seller on account of or
arising from any employment contract, plan or arrangement in effect
prior to the Closing.
(b) The Purchaser shall indemnify and hold harmless the Seller, its
Affiliates, officers, directors, employees, agents and representatives,
and any Person claiming by or through any of them, against and in
respect of any and all claims, costs, expenses, damages, liabilities,
losses or deficiencies (including, without limitation, counsel's fees
and other costs and expenses incident to any suit, action or proceeding)
(the "Damages") arising out of, resulting from or incurred in connection
with (i) any inaccuracy in any representation or the breach of any
warranty made by the Purchaser in this Agreement, (ii) the breach by the
Purchaser of any covenant or agreement to be performed by it hereunder,
and (iii) any Assumed Liability.
(c) any Environmental Claim or Release of Regulated Substances which
exists on the Closing Date or which may be incurred or suffered by the
Purchaser arising out of an Environmental Condition that is either: (1)
specified in the Environmental Audit, or (2) is known to have existed or
be existing on the Closing Date by Seller, its officers, directors,
employees representatives, agents, attorneys or consultants or referred
to in the documents provided or made available to Purchaser by Seller
under this Agreement or (3) is discovered within three years after the
Closing Date, unless Seller can satisfactorily establish that such
Environmental Condition was not caused by Seller during its operation of
the Facilities and that such Environmental Condition was not present on
the Facilities at the time of the Closing. In the event the Purchaser
and Seller dispute coverage for any Environmental Claim or Release
pursuant to Section 10.2(c)(3), such dispute shall be presented to
binding arbitration in accordance with the rules of the International
Chamber of Commerce in Philadelphia, Pennsylvania, by a panel of three
arbitrators. Seller shall, at its sole cost and expense be responsible
for conducting all necessary investigation, remediation, and other
response activities for any Environmental Conditions which exist on
Facilities at the time of the Closing. Seller shall provide the
Purchaser with copies of all reports made by or for Seller in connection
with the performance of Seller's duties under this Section 10.2(c).
Seller shall conduct all investigation, response and remediation
activities in a manner which will not, if possible, interfere with the
Purchaser's operation of the Business.
(d) Any Person providing indemnification pursuant to the provisions of
this Section 10.2 is hereinafter referred to as an "Indemnifying Party"
and any Person entitled to be indemnified pursuant to the provisions of
this Section 10.2 is hereinafter referred to as an "Indemnified Party."
(e) Following the determination of the Final Inventory Value as of the
Closing Date, any claim made under this Agreement except for any
indemnity provided in Section 10.2(c), as to which any limitations are
expressed in such Section 10.2(c) itself, shall be made only pursuant
and subject to this Article X:
(i) No claim shall be made except to the extent that the aggregate of
all claims suffered by a party exceeds $30,000;
(ii) No claim shall be made based on a particular representation or
warranty more than three months after the expiration thereof in
accordance with this Article X;
(iii) Damages shall be limited to the Purchase Price for all such claims
in the aggregate; and
(iv) No claim may be made of consequential or incidental damages except
to the extent such damages comprise a portion of a claim by a third
party to be indemnified against.
Section 3 Procedures for Claims. In the case of any claim for
indemnification arising from a claim of a third party, an Indemnified
Party shall give prompt written notice, in no event more than 10 days
following such Indemnified Party's receipt of such claim or demand, to
the Indemnifying Party of any claim or demand which such Indemnified
Party has knowledge and as to which it may request indemnification
hereunder. The Indemnifying Party shall have the right to defend and to
direct the defense against any such claim or demand, in its name or in
the name of the Indemnified Party, as the case may be, at the expense of
the Indemnifying Party, and with counsel selected by the Indemnifying
Party unless (i) such claim or demand seeks an order, injunction or
other equitable relief against the Indemnified Party, or (ii) the
Indemnified Party shall have reasonably concluded that (x) there is a
conflict of interest between the Indemnified Party and the Indemnifying
Party in the conduct of the defense of such claim or demand or (y) the
Indemnified Party has one or more defenses not available to the
Indemnifying Party. Notwithstanding anything in this Agreement to the
contrary, the Indemnified Party shall, at the expense of the
Indemnifying Party, cooperate with the Indemnifying Party, and keep the
Indemnifying Party fully informed, in the defense of such claim or
demand. The Indemnified Party shall have the right to participate in
the defense of any claim or demand with counsel employed at its own
expense; provided, however, that, in the case of any claim or demand
described in clause (i) or (ii) of the second preceding sentence or as
to which the Indemnifying Party shall not in fact have employed counsel
to assume the defense of such claim or demand, the reasonable fees and
disbursements of such counsel shall be at the expense of the
Indemnifying Party. The Indemnifying Party shall have no
indemnification obligations with respect to any such claim or demand
which shall be settled by the Indemnified Party without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
ARTICLE XI
Miscellaneous
Section 1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered
personally, by facsimile or sent by certified, registered or express air
mail, postage prepaid, and shall be deemed given when so delivered
personally, or by facsimile, or if mailed, five days after the date of
mailing, as follows:
If to the Purchaser Micro Acquisition Corp.
c/o Microsemi Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Seller: SGS-Thomson Microelectronics, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 2 Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated, except as otherwise provided
herein, each party hereto shall pay its own expenses incident to this
Agreement and the transactions contemplated herein.
Section 3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT GIVING EFFECT TO THE
CHOICE OF LAW PRINCIPLES THEREOF. EACH OF THE PARTIES HERETO
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH OF PENNSYLVANIA OR THE UNITED STATES DISTRICT COURT FOR
EASTERN DISTRICT OF PENNSYLVANIA FOR THE PURPOSE OF ANY SUIT, ACTION,
PROCEEDING OR JUDGMENT RELATING TO OR ARISING OUT OF THIS AGREEMENT AND
THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO
IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH
SUIT, ACTION OR PROCEEDING AND TO THE LAYING OF VENUE IN SUCH COURT.
EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION TO THE LAYING OF
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS AND
IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM;
PROVIDED, HOWEVER, UNLESS OTHERWISE AGREED BETWEEN THE PARTIES, ANY CASE
INSTITUTED OR COMMENCED BY THE SELLER OR THE PURCHASER OR ITS AFFILIATES
SHALL BE BROUGHT IN PHILADELPHIA, PENNSYLVANIA.
Section 4 Assignment; Successors and Assigns; No Third Party Rights.
Except as otherwise provided herein, this Agreement may not be assigned
by operation of law or otherwise without the prior written consent of
the other party, which shall not be unreasonably withheld, and any
attempted assignment without such consent shall be null and void. If
the Purchaser merges, consolidates, or combines, or transfers, sells, or
disposes of substantially all of the Purchased Assets, the Purchaser can
assign its rights in this Agreement to such transferee or successor that
assumes this Agreement in writing. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors, assigns and legal representatives, except as may otherwise
expressly be provided in Section 7.8. This Agreement shall be for the
sole benefit of the parties to this Agreement and their respective
successors, assigns and legal representatives and is not intended, nor
shall be construed, to give any Person, other than the parties hereto
and their respective successors, assigns and legal representatives, any
legal or equitable right, remedy or claim hereunder.
Section 5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original agreement, but
all of which together shall constitute one and the same instrument.
Section 6 Titles and Headings. The headings and table of contents in
this Agreement are for reference purposes only, and shall not in any way
affect the meaning or interpretation of this Agreement.
Section 7 Entire Agreement. This Agreement, including the Schedules
and Exhibits attached thereto, constitutes the entire agreement among
the parties with respect to the matters covered hereby and supersedes
all previous written, oral or implied understandings among them with
respect to such matters, including without limitation the letter of
agreement in principle dated July 10, 1996, accepted July 12, 1996,
between the Seller and Microsemi Corporation (the "Letter of Intent").
Section 8 Amendment and Modification. This Agreement may only be
amended or modified in writing signed by the party against whom
enforcement of such amendment or modification is sought.
Section 9 Public Announcement. Except as may be required by law, in
the judgment of either party after considering advice of legal counsel,
neither the Seller, on the one hand, nor the Purchaser, on the other
hand, shall issue any press release or otherwise publicly disclose this
Agreement or the transactions contemplated hereby or any dealings
between or among the parties in connection with the subject matter
hereof without the prior approval of the other. In the event that any
such press release or other public disclosure shall be required, the
party required to issue such release or other disclosure shall consult
in good faith with the other party hereto with respect to the form and
substance of such release or other disclosure no less than five (5)
Business Days prior to the public dissemination thereof, except with the
other party's consent and approval, which shall not be unreasonably
withheld. Neither party shall disclose the Purchase Price, whether
prior to, on or after the Closing Date, except as may be required by
applicable laws or regulations or the rules of any securities exchange
or association binding on the Purchaser or the Seller, as the case may
be, or except as may be required to obtain consents and approvals from
banks or financial institutions or any of the parties to agreements to
be assigned to the Purchaser.
Section 10 Waiver. Any of the terms or conditions of this Agreement
may be waived at any time by the party or parties entitled to the
benefit thereof, but only by a writing signed by the party or parties
waiving such terms or conditions.
Section 11 Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad
to permit enforcement of such restriction to its fullest extent, such
restriction shall be enforced to the maximum extent permitted by law.
▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ Construction. Each of the Purchaser and the
Seller acknowledge that this Agreement has been prepared jointly by the
parties hereto, and shall not be strictly construed against either
party.
Section 13 Risk of Loss. Prior to the Closing, the risk of loss with
respect to the Purchased Assets shall remain with the Seller.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MICRO ACQUISITION CORP.,
A Delaware Corporation
By:
Name:
Title:
SGS-THOMSON MICROELECTRONICS, INC.,
A Delaware Corporation
By:
Name:
Title:
MOTOROLA - MICROSEMI POOWERMITE TECHNOLOGY AGREEMENT
APPENDIX B
POOWERMITE PACKAGE SPECIFICATIONS
(Attached)
[DRAWING, SHEET 1 OF 3]
[DRAWING, SHEET 2 OF 3]
[DRAWING, SHEET 3 OF 3]
MOTOROLA - MICROSEMI POOWERMITE TECHNOLOGY AGREEMENT
APPENDIX C
MICROSEMI/MOTOROLA TRANSMITTAL RECORD
Date of Transmittal:
Transferring Company Name:
Attention Document Control Manager:
Address:
City, State, Zip:
The Confidential/Proprietary document(s) listed is/are transmitted in
accordance with the provisions of the MICROSEMI-MOTOROLA Agreement dated
ITEM
REFERENCE #
DESCRIPTION OF DOCUMENT/MATERIAL
REV.#
Received By: Transferred By:
(Receiving Company Representative) (Transferring Company Representative)
(Title) (Title)
(Date) (Date)
Please return an original, signed copy of this Transmittal Record to:
Transferring Company Name:
Attention Document Control Manager:
Address:
City, State, ZIP: