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EXHIBIT 2
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
DIGITAL EQUIPMENT CORPORATION,
ON THE ONE HAND,
AND
INTEL CORPORATION,
ON THE OTHER HAND
DATED MARCH 6, 1998
Confidential Treatment has been requested as to certain portions of this
agreement. The term "Confidential Treatment" and the ▇▇▇▇ "*" as used
throughout this Exhibit 2 means that the material has been omitted and filed
separately with the Securities and Exchange Commission.
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TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS............................................................................................1
1.01. Definitions.......................................................................................1
1.02. Index of Other Defined Terms......................................................................7
ARTICLE II PURCHASE AND SALE.....................................................................................8
2.01. Purchased Assets..................................................................................8
2.02. Excluded Assets...................................................................................9
2.03. Assumption of Liabilities........................................................................10
2.04. Excluded Liabilities.............................................................................10
2.05. Assignment of Contracts and Rights...............................................................11
2.06. Purchase Price...................................................................................11
2.07. Closing..........................................................................................12
2.08. Adjustment to Initial Purchase Price.............................................................13
2.09. Reimbursement for Losses on Disposition of Purchased Assets......................................13
2.10. Dual Use Assets..................................................................................14
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER............................................................15
3.01. Existence and Good Standing......................................................................15
3.02. Authorization and Enforceability.................................................................15
3.03. Governmental or Other Authorization by Seller's Subsidiaries.....................................15
3.04. Non-Contravention................................................................................15
3.05. Undisclosed Liabilities; Books and Records.......................................................16
3.06. Absence of Certain Changes.......................................................................16
3.07. Properties: Material Leases; Tangible Assets.....................................................16
3.08. Additional Capital Equipment.....................................................................17
3.09. Inventories......................................................................................17
3.10. Litigation.......................................................................................17
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3.11. Material Contracts...............................................................................17
3.12. Permits; Required Consents.......................................................................18
3.13. Compliance with Applicable Laws..................................................................18
3.14. Intellectual Property............................................................................18
3.15. Environmental Compliance.........................................................................21
3.16. Insurance........................................................................................21
3.17. Tax Matters......................................................................................22
3.18. Sufficiency of and Title to the Purchased Assets.................................................22
3.19. Product Warranties...............................................................................22
3.20. Backlog..........................................................................................23
3.21. Supplier Relationships...........................................................................23
3.22. Representations Regarding Real Property..........................................................23
3.23. Full Disclosure..................................................................................24
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASER..........................................................24
4.01. Existence and Good Standing......................................................................24
4.02. Authorization and Enforceability.................................................................24
4.03. Governmental or Other Authorization..............................................................24
4.04. Non-Contravention................................................................................24
4.05. Litigation.......................................................................................25
4.06. Compliance with Applicable Laws..................................................................25
4.07. Projections......................................................................................25
ARTICLE V COVENANTS OF SELLER...................................................................................25
5.01. Operation of Business Prior to Closing...........................................................25
5.02. No Continuing Negotiations.......................................................................27
5.03. Notices of Certain Events........................................................................27
5.04. Supplier Customer Introductions..................................................................27
5.05. Transfer of Permits..............................................................................28
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5.06. Certificate of Performance by Seller.............................................................28
5.07. Transfer of Tangible Media.......................................................................28
5.08. Release of Moral Rights..........................................................................28
ARTICLE VI COVENANTS OF PURCHASER...............................................................................29
6.01. Notices of Certain Events........................................................................29
6.02. Use of Name......................................................................................29
6.03. Certificate of Performance by Purchaser..........................................................29
ARTICLE VII COVENANTS OF ALL PARTIES............................................................................30
7.01. Efforts to Close; Certain Filings................................................................30
7.02. Further Assurances...............................................................................30
7.03. Public Announcements.............................................................................31
7.04. Tax Matters......................................................................................31
7.05. Allocation of Purchase Price.....................................................................32
7.06. Confidentiality..................................................................................32
7.07. Access to Information............................................................................32
7.08. Lease Agreement and Transition Services Agreement................................................33
7.09. Knowing Misrepresentation or Omission............................................................33
7.10. Environmental Matters............................................................................33
ARTICLE VIII CONDITIONS TO CLOSING..............................................................................34
8.01. Conditions to Obligations of Purchaser...........................................................34
8.02. Conditions to Obligations of Seller..............................................................34
ARTICLE IX INDEMNIFICATION......................................................................................35
9.01. Agreement to Indemnify...........................................................................35
9.02. Indemnification Payments and Survival............................................................36
9.03. Claims for Indemnification.......................................................................37
9.04. Defense of Claims................................................................................37
ARTICLE X TERMINATION...........................................................................................38
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10.01. Grounds for Termination.........................................................................38
10.02. Effect of Termination...........................................................................38
ARTICLE XI MISCELLANEOUS........................................................................................38
11.01. Notices.........................................................................................38
11.02. Amendments; Waivers.............................................................................40
11.03. Expenses........................................................................................40
11.04. Successors and Assigns..........................................................................40
11.05. Governing Law...................................................................................40
11.06. Counterparts; Effectiveness.....................................................................40
11.07. Entire Agreement; Survival of Settlement Agreement..............................................41
11.08. Captions........................................................................................41
11.09. Severability....................................................................................41
11.10. Construction....................................................................................41
11.11. Dispute Resolution..............................................................................41
11.12. Submission to Jurisdiction; Agent for Service...................................................41
11.13. Meaning of Include and Including................................................................42
11.14. Third Party Beneficiaries.......................................................................42
11.15. Confidentiality.................................................................................42
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EXHIBITS
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Exhibit 1.01A Form of Assignment of Assumption Agreement
Exhibit 1.01B Form of ▇▇▇▇ of Sale
Exhibit 1.01C Form of Human Resources Agreement
Exhibit 1.01D(1) Form of Asset Purchase Agreement
Exhibit 1.01D(2) Form of Real Estate Purchase Agreement
Exhibit 1.01E Form of License Agreement
Exhibit 1.01F Form of Sales Agreement
Exhibit 1.01G Form of Supply Agreement
SCHEDULES
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Schedule 1.01 Permitted Liens
Schedule 2.01(a) Real Property Legal Description
Schedule 2.01(b) Inventory
Schedule 2.01(d) Equipment
Schedule 2.01(f) Prepaid Expenses
Schedule 2.01(h) Assumed Contracts
Schedule 2.01(l) Software Tools Used in Business
Schedule 2.02(b) Excluded Contracts
Schedule 2.06(a)(1) Seller's Application of GAAP
Schedule 2.06(a)(2) Purchaser's Inventory Valuation Practices
Schedule 2.06(a)(3) Unaudited Statement as of December 26, 1997
Schedule 3.01 Location of Purchased Assets
Schedule 3.03 Governmental Authorizations
Schedule 3.04 Non-Contravention Exceptions
Schedule 3.05(a) Liabilities of Seller
Schedule 3.06 Absence of Certain Changes
Schedule 3.07(c) Personal Property Leases
Schedule 3.08 Capital Equipment or Order at 10/27/97
Schedule 3.10 Litigation
Schedule 3.11(a) Material Contracts
Schedule 3.11(c) Largest Suppliers
Schedule 3.12(a) Permits
Schedule 3.12(b) Required Consents
Schedule 3.14(b) Trademarks
Schedule 3.14(c) Patents
Schedule 3.14(d) Copyrights and Mask Work Rights
Schedule 3.14(f) Intellectual Property Assets Contracts
Schedule 3.14(h) Infringement Generally
Schedule 3.14(i) Software Tools
Schedule 3.15(a) Environmental Permits
Schedule 3.15(c) Environmental Events or Reports
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Schedule 3.16 Insurance Policies
Schedule 3.17 Tax Matters
Schedule 3.19 Product Warranties
Schedule 3.20 Backlog
Schedule 3.21 Material Disagreement or Change with Material Customers
Schedule 3.22(b) Representations Regarding Real Property
Schedule 3.22(f)(1) Hudson, Massachusetts Title Commitment
Schedule 4.03 Governmental Authorizations
Schedule 4.04 Required Consents
Schedule 7.10 Summary of Identified Environmental Contamination
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of March 6, 1998 (the "Agreement"),
is by and between Digital Equipment Corporation, a Massachusetts corporation,
("Seller"), and Intel Corporation, a Delaware corporation ("Purchaser"). All
capitalized terms have the meanings ascribed to such terms in Article I or as
otherwise defined herein.
W I T N E S S E T H:
WHEREAS, Purchaser and Seller entered into a Settlement Agreement dated
October 27, 1997 (the "Settlement Agreement"); and
WHEREAS, pursuant to the Settlement Agreement,
(i) Seller has agreed to sell to Purchaser, and Purchaser has agreed to
purchase from Seller, substantially all of the assets used in the Business;
and
(ii) Purchaser has agreed to assume certain Liabilities relating to the
Business in connection with such purchase of such assets; and
(iii) Purchaser has agreed to license from Seller, and Seller has agreed to
license to Purchaser, certain Intellectual Property Rights not included in
such assets to be sold to Purchaser;
(iv) Seller has agreed to lease from Purchaser, and Purchaser has agreed to
lease to Seller, certain real property and improvements included in such
assets to be sold to Purchaser; and
WHEREAS, the Settlement Agreement provides for Purchaser and Seller to
further document the above;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
representations, warranties, covenants and agreements hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. The following terms, as used herein, have the following
meanings:
"Acquisition Documents" means this Agreement, the ▇▇▇▇ of Sale, the Real
Property Deeds, the Assumption Agreement, the License Agreement, the Lease
Agreement, the Human Resources Agreement, the Transition Services Agreement, the
Israeli Asset Purchase Agreements and any other document or agreement executed
in connection with any of the foregoing, together with any Exhibits and
Schedules thereto, and in each case as modified, amended, supplemented, restated
or renewed from time to time.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under direct or indirect common control
with such other Person.
"Alpha" means the semiconductor product family owned by Seller and branded
under the trade name Alpha, which is designed, developed, manufactured and
marketed by Seller.
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"Alpha Assets" means the assets of Seller used in the Alpha Operations
including, but not limited to, all Alpha Products, all Alpha Products finished
goods inventory, all hardware and software tools principally relating to Alpha
or used principally by Alpha Employees, all Alpha IP Assets, and all other
intangible property principally relating to Alpha Products and all other assets
principally relating to the Alpha Operations.
"Alpha IP Assets" means the Intellectual Property Rights (as defined in
Section 3.14(a)(i)) relating to Alpha.
"Alpha Operations" means the business of designing, developing and
marketing Alpha Products as conducted by Seller.
"Alpha Product" means any semiconductor product or device previously or
currently manufactured and marketed or currently under development by Seller
that is part of Alpha, together with associated software and packaging.
"Ancillary Agreements" means the Patent Cross License between Seller and
Purchaser attached as Exhibit C to the Settlement Agreement, the Purchaser
Release attached as Exhibit D to the Settlement Agreement, the Seller Release
attached as Exhibit E to the Settlement Agreement, the Supply Agreement and the
Sales Agreement.
"Applicable Law" means, with respect to any Person, any federal, state,
local or foreign statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment or decree of any
Governmental Authority (including any Environmental Law) applicable to such
Person or any of its Affiliates or Plan Affiliates or any of their respective
properties, assets, officers, directors, employees, consultants or agents.
"Associate" or "Associated With" means, when used to indicate a
relationship with any Person, (a) any other Person of which such first Person is
an officer, director or partner or is, directly or indirectly, the beneficial
owner of ten percent (10%) or more of any class of equity securities,
partnership or membership interests or other comparable ownership interests
issued by such other Person, (b) any trust or other estate in which such first
Person has a ten percent (10%) or more beneficial interest or as to which such
first Person serves as trustee or in a similar fiduciary capacity and (c) any
relative or spouse of such first Person who has the same home as such first
Person.
"Assumption Agreement" means that certain Assignment and Assumption
Agreement dated as of the Closing Date, to be executed by Purchaser, and, as
Seller shall reasonably request, by appropriate subsidiaries of Purchaser in
favor of Seller, in substantially the form attached hereto as EXHIBIT 1.01A.
"▇▇▇▇ of Sale" means that certain ▇▇▇▇ of Sale dated as of the Closing
Date, to be executed by Seller, and, as Purchaser shall reasonably request, by
appropriate subsidiaries of Seller, in favor of Purchaser, in substantially the
form attached hereto as EXHIBIT 1.01B.
"Books and Records" means with respect to any Person, all files, documents,
instruments, papers, books and records of such Person's operations, affairs,
financial condition, results of operations, prospects, assets or Liabilities,
including financial statements, letters from accountants and auditors, budgets,
pricing guidelines, journals, deeds, title policies, contracts, licenses,
customer lists, Permits, computer files and programs, retrieval programs,
operating data and plans, projections, forecasts and environmental studies and
plans but excludes personnel records, including, without limitation, employees'
medical records and information, and information relating to employees' job
performance.
"Business" means the semiconductor manufacturing business as currently
conducted by Seller, including all products and aspects of such business under
current research or development, but excluding the Alpha Operations and all
Alpha Assets.
"Business Day" means each day other than a Saturday, Sunday or other day on
which commercial banks in New York City, New York are authorized or required by
law to close.
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"Closing Date" means the date of the Closing.
"Contracts" means all written contracts, agreements, options, leases,
licenses, sales and purchase orders, warranties, commitments and other
instruments of any kind, to which either Seller is a party or is otherwise bound
and which relate to the Business or the Purchased Assets.
"Damages" means all demands, claims, actions or causes of action,
assessments, losses, damages, costs, expenses, Liabilities, judgments, awards,
fines, response costs, sanctions, Taxes, penalties, charges and amounts paid in
settlement, including (a) interest on cash disbursements in respect of any of
the foregoing at the Reference Rate in effect from time to time, plus two
percent (2%), compounded quarterly, from the date each such cash disbursement is
made until the date the Person incurring such cash disbursement shall have been
indemnified in respect thereof and (b) reasonable out-of-pocket costs, fees and
expenses (including costs, fees and expenses of attorneys, accountants and
auditors and other agents of, or other Persons retained by, such Person).
"Environmental Law" means any federal, state, interstate or local law,
regulation, rule, requirement, administrative interpretation, directive,
judgment, decree, order, permit, license or Applicable Law pertaining to the
protection of human health, safety or the environment, including, but not
limited to, the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
the Clean Air Act, the Water Pollution Control Act, the Safe Drinking Water Act
and the Toxic Substances Control Act ("TSCA").
"Equipment" means all machinery, equipment, furniture, office equipment,
communications equipment, computer equipment, vehicles, spare and replacement
parts, fuel and other tangible personal property (and interests in any of the
foregoing), of the Business.
"GAAP" means generally accepted accounting principles in the United States
of America applied on a consistent basis.
"Governmental Approval" means an authorization, consent, approval, permit
or license issued by, or a required registration or filing with, any
Governmental Authority.
"Governmental Authority" means any foreign or domestic federal, state or
local governmental authority, or any political or other subdivision, department
or branch of any of the foregoing , or any regulatory, administrative or
governmental agency, or any court or the New York Stock Exchange or the National
Association of Securities Dealers.
"Hazardous Substance" means any substance or material (a) the presence or
potential presence of which requires reporting, the preparation of a plan, an
investigation or remediation under any Environmental Law, (b) that is defined as
a "hazardous waste", "hazardous material" or "hazardous substance" under any
Environmental Law, (c) that is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic or mutagenic or otherwise hazardous and is
regulated by any Governmental Authority having or asserting jurisdiction over
Seller, the Business, or (d) that contains gasoline, diesel fuel or other
petroleum hydrocarbons, polychlorinated biphenyls (PCBs) or asbestos.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976,
as amended.
"HSR Filings" means the filings made under the HSR Act by Seller and
Purchaser in respect of Seller's sale and Purchaser's purchase of the Purchased
Assets.
"Human Resources Agreement" means that certain Human Resources Agreement
dated as of the Closing Date between Purchaser and Seller, in the form attached
hereto as EXHIBIT 1.01C.
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"Indemnifying Party" means (a) with respect to any Purchaser Indemnitee
asserting a claim under this Agreement, Seller and (b) with respect to any
Seller Indemnitee asserting a claim under this Agreement, Purchaser.
"Indemnitee" means (a) with respect to any Seller Indemnitee asserting a
claim under Article IX of this Agreement, such Seller Indemnitee and (b) with
respect to any Purchaser Indemnitee asserting a claim under this Agreement, such
Purchaser Indemnitee.
"Intellectual Property Claims" means all claims by Purchaser with respect
to an inaccuracy or misrepresentation in the representations and warranties of
Section 3.14 or a breach of the License Agreement.
"IRS" means the Internal Revenue Service.
"Israeli Asset Purchase Agreements" means that certain Asset Purchase
Agreement dated as of the Closing Date and that certain Real Estate Purchase
Agreement dated as of the Closing Date between Digital Equipment (DEC) Technical
Center (Israel) Ltd. and Intel Israel (74) Ltd., in substantially the forms
attached hereto as EXHIBIT 1.01D(1) and EXHIBIT 1.01D(2), respectively.
"Knowledge" means, with respect to any Person, the actual knowledge of such
Person, after reasonable inquiry. Without limiting the generality of the
foregoing, with respect to any Person that is a corporation, limited liability
company, partnership or other business entity, actual knowledge shall be deemed
to include the actual knowledge of the management employees of such Person
having responsibility, both day to day and supervisory, for the area of
operation of the business or the financial or legal matters to which the issue
of knowledge relates under the terms of this Agreement.
"Lease Agreement" means the assignment, sublease or other arrangement dated
as of the Closing Date between Purchaser, as lessor, and Seller, as lessee.
"Liability" means, with respect to any Person, any liability or obligation
of such Person of any kind, character or description, whether known or unknown,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated,
secured or unsecured, joint or several, due or to become due, vested or
unvested, executory, determined, determinable or otherwise and whether or not
the same is required to be accrued on the financial statements of such Person.
"License Agreement" means that certain License Agreement dated as of the
Closing Date between Seller, as licensor, and Purchaser, as licensee, in the
form attached hereto as EXHIBIT 1.01E.
"Lien" means, with respect to any asset, any mortgage, title defect or
objection, lien, pledge, charge, security interest, encumbrance or hypothecation
in respect of such asset.
"Material Adverse Effect" means, (i) with respect to any Person, a change
in, or effect on, or group of such changes in or effects on, the operations,
financial condition or results of operations, assets or Liabilities of the
Person, taken as a whole, that results in a material adverse effect on, or a
material adverse change in, the operations, financial condition, results of
operations, assets or Liabilities of such Person, taken as a whole, excluding
adverse changes in the general economy; and (ii) with respect to the Business
and the Purchased Assets, a change in, or effect on, or group of such changes in
or effects on, the Business and the Purchased Assets, taken as a whole, that
results in a material adverse effect on, or a material adverse change in, the
operations of the Business and the value of the Purchased Assets, taken as a
whole, excluding adverse changes in the general economy.
"Non-Alpha Products" means any semiconductor product or device currently
manufactured, marketed or under development by Seller as part of or in
connection with the Business, excluding Alpha Products, together with associated
software and packaging.
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"Non-Alpha Transferred IP Assets" means Seller's rights (subject to
Seller's prior, existing licenses) in the know how, trade secrets, copyrights,
and mask works embodied in the Non-Alpha technology (which for purposes of this
provision shall mean DEC Technology other than Retained IP Assets). For purposes
of this provision, Retained IP Assets shall mean patents or rights in and to
patent applications, continuations, continuations-in-part, divisions and reissue
applications, Alpha Design Technology, Alpha Supply Technology, Process
Technology and Packaging and Assembly as these terms are defined in the License
Agreement.
"Permitted Liens" means (a) Liens for Taxes or governmental assessments,
charges or claims the payment of which is not yet due, (b) statutory Liens of
landlords and Liens of carriers, warehousemen, mechanics, materialmen and other
similar Persons and other Liens imposed by Applicable Law incurred in the
ordinary course of business for sums not yet delinquent or immaterial in amount
and being contested in good faith, (c) Liens constituting or securing executory
obligations under any lease that constitutes an "operating lease" under GAAP and
(d) the Liens set forth on SCHEDULE 1.01 hereto. Notwithstanding the foregoing,
no Lien arising under the Code or ERISA with respect to the operation,
termination, restoration or funding of any Benefit Plan sponsored by, maintained
by or contributed to by Seller or any of its ERISA Affiliates or arising in
connection with any excise tax or penalty tax with respect to such Benefit Plan
shall be a Permitted Lien.
"Person" means an individual, corporation (including its subsidiaries),
partnership, association, limited liability company, trust, estate or other
similar business entity or organization, including a Governmental Authority.
"Post-Closing Tax Period" means any Tax period (or portion thereof) ending
after the Closing Date.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
on or before the close of business on the Closing Date.
"Purchaser Environmental Liabilities" means all Liabilities of Purchaser
(whether such Liabilities are owed to Governmental Authorities, third Persons or
otherwise, and whether Purchaser is the sole party obligated or holds the
obligation together with any other Person) with respect to the Business and the
Purchased Assets as follows: (a) attributable to Purchaser's failure to comply
with any Environmental Law in its operation of the Business after the Closing
Date, or (b) arising out of contamination by materials disposed of at any
location by or for Seller in its operation of the Business after the Closing
Date for which Purchaser is liable pursuant to any Environmental Law.
"Real Property Deeds" shall mean the appropriate deeds regarding the
Seller's Hudson, Massachusetts and Jerusalem, Israel facilities.
"Reference Rate" means the per annum rate of interest publicly announced
from time to time by Bank of America, NT & SA, as its prime rate (or reference
rate). Any change in the Reference Rate shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Sales Agreement" means that certain Intel Sales Agreement dated as of the
Closing Date between Purchaser and Seller, in the form attached hereto as
EXHIBIT 1.01F.
"Seller Environmental Liabilities" means all Liabilities of Seller (whether
such Liabilities are owed to Governmental Authorities, third Persons or
otherwise, and whether Seller is the sole party obligated or holds the
obligation together with any other Person) with respect to the Business and the
Purchased Assets as follows: (a) attributable to Seller's failure to comply with
any Environmental Law in its operation of the Business on or prior to the
Closing Date, or (b) arising out of contamination by materials disposed of at
any location by or for Seller in its operation of the Business on or prior to
the Closing Date for which the Seller is liable pursuant to any Environmental
Law.
"Subsidiary" means, with respect to any Person, (a) any corporation as to
which more than fifty percent (50%) of the outstanding stock having ordinary
voting rights or power (and excluding stock having voting rights
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only upon the occurrence of a contingency unless and until such contingency
occurs and such rights may be exercised) is owned or controlled, directly or
indirectly, by such Person and/or by one or more of such Person's direct or
indirect Subsidiaries and (b) any partnership, limited partnership, limited
liability company or other entity, whether incorporated or unincorporated (i) of
which the majority of the securities or interests having by the terms thereof
ordinary voting power to elect a majority of the Board of Directors or others
performing similar functions with respect to such corporation or other entity is
directly or indirectly owned or controlled by such Person or by one or more of
such Person's Subsidiaries, (ii) of which any Person or any such Person's
Subsidiaries is a general partner or managing member or (iii) which such Person
or any such Person's Subsidiaries otherwise controls.
"Supply Agreement" means that certain Supply Agreement for Alpha
Microprocessors, Alpha-Related Devices and Non-Alpha Devices dated as of the
Closing Date between Purchaser and Seller, in the form attached hereto as
EXHIBIT 1.01G.
"Taxes" means (a) all foreign, federal, state, local and other net income,
gross income, gross receipts, sales, use, ad valorem, value added, intangible,
unitary, capital gain, transfer, franchise, profits, license, lease, service,
service use, withholding, backup withholding, payroll, employment, estimated,
excise, severance, stamp, occupation, premium, property, prohibited
transactions, windfall or excess profits, customs, duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts with respect thereto, (b)
any Liability for payment of amounts described in clause (a) whether as a result
of transferee liability, of being a member of an affiliated, consolidated,
combined or unitary group for any period, or otherwise through operation of law
and (c) any Liability for the payment of amounts described in clause (a) or (b)
as a result of any tax sharing, tax indemnity or tax allocation agreement or any
other express or implied agreement to indemnify any other person for Taxes; and
the term "Tax" means any one of the foregoing Taxes.
"Tax Returns" means all returns, reports, forms or other information filed
or required to be filed with respect to any Tax.
"Title Commitment" shall mean the commitment for title insurance in favor
of Purchaser regarding the Seller's Hudson, Massachusetts facility which is
attached hereto as Schedule 3.22(f)(1).
"Title Policies" shall mean the title insurance policies in favor of
Purchaser regarding the Seller's Hudson, Massachusetts and Jerusalem, Israel
facilities to be received by Purchaser at Closing substantially in the form
described in the Title Commitment.
"Transition Services Agreement" means that certain Transition Services
Agreement dated as of the Closing Date between Purchaser and Seller.
"Tort Claim" means any claim, on any grounds or basis, under any statute or
common law, for personal injury, wrongful death, defamation, property damage,
product liability, wrongful interference with economic interests or other
tortuous conduct of a Person (whether or not liability is predicated on
negligence, intentional or reckless conduct, breach of contract or strict
liability).
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1.02. INDEX OF OTHER DEFINED TERMS. In addition to these terms defined
above, the following terms shall have the respective meanings given thereto in
the sections or agreements indicated below:
DEFINED TERM SECTION
------------ -------
Acquired Subsidiaries................................ 2.02
Alpha Employees...................................... Human Resources Agreement
ARM.................................................. 2.01(k)
Assumed Contracts.................................... 2.01(h)
Assumed Liabilities.................................. 2.03
Benefit Arrangement.................................. Human Resources Agreement
Benefit Plan......................................... Human Resources Agreement
Closing.............................................. 2.07
Closing Date Statement............................... 2.08(a)
Closing Purchase Price............................... 2.08(a)
Code................................................. Human Resources Agreement
Copyrights........................................... 3.14(a)
DEC Israel........................................... 5.01(b)(viii)
DEC Technology....................................... License Agreement
Disposition.......................................... 2.09(a)
Dual Use Assets...................................... 2.10
Employee Benefit Plan................................ Human Resources Agreement
Employee Pension Benefit Plan........................ Human Resources Agreement
ERISA................................................ Human Resources Agreement
Excluded Assets...................................... 2.02
Excluded Liabilities................................. 2.04
Financials........................................... 3.05(a)
▇▇▇▇▇▇ Property...................................... 7.10
I.C.................................................. 5.01(b)(viii)
I.C. Consent......................................... 5.01(b)(viii)
Identified Environmental Contamination............... 7.10
Initial Purchase Price............................... 2.06(b)
Initial Purchase Price Statement..................... 2.06(b)
Insurance Policies................................... 3.16
Intellectual Property Assets......................... 3.14
Intellectual Property Rights......................... 3.14(a)
Inventory............................................ 2.01(b)
Intel Israel......................................... 5.01(b)(viii)
IP-Related Knowledge................................. 3.14(a)
Loss on Disposition.................................. 2.09(a)
Marks................................................ 3.14(a)
Material Contracts................................... 3.11(a)
Mask Work Rights..................................... 3.14(a)
Outside Date......................................... 10.01(b)
Patents.............................................. 3.14(a)
Permits.............................................. 3.12(a)
Personal Property Leases............................. 3.07(c)
Plan................................................. 7.10(a)
Prepaid Expenses..................................... 2.01(f)
Proceedings.......................................... 3.10
Property............................................. 3.22
Property Laws........................................ 3.22(b)
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Purchase Price....................................... 2.06(a)
Purchased Assets..................................... 2.01
Purchaser............................................ Preamble
Purchaser Indemnitees................................ 9.01(a)
Purchaser Approvals.................................. 4.03
Purchaser's Closing Certificate...................... 6.03
Reimbursement Statement.............................. 2.09(c)
Required Consents.................................... 3.12(b)
Required Contractual Consent......................... 3.12(b)
Required Governmental Approval....................... 3.12(b)
Response Actions..................................... 7.10(a)
Scheduled Payables................................... 2.03(b)
Seller............................................... Preamble
Seller Indemnitees................................... 9.01(b)
Seller's Closing Certificate......................... 5.07
Settlement Agreement................................. Preamble
Sewer Permit......................................... 3.15(d)
Statement of Objections.............................. 2.08(a)
Tangible Property Values............................. 7.05(a)
Third Party Non-Patent IP Claims..................... 9.01(a)
Third Party Non-Patent IP Rights..................... 9.01(a)
Third Party Patent Claims............................ 9.01(a)
Third Party Transaction.............................. 5.04
TLA.................................................. 2.01(k)
Trademarks........................................... 3.14(a)
Transferred Copyrights and Mask
Work Rights...................................... 3.14(d)
Transition Services.................................. 7.08(b)
ARTICLE II
PURCHASE AND SALE
2.01. PURCHASED ASSETS. Upon the terms and subject to the conditions of
this Agreement, at the Closing, Purchaser agrees to purchase from Seller, and
Seller agrees to sell, transfer, assign and deliver to Purchaser, free and clear
of all Liens other than Permitted Liens (and subject to the Assumed
Liabilities), all assets of Seller used in the Business, whether owned by Seller
or subsidiaries of Seller, as the same shall exist on the Closing Date, (the
"Purchased Assets"). Without limiting the generality of the foregoing, the
Purchased Assets shall include all of Seller's right, title and interest in, to
and under:
(a) all real property and all buildings thereon, all improvements
thereto and fixtures thereon and all related rights at the Seller's Hudson,
Massachusetts and Jerusalem, Israel facilities, the legal description of
each being set forth on SCHEDULE 2.01(a);
(b) all items of inventory relating to the Business (the "Inventory"),
notwithstanding how classified in the financial records of Seller, whether
hardware, software, or otherwise, and including all raw materials, finished
goods, products, supplies, spare parts, samples and work in progress,
including those items listed on SCHEDULE 2.01(b);
(c) all collateral materials, manuals, sales materials and product
information materials used in the operation of the Business;
(d) all of the fixed and other tangible personal property used in
connection with the operation of the Business, including all capital assets
such as engineering workstations used in the design
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and development of products for the Business, all Equipment described on
SCHEDULE 2.01(d) (including Equipment on order as of October 27, 1997 as
described on SCHEDULE 2.01(d)), all Equipment which was ordered after
October 27, 1997 with the prior written approval of Purchaser, and spare
parts;
(e) all backlog of the Business;
(f) all prepaid expenses (including ad valorem taxes, leases and
rentals) existing on the Closing Date relating to goods and services to be
received by Purchaser after the Closing Date, including the prepaid
expenses listed on SCHEDULE 2.01(f) ("Prepaid Expenses");
(g) all information and other tangible assets relating to technical or
engineering support;
(h) any Contract relating to the Business which entails payment on an
annualized basis by either party thereto of less than $300,000 and which
does not require either party to purchase or supply all of the other
party's output or requirements, as applicable, and all Contracts listed on
SCHEDULE 2.01(h) (the "Assumed Contracts");
(i) the originals or true copies of all Books and Records relating to
the Business, other than those described in Section 2.02(a)(iv);
(j) all Equipment on order as of the Closing Date which was ordered
after October 27, 1997 with the prior written approval of Purchaser;
(k) all Non-Alpha Transferred IP Assets, provided that such Non-Alpha
Transferred IP Assets shall be subject to Seller's prior license grant to
Advanced Risc Machines Limited ("ARM") under the existing Technology
Licensing Agreement (the "TLA") between Seller and ARM. Subject to ARM's
consent, Seller shall assign the TLA to Purchaser, effective as of the
Closing;
(l) all software listed in SCHEDULE 2.01(l); and
(m) all goodwill associated with the Purchased Assets.
To the extent that some or all of the Purchased Assets are held by Seller
in one or more wholly owned corporate subsidiaries, Purchaser shall have the
option to acquire such Purchased Assets through the acquisition of all the stock
of such subsidiary or subsidiaries (any such acquired subsidiaries being herein
referred to as "Acquired Subsidiaries").
2.02. EXCLUDED ASSETS. Notwithstanding Section 2.01, Purchaser and Seller
expressly understand and agree that the following assets and properties of
Seller (the "Excluded Assets") shall be excluded from the Purchased Assets:
(a) the Alpha Operations and all Alpha Assets;
(b) all Contracts that are not Assumed Contracts, including the
Contracts listed on SCHEDULE 2.02(b);
(c) all Alpha IP Assets and all Intellectual Property Assets other
than the Non-Alpha Transferred IP Assets;
(d) the accounting records and Tax Returns of Seller, PROVIDED that
Purchaser shall have access to and be provided with copies of all
accounting records of Seller relating to the Business pursuant to Section
5.05;
(e) all cash and cash equivalents on hand and in banks on the Closing
Date;
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(f) all accounts receivable arising out of the ordinary course of the
Business on or prior to the Closing;
(g) all of Seller's Employee Benefit Plans, Employee Pension Benefit
Plans and Benefit Arrangements which cover the employees of the Business;
(h) all insurance contracts in effect as of the date of this Agreement
insuring the Purchased Assets; and
(i) all Equipment which was ordered after October 27, 1997 without the
prior written approval of Purchaser and all Equipment on order as of the
Closing Date which was ordered after October 27, 1997 without the prior
written approval of Purchaser.
2.03. ASSUMPTION OF LIABILITIES. Upon the terms and subject to the
conditions of this Agreement, effective at the time of Closing, Purchaser agrees
to assume and be solely responsible for the following liabilities (the "Assumed
Liabilities"):
(a) all Liabilities arising out of or under the Assumed Contracts
(subject to Section 2.05) as follows:
(i) Liabilities accruing on or after the Closing Date, except for
payment obligations for goods and services received by Seller prior to
the Closing Date; and
(ii) Liabilities accruing prior to the Closing Date but relating
to goods and services received by the Purchaser after the Closing
Date, provided that Purchaser has not otherwise paid for such benefits
in the Purchase Price;
(b) all Liabilities arising out of or under the ownership, use and
operation of the Business and Purchased Assets on or after the Closing
Date, except as provided in Section 2.04(a)-(g); and
(c) All Purchaser Environmental Liabilities; and
(d) the Purchase Tax and the Value Added Tax (such terms as defined in
the Israeli Asset Purchase Agreements) in connection with the sale of the
Purchased Assets in Israel and the payment provided for in Section
5.01(b)(ix).
2.04. EXCLUDED LIABILITIES. Notwithstanding any provision in this Agreement
or any of the other Acquisition Documents to the contrary, Purchaser is assuming
only the Assumed Liabilities and is not assuming any other Liability of Seller
of whatever nature, whether presently in existence or arising hereafter. All
such other Liabilities of Seller shall be retained by and remain Liabilities of
Seller (all such Liabilities of Seller not being assumed by Purchaser being
herein referred to as the "Excluded Liabilities"). Without limiting the
generality of the foregoing, none of the following shall be Assumed Liabilities,
and all of the following shall be Excluded Liabilities, for the purposes of this
Agreement:
(a) all Liabilities relating to any Seller Employee Benefit Plan,
Employee Pension Benefit Plan and Benefit Arrangement or other compensation
arrangements existing on or prior to the Closing Date which cover the
employees of the Business;
(b) all Liabilities under Contracts except for those Liabilities under
Assumed Contracts assumed by Purchaser pursuant to Section 2.03;
(c) all Taxes arising from or in connection with the Business or
Purchased Assets that are incurred during or attributable to the
Pre-Closing Tax Period, and any other Taxes of Seller of any kind,
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including Taxes relating to the sale of the Business and Purchased Assets
other than the tax obligations listed in Section 2.03(d), which shall be
paid by Purchaser;
(d) all claims against Seller, or any other Liabilities of any kind or
nature whatsoever relating to the Business or the Purchased Assets, which
accrue prior to the Closing Date, regardless of whether such claim or
Liability shall become known before, on or after the Closing Date, except
for Liabilities assumed under Section 2.03(a)(ii);
(e) all warranty or product liability claims with respect to products
sold prior to the Closing Date and with respect to products sold after the
Closing Date that were finished goods inventory on the Closing Date;
(f) all Seller Environmental Liabilities; and
(g) all Liabilities arising out of or under the ownership, use and
operation of the Excluded Assets.
2.05. ASSIGNMENT OF CONTRACTS AND RIGHTS. Anything in this Agreement or any
other Acquisition Document to the contrary notwithstanding, this Agreement shall
not constitute an agreement to assign any Contract which is to be an Assumed
Contract or any asset which is to be a Purchased Asset or any claim or right or
any benefit arising thereunder or resulting therefrom, if an attempted
assignment thereof, without the consent of a party thereto other than Seller,
would constitute a breach or other contravention thereof or in any way adversely
affect the rights of Purchaser or Seller thereunder. Seller shall use
commercially reasonable efforts (but without the requirement of any payment of
money by Seller) to obtain the consent of the other Persons for the assignment
thereof to Purchaser. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would adversely affect the rights
thereunder so that Purchaser would not receive substantially all such rights,
Seller and Purchaser shall cooperate in a mutually agreeable arrangement under
which Purchaser would obtain the benefits and assume the obligations thereunder
in accordance with this Agreement, including subcontracting, sub-licensing or
sub-leasing to Purchaser, or under which Seller would enforce for the benefit of
Purchaser, with Purchaser assuming Seller's obligations, any and all rights of
Seller against a third party thereto. Seller shall promptly pay to Purchaser
when received all monies received by Seller in respect of any Assumed Contract
or Purchased Asset, or transfer any claim or right or any benefit arising
thereunder, except to the extent the same represents an Excluded Asset. To the
extent the benefits therefrom and obligations thereunder have been provided by
alternative arrangements as provided above, the Contract shall be deemed an
Assumed Contract and the asset shall be deemed a Purchased Asset, provided that
Purchaser shall not be responsible for any Liabilities (i) arising out of a
claim of breach of such Assumed Contract due to the establishment of the
alternative arrangements, or (ii) arising out of such Assumed Contract or
Purchased Asset as a result of Seller's action without Purchaser's approval in a
manner inconsistent with the alternative arrangements or Seller's failure to act
at Purchaser's reasonable direction in connection with performance under the
Contract. To the extent the benefits therefrom and obligations thereunder have
not been provided by alternative arrangements reasonably satisfactory to
Purchaser, the Contract shall not be deemed an Assumed Contract and the asset
shall not be deemed a Purchased Asset. Seller covenants not to use, or to sell,
assign or otherwise extend the benefits to any Person from any such Contract or
asset in a manner which is competitive with the Business as owned and operated
by Purchaser.
2.06. PURCHASE PRICE; INITIAL PURCHASE PRICE.
(a) PURCHASE PRICE. The purchase price for the Purchased Assets (the
"Purchase Price") shall be equal to the net book value of the tangible
Purchased Assets as of the Closing Date, plus the amount of all Prepaid
Expenses. The net book value shall be calculated in accordance with GAAP as
set forth on SCHEDULE 2.06(a)(1), provided that net book value of Equipment
on order which is part of the Purchased Assets shall be equal to the
amounts actually paid therefor by Seller as of the Closing Date and net
book value of Inventory shall be calculated based solely on Purchaser's
current inventory valuation practices with respect to such Inventory as of
the Closing Date as set forth on SCHEDULE 2.06(a)(2). SCHEDULE 2.06(a)(3)
hereto presents an unaudited statement as of December 26, 1997 that sets
forth the net
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book value of the tangible Purchased Assets and Prepaid Expenses as of such
date, calculated in accordance with the provisions of this Section 2.06.
(b) INITIAL PURCHASE PRICE. Not less than 15 days preceding the
Closing Date, Seller shall deliver to purchaser an unaudited statement as
of a date not more than 45 days preceding the Closing Date (the "Initial
Purchase Price Statement") that has been prepared in accordance with the
provisions of Section 2.06(a) and on a basis consistent with the
methodologies and assumptions used in preparing Schedule 2.06(a)(3), which
shall set forth the net book value of the tangible Purchased Assets and
Prepaid Expenses as of such date (the "Initial Purchase Price").
2.07. CLOSING. The closing of the purchase and sale of the Business and the
Purchased Assets and assumption of the Assumed Liabilities hereunder (the
"Closing") shall take place at the offices of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C. in Boston, Massachusetts, as soon as practicable, but in
no event later than thirty (30) days after satisfaction of the condition set
forth in Sections 8.01(b) and 8.02(b), or at such other time or place as the
parties may agree. At the Closing:
(a) Seller shall execute and deliver to Purchaser such endorsements,
consents, assignments and other good and sufficient instruments of
conveyance and assignment as the parties and their respective counsel shall
deem reasonably necessary or appropriate to vest in Purchaser all right,
title and interest in, to and under the Purchased Assets, including without
limitation (i) a Massachusetts Quitclaim Deed conveying good, clear, record
and marketable title to the property described in the Title Policies,
subject only to the encumbrances listed in the Title Policies and one or
more Activity and Use Limitations recorded pursuant to Section 7.10 herein,
and which Deed shall state that the property conveyed does not constitute
all or substantially all of the assets of Seller in the Commonwealth of
Massachusetts, (ii) such affidavits and indemnities regarding parties in
possession, mechanics' liens and other matters, and gap indemnities, as the
title company shall customarily require to cause the Title Policies,
including the endorsements thereto described in the Title Commitments, to
be issued at Closing and (iii) satisfactory evidence, suitable for
recording, in accordance with Massachusetts conveying custom that the
person or persons executing the Deed are incumbent officers of Seller who
are authorized to execute and deliver the Deed and any other instruments of
conveyance;
(b) Seller and Purchaser shall execute, and have appropriate
subsidiaries execute and deliver Assumption Agreements;
(c) Seller and Purchaser shall execute, and have appropriate
subsidiaries execute and deliver Bills of Sale;
(d) Seller and Purchaser shall execute and deliver the License
Agreement;
(e) Seller and Purchaser shall execute and deliver the Lease
Agreement;
(f) Seller and Purchaser shall execute and deliver the Human Resources
Agreement;
(g) Seller and Purchaser shall execute and deliver the Transition
Services Agreement;
(h) Seller and Purchaser shall cause the Israeli Asset Purchase
Agreements to be duly executed and delivered;
(i) Seller shall deliver the Seller's Closing Certificate provided for
in Section 5.06;
(j) Purchaser shall deliver the Purchaser's Closing Certificate
provided for in Section 6.03; and
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(k) Purchaser and Seller shall deliver the schedule and any other
documentation resulting from the resolution regarding the status of Dual
Use Assets pursuant to Section 2.10.
(l) Purchaser shall pay the Initial Purchase Price by means of wire
transfer of immediately available funds to an account designated by Seller
at least two business days prior to the Closing Date.
2.08. ADJUSTMENT TO INITIAL PURCHASE PRICE.
(a) CLOSING DATE STATEMENT. Not more than 60 days following the
Closing Date, Seller shall deliver to Purchaser an unaudited statement as
of the Closing Date (the "Closing Date Statement") that has been prepared
in accordance with the provisions of Section 2.06(a) and on a basis
consistent with the methodologies and assumptions used in preparing the
Initial Purchase Price Statement, which shall set forth the net book value
of tangible Purchased Assets and Prepaid Expenses as of the Closing Date
(the "Closing Purchase Price"). Upon receipt of the Closing Date Statement,
Purchaser, and, if so desired by Purchaser and at Purchaser's expense,
Purchaser's independent accountant, shall be permitted during the
succeeding 30-day period to examine, and Seller shall make available, the
Books and Records of Seller associated with the Business and any work
papers and reconciliations prepared by Seller in the preparation of the
Closing Date Statement. As promptly as practicable and in no event later
than the last day of such 30-day period, Purchaser shall either inform
Seller in writing that the Closing Date Statement is acceptable, or object
to the Closing Date Statement by delivering to Seller a written statement
setting forth a specific description of Purchaser's objections to the
Closing Date Statement (the "Statement of Objections").
If Purchaser shall fail to deliver a Statement of Objections within
such 30-day period, the Closing Date Statement shall be deemed to have been
accepted by Purchaser. In the event that Purchaser shall object to the
Closing Date Statement as provided above, Seller and Purchaser shall
attempt in good faith to resolve any such objections within 15 days of
Seller's receipt of Purchaser's Statement of Objections. If Seller and
Purchaser shall be unable to resolve the matter within such 15-day period,
they shall, within 15 days thereafter, engage ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ to resolve
any unresolved objections of Purchaser and to make any adjustments to the
unresolved items on the Closing Date Statement. In making its determination
with respect to whether any such adjustments are appropriate, such
accountant shall evaluate those items or amounts in the Closing Date
Statement as to which Purchaser has objected and shall determine whether
such items have been prepared in accordance with the provisions of Section
2.06(a). The fees of such firm shall be borne by Seller if Purchaser's
calculation of disputed amounts as set forth in the Statement of Objections
is closer to such accountant's final determination than Seller's
calculation thereof, or by Purchaser if the Seller's calculation is closer
to that of such accountant's final determination. Seller and Purchaser and
their respective accountants shall each make readily available to such firm
all relevant Books and Records and work papers prepared by them relating to
the Closing Date Statement as may be requested by such firm to resolve the
disputes. Such firm's resolution of the dispute and its adjustments to the
Closing Date Statement shall be conclusive and binding upon the parties.
(b) ADJUSTMENT TO INITIAL PURCHASE PRICE. Upon the later to occur of
(i) acceptance or deemed acceptance of the Closing Date Statement or (ii)
the resolution of Purchaser's objections in connection therewith, Seller
shall pay to Purchaser the amount, if any, by which Initial Purchase Price
exceeds the Closing Purchase Price or, conversely, Purchaser shall pay to
Seller the amount, if any, by which the Closing Purchase Price exceeds the
Initial Purchase Price. The applicable amount shall be paid by wire
transfer of immediately available funds to the appropriate party within
five business days after such determination.
2.09. REIMBURSEMENT FOR LOSSES ON DISPOSITION OF PURCHASED ASSETS.
(a) To the extent Purchaser sells (excluding sale and leaseback
transactions) any of the fixed assets or Equipment included in the
Purchased Assets (a "Disposition") and, upon such sale, incurs a loss as
hereinafter calculated (a "Loss on Disposition"), Seller agrees to
reimburse Purchaser as provided in
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this Section 2.09 for the aggregate Loss on Disposition in connection with
the initial Dispositions by Purchaser of the first [*] worth of Purchased
Assets. To qualify as a Disposition under this Section 2.09, Purchaser will
make good faith efforts to sell the Purchased Asset at fair market value
and must provide Seller with the rights of first refusal set forth in
Section 2.09(b). A cancellation by Purchaser of Equipment on order as of
the Closing Date after the Closing Date, or a cancellation by Seller of
Equipment on order as of the date hereof before the Closing Date with the
prior written approval of ▇▇▇▇▇ ▇▇▇▇▇▇ shall be a Disposition in the amount
of the canceled order. The Loss on Disposition in connection with a
Disposition shall be equal to the proceeds of the sale of the Purchased
Asset (net of freight and reasonable commissions, and reasonable
de-installation expenses, if any) minus the net book value of such
Purchased Asset at the time of Disposition determined based on Seller's
depreciation schedules used in determining the Purchase Price for such
Purchased Asset. The Loss on Disposition in connection with a Disposition
which is a cancellation of Equipment on order as provided above shall be
the amount of any forfeited deposit or cancellation penalty.
(b) Purchaser shall provide Seller at least 10 days advance written
notice of the fixed assets or Equipment which it intends to sell and shall
grant Seller a right of first refusal as hereinafter provided with respect
to each proposed Disposition. Prior to the consummation of a proposed
Disposition, Purchaser shall provide Seller with written notice of the
proposed Disposition, including the proposed sale price and other
information material to the transaction, together with at least two bona
fide third-party offers in connection with the proposed Disposition, in
accordance with the provisions of Section 11.01 hereof, and Seller shall
have ten days after receipt of such notice to notify Purchaser whether it
will purchase the applicable asset or assets pursuant to the terms of
either third-party offer. Seller may assign such right of purchase to a
third party, subject to Purchaser's consent, which will not be unreasonably
withheld. If Seller shall not respond to Purchaser by the end of such
10-day period or if Seller fails to purchase within 10 days of delivery by
Seller of its notice of intent to purchase the applicable assets, Seller
shall be deemed to have rejected the offer to purchase such asset or
assets. If Seller rejects Purchaser's offer, then Purchaser may sell such
asset or assets to the third party at a price at least as high as the
highest price reported to Seller in the notice to Seller provided hereunder
and such sale will be deemed to be at fair market value.
(c) Within 30 days of the end of each calendar quarter, commencing
with the quarter ending March 31, 1998, Purchaser shall deliver to Seller
an unaudited statement (a "Reimbursement Statement") which shall set forth
a chronological schedule and the relevant terms of all Dispositions during
the quarter and a detailed calculation of the aggregate Losses on
Disposition incurred in connection with such Dispositions during the
calendar quarter in accordance with the provisions of this Section 2.09. At
the time of delivery of the Reimbursement Statement, Purchaser shall also
deliver to Seller documentation relating to each Disposition in connection
with which a Loss on Disposition was incurred by Purchaser. Seller shall
reimburse Purchaser for such Losses on Disposition by wire transfer of
immediately available funds to Purchaser within 20 days of receipt of the
Reimbursement Statement. The last sentence of Section 2.09(b) shall not
preclude Seller from objecting to the calculation of the Loss on
Disposition solely on the basis that the third-party offers referred to in
Section 2.09(b) are not bona fide. Any such objections shall be handled as
a dispute subject to Section 11.11.
2.10 DUAL USE ASSETS. Purchaser and Seller acknowledge and agree that the
Purchased Assets and Excluded Assets will include assets which are currently
used in both the Alpha Operations and the Business (such assets being
hereinafter referred to as "Dual Use Assets"). Purchaser and Seller agree that
it is in the interests of both parties to use all reasonable efforts prior to
the Closing Date to definitively identify all Dual Use Assets and to meet and
confer for the purpose of seeking to resolve any disputes with regard to the
status of such Dual Use Assets as either Purchased Assets or Excluded Assets. In
furtherance of this objective, Seller hereby agrees to deliver to Purchaser not
later than 10 days after the date hereof a schedule setting forth all Alpha
Assets. Purchaser and Seller agree that each party shall designate a team of
their respective personnel that shall commence joint work promptly following the
execution of this Agreement with the objective of identifying in writing all
Dual Use Assets, and resolving, prior to the Closing Date, any disputes with
regards to the status of such Dual Use Assets as Purchased Assets or Excluded
Assets, which resolution may include the possibility of a reclassification of a
Dual
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Use Asset from a Purchased Asset to an Excluded Asset, or vice versa, or shared,
alternating or licensed use of such Dual Use Assets. In no event shall any asset
used exclusively in the Alpha Operations or used exclusively in the Business be
eligible for classification as a Dual Use Asset. Purchaser and Seller shall
execute and deliver at the Closing a schedule detailing the resolution of the
status of Dual Use Assets pursuant to this Section 2.10 as well as any
contractual documentation, which might include revisions to this Agreement, or
the Schedules hereto, or the Acquisition Documents. Disputes with regards to
making the foregoing determination shall be resolved by the mutual agreement of
▇▇▇▇▇ ▇▇▇▇▇▇ from Purchaser and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ from Seller. To the extent
the foregoing individuals are unable to reach a mutual agreement, such dispute
shall be resolved in accordance with Section 11.11 hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement and to
consummate the transactions contemplated herein, Seller represents and warrants
to Purchaser as follows:
3.01. EXISTENCE AND GOOD STANDING. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Massachusetts and has all corporate power and authority required to carry on the
Business as now conducted and to own and operate the Business. Seller is not
required to be qualified to conduct business in any state other than such states
where it is so qualified or where the failure to be so qualified, whether singly
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect on the Business and the Purchased Assets. Seller has heretofore delivered
to Purchaser complete and correct copies of its Articles of Organization and
Bylaws as currently in effect. Attached hereto as SCHEDULE 3.01 is a listing of
the states and countries in which the Purchased Assets are located.
3.02. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance by Seller of this Agreement and the other Acquisition Documents and
the consummation of the transactions contemplated hereby and thereby, are within
Seller's corporate power and have been duly authorized by all necessary
corporate and shareholder action on its part, including any action required by
Seller's Subsidiaries. This Agreement has been and, when executed at the
Closing, the other Acquisition Documents will have been, duly and validly
executed by Seller and, assuming the due authorization, execution and delivery
of this Agreement and the other Acquisition Documents to which it is a party by
Purchaser, will constitute the legal, valid and binding agreements of Seller.
3.03. GOVERNMENTAL OR OTHER AUTHORIZATION BY SELLER'S SUBSIDIARIES. Except
as set forth on SCHEDULE 3.03, the execution, delivery and performance by Seller
of this Agreement and the other Acquisition Documents, and the consummation by
it of the transactions contemplated hereby and thereby, require no Governmental
Approval from any Governmental Authority or any consent, waiver or approval of
Seller's Subsidiaries.
3.04. NON-CONTRAVENTION. Except as set forth on SCHEDULE 3.04, the
execution, delivery and performance of this Agreement and the other Acquisition
Documents by Seller, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (a) contravene or conflict with the
Articles of Organization or Bylaws of Seller, (b) assuming receipt of the
Required Governmental Approvals, contravene or conflict with or constitute a
violation of any provision of any Applicable Law binding upon or applicable to
Seller, the Purchased Assets or the Business, except for any contravention,
conflict or violation that could not reasonably be expected to have a Material
Adverse Effect on the Business and Purchased Assets, or (c) assuming receipt of
the Required Consents, constitute a default under, give rise to any right of
termination, cancellation or acceleration of, or to a loss of any material
benefit to which the Business is entitled, or result in the creation or
imposition of any Lien on the Purchased Assets (other than Permitted Liens),
under any Assumed Contract, Material Contract or any Permit relating to the
Business or by which the Purchased Assets or the Business may be bound or
materially affected, except for any default, right of termination, cancellation,
acceleration, loss or Lien that could not reasonably be expected to have a
Material Adverse Effect on the Business and Purchased Assets.
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3.05. UNDISCLOSED LIABILITIES; BOOKS AND RECORDS.
(a) There are no Liabilities of Seller related to the Business other
than (i) Liabilities incurred in the ordinary course of business that are
consistent with Seller's past practices and (ii) the Liabilities described
on SCHEDULE 3.05(a) hereto.
(b) All of the Books and Records of Seller relating to the Business
have been made available to Purchaser prior to the execution of this
Agreement and contain a true and complete record, in all material respects,
of the business, operations, financial condition, results of operations,
assets and Liabilities relating to the Business. Seller has no Books and
Records recorded, stored, maintained, operated or otherwise wholly or
partly dependent upon or held by any means (including any electronic,
mechanical or photographic process, whether computerized or not) that are
not under the exclusive ownership and direct control of Seller.
(c) Schedule 2.06(a)(3) has been prepared by Seller in accordance with
the provisions of Section 2.06(a) and is true and complete.
3.06. ABSENCE OF CERTAIN CHANGES. Except as set forth on SCHEDULE 3.06 and
except for the transactions contemplated by the Settlement Agreement and this
Agreement and after giving effect to the impact of the transactions contemplated
by the Settlement Agreement and this Agreement, since October 27, 1997, the
Business has been conducted in the ordinary course consistent with past
practice, and there has not been:
(a) any event, occurrence, state of circumstances or facts or change
in respect of Seller or in the Business that has had or that could
reasonably be expected to have, either alone or together, a Material
Adverse Effect on the Business and Purchased Assets;
(b)(i) any change in any Liabilities of Seller related to the Business
or Purchased Assets that has had, or that could reasonably be expected to
have, a Material Adverse Effect on the Business and Purchased Assets or
(ii) any incurrence, assumption or guarantee of any indebtedness for
borrowed money by Seller that could reasonably be expected to have a
Material Adverse Effect on the Business and Purchased Assets;
(c) any creation, assumption or sufferance of (whether by action or
omission) the existence of any Lien on any of the Purchased Assets, other
than Permitted Liens and Liens that could not reasonably be expected to
have a Material Adverse Effect on the Business and Purchased Assets;
(d) any material waiver, amendment, termination or cancellation of any
Assumed Contract or any relinquishment of any material rights thereunder by
Seller, other than, in each such case, actions taken in the ordinary course
of business consistent with past practice that are not material with
respect to any such Assumed Contract;
(e) any sale, assignment, transfer, lease or other disposition of or
agreement to sell, assign, transfer, lease or otherwise dispose of any
Purchased Asset, other than sales in the ordinary course of business
consistent with past practice; or
(f) any capital expenditure commitment by Seller for an addition to
property, plant, equipment or capital assets comprising Purchased Assets
which has not been approved by Purchaser in writing.
3.07. PROPERTIES; MATERIAL LEASES; TANGIBLE ASSETS.
(a) Seller has a legal, valid and binding leasehold or license
interest in all material leased personal property or personal properties
held under license which are used in the Business.
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(b) All material tangible personal properties and assets which are
used in the Business (including Equipment constituting Purchased Assets)
are in all material respects structurally sound and are in good operating
condition and repair (subject to normal wear and tear) and are adequate for
the uses to which they are put, and no material personal properties or
assets necessary for the conduct of the Business in substantially the same
manner as the Business has heretofore been conducted are in need of
replacement, maintenance or repair, except for such required routine
replacement, maintenance and repair, which, if not performed, could not
reasonably be expected to have a Material Adverse Effect on the Business
and Purchased Assets. The Equipment scheduled on SCHEDULE 2.01(d)
constitutes all Equipment which is material to the operation of the
Business.
(c) SCHEDULE 3.07(c) sets forth all material personal property leases
relating to the Business to which Seller is a party or by which Seller is
bound (collectively, the "Personal Property Leases"). With respect to the
Personal Property Leases, there exist no material defaults by Seller or, to
the knowledge of Seller, threatened default by the lessor or any third
party thereunder. Assuming the Required Consents are obtained, the
transactions contemplated by this Agreement will not result in any default,
penalty or modification of any of the Personal Property Leases.
3.08. ADDITIONAL CAPITAL EQUIPMENT. SCHEDULE 3.08 sets forth a list of
capital equipment on order at October 27, 1997 for the use in the Business and
capital equipment ordered after October 27, 1997 for use in the Business. Seller
has not ordered after October 27, 1997 any additional capital equipment for use
in the Business without the prior written approval of Purchaser.
3.09. INVENTORIES. All inventories of raw materials, work-in-process and
finished goods included in the Purchased Assets were acquired in the ordinary
course of business consistent with past practice. All such inventories consist
of a quality and quantity usable and saleable (free of any material defect or
deficiency) in the ordinary course of business, consistent with past practice,
except for slow-moving, damaged or obsolete items and materials of below
standard quality. There is no reason to believe that Purchaser will experience
in the foreseeable future any difficulty in obtaining, in quantities consistent
with historical amounts obtained by Seller, the inventory necessary to conduct
the Business in the manner historically conducted by Seller.
3.10. LITIGATION. Except as set forth on SCHEDULE 3.10, there are no
actions, suits, claims, hearings, arbitrations, audits, or proceedings (public
or private) (collectively, "Proceedings") that have been brought or initiated by
or against any Governmental Authority or any other Person, or are pending or, to
Seller's knowledge, threatened (a) by or against Seller, relating to any of the
Purchased Assets or the Business or (b) that seeks to prevent, enjoin, alter or
delay the transactions contemplated by this Agreement or any of the other
Acquisition Documents or Ancillary Agreements. There are no existing orders,
judgments or decrees of any Governmental Authority relating to the Business.
Except as disclosed on SCHEDULE 3.10, there are no material Proceedings that
have been brought or initiated or, to Seller's knowledge, threatened to be
brought or initiated, by any customer or other third Person against Seller
relating to any of the Purchased Assets or the Business, including any
Proceeding in connection with any Tort Claim based in whole or in part on a
defect in any of the products sold by the Business.
3.11. MATERIAL CONTRACTS.
(a) SCHEDULE 3.11(a) sets forth a list of all Contracts as follows
(collectively with the Personal Property Leases and the Contracts listed on
SCHEDULE 3.14(f), the "Material Contracts"): (i) each sales Contract
relating to the Business pursuant to which the dollar volume of sales to
Seller exceeded One Million Dollars ($1,000,000) in the 12-month period
ended September 30, 1997, (ii) each Contract that requires payment by or to
Seller in respect of the Business or any of the Purchased Assets subsequent
to the date of this Agreement of more than One Million Dollars
($1,000,000), (iii) all Contracts in respect of the Business relating to,
and evidences of, indebtedness for borrowed money or the deferred purchase
price of property (whether incurred, assumed, guaranteed or secured by any
asset), (iv) all partnership, joint venture or other similar Contracts,
arrangements or agreements, directly affecting the Business or any of the
Purchased Assets; and (v) all other Contracts relating to the Business or
any of the Purchased
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Assets where the loss of any such Contract or a group of such Contracts, or
a default under any such Contract or group of such Contracts, could be
reasonably expected to result in a Material Adverse Effect on the Business
and Purchased Assets.
(b) Each Assumed Contract which is listed on SCHEDULE 2.01(h) is a
legal, valid and binding obligation of Seller and, to the knowledge of
Seller, each other Person who is a party thereto, enforceable against
Seller and each such Person in accordance with its terms, except where the
failure to be legal, valid or binding could not reasonably be expected to
have a Material Adverse Effect on the Business and Purchased Assets, and
neither Seller nor, to the knowledge of Seller, any other party thereto is
in material default thereunder, except for any default that could not
reasonably be expected to have a Material Adverse Effect on the Business
and Purchased Assets.
(c) SCHEDULE 3.11(c) sets forth a list (by name, address and
individuals to contact) of the twenty (20) largest suppliers by dollar
volume of the Business for the 12-month period ended September 30, 1997,
together with the dollar amount of sales during said period and a summary
description of the products purchased.
3.12. PERMITS; REQUIRED CONSENTS.
(a) To the knowledge of Seller, SCHEDULE 3.12(a) sets forth all
material approvals, authorizations, certificates, consents, licenses,
orders and permits and other similar authorizations of all Governmental
Authorities (and all other Persons) necessary for the operation of the
Business, including use, ownership and operation of the Property in
substantially the same manner as operated by Seller currently and during
the past twelve (12) months (collectively, the "Permits"). Except as set
forth in SCHEDULE 3.12(a), each Permit is valid and in full force and
effect in all material respects, except where the failure to be valid and
in full force and effect could not reasonably be expected to have a
Material Adverse Effect on the Business and Purchased Assets.
(b) SCHEDULE 3.12(b) lists (i) to Seller's knowledge, each
Governmental Approval required under Applicable Law to be obtained by
Seller by virtue of the execution and delivery of this Agreement and the
other Acquisition Documents, or the consummation of the transactions
contemplated hereby and thereby, to avoid the loss of, or any material
modification to, any Permit, except for any Required Governmental Approval
the failure of which to have could not reasonably be expected to have a
Material Adverse Effect on the Business and Purchased Assets (each, a
"Required Governmental Approval"), and (ii) each Material Contract with
respect to which the consent of the other party or parties thereto must be
obtained by Seller by virtue of the execution and delivery of this
Agreement and the other Acquisition Documents and the Ancillary Agreements,
or the consummation of the transactions contemplated hereby and thereby to
avoid the loss of any material benefit under, or any material modification
to, any such Material Contract (each, a "Required Contractual Consent" and,
collectively with the Required Governmental Approvals, the "Required
Consents").
3.13. COMPLIANCE WITH APPLICABLE LAWS. Seller has not violated or
infringed, and is not violating or infringing, in connection with the Business
or its ownership of Purchased Assets, any Applicable Law or any order, writ,
injunction or decree of any Governmental Authority applicable to the Business
and Purchased Assets, except for any violation or infringement that could not
reasonably be expected to have a Material Adverse Effect on the Business and
Purchased Assets.
3.14. INTELLECTUAL PROPERTY.
(a) Certain Definitions.
(i) The term "Intellectual Property Rights" means all United
States and foreign:
(1) registered trademarks and service marks, and applications therefor
(collectively, "Marks");
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(2) patents and patent applications (collectively, "Patents");
(3) copyrights, whether registered or unregistered (collectively,
"Copyrights") and mask work rights, including without limitation any rights
protected under Chapter 9 of title 17 of the United States Code (collectively,
"Mask Work Rights"); and
(4) know-how, trade secrets, techniques, technical data or information and
any other proprietary and intellectual property rights not included in the
foregoing subparagraphs (2) or (3) (collectively, "Trade Secrets"); and
(ii) The term "Intellectual Property Assets" means all
Intellectual Property Rights owned or licensed by Seller and necessary
to the conduct of the Business and all further uses of the terms
Marks, Patents, Copyrights, Mask Work Rights, and Trade Secrets in
this Section 3.14 shall mean Marks, Patents, Copyrights, Mask Work
Rights and Trade Secrets that are Intellectual Property Assets.
(iii) The term "IP-Related Knowledge" means the actual knowledge
of the following employees of Seller on the date hereof: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, in each case without any
obligation of inquiry or investigation.
(b) TRADEMARKS.
(i) SCHEDULE 3.14(b) contains a list of all Marks used by Seller
on the Non-Alpha Products. Except as set forth on SCHEDULE 3.14(b),
Seller is the owner of all right, title and interest in and to
registrations or applications therefor for each of the Marks, free and
clear of all Liens.
(ii) Except as set forth on SCHEDULE 3.14(b), all Marks have been
registered with the Governmental Authorities indicated on SCHEDULE
3.14(b), and, except as set forth on SCHEDULE 3.14(b), are currently
in compliance with all legal requirements (including the timely
post-registration filing of affidavits of use and incontestability and
renewal applications), and are not subject to any maintenance fees or
actions falling due within ninety days after the Closing Date.
(iii) Except as set forth on SCHEDULE 3.14(b), Seller has not
been formally notified in writing that any ▇▇▇▇ is now involved in any
opposition or cancellation and, to Seller's IP-Related Knowledge, no
such action is threatened in writing with respect to any of the Marks.
(iv) Except as set forth on SCHEDULE 3.14(b), Seller has not been
formally notified in writing that any of the Marks used by Seller
infringes or is alleged to infringe any trade name, trademark or
service ▇▇▇▇ of any third party.
(c) PATENTS.
(i) Except as set forth in SCHEDULE 3.14(c), no Patent is now
involved in any interference proceeding. To Seller's IP-Related
Knowledge, there is no interfering patent or patent application of any
third party with respect to any Patent.
(ii) Except as set forth on SCHEDULE 3.14(c), to Seller's
IP-Related Knowledge, none of the products used, manufactured,
marketed, sold or licensed, nor any process or know-how used, by
Seller in the Business infringes or is alleged in writing to infringe
any patent or other proprietary right of any other Person.
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(d) COPYRIGHTS AND MASK WORK RIGHTS.
(i) SCHEDULE 3.14(d) contains a complete and accurate list of all
Copyrights and Mask Work Rights that are included in the Non-Alpha
Transferred IP Assets (the "Transferred Copyrights and Mask Work
Rights") relating to the design, manufacture and use of Non-Alpha
Products (excluding marketing materials) that have been registered
with the applicable Governmental Authorities. Except as set forth on
SCHEDULE 3.14(d), Seller is the owner of all right, title and interest
in and to each of such registered Transferred Copyrights and Mask Work
Rights, free and clear of all Liens and other material adverse claims.
(ii) Except as specified in SCHEDULE 3.14(d), all of the
registered Transferred Copyrights and Mask Work Rights are currently
in compliance with all formal legal requirements, and are not subject
to any maintenance fees or actions falling due within ninety days
after the date of Closing.
(iii) Except as set forth on SCHEDULE 3.14(d), to Seller's
IP-Related Knowledge, no writing or other work of authorship fixed in
a tangible medium, and no mask work fixed in the form of a
semiconductor chip, that is used, copied, modified, displayed,
performed or distributed in connection with the conduct of the
Business infringes or is alleged in writing to infringe any
Intellectual Property Right of any third party.
(e) TRADE SECRETS.
(i) To Seller's IP-Related Knowledge, no unauthorized disclosure
or misappropriation of Trade Secrets that are included in the
Non-Alpha Transferred IP Assets (the "Transferred Trade Secrets") has
occurred as a result of a failure by Seller to take reasonable
precautions to protect the secrecy, confidentiality and value thereof.
(ii) To Seller's IP-Related Knowledge, Seller has the right to
use the Trade Secrets to conduct the Business and following the
Closing Purchaser shall have the right to use the Trade Secrets to
conduct the Business. To Seller's IP-Related Knowledge, none of the
Trade Secrets has been, or is alleged in writing to have been,
misappropriated from, or violates or is alleged in writing to violate
the Intellectual Property Rights of, any third party.
(f) INTELLECTUAL PROPERTY CONTRACTS. SCHEDULE 3.14(f) contains a list
of (i) all Assumed Contracts relating to the Intellectual Property Assets
to which Seller is a party or by which Seller is bound, except for any
license for common publicly retailed software programs that are currently
distributed and Contracts that involve a payment by Seller of aggregate
annual royalties of less than One Hundred Thousand Dollars ($100,000) and
(ii) all Assumed Contracts under which Seller has executory development,
intellectual property grant-back, or non-competition obligations or
requirements to commercialize intellectual property transferred, licensed
or developed under the respective Assumed Contracts, the failure of which
obligations or requirements to perform could reasonably be expected, in the
aggregate, to have a Material Adverse Effect on the Business and Purchased
Assets. SCHEDULE 3.14(f) identifies specifically each Assumed Contract
under which Seller has granted a license of any kind to any Person in
respect of any of the Non-Alpha Transferred IP Assets other than those
Assumed Contracts, the granting of rights to such Person under which could
not, in the aggregate, reasonably be expected to have a Material Adverse
Effect on the Business and Purchased Assets.
(g) EMPLOYEE AGREEMENTS. To Seller's IP-Related Knowledge, no
employees of Seller involved in any way in the Business have failed to
execute written agreements with Seller that assign to Seller all
Intellectual Property Rights used in or relating to the Business and that
contain appropriate confidentiality obligations, where such failures, in
the aggregate, would have a Material Adverse Effect on the Business and
Purchased Assets.
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(h) INFRINGEMENT GENERALLY. Except as set forth on SCHEDULE 3.14(h),
Seller is not, nor has it during the three (3) years preceding the date of
this Agreement been, a party to any Proceeding, nor, to the actual
knowledge of each lawyer on Seller's legal staff employed at Seller's
facility in Maynard, Massachusetts, without any obligation of inquiry or
investigation, has any Proceeding been threatened in writing during the one
(1)-year period preceding the date of this Agreement, that involves or
involved a claim of infringement by Seller of any Intellectual Property
Rights of any other Person in connection with Seller's conduct on its
operation of the Business. Except as specifically disclosed on one or more
schedules under this Section 3.14, no Intellectual Property Asset is
subject to any outstanding order, judgment, decree or stipulation.
(i) SOFTWARE TOOLS AND OTHER SOFTWARE. SCHEDULE 3.14(i) identifies all
software tools and other software used in connection with the conduct of
the Business (other than office automation and similar software generally
used throughout Seller's operations) that will be licensed by Seller to
Purchaser pursuant to the terms of the License Agreement.
3.15. ENVIRONMENTAL COMPLIANCE.
(a) Seller has obtained and is in material compliance with all
approvals, authorizations, certificates, consents, licenses, orders and
permits or other similar authorizations of all Governmental Authorities,
that relate to the Business or the Purchased Assets and are required under
any Environmental Law, a correct and complete list of which is set forth on
SCHEDULE 3.15(a).
(b) Seller is in material compliance with all other limitations,
restrictions, conditions, standards, requirements, schedules and timetables
required or imposed under all Environmental Laws.
(c) Except as set forth on SCHEDULE 3.15(c), to Seller's knowledge,
there are no past or present events, conditions, circumstances, activities,
practices, incidents, actions, omissions or plans relating to the Business
or the Purchased Assets that will likely interfere with or prevent
continued compliance with any Environmental Law by the Seller, or that will
likely give rise to any Seller Environmental Liability or that otherwise
will likely form the basis of any proceeding, hearing, study or
investigation relating to the Seller, the Purchased Assets or the Business
(1) under any Environmental Law, (2) based on or related to the
manufacture, processing, distribution use, treatment, storage, disposal,
transport or handling, or the emission, discharge, release or threatened
release, of any Hazardous Substance, or (3) resulting from exposure to work
place hazards. To the Seller's knowledge, SCHEDULE 3.15(c) sets forth a
complete and correct list of all surveys, analyses and reviews relating to
any of the Purchased Assets or the Business performed or prepared at any
time by any Person that discuss or relate to any existing Seller
Environmental Liability, or any set of facts or circumstances that will
likely give rise to any Seller Environmental Liability.
(d) In connection with the foregoing representations and warranties of
Seller, Purchaser acknowledges that it is aware that the Industrial Sewer
Connection Permit (the "Sewer Permit") for Seller's Hudson, Massachusetts
property has expired, that an application for renewal of the Sewer Permit
was filed prior to said expiration, and that a new Industrial Sewer
Connection Permit has not yet been issued. To the extent that the status of
the Sewer Permit is deemed to be at variance with any representation or
other statement of Seller in this Agreement, that representation or other
statement shall be deemed not to apply to the status of the Sewer Permit.
3.16. INSURANCE. Set forth on SCHEDULE 3.16 is a complete and correct list
of all material insurance policies of any kind owned by Seller currently in
force with respect to the Business (collectively, the "Insurance Policies"),
including all "occurrence based" liability policies regardless of the periods to
which they relate. SCHEDULE 3.16 also sets forth for each Insurance Policy the
type of coverage, the name of the insureds, the insurer, the expiration date,
the period to which it relates, the deductibles and loss retention amounts and
the amounts of coverage. All of such insurance policies are in full force and
effect and are valid, outstanding and all premiums due thereon have been paid in
full. No insurer under any such Insurance Policy has canceled or generally
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disclaimed liability under any such policy or, to Seller's knowledge, indicated
any intent to do so or not to renew any such policy.
3.17. TAX MATTERS. Except as set forth on SCHEDULE 3.17 hereto:
(a) Seller has filed on a timely basis all Tax Returns required to
have been filed by it with respect to the Business or the Purchased Assets
and has paid on a timely basis all Taxes with respect to the Business or
the Purchased Assets as due. All such Tax Returns are true, complete and
correct with respect to the Business or the Purchased Assets, except where
the failure to be true, complete and correct could not reasonably be
expected to have a Material Adverse Effect on the Business and Purchased
Assets. No Liability for Taxes with respect to the Business or the
Purchased Assets has been incurred by Seller since October 27, 1997 other
than in the ordinary course of its business. Seller has not received notice
that it is or may be subject to Tax with respect to the Business or the
Purchased Assets in a jurisdiction in which it has not filed or does not
currently file Tax Returns with respect to the Business or the Purchased
Assets;
(b) With respect to all amounts in respect of Taxes imposed upon
Seller, or for which Seller is or could be liable with respect to the
Business or the Purchased Assets, whether to taxing authorities (as, for
example, under Applicable Law) or to other Persons (as, for example, under
tax allocation agreements), and with respect to all taxable periods or
portions of periods ending on or before the Closing Date, all applicable
Tax laws and agreements have been complied with in all material respects,
and all such amounts required to be paid by Seller to taxing authorities
with respect to the Business or the Purchased Assets or others have been
paid;
(c) There are no Liens for Taxes (other than for current Taxes not yet
due and payable) upon any of the Purchased Assets;
(d) The Business does not have and has not had a permanent
establishment in any foreign country, as defined in any applicable Tax
treaty or convention between the United States of America and such foreign
country, and has not engaged in a trade or business within any foreign
country; and
(e) None of the Purchased Assets is property that is required to be
treated as owned by any other Person pursuant to the "safe harbor lease"
provisions of former Section 168(f)(8) of the Internal Revenue Code of
1954, as amended and in effect immediately prior to the enactment of the
Tax Reform Act of 1986, and none of the Purchased Assets is "tax exempt use
property" within the meaning of Section 168(h) of the Code.
3.18. SUFFICIENCY OF AND TITLE TO THE PURCHASED ASSETS. Except for Assumed
Contracts which require waivers or consents to be transferred, which waivers or
consents shall not have been obtained prior to the Closing, upon consummation of
the transactions contemplated by this Agreement, Seller will have assigned,
transferred and conveyed to Purchaser all of the Purchased Assets, which
constitute substantially all of the properties and assets now held or employed
by Seller in connection with the Business. The transfer of the Purchased Assets
to Purchaser pursuant to this Agreement (together with the execution and
performance of the License Agreement and the provision of sufficient working
capital and corporate overhead support by Purchaser) will enable Purchaser to
manufacture the Non-Alpha Products being transferred to Purchaser pursuant
hereto at levels comparable to those currently achieved by the Seller.
3.19. PRODUCT WARRANTIES. SCHEDULE 3.19 sets forth copies of the written
product warranties and guaranties by Seller currently in effect with respect to
the Non-Alpha Products. To Seller's knowledge, there have not been any material
deviations from such warranties and guaranties and no claims with respect to
such product warranties and guaranties on products or services exist relating to
the Business or any of the Purchased Assets, except for such claims with respect
to product warranties or guaranties as could not reasonably be expected to have
a Material Adverse Effect on the Business and Purchased Assets.
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3.20. BACKLOG.
(a) SCHEDULE 3.20 sets forth, with respect to each Assumed Contract
having unfilled backlog, the name of each customer, the dollar amount of
backlog, any dollar amounts included which are unfunded by any customer in
respect of undelivered orders, a brief description of the products and
services to be provided, the proposed delivery dates therefor and any
unexercised valid and subsisting options in the backlog giving a brief
description of the Assumed Contracts to which they relate.
(b) Except as set forth on SCHEDULE 3.20, all of the Assumed Contracts
constituting the backlog of Seller as it relates to the Business were
entered into in the ordinary course of business at usual and customary
▇▇▇▇-ups at the time entered into and would be capable of performance in
accordance with the terms and conditions of each such Contract by Seller,
if it retained the Purchased Assets to be transferred and Assumed
Liabilities to be assumed hereunder.
3.21. CUSTOMER AND SUPPLIER RELATIONSHIPS. Except as set forth on SCHEDULE
3.21, since October 27, 1997, the Business has not lost, had a material
disagreement with or experienced a material adverse change in its relationship
with any material customer of or supplier to the Business, except for such
losses, disagreements or adverse changes as could not reasonably be expected to
have a Material Adverse Effect on the Business and Purchased Assets.
3.22. REPRESENTATIONS REGARDING REAL PROPERTY. With respect to each of the
parcels of real property (the "Property") which are part of the Purchased
Assets:
(a) To the best of Seller's knowledge, there are no physical or
mechanical defects in any of the improvements on the Property which would
materially impair the intended use of this Purchased Asset, and all such
improvements are in good operating condition and repair (subject to normal
wear and tear);
(b) Except as set forth on SCHEDULE 3.22(b), to the best of Seller's
knowledge, the current use and operation of the Property are fully
entitled, without restriction or conditions, and are in compliance with
applicable codes, ordinances, rules, laws, regulations and requirements,
including without limitation those applicable to subdivisions, construction
of improvements, zoning, land use, public safety, Hazardous Substances and
the Americans with Disabilities Act (collectively, "Property Laws"), except
for such restrictions or conditions or such non-compliance as could not
reasonably be expected to have a Material Adverse Effect on the Business
and Purchased Assets, and Seller has received no notice of non-compliance
with any Property Laws which has not been resolved;
(c) To the best of Seller's knowledge, there are no zoning or other
land-use regulation proceedings or any change or proposed change in any
applicable Property Laws, which could detrimentally affect the use or
operation of the Property, except for such proceedings, changes or proposed
changes as could not reasonably be expected to have a Material Adverse
Effect on the Business and Purchased Assets, and Seller has not received
notice of any special assessment proceedings affecting the Property which
have not been resolved.
(d) To the best of Seller's knowledge, all water, sewer, gas,
electric, telephone and drainage facilities and all other utilities
required by law or for the present use and operation of the Property are
installed to the property lines of the Property, are all connected and
operating pursuant to valid permits, are adequate to service the Property
and to permit compliance with all Property Laws and the present usage of
the Property, and are connected to the Property by means of one or more
public or private easements extending from the Property to one or more
public streets, public rights-of-way or utility facilities.
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(e) To the best of Seller's knowledge, Seller has obtained all
approvals, easements and rights of way (and all such items are currently in
full force and effect) required from private parties for the present use
and operation of the Property and to ensure free and unimpeded vehicular
and pedestrian ingress to and egress from the Property as required to
permit the present usage of the Property.
(f) Seller is the sole owner of good, marketable and insurable fee
simple title to the Property, free and clear of all liens, security
interests, covenants, conditions, rights-of-way, easements and encumbrances
of any kind or character whatsoever, subject only to the matters shown on
the Title Commitment, copies of which are attached hereto as Schedule
3.22(f)(1), and one or more Activity and Use Limitations recorded pursuant
to Section 7.10 hereof.
(g) Seller has not committed nor obligated itself in any manner
whatsoever to sell the Property, or any portion thereof, to any party other
than Buyer. Seller has not hypothecated or assigned any rents or income
from the Property, or any portion thereof, in any manner except pursuant to
secured financing to be assumed or discharged at Closing.
3.23. FULL DISCLOSURE. To Seller's knowledge, the information contained in
this Agreement and the Schedules and Exhibits with respect to the Business, the
Purchased Assets, the Assumed Contracts and the transactions contemplated by
this Agreement are true and correct in all material respects and do not omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not materially
misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement and to consummate
the transactions contemplated herein, Purchaser hereby represents and warrants
to Seller as follows:
4.01. EXISTENCE AND GOOD STANDING. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all corporate power and authority required to carry on its
business as now conducted and to own and operate its businesses as now owned and
operated by it. Purchaser is not required to be qualified to conduct business in
any state other than such states where the failure to be so qualified, whether
singly or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect on it. Purchaser has heretofore delivered to Seller complete and
correct copies of its certificate of incorporation and bylaws as currently in
effect.
4.02. AUTHORIZATION AND ENFORCEABILITY. The execution, delivery and
performance by Purchaser of this Agreement and the other Acquisition Documents,
and the consummation of the transactions contemplated hereby and thereby, are
within Purchaser's powers and have been duly authorized by all necessary
corporate and stockholder action on its part. This Agreement has been and, when
executed at the Closing, the other Acquisition Documents will have been, duly
and validly executed by Purchaser and, assuming the due execution and delivery
of this Agreement and the other Acquisition Documents by Seller, will constitute
the legal, valid and binding agreements of Purchaser, enforceable against it in
accordance with their respective terms.
4.03. GOVERNMENTAL OR OTHER AUTHORIZATION. Except as set forth on SCHEDULE
4.03, the execution, delivery and performance by Purchaser of this Agreement and
the other Acquisition Documents, and the consummation by it of the transactions
contemplated hereby and thereby, require no Governmental Approval from any
Governmental Authority or any consent, waiver or approval of any other Person
(such required consents and approvals, the "Purchaser Approvals").
4.04. NON-CONTRAVENTION. Except as set forth on SCHEDULE 4.04, the
execution, delivery and performance of this Agreement and the other Acquisition
Documents by Purchaser, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (a) contravene or conflict with the
certificate of
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incorporation or bylaws of Purchaser, (b) assuming receipt of the Purchaser
Approvals that are Governmental Approvals, contravene or conflict with or
constitute a material violation of any provision of any Applicable Law binding
upon or applicable to Purchaser or (c) assuming receipt of the Purchaser
Approvals that are not Governmental Approvals, contravene or constitute a
default under any material agreement to which Purchaser is a party.
4.05. LITIGATION. There are no actions, suits, claims, hearings,
arbitrations, audits or proceedings (public or private) (collectively, the
"Proceedings") that have been brought or initiated by or against any
Governmental Authority or any Person, or are pending or, to Purchaser's
knowledge, threatened (a) by or against Purchaser, relating to the Business or
any of the Purchased Assets or (b) that seek to enjoin, alter, or materially
delay the transactions contemplated by this Agreement or any of the other
Acquisition Documents.
4.06. COMPLIANCE WITH APPLICABLE LAWS. Purchaser has not violated or
infringed, and is not violating or infringing, in any material respect, any
Applicable Law or any order, writ, injunction or decree of any Governmental
Authority that could reasonably be expected to prevent or materially delay any
of the transactions contemplated by this Agreement or any of the Acquisition
Documents.
4.07. PROJECTIONS. In connection with Purchaser's investigation of the
Business and the Purchased Assets, Purchaser has received from Seller certain
estimates, projections and other forecasts for the Business. Purchaser
acknowledges that there are uncertainties inherent in attempting to make such
estimates, projections, forecasts, plans and budgets, that Purchaser is familiar
with such uncertainties, that Purchaser is taking full responsibility for making
its own evaluation of the adequacy and accuracy of all estimates, projections,
forecasts, plans and budgets so furnished to it, and that Purchaser will not
assert any claim against Seller or any of its Subsidiaries or Affiliates or any
of their respective directors, officers, employees, agents or representatives or
hold any of them liable, in connection with such estimates, projections and
forecasts.
ARTICLE V
COVENANTS OF SELLER
Seller agrees that:
5.01. OPERATION OF BUSINESS PRIOR TO CLOSING. Between the date hereof and
the earlier of the termination of this Agreement pursuant to Article X hereof or
Closing Date,
(a) NEGATIVE COVENANTS. Seller covenants and agrees with Purchaser
that, except (1) as contemplated by this Agreement, the Acquisition
Documents and the Ancillary Agreements, or (2) with the prior written
consent of Purchaser, which consent shall not be unreasonably withheld, it
shall not do any of the following with respect to the Business and the
Purchased Assets other than in the ordinary course of business and after
giving effect to the impact of the transactions contemplated by the
Settlement Agreement and this Agreement:
(i) sell or otherwise dispose of any material Purchased Assets,
except Inventory, cancel any debts or claims involving any Person
relating to the Business or Purchased Assets, or pledge, assign or
otherwise convey, or cause any Lien to be placed upon any Purchased
Asset;
(ii) enter into any transaction with respect to any Purchased
Asset, including any capital expenditure commitment;
(iii) amend its Articles of Organization or Bylaws in any way
that could reasonably be expected to have a Material Adverse Effect
either on the Business and the Purchased Asset or on the prospects for
consummating the transactions contemplated by this Agreement;
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(iv) permit its corporate existence or any Permit to be
suspended, lapsed, revoked or modified in any way that could
reasonably be expected to have a Material Adverse Effect on the
Business and the Purchased Assets;
(v) amend or terminate any Material Contract;
(vi) except as would not be material, allow any insurance policy
relating to the Business or any Purchased Asset to be amended or
terminated without replacing such policy with a policy providing
substantially equivalent coverage, insuring comparable risks and
issued by an insurance company financially comparable to the prior
insurance company;
(vii) except as would not be material or except pursuant to any
agreements disclosed in the Schedules or Exhibits or for normal salary
adjustments consistent with past practice, increase any benefits
payable, termination pay policies or employment agreements with any
employee of the Business;
(viii) make (through its officers) any representation or
commitment to employees of the Business with respect Purchaser's
intention to offer employment to any such employee or to the continued
maintenance of any benefit plan after the Closing that is inconsistent
with the provisions of the Human Resources Agreement;
(ix) incur any indebtedness relating to the Business; and
(x) enter into any license agreement with respect to any
Non-Alpha Transferred IP Assets.
(b) AFFIRMATIVE COVENANTS. Seller shall use all reasonable efforts, in
the ordinary course of business and after giving effect to the impact of
the transactions contemplated by the Settlement Agreement and this
Agreement, to:
(i) maintain its assets and properties used in the Business
(including all Intellectual Property Rights), reasonable wear and
tear, damage by fire and other casualty excepted;
(ii) comply in all respects with all Applicable Laws affecting
the Business, except for such noncompliance as could not reasonably be
expected to have a Material Adverse Effect on the Business and
Purchased Assets;
(iii) properly and timely file all Tax Returns required to be
filed and make timely payment of all applicable Taxes when due and pay
the expenses of preparation therefor;
(iv) take all actions reasonably necessary to be in material
compliance with all Material Contracts, and to maintain the
effectiveness of all Permits, except for such Permits the failure of
which to maintain could not reasonably be expected to have a Material
Adverse Effect on the Business and Purchased Assets;
(v) notify Purchaser of any action, event, condition or
circumstance, or group of actions, events, conditions or circumstances
that results in, or could reasonably be expected at the time to result
in, a Material Adverse Effect on the Business and Purchased Assets;
(vi) pay accounts payable of the Business;
(vii) preserve its relationships with suppliers to the Business
and others having business relations with the Business;
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(viii) advise Intel Israel Ltd ("Intel Israel"), on a
phase-by-phase basis, of the progress and eventual outcome of any
negotiations held between Digital Equipment (DEC) Technical Center
(Israel) Ltd ("DEC Israel") and the Government of Israel, through the
Investment Center (the "I.C."), aimed at obtaining the I.C.'s consent
(the "I.C. Consent") to the sale and transfer of the Purchased Assets
situated in Israel to Intel Israel; and
(ix) if the I.C. Consent shall be conditioned upon DEC Israel
repaying to the I.C. all or any part of the grants received in the
past by DEC Israel, Intel Israel shall pay to DEC Israel or the I.C.,
as the case may be, such amount as is provided for under the terms of
the Israeli Asset Purchase Agreements.
(c) COMMUNICATIONS WITH RESPECT TO BUSINESS OPERATIONS. Seller shall
report to Purchaser as reasonably requested by Purchaser regarding the
operations of the Business, including information on product developments
and sales to the extent permitted by law, and developments in supplier
relationships, as well as any other information that would be useful to
Purchaser in keeping abreast of changes or proposed changes in the Business
and the Purchased Assets.
5.02. NO CONTINUING NEGOTIATIONS. Between the date hereof and the earlier
of the termination of this Agreement and the Closing Date, neither Seller nor
any Affiliate or Associate of Seller, nor any officer, director, employee or
shareholder of Seller or any such Affiliate or Associate, nor any party acting
on behalf of any of the foregoing, shall solicit or encourage, directly or
indirectly, any inquiries, discussions or proposals, or enter into any
discussions, negotiations or agreements with, or provide any confidential
information to, any Person other than Purchaser and its representatives with
respect to the transactions contemplated hereby or any sale, issuance, transfer
or encumbrance of any kind of the Business or any of the Purchased Assets (each
of the foregoing is referred to as a "Third Party Transaction"), other than
sales of Inventory in the ordinary course of business consistent with past
practice, as otherwise permitted by this Agreement, the Acquisition Documents or
the Ancillary Agreements, or other than any inquiries, discussions, proposals,
negotiations or agreements relating generally to the Seller (provided that the
Seller shall use all reasonable efforts to preserve and effectuate this
Agreement in connection with any such activity and any transaction resulting
therefrom).
5.03. NOTICES OF CERTAIN EVENTS. Seller shall promptly notify Purchaser of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with an
Assumed Contract which is a Material Contract;
(b) any material notice or other material communication from any
Person alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement or any of
the other Acquisition Documents;
(c) any material notice or other material communication from any
Governmental Authority in connection with the transactions contemplated by
this Agreement; or
(d) any actions, suits, claims, investigations or proceedings
commenced or, to their knowledge threatened against, relating to or
involving or otherwise affecting Seller, any of the Purchased Assets or the
Business that, if pending on the date of this Agreement, would have been
required to have been disclosed pursuant to Section 3.10 or that relate to
the consummation of the transactions contemplated by this Agreement.
5.04. SUPPLIER CUSTOMER INTRODUCTIONS. Seller shall use reasonable efforts,
upon the reasonable request of Purchaser, to introduce Purchaser, or arrange for
a personal introduction of Purchaser's representatives, to suppliers to and
customers of the Business for the purpose of ensuring good supplier and customer
relationships following the Closing.
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5.05. TRANSFER OF PERMITS. Seller will transfer to Purchaser on the Closing
Date, to the extent transferable, all of its rights in and to all existing
Permits for the operation of the Hudson, Massachusetts facility and will
cooperate with Purchaser after the Closing Date in Purchaser's effort to
finalize the transfer of and the issuance of additional Permits required by
Purchaser to expand this facility.
5.06. CERTIFICATE OF PERFORMANCE BY SELLER.
(a) At the Closing, Seller shall deliver to Purchaser a certificate
(the "Seller's Closing Certificate") signed by two duly authorized
executive officers of Seller that shall set forth either: (1)(A) that
Seller has performed and satisfied in all material respects each of its
obligations hereunder required to be performed and satisfied by it on or
prior to the Closing Date, and (B) each of the representations and
warranties of Seller contained herein or in any of the Acquisition
Documents and in any Schedules or Exhibits hereto or thereto shall have
been true and correct in all material respects and contained no knowing
misstatements or omissions that would have made any such representations or
warranties materially misleading when made, and such representations and
warranties are true and correct in all material respects and contain no
knowing misstatements or omissions that would make such representations and
warranties materially misleading as of the Closing; or (2) any ways in
which Seller may not have performed and satisfied in all material respects
each of its obligations hereunder required to be performed and satisfied by
it on or prior to the Closing Date and any required modifications or
amendments to such representations or warranties (including any Exhibits or
Schedules thereto) required to make such representations or warranties true
and correct in all material respects as of the Closing Date;
(b) In the event that (i) any modification or amendment to a
representation or warranty is required to be made in Seller's Closing
Certificate, and (ii) such modification or amendment constitutes evidence
of a knowing misrepresentation or omission to disclose a material fact by
Seller prior to the Closing Date, and (iii) such knowing misrepresentation
or omission has a material adverse impact on the transactions contemplated
by this Agreement and the Settlement Agreement, taken as a whole, then the
negotiation of a reevaluation of the transactions contemplated by this
Agreement as provided in Section 7.09 hereof shall take place after the
Closing and shall be accounted for at the time of the adjustment to the
Initial Purchase Price as provided in Section 2.08(b) of this Agreement, as
Purchaser's sole remedy at law and equity; and
(c) In the event that (i) Seller shall not have performed and
satisfied in all material respects each of its obligations under this
Agreement required to be performed and satisfied by it on or prior to the
Closing Date, or (ii) any modification or amendment to a representation or
warranty shall be required to be made in Seller's Closing Certificate in
order to make such representation or warranty true and correct in all
material respects as of the Closing, but such modification or amendment
does not result from a knowing misrepresentation or omission by Seller,
then to the extent Seller's failure to perform and satisfy its obligations
under this Agreement required to be performed or satisfied by it on or
prior to the Closing Date or the misrepresentation or omission corrected by
such modification or amendment gives rise to Damages to Purchaser,
Purchaser's remedy shall be to proceed against Seller for breach in
accordance with the provisions of Article IX of this Agreement, as
Purchaser's sole remedy at law and equity.
5.07. TRANSFER OF TANGIBLE MEDIA. Upon or promptly after the Closing,
Seller shall deliver possession to Purchaser of at least one tangible copy of
any and all software used in the Business that is either a Purchased Asset or
licensed to Purchaser under the License Agreement.
5.08. RELEASE OF MORAL RIGHTS Seller irrevocably waives and relinquishes,
and agrees to indemnify and hold Purchaser harmless from and against any claim,
action or proceeding in which Seller asserts, any "moral rights" or their
equivalent arising under the law of any country anywhere in the world that
Seller may possess with respect to any Non-Alpha Transferred IP Assets or any of
Seller's Intellectual Property Rights licensed by Seller to Purchaser under the
License Agreement other than the right of attribution.
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ARTICLE VI
COVENANTS OF PURCHASER
Purchaser agrees that:
6.01. NOTICES OF CERTAIN EVENTS. Purchaser shall promptly notify Seller of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement or any of the other Acquisition
Documents;
(b) any notice or other communication from any Governmental Authority
in connection with the transactions contemplated by this Agreement; or
(c) any actions, suits, claims, investigations or proceedings
commenced or, to their knowledge threatened against, relating to or
involving or otherwise affecting Purchaser, any of the Purchased Assets or
the Business that, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 4.05 or that
relate to the consummation of the transactions contemplated by this
Agreement.
6.02. USE OF NAME. Anything herein to the contrary notwithstanding, no
interest in or right to use the name "Digital Equipment Corporation" or any
derivation thereof or any logo, trademark or trade name in which Seller has any
interest (the "Retained Names and Marks") is being transferred to Purchaser
pursuant to the transactions contemplated by this Agreement. The Purchaser
agrees not to use any materials bearing Retained Names and Marks or sell,
transfer or ship any inventory or products bearing Retained Names and Marks (i)
unless requested to do so by Seller, (ii) to the extent displayed on any of the
Purchased Assets at the Closing Date or (iii) as required under Assumed
Contracts with customers for a period of up to the earlier of (A) [*]. Purchaser
agrees that Seller shall have no Liability or responsibility for claims by third
parties arising out of, or relating to, the use by Purchaser of any Retained
Name or ▇▇▇▇ after the Closing Date, other than for uses requested in writing by
Seller and other than claims which are in respect of Excluded Liabilities, and
Purchaser agrees to defend, indemnify and hold harmless Seller from any and all
Claims that may arise out of the use thereof by Purchaser.
6.03. CERTIFICATE OF PERFORMANCE BY PURCHASER.
(a) At the Closing, Purchaser shall deliver to Seller a certificate
(the "Purchaser's Closing Certificate") signed by two duly authorized
executive officers of Purchaser that shall set forth either: (1)(A) that
Purchaser has performed and satisfied in all material respects each of its
obligations hereunder required to be performed and satisfied by it on or
prior to the Closing Date, and (B) each of the representations and
warranties of Purchaser contained herein or in any of the Acquisition
Documents and in any Schedules or Exhibits hereto or thereto shall have
been true and correct in all material respects and contained no knowing
misstatements or omissions that would have made any such representations or
warranties materially misleading when made, and such representations and
warranties are true and correct in all material respects and contain no
knowing misstatements or omissions that would make such representations and
warranties materially misleading as of the Closing; or (2) any ways in
which Purchaser may not have performed and satisfied in all material
respects each of its obligations hereunder required to be performed and
satisfied by it on or prior to the Closing Date and any required
modifications or amendments to such representations or warranties
(including any Exhibits or Schedules thereto) required to make such
representations or warranties true and correct in all material respects as
of the Closing Date.
(b) In the event that (i) Purchaser shall not have performed and
satisfied in all material respects each of its obligations under this
Agreement required to be performed and satisfied by it on or prior to the
Closing Date, or (ii) any modification or amendment to a representation or
warranty shall be
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required to be made in Purchaser's Closing Certificate in order to make
such representation or warranty true and correct in all material respects
as of the Closing, but such modification or amendment does not result from
a knowing misrepresentation or omission by Purchaser, then to the extent
Purchaser's failure to perform and satisfy its obligations under this
Agreement required to be performed or satisfied by it on or prior to the
Closing Date or the misrepresentation or omission corrected by such
modification or amendment gives rise to Damages to Seller, Seller's remedy
shall be to proceed against Purchaser for breach in accordance with the
provisions of Article IX of this Agreement, as Seller's sole remedy at law
and equity.
ARTICLE VII
COVENANTS OF ALL PARTIES
7.01. EFFORTS TO CLOSE; CERTAIN FILINGS.
(a) The parties agree to use their respective best efforts to
cooperate with the requests of all Governmental Authorities in connection
with the transactions contemplated by this Agreement and the other
Acquisition Documents. Subject to the following sentence, the parties agree
that they shall (i) cooperate in any investigation and promptly respond to
any request for additional information issued by any domestic or foreign
antitrust or equivalent enforcement agency and (b) defend the transactions
contemplated by this Agreement and the Settlement Agreement in court or in
any administrative Proceeding against any challenge to the legality
thereof, including the prosecution of appeals. Without limiting the
generality of the foregoing, neither party hereto shall be obligated to
comply with any request by, or any requirement of the Federal Trade
Commission (the "FTC"), the Department of Justice (the "DOJ") or any other
governmental authority or enter into a consent decree or settlement with
such agency which requires either party hereto to: (i) dispose of any
assets or operations material to this transaction; or (ii) to comply with
any material restriction on the manner in which they conduct their
respective operations. The parties hereto agree to modify and amend this
Agreement as necessary to implement a proposed settlement with an antitrust
agency provided that such settlement is consistent with this Section 7.01.
(b) The parties hereto shall cooperate with one another in determining
whether any action by or in respect of, or filing with, any Governmental
Authority is required or reasonably appropriate, in connection with the
consummation of the transactions contemplated by this Agreement and the
other Acquisition Documents. Without limiting the generality of the
foregoing, Purchaser and its respective Affiliates and Associates
(including any "ultimate parent entity", as defined in the HSR Act), and
Seller and Seller's respective Affiliates and Associates (including any
"ultimate parent entity", as defined in the HSR Act) shall, unless this
Agreement shall have been terminated pursuant to Section 10.01, make all
required or requested submissions, under the HSR Act or any analogous
Applicable Law, if required. Subject to the terms and conditions of this
Agreement, in taking such actions or making any such filings, the parties
hereto shall furnish information required in connection therewith and seek
timely to obtain any such actions, consents, approvals or waivers;
PROVIDED, HOWEVER, that the parties hereto shall cooperate with each other
in connection with the making of all such filings to the extent permitted
by Applicable Law and by the Settlement Joint Defense Agreement between
Seller and Purchaser dated November 3, 1997.
7.02. FURTHER ASSURANCES. Each party hereto agrees to execute and deliver
and, as reasonably requested by the other party, have their respective
subsidiaries execute and deliver, such other documents, certificates, agreements
and other writings and to take such other actions as may be reasonably necessary
in order to consummate or implement expeditiously the transactions contemplated
by this Agreement, the Acquisition Documents and the Ancillary Agreements. From
and after the Closing Date, each of Seller and Purchaser shall comply at its own
expense with all conditions and requirements imposed on it as set forth in (a)
the Required Governmental Approvals, to the extent necessary such that all such
Governmental Approvals will remain in full force and effect assuming, if
applicable, continued compliance of the terms thereof by the other party and (b)
the
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Required Contractual Consents to the extent necessary such that all such
consents and approvals will remain effective and enforceable against the Persons
giving such consents and approvals, assuming, if applicable, continued
compliance with the terms thereof by the other party.
7.03. PUBLIC ANNOUNCEMENTS. Seller and Purchaser shall consult with each
other before issuing any press release or otherwise making any public statement
with respect to the transactions contemplated by this Agreement, and shall not
issue any such press release or make any such public statement prior to such
consultation except as may be required by applicable law or requirements of the
Exchange Act, NASDAQ or any national securities exchange as advised by counsel,
in which case the parties shall use their reasonable efforts to consult with
each other prior to issuing such a release or making such a statement.
7.04. TAX MATTERS.
(a) COOPERATION. The parties hereto agree to furnish or cause to be
furnished to one another, upon request, as promptly as practicable, such
information and assistance relating to the Purchased Assets, the Assumed
Liabilities and the Business as is reasonably necessary for the filing of
all Tax Returns, and making of any election related to Taxes, the
preparation for any audit by any taxing authority, and the prosecution or
defense of any claim, suit or proceeding relating to any Tax Return. The
parties hereto shall cooperate with each other in the conduct of any audit
or other proceeding related to Taxes involving the Business and each shall
execute and deliver such powers of attorney and other documents as are
necessary to carry out the intent of this Section 7.04(a).
(b) ALLOCATION OF TAXES. All property taxes and similar ad valorem
obligations levied with respect to the Purchased Assets for a taxable
period that includes (but does not end on) the Closing Date shall be
apportioned between Seller and Purchaser as of the Closing Date based on
the number of days of such taxable period included in the Pre-Closing Tax
Period and the number of days of such taxable period included in the
Post-Closing Tax Period. Seller shall be liable for the proportionate
amount of such Taxes that is attributable to the Pre-Closing Tax Period,
and Purchaser shall be liable for the proportionate amount of such Taxes
that is attributable to the Post-Closing Tax Period. Within a reasonable
period after the Closing, Seller and Purchaser shall present a statement to
the other setting forth the amount of reimbursement to which each is
entitled under this Section 7.04(b), together with such supporting evidence
as is reasonably necessary to calculate the proration amount. The proration
amount shall be paid by the party owing it to the other within thirty (30)
days after delivery of such statement. Thereafter, Seller shall notify
Purchaser upon receipt of any ▇▇▇▇ for personal property taxes relating to
the Purchased Assets, part or all of which are attributable to the
Post-Closing Tax Period, and shall promptly deliver such ▇▇▇▇ to Purchaser
who shall pay the same to the appropriate taxing authority, provided that
if such ▇▇▇▇ covers any part of the Pre-Closing Tax Period, Seller shall
also remit prior to the due date of assessment to Purchaser payment for the
proportionate amount of such ▇▇▇▇ that is attributable to the Pre-Closing
Tax Period. In the event that either Seller or Purchaser shall thereafter
make a payment for which it is entitled to reimbursement under this Section
7.04(b), the other party shall make such reimbursement promptly, but in no
event later than thirty (30) days after the presentation of a statement
setting forth the amount of reimbursement to which the presenting party is
entitled along with such supporting evidence as is reasonably necessary to
calculate the amount of reimbursement. Any payment required under this
Section 7.04(b) and not made within thirty (30) days after delivery of the
statement shall bear interest at the rate per annum determined, from time
to time, under the provisions of Section 6621(a)(2) of the Code for each
day until paid.
(c) RESPONSIBILITY FOR PAYMENT. Except as provided in Section 7.04(b),
Seller shall pay as and when due any and all Liabilities for Taxes of or
relating to the Purchased Assets and the Business (i) accrued with respect
to all taxable periods of Seller ending on or before the Closing Date, (ii)
accrued with respect to the Purchased Assets or the Business during all
periods up to and including the Closing whether or not such periods are
taxable periods or (iii) incurred and payable as a result of the
transactions contemplated by this Agreement (including but not limited to
any transfer, documentary, sales, use or other Taxes assessed upon or with
respect to the transfer of the Purchased Assets to Purchaser, and any
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recording or filing fees with respect thereto), except for the tax
obligations provided for in Section 2.03(d) which Purchaser shall pay.
(d) SALES TAX CERTIFICATES. Seller will cooperate with Purchaser in
obtaining the appropriate certificates and other documents with respect to
any sales and use tax liability arising in connection with the acquisition
of the Purchased Assets.
7.05. ALLOCATION OF PURCHASE PRICE. Purchaser and Seller hereby agree that
the Purchase Price of the Purchased Assets (including the amount of the Assumed
Liabilities) will be allocated within sixty (60) Business Days after the Closing
Date. Purchaser and Seller agree to be bound by such allocation. Such allocation
shall comply with Section 1060 of the Internal Revenue Code of 1986, as amended,
and Treasury Regulations promulgated thereunder. Such allocation shall also be
consistent with the statements of value contained in the Real Property Deeds.
Subject to the requirements of any applicable tax law, all Tax Returns and
reports including, without limitation, IRS form 8594, filed by the Purchaser and
the Seller shall be prepared consistently with such allocation and neither the
Purchaser nor the Seller shall take a position contrary thereto. In the event of
any Purchase Price adjustment in accordance with Section 2.08 hereof, the
Purchaser and the Seller agree to adjust such allocation to reflect such
Purchase Price adjustment and to file consistently any tax returns and reports
including, without limitation, IRS form 8594, required as a result of such
Purchase Price adjustment. The foregoing allocation shall not affect Seller's
obligation to pay and indemnify and hold Purchaser harmless from and against
such Taxes arising prior to or on the Closing Date, or as a result of the
transfer of the Purchased Assets to Purchaser, unless otherwise provided in this
Agreement or in the Israeli Asset Purchase Agreements.
7.06. CONFIDENTIALITY. Purchaser and Seller acknowledge and confirm that
they have entered into a confidentiality agreement dated September 9, 1997, as
amended (the "Confidentiality Agreement"), and that the Confidentiality
Agreement shall remain in full force and effect in accordance with its terms,
notwithstanding Purchaser's and Seller's entering into this Agreement and
whether or not the transactions contemplated by this Agreement and the
Settlement Agreement are consummated or terminated.
7.07. ACCESS TO INFORMATION.
(a) Subject to the provision of the Confidentiality Agreement, from
the date hereof until the Closing Date, Seller hereto shall promptly (i)
give Purchaser and its respective counsel, financial advisors, accountants,
auditors and other authorized representatives reasonable access to the
offices, properties, Books and Records relating to the Business and the
Purchased Assets, upon reasonable prior notice, (but only in a manner that
does not cause disruption to Seller's business activities and only in
accordance with Seller's site security regulations then in effect), (ii)
make available to Purchaser and its counsel, financial advisors, auditors
and other authorized representatives such financial and operating data and
other information relating to the Business and the Purchased Assets, as
Purchaser may reasonably request and (iii) instruct its directors,
officers, key employees, counsel, auditors and financial advisors to
cooperate with Purchaser's directors, officers, key employees, counsel,
financial advisors, auditors and other authorized representatives;
provided, however, that if Seller reasonably believes that the disclosure
of any information hereunder would violate any Applicable Law, then Seller
shall be entitled not to disclosure such information, and the parties agree
to negotiate in good faith alternative means of disclosure, if possible,
that would not violate Applicable Law.
(b) Seller agrees that from and after the Closing Date, it will permit
Purchaser and its representatives, in accordance with the procedures set
forth in paragraph 7.07(a) above, to have access to and to examine and take
copies of its Books and Records which are not delivered to Purchaser
pursuant hereto and which directly relate to the Business and the Purchased
Assets occurring prior to the Closing or to transactions or events
occurring subsequent to the Closing which arise out of transactions or
events occurring prior to the Closing. All Books and Records of the Seller
relating to the Business and the Purchased Assets as conducted by Seller
before the Closing Date and not delivered to Purchaser pursuant hereto will
be preserved by Seller for a period of not less than seven years following
the Closing Date, or such longer period as may be required by Applicable
Law; provided, however, that Seller shall provide
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written notice to Purchaser after the expiration of such seven year period
if Seller desires to dispose of or destroy such Books and Records and shall
provide Purchaser with the right to copy or take possession of such Books
and Records.
(c) Purchaser agrees that from and after the Closing Date, it will
permit Seller and its representatives, in accordance with the procedures
set forth in paragraph 7.07(a) above, to have access to and take copies of
all Books and Records of Seller which are delivered to Purchaser pursuant
to this Agreement. All such Books and Records delivered to Purchaser will
be preserved by Purchaser for a period of not less than seven years
following the Closing Date, or such longer period as may be required by
Applicable Law; provided, however, that Purchaser shall provide written
notice to Seller after the expiration of such seven year period if
Purchaser desires to dispose of or destroy such Books and Records and shall
provide Seller with the right to copy or take possession of such Books and
Records.
7.08. LEASE AGREEMENT AND TRANSITION SERVICES AGREEMENT.
(a) Purchaser and Seller agree to negotiate in good faith prior to the
Closing a Lease Agreement pursuant to which Purchaser shall lease to Seller
commercial space after the Closing Date at Seller's Hudson, Massachusetts
facility on reasonable commercial terms to accommodate the Alpha Employees
until relocated.
(b) Purchaser and Seller understand and agree that it will be in the
interests of both parties to establish arrangements whereby each shall
provide various services to the other on a transitional basis (hereinafter,
"Transition Services") following the Closing Date and in furtherance of the
purposes and intent of the transactions described in the Acquisition
Agreements and the Ancillary Agreements to be executed and delivered
between the parties on the Closing Date. Purchaser and Seller understand
that the exact nature and scope of the Transition Services cannot as of the
date hereof be determined with specificity or completeness, and that such
determinations will in part be dependent upon the actual scheduling of the
Closing Date and other factors, and that particular Transition Services may
be identified before and after the Closing Date. Purchaser and Seller agree
to meet and confer on a timely basis, and from time to time, to negotiate
and enter into a Transition Services Agreement to provide for the delivery
of and payment for Transition Services. Purchaser and Seller agree that it
is their mutual intention to facilitate the delivery of Transition Services
on reasonable terms and conditions, and to accommodate the addition of
Transition Services following the Closing Date as the usefulness and
facilitation to provide such services is identified.
7.09 KNOWING MISREPRESENTATION OR OMISSION. If there is evidence of a
knowing misrepresentation or omission to disclose a material fact by Seller's
management to Purchaser's management prior to the Closing Date, and such
misrepresentation has a material adverse impact on the transaction contemplated
by this Agreement and the Settlement Agreement, taken as a whole, Purchaser and
Seller agree in good faith to negotiate a revaluation of the transactions
contemplated by this Agreement and the Settlement Agreement that accounts for
the impact of such material misrepresentation.
7.10 ENVIRONMENTAL MATTERS. Seller and Purchaser have identified the
presence of certain environmental contamination at the Seller's Hudson,
Massachusetts property (the "Hudson Property") arising out of uses of the ▇▇▇▇▇▇
Property prior to Seller's ownership and requiring further investigation and
clean-up under Environmental Laws (the "Identified Environmental
Contamination"). For purposes of the agreements in this Section 7.10, the
Identified Environmental Contamination shall be limited to the contaminants and
geographic areas (the "Sites") set forth in the Summary of Identified
Environmental Contamination attached hereto as SCHEDULE 7.10. Seller and
Purchaser agree that the Identified Environmental Contamination shall be
addressed as follows:
(a) Seller will develop a plan (the "Plan") to conduct all response
actions required under the Massachusetts Contingency Plan, 310 CMR 40.0000
ET SEQ. ("MCP"), in order to obtain one or more Response Action Outcomes
("RAOs") under the MCP for the Sites consistent with the Seller's
activities on
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and uses of the Property (the "Response Actions"), which Plan may include
the implementation of one or more Activity and Use Limitations (as defined
in the MCP) as will not interfere with manufacturing activities consistent
with Seller's present use of the ▇▇▇▇▇▇ Property.
(b) Seller will commence implementation of the Plan prior to Closing
and will use diligent efforts to complete the Response Actions prior to
Closing. After Closing, Purchaser agrees to provide to Seller responsible
access to the Property, if necessary, to complete any and all work
associated with the completion of the Response Actions and obtaining the
RAOs. Purchaser agrees further to cooperate with Seller in satisfying any
recording and filing requirements in connection with the RAOs.
(c) Seller shall be responsible for all costs associated with
implementation of the Plan and completion of the Response Actions.
ARTICLE VIII
CONDITIONS TO CLOSING
8.01. CONDITIONS TO OBLIGATIONS OF PURCHASER. The obligations of Purchaser
to consummate the Closing are subject to the satisfaction or waiver of each of
the following conditions:
(a) SELLER'S CLOSING CERTIFICATE. Purchaser shall have received
Seller's Closing Certificate.
(b) HSR ACT. Any waiting period (and any extension thereof) under the
HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
(c) ADDITIONAL FACILITY PERMIT. Seller shall have obtained and
transferred to Purchaser a Permit necessary to authorize the Hudson,
Massachusetts facility to discharge no less than 600,000 gallons per day of
waste water to publicly-owned wastewater treatment facilities.
(d) LITIGATION. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any
court or other Governmental Authority preventing the transfers contemplated
hereby or the consummation of the Closing, shall be in effect as of the
Closing Date, and no proceeding by any court or other Governmental
Authority seeking to restrict or prohibit the transfer and exchange
contemplated hereby or the consummation of the Closing shall be pending as
of the Closing Date, except for such proceedings which, if concluded
successfully by such court or Governmental Authority, could not reasonably
be expected to have a Material Adverse Effect on the Business and Purchased
Assets.
(e) ACQUISITION DOCUMENTS; ANCILLARY AGREEMENTS. All Acquisition
Documents and Ancillary Agreements to which Seller or Seller's subsidiaries
are a party shall have been duly executed and delivered to Purchaser.
(f) OPINIONS OF COUNSEL. Purchaser shall have received an opinion of
counsel from Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel
to Seller, dated the Closing Date and an opinion from Seller's Assistant
General Counsel, dated the Closing Date in form and substance as reasonably
agreed to by Purchaser and Seller.
8.02. CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of Seller to
consummate the Closing are subject to the satisfaction or waiver of each of the
following conditions:
(a) PURCHASER'S CLOSING CERTIFICATE. Seller shall have received
Purchaser's Closing Certificate.
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(b) HSR ACT. Any waiting period (and any extension thereof) under the
HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
(c) LITIGATION. No temporary restraining order, preliminary or
permanent injunction, cease and desist order or other order issued by any
court or other Governmental Authority preventing the transfers contemplated
hereby or the consummation of the Closing, shall be in effect as of the
Closing Date, and no proceeding by any court or other Governmental
Authority seeking to restrict or prohibit the transfer and exchange
contemplated hereby or the consummation of the Closing shall be pending as
of the Closing Date, except for such proceedings which, if such court or
Governmental Authority, could not reasonably be expected to have a Material
Adverse Effect on the Business and Purchased Assets.
(d) ACQUISITION DOCUMENTS; ANCILLARY AGREEMENTS. All Acquisition
Documents and Ancillary Agreements to which Purchaser or Purchaser's
subsidiaries are a party shall have been duly executed and delivered to
Seller.
(e) OPINION OF COUNSEL. Seller shall have received an opinion of
counsel from ▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel to Purchaser, dated the
Closing Date and an opinion from Purchaser's General Counsel, dated the
Closing Date, in form and substance as reasonably agreed to by Purchaser
and Seller.
ARTICLE IX
INDEMNIFICATION
9.01. AGREEMENT TO INDEMNIFY.
(a) PURCHASER INDEMNITEES. Purchaser and its Affiliates, and each
officer, director, shareholder, employee, representative and agent of all
of the foregoing (collectively, the "Purchaser Indemnitees"), shall each be
indemnified and held harmless to the extent set forth in this Article IX by
Seller with respect to any and all Damages incurred by any Purchaser
Indemnitee as a proximate result of: (1) an inaccuracy or misrepresentation
in the representations and warranties in this Agreement or any other
Acquisition Document, or any breach of any covenant or agreement made in
this Agreement or any other Acquisition Document (including any Exhibits
(other than the Ancillary Agreements) and Schedules hereto and thereto), by
Seller; (2) any Excluded Liabilities; and (3) any Non-Alpha Products'
(conforming strictly to Seller's designs as of the Closing Date) made,
used, imported, or sold by or on behalf of Purchaser, infringing any patent
of any third party ("Third Party Patent Claims"), provided that Seller
shall have no indemnification obligations hereunder with respect to any
Non-Alpha Product of a design that has been enhanced or modified after the
Closing Date other than a minor modification that Purchase can demonstrate
is actually necessary solely for migrating to another fabrication process;
and (4) Non-Alpha Products' or future generations thereof made, copied,
displayed, used, performed, imported, sold, offered for sale, distributed
or otherwise disposed of by or on behalf of Purchaser, infringing any
copyrights or mask work rights, or misappropriating trade secrets of any
third party ("Third Party Non-Patent IP Rights") where such action or claim
is based solely on Seller's infringement or misappropriation of such Third
Party Non-Patent IP Rights prior to the Closing Date ("Third Party
Non-Patent IP Claims"); provided that Seller shall have no indemnification
obligation hereunder with respect to any such action or claim to the extent
such action or claim is based on any addition, modification or combination
made, utilized or implemented by Purchaser that was not part of, or
utilized in connection with the making, copying, displaying, using,
performing, importing, selling, offering for sale, distributing or
disposing of, any Non-Alpha Product prior to the Closing Date.
(b) SELLER INDEMNITEES. Seller and its Affiliates, and each officer,
director, shareholder, employee, representative and agent of all of the
foregoing (collectively, the "Seller Indemnitees"), shall each be
indemnified and held harmless to the extent set forth in this Article IX by
Purchaser, with respect to any and all Damages incurred by any Seller
Indemnitee as a proximate result of (1) an inaccuracy or
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misrepresentation in the representations and warranties made in this
Agreement or in any other Acquisition Document, or any breach of any
covenant or agreement in this Agreement or any other Acquisition Document
(including any Exhibits (other than the Ancillary Agreements) and Schedules
hereto and thereto), by Purchaser; and (2) any Assumed Liabilities.
(c) EFFECT OF INJUNCTION. If Purchaser's use of any of the Non-Alpha
Transferred IP Assets is enjoined in any lawsuit with respect to Third
Party Rights or, if in Seller's reasonable opinion, the use of any of the
Non-Alpha Transferred IP Assets is likely to be enjoined in a lawsuit,
Seller shall, at its option and expense, either (a) procure for Intel the
right to use such Non-Alpha Transferred IP Assets or (b) modify any such
Non-Alpha Transferred IP Assets to render it noninfringing, while
maintaining substantially equivalent functionality and quality, and supply
to Purchaser such Non-Alpha Transferred IP Assets.
(d) EQUITABLE RELIEF. Nothing set forth in this Article IX shall be
deemed to prohibit or limit any Purchaser Indemnitee's or Seller
Indemnitee's right at any time before, on or after the Closing Date, to
seek injunctive or other equitable relief for the failure of any
Indemnifying Party to perform or comply with any covenant or agreement
contained herein.
9.02. INDEMNIFICATION PAYMENTS AND SURVIVAL.
(a) No action may be brought by an Indemnitee with respect to any
indemnifiable claim under this Article IX more than twelve (12) months
after the Closing Date, except that (i) claims, if any, asserted in writing
prior to twelve (12) months after the Closing Date identified as a claim
for indemnification pursuant to this Article IX shall survive until finally
resolved and satisfied in full, (ii) actions for Damages in respect of
Taxes may be brought at any time prior to the expiration of the statute of
limitations with respect to such Taxes, (iii) actions for Damages with
respect to either Purchaser or Seller Environmental Liabilities may be
brought at any time within thirty-six (36) months after the Closing Date,
(iv) actions may be brought at any time for Damages (A) resulting from any
fraudulent misrepresentation intentionally made in order to induce a party
to enter into this Agreement, (B) by Seller, in respect of any claim
asserted against Seller by a third party in respect of any Assumed
Liability or (C) by Purchaser, in respect of any Claim asserted against
Purchaser by a third party in respect of any Excluded Liability, (v)
actions for Damages with respect to Third Party Patent Claims may be
brought at any time within 18 months after the Closing Date, and (vi)
actions for Damages with respect to Third Party Non-Patent IP Claims may be
brought at any time within 48 months after the Closing Date. Each covenant
and agreement contained herein shall survive until performed in accordance
with its terms.
(b) Except as provided in Section 9.02(d), no claim may be made
against an Indemnifying Party pursuant to its indemnification obligations
set forth in this Article IX with respect to any individual item of Damage
unless and until the aggregate of all such Damages actually incurred by the
Indemnitee exceeds $25,000,000 (the "THRESHOLD AMOUNT"), and the
Indemnitee's rights to indemnification hereunder shall only be with respect
to such amounts in excess of the Threshold Amount. In the case of any claim
for indemnification made by the Indemnitee to the Indemnifying Party in
which the Indemnitee asserts for the first time that the Threshold Amount
has been or will be exceeded after or upon satisfaction of the claim for
which the Indemnitee seeks indemnification, the Indemnitee shall set forth
in reasonable detail the Damages, including the basis therefor, which have
exceeded or which together with the claim being made, will exceed the
Threshold Amount. The Indemnifying Party's obligation to indemnify the
Indemnitee and hold it harmless under Section 9.01 with respect to Damages
other than with respect to either Purchaser or Seller Environmental
Liabilities, as the case may be, shall in no event exceed an amount equal
to $500,000,000. The Indemnifying Party shall not be obligated for any
indirect, special or consequential damages incurred by the Indemnitee.
(c) For purposes of determining the amount of Damages incurred by an
Indemnitee, such Damages shall be net of any insurance payment actually
received by the Indemnitee in compensation for the same Damages for which
indemnification is sought and shall be reduced by the amount of any tax
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benefits to be realized by the Indemnitee with respect to the matter which
was the basis for the Damages for which indemnification is sought.
(d) Notwithstanding the provisions of Section 9.02(b), the Threshold
Amount shall not apply (i) to claims by Purchaser with respect to Excluded
Liabilities, (ii) to claims by Seller with respect to Assumed Liabilities,
(iii) to claims by either party with respect to Losses on Disposition, (iv)
to claims by either party with respect to the Lease Agreement or the
Transition Services Agreement and (v) claims for indemnification by Seller
against Purchaser with respect to Section 6.02 of this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Agreement, but subject to Section 10.02, except in the case of fraud,
willful misconduct or intentional misrepresentation, the indemnity
provisions of this Article IX shall be the sole and exclusive remedy of
each party against the other for breach of the representations and
warranties made in this Agreement or in any other Acquisition Document, or
any breach of any covenant, agreement or obligation made in this Agreement
or any other Acquisition Document.
(f) The survival periods and rights to indemnification provided for in
this Article IX shall remain in effect, notwithstanding any investigation
at any time by or on behalf of any party hereto or any waiver of any party
hereto of any condition to such party's obligation to consummate the
transactions contemplated hereby.
9.03. CLAIMS FOR INDEMNIFICATION. If any Indemnitee shall believe that such
Indemnitee is entitled to indemnification pursuant to this Article IX in respect
of any Damages, such Indemnitee shall give the appropriate Indemnifying Party
prompt written notice thereof. Any such notice shall set forth in reasonable
detail and to the extent then known the basis for such claim for
indemnification. The failure of such Indemnitee to give notice of any claim for
indemnification promptly, but within the periods specified by Section 9.02,
shall not adversely affect such Indemnitee's right to indemnification hereunder
unless and only to the extent that such failure adversely affects the
Indemnifying Party's ability to reasonably defend such claim. Each such claim
for indemnity shall expressly state that the Indemnifying Party shall have only
the thirty (30) Business Day period referred to in the next sentence to dispute
or deny such claim. The Indemnifying Party shall have thirty (30) Business Days
following its receipt of such notice either to (a) acquiesce in such claim by
giving such Indemnitee written notice of such acquiescence or (b) object to the
claim by giving such Indemnitee written notice of the objection. If (i)
Indemnitee's notice clearly states that a failure by the Indemnifying Party to
object to the claim within thirty (30) Business Days following its receipt shall
entitle the Indemnitee to be indemnified, and (ii) the Indemnifying Party does
not respond within such thirty (30) Business Day period, such Indemnitee shall
be entitled to be indemnified for all Damages reasonably and proximately
incurred by such Indemnitee in respect of such claim subject to the limitations
set forth in Section 9.02. If (i) the Indemnitee's notice does not clearly state
that a failure by the Indemnifying Party to object to the claim within thirty
(30) Business Days following its receipt shall entitle the Indemnitee to be
indemnified, and (ii) the Indemnifying Party does not respond within such thirty
(30) Business Day period, Indemnitee claim shall be deemed rejected. If the
Indemnifying Party objects to such claim in a timely manner, and such Indemnitee
and the Indemnifying Party are unable to resolve their dispute within ten (10)
Business Days following delivery of such objection (or such additional period of
time as may be mutually agreed to by such Persons), the claim shall be submitted
immediately to dispute resolution pursuant to Section 11.11.
9.04. DEFENSE OF CLAIMS. In connection with any claim that may give rise to
indemnity under this Article IX resulting from or arising out of any claim or
Proceeding against an Indemnitee by a Person that is not a party hereto, the
Indemnifying Party may but shall not be obligated to (unless such Indemnitee
elects not to seek indemnity hereunder for such claim), upon written notice to
the relevant Indemnitee, assume the defense of any such claim or Proceeding if
the Indemnifying Party with respect to such claim or Proceeding acknowledges to
the Indemnitee the Indemnitee's right to indemnity pursuant hereto to the extent
provided herein and provides assurances, reasonably satisfactory to such
Indemnitee, that the Indemnifying Party will be financially able to satisfy such
claim to the extent provided herein if such claim or Proceeding is decided
adversely. If the Indemnifying Party assumes the defense of any such claim or
Proceeding, the Indemnifying Party shall select counsel reasonably acceptable to
such Indemnitee to conduct the defense of such claim or Proceeding, shall take
all
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steps necessary in the defense or settlement thereof and shall at all times
diligently and promptly pursue the resolution thereof. If the Indemnifying Party
shall have assumed the defense of any claim or Proceeding in accordance with
this Section 9.04, the Indemnifying Party shall be authorized to consent to a
settlement of, or the entry of any judgment arising from, any such claim or
Proceeding, without the prior written consent of such Indemnitee; PROVIDED,
HOWEVER, that the Indemnifying Party shall, subject to the provisions of Section
9.01, pay or cause to be paid all amounts arising out of such settlement or
judgment concurrently with the effectiveness thereof; PROVIDED FURTHER, that the
Indemnifying Party shall not be authorized to encumber any of the assets of any
Indemnitee or to agree to any restriction that would apply to any Indemnitee or
to its conduct of business; and PROVIDED FURTHER, that a condition to any such
settlement shall be a complete release of such Indemnitee and its Affiliates,
directors, officers, employees and agents with respect to such claim, including
any reasonably foreseeable collateral consequences thereof. Such Indemnitee
shall be entitled to participate in (but not control) the defense of any such
action, with its own counsel and at its own expense. Each Indemnitee shall, and
shall cause each of its Affiliates, directors, officers, employees and agents
to, cooperate fully with the Indemnifying Party in the defense of any claim or
Proceeding being defended by the Indemnifying Party pursuant to this Section
9.04. If the Indemnifying Party does not assume the defense of any claim or
Proceeding resulting therefrom in accordance with the terms of this Section
9.04, such Indemnitee may defend against such claim or Proceeding in such manner
as it may deem appropriate, including settling such claim or Proceeding after
giving notice of the same to the Indemnifying Party, on such terms as such
Indemnitee may deem appropriate. If the Indemnifying Party is ultimately
adjudged liable and seeks to question the manner in which such Indemnitee
defended such claim or Proceeding or the amount of or nature of any such
settlement, the Indemnifying Party shall have the burden to prove by a
preponderance of the evidence that such Indemnitee did not defend such claim or
Proceeding in a reasonably prudent manner.
ARTICLE X
TERMINATION
10.01. GROUNDS FOR TERMINATION. This Agreement may be terminated at any
time prior to the Closing:
(a) By mutual written agreement of Seller and Purchaser; or
(b) By Seller or Purchaser at any time after June 30, 1998 (the
"Outside Date") upon five (5) days' written notice to the other party.
10.02. EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 10.01, this Agreement, except for the provisions
of Article IX, this Section 10.02 and Article XI, shall become void and of no
further force or effect, without any liability on the part of any party or its
directors, officers, employees, representatives or shareholders. Nothing in this
Section 10.02 shall relieve any party to this Agreement of Liability for breach
of this Agreement.
ARTICLE XI
MISCELLANEOUS
11.01. NOTICES. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand, claim
or other communication hereunder shall be deemed duly given (a) if personally
delivered, when so delivered, (b) if mailed, two (2) Business Days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below, (c) if given
by telex or telecopier, once such notice or other communication is transmitted
to the telex or telecopier number specified below and the appropriate answer
back or telephonic confirmation is received, provided that such notice or other
communication is promptly thereafter mailed in accordance with the provisions of
clause (b) above or (d) if sent through an overnight delivery service in
circumstances to which such service guarantees next day delivery, the day
following being so sent:
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if to Purchaser, to:
Intel Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Mail Stop CH5-201
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Intel Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Mail Stop SC4 ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
if to Seller, to:
Digital Equipment Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
Digital Equipment Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
and General Counsel
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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and
Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including ordinary mail or
electronic mail), but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
11.02. AMENDMENTS; WAIVERS.
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by all parties hereto, or in the case of a waiver, by the
party against whom the waiver is to be effective.
(b) No waiver by a party of any default, misrepresentation or breach
of a warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation or
breach of a warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent occurrence. No failure or
delay by a party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Except as otherwise
specifically provided in this Agreement, the rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided under Applicable Law.
11.03. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the other Acquisition Documents and in closing and carrying out
the transactions contemplated hereby and thereby shall be paid by the party
incurring such cost or expense; PROVIDED, HOWEVER, that the filing fee in
respect of the HSR Filings shall be borne equally by the parties hereto
regardless of who is required to pay such fee under the HSR Act.
11.04. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
heirs, personal representatives and permitted assigns. No party hereto may
assign either this Agreement or any of its rights, interests or obligations
hereunder without the prior written approval of each other party, which approval
shall not be unreasonably withheld, provided that Purchaser may assign its
rights and obligations to one or more wholly owned subsidiaries subject to
Purchaser's guarantee of such subsidiary's or subsidiaries' performance of any
such obligations. Notwithstanding the foregoing, an assignment of this Agreement
made, or deemed to be made, as a consequence of any business combination
transaction, whether carried out as a sale of assets, merger, sale of stock or
any other combination thereof or similar transaction, by either party shall be
permitted without the other party's consent.
11.05. GOVERNING LAW. This Agreement shall be construed in accordance with
and governed by the internal laws (without reference to choice or conflict of
laws) of the State of Delaware.
11.06. COUNTERPARTS; EFFECTIVENESS. This Agreement may be signed in any
number of counterparts and the signatures delivered by telecopy, each of which
shall be an original, with the same effect as if the signatures were upon the
same instrument and delivered in person. This Agreement shall become effective
when each party hereto shall have received a counterpart hereof signed by the
other parties hereto.
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11.07. ENTIRE AGREEMENT; SURVIVAL OF SETTLEMENT AGREEMENT.
(a) This Agreement (including the Schedules and Exhibits
referred to herein, which are hereby incorporated by reference), the
other Acquisition Documents, the Ancillary Agreements and the
Settlement Agreement constitute the entire agreement between and among
the parties with respect to the subject matter hereof and thereof and
supersede all prior agreements, understandings and negotiations, both
written and oral, between and among the parties with respect to the
subject matter of this Agreement. Neither this Agreement nor any
provision hereof is intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
(b) On and after the Closing, the following provisions in the
Settlement Agreement shall remain in effect: Article IV, Sections B-G
and Sections I-J; Article V, Sections F-G; Article VI; Article VII; and
Article VIII, Sections B-F, Sections I-K and Sections M-O. In all other
respects, the remaining provisions of the Settlement Agreement shall
have no further force and effect.
11.08. CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof. All references to an Article, Section, Exhibit or Schedule are
references to an Article, Section, Exhibit or Schedule of this Agreement, unless
otherwise specified, and include all subparts thereof.
11.09. SEVERABILITY. If any provision of this Agreement, or the
application thereof to any Person, place or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable or void, the
remainder of this Agreement and such provisions as applied to other Persons,
places and circumstances shall remain in full force and effect only if, after
excluding the portion deemed to be unenforceable, the remaining terms shall
provide for the consummation of the transactions contemplated hereby in
substantially the same manner as originally set forth at the later of the date
this Agreement was executed or last amended.
11.10. CONSTRUCTION. The parties hereto intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any party has breached any representation, warranty or covenant
contained herein in any respect, the fact that there exists another
representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not
breached shall not detract from or mitigate the fact that the party is in breach
of the first representation, warranty or covenant.
11.11. DISPUTE RESOLUTION. All disputes arising directly under the
express terms of this Agreement or the grounds for termination thereof shall be
resolved as follows: The senior management of both parties shall meet to attempt
to resolve such disputes. If the disputes cannot be resolved by the senior
management, either party may make a written demand for formal dispute resolution
and specify therein the scope of the dispute. Within thirty days after such
written notification, the parties agree to meet for one day with an impartial
mediator and consider dispute resolution alternatives other than litigation. If
an alternative method of dispute resolution is not agreed upon within thirty
days after the one day mediation, either party may begin litigation proceedings.
11.12. SUBMISSION TO JURISDICTION; AGENT FOR SERVICE. EACH OF THE
PARTIES HERETO CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL
COURT LOCATED WITHIN THE CITY OF WILMINGTON, STATE OF DELAWARE, AND IRREVOCABLY
AGREES THAT ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR ANY
AGREEMENT OR INSTRUMENT EXECUTED HEREUNDER, SHALL BE LITIGATED IN SUCH COURTS,
AND EACH OF THE PARTIES WAIVES ANY
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OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS TO
THE CONDUCT OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS TO ALL SUCH
SERVICE OF PROCESS MADE IN THE MANNER SET FORTH IN SECTION 11.01. NOTHING
CONTAINED IN THIS SECTION 11.12 SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE
LEGAL PROCESS ON ANY OTHER PARTY IN ANY OTHER MANNER PERMITTED BY LAW.
11.13. MEANING OF INCLUDE AND INCLUDING. Whenever in this Agreement
the word "include" or "including" is used, it shall be deemed to mean "include,
without limitation" or "including, without limitation," as the case may be, and
the language following "include" or "including" shall not be deemed to set forth
an exhaustive list.
11.14. THIRD PARTY BENEFICIARIES. Other than Indemnitees under
Article IX who are not parties to this Agreement, no provision of this Agreement
shall create any third party beneficiary rights in any Person, including any
employee or former employee of Seller or any Affiliate or Associate thereof
(including any beneficiary or dependent thereof).
11.15. CONFIDENTIALITY. Neither of Purchaser or Seller will disclose
the terms of this Agreement without the prior written consent of the other
except if and to the extent required by applicable laws and other than
disclosure by Seller to Compaq Corporation. Either of Purchaser or Seller may
disclose this Agreement to the extent required by law or judicial order,
provided that if such disclosure is pursuant to judicial order or proceeding,
the disclosing party will notify the other party promptly before such disclosure
and will cooperate with the other party to seek confidential treatment with
respect to the disclosure if requested by the other party, and provided further
that if such disclosure is required pursuant to law or to the rules and
regulations of any federal, state or local governmental organization, the
parties will cooperate to seek confidential treatment of this Agreement, to the
maximum extent possible under law.
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IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PURCHASER:
INTEL CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Title: Executive Vice President
SELLER:
DIGITAL EQUIPMENT CORPORATION,
a Massachusetts corporation
By: R.E. ▇▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President, Digital Semiconductor
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SUMMARY OF OMITTED EXHIBITS AND SCHEDULES TO ASSET PURCHASE
AGREEMENT
EXHIBITS
Exhibit 1.01A Form of Assignment of Assumption Agreement
Exhibit 1.01B Form of ▇▇▇▇ of Sale
Exhibit 1.01C Form of Human Resources Agreement
Exhibit 1.01D(1) Form of Israeli Asset Purchase Agreement
Exhibit 1.01D(2) Form of Israeli Real Estate Purchase Agreement
Exhibit 1.01E Form of License Agreement
Exhibit 1.01F Form of Sales Agreement
Exhibit 1.01G Form of Supply Agreement
SCHEDULES
Schedule 1.01 Permitted Liens
Schedule 2.01(a) Real Property Legal Description
Schedule 2.01(b) Inventory
Schedule 2.01(d) Equipment
Schedule 2.01(f) Prepaid Expenses
Schedule 2.01(h) Assumed Contracts
Schedule 2.01(l) Software Tools Used in Business
Schedule 2.02(b) Excluded Contracts
Schedule 2.06(a)(1) Seller's Application of GAAP
Schedule 2.06(a)(2) Purchaser's Inventory Valuation Practices
Schedule 2.06(a)(3) Unaudited Statement as of December 26, 1997
Schedule 3.01 Location of Purchased Assets
Schedule 3.03 Governmental Authorizations
Schedule 3.04 Non-Contravention Exceptions
Schedule 3.05(a) Liabilities of Seller
Schedule 3.06 Absence of Certain Changes
Schedule 3.07(c) Personal Property Leases
Schedule 3.08 Capital Equipment on Order at 10/27/97
Schedule 3.10 Litigation
Schedule 3.11(a) Material Contracts
Schedule 3.11(c) Largest Suppliers
Schedule 3.12(a) Permits
Schedule 3.12(b) Required Consents
Schedule 3.14(b) Trademarks
Schedule 3.14(c) Patents
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Schedule 3.14(d) Copyrights and Mask Work Rights
Schedule 3.14(f) Intellectual Property Assets Contracts
Schedule 3.14(h) Infringement Generally
Schedule 3.14(i) Software Tools
Schedule 3.15(a) Environmental Permits
Schedule 3.15(c) Environmental Events or Reports
Schedule 3.16 Insurance Policies
Schedule 3.17 Tax Matters
Schedule 3.19 Product Warranties
Schedule 3.20 Backlog
Schedule 3.21 Material Disagreement or Change with Material Customers
Schedule 3.22(b) Representations Regarding Real Property
Schedule 3.22(f)(1) Hudson, Massachusetts Title Commitment
Schedule 4.03 Governmental Authorizations
Schedule 4.04 Required Consents
Schedule 7.10 Summary of Identified Environmental Contamination