EXHIBIT 99.3
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U.S. ASSET PURCHASE AGREEMENT
DATED AS OF DECEMBER 16, 2001
BY AND BETWEEN
CONEXANT SYSTEMS, INC.,
AND
ALPHA INDUSTRIES, INC.
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TABLE OF CONTENTS
Page No.
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ARTICLE I DEFINITIONS.....................................................................1
ARTICLE II SALE AND PURCHASE OF ASSETS.....................................................8
Section 2.1. Purchase and Sale of Assets.....................................................8
Section 2.2. Purchase Price..................................................................8
Section 2.3. No Assumption of Liabilities....................................................9
Section 2.4. Allocation of Purchase Price....................................................9
ARTICLE III SELLER'S REPRESENTATIONS AND WARRANTIES.........................................9
Section 3.1. Corporate Status, Good Standing and Authorization...............................9
Section 3.2. Authority; Enforceability.......................................................9
Section 3.3. Consents; No Conflicts or Violations...........................................10
Section 3.4. Compliance with Laws...........................................................10
Section 3.5. Intellectual Property..........................................................10
Section 3.6. Litigation.....................................................................11
Section 3.7. Employee Matters...............................................................11
Section 3.8. Labor Relations................................................................11
Section 3.9. Tax Matters....................................................................11
Section 3.10. No Brokers.....................................................................12
Section 3.11. Title to Properties............................................................12
Section 3.12. Insurance......................................................................12
ARTICLE IV PURCHASER'S REPRESENTATIONS AND WARRANTIES.....................................12
Section 4.1. Organization of Purchaser......................................................12
Section 4.2. Authority; Enforceability......................................................12
Section 4.3. Consents; No Conflicts or Violations...........................................13
Section 4.4. Litigation.....................................................................13
Section 4.5. No Brokers.....................................................................14
ARTICLE V COVENANTS......................................................................14
Section 5.1. Access.........................................................................14
Section 5.2. Reasonable Best Efforts........................................................15
Section 5.3. Conduct of Business by Seller..................................................17
Section 5.4. Employment Arrangements........................................................18
Section 5.5. Public Announcements...........................................................18
Section 5.6. Supplements to Schedules.......................................................19
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Page No.
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Section 5.7. Insurance......................................................................19
Section 5.8. License of Purchaser Intellectual Property to Seller...........................21
ARTICLE VI CONDITIONS TO SELLER'S AND PURCHASER'S OBLIGATIONS.............................22
ARTICLE VII CLOSING........................................................................22
Section 7.1. Deliveries by Seller...........................................................22
Section 7.2. Deliveries by Purchaser........................................................23
ARTICLE VIII INDEMNIFICATION................................................................23
Section 8.1. Indemnification by Seller......................................................23
Section 8.2. Indemnification by Purchaser...................................................24
Section 8.3. Limitations on Indemnification Obligations.....................................24
Section 8.4. Procedures Relating to Indemnification.........................................25
Section 8.5. Sole and Exclusive Remedy......................................................27
Section 8.6. Termination of Indemnification Obligations.....................................28
Section 8.7. Effect of Investigation........................................................28
ARTICLE IX TAXES..........................................................................28
Section 9.1. Transfer, Sales and Use Taxes..................................................28
Section 9.2. Tax Returns....................................................................28
Section 9.3. Prorations.....................................................................29
Section 9.4. Allocation of Straddle Period Taxes............................................29
ARTICLE X TERMINATION....................................................................29
Section 10.1. Voluntary Termination..........................................................29
Section 10.2. Automatic Termination..........................................................30
Section 10.3. Effect of Termination..........................................................30
ARTICLE XI MISCELLANEOUS..................................................................30
Section 11.1. Assignment.....................................................................30
Section 11.2. Notices........................................................................30
Section 11.3. Choice of Law; Dispute Resolution..............................................32
Section 11.4. Survival of Representations and Warranties and Covenants.......................32
Section 11.5. Limitations on Representations and Warranties..................................33
Section 11.6. Entire Agreement; Waivers......................................................33
Section 11.7. Counterparts...................................................................33
Section 11.8. Severability...................................................................33
Section 11.9. Headings.......................................................................34
Section 11.10. Expenses.......................................................................34
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Page No.
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Section 11.11. Amendments.....................................................................34
Section 11.12. Parties in Interest............................................................34
Section 11.13. Schedules and Exhibits.........................................................34
Section 11.14. Cooperation Following the Closing..............................................34
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U.S. ASSET PURCHASE AGREEMENT
U.S. ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of December 16,
2001, by and between Conexant Systems, Inc., a Delaware corporation ("Seller"),
and Alpha Industries, Inc., a Delaware corporation ("Purchaser"). Seller and
Purchaser are sometimes hereinafter collectively referred to as the "Parties"
and individually as a "Party."
RECITALS
A. Seller employs certain employees (the "Package Design Team") at its
facilities in Newport Beach, California, who perform certain design and other
functions in support of certain manufacturing and assembly operations conducted
by Seller and its Affiliates (as defined herein) in Mexicali, Baja California,
Mexico;
B. Seller owns certain assets (including certain intellectual property) in
the United States utilized by the Package Design Team, which it desires to sell
to Purchaser; and
C. Purchaser desires to purchase the Assets (as defined herein) and employ
the Package Design Team Employees (as defined herein) pursuant to the terms set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the representations, warranties,
mutual covenants and promises contained herein and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
given those terms in this ARTICLE I or in the Section of this Agreement
referenced in the definition provided for such term:
"Affiliate" of a Person means any other Person that, directly or
indirectly, controls, is controlled by, or is under common control with, such
Person. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with"), as used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" is defined in the first paragraph hereof.
"Assets" means all of Seller's right, title and interest in and to (i) the
equipment specifically set forth on SCHEDULE 2.1, together with all prepaid
expenses paid by Seller with respect to such equipment and all third party
insurance proceeds (if any) in respect of losses, liabilities or damage with
respect to such equipment arising out of insured incidents occurring after the
date hereof and prior to the Closing (to the extent Seller and its Affiliates
have no obligation to reimburse the insurer for such insurance proceeds), (ii)
the Intellectual Property set forth on SCHEDULE 3.5 and (iii) the Books and
Records.
"Books and Records" means all documents, information, computer data,
files, books and records (in each case, in whatever form or media, including
electronic media) that relate exclusively to (i) the Assets or (ii) the Package
Design Team Employees.
"Business Day" means a day other than a Saturday, a Sunday or a day on
which banks are required or authorized to close in the City of New York.
"Charter Document" means any of the certificate of incorporation, bylaws,
agreement of limited partnership, operating agreement or other organizational or
constitutive document of a Person.
"Claim(s)" means any action, suit, litigation, proceeding, arbitration or
other method of settling disputes or disagreements and any grievance, complaint,
claim, charge, demand, investigation or other similar matter.
"Claims Made Policies" is defined in Section 5.7(b).
"Closing" means the consummation of the transactions contemplated by this
Agreement on the Closing Date.
"Closing Date" is defined in the first paragraph of ARTICLE VII.
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"Code" means the United States Internal Revenue Code of 1986, as amended.
"Consent(s)" means any and all consents, waivers, approvals,
authorizations, declarations, filings, recordings, registrations or exemptions.
"Damages" means any and all losses, Liabilities, claims, damages,
deficiencies, obligations, fines, payments, Taxes, Encumbrances, and costs and
expenses, whether matured or unmatured, absolute or contingent, accrued or
unaccrued, liquidated or unliquidated, known or unknown, whenever arising and
whether or not resulting from Third Party Claims (including the costs and
expenses of any and all Claims; all amounts paid in connection with any demands,
assessments, judgments, settlements and compromises relating thereto; interest
and penalties with respect thereto; out-of-pocket expenses and reasonable
attorneys', accountants' and other experts' fees and expenses reasonably
incurred in investigating, preparing for or defending against any such Claims or
in asserting, preserving or enforcing an Indemnified Party's rights hereunder;
and any losses that may result from the granting of injunctive relief as a
result of any such Claims).
"Dispute" is defined in Section 11.3(b).
"dollars" or "U.S.$" means United States dollars.
"Effective Time" is defined in the Merger Agreement.
"Employee Matters Agreement" means the Employee Matters Agreement to be
entered into by and among Seller, Washington and Purchaser on or before the
Effective Time.
"Encumbrance" means any lien, pledge, easement, security interest,
mortgage, deed of trust, right-of-way, retention of title agreement or other
encumbrance of whatever nature.
"Governmental Authority" means any federal, state or local governmental
authority or regulatory body of any nation, any subdivision, agency, commission,
board or authority or instrumentality thereof, or any quasi-governmental or
private body asserting, exercising or empowered to assert or exercise any
regulatory authority thereunder and any Person, directly or indirectly, owned by
and subject to the control of any of the foregoing.
"HSR Act" means the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
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"including" means including without limiting the generality of what
precedes that term.
"Income Tax" means (a) any Tax based upon, measured by, or calculated with
respect to (i) net income or profits (including, but not limited to, any capital
gains, minimum Tax and any Tax on items of Tax preference, but not including
sales, use, real or personal property, gross or net receipts, transfer or
similar Taxes) or (ii) multiple bases (including, but not limited to, corporate
franchise, doing business or occupation Taxes) if one or more of the bases upon
which such Tax may be based, measured by, or calculated with respect to, is
described in clause (i) above, or (b) any U.S. state or local franchise Tax;
including in the case of each of (a) and (b) any related interest and any
penalties, additions to such Tax or additional amounts imposed with respect
thereto by any Tax authority.
"Indemnified Party" is defined in Section 8.3(a).
"Indemnifying Party" is defined in Section 8.3(a).
"Indemnity Reduction Amounts" is defined in Section 8.3(a).
"Information" means all records, books, contracts, instruments, computer
data and other data and information (in each case, in whatever form or medium,
including electronic media).
"Insurance Proceeds" means monies (a) received by an insured from an
insurance carrier, (b) paid by an insurance carrier on behalf of an insured or
(c) received from any third party in the nature of insurance, contribution or
indemnification in respect of any Liability.
"Intellectual Property" means trademarks, service marks, brand names,
certification marks, trade dress and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not, in any
jurisdiction; patents, applications for patents (including divisions,
continuations, continuations in part and renewal applications), and any
renewals, extensions or reissues thereof, in any jurisdiction; nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any Person; writings and
other works, whether copyrightable or not, in any jurisdiction; and
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; and any other intellectual
property or proprietary rights.
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"Law" means all laws, principals of common law, statutes, constitutions,
treaties, rules, regulations, ordinances, codes, ruling, orders and
determinations of any Governmental Authority.
"Liabilities" means any and all claims, debts, liabilities, commitments
and obligations of whatever nature, whether fixed, contingent or absolute,
matured or unmatured, liquidated or unliquidated, accrued or not accrued, known
or unknown, due or to become due, whenever or however arising and whether or not
the same would be required by generally accepted accounting principles to be
reflected as a liability in financial statements or disclosed in the notes
thereto.
"Maquiladora" means Conexant Systems, S.A. de C.V., a sociedad anonima de
capital variable organized under the laws of Mexico.
"Material Adverse Change" or "Material Adverse Effect" means any event,
change, circumstance or development that is materially adverse to (i) the
ability of Seller to consummate the transactions contemplated by this Agreement
or (ii) the Assets taken as a whole or the use of the Assets, taken as a whole,
in the manner heretofore used by Seller, other than, with respect to clause
(ii), any event, change, circumstance or development (A) resulting from any
action taken in connection with the transactions contemplated hereby pursuant to
the terms of this Agreement, (B) relating to the economy or financial markets in
general, (C) relating in general to the industries in which Seller operates and
not specifically relating to Seller or (D) relating to any action or omission of
Seller or any Subsidiary of either of them taken with the express prior written
consent of Purchaser.
"Merger" is defined in the recitals of the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Reorganization, dated
as of December 16, 2001, by and among Seller, Washington and Purchaser.
"Mexican Stock and Asset Purchase Agreement" means that certain Mexican
Stock and Asset Purchase Agreement, dated as of December 16, 2001, by and
between Seller and Purchaser.
"Non-Income Tax" means any Tax other than an Income Tax.
"Occurrence Basis Policies" is defined in Section 5.7(b).
"Package Design Team" is defined in Recital A.
"Package Design Team Employee(s)" means the persons employed by Seller and
listed on SCHEDULE 3.7(a).
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"Party" and "Parties" are defined in the first paragraph of this
Agreement.
"Permits" means licenses, permits, authorizations, consents, certificates,
registrations, variances, franchises and other approvals from any Governmental
Authority, including those relating to environmental matters.
"Permitted Encumbrance" means (i) Encumbrances for Taxes, assessments or
governmental charges or levies on property not yet due and payable or which are
being contested in good faith and for which appropriate reserves are maintained,
(ii) Encumbrances of landlords, carriers, warehousemen, mechanics and other
Encumbrances imposed by law and incurred in the ordinary course of business as
currently operated, (iii) Encumbrances for purchase money obligations incurred
in the ordinary course of business consistent with past practice and (iv)
Encumbrances incurred in the ordinary course of business which, individually or
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
"Person" means an individual, corporation, limited liability entity,
partnership, association, trust, unincorporated organization, other entity or
group (as defined in the Exchange Act), including any Governmental Authority.
"Policies" means all insurance policies, insurance contracts and claim
administration contracts of any kind of Seller relating to the Assets which were
or are in effect at any time at or prior to the Closing, including primary,
excess and umbrella, commercial general liability, fiduciary liability, product
liability, automobile, aircraft, property and casualty, business interruption,
directors and officers liability, employment practices liability, workers'
compensation, crime, errors and omissions, special accident, cargo and employee
dishonesty insurance policies and captive insurance company arrangements,
together with all rights, benefits and privileges thereunder.
"Privileged Information" means, with respect to a Party, Information
regarding the Party, or any of its operations, employees, assets or Liabilities
(whether in documents or stored in any other form or known to its employees or
agents) that is or may be protected from disclosure pursuant to the
attorney-client privilege, the work product doctrine or other applicable
privileges, that a Party has or may come into possession of or has obtained or
may obtain access to pursuant to this Agreement or otherwise.
"Promissory Note" means a promissory note issued by Purchaser in favor of
Seller in a principal amount equal to the Purchase Price, substantially on the
terms attached hereto as EXHIBIT "A".
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"Purchase Price" means the amount allocated to the purchase price of the
Assets being sold hereunder pursuant to the terms of Section 2.5 of the Mexican
Stock and Asset Purchase Agreement.
"Purchaser" is defined in the first paragraph of this Agreement.
"Purchaser Indemnified Parties" is defined in Section 8.1.
"Representative" means, with respect to any Person, any of such Person's
directors, officers, employees, agents, consultants, advisors, accountants,
attorneys and representatives.
"Schedules" means the disclosure schedules contained in this Agreement
which schedules are attached hereto and incorporated by reference as if
specifically set forth herein.
"Seller" is defined in the first paragraph of this Agreement.
"Seller Indemnified Parties" is defined in Section 8.2.
"Seller Spinoff" is defined in Section 5.8(c).
"Subsidiary" when used with respect to any Person means any corporation or
other organization, whether incorporated or unincorporated, at least a majority
of the securities or other interests of which having by their terms ordinary
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is,
directly or indirectly, owned or controlled by such Person or by any one or more
of its Subsidiaries, or by such Person and one or more of its Subsidiaries.
"Tax" and "Taxes" shall mean all forms of taxation, whenever created or
imposed, and whether of the United States or elsewhere, and whether imposed by a
federal, state, municipal, governmental, territorial, local, foreign or other
body, and without limiting the generality of the foregoing, shall include net
income, gross income, gross receipts, sales, use, value added, ad valorem,
transfer, recording, franchise, profits, license, lease, service, service use,
payroll, wage, withholding, employment, unemployment insurance, workers
compensation, social security, excise, severance, stamp, business license,
business organization, occupation, premium, property, environmental, windfall
profits, customs, duties, alternative minimum, estimated or other taxes, fees,
premiums, assessments or charges of any kind whatever imposed or collected by
any governmental entity or political subdivision thereof, together with any
related
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interest and any penalties, additions to such tax or additional amounts imposed
with respect thereto by any Tax authority.
"Tax Proceeding" means any audit, examination, Claim or other
administrative or judicial proceeding relating to Taxes or Tax Returns.
"Tax Return" shall mean any return, filing, questionnaire, information
return, election or other document required or permitted to be filed, including
requests for extensions of time, filings made with respect to estimated tax
payments, claims for refund and amended returns that may be filed, for any
period with any Tax authority (whether domestic or foreign) in connection with
any Tax (whether or not a payment is required to be made with respect to such
filing).
"Third Party Claim" is defined in Section 8.4(a).
"To the knowledge of Seller" or words of similar import with respect to a
fact or matter means the actual knowledge of the executive officers of Seller
listed on SCHEDULE 1 after reasonable inquiry.
"Washington" means Washington Sub, Inc., a Delaware corporation.
"Washington Business" is defined in the Merger Agreement.
"Washington Participants" is defined in the Employee Matters Agreement.
ARTICLE II
SALE AND PURCHASE OF ASSETS
Section 2.1. PURCHASE AND SALE OF ASSETS. At the Closing, Seller shall
sell, transfer, convey, assign and deliver to Purchaser, and Purchaser shall
purchase, acquire and accept, the Assets, as the same shall exist on the Closing
Date, free and clear of any Encumbrances other than Permitted Encumbrances.
Section 2.2. PURCHASE PRICE. The Purchase Price to be paid by Purchaser to
Seller in consideration for the Assets shall be payable, at the election of
Purchaser, either (A) by wire transfer of immediately available funds at the
Closing or (B) by delivery of the Promissory Note at the Closing; PROVIDED,
HOWEVER, that if Purchaser shall elect to pay the Purchase Price pursuant to
clause (B), Purchaser shall provide written notice of such election to Seller no
later than thirty (30) days prior to the Closing Date.
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Section 2.3. NO ASSUMPTION OF LIABILITIES. Purchaser shall not assume
hereunder any Liabilities of Seller related to the Assets. This section shall
not affect any other obligation of Purchaser under this Agreement.
Section 2.4. ALLOCATION OF PURCHASE PRICE. Purchaser and Seller mutually
agree that the Purchase Price shall be allocated among the Assets in the manner
required by Section 1060 of the Code and Treasury Regulations promulgated
thereunder. Purchaser and Seller shall agree upon such allocation prior to the
Closing and shall file Form 8594 with the United States Internal Revenue Service
reflecting such allocation. Neither Seller nor Purchaser shall take a position
inconsistent with such allocation in any Tax Proceeding, in any refund claim, in
any litigation or investigation or otherwise. If a competent Government
Authority adjusts such allocation for any reason, the allocation shall be deemed
to be amended to conform to any such adjustments.
ARTICLE III
SELLER'S REPRESENTATIONS AND WARRANTIES
Seller hereby represents and warrants to Purchaser as of the date hereof
and as of the Closing Date the following:
Section 3.1. CORPORATE STATUS, GOOD STANDING AND AUTHORIZATION. Seller is
a corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with all requisite corporate power
and authority to own the Assets, except where the failure to have such power and
authority, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect. Seller is duly licensed or qualified to do
business as a foreign corporation in all states or jurisdictions in which the
nature of Assets or the operations thereof by the Package Design Team requires
such license or qualification, except where the failure to be so licensed or
qualified, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
Section 3.2. AUTHORITY; ENFORCEABILITY. Seller has all requisite corporate
power and authority to enter into this Agreement and perform its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by Seller and the consummation by Seller of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of
Seller. This Agreement has been duly authorized, executed and delivered by
Seller and is a legally valid and binding obligation of Seller (assuming that
this Agreement constitutes the valid and binding obligation of Purchaser) and is
enforceable against Seller in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
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fraudulent conveyance, moratorium and similar Laws relating to or affecting
creditors generally or by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 3.3. CONSENTS; NO CONFLICTS OR VIOLATIONS. Except for the Consents
set forth on SCHEDULE 3.3 and Consents which if not obtained and maintained by
Seller, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect, there are no Consents of any Governmental
Authority required in connection with (i) Seller's execution and delivery of
this Agreement and the other agreements, documents and instruments to be
executed and delivered by Seller in connection herewith or (ii) the performance
by Seller of its obligations herein or therein or the consummation by Seller of
the transactions contemplated hereby or thereby. Assuming receipt of all of the
Consents set forth on SCHEDULE 3.3 (including any required HSR Act approval),
neither the execution or delivery by Seller of this Agreement nor the
consummation by Seller of the transactions contemplated hereby will, with or
without the giving of notice or the lapse of time or both, conflict with or
result in a breach or violation of or give rise to a default or right of
termination, amendment, cancellation or acceleration under (i) any provision of
Seller's Charter Documents, (ii) any contract, agreement, note, bond, mortgage,
indenture, lease, license, franchise, permit, concession, instrument or
obligation to which Seller is a party or by which any of its properties or
assets are bound or (iii) any Law or license or other requirement to which
Seller or its properties or assets is subject, except, in the case of items (ii)
and (iii) above only, for those which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
Section 3.4. COMPLIANCE WITH LAWS. Except as disclosed on SCHEDULE 3.4,
Seller is in compliance in all material respects with all Laws applicable with
respect to the Assets, the manner in which the Assets are used and the Package
Design Team, except where the failure to so comply, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect,
and Seller has not received within the past twelve (12) months any written
notice or correspondence from any Governmental Authority to the effect that it
is not in compliance with any such applicable Laws, except for such violations
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
Section 3.5. INTELLECTUAL PROPERTY. Except as would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect: (i)
Seller owns, or is licensed to use (in each case, free and clear of any
Encumbrances), all Intellectual Property set forth on SCHEDULE 3.5; (ii) to the
knowledge of Seller, the use of any Intellectual Property set forth on SCHEDULE
3.5 by Seller does not infringe on or otherwise violate the rights of any
Person; (iii) the use of Intellectual Property set forth on SCHEDULE 3.5 by or
on behalf of Seller is in accordance with any applicable license
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pursuant to which Seller acquired the right to use any Intellectual Property;
(iv) to the knowledge of Seller, no Person is challenging, infringing on or
otherwise violating any right of Seller with respect to any Intellectual
Property set forth on SCHEDULE 3.5 owned by and/or licensed to Seller; and (v)
Seller does not have any knowledge of any pending claim, order or proceeding
with respect to any use of Intellectual Property set forth on SCHEDULE 3.5 by
Seller and, to the knowledge of Seller, no Intellectual Property set forth on
SCHEDULE 3.5 is being used or enforced in a manner that would reasonably be
expected to result in the abandonment, cancellation or unenforceability of such
Intellectual Property.
Section 3.6. LITIGATION. Except as set forth on SCHEDULE 3.6, there is no
action, suit or proceeding or regulatory investigation pending or, to the
knowledge of Seller, threatened against Seller or its business or operations
affecting the Package Design Team or any of the Assets or this Agreement before
any court or arbitrator or any governmental body, agency or official, except for
those which, if adversely determined, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. Seller is not a
party to or subject to any judgment, order, rule, writ, injunction, or decree of
any Governmental Authority or arbitrator which relates to or affects the Assets
or the Package Design Team, except as, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
Section 3.7. EMPLOYEE MATTERS.
(a) PACKAGE DESIGN TEAM EMPLOYEES. SCHEDULE 3.7(A) contains a list of all
current Package Design Team Employees as of the date hereof.
Section 3.8. LABOR RELATIONS. Except as stated on SCHEDULE 3.8, as of the
date hereof, Seller is not a signatory to any collective bargaining agreement
with any trade union or labor organization relating to Package Design Team
Employees.
Section 3.9. TAX MATTERS.
(a) All material Tax Returns required to be filed by Seller with respect
to the Assets have been timely filed. All such Tax Returns are true, correct and
complete, except as, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. All Taxes shown as due and payable
by or with respect to such Tax Returns have been timely paid in full.
(b) Except as set forth on SCHEDULE 3.9(B), there are no Tax proceedings
presently pending with regard to any Non-Income Taxes related to the Assets, and
no notice has been received from any Governmental Authority of the expected
commencement of such a Tax Proceeding.
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(c) There are no Encumbrances for any Tax on the Assets, except for
Permitted Encumbrances.
(d) None of the Assets is a lease made pursuant to Section 168(f)(8) of
the Internal Revenue Code of 1954.
(e) None of the Assets constitute "tax exempt use property" within the
meaning of Section 168(h) of the Code or is "tax exempt bond financed property"
within the meaning of Section 168(g) of the Code.
Section 3.10. NO BROKERS. Neither this Agreement nor the sale of the
Assets was induced or procured through any Person acting on behalf of or
representing Seller and no commissions or any other payment is due to any
intermediary in connection therewith.
Section 3.11. TITLE TO PROPERTIES. Seller has good and valid title to the
Assets, except, in each case, where the failure to have such good and valid
title, or valid leasehold interest, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
Section 3.12. INSURANCE. Seller maintains insurance coverage in respect of
the Assets with reputable insurers in such amounts and covering such risks as is
deemed reasonably appropriate for its business (taking into account the cost and
availability of such insurance).
ARTICLE IV
PURCHASER'S REPRESENTATIONS AND WARRANTIES
Purchaser hereby represents and warrants to Seller as of the date hereof
and as of the Closing Date the following:
Section 4.1. ORGANIZATION OF PURCHASER. Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation.
Section 4.2. AUTHORITY; ENFORCEABILITY. Purchaser has all requisite
corporate power and authority to enter into this Agreement and perform its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by Purchaser and the consummation by Purchaser of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Purchaser. This Agreement has been duly
authorized, executed and delivered by Purchaser and is a
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legally valid and binding obligation of Purchaser (assuming that this Agreement
constitutes the valid and binding obligation of Seller) and is enforceable
against Purchaser in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and similar Laws relating to or affecting creditors generally or by
general equity principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 4.3. CONSENTS; NO CONFLICTS OR VIOLATIONS. Except for the Consents
set forth on SCHEDULE 4.3 and the Consents which if not obtained and maintained
by Purchaser, individually or in the aggregate, would not reasonably be expected
to have a material adverse effect on Purchaser's ability to consummate the
transactions contemplated by this Agreement, there are no Consents of any
Governmental Authorities required in connection with (i) Purchaser's execution
and delivery of this Agreement and the other agreements, documents and
instruments to be executed and delivered by Purchaser in connection herewith or
(ii) the performance by Purchaser of its obligations herein or therein or the
consummation by Seller of the transactions contemplated hereby or thereby.
Assuming receipt of all of the Consents set forth on SCHEDULE 4.3 (including,
any required HSR Act approval), neither the execution or delivery by Purchaser
of this Agreement nor the consummation by Purchaser of the transactions
contemplated hereby will, with or without the giving of notice or the lapse of
time or both, conflict with or result in a breach or violation of or give rise
to a default or right of termination, amendment, cancellation or acceleration
under (i) any provision of Purchaser's Charter Documents, (ii) any material
contract, agreement, note, bond, mortgage, indenture, lease, license, franchise,
permit, concession, instrument or obligation to which Purchaser is a party or by
which any of its properties or assets are bound or (iii) any Law or license or
other requirement to which Purchaser or its properties or assets is subject,
except, in the case of items (ii) and (iii) above only, for those which,
individually or in the aggregate, would not reasonably be expected to have a
material adverse effect on Purchaser's ability to consummate the transactions
contemplated by this Agreement.
Section 4.4. LITIGATION. Except as set forth on SCHEDULE 4.4, there is no
action, suit or proceeding or regulatory investigation pending or, to the
knowledge of Purchaser, threatened against Purchaser affecting this Agreement
before any court or arbitrator or any governmental body, agency or official,
except for those which, if adversely determined, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect on
Purchaser's ability to consummate the transactions contemplated by this
Agreement. Purchaser is not a party to or subject to any judgment, order, writ,
injunction, or decree of any Governmental Authority or arbitrator, except as,
individually or in the aggregate, would not reasonably be expected to have a
material
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adverse effect on Purchaser's ability to consummate the transactions
contemplated by this Agreement.
Section 4.5. NO BROKERS. Neither this Agreement nor the purchase of the
Assets was induced or procured through any Person acting on behalf of or
representing Purchaser and no commissions or any other payment is due to any
intermediary in connection therewith.
ARTICLE V
COVENANTS
The Parties hereby covenant as follows:
Section 5.1. ACCESS.
(a) ACCESS TO INFORMATION BY PURCHASER PRIOR TO CLOSING. Prior to Closing,
subject to compliance with applicable laws, Seller and Maquiladora shall, upon
reasonable request, afford to Purchaser and its Representatives reasonable
access during normal business hours to all Books and Records. Purchaser shall
coordinate its requests and activities under this Section 5.1 with Seller's need
for security and will assist Seller in minimizing disruption to Seller's normal
business operations.
(b) ACCESS TO INFORMATION BY PURCHASER AFTER CLOSING. From and after the
Closing, Seller will afford to Purchaser and its Representatives (at Purchaser's
expense) reasonable access and duplicating rights during normal business hours
and upon reasonable advance notice to all Books and Records within Seller's
possession or control relating to the Assets, insofar as such access is
reasonably required by Purchaser.
(c) ACCESS TO BOOKS AND RECORDS BY SELLER. Purchaser shall, following the
Closing, give Seller and its Representatives such access, during normal business
hours and upon reasonable prior notice, to the Books and Records and such other
documents as shall be reasonably necessary for Seller in connection with its
performance of its obligations hereunder, for the preparation and filing of
Seller's Tax Returns for periods prior to the Closing Date and for any other
reasonable purposes, and Purchaser will allow Seller and its Representatives to
make extracts and copies thereof as may be necessary for such purposes at
Seller's expense. Purchaser shall preserve and protect the Books and Records in
its possession and control for the period required by the applicable records
retention policy of Seller in effect immediately prior to the Closing. Purchaser
shall offer to deliver the Books and Records to Seller prior to their
destruction or other disposition.
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(d) PRODUCTION OF WITNESSES. Subject to Section 5.1(e), after the Closing,
each Party will make available to the other Party, upon written request and at
the cost and expense of the Party so requesting, its directors, officers,
employees and agents as witnesses to the extent that any such Person may
reasonably be required (giving consideration to business demands of such
directors, officers, employees and agents) in connection with any Claims or
administrative or other proceedings in which the requesting party may from time
to time be involved and relating to the Assets or the Package Design Team or
arising in connection with the relationship between the Parties on or prior to
the Closing Date, provided that the same shall not unreasonably interfere with
the conduct of business by the Party of which the request is made.
(e) CONFIDENTIALITY. From and after the Closing, each of Seller and
Purchaser shall hold, and shall use reasonable efforts to cause its Affiliates
and Representatives to hold, in strict confidence all Information concerning the
other Party in its possession or control prior to the Closing or furnished to it
by another Party pursuant to the Merger and the transactions contemplated
thereby and will not release or disclose such Information to any other Person,
except its Affiliates and its and their Representatives, who will be bound by
the provisions of this Section 5.1(e); PROVIDED, HOWEVER, that any Person may
disclose such Information to the extent that (a) disclosure is compelled by
judicial or administrative process or, in the opinion of such Person's counsel,
by other requirements of law (in which case the Party required to make such
disclosure will notify the other Party as soon as practicable of such obligation
or requirement and cooperate with the other Party to limit the Information
required to be disclosed and to obtain a protective order or other appropriate
remedy with respect to the Information ultimately disclosed) or (b) such Person
can show that such Information was (i) available to such Person on a
nonconfidential basis (other than from a Party) prior to its disclosure by such
Person, (ii) in the public domain through no fault of such Person or (iii)
lawfully acquired by such Person from another source after the time that it was
furnished to such Person by the other Party or its Affiliates, Representatives
or Subsidiaries, and not acquired from such source subject to any
confidentiality obligation on the part of such source known to the acquiror, or
on the part of the acquiror. Each Party acknowledges that it will be liable for
any breach of this Section 5.1(e) by its Affiliates, Representatives and
Subsidiaries. Notwithstanding the foregoing, each Party will be deemed to have
satisfied its obligations under this Section 5.1(e) with respect to any
Information (other than Privileged Information) if it exercises the same care
with regard to such Information as it takes to preserve confidentiality for its
own similar Information.
Section 5.2. REASONABLE BEST EFFORTS.
(a) Subject to the terms and conditions of this Agreement, each Party will
use its reasonable best efforts to take, or cause to be taken, all actions and
to do, or
15
cause to be done, and to assist and cooperate with the other Party in doing or
causing to be done, all things necessary, proper or advisable under this
Agreement and applicable laws to consummate the transactions contemplated by
this Agreement as soon as practicable after the date hereof, including (i)
preparing and filing as promptly as practicable all documentation to obtain as
promptly as practicable all Consents set forth on SCHEDULES 3.3 AND 4.3 and (ii)
taking all reasonable steps as may be necessary to obtain all Consents set forth
on SCHEDULES 3.3 AND 4.3. In furtherance and not in limitation of the foregoing,
each Party hereto agrees to make (i) an appropriate filing (if applicable) of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and (ii) all other necessary filings with other Governmental Authorities
relating to the transactions contemplated herein, and, in each case, to supply
as promptly as practicable any additional information and documentary material
that may be requested pursuant to such applicable laws or by such Governmental
Authorities and to use reasonable best efforts to cause the expiration or
termination of the applicable waiting periods under the HSR Act and the receipt
of the Consents set forth on SCHEDULES 3.3 AND 4.3 under such other applicable
laws or from such Governmental Authorities as soon as practicable.
(b) Each of Seller and Purchaser shall, in connection with the efforts
referenced in Section 5.2(a) to obtain all Consents set forth on SCHEDULES 3.3
AND 4.3, use its reasonable best efforts to (i) cooperate in all respects with
each other in connection with any filing or submission and in connection with
any investigation or other inquiry, including any proceeding initiated by a
private party, (ii) promptly inform the other Party of any communication
received by such Party from, or given by such Party to, the Antitrust Division
of the Department of Justice (the "DOJ"), the Federal Trade Commission (the
"FTC") or any other Governmental Authority and of any material communication
received or given in connection with any proceeding by a private party, in each
case regarding any of the transactions contemplated hereby, and (iii) permit the
other Party to review any communication given by it to, and consult with each
other in advance of any meeting or conference with, the DOJ, the FTC or any such
other Governmental Authority or, in connection with any proceeding by a private
party, with any other Person, and to the extent appropriate or permitted by the
DOJ, the FTC or such other applicable Governmental Authority or other Person,
give the other Party the opportunity to attend and participate in such meetings
and conferences.
(c) In furtherance and not in limitation of the covenants of the Parties
contained in Section 5.2(a) and Section 5.2(b), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any applicable laws, or if any
statute, rule, regulation, executive order, decree, injunction or administrative
order is enacted, entered, promulgated or enforced by a Governmental Authority
which would make transactions contemplated hereby illegal or would
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otherwise prohibit or materially impair or delay the consummation of the
transactions contemplated hereby, each of the Parties shall cooperate in all
respects with each other and use its respective reasonable best efforts to
contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement and to have such statute, rule, regulation, executive order, decree,
injunction or administrative order repealed, rescinded or made inapplicable so
as to permit the consummation of the transactions contemplated by this
Agreement.
(d) Notwithstanding the foregoing or any other provision of this
Agreement, nothing in this Section 5.2 shall create an obligation by the Parties
to take any action in addition to the actions required to be taken pursuant to
the Merger Agreement to consummate the Merger.
Section 5.3. CONDUCT OF BUSINESS BY SELLER. From the data hereof
until the Closing Date, Seller shall, except as expressly required or permitted
by this Agreement and except as otherwise consented to in writing by Purchaser:
(i) conduct the operations of the Package Design Team and employ the
Assets in the ordinary course of business consistent with past practice;
(ii) not grant, create, incur or suffer to exist any Encumbrance
(other than a Permitted Encumbrance granted, created, incurred or suffered
to exist in the ordinary course of business consistent with past practice)
on the Assets;
(iii) not increase in any manner the base compensation of, or enter
into any new bonus or incentive agreement or arrangement with, any Package
Design Team Employees, other than in the ordinary course of business
consistent with past practice;
(iv) not adopt or amend any Benefit Plan with respect to Package
Design Team Employees or to increase the benefits provided under any
Benefit Plan to Package Design Team Employees other than in the ordinary
course of business consistent with past practice;
(v) not grant any license or sublicense or otherwise transfer, other
than in the ordinary course of business consistent with past practice, any
portion of its right, title or interest in any Intellectual Property
included in the Assets; and
(vi) not authorize, or commit or agree to take, any of the foregoing
actions.
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Section 5.4. EMPLOYMENT ARRANGEMENTS.
(a) EMPLOYMENT. Purchaser shall offer employment, with comparable
compensation and benefits, commencing as of the Closing Date, to each of the
Package Design Team Employees (including those who are actively employed or on
layoff, leave or short-term or long-term disability or other permitted absence
from employment). Purchaser shall provide to each Package Design Team Employee
(i) employment and a salary or wage level at least equal to that which such
Package Design Team Employee was entitled from Seller and its Subsidiaries and
Affiliates immediately prior to the Closing Date and (ii) employee benefits
comparable in all material respects to and no less favorable in the aggregate
than the employee benefits provided to each such Package Design Team Employee by
Seller and its Subsidiaries and Affiliates immediately prior to the Closing
Date; PROVIDED, HOWEVER, that after the Closing Date, Purchaser expressly
reserves the right to modify any salary or wage level of any Package Design Team
Employee and to amend, modify or terminate any benefit plan or program
established or maintained by Purchaser for the benefit of Package Design Team
Employees in accordance with the terms of such plan or program and applicable
law.
(b) EMPLOYEE MATTERS AGREEMENT TERMS APPLICABLE. The Parties agree
that all terms and provisions of the Employee Matters Agreement applicable to
Washington Participants (including all Liabilities and obligations assumed or to
be performed by Purchaser or Washington under the Employee Matters Agreement
relating to the Washington Participants) shall, to the extent applicable, also
apply to the Package Design Team Employees, and that the Package Design Team
Employees shall be deemed to be Washington Participants for all purposes of the
Employee Matters Agreement (other than Section 2.01 thereof). Accordingly,
Purchaser hereby assumes, and agrees to fully perform, pay and discharge, all
Liabilities and obligations in respect of the Package Design Team Employees of
the type that were assumed by or allocated to Purchaser, Washington or any
Subsidiary of Washington under the Employee Matters Agreement in respect of
Washington Participants and to perform, pay and discharge such Liabilities and
obligations in the same manner as provided in the Employee Matters Agreement.
Section 5.5. PUBLIC ANNOUNCEMENTS. The Parties shall use reasonable
best efforts to develop a joint communications plan and each Party shall use
reasonable best efforts (i) to ensure that all press releases and other public
statements with respect to the transactions contemplated hereby shall be
consistent with such joint communications plan, and (ii) unless otherwise
required by applicable laws or by obligations pursuant to any listing agreement
with or rules of any securities exchange or automated quotation system, to
consult with each other before issuing any press release or, to the extent
practicable, otherwise making any public statement with respect to this
Agreement or the transactions contemplated hereby.
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Section 5.6. SUPPLEMENTS TO SCHEDULES. From time to time up to the
Closing, Seller and Purchaser may supplement or amend the Schedules after they
have been delivered pursuant to this Agreement with respect to any matter first
existing or occurring on or after the date hereof which, if existing or
occurring at or prior to the date hereof, would have been required to be set
forth or described in such Schedules or which is necessary to correct any
information in such Schedules which has been rendered inaccurate thereby;
PROVIDED, HOWEVER, that if any facts that give rise to such matter existed or
occurred on or before the date hereof, no such supplement or amendment may be
made under this Section 5.6 with respect thereto. Any supplement or amendment to
any Schedule shall not, following Closing, constitute a basis for any Claim for
indemnification pursuant to ARTICLE VIII.
Section 5.7. INSURANCE.
(a) COVERAGE. Subject to the provisions of this Section 5.7,
coverage of the Assets under all Policies shall cease as of the Closing. From
and after the Closing, Purchaser will be responsible for obtaining and
maintaining all insurance coverages for the Assets. All Policies will be
retained by Seller and Seller's Subsidiaries, together with all rights, benefits
and privileges thereunder (including the right to receive any and all return
premiums with respect thereto), except that Purchaser will have the rights in
respect of Policies to the extent described in Section 5.7(b).
(b) RIGHTS UNDER POLICIES. From and after the Closing, Purchaser
will have no rights with respect to any Policies, except that (i) Purchaser will
have the right to assert claims (and Seller will use commercially reasonable
efforts to assist Purchaser in asserting claims) for any loss, liability or
damage with respect to the Assets under Policies with third-party insurers which
are "occurrence basis" insurance policies ("Occurrence Basis Policies") arising
out of insured incidents occurring from the date coverage thereunder first
commenced until the Closing to the extent that the terms and conditions of any
such Occurrence Basis Policies and agreements relating thereto so allow and (ii)
Purchaser will have the right to continue to prosecute claims with respect to
the Assets properly asserted with an insurer prior to the Closing (and Seller
will use commercially reasonable efforts to assist Purchaser in connection
therewith) under Policies with third-party insurers which are insurance policies
written on a "claims made" basis ("Claims Made Policies") arising out of insured
incidents occurring from the date coverage thereunder first commenced until the
Closing to the extent that the terms and conditions of any such Claims Made
Policies and agreements relating thereto so allow, PROVIDED, that in the case of
both clauses (i) and (ii) above, (A) all of Seller's reasonable out-of-pocket
costs and expenses incurred in connection with the foregoing are promptly paid
by Purchaser, (B) Seller may, at any time, without liability or obligation to
Purchaser (other than as set forth in Section 5.7(c)), amend, commute,
terminate, buy-out, extinguish liability under or otherwise modify any
Occurrence Basis Policies or Claims
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Made Policies (and such claims shall be subject to any such amendments,
commutations, terminations, buy-outs, extinguishments and modifications), (C)
such claims will be subject to (and recovery thereon will be reduced by the
amount of) any applicable deductibles, retentions or self-insurance provisions,
(D) such claims will be subject to (and recovery thereon will be reduced by the
amount of) any payment or reimbursement obligations of Seller, any of Seller's
Subsidiaries or any Affiliate of Seller or any of Seller's Subsidiaries in
respect thereof and (E) such claims will be subject to exhaustion of existing
aggregate limits. Seller's obligation to use commercially reasonable efforts to
assist Purchaser in asserting claims under applicable Policies will include
using commercially reasonable efforts in assisting Purchaser to establish its
right to coverage under such Policies (so long as all of Seller's reasonable
out-of-pocket costs and expenses in connection therewith are promptly paid by
Purchaser). None of Seller or Seller's Subsidiaries will bear any Liability for
the failure of an insurer to pay any claim under any Policy. It is understood
that any Claims Made Policies will not provide any coverage to Purchaser for
incidents occurring prior to the Closing but which are asserted with the
insurance carrier after the Closing.
(c) SELLER ACTIONS. In the event that after the Closing, Seller
proposes to amend, commute, terminate, buy-out, extinguish liability under or
otherwise modify any Policies under which Purchaser has rights to assert claims
pursuant to Section 5.7(b) in a manner that would adversely affect any such
rights of Purchaser, (i) Seller will give Purchaser prior notice thereof and
consult with Purchaser with respect to such action (it being understood that the
decision to take any such action will be in the sole discretion of Seller) and
(ii) Seller will pay to Purchaser its equitable share (which shall be determined
by Seller in good faith based on the amount of premiums paid by or allocated to
Purchaser or the Assets in respect of the applicable Policy) of any net proceeds
actually received by Seller from the insurer under the applicable Policy as a
result of such action by Seller (after deducting Seller's reasonable costs and
expenses incurred in connection with such action).
(d) ADMINISTRATION. From and after the Closing:
(i) Seller or a Subsidiary of Seller, as appropriate, will be
responsible for the Claims Administration with respect to claims of Seller
and Seller's Subsidiaries under Policies; and
(ii) Purchaser will be responsible for the Claims
Administration with respect to claims of Purchaser under Policies.
(e) INSURANCE PREMIUMS. From and after the Closing, Seller will
pay all premiums (retrospectively-rated or otherwise) as required under the
terms and conditions of the respective Policies in respect of periods prior to
the Closing, whereupon
20
Purchaser will upon the request of Seller, forthwith reimburse Seller for that
portion of such premiums paid by Seller as are reasonably determined by Seller
to be attributable to the Assets.
(f) AGREEMENT FOR WAIVER OF CONFLICT AND SHARED DEFENSE. In the
event that a Policy provides coverage for both Seller and/or a Subsidiary of
Seller, on the one hand, and Purchaser, on the other hand, relating to the same
occurrence, Seller and Purchaser agree to defend jointly and to waive any
conflict of interest necessary to the conduct of that joint defense. Nothing in
this Section 5.7(f) will be construed to limit or otherwise alter in any way the
indemnity obligations of the parties to this Agreement, including those created
by this Agreement, by operation of law or otherwise.
Section 5.8. LICENSE OF PURCHASER INTELLECTUAL PROPERTY TO SELLER.
(a) Effective as of the Closing Date, Purchaser hereby grants to
Seller, its Subsidiaries and its Affiliates, a non-exclusive, world-wide,
irrevocable royalty-free license, without the right to assign or grant
sublicenses, except as provided in Sections 5.8(b) and (c), under all
Intellectual Property constituting Assets (excluding trademarks, trade names,
domain names, service marks, trade dress and any other form of trade identity),
to make, have made, use, sell, offer for sale, import, or otherwise dispose of
semiconductor products and systems in the conduct of their respective businesses
as they are being conducted on the Closing Date and any related extensions or
expansions thereof, and to practice any process involved in the use or
manufacture thereof.
(b) The license granted under Section 5.8(a) is non-assignable and
non-transferable (in insolvency proceedings, by reason of corporate merger, by
acquisition or other change in control or otherwise).
(c) The license granted under Section 5.8(a) does not include the
right to grant sublicenses, except that Seller, its Subsidiaries and its
Affiliates may grant a sublicense (within the scope of such license) to any
entity or business that is a spin-off or other similar divestiture of all or any
part of the businesses of Seller, its Subsidiaries and its Affiliates (a "Seller
Spin-Off") and to any subsequent entity or business that is a spin-off or other
similar divestiture of all or any part of a Seller Spin-Off; PROVIDED, HOWEVER,
that any such sublicense shall be subject to the same restrictions on assignment
and transfer as the original license granted in this Section 5.8.
(d) In the event that following the Closing, Seller or a Seller
Spin-Off becomes insolvent or is acquired by or merges with a third party, such
license or sublicense shall immediately and automatically terminate with respect
to such Person and its Affiliates effective as of the date of such insolvency,
acquisition or merger, unless
21
Seller and Purchaser otherwise agree; provided that such termination of such
license or sublicense shall not necessarily affect any other license or
sublicense.
ARTICLE VI
CONDITIONS TO
SELLER'S AND PURCHASER'S OBLIGATIONS
The obligations of Seller and Purchaser to complete the transactions
contemplated by this Agreement are subject to the Closing (as defined in the
Merger Agreement) under the Merger Agreement having been consummated.
ARTICLE VII
CLOSING
The Closing shall, unless another time and date is agreed to in
writing by the Parties, take place immediately following the Closing (as defined
in the Merger Agreement) under the Merger Agreement and will be effective
immediately following the Effective Time (the time and date of such Closing
being herein called the "Closing Date"). The Closing will take place at the
offices of ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or such other place as the Parties may agree. On the Closing Date, the
Parties hereto shall deliver the following:
Section 7.1. DELIVERIES BY SELLER. At the Closing, Seller shall
deliver to Purchaser the following which in the case of documents, shall be
reasonably satisfactory to Purchaser:
(i) an Assets ▇▇▇▇ of Sale and Assignment and Assumption Agreement,
duly executed by Seller, in form and substance reasonably satisfactory to
Purchaser;
(ii) the Assets; and
(iii) all documents of title and instruments of conveyance necessary
to transfer record and beneficial ownership to Purchaser of all Assets
which require execution, endorsement or delivery of such a document under
applicable Law in order to vest record or beneficial ownership thereto in
Purchaser.
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Section 7.2. DELIVERIES BY PURCHASER. At the Closing, Purchaser
shall deliver to Seller the following, which in the case of documents shall be
reasonably satisfactory to Seller:
(i) (A) cash payment of the Purchase Price (via wire transfer of
immediately available funds), pursuant to Section 2.3, or (B) the
Promissory Note, duly executed by Purchaser, in form and substance
reasonably satisfactory to Seller, in which case, the Purchase shall
deliver to Seller at Closing, in addition to the other deliveries required
hereby, (I) a security agreement, duly executed by Purchaser, in form and
substance reasonably satisfactory to Seller and Purchaser and in customary
form for transactions of this nature, granting Seller a first priority
security interest in the security described on EXHIBIT "A", (II) such
notices, recordings, mortgages, statements, filings, instruments or other
agreements and documents as Seller may reasonably require to have a
perfected first priority security interest in the security described on
EXHIBIT "A" and (III) customary opinions of counsel to Purchaser for
secured transactions of this nature reasonably satisfactory to the Parties
and their counsel; and
(ii) an Asset ▇▇▇▇ of Sale and Assignment and Assumption Agreement,
duly executed by Purchaser, in form and substance reasonably satisfactory
to Seller.
ARTICLE VIII
INDEMNIFICATION
Section 8.1. INDEMNIFICATION BY SELLER. Subject to the limitations
on and procedures for indemnification set forth in this ARTICLE VIII, Seller
shall indemnify, defend and hold harmless Purchaser and its Representatives and
Affiliates and each of the heirs, executors, successors and assigns of any of
the foregoing (collectively, the "Purchaser Indemnified Parties") from and
against, and pay or reimburse, as the case may be, the Purchaser Indemnified
Parties for, any Damages, as incurred, suffered by any Purchaser Indemnified
Parties to the extent based upon, arising out of or relating to the following:
(i) the breach of any representation or warranty of Seller contained
in this Agreement; or
(ii) the breach by Seller of any covenant or agreement of Seller
contained in this Agreement.
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Section 8.2. INDEMNIFICATION BY PURCHASER. Subject to the
limitations on and procedures for indemnification set forth in this ARTICLE
VIII, Purchaser shall indemnify, defend and hold harmless Seller and its
Representatives and Affiliates and each of the heirs, executors, successors and
assigns of any of the foregoing (collectively, the "Seller Indemnified Parties")
from and against, and pay or reimburse, as the case may be, the Seller
Indemnified Parties for, any Damages, as incurred, suffered by any Seller
Indemnified Parties to the extent based upon, arising out of or relating to the
following:
(i) the breach of any representation or warranty of Purchaser
contained in this Agreement; or
(ii) the breach by Purchaser of any covenant or agreement of
Purchaser contained in this Agreement.
Section 8.3. LIMITATIONS ON INDEMNIFICATION OBLIGATIONS. (a) The
amount which any Party (an "Indemnifying Party") is or may be required to pay to
any Person (an "Indemnified Party") in respect of Damages or other Liability for
which indemnification is provided under this Agreement shall be reduced by any
amounts actually received (including Insurance Proceeds actually received) by or
on behalf of such Indemnified Party (net of increased insurance premiums and
charges to the extent related to Damages and costs and expenses (including
reasonable legal fees and expenses) incurred by such Indemnified Party in
connection with seeking to collect and collecting such amounts) in respect of
such Damages or other Liability (such net amounts are referred to herein as
"Indemnity Reduction Amounts"). If any Indemnified Party receives any Indemnity
Reduction Amounts in respect of Damages for which indemnification is provided
under this Agreement after the full amount of such Damages has been paid by an
Indemnifying Party or after an Indemnifying Party has made a partial payment of
such Damages and such Indemnity Reduction Amounts exceed the remaining unpaid
balance of such Damages, then the Indemnified Party shall promptly remit to the
Indemnifying Party an amount equal to the excess (if any) of (A) the amount
theretofore paid by the Indemnifying Party in respect of such Damages, less (B)
the amount of the indemnity payment that would have been due if such Indemnity
Reduction Amounts in respect thereof had been received before the indemnity
payment was made.
(b) In determining the amount of any indemnity payment under this
Agreement, such amount shall be (i) reduced to take into account any net Tax
benefit realized by the Indemnified Party and its Affiliates arising from the
incurrence or payment by the Indemnified Party or its Affiliates of any amount
in respect of which such payment is made and (ii) increased to take into account
any net Tax cost incurred by the Indemnified Party and its Affiliates as a
result of the receipt or accrual of payments hereunder (grossed-up for such
increase), in each case determined by treating the Indemnified Party and its
Affiliates as recognizing all other items of income, gain, loss,
24
deduction or credit before recognizing any item arising from the receipt of
accrual of any payment hereunder. In determining the amount of any such Tax
benefit or Tax cost, the Indemnified Party and its Affiliates shall be deemed to
be subject to the applicable Taxes at the maximum statutory rate then in effect.
It is the intention of the Parties to this Agreement that payments made pursuant
to this Agreement are to be treated as relating back to the Closing Date as a
purchase price adjustment, and the Parties shall not take any position
inconsistent with such intention before any Tax authority, except to the extent
that a final determination (as defined in Section 1313 of the Code) with respect
to the recipient party causes any such payment not to be so treated.
(c) No monetary amount will be payable by Seller to any Purchaser
Indemnified Party with respect to the indemnification of any claims pursuant to
Section 8.1(i) until the aggregate amount of Damages actually incurred by the
Purchaser Indemnified Parties with respect to such claims shall exceed on a
cumulative basis an amount equal to fifty thousand dollars (U.S.$50,000), in
which event Seller shall be responsible only for the amount of such Damages in
excess of fifty thousand dollars (U.S.$50,000). No monetary amount will be
payable by Seller to any Purchaser Indemnified Party with respect to the
indemnification of any claims pursuant to Section 8.1(i) after the aggregate
amount of Damages actually paid by Seller with respect to such claims shall
equal on a cumulative basis an amount equal to five hundred thousand dollars
(U.S.$500,000).
(d) No monetary amount will be payable by Purchaser to any Seller
Indemnified Party with respect to the indemnification of any claims pursuant to
Section 8.2(i) until the aggregate amount of Damages actually incurred by the
Seller Indemnified Parties with respect to such claims shall exceed on a
cumulative basis an amount equal to fifty thousand dollars (U.S.$50,000), in
which event Purchaser shall be responsible only for the amount of such Damages
in excess of fifty thousand dollars (U.S.$50,000). No monetary amount will be
payable by Purchaser to any Seller Indemnified Party with respect to the
indemnification of any claims pursuant to Section 8.2(i) after the aggregate
amount of Damages actually paid by Purchaser with respect to such claims shall
equal on a cumulative basis an amount equal to five hundred thousand dollars
(U.S.$500,000).
Section 8.4. PROCEDURES RELATING TO INDEMNIFICATION. (a) If a claim
or demand is made against an Indemnified Party, or an Indemnified Party shall
otherwise learn of an assertion, by any Person who is not a party to this
Agreement (or an Affiliate thereof) as to which an Indemnifying Party may be
obligated to provide indemnification pursuant to this Agreement (a "Third Party
Claim"), such Indemnified Party will notify the Indemnifying Party in writing,
and in reasonable detail, of the Third Party Claim reasonably promptly after
becoming aware of such Third Party Claim; PROVIDED, HOWEVER, that failure to
give such notification will not affect the indemnification provided
25
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure. Thereafter, the Indemnified Party will
deliver to the Indemnifying Party, promptly after the Indemnified Party's
receipt thereof, copies of all material notices and documents (including court
papers) received or transmitted by the Indemnified Party relating to the Third
Party Claim.
(b) If a Third Party Claim is made against an Indemnified Party,
the Indemnifying Party will be entitled to participate in or to assume the
defense thereof (in either case, at the expense of the Indemnifying Party) with
counsel selected by the Indemnifying Party and reasonably satisfactory to the
Indemnified Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party will not be liable to the
Indemnified Party for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof; PROVIDED, HOWEVER,
that if in the Indemnified Party's reasonable judgment a conflict of interest
exists in respect of such claim or if the Indemnifying Party shall have assumed
responsibility for such claim with any reservations or exceptions, such
Indemnified Party will have the right to employ separate counsel reasonably
satisfactory to the Indemnifying Party to represent such Indemnified Party and
in that event the reasonable fees and expenses of such separate counsel (but not
more than one separate counsel for all Indemnified Parties similarly situated)
shall be paid by such Indemnifying Party. If the Indemnifying Party assumes the
defense of any Third Party Claim, the Indemnified Party will have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party, it being
understood that the Indemnifying Party will control such defense. The
Indemnifying Party will be liable for the reasonable fees and expenses of
counsel employed by the Indemnified Party for any period during which the
Indemnifying Party has failed to assume the defense thereof. If the Indemnifying
Party assumes the defense of any Third Party Claim, the Indemnifying Party will
promptly supply to the Indemnified Party copies of all material correspondence
and documents relating to or in connection with such Third Party Claim and keep
the Indemnified Party fully informed of all material developments relating to or
in connection with such Third Party Claim (including providing to the
Indemnified Party on request updates and summaries as to the status thereof). If
the Indemnifying Party chooses to defend a Third Party Claim, the Parties will
cooperate in the defense thereof (such cooperation to be at the expense,
including reasonable legal fees and expenses, of the Indemnifying Party), which
cooperation shall include the retention in accordance with this Agreement and
(upon the Indemnifying Party's request) the provision to the Indemnifying Party
of records and information which are reasonably relevant to such Third Party
Claim, and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder.
26
(c) No Indemnifying Party will consent to any settlement,
compromise or discharge (including the consent to entry of any judgment) of any
Third Party Claim without the Indemnified Party's prior written consent (which
consent will not be unreasonably withheld); PROVIDED, HOWEVER, that if the
Indemnifying Party assumes the defense of any Third Party Claim, the Indemnified
Party will agree to any settlement, compromise or discharge of such Third Party
Claim which the Indemnifying Party may recommend and which by its terms
obligates the Indemnifying Party to pay the full amount of Damages in connection
with such Third Party Claim and unconditionally and irrevocably releases the
Indemnified Party and its Affiliates completely from all Liability in connection
with such Third Party Claim; PROVIDED, HOWEVER, that the Indemnified Party may
refuse to agree to any such settlement, compromise or discharge (x) that
provides for injunctive or other non-monetary relief affecting the Indemnified
Party or any of its Affiliates or (y) that, in the reasonable opinion of the
Indemnified Party, would otherwise materially adversely affect the Indemnified
Party or any of its Affiliates. Whether or not the Indemnifying Party shall have
assumed the defense of a Third Party Claim, the Indemnified Party will not
(unless required by law) admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Indemnifying Party's
prior written consent (which consent will not be unreasonably withheld).
(d) Any claim on account of Damages which does not involve a Third
Party Claim will be asserted by reasonably prompt written notice given by the
Indemnified Party to the Indemnifying Party from whom such indemnification is
sought. The failure by any Indemnified Party to so notify the Indemnifying Party
will not relieve the Indemnifying Party from any liability which it may have to
such Indemnified Party under this Agreement, except to the extent that the
Indemnifying Party shall have been actually prejudiced by such failure.
(e) In the event of payment in full by an Indemnifying Party to
any Indemnified Party in connection with any Third Party Claim, such
Indemnifying Party will be subrogated to and shall stand in the place of such
Indemnified Party as to any events or circumstances in respect of which such
Indemnified Party may have any right or claim relating to such Third Party Claim
against any claimant or plaintiff asserting such Third Party Claim or against
any other Person. Such Indemnified Party will cooperate with such Indemnifying
Party in a reasonable manner, and at the cost and expense of such Indemnifying
Party, in prosecuting any subrogated right or claim.
Section 8.5. SOLE AND EXCLUSIVE REMEDY. The indemnities contained in
this ARTICLE VIII shall be the sole and exclusive remedies of the Parties
hereto, their Affiliates, successors and assigns with respect to any and all
claims arising out of or relating to this Agreement, the transactions
contemplated hereby, any provision hereof or the breach or performance thereof.
27
Section 8.6. TERMINATION OF INDEMNIFICATION OBLIGATIONS. Except as
set forth in the following sentence, the indemnification obligations of each of
Seller and Purchaser hereunder will survive, including surviving the sale or
other transfer by any party of any assets or businesses or the assignment by any
party of any Liabilities. The obligations of each Party to indemnify, defend and
hold harmless Indemnified Parties (i) pursuant to Sections 8.1(i) and 8.2(i),
shall terminate when the applicable representation or warranty expires pursuant
to Section 11.4 and (ii) pursuant to Sections 8.1(ii) and 8.2(ii) shall
terminate upon the expiration of all applicable statutes of limitation (giving
effect to any extensions thereof, other than extensions caused by the applicable
Indemnified Party); PROVIDED, HOWEVER, that as to clauses (i) and (ii) above,
such obligations to indemnify, defend and hold harmless shall not terminate with
respect to any individual claim as to which the Indemnified Party shall have,
before the expiration of the applicable period, previously delivered a notice
(stating in reasonable detail the basis of such claim) to the Indemnifying
Party.
Section 8.7. EFFECT OF INVESTIGATION. The right to indemnification
pursuant to Sections 8.1(i) and 8.2(i) shall not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and
delivery of this Agreement.
ARTICLE IX
TAXES
Section 9.1. TRANSFER, SALES AND USE TAXES. Notwithstanding anything
to the contrary in this Agreement, all transfer, documentary, sales, use, stamp,
registration, value added and other similar Taxes and fees (including any
penalties and interest) incurred in connection with the transactions
contemplated by this Agreement shall be shared equally by Seller and Purchaser.
Each Party hereto agrees to file all necessary documentation (including all Tax
Returns) with respect to all such Taxes in a timely manner. On or before the
Closing Date, Purchaser shall provide to Seller a required sales and use tax
purchase exemption certificate or certificates with respect to the Assets to the
extent they constitute (i) exempt tangible personal property held for resale or
for incorporation into goods to be held for resale, (ii) exempt manufacturing
and production equipment, or (iii) otherwise are exempt from the sales and use
tax upon the provision of an appropriate exemption certificate.
Section 9.2. TAX RETURNS. Seller shall prepare and file or cause to
be prepared and filed all Tax Returns (including amendments thereto) which are
required to be filed in respect of the Assets for any taxable period ending on
or before the Closing Date and any taxable period that includes (but does not
end on) the Closing Date (a
28
"Straddle Period"). Purchaser hereby irrevocably designates, and agrees to cause
each of its Affiliates to designate Seller as its agent to take any and all
actions necessary or incidental to the preparation and filing of such Tax
Returns. All Tax Returns (including amendments thereto) required to be filed in
respect of the Assets for taxable periods beginning after the Closing Date shall
be the responsibility of Purchaser.
Section 9.3. PRORATIONS. Purchaser and Seller agree that Taxes with
respect to the Assets shall be prorated as of the Closing Date, with Seller
liable to the extent such Taxes relate to any time period on or before the
Closing Date, and Purchaser liable to the extent such Taxes relate to periods
commencing after the Closing Date.
Section 9.4. ALLOCATION OF STRADDLE PERIOD TAXES. In the case of any
Straddle Period:
(a) PERIODIC TAXES. (i) The periodic Taxes with respect to the
Assets that are not based on income or receipts (E.G., property Taxes) for the
portion of any Straddle Period which ends on the Closing Date shall be computed
based on the ratio of the number of days in such portion of the Straddle Period
and the number of days in the entire taxable period, and (ii) the periodic taxes
with respect to the Assets that are not based on income or receipts for the
portion of any Straddle Period beginning on the day after the Closing Date shall
be computed based on the ratio of the number of days in such portion of the
Straddle Period and the number of days in the entire taxable period.
(b) NON-PERIODIC TAXES. (i) The Taxes with respect to the Assets
for that portion of any Straddle Period ending on the Closing Date (other than
Taxes described in Section 9.4(a) above), shall be computed on a
"closing-of-the-books" basis as if such taxable period ended as of the close of
business on the Closing Date, and (ii) the Taxes with respect to the Assets for
that portion of any Straddle Period beginning after the Closing Date (other than
Taxes described in Section 9.4(a) above), shall be computed on a
"closing-of-the-books" basis as if such taxable period began on the day after
the Closing Date.
ARTICLE X
TERMINATION
Section 10.1. VOLUNTARY TERMINATION. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any time
prior to the Closing Date by the mutual written consent of Purchaser and Seller.
29
Section 10.2. AUTOMATIC TERMINATION. In the event of a termination
of the Merger Agreement, this Agreement shall automatically and immediately
terminate.
Section 10.3. EFFECT OF TERMINATION. In the event of the termination
of this Agreement, all further obligations of the Parties hereunder shall
terminate, and the transactions contemplated hereby shall be abandoned without
further action or liability by any of the Parties hereto, except that (i)
Section 10.3 ("Effect of Termination"), Section 11.2 ("Notices"), Section 11.3
("Choice of Law, Dispute Resolution"), Section 11.6 ("Entire Agreement;
Waivers"), Section 11.8 ("Severability"), Section 11.10 ("Expenses") and Section
11.12 ("Parties in Interest") shall survive such termination and (ii) nothing
shall relieve any Party hereto from liability for any breach of this Agreement
prior to such termination.
ARTICLE XI
MISCELLANEOUS
Section 11.1. ASSIGNMENT. No Party to this Agreement will convey,
assign or otherwise transfer any of its rights or obligations under this
Agreement without the prior written consent of the other Party in its sole and
absolute discretion. Notwithstanding the foregoing, any Party may (without
obtaining any consent) assign, delegate or sublicense all or any portion of its
rights and obligations hereunder to (i) the surviving entity resulting from a
merger or consolidation involving such Party, (ii) the acquiring entity in a
sale or other disposition of (A) all or substantially all of the assets of such
Party as a whole or (B) any line of business or division of such Party, (iii)
any other Person that is created as a result of a spin-off from, or similar
reorganization transaction of, such Party or any line of business or division of
such Party, (iv) in the case of Purchaser, to Maquiladora or (v) an Affiliate.
In the event of an assignment pursuant to (ii) or (iii) above, the non-assigning
Party shall, at the assigning Party's request, use good faith commercially
reasonable efforts to enter into separate agreements with each of the resulting
entities and take such further actions as may be reasonably required to assure
that the rights and obligations under this Agreement are preserved, in the
aggregate, and divided equitably between such resulting entities. Any
conveyance, assignment or transfer requiring the prior written consent of
another Party pursuant to this Section 11.1 which is made without such consent
will be void ab initio. No assignment of this Agreement will relieve the
assigning Party of its obligations hereunder.
Section 11.2. NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the date of
delivery if delivered personally, (b) upon confirmation of receipt if delivered
by telecopy or telefacsimile, (c) on the first Business Day following the date
of dispatch if delivered by a recognized
30
next-day courier service, or (d) on the fifth Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the Party
to receive such notice:
If to Purchaser, to:
Alpha Industries, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Financial Officer
With copies to (not effective for purposes of notice):
Alpha Industries, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
General Counsel
or if to Seller, to:
Conexant Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Senior Vice President, General
Counsel and Secretary
With a copy to (not effective for purposes of notice):
▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
31
Section 11.3. CHOICE OF LAW; DISPUTE RESOLUTION.
(a) CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (without giving effect to
choice of law principles).
(b) DISPUTE RESOLUTION. In the event that from and after the Closing, any
dispute, claim or controversy (collectively, a "Dispute") arises out of or
relates to any provision of this Agreement or the breach, performance,
enforcement or validity or invalidity thereof, the designees of Seller's Chief
Executive Officer and Purchaser's Chief Executive Officer will attempt a good
faith resolution of the Dispute within thirty (30) days after either Party
notifies the other Party in writing of the Dispute. If the Dispute is not
resolved within thirty (30) days of the receipt of the notification, or within
such other time as they may agree, the Dispute will be referred for resolution
to Seller's Chief Executive Officer and Purchaser's Chief Executive Officer.
Should they be unable to resolve the Dispute within thirty (30) days following
the referral to them, or within such other time as they may agree, Seller and
Purchaser will then attempt in good faith to resolve such Dispute by mediation
in accordance with the then-existing CPR Mediation Procedures promulgated by the
CPR Institute for Dispute Resolution, New York City. If such mediation is
unsuccessful within thirty (30) days (or such other period as the Parties may
mutually agree) after the commencement thereof, such Dispute shall be submitted
by the Parties to binding arbitration, initiated and conducted in accordance
with the then-existing American Arbitration Association Commercial Arbitration
Rules, before a single arbitrator selected jointly by Seller and Purchaser, who
shall not be the same person as the mediator appointed pursuant to the preceding
sentence. If Seller and Purchaser cannot agree upon the identity of an
arbitrator within ten (10) days after the arbitration process is initiated, then
the arbitration will be conducted before three arbitrators, one selected by
Seller, one selected by Purchaser and the third selected by the first two. The
arbitration shall be conducted in San Francisco, California and shall be
governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16, and
judgment upon the award may be entered by any court having jurisdiction thereof.
The arbitrators shall have case management authority and shall resolve the
Dispute in a final award within one hundred eighty (180) days from the
commencement of the arbitration action, subject to any extension of time thereof
allowed by the arbitrators upon good cause shown.
Section 11.4. SURVIVAL OF REPRESENTATIONS AND WARRANTIES AND COVENANTS.
The respective representations and warranties of the Parties contained in this
Agreement (other than those set forth in the following sentence) will survive
the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the Closing and will continue in full force
and effect until six (6) months after the Closing Date and will then expire. The
representations and warranties of the Parties
32
contained in Section 3.1, Section 3.2, Section 3.3, Section 3.9, Section 3.11,
Section 4.1, Section 4.2, and Section 4.3 will survive the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the Closing and will continue in full force and effect until all
applicable statutes of limitation (including any extensions thereof) have
expired and will then expire. All covenants of the Parties contained in this
Agreement will remain in full force and effect after, and survive, the Closing
(other than those to be performed at or prior to the Closing).
Section 11.5. LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. Except
for the representations and warranties set forth in this Agreement, the Assets
are being sold "AS IS, WHERE IS, AND WITH ALL FAULTS." EXCEPT FOR THE
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER CONCERNING THE ASSUMED LIABILITIES, THE
ASSETS, OR ANY OTHER MATTER, EXPRESS OR IMPLIED, ORAL, OR WRITTEN. SELLER HEREBY
SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTY OF MERCHANTABILITY AND THE IMPLIED
WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE.
Section 11.6. ENTIRE AGREEMENT; WAIVERS. This Agreement, together
with all exhibits and Schedules hereto, and the other agreements and instruments
of the Parties delivered in connection herewith constitute the entire agreement
and supersede all prior agreements and understandings both written and oral,
among the Parties with respect to the subject matter hereof. The failure of any
Party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
Section 11.7. COUNTERPARTS. This Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement. This Agreement may be executed and delivered by telecopier with the
same force and effect as if it were a manually executed and delivered
counterpart.
Section 11.8. SEVERABILITY. If any provision of this Agreement or
the application thereof to any Person or circumstance is determined by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, will remain in full force and effect and will in no way be
affected, impaired or invalidated thereby. If the economic or legal substance of
the transactions contemplated hereby is affected in any manner adverse to any
Party as a result thereof, the Parties will negotiate in good faith in an effort
to agree upon a suitable and equitable substitute provision to effect the
original intent of the Parties.
33
Section 11.9. HEADINGS. The headings of the Articles and Sections
herein are inserted for convenience of reference only and are not intended to be
a part of or to affect the meaning or interpretation of this Agreement.
Section 11.10. EXPENSES. Except as otherwise provided in this
Agreement, each of the Parties shall be liable for its own expenses incurred in
connection with the negotiation, preparation, execution and performance of this
Agreement prior to Closing.
Section 11.11. AMENDMENTS. This Agreement cannot be amended,
modified or supplemented except by a written agreement executed by Seller and
Purchaser.
Section 11.12. PARTIES IN INTEREST. This Agreement is binding upon
and is for the benefit of the Parties hereto and their respective successors and
permitted assigns. This Agreement is not made for the benefit of any Person not
a Party hereto, and no Person other than the Parties hereto or their respective
successors and permitted assigns will acquire or have any benefit, right, remedy
or claim under or by reason of this Agreement, except that the provisions of
Sections 8.1 and 8.2 hereof shall inure to the benefit of the Persons referred
to therein.
Section 11.13. SCHEDULES AND EXHIBITS. Inclusion of an item or
matter on any of the Schedules or Exhibits attached hereto shall not be deemed
to be an admission by any Party that such item or matter is required to be
disclosed in such Schedule or Exhibit. Each disclosure on each Schedule, to the
extent specified therein, qualifies the correspondingly numbered representation
and warranty or covenant contained herein and, to the extent it is apparent on
the face of such disclosure that such disclosure qualifies another
representation or warranty contained herein, such other representation and
warranty.
Section 11.14. COOPERATION FOLLOWING THE CLOSING. Following the
Closing, the Parties shall each deliver to the other such further information
and documents and shall execute and deliver to the other such further
instruments and agreements as the other shall reasonably request to consummate
or confirm the transactions provided for in this Agreement, to accomplish the
purpose of this Agreement or to assure to the other the benefits of this
Agreement.
[The remainder of this page is left intentionally blank; signature page follows]
34
IN WITNESS WHEREOF, each of the Parties listed below has executed this
U.S. Asset Purchase Agreement as of the day and year first above written.
CONEXANT SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board and Chief
Executive Officer
ALPHA INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and Chief Executive Officer
35
AMENDMENT TO THE
U.S. ASSET PURCHASE AGREEMENT
AMENDMENT NO. 1 TO THE U.S. ASSET PURCHASE AGREEMENT, dated as
of June 25, 2002 (this "Amendment"), to the U.S. Asset Purchase Agreement, dated
as of December 16, 2001, by and between CONEXANT SYSTEMS, INC. ("Seller") and
ALPHA INDUSTRIES, INC. ("Purchaser") (as amended, modified or supplemented from
time to time, the "U.S. Asset Purchase Agreement").
W I T N E S S E T H :
WHEREAS, Seller and Purchaser wish to amend the U.S. Asset
Purchase Agreement as set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions. Capitalized terms used herein and not
defined herein have the meanings ascribed to them in the U.S. Asset Purchase
Agreement.
SECTION 2. Conditions to Effectiveness of this Amendment. This
Amendment shall become effective on June 25, 2002 (the "Amendment Effective
Date").
SECTION 3. Amendment to the U.S. Asset Purchase Agreement.
(a) Article I is hereby amended by deleting in its
entirety the definition of "Mexican Stock and Asset
Purchase Agreement" and inserting in lieu thereof the
following:
"Mexican Asset Purchase Agreement" means that certain
Amended and Restated Mexican Asset Purchase
Agreement, dated as of June 25, 2002, by and between
Seller and Purchaser, as the same may be amended,
modified or supplemented from time to time.
"Mexican Stock and Asset Purchase Agreement" means
the Mexican Stock Purchase Agreement and the Mexican
Asset Purchase Agreement, individually and
collectively.
"Mexican Stock Purchase Agreement" means that certain
Mexican Stock Purchase Agreement, dated as of June
25, 2002, by and
between Seller and Purchaser, as the same may be
amended, modified or supplemented from time to time.
(b) Article I is hereby amended by deleting in its
entirety the definition of "Purchase Price" and
inserting in lieu thereof the following:
"Purchase Price" means fifty million eight hundred
ninety thousand dollars (U.S.$50,890,000).
[No additional text on this page]
2
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
CONEXANT SYSTEMS, INC.,
as Seller
By: /s/ ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Senior Vice President, General
Counsel and Secretary
ALPHA INDUSTRIES, INC.,
as Purchaser
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President,
Chief Financial Officer,
Treasurer and Secretary