Exhibit 2
[Execution Copy]
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ASSET PURCHASE AGREEMENT
By and between
AGERE SYSTEMS INC.
As Seller
And
TRIQUINT SEMICONDUCTOR, INC.
As Buyer
Dated as of October 21, 2002
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Agere Systems Proprietary
TABLE OF CONTENTS
Page
1. Definitions...................................................................2
1.1 Defined Terms........................................................2
1.2 Additional Defined Terms.............................................9
1.3 Other Definitional and Interpretive Matters..........................10
2. Purchase and Sale of the Optoelectronics Business.............................11
2.1 Purchase and Sale of Assets..........................................11
2.2 Excluded Assets......................................................12
2.3 Purchase Price.......................................................14
2.4 Assumed Liabilities..................................................14
2.5 Excluded Liabilities.................................................15
2.6 Further Assurances; Further Conveyances and Assumptions;
Consent of Third Parties.............................................15
2.7 Proprietary Information..............................................17
2.8 Bulk Sales Law.......................................................17
2.9 Taxes................................................................17
2.10 Buyer Designee.......................................................18
3. Representations and Warranties of Seller......................................18
3.1 Organization and Qualification; Subsidiaries.........................18
3.2 Authorization........................................................19
3.3 Binding Effect.......................................................19
3.4 Non-Contravention; Consents..........................................19
3.5 Title to Property; Principal Equipment; Sufficiency of Assets........20
3.6 Permits; Licenses....................................................21
3.7 Real Estate; Environmental Matters...................................21
3.8 Compliance With Laws.................................................23
3.9 Litigation...........................................................23
3.10 Business Employees...................................................23
3.11 Contracts............................................................24
3.12 Revenues; Financial Information; Absence of Certain Changes..........25
3.13 Intellectual Property................................................26
3.14 Product Liability and Recalls........................................28
3.15 Product Warranty.....................................................29
3.16 Inventory............................................................29
3.17 Customer and Suppliers...............................................29
3.18 Restrictions on the Business.........................................29
3.19 Brokers..............................................................30
3.20 Taxes................................................................30
3.21 Product Development..................................................30
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3.22 No Other Representations or Warranties...............................31
4. Representations and Warranties of Buyer.......................................31
4.1 Organization and Qualification.......................................31
4.2 Authorization; Binding Effect........................................31
4.3 Non-Contravention; Consents..........................................32
4.4 Brokers..............................................................33
4.5 No Inducement or Reliance; Independent Assessment....................33
4.6 Sufficiency of Funds.................................................33
4.7 No Other Representations or Warranties...............................34
5. Certain Covenants.............................................................34
5.1 Access and Information...............................................34
5.2 Conduct of the Optoelectronics Business..............................35
5.3 Tax Reporting and Allocation of Consideration........................37
5.4 Business Employees...................................................38
5.5 Collateral Agreements; Leased Equipment..............................40
5.6 Reasonable Commercial Efforts........................................40
5.7 Contacts with Suppliers and Customers................................41
5.8 Use of Agere Systems' Name...........................................42
5.9 Non-Solicitation or Hiring of Transferred Employees..................43
5.10 No Negotiation or Solicitation.......................................44
5.11 Non-Competition......................................................44
5.11 Future Collaborations................................................45
6. Confidential Nature of Information............................................45
6.1 Confidentiality Agreement............................................45
6.2 Seller's Proprietary Information.....................................45
6.3 Buyer's Proprietary Information......................................47
6.4 Confidential Nature of Agreements....................................48
7. Closing.......................................................................48
7.1 Deliveries by Seller or the Subsidiaries.............................48
7.2 Deliveries by Buyer or a Buyer Designee..............................49
7.3 Closing Date.........................................................49
7.4 Contemporaneous Effectiveness........................................49
8. Conditions Precedent to Closing...............................................50
8.1 General Conditions...................................................50
8.2 Conditions Precedent to Buyer's Obligations..........................51
8.3 Conditions Precedent to Seller's Obligations.........................52
8.4 Conditions Precedent to Real Estate Closing..........................52
9. Status of Agreements..........................................................53
9.1 Effect of Breach.....................................................53
9.2 Survival of Representations and Warranties...........................53
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9.3 General Agreement to Indemnify.......................................53
9.4 General Procedures for Indemnification...............................55
10. Miscellaneous Provisions......................................................56
10.1 Notices..............................................................57
10.2 Expenses.............................................................57
10.3 Entire Agreement; Modification.......................................58
10.4 Assignment; Binding Effect; Severability.............................58
10.5 Governing Law........................................................58
10.6 Consent to Jurisdiction..............................................58
10.7 Waiver of Jury Trial.................................................59
10.8 Execution in Counterparts............................................59
10.9 Public Announcement..................................................59
10.10 No Third-Party Beneficiaries.........................................60
11. Termination and Waiver........................................................60
11.1 Termination..........................................................60
11.2 Effect of Termination................................................61
11.3 Waiver of Agreement..................................................61
11.4 Amendment of Agreement...............................................61
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Agere Systems Proprietary
Schedules
Schedule 1.1(a) Business Employees
Schedule 1.1(b) Leased Equipment
Schedule 2.1(i) Licenses
Schedule 2.2(e) Excluded Contracts
Schedule 2.3 Principal Equipment - Moving Procedures
Schedule 3.2 Subsidiaries
Schedule 3.4(b) Required Consents
Schedule 3.6 Governmental Permits
Schedule 3.7(a) Leased Premises; Assumed Leases
Schedule 3.7(b) Transferred Premises
Schedule 3.7(d) Environmental Matters
Schedule 3.8 Compliance with Laws
Schedule 3.9 Litigation
Schedule 3.10(a) Labor Agreement - Mexico
Schedule 3.10(b) Benefit Plans
Schedule 3.11 Material Contracts
Schedule 3.12(a) Revenues
Schedule 3.12(b) Financial Information
Schedule 3.12(c) Absence of Certain Changes
Schedule 3.13(b) Intellectual Property
Schedule 3.14(b) Product Claims
Schedule 3.15 Product Warranty
Schedule 3.17 Customers and Suppliers
Schedule 5.2. Exceptions to Seller's Conduct of Optoelectronics Business
Schedule 5.4(b) Tuition and Relocation Benefits; International Assignees
Schedule 5.4(c) Severance Benefits
Schedule 8.2(d) Designated Consents
Exhibits
Exhibit A Form of Assignment and Xxxx of Sale and Assumption Agreement
Exhibit B Form of Intellectual Property Agreement
Exhibit C Form of Lease Assignment
Exhibit D Form of Sublease
Exhibit E Form of Supply Agreement
Exhibit F Form of Transition Services Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of October [21],
2002 by and between AGERE SYSTEMS INC., a Delaware corporation ("Seller" or
"Agere"), with offices at 0000 Xxxxxxxx Xxxxxxx XX, Xxxxxxxxx, XX 00000 and
TRIQUINT SEMICONDUCTOR, INC., a Delaware corporation ("Buyer"), with offices at
0000 XX Xxxxxxxxx Xxxxxxx, Xxxxxxxxx, XX 00000.
R E C I T A L S
A. WHEREAS, Seller and the Subsidiaries (as hereinafter defined) are, among
other things, engaged through a unit of its Infrastructure Systems Group in the
Optoelectronics Business (as hereinafter defined);
B. WHEREAS, the Optoelectronics Business is comprised of certain assets and
liabilities that are currently owned by Seller or a Subsidiary or in respect of
which Seller or a Subsidiary is currently obligated, as the case may be;
C. WHEREAS, Seller and the Subsidiaries desire to sell, transfer and assign
to Buyer or a Buyer Designee (as hereinafter defined), and Buyer or a Buyer
Designee desires to purchase from Seller and the Subsidiaries, the Purchased
Assets (as hereinafter defined), and Buyer or a Buyer Designee is willing to
assume, the Assumed Liabilities (as hereinafter defined), in each case as more
fully described and upon the terms and subject to the conditions set forth
herein; and
D. WHEREAS, Seller and/or one or more of the Subsidiaries and Buyer or a
Buyer Designee desire to enter into each Assignment and Xxxx of Sale and
Assumption Agreement, the Intellectual Property Agreement, each Lease
Assignment, the Real Estate Deed, each Sublease, the Supply Agreement and the
Transition Services Agreement (each as hereinafter defined and collectively, the
"Collateral Agreements").
Agere Systems Proprietary
NOW, THEREFORE, in consideration of the mutual agreements and covenants
herein contained and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
1. Definitions
1.1 Defined Terms
For the purposes of this Agreement the following words and phrases shall
have the following meanings:
"Affiliate" of any Person means any Person that controls, is controlled by,
or is under common control with such Person. As used herein, the term "control"
(including the terms "controlling", "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities or other interests, by contract or otherwise.
"Assignment and Xxxx of Sale and Assumption Agreement" means each agreement
in substantially the form set forth as Exhibit A.
"Assumed Leases" means the Leases identified on Schedule 3.7(a) to be
assumed by the Buyer pursuant to a Lease Assignment or Sublease.
"Benefit Plan" means, in respect of any Business Employee, each Pension
Plan, Welfare Plan and employment, bonus, pension, profit sharing, deferred
compensation, incentive compensation, stock ownership, stock option, stock
purchase, phantom stock, performance, retirement, thrift, savings, stock bonus,
excess benefit, supplemental unemployment, paid time off, perquisite, fringe
benefit, vacation, sick leave, severance, disability, death benefit,
hospitalization, medical, dental, life insurance, welfare benefit or other plan,
program or arrangement, in each case maintained or contributed to, or required
to be maintained or contributed to, by Seller or its Affiliates.
"Business Day" means a day that is not a Saturday, a Sunday or a statutory
or civic holiday in the State of New York or any other day on which banking
institutions are not required by law to be closed in the State of New York.
"Business Employees" means the employees of Seller or the Subsidiaries
employed in the Optoelectronics Business and identified on Schedule 1.1(a).
"Business Records" means all books, records, ledgers, tangible data, disks,
tapes, and other media-storing data and files or other similar information
whether in hardcopy or computer format and whether stored in network facilities
or otherwise, in each case to the
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extent used or held for use primarily in the operation or conduct of the
Optoelectronics Business, including engineering information, manuals and data,
including databases for reference designs), product datasheets, sales and
purchase correspondence, price lists, lists of present and former customers,
information concerning customer contacts, purchasing history, technical
characteristics and other information reasonably required for ongoing customer
relationships, lists of present and former suppliers or vendors, mailing lists,
warranty information, catalogs, sales promotion literature, advertising
materials, brochures, bids, records of operation, accounting and financial
records, personnel and employment records, standard forms of documents, manuals
of operations or business procedures, designs, research materials and product
testing reports, and any information relating to any Tax imposed on any
Purchased Assets, but excluding any such items to the extent (i) they are
included in, or primarily related to, the Excluded Assets or Excluded
Liabilities or (ii) any applicable Law prohibits their transfer.
"Buyer Designee" means one or more Affiliates of Buyer identified to Seller
in accordance with Section 2.10 prior to the Closing Date.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. 'SS''SS' 9601 et seq. as amended.
"Closing" means the closing of the transactions described in Article 7.
"Closing Date" means the date of the Closing as determined pursuant to
Section 7.3.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Confidentiality Agreement" means the agreement between Seller and Buyer
dated September 16, 2002.
"Contracts" means all Third-Party contracts, agreements, leases, subleases,
supply contracts, commitments, purchase orders, sales orders and instruments
used or held for use primarily in the operation or conduct of the
Optoelectronics Business, that will be in effect on the Closing Date and to
which Seller or a Subsidiary is a party, including, without limitation, any such
contracts, agreements, leases, subleases, supply contracts, commitments,
purchase orders, sales orders and instruments (i) for the lease of machinery,
equipment, motor vehicles, furniture or office equipment, (ii) for the provision
of goods or services to the Optoelectronics Business, (iii) for the sale by the
Optoelectronics Business of goods or performance by the Optoelectronics Business
of services, (iv) for the sale and distribution of the products of the
Optoelectronics Business, and (v) any such contracts, agreements, leases,
subleases, supply contracts, commitments, purchase orders, sales orders and
instruments referred to in clauses (i) - (iv), inclusive, entered into between
the date hereof and the Closing Date by Seller or any Subsidiary in the ordinary
course of business consistent with past practice and outstanding as of the
Closing Date, but not the Excluded Contracts.
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"Counsel for Buyer" means Xxxx Xxxxx LLP.
"Counsel for Seller" means a Vice President - Law of Seller.
"Encumbrance" means any lien, claim, charge, encumbrance, security
interest, mortgage, pledge, easement, capital lease, conditional sale or other
title retention agreement, covenant, licenses, adverse claims of ownership or
use, or other similar restriction or Third Party right affecting the Purchased
Assets, but shall not include Permitted Encumbrances.
"Environmental Law" means any Law that governs the existence of or provides
a remedy for release of Hazardous Substances, the protection of persons, natural
resources or the environment, the management of Hazardous Substances, or other
activities involving Hazardous Substances including, without limitation, under
CERCLA, the Hazardous Materials Transportation Act, 49 U.S.C. 'SS' 1801 et seq.,
the Resource Conservation and Recovery Act, 42 U.S.C. 'SS' 6901 et seq., the
Clean Water Act, 33 U.S.C. Section 'SS' 1251 et seq., the Clean Air Act, 42
U.S.C. 'SS' 7401 et seq., the Toxic Substance Control Act, 15 U.S.C. 'SS' 2601
et seq., the Oil Pollution Act of 1990, 33 U.S.C. 'SS' 2701 et seq., and the
Occupational Safety and Health Act, 29 U.S.C. 'SS' 651 et seq., or any other
similar Law, as any such law has been amended or supplemented, and the
regulations promulgated pursuant thereto.
"Environmental Liabilities" means any and all liabilities arising in
connection with or in any way relating to Seller or a Subsidiary (or any
predecessor of Seller or a Subsidiary or any prior owner of all or part of its
business and assets), any property now or previously owned, leased or operated
by such Seller or a Subsidiary, the Optoelectronics Business (as currently or
previously conducted), or the Purchased Assets which (i) arise under or relate
to any Environmental Laws and (ii) relate to actions occurring or conditions
existing on or before the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Excluded Contracts" means those Contracts (i) identified in Schedule
2.2(e), (ii) under which performance by Seller or an Affiliate of Seller has
been completed and for which there is no remaining warranty, maintenance or
support obligation, (iii) that constitute a General Purchase Agreement, (iv)
under which performance by the counterparty has been completed and for which
there is no remaining payment obligation of such party, (v) that primarily
relate to Excluded Assets or Excluded Liabilities, or (vi) except as
specifically provided in Section 2.4(a), any contract, whether express or
implied, between Seller and any of its employees, including, without limitation,
any United States collective bargaining agreement.
"Excluded Taxes" means any liability, obligation or commitment, whether or
not accrued, assessed or currently due and payable, for any Taxes relating to,
pertaining to, or
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arising out of, the Optoelectronics Business or the Purchased Assets for any
Pre-Closing Tax Period.
"Fixtures and Supplies" means all furniture, furnishings and other tangible
personal property related to office operations owned by Seller or a Subsidiary
and used or held for use primarily in the operation or conduct of the
Optoelectronics Business and located in Breinigsville, PA and Matamoros, Mexico,
including, without limitation, desks, tables, chairs, file cabinets and other
storage devices and office supplies and any additions, improvements,
replacements and alterations thereto between the date hereof and the Closing
Date and all warranties and guarantees, if any, express or implied with respect
to the foregoing, but excluding any such items that primarily relate to Excluded
Assets or Excluded Liabilities.
"GAAP" means U.S. generally accepted accounting principles.
"General Purchase Agreements" means Third-Party supply contracts or other
agreements between Seller or an Affiliate of Seller and a Third Party pursuant
to which Seller or an Affiliate purchases or sells products or services from or
to such Third-Party primarily for one or more of Seller's or such Affiliate's
businesses and not used or held for use primarily in the operation or conduct of
the Optoelectronics Business.
"Governmental Body" means any legislative, executive or judicial unit of
any governmental entity (foreign, federal, state or local) or any department,
commission, board, agency, bureau, official or other regulatory, administrative
or judicial authority thereof.
"Governmental Permits" means all governmental permits and licenses,
certificates of inspection, approvals or other authorizations identified on
Schedule 3.6 issued to Seller or a Subsidiary by a Governmental Body with
respect to the Optoelectronics Business and necessary for the operation or
conduct of the Optoelectronics Business as currently conducted under applicable
Laws.
"Hazardous Substance" means (i) any hazardous, toxic or dangerous waste,
substance or material defined as such pursuant to any Environmental Law, (ii)
asbestos or PCBs and (iii) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated by any Governmental Body pursuant
to any Environmental Law.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
as amended.
"Intellectual Property Agreement" means the agreement in substantially the
form set forth as Exhibit B.
"Inventory" means all inventory, wherever located, including raw materials,
work in process, recyclable materials, finished products, inventoriable
supplies, and parts and non-capital spare parts owned by Seller or a Subsidiary
and used or held for use primarily in the
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operation or conduct of the Optoelectronics Business, and any rights of Seller
or a Subsidiary to the warranties received from suppliers and any related
claims, credits, rights of recovery and setoff with respect to such Inventory,
but only to the extent such rights are assignable.
"IRS" means the U.S. Internal Revenue Service.
"Law" means any national, federal, state, provincial or local law, statute,
ordinance, rule, regulation, code, order, judgment, injunction or decree of any
country.
"Lease" means the lease for any of the Leased Premises.
"Lease Assignment" means each assignment agreement with respect to a Lease
in substantially the form set forth as Exhibit C.
"Leased Equipment" means the vehicles, computers, servers, machinery and
equipment and other similar items identified on Schedule 1.1(b) leased and used
or held for use by Seller or a Subsidiary primarily in the operation or conduct
of the Optoelectronics Business but shall not include any such items that are
Excluded Assets or Excluded Liabilities.
"Leased Premises" means the real property that is leased by Seller or a
Subsidiary from Third Parties and used by Seller or a Subsidiary primarily in
the conduct of the Optoelectronics Business as identified on Schedule 3.7(a).
"Licenses" means all licenses, agreements and other arrangements identified
on Schedule 2.1(i), concerning any Proprietary Information to which Seller or a
Subsidiary is a party to the extent used or held for use primarily in the
operation or conduct of the Optoelectronics Business but not (i) the
Nonassignable Licenses, (ii) generally available shrink-wrap software licenses,
or (iii) any such items primarily related to Excluded Assets or Excluded
Liabilities.
"Nonassignable Licenses" means those Licenses of Proprietary Information
under which Seller or an Affiliate of Seller is the licensee that are (i) not by
their terms assignable to Buyer or (ii) related to other businesses of Seller or
an Affiliate of Seller and not used or held for use primarily in the operation
or conduct of the Optoelectronics Business.
"Optoelectronics Business" means the worldwide design, engineering,
manufacturing, marketing, sale and distribution of optoelectronics components
consisting of the following businesses of Seller: sources, transmitters and
receivers, transponder and transceiver, Lithium Niobate, optical amplifiers,
Undersea Pump Lasers, Thin Film Filters, Silica Waveguide and MEMs, as carried
on by Seller or a Subsidiary as of the date hereof, but excluding (i) Agere's
integrated circuit manufacturing facilities and any assets related to Agere's
integrated circuit products, (ii) the CATV+ business as currently conducted in
Seller's Irwindale, CA and Alhambra, CA facilities, and (iii) any assembly and
test, billing,
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order entry, fulfillment, accounting, collections, sales and other centralized
or administrative activities that are currently provided by centralized
functional organizations within, or controlled by, Agere, in the case of clauses
(i), (ii) and (iii) that are not being transferred hereunder. For the avoidance
of doubt, the parties agree that while the CATV+ assets, liabilities and
operations are not part of the Purchased Assets purchased or assumed by Buyer
hereunder, the right to conduct those portions of the CATV+ business related to
digital products/sources and receivers currently in development in California
are deemed part of the "Optoelectronics Business."
"Pension Plan" means each "employee pension benefit plan" (within the
meaning of Section 3(2) of ERISA).
"Permitted Encumbrances" means any (i) statutory lien for Taxes,
assessments and other governmental charges or liens of carriers, landlords,
warehouseman, mechanics and material men incurred in the ordinary course of
business, which are in each case for sums not yet due and payable or being
contested in good faith by appropriate proceedings and for which appropriate
reserves (if required) are being maintained in accordance with GAAP, (ii) liens
incurred or deposits made in the ordinary course of the Optoelectronics Business
in connection with workers' compensation, unemployment insurance and other types
of social security or to secure the performance of tenders, statutory
obligations, surety and appeal bonds and similar obligations, (iii) licenses
granted by Seller or an Affiliate of Seller in connection with sales of products
in the ordinary course of the Optoelectronics Business and (iv) any Encumbrance
or minor imperfection in title or minor encroachments, if any, that,
individually or in the aggregate, are not material in amount, do not materially
interfere with the conduct of the Optoelectronics Business or with the use of
the Purchased Assets or do not materially affect the value of the Purchased
Assets or the Optoelectronics Business.
"Person" means any individual, corporation, partnership, firm, association,
joint venture, joint stock company, trust, unincorporated organization or other
entity, or any government or regulatory, administrative or political subdivision
or agency, department or instrumentality thereof.
"Post-Closing Tax Period" means any Tax period beginning after the Closing
Date, and, in the case of any Straddle Period, the portion of such Straddle
Period beginning the day after the Closing Date.
"Pre-Closing Tax Period" means any Tax period ending on or before the
Closing Date and, in the case of any Straddle Period, the portion of such
Straddle Period ending on the Closing Date.
"Premises" means the Leased Premises and the Transferred Premises.
"Principal Equipment" means all computers, servers, machinery, equipment
(including any related spare parts, dies, molds, tools, and tooling) and other
items used or held for use
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by Seller or a Subsidiary primarily in the operation or conduct of the
Optoelectronics Business but not the Leased Equipment or any such items
primarily related to Excluded Assets or Excluded Liabilities. Principal
Equipment includes rights to the warranties received from the manufacturers and
distributors of such items and to any related claims, credits, rights of
recovery and setoff with respect to such items, but only to the extent such
rights are assignable. The final determination of applicable Principal Equipment
shall be subject to the moving procedures set forth in Schedule 2.3.
"Proprietary Information" means all intellectual property and other
information (whether or not protectable by patent, copyright, mask works or
trade secret rights), (i) including, but not limited to, works of authorship in
any and all media, inventions, discoveries, improvements, patentable subject
matter, patents, patent applications, industrial models, industrial designs,
trade secrets, trade secret rights, software, works, copyrightable subject
matters, copyright rights and registrations, mask works, know-how and show-how,
trademarks, trade names, service marks, emblems, logos, insignia and related
marks, the goodwill of any business symbolized thereby and all common law rights
related thereto, specifications, technical manuals and data, databases,
libraries, blueprints, drawings, designs, techniques, proprietary processes,
product information, business plans and development work-in-process; (ii) all
registrations and applications for the foregoing; and (iii) all rights to obtain
renewals, extensions continuations, continuations-in-part, re-issues, divisions
or similar legal protections related thereto.
"Real Estate Deed" means a standard form special warranty deed with respect
to the Transferred Premises, subject only to the Permitted Encumbrances.
"Return" means any return, declaration, report, statement, and any other
document required to be filed in respect of any Tax, including any amendment
thereto.
"Seller Material Adverse Effect" means any condition or event that has a
material and adverse effect upon the (i) assets, business, financial condition
or results of operations of the Optoelectronics Business taken as a whole, or
(ii) ability of Seller and its Affiliates to consummate the transactions
contemplated by this Agreement or any Collateral Agreement, other than any
condition or event (a) resulting from conditions in the United States or foreign
economies or securities markets in general or from a war or similar action, (b)
resulting from conditions in the optoelectronics industry in general and not
specific to the Optoelectronics Business, (c) resulting from the transactions
contemplated by this Agreement or any Collateral Agreement, or (d) arising out
of or resulting from actions of Buyer or a Buyer Designee in connection with
this Agreement.
"Straddle Period" means any Tax period that begins on or before and ends
after the Closing Date.
"Sublease" means the agreement in substantially the form set forth as
Exhibit D.
"Subsidiaries" means the entities listed on Schedule 3.2.
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"Supply Agreement" means the agreement in substantially the form set forth
as Exhibit E.
"Taxes" means all taxes of any kind, and all charges, fees, customs,
levies, duties, imposts, required deposits or other assessments, including,
without limitation, all net income, capital gains, gross income, gross receipt,
property, franchise, sales, use, excise, withholding, payroll, employment,
social security, worker's compensation, unemployment, occupation, capital stock,
ad valorem, value added, transfer, gains, profits, net worth, asset,
transaction, and other taxes, and any interest, penalties or additions to tax
with respect thereto, imposed upon any Person by any taxing authority or other
Governmental Body under applicable Law.
"Third Party" means any Person not an Affiliate of the other referenced
Person or Persons.
"Transferred Premises" means the real property identified on Schedule
3.7(b).
"Transition Services Agreement" means the agreement in substantially the
form set forth as Exhibit F.
"Welfare Plan" means each "employee welfare benefit plan" (within the
meaning of Section 3(1) of ERISA).
1.2 Additional Defined Terms
For purposes of this Agreement, the following terms shall have the meanings
specified in the Sections indicated below:
Term Section
"Agere" Preamble
"Agreement" Preamble
"Asset Acquisition Statement" Section 5.3(b)
"Assigned Intellectual Property" Section 3.13(a)
"Assumed Liabilities" Section 2.4
"Antitrust Division" Section 5.6(b)
"Buyer" Preamble
"Buyer Savings Plan" Section 5.4(e)
"Collateral Agreements" Recital D
"Excluded Assets" Section 2.2
"Excluded Leased Equipment" Section 5.5(b)
"Excluded Liabilities" Section 2.5
"FTC" Section 5.6(b)
"Indemnified Party" Section 9.3(a)
"Indemnifying Party" Section 9.4(a)
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"Licensed Intellectual Property" Section 3.13(a)
"Losses" Section 9.3(a)
"Lucent" Section 3.13(g)
"Material Contracts" Section 3.11(a)
"Nonassignable Assets" Section 2.6(c)
"Optoelectronics Intellectual Property" Section 3.13(b)
"Pre-Closing Tax Period" Section 2.9(b)
"Post-Closing Tax Period" Section 2.9(b)
"Purchase Price" Section 2.3
"Purchased Assets" Section 2.1
"Purchased Leased Equipment" Section 5.5(b)
"Real Estate Closing" Section 7.3
"Real Estate Closing Date" Section 7.3
"Required Consents" Section 3.4(b)
"Seller" Preamble
"Seller Name" 5.8(a)
"Third-Party Claim" Section 9.4(a)
"Transferred Employees" Section 5.4(a)
"Warn Act" Section 5.4(g)
1.3 Other Definitional and Interpretive Matters
Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:
(a) Calculation of Time Period. When calculating the period of time before
which, within which or following which any act is to be done or step taken
pursuant to this Agreement, the date that is the starting reference date in
calculating such period shall be excluded. If the last day of such period is a
non-Business Day, the period in question shall end on the next succeeding
Business Day.
(b) Gender and Number. Any reference in this Agreement to gender shall
include all genders, and words imparting the singular number only shall include
the plural and vice versa.
(c) Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any "Section" are to the corresponding Section of this Agreement
unless otherwise specified.
(d) Herein. The words such as "herein," "hereinafter," "hereof," and
"hereunder" refer to this Agreement as a whole and not merely to a subdivision
in which such words appear unless the context otherwise requires.
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(e) Including. The word "including" or any variation thereof means
"including, without limitation" and shall not be construed to limit any general
statement that it follows to the specific or similar items or matters
immediately following it.
(f) Reasonable Commercial Efforts. Reasonable commercial efforts means that
the obligated party is required to make a diligent, reasonable and good faith
effort to accomplish the applicable objective. Such obligation, however, does
not require an expenditure of material funds or the incurrence of a liability on
the part of the obligated party, nor does it require that the obligated party
act in a manner that would be contrary to normal commercial practices in order
to accomplish the objective. The fact that the objective is or is not actually
accomplished is no indication that the obligated party did or did not in fact
utilize its reasonable commercial efforts in attempting to accomplish the
objective.
(g) Schedules and Exhibits. The Schedules and Exhibits attached to this
Agreement shall be construed with and as an integral part of this Agreement to
the same extent as if the same had been set forth verbatim herein. Any matter
disclosed by either party on any one Schedule with respect to any
representation, warranty or covenant of such party shall be deemed disclosed for
purposes of all other representations, warranties or covenants of such party to
the extent that it is reasonably apparent from such disclosure that it also
relates to such other representations, warranties or covenants, and to the
extent any matter disclosed on any Schedule conflicts with any representation,
warranty or covenant of such party contained in this Agreement, and to the
extent such conflict is reasonably apparent thereto, such party shall not have
any liability with respect such representation, warranty or covenant.
2. Purchase and Sale of the Optoelectronics Business
2.1 Purchase and Sale of Assets
Upon the terms and subject to the conditions of this Agreement and in
reliance on the representations and warranties contained herein, on the Closing
Date, Seller shall, or shall cause one or more of the Subsidiaries, as
appropriate, to, grant, bargain, sell, transfer, assign, convey and deliver to
Buyer or one or more Buyer Designees, and Buyer or one or more Buyer Designees
shall purchase, acquire and accept from Seller or the applicable Subsidiary, all
of the right, title and interest in, to and under the Purchased Assets that
Seller or the applicable Subsidiary owns, leases, licenses, possesses, or uses
as the same shall exist on the Closing Date, wherever located, free and clear of
Encumbrances. For purposes of this Agreement, the term "Purchased Assets" means
all the assets, properties and rights used or held for use by Seller or the
applicable Subsidiary primarily in the operation or conduct of the
Optoelectronics Business, whether tangible or intangible, real, personal or
mixed, set forth or described in paragraphs (a) through (n) below (except in
each case for the Excluded Assets), whether or not any of such assets,
properties or rights have any value for accounting
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purposes or are carried or reflected on or specifically referred to in Seller's
or the applicable Subsidiary's financial statements:
(a) the Assumed Leases
(b) the Transferred Premises;
(c) the Principal Equipment;
(d) the Purchased Leased Equipment;
(e) the Fixtures and Supplies;
(f) the Inventory;
(g) the Assigned Intellectual Property;
(h) the Contracts;
(i) the Licenses;
(j) the Business Records;
(k) the Governmental Permits but only to the extent that such Governmental
Permits are assignable or transferable to Buyer;
(l) all rights, choses and claims of any kind relating to the
Optoelectronics Business, known or unknown, accrued or contingent, against Third
Parties arising out of transactions occurring after the Closing Date;
(m) all prepaid expenses for leased and rented equipment; and
(n) the goodwill of the Optoelectronics Business.
2.2 Excluded Assets
Notwithstanding anything in Section 2.1 to the contrary, it is hereby
expressly acknowledged and agreed that the Purchased Assets shall not include,
and neither Seller nor any Subsidiary is granting, bargaining, selling,
transferring, assigning, conveying or delivering to Buyer or a Buyer Designee,
and neither Buyer nor any Buyer Designee is purchasing, acquiring or accepting
from Seller or any Subsidiary, any of the rights, properties or assets set forth
or described in paragraphs (a) through (i) below (the rights, properties and
assets expressly excluded by this Section 2.2 or otherwise excluded by the terms
of Section 2.1 from the Purchased Assets being referred to herein as the
"Excluded Assets"):
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(a) any of Seller's or any Affiliate of Seller's receivables, cash, cash
equivalents, bank deposits or similar cash items or employee receivables;
(b) any (i) confidential personnel records pertaining to any Business
Employee, or (ii) other books and records that Seller or any Affiliate of Seller
is required by Law to retain; provided, however, that Buyer shall have the
right, to the extent permitted by Law, to make copies of any portions of such
retained confidential personnel records and other books and records that relate
to the Optoelectronics Business, the Purchased Assets, the Assigned Liabilities
or the Transferred Employees; and (iii) any information management system of
Seller or any Affiliate of Seller other than those used or held for use
primarily in the operation or conduct of the Optoelectronics Business and
contained within computer hardware included as a Purchased Asset pursuant to
Sections 2.1(c) and (d);
(c) any claim, right or interest of Seller or any Affiliate of Seller in or
to any refund, rebate, abatement or other recovery for Taxes, together with any
interest due thereon or penalty rebate arising therefrom, for any Tax period (or
portion thereof) ending on or before the Closing Date;
(d) subject to Section 5.8, any rights to, or the use of, the "Agere," or
"Agere Systems" trademarks;
(e) the Excluded Contracts, the Nonassignable Licenses and the Excluded
Leased Equipment;
(f) any insurance policies or rights of proceeds thereof;
(g) except as specifically provided in Section 5.4, any of the assets of
the Benefits Plans;
(h) any rights, claims or causes of action of Seller or any Affiliate of
Seller against Third Parties relating to the assets, properties or operations of
the Optoelectronics Business of Seller or any Affiliate of Seller arising out of
transactions occurring on or before the Closing Date; and
(i) all other assets, properties, interests and rights of Seller or any
Affiliate of Seller not identified in Section 2.1, including any such items and
the real property related to the manufacturing operations and facilities used
primarily by Seller's integrated circuits business.
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2.3 Purchase Price
In consideration of the grant, bargain, sale, transfer, assignment,
conveyance and delivery by Seller and the Subsidiaries of the Purchased Assets
to Buyer or a Buyer Designee, and in addition to assuming the Assumed
Liabilities, Buyer or a Buyer Designee shall pay to Seller at the Closing, an
aggregate amount equal to FORTY MILLION and 00/100 Dollars ($40,000,000) (the
"Purchase Price") in cash by wire transfer of immediately available funds to an
account designated by Seller's written instructions to Buyer at least two (2)
Business Days prior to Closing (subject to the holdback in an amount equal to
$5,000,000 for the Real Estate Closing).
2.4 Assumed Liabilities
On the Closing Date, Buyer or one or more Buyer Designee shall execute and
deliver to Seller each Assignment and Xxxx of Sale and Assumption Agreement
pursuant to which Buyer or any such Buyer Designee shall accept, assume and
agree to pay, perform or otherwise discharge, in accordance with the respective
terms and subject to the respective conditions thereof, the Assumed Liabilities.
For purposes of this Agreement, the term "Assumed Liabilities" means the
liabilities and obligations set forth or described in paragraphs (a) through (f)
below, whether or not any such liability or obligation has a value for
accounting purposes or is carried or reflected on or specifically referred to in
Seller's or the applicable Subsidiary's financial statements:
(a) the unpaid vacation, personal days and floating holidays accrued by
Transferred Employees;
(b) the liabilities and obligations arising after the Closing Date under
the Assumed Leases and the transferred Contracts, Licenses and Government
Permits;
(c) with respect to the Optoelectronics Business, any product warranty
liabilities arising from sales of products in the ordinary course of business on
or before the Closing Date;
(d) the Permitted Encumbrances and all other Encumbrances and other
obligations related to the Purchased Assets that are specifically identified in
this Agreement or the Schedules hereto;
(e) the obligations and liabilities with respect to the Optoelectronics
Business or the Purchased Assets arising from, or in connection with, the
conduct of the Optoelectronics Business or the ownership of the Purchased Assets
by Buyer or a Buyer Designee after the Closing Date; and
(f) the employment-related obligations and liabilities arising as a result
of the Transferred Employees' employment with Buyer or Buyer Designees after the
Closing Date.
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2.5 Excluded Liabilities
Neither Buyer nor any Buyer Designee shall assume or be obligated to pay,
perform or otherwise assume or discharge any liabilities or obligations of
Seller or any Affiliate of Seller, whether direct or indirect, known or unknown,
absolute or contingent, except for the Assumed Liabilities (all of such
liabilities and obligations not so assumed being referred to herein as the
"Excluded Liabilities") and Seller or a Subsidiary shall pay, perform and
discharge all such Excluded Liabilities. For the avoidance of doubt, the parties
agree that the Excluded Liabilities include, but are not limited to, any and all
liabilities or obligations set forth or described in paragraphs (a) through (g)
below, whether or not any such liability or obligation has a value for
accounting purposes or is carried or reflected on or specifically referred to in
Seller's or the applicable Subsidiary's financial statements:
(a) any Excluded Taxes;
(b) any Environmental Liabilities;
(c) any and all liabilities or obligations arising out of or related to any
Excluded Asset;
(d) except as identified in Section 2.4(a), any and all liabilities or
obligations relating to or in connection with (i) the employment and any
termination of such employment by Seller of any employee or former employee of
Seller on or before the Closing Date; and/or (ii) any employee's or former
employee's or his/her dependents' rights or obligations under any fringe benefit
of employment with Seller, including any Benefit Plan of Seller or an Affiliate
of Seller;
(e) any and all liabilities or obligations in connection with, or relating
to, any actions, suits, claims or proceedings against Seller or any Subsidiary
which arise or accrue on or before the Closing Date;
(f) Any benefit liabilities relating to or arising in connection with
Section 4980B of the Code (COBRA) to provide continuation of health care
coverage to employees or former employees of Seller or their dependents arising
from a qualifying event occurring on or before the Closing Date; and
(g) Any liabilities of the Benefit Plans.
2.6 Further Assurances; Further Conveyances and Assumptions; Consent of
Third Parties
(a) From time to time following the Closing, Seller shall, or shall cause
its Affiliates to, make available to Buyer or a Buyer Designee such
non-confidential data and
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information in personnel records of Transferred Employees as is reasonably
necessary for Buyer to integrate such employees into Buyer's or a Buyer
Designee's workforce.
(b) From time to time following the Closing, Seller and Buyer shall, and
shall cause their respective Affiliates to, execute, acknowledge and deliver all
such further conveyances, notices, assumptions, releases and acquittances and
such other instruments, and shall take such further actions, as may be necessary
or appropriate to assure fully to Buyer and its Affiliates and each of their
respective successors or assigns, all of the properties, rights, titles,
interests, estates, remedies, powers and privileges intended to be conveyed to
Buyer or a Buyer Designee under this Agreement and the Collateral Agreements and
to assure fully to Seller and its Affiliates and each of their respective
successors and assigns, the assumption of the liabilities and obligations
intended to be assumed by Buyer or a Buyer Designee under this Agreement and the
Collateral Agreements, and to otherwise make effective the transactions
contemplated hereby and thereby (including (i) transferring back to Seller or a
Subsidiary any asset or liability not contemplated by this Agreement to be a
Purchased Asset or an Assumed Liability, respectively, which asset or liability
was transferred to Buyer or a Buyer Designee at the Closing and (ii)
transferring to Buyer or a Buyer Designee any asset or liability contemplated by
this Agreement to be a Purchased Asset or an Assumed Liability, respectively,
which was not transferred to Buyer or a Buyer Designee at the Closing).
(c) Nothing in this Agreement nor the consummation of the transactions
contemplated hereby shall be construed as an attempt or agreement to assign any
Purchased Asset, including any Contract, Lease, License, Governmental Permit,
certificate, approval, authorization or other right, which by its terms or by
Law is nonassignable without the consent of a Third Party or a Governmental Body
or is cancelable by a Third Party in the event of an assignment ("Nonassignable
Assets") unless and until such consent shall have been obtained. Seller and
Buyer shall, and shall cause their respective Affiliates to, cooperate with
Seller and Buyer, as the case may be, in endeavoring to obtain such consents
promptly. To the extent permitted by applicable Law, in the event consents to
the assignment thereof cannot be obtained, Seller and Buyer shall, and shall
cause their respective Affiliates to, cooperate in a mutually agreeable
arrangement under which (i) Buyer or a Buyer Designee would obtain the benefits
and assume the obligations under such Nonassignable Assets in accordance with
this Agreement including by sub-contracting, sub-licensing, or sub-leasing to
Buyer or a Buyer Designee, or (ii) such Nonassignable Assets would be held, as
of and from the Closing Date, by Seller or the applicable Subsidiary in trust
for Buyer or a Buyer Designee and the covenants and obligations thereunder would
be performed by Buyer or a Buyer Designee in Seller's or such Subsidiary's name
and all benefits and obligations existing thereunder would be for Buyer's or the
applicable Buyer Designee's account. Seller shall, and shall cause its
Affiliates to, also take or cause to be taken at Buyer's or a Buyer Designee's
expense such actions in its name or otherwise as Buyer may reasonably request so
as to provide Buyer or the applicable Buyer Designee with the benefits of the
Nonassignable Assets and to effect collection of money or other consideration
that becomes due and payable under the Nonassignable Assets, and Seller or the
applicable Subsidiary shall promptly pay
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over to Buyer the applicable Buyer Designee all money or other consideration
received by it in respect to all Nonassignable Assets.
(d) Buyer and Seller shall, and shall cause their respective Affiliates to,
use their respective reasonable commercial efforts to obtain, or to cause to be
obtained, any consent, substitution, approval, or amendment required to transfer
all obligations under any and all Contracts, Leases, Licenses, Governmental
Permits, certificates, approvals, authorizations or other rights or obligations
or liabilities that constitute Assumed Liabilities or to obtain in writing the
unconditional release of Seller and its Affiliates so that, in any such case,
Buyer and its Affiliates shall be solely responsible for such Assumed
Liabilities.
(e) As of and from the Closing Date, Seller on behalf of itself and its
Affiliates authorizes Buyer, to the extent permitted by applicable Law and the
terms of the Nonassignable Assets, at Buyer's expense, to perform all the
obligations and receive all the benefits of Seller or its Affiliates under the
Nonassignable Assets and appoints Buyer its attorney-in-fact to act in its name
on its behalf or in the name of the applicable Affiliate of Seller and on such
Affiliate's behalf with respect thereto.
(f) Notwithstanding anything in this Agreement to the contrary, unless and
until any consent or approval with respect to any Nonassignable Asset is
obtained, such Nonassignable Asset shall not constitute a Purchased Asset and
any associated liability shall not constitute an Assumed Liability for any
purpose under this Agreement.
2.7 Proprietary Information
Unless expressly set forth in this Agreement, the Intellectual Property
Agreement or in any Collateral Agreement, no title, right or license of any kind
is granted to Buyer pursuant to this Agreement with respect to Proprietary
Information of Seller or any Affiliate of Seller, either directly or indirectly,
by implication, by estoppel or otherwise.
2.8 Bulk Sales Law
Buyer hereby waives compliance by Seller and any Subsidiary with the
requirements and provisions of any "bulk-transfer" Laws of any jurisdiction,
including Article 6 of the Pennsylvania Uniform Commercial Code, that may
otherwise be applicable with respect to the sale of any or all of the Purchased
Assets to Buyer or a Buyer Designee.
2.9 Taxes
(a) All (i) recording and filing fees and (ii) transfer, documentary,
sales, use, stamp, registration, value added and other such Taxes incurred in
connection with the transactions contemplated by this Agreement shall be paid by
the party prescribed by applicable Law as primarily liable.
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(b) All real property Taxes, personal property Taxes and similar ad valorem
obligations levied with respect to the Purchased Assets for a Straddle Period
shall be apportioned between Seller and Buyer based on the number of days of
such Straddle Period, and Seller shall be liable for the proportionate amount of
such Taxes that is attributable to the Pre-Closing Tax Period within such
Straddle Period, and Buyer shall be liable for the proportionate amount of such
Taxes that is attributable to the Post-Closing Tax Period within such Straddle
Period. Any refund, rebate, abatement or other recovery of such Taxes
attributable to the Pre-Closing Tax Period shall be for the account of the
Seller, and any refund, rebate, abatement or other recovery of such Taxes
attributable to the Post-Closing Tax Period shall be for the account of the
Buyer.
2.10 Buyer Designee
The parties agree that Buyer may assign the right to purchase certain of
the Purchased Assets to one or more Buyer Designees or that one or more Buyer
Designees may enter into a Collateral Agreement. Notwithstanding any such
assignment or execution of a Collateral Agreement by a Buyer Designee, Buyer
shall remain liable for, and any such assignment or execution shall not relieve
Buyer of, its obligations hereunder or thereunder. Any reference to Buyer in
this Agreement shall to the extent applicable also be deemed a reference to the
applicable Buyer Designee, except where in context of this Agreement such use
would not be appropriate.
3. Representations and Warranties of Seller
Except as set forth in Schedules attached hereto and delivered by Seller to
Buyer prior to the execution of this Agreement, Seller represents and warrants
to Buyer that:
3.1 Organization and Qualification; Subsidiaries
(a) Seller is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Delaware and has all requisite corporate
power and authority to carry on the Optoelectronics Business as currently
conducted by it and to own or lease and operate the Purchased Assets. Seller is
duly qualified to do business and is in good standing as a foreign corporation
(in any jurisdiction that recognizes such concept) in each jurisdiction where
the ownership or operation of the Purchased Assets or the operation or conduct
of the Optoelectronics Business requires such qualification, except where the
failure to be so qualified or in good standing, individually or in the
aggregate, has not had and could not reasonably be expected to have a Seller
Material Adverse Effect.
(b) Schedule 3.2 sets forth a list of each Subsidiary of Seller that has
title to any asset reasonably expected to be a Purchased Asset or an obligation
reasonably expected to be an Assumed Liability, together with its jurisdiction
of organization. Except as set forth on Schedule 3.2, each entity is duly
organized, validly existing and in good standing (in any jurisdiction that
recognizes such concept) under the Laws of its jurisdiction of organization and
has all requisite corporate or similar power and authority to own, lease and
operate the
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Purchased Assets owned by it and to carry on its portion of the Optoelectronics
Business as presently conducted and is duly qualified to do business and is in
good standing as a foreign corporation or other entity (in any jurisdiction that
recognizes such concept) in each jurisdiction where the ownership or operation
of its properties and assets or the conduct of its business requires such
qualification, except for failures to be so duly organized, validly existing,
qualified or in good standing that, individually or in the aggregate, have not
had and could not reasonably be expected to have a Seller Material Adverse
Effect. The Subsidiaries listed on Schedule 3.2 are the only Affiliates of
Seller that have title to any Purchased Asset or any obligation that is an
Assumed Liability, in each case related to the Optoelectronics Business as
currently conducted.
3.2 Authorization
(a) Seller has all requisite corporate power and authority to execute,
deliver and perform this Agreement and the Collateral Agreements to which it
will be a party and to effect the transactions contemplated hereby and thereby,
and the execution, delivery and performance of this Agreement and the Collateral
Agreements to which it will be a party has been duly authorized by all requisite
corporate action.
(b) Each Subsidiary that has title to any asset reasonably expected to be a
Purchased Asset or an obligation reasonably expected to be an Assumed Liability
has all requisite corporate power and authority to execute and deliver the
Collateral Agreements to which it will be a party and to effect the transactions
contemplated thereby and has duly authorized the execution, delivery and
performance of the Collateral Agreements to which it will be a party by all
requisite corporate action.
3.3 Binding Effect
This Agreement has been duly executed and delivered by Seller and this
Agreement is, and the Collateral Agreements to which Seller and each Subsidiary,
which has title to any asset reasonably expected to be a Purchased Asset or an
obligation reasonably expected to be an Assumed Liability, will be a party when
duly executed and delivered by Seller or such Subsidiary will be, valid and
legally binding obligations of Seller or such Subsidiary, enforceable against
Seller or such Subsidiary, as applicable, in accordance with their respective
terms, except to the extent that enforcement of the rights and remedies created
hereby and thereby may be affected by bankruptcy, reorganization, moratorium,
insolvency and similar Laws of general application affecting the rights and
remedies of creditors and by general equity principles.
3.4 Non-Contravention; Consents
(a) Assuming that all Required Consents have been made, the execution,
delivery and performance of this Agreement by Seller and the Collateral
Agreements by Seller or any Subsidiary that is a party thereto and the
consummation of the transactions contemplated hereby and thereby do not and will
not: (i) result in a breach or violation of, or conflict with,
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any provision of Seller's or the applicable Subsidiary's charter, by-laws or
similar organizational document, (ii) violate or result in a breach of or
constitute an occurrence of default under any provision of, result in the
acceleration or cancellation of any obligation under, or give rise to a right by
any party to terminate or amend its obligations under, any mortgage, deed of
trust, conveyance to secure debt, note, loan, indenture, lien, lease, agreement,
license, permit, instrument, order, judgment, decree or other arrangement or
commitment to which Seller or the applicable Subsidiary is a party or by which
it is bound and which relates to the Optoelectronics Business or the Purchased
Assets, or (iii) violate any order, judgment, decree, rule or regulation of any
court or any Governmental Body having jurisdiction over Seller, a Subsidiary,
the Optoelectronics Business or the Purchased Assets, other than in the case of
clauses (ii) and (iii), any such violations, breaches, defaults, accelerations
or cancellations of obligations or rights that, individually or in the
aggregate, have not had and could not reasonably be expected to have a Seller
Material Adverse Effect.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Seller or a
Subsidiary in connection with the execution, delivery and performance of this
Agreement or the Collateral Agreements or for the consummation of the
transactions contemplated hereby or thereby by Seller or a Subsidiary, except
for (i) any filings required to be made under the HSR Act and any applicable
filings required under foreign antitrust Laws, (ii) consents or approvals of
Third Parties that are required to transfer or assign to Buyer or a Buyer
Designee any Purchased Assets or assign the benefits of or delegate performance
with regard thereto in any material respect, which are set forth in Schedule
3.4(b) (items (i) and (ii) being referred to herein as the "Required Consents")
and (iii) such consents, approvals, orders, authorizations, registrations,
declarations or filings the failure of which to be obtained or made,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Seller Material Adverse Effect.
3.5 Title to Property; Principal Equipment; Sufficiency of Assets
(a) Seller or a Subsidiary has and at the Closing will have good and valid
title in and to, or a valid and binding leasehold interest or license in, all
real and personal tangible Purchased Assets free and clear of any Encumbrance.
(b) Each material, tangible Purchased Asset is in good operating condition,
suitable for the purposes for which it is currently being used, but is otherwise
being transferred on a "where is" and, as to condition, "as is" basis.
(c) Except for (i) the assets that will be used in connection with
providing services under the Transition Services Agreement, (ii) the assets and
Business Employees not transferred to Buyer or a Buyer Designee at Buyer's
request and (iii) the Excluded Assets, the Purchased Assets and the Transferred
Employees and the rights to be acquired under this Agreement and the Collateral
Agreements (including the services to be provided pursuant to the Transition
Services Agreement) constitute all property, assets, personnel and rights that
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are used or held for use by Seller or a Subsidiary primarily in the operation or
conduct the Optoelectronics Business. In the event this Section 3.5(c) is
breached because Seller or a Subsidiary has in good faith failed to identify and
transfer any assets or properties or provide any services used or held for use
primarily in the Optoelectronics Business, such breach shall be deemed cured if
Seller or the applicable Subsidiary promptly transfers such properties or assets
or provides such services to Buyer or a Buyer Designee at no additional cost to
Buyer or a Buyer Designee.
3.6 Permits; Licenses
Except as set forth on Schedule 3.6, there are no material Governmental
Permits necessary for or used by Seller or a Subsidiary to operate the
Optoelectronics Business as now being operated or to use or occupy the Premises,
which Governmental Permits are required by currently effective Laws. Seller or
one of its Subsidiaries owns, holds or possesses in their own name, all
Governmental Permits necessary to own or lease, operate and use the Purchased
Assets or own, use or occupy the Premises and to carry on and conduct the
Optoelectronics Business and its operations as presently conducted, except for
such Governmental Permits, the absence of which, individually or in the
aggregate, has not had and could not reasonably be expected to have a Seller
Material Adverse Effect. The Governmental Permits held, owned or possessed by
Seller or a Subsidiary are valid and in full force and effect and no proceeding
is recorded, pending or, to Seller's knowledge, threatened seeking the
suspension, modification, limitation or revocation of any such Governmental
Permit. Neither Seller nor any Subsidiary is in violation of or default under
any such Governmental Permits which, individually or in the aggregate, has had
or could reasonably be expected to have a Seller Material Adverse Effect.
3.7 Real Estate; Environmental Matters
(a) Schedule 3.7(a) contains a complete and accurate list of the Leased
Premises and the Assumed Leases. Buyer has been provided with a complete and
correct copy of each Assumed Lease. Except as set forth in Schedule 3.7(a), each
Assumed Lease is in full force and effect and, to Seller's knowledge, neither
Seller nor any Subsidiary has violated, and the landlord has not waived, any of
the material terms or conditions of any Assumed Lease and, to Seller's
knowledge, all the material covenants to be performed by the Seller or a
Subsidiary and the landlord under each Assumed Lease prior to the date hereof
have been performed in all material respects.
(b) Schedule 3.7(b) contains a complete and accurate list of the
Transferred Premises. Seller or a Subsidiary has good and valid title to the
Transferred Premises. Except as set forth on Schedule 3.7(b), none of such
Transferred Premises are subject to any Encumbrance except for Permitted
Encumbrances.
(c) The use of the Premises, as presently used by the Optoelectronics
Business, does not violate any local zoning or similar land use laws or
governmental regulations which violation, individually or in the aggregate, has
had or could reasonably be expected to have a
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Seller Material Adverse Effect. Neither Seller nor any Subsidiary is in
violation of or in noncompliance with any covenant, condition, restriction,
order or easement affecting any of the Premises where such violation or
noncompliance, individually or in the aggregate, has had or could reasonably be
expected to have a Seller Material Adverse Effect. There is no condemnation or,
to Seller's knowledge, threatened condemnation affecting any of the Premises.
(d) Except as set forth in Schedule 3.7(d) and in respect of the
Optoelectronics Business and the Premises:
(i) the operations of the Optoelectronics Business and the Premises
comply in all material respects with all applicable Environmental Laws;
(ii) Seller and each Subsidiary has obtained all environmental, health
and safety Governmental Permits required by or related to any Environmental Law
and necessary for its operations, and all such Governmental Permits are in good
standing, and Seller and each Subsidiary is in compliance with all terms and
conditions of such permits except where the failure to obtain, maintain in good
standing or be in compliance with, such permits, individually or in the
aggregate, has not had and could not reasonably be expected to have a Seller
Material Adverse Effect;
(iii) none of Seller, any Subsidiary or any of the Premises or the
operations of the Optoelectronics Business, is subject to any on-going
investigation by, order from or agreement with any Person respecting (A) any
Environmental Law, or (B) any remedial action arising from the release or
threatened release of a Hazardous Substance into the environment;
(iv) neither Seller nor any Subsidiary is subject to any judicial or
administrative proceeding, order, judgment, decree or settlement alleging or
addressing a violation of or liability under any Environmental Law;
(v) Seller or each applicable Subsidiary has filed all notices required
to be filed under any Environmental Law indicating past or present treatment,
storage or disposal of a Hazardous Substance or reporting a spill or release of
a Hazardous Substance into the environment except where the failure to file any
such notices, individually or in the aggregate, has not had and could not
reasonably be expected to have a Seller Material Adverse Effect;
(vi) there is not now, nor to Seller's knowledge, has there ever been,
on or in any Premise any aboveground or underground storage tanks;
(vii) neither Seller nor any Subsidiary has received any written
notice, or to Seller's knowledge, other claim to the effect that it is or may be
liable to any Person as a result of the release or threatened release of a
Hazardous Substance;
(viii) to Seller's knowledge, there have been no releases, or
threatened releases of any Hazardous Substances into, on or under any of the
Premises, in any case in
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such a way as to create any liability (including the costs of investigation and
remediation) under any applicable Environmental Law; and
(ix) Seller has delivered to Buyer true and complete copies of all
asbestos and other environmental reports disclosing the presence of asbestos,
fiberglass, radon, urea formaldehyde, polychlorinated biphenyls or other
Hazardous Materials on any of the Premises.
3.8 Compliance With Laws
Except as set forth on Schedule 3.8, with respect to the Optoelectronics
Business conducted by Seller and the Subsidiaries, Seller and each Subsidiary is
in compliance with all applicable Laws and all decrees, orders, judgments,
writs, injunctions, permits and licenses of or from Governmental Bodies by which
the Optoelectronics Business or the Purchased Assets are bound or affected
except for instances of noncompliance or possible noncompliance that,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Seller Material Adverse Effect.
3.9 Litigation
Except as set forth on Schedule 3.9, there is no action, suit, consent
decree, proceeding, arbitration or governmental investigation pending or, to
Seller's knowledge, threatened against Seller or any Subsidiary, the
Optoelectronics Business or the Purchased Assets, (i) which seeks to restrain or
enjoin the consummation of the transactions contemplated hereby or (ii) with
respect to the Optoelectronics Business, the Purchased Assets, the Assumed
Liabilities or the Transferred Employees that, individually or in the aggregate,
has had or could be reasonably expected to have a Seller Material Adverse
Effect. Further to Seller's knowledge there is no basis for any such action,
suit, proceeding, arbitration or investigation that is not yet pending or
threatened which, individually or in the aggregate, would have or could
reasonably be expected to have a Seller Material Adverse Effect.
3.10 Business Employees
(a) Schedule 1.1(a) contains a complete and accurate list of all the
Business Employees as of the date specified in such list (which in any event
shall be no more than ten (10) business days prior to the date hereof), showing
for each Business Employee, the name, title, location, service date, annual
salary or wages as of such date, aggregate annual compensation for Seller's 2002
fiscal year and which employees are represented by the Confederacion de
Trabajadores de Mexico. Except as set forth on Schedule 3.10(a), none of the
Business Employees is covered by any union, collective bargaining agreement or
other similar labor agreement, formal or informal, nor, to Seller's knowledge,
has there been any labor union organizing activities relating to the Business
Employees within the past five years.
(b) Except as set forth in Schedule 3.10(b), with respect to the Business
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Employees, Seller does not currently maintain, contribute to or have any
liability under any Benefit Plan. With respect to each Benefit Plan identified
on Schedule 3.10(b), Seller has made available to the Buyer true and complete
copies of the most recent summary plan or other written description thereof.
Each Benefit Plan listed on Schedule 3.10(b) has been operated in material
compliance with all applicable Laws, including ERISA. Each Benefit Plan that is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter, or has pending or has time remaining in which to
file an application for such determination, from the IRS, and Seller is not
aware of reason why any such determination letter should be revoked or not
issued or reissued. Neither Seller nor any Subsidiary is a party to any
agreement, contract, arrangement or plan that has resulted or could result,
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code or any similar
provisions of foreign, state or local law.
(c) With respect to the Optoelectronics Business, there is not presently
pending or existing, and to Seller's knowledge there is not threatened, (i) any
strike, slowdown, picketing, or work stoppage, (ii) any application for
certification of a collective bargaining agent, or (iii) any controversies
pending, or to Seller's knowledge, threatened between Seller or any Subsidiary
and any of its employees that, individually or in the aggregate, have had or
could reasonably be expected to have a Seller Material Adverse Effect.
3.11 Contracts
(a) Schedule 3.11 contains a complete and accurate list of all existing
Contracts of Seller or a Subsidiary that are not cancelable by notice to the
other parties in thirty days or less and:
(i) involve or could reasonably be expected to involve payments by or
to Seller or a Subsidiary either of more than $50,000 per year or more than
$100,000 in the aggregate over the full term thereof;
(ii) are with Business Employees;
(iii) contain any provision or covenant prohibiting or limiting the
ability of Seller or a Subsidiary to engage in any activity relating to or
involving the Optoelectronics Business (including geographical restrictions) or
to compete, directly or indirectly, with any Person as to the Optoelectronics
Business;
(iv) create or obligate Seller or a Subsidiary to participate in any
joint venture or similar arrangement with respect to or affecting the
Optoelectronics Business or the Purchased Assets;
(v) relate to any material license relating to the Optoelectronics
Business or the Purchased Assets; and
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(vi) constitute any other agreement, commitment, arrangement or plan
not made in the ordinary course of business that is material to the
Optoelectronics Business (clauses (i) through (vi) collectively, the "Material
Contracts").
(b) Each Material Contract is valid, binding and enforceable against Seller
or the applicable Subsidiary and, to Seller's knowledge, the other parties
thereto in accordance with its terms and is in full force and effect. Except as
set forth on Schedule 3.11, neither Seller nor any Subsidiary has received any
notice that it is in default under or in breach of or is otherwise delinquent in
performance under any Material Contract, and, to Seller's knowledge, each of the
other parties thereto has performed all obligations required to be performed by
it under, and is not in default under, any Material Contract and no event has
occurred that, with notice or lapse of time, or both, would constitute such a
default, except for breaches, failures of performance or defaults that,
individually or in the aggregate, have not had and could not reasonably be
expected to have a Seller Material Adverse Effect. Seller or a Subsidiary has
made available to Buyer true and complete copies of all Material Contracts.
(c) Schedule 3.11(c) identifies accurately whether the companies listed
thereon are licensed to the assigned patent applications.
3.12 Revenues; Financial Information; Absence of Certain Changes
(a) Schedule 3.12(a) sets forth a statement of revenues for the
Optoelectronics Business for each of the fiscal years ended September 30, 2002,
2001 and 2000. The statement of revenues is derived from and has been prepared
in accordance with the books and records of Seller and the Subsidiaries (which
are accurate and complete in all material respects) on a consistent basis
throughout the periods covered thereby and (ii) presents fairly the revenues of
the Optoelectronics Business for such periods. The revenue of the
Optoelectronics Business reflected on Schedule 3.12(a) has been recognized in
accordance with GAAP and SAB 101 (as noted on Schedule 3.12(a)).
(b) The historical financial information relating to the Optoelectronics
Business set forth on Schedule 3.12(b) was prepared in good faith by Seller's
management and is based upon reasonable assumptions. Seller is not aware of any
fact or set of circumstances that would lead it to believe that such historical
financial information is incorrect or misleading in any material respect.
(c) Except as set forth in Schedule 3.12(c), since September 30, 2002, the
Optoelectronics Business has been conducted in the ordinary course consistent
with past practices and there has not been:
(i) any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or could reasonably be
expected to have a Seller Material Adverse Effect;
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(ii) any creation or other incurrence of any Encumbrance on any
Purchased Asset other than in the ordinary course of business consistent with
past practices;
(iii) any damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Optoelectronics Business or any Purchased
Asset which, individually or in the aggregate, has had or could reasonably be
expected to have a Seller Material Adverse Effect;
(iv) any transaction or commitment made, or any contract or agreement
entered into, by Seller or a Subsidiary relating to the Optoelectronics Business
or any Purchased Asset (including the acquisition or disposition of any assets)
or any relinquishment by Seller or a Subsidiary of any contract or other right,
in either case, material to the Optoelectronics Business, other than
transactions and commitments in the ordinary course of business consistent with
past practices and those contemplated by this Agreement and the Collateral
Agreements;
(v) any change in any method of accounting or accounting practice by
Seller or a Subsidiary with respect to the Optoelectronics Business;
(vi) any (i) employment, deferred compensation, severance, retirement
or other similar agreement entered into with any Business Employee (or any
amendment to any such existing agreement), (ii) change in compensation or other
benefits payable to any Business Employee pursuant to any severance or
retirement plans or policies thereof;
(vii) any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize the Business Employees, which employees were not subject to a
collective bargaining agreement as of September 30, 2002, or any lockouts,
strikes, slowdowns, work stoppages or threats thereof by or with respect to
Business Employees; or
(viii) any shipments or sales of quantities of products of the
Optoelectronics Business to customers, including distributors, other than in the
ordinary course consistent with their past requirements.
(d) Seller has not received or booked any prepaid revenues applicable to
the Optoelectronics Business applicable to performance due after the Closing
Date.
(e) The aggregate product warranty liability to be assumed by Buyer
hereunder for periods before the Closing is not so great as to cause a Seller
Material Adverse Effect.
3.13 Intellectual Property
(a) Seller or one of its Affiliates owns all of the copyrights, know-how,
service marks, trademarks, trade secrets, patent applications and other
intellectual property rights
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that it is assigning to Buyer pursuant to the Intellectual Property Agreement
(collectively, the "Assigned Intellectual Property"). Seller or one of its
Affiliates owns or has a valid right to grant the licenses to all of the
copyrights, know-how, service marks, trademarks, trade secrets, patents and
other intellectual property rights that it is licensing to Buyer pursuant to the
Intellectual Property Agreement (collectively, the "Licensed Intellectual
Property").
(b) Except as set forth in Schedule 3.13(b), in connection with the
operation of the Optoelectronics Business,
(i) to Seller's knowledge, none of Seller or any of its Affiliates has
infringed, misappropriated or otherwise violated any intellectual property
rights or other proprietary rights of any third Person;
(ii) there is no suit, or proceeding pending against, or, to Seller's
knowledge, threatened against or written claim affecting, the Optoelectronics
Business (x) based upon, or challenging or seeking to deny or restrict, the
rights of Seller or any of its Affiliates in any of the Assigned Intellectual
Property or the Licensed Intellectual Property (collectively, the
"Optoelectronics Intellectual Property"), (y) alleging that the use of the
Optoelectronics Intellectual Property or any services provided, processes used,
or products manufactured, used, imported, offered for sale or sold with respect
to the Optoelectronics Business do or may conflict with, misappropriate,
infringe or otherwise violate any intellectual property rights or other
proprietary rights of any third party, or (z) alleging that Seller or any of its
Affiliates infringed, misappropriated, or otherwise violated any intellectual
property rights or other proprietary rights of any third party in connection
with the operation of the Optoelectronics Business; and
(iii) to Seller's knowledge, (A) the Optoelectronics Intellectual
Property constitutes all the material intellectual property rights or other
material proprietary rights owned or licensed (to the extent Seller has a right
to license or sublicense Buyer thereunder without payment of a fee) by Seller or
one of its Affiliates. Buyer's sole remedy for Seller's failure to deliver the
Optoelectronics Intellectual Property is as set forth in the Intellectual
Property Agreement; (B) there exist no restrictions on the disclosure, use,
license or transfer of the Optoelectronics Intellectual Property (other than the
restrictions imposed in the Intellectual Property Agreement); (C) the
consummation of the transactions contemplated by this Agreement will not alter,
impair or extinguish any Optoelectronics Intellectual Property; and (D)
excluding patent license agreements with third parties not identified on
Schedule 3.13(b)(ii), the Licenses set forth on Schedule 3.13(b)(iii) constitute
all material Licenses of Seller to the intellectual property rights or other
proprietary rights of third parties that are used in the Optoelectronics
Business, other than licenses to standard office personal computer and
networking software.
(c) At the Closing, Seller or one of its Affiliates will provide, either by
assignment or license, to Buyer in accordance with the Intellectual Property
Agreement, all of the Optoelectronics Intellectual Property owned by Seller or
the applicable Affiliate, which Buyer
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requires to conduct the Optoelectronics Business after the Closing and to make,
have made, use, lease, import, offer to sell or sell the products, as such
products and services existed as of the Closing Date, of the Optoelectronics
Business. Seller will transfer clear title to the Assigned Intellectual Property
and offer Licensed Intellectual Property free and clear of any Encumbrance,
excluding patent license agreements with third parties, which would materially
interfere with the license grant.
(d) To Seller's knowledge, (i) none of the Assigned Intellectual Property
material to the operation of the Optoelectronics Business has been adjudged
invalid or unenforceable in whole or part, and (ii) all such Assigned
Intellectual Property is valid and enforceable.
(e) To Seller's knowledge, Seller or an Affiliate of Seller has taken
reasonable actions to maintain and protect the Assigned Intellectual Property,
including payment of applicable maintenance fees and filing of applicable
statements of use other than certain foreign applications which Seller has
dropped in the ordinary course of business.
(f) Seller or one of its Affiliates has taken reasonable steps to maintain
the confidentiality of all confidential intellectual property rights or other
proprietary rights. To Seller's knowledge, there has been no misappropriation of
confidential intellectual property that, individually or in the aggregate, has
had or could reasonably be expected to have a Seller Material Adverse Effect. To
Seller's knowledge, reasonable effort has been made to ensure confidentiality
provisions are in place for those Business Employees having access to
confidential intellectual property which is material to the Optoelectronics
Business. To Seller's knowledge there is no material infringement of the
Assigned Intellectual Property by any third party; provided, however, that the
foregoing shall not be deemed to apply to the patent applications that Seller is
assigning to Buyer pursuant to the Intellectual Property Agreement.
(g) In connection with the separation of Lucent Technologies Inc.
("Lucent") from AT&T Corp., Lucent and AT&T Corp. executed and delivered patent
assignments. The ownership of patents, as between Lucent and AT&T Corp., was
divided such that Lucent or one of its Affiliates was vested, among other
patents, with ownership of patents that related primarily to the Optoelectronics
Business. Subsequently, in connection with the separation of Agere from Lucent,
Agere and Lucent executed and delivered patent assignments. The ownership of
patents, as between Agere and Lucent, was divided such that Agere or one of its
Affiliates was vested, among other patents, with ownership of patents that
relate primarily to the Optoelectronics Business.
3.14 Product Liability and Recalls
(a) Each of the products produced or sold by Seller or a Subsidiary in
connection with the Optoelectronics Business is, and at all times up to and
including the sale thereof has been, in compliance in all material respects with
all applicable Laws. To Seller's knowledge,
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Agere Systems Proprietary
there is no material design or manufacturing defect that has been established or
is being investigated with respect to any of such products.
(b) Except as set forth in Schedule 3.14(b), since January 1, 2001, there
has been no action, suit, claim, inquiry, proceeding or investigation in any
case by or before any court or Governmental Body pending or, to Seller's
knowledge, threatened against or involving the Optoelectronics Business relating
to any product alleged to have been designed, manufactured or sold by the
Optoelectronics Business and alleged to have been defective or improperly
designed or manufactured, nor to Seller's knowledge is there any pattern of
product failure relating to any products designed, manufactured or sold by the
Optoelectronics Business.
(d) Since January 1, 2001, there has been no pending, or to Seller's
knowledge, threatened recall or investigation of any product sold by Seller or a
Subsidiary in connection with the Optoelectronics Business.
3.15 Product Warranty
Schedule 3.15 includes copies of the standard terms and conditions of sale
for products of the Optoelectronics Business (containing applicable guaranty,
warranty and indemnity provisions). Except as set forth in Schedule 3.15, the
products manufactured by the Optoelectronics Business have been sold by the
Optoelectronics Business in accordance with the standard terms and conditions of
sale. All product warranty claims included in the Assumed Liabilities shall be
governed by the terms of such warranty provisions.
3.16 Inventory
The Inventory is, and as of the Closing Date, will be, of quality and
quantity usable or saleable in the ordinary course of the Optoelectronics
Business, except in each case for obsolete items and items of below-standard
quality that have been written down to estimated net realizable value in
accordance with GAAP.
3.17 Customer and Suppliers
Schedule 3.17 contains a list setting forth the ten (10) largest customers
of the Optoelectronics Business, by dollar amount, over each of the 12-month
periods ended September 30, 2002, 2001 and 2000. All purchase and sale orders
and other commitments for purchases and sales made by Seller or a Subsidiary in
connection with the Optoelectronics Business have been made in the ordinary
course of business in accordance with past practices, and no payments have been
made to any supplier or their representatives other than payments to such
suppliers or their representatives for the payment of the invoiced price of
supplies purchased or goods sold in the ordinary course of business.
3.18 Restrictions on the Business
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Except for this Agreement, to the Seller's knowledge, there is no
agreement, judgment, injunction, order or decree materially affecting (i)
Seller's or a Subsidiary's conduct of the Optoelectronics Business as currently
conducted, or (ii) Buyer's ability to conduct the Optoelectronics Business after
the Closing as currently conducted by Seller.
3.19 Brokers
Other than Xxxxxx Xxxxxxx & Co., as to which Seller shall have full
responsibility and for which Buyer shall not have any liability, no broker,
investment banker, financial advisor or other Person is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of Seller or any Affiliate of Seller.
3.20 Taxes
There are no liens for Taxes upon any of the Purchased Assets other
than Permitted Encumbrances and no action, proceeding or, to the Seller's
knowledge, investigation has been instituted against Seller or any Subsidiary
that would give rise to any such lien other than Permitted Encumbrances. Seller
and each Subsidiary has duly and timely filed all material Tax Returns that it
was required to file; all such Returns were correct and complete in all material
respects; and all Taxes owed and shown as due on any Return, have been paid.
None of the Purchased Assets is an asset or property that is or will be required
to be treated as (a) described in Section 168(f)(8) of the U.S. Internal Revenue
Code of 1954 and in effect immediately before the enactment of the Tax Reform
Act of 1986, or (b) tax-exempt use property within the meaning of Section
168(h)(1) of the Code.
3.21 Product Development
To Seller's knowledge, there are no substantial and negative effects on
the progress of Seller's product development for products currently under
development or testing by Seller in connection with its Optoelectronics
Business, for products expected to be introduced before the end of calendar
2003, that would make those potential products impossible to develop or that
would materially delay their currently anticipated first customer ship date.
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3.22 No Other Representations or Warranties
Except for the representations and warranties contained in this Xxxxxxx
0, xxxx of Seller, any Affiliate of Seller or any other Person makes any
representations or warranties, and Seller hereby disclaims any other
representations or warranties, whether made by Seller, or any Affiliate of
Seller, or any of their respective officers, directors, employees, agents or
representatives, with respect to the execution and delivery of this Agreement or
any Collateral Agreement, the transactions contemplated hereby or the
Optoelectronics Business, notwithstanding the delivery or disclosure to Buyer or
its representatives of any documentation or other information with respect to
any one or more of the foregoing. Notwithstanding anything to the contrary
herein, no representation or warranty contained in this Section 3 is intended
to, or does, cover or otherwise pertain to any assets that are not included in
the Purchased Assets or any liabilities that are not included in the Assumed
Liabilities.
4. Representations and Warranties of Buyer
Except as set forth in Schedules attached hereto and delivered by Buyer
to Seller prior to the execution of this Agreement, Buyer represents and
warrants to Seller that:
4.1 Organization and Qualification
Each of Buyer and any Buyer Designee is a corporation, limited
partnership, or other legal entity duly organized, validly existing and in good
standing under the Laws of the jurisdiction of its incorporation or organization
and each of Buyer and any Buyer Designee has all requisite legal power and
authority to carry on its business as currently conducted by it and to own or
lease and operate its properties. Each of Buyer and any Buyer Designee is duly
qualified to do business and is in good standing as a foreign corporation (in
any jurisdiction that recognizes such concept) in each jurisdiction where the
ownership or operation of its assets or the conduct of its business requires
such qualification, except where the failure to be so qualified or in good
standing, individually or in the aggregate, has not had and could not reasonably
be expected to have a material adverse effect on Buyer's business taken as a
whole or on Buyer's or any Buyer Designee's ability to consummate the
transactions under this Agreement and the Collateral Agreements.
4.2 Authorization; Binding Effect
(a) Each of Buyer and any Buyer Designee has all requisite corporate
power and authority to execute, deliver and perform this Agreement and the
Collateral Agreements to which it will be a party, as the case may be, and to
effect the transactions contemplated hereby and thereby and the execution,
delivery and performance of this Agreement and the Collateral Agreements by
Buyer or a Buyer Designee has been duly authorized by all requisite corporate
action.
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(b) This Agreement has been duly executed and delivered by Buyer and
this Agreement is, and the Collateral Agreements to which Buyer or a Buyer
Designee will be a party when duly executed and delivered by Buyer or such Buyer
Designee will be, valid and legally binding obligations of Buyer or such Buyer
Designee enforceable against Buyer or such Buyer Designee in accordance with
their respective terms, except to the extent that enforcement of the rights and
remedies created hereby and thereby may be affected by bankruptcy,
reorganization, moratorium, insolvency and similar Laws of general application
affecting the rights and remedies of creditors and by general equity principles.
4.3 Non-Contravention; Consents
(a) Assuming that the consents specified in Section 4.3(b) below have
been obtained, the execution, delivery and performance of this Agreement and the
Collateral Agreements by Buyer and any Buyer Designee and the consummation of
the transactions contemplated hereby and thereby do not and will not: (i) result
in a breach or violation of any provision of Buyer's or any Buyer Designee's
charter or by-laws or similar organizational document (ii) violate or result in
a breach of or constitute an occurrence of default under any provision of,
result in the acceleration or cancellation of any obligation under, or give rise
to a right by any party to terminate or amend its obligations under, any
mortgage, deed of trust, conveyance to secure debt, note, loan, indenture, lien,
lease, agreement, instrument, order, judgment, decree or other arrangement or
commitment to which Buyer or any Buyer Designee is a party or by which it or its
assets or properties are bound, or (iii) violate any applicable Law, order,
judgment, injunction, decree, rule or regulation of any court or any
Governmental Body having jurisdiction over Buyer or any Buyer Designee or any of
their respective properties, other than in the case of clauses (ii) and (iii),
any such violations, breaches, defaults, accelerations or cancellations of
obligations or rights that, individually or in the aggregate, have not had and
could not be reasonably expected to have a material adverse effect on Buyer's
business taken as a whole or on Buyer's or any Buyer Designee's ability to
consummate the transactions under this Agreement and the Collateral Agreements.
(b) No consent, approval, order or authorization of, or registration,
declaration or filing with, any Person is required to be obtained by Buyer or
any Buyer Designee in connection with the execution, delivery and performance of
this Agreement or the Collateral Agreements or for the consummation of the
transactions contemplated hereby or thereby, except for (i) any filings required
to be made under the HSR Act and any applicable filings required under foreign
antitrust Laws, (ii) a waiver or consent from the SEC concerning obligations
with respect to filing of full three year audited financial statements of the
Optoelectronics Business as a part of Buyer's Form 8-K obligations that will
permit Buyer to comply with its statutory and regulatory obligations with
information available from Seller, and (iii) such consents, approvals, orders,
authorizations, registrations, declarations or filings the failure of which to
be obtained or made, individually or in the aggregate, have not had and could
not reasonably be expected to have a material adverse effect on Buyer's business
taken as a whole or on Buyer's or any Buyer Designee's ability to consummate the
transactions under this Agreement and the Collateral Agreements.
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4.4 Brokers
No broker, investment banker, financial advisor or other Person is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based on arrangements made by or on behalf of Buyer or an Affiliate of Buyer.
4.5 No Inducement or Reliance; Independent Assessment
(a) With respect to the Purchased Assets, the Optoelectronics Business
and any other rights or obligations to be transferred hereunder or under the
Collateral Agreements or pursuant hereto or thereto, Buyer has not been induced
by and has not relied upon any representations, warranties or statements,
whether express or implied, made by Seller, any Affiliate of Seller, or any
agent, employee, attorney or other representative of Seller or by any other
Person representing or purporting to represent Seller that are not expressly set
forth in this Agreement or in the Collateral Agreements (including the Schedules
and Exhibits hereto and thereto), whether or not any such representations,
warranties or statements were made in writing or orally, and none of Seller, any
Affiliate of Seller, or any agent, employee, attorney, other representative of
Seller or other Person shall have or be subject to any liability to Buyer or any
other Person resulting from the distribution to Buyer, or Buyer's use of, any
such information, including any information, documents or material made
available in any "data rooms" or management presentations or in any other form
in expectation of the transactions contemplated hereby.
(b) Buyer acknowledges that it has made its own assessment of the
present condition and the future prospects of the Optoelectronics Business and
is sufficiently experienced to make an informed judgment with respect thereto.
Buyer further acknowledges that neither Seller nor any Affiliate of Seller has
made any warranty, express or implied, as to the future prospects of the
Optoelectronics Business or its profitability for Buyer, or with respect to any
forecasts, projections or Optoelectronics Business plans prepared by or on
behalf of Seller and delivered to Buyer in connection with the Optoelectronics
Business and the negotiation and the execution of this Agreement.
4.6 Sufficiency of Funds
Buyer (i) has sufficient funds available to pay the Purchase Price and
any expenses incurred by Buyer in connection with the transactions contemplated
by this Agreement or the Collateral Agreements; (ii) has the resources and
capabilities (financial or otherwise) to perform its obligations hereunder and
under the Collateral Agreements; and (iii) has not incurred any obligation,
commitment, restriction or liability of any kind, absolute or contingent,
present or future, which would impair or adversely affect such resources and
capabilities.
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4.7 No Other Representations or Warranties
Except for the representations and warranties contained in this Xxxxxxx
0, xxxx of Buyer, any Affiliate of Buyer or any other Person makes any
representations or warranties, and Buyer hereby disclaims any other
representations or warranties, whether made by Buyer, any Affiliate of Buyer, or
any of their officers, directors, employees, agents or representatives, with
respect to the execution and delivery of this Agreement or any Collateral
Agreement or the transactions contemplated hereby and thereby, notwithstanding
the delivery or disclosure to Seller or its representatives of any documentation
or other information with respect to any one or more of the foregoing.
5. Certain Covenants
5.1 Access and Information
(a) Seller shall give, or cause its Affiliates to give, to Buyer and
its Affiliates, and their respective officers, employees, accountants, counsel
and other representatives (including financing sources) reasonable access during
Seller's or the applicable Affiliate's normal business hours throughout the
period prior to the Closing (or the Real Estate Closing with respect to the
Transferred Premises) to all of Seller's or the applicable Affiliate's
properties, books, contracts, commitments, reports of examination and records
relating to the Optoelectronics Business, the Purchased Assets and the Assumed
Liabilities (but excluding those related primarily to the Excluded Assets and
Excluded Liabilities and subject to any limitations that are reasonably required
to preserve any applicable attorney-client privilege or legal or contractual
Third-Party confidentiality obligation). Seller shall assist, and cause its
Affiliates to assist, Buyer and its Affiliates and financing sources in making
such investigation and shall cause its counsel, accountants, engineers,
consultants and other non-employee representatives to be reasonably available to
any of them for such purposes. As used herein, the phrase "reasonable access"
shall include, without limitation, the right of Buyer and its Affiliates, and
their respective officers, employees, accountants, counsel, contractors, and
other representatives, to conduct physical inspections of the Transferred
Premises and the Leased Premises, including without limitation, the right to
conduct, or have conducted by a third-party chosen by Buyer, Phase I and Phase
II environmental site assessments, which may include physical investigation of
improvements, fixtures, and equipment, and investigation of soil and
groundwater, on the Transferred Premises and the Leased Premises.
(b) After the Closing Date, Seller and Buyer shall provide, and shall
cause their respective Affiliates to provide, to each other and to their
respective officers, employees, accountants, counsel and other representatives,
upon request (subject to any limitations that are reasonably required to
preserve any applicable attorney-client privilege or legal or contractual
Third-Party confidentiality obligation), reasonable access for inspection and
copying of all Business Records, Governmental Permits, Licenses, Contracts and
any other information existing as of the Closing Date and relating to the
Optoelectronics Business, the Purchased Assets, the Assumed Liabilities or the
Transferred Employees and shall make their
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respective personnel reasonably available for interviews, depositions and
testimony in any legal matter concerning transactions contemplated by this
Agreement, the operations or activities relating to the Optoelectronics
Business, the Purchased Assets, the Assumed Liabilities or the Transferred
Employees and as otherwise may be necessary or desirable to enable the party
requesting such assistance to: (i) comply with any reporting, filing or other
requirements imposed by any Governmental Body; (ii) assert or defend any claims
or allegations in any litigation or arbitration or in any administrative or
legal proceeding other than claims or allegations that one party to this
Agreement has asserted against the other; (iii) prepare any and all historical
or pro forma financial statements related to the Optoelectronics Business for
purposes of complying, or preparing to comply, with any rules or regulations of
the Securities and Exchange Commission; or (iv) subject to clause (ii) above,
perform its obligations under this Agreement. The party requesting such
information or assistance shall reimburse the other party for all reasonable and
necessary out-of-pocket costs and expenses, if any, incurred by such party in
providing such information and in rendering such assistance. The access to
files, books and records contemplated by this Section 5.1(b) shall be during
normal business hours and upon reasonable prior notice and shall be subject to
such reasonable limitations as the party having custody or control thereof may
impose to preserve the confidentiality of information contained therein. Seller
will make any access software that is necessary for access to Business Records
under this paragraph, available without charge, and shall permit and assist to
make electronic copies of any Business Records available electronically, all
subject to reasonable security measures.
(c) Buyer shall preserve all Business Records, Licenses and
Governmental Permits for at least seven (7) years after the Closing Date.
5.2 Conduct of the Optoelectronics Business
From and after the date of this Agreement and through the Closing Date,
except as otherwise contemplated by this Agreement or in Schedule 5.2 or as
Buyer shall otherwise consent to in writing, Seller and the Subsidiaries, with
respect to the Optoelectronics Business:
(a) will carry on the Optoelectronics Business in the ordinary course
consistent with past practice and, to the extent consistent therewith, use its
reasonable commercial efforts to keep intact the Optoelectronics Business, keep
available the services of the Business Employees and preserve the relationships
of the Optoelectronics Business with customers, suppliers, licensors, licensees,
distributors and others that have a business relationship with the
Optoelectronics Business;
(b) will not permit, other than as may be required by Law or a
Governmental Body, all or any of the Purchased Assets (real or personal,
tangible or intangible) presently and actively used or held for use primarily in
the operation or conduct of the Optoelectronics Business to be sold, licensed,
disposed of, or subjected to any Encumbrance, other than sales
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of Inventory in the ordinary course of business consistent with past practice
and Section 5.2(d);
(c) will not sell, lease, license, transfer or dispose of any asset
that would otherwise be a Purchased Asset, other than sales of Inventory in the
ordinary course of business consistent with past practice and Section 5.2(d);
(d) will not sell Inventory outside of the ordinary course of business
consistent with past practice and will maintain Inventory sufficient to meet
expected customer requirements, consistent with past practice, including
sufficient raw materials, capacity and work in process in light of anticipated
demand and customary cycle times;
(e) will not acquire any asset that will be a Purchased Asset except in
the ordinary course of business consistent with past practice;
(f) will not enter into, terminate or materially extend or materially
modify any Material Contract except in the ordinary course of business
consistent with past practice;
(g) will not incur or assume any liabilities, obligations or
indebtedness for borrowed money, other than in the ordinary course of business
consistent with past practice or that will constitute Excluded Liabilities;
(h) will not increase the salaries, wage rates, other compensation or
fringe benefits of any Business Employees;
(i) will not do any other act which would cause any representation or
warranty of Seller in this Agreement to be or become untrue in any material
respect or intentionally omit to take any action necessary to prevent any such
representation or warranty from being untrue in any material respect; and
(k) will not enter into any agreement or commitment with respect to any
of the foregoing.
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5.3 Tax Reporting and Allocation of Consideration
(a) Seller and Buyer acknowledge and agree that (i) Seller will be
responsible for and will perform all Tax withholding, payment and reporting
duties with respect to any wages and other compensation paid by Seller or a
Subsidiary to any Business Employee in connection with the operation or conduct
of the Optoelectronics Business for any Pre-Closing Tax Period, and (ii) Buyer
will be responsible for and will perform all Tax withholding, payment and
reporting duties with respect to any wages and other compensation paid by Buyer
to any Transferred Employee with respect any Post-Closing Tax Period. For the
avoidance of doubt, nothing in this paragraph is intended to modify or adjust
the substantive liability of Buyer and Seller under this Agreement with respect
to the Taxes described in this paragraph.
(b) Seller and Buyer recognize their mutual obligations pursuant to
Section 1060 of the Code to timely file IRS Form 8594 (the "Asset Acquisition
Statement") with their respective federal income tax returns. Accordingly,
Seller and Buyer shall, no later than ninety (90) days after the Closing Date,
attempt in good faith to (i) enter into a Purchase Price allocation agreement
providing for the allocation of the Purchase Price among the Purchased Assets
consistent with the provisions of Section 1060 of the Code and the Treasury
Regulations thereunder and (ii) cooperate in the preparation of the Asset
Acquisition Statement in accordance with clause (i) for timely filing with their
respective federal income tax returns. If Seller and Buyer shall have agreed on
a Purchase Price allocation and an Asset Acquisition Statement, then Seller and
Buyer shall file the Asset Acquisition Statement in the form so agreed and
neither Seller nor Buyer shall take a Tax position which is inconsistent with
such Purchase Price allocation, unless compelled to do otherwise by the IRS.
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5.4 Business Employees
(a) As of the Closing Date, Buyer shall make offers of employment to
those Business Employees listed on Schedule 1.1(a) (including those absent due
to vacation, holiday, illness, leave of absence or short-term disability, but
excluding any Business Employees on long-term disability) to whom it decides to
offer positions in Buyer's sole discretion. Seller and any applicable Subsidiary
shall cooperate and assist in facilitating the Buyer's or a Buyer Designee's
offers and will not take any action, or cause any of the Subsidiaries to take
any action, which would impede, hinder, interfere or otherwise compete with
Buyer's or a Buyer Designee's effort to hire any Business Employees. Business
Employees who accept Buyer's or a Buyer Designee's offer of employment, as of
the effective date of their employment with Buyer, are referred to as
"Transferred Employees." Employment with Buyer or a Buyer Designee of
Transferred Employees shall be effective as of the day following the close of
business on the Closing Date, except that the employment of individuals
receiving short-term disability benefits or on approved leave of absence on the
Closing Date will become effective as of the date they present themselves for
work with the Buyer or a Buyer Designee. The parties agree to finalize the list
of Business Employees (to include not more than approximately 150 employees plus
Matamoros, Mexico employees Buyer wishes to retain) not later ten (10) days from
the date hereof to whom offers of employment may be made. Buyer understands that
the individuals that are not on such list of Business Employees may be
terminated by Seller, in its sole discretion at any time thereafter except for
any such employees that Seller retains to provide transition services to Buyer
or for its other businesses.
(b) Buyer or a Buyer Designee shall provide, or shall cause to be
provided, to Transferred Employees, until at least December 31, 2003, the same
salary offered by Seller or the applicable Subsidiary immediately prior to the
Closing Date as set forth on Schedule 1.1(a ). Buyer or a Buyer Designee shall
provide, or shall cause to be provided, to Transferred Employees employee
benefits that, in the aggregate, are no less favorable than those provided to
similarly situated employees of Buyer or the applicable Buyer Designee. Except
as expressly set forth in this Section 5.4, no assets of any Benefit Plan shall
be transferred to Buyer or any Affiliate of Buyer. Each employee benefit plan,
program, policy and arrangement of Buyer or an Affiliate of Buyer, including any
Pension Plans, Welfare Plans, vacation plans and severance plans, shall
recognize to the extent permitted by Buyer's or a Buyer Designee's plans and to
the extent that it is administratively feasible to do so (i) for purposes of
satisfying any deductibles, co-pays and out-of-pocket maximums during the
coverage period that includes the Closing Date, any payment made by any
Transferred Employee towards deductibles, co-pays and out-of-pocket maximums in
any health or other insurance plan of Seller or a Subsidiary and (ii) for
purposes of determining eligibility to participate, vesting and for any schedule
of benefits based on service, all service with Seller or a Subsidiary, including
service with predecessor employers that was recognized by Seller or a Subsidiary
and any prior unbridged service with Seller or a Subsidiary, provided that such
service shall not be recognized to the extent such recognition would result in a
duplication of benefits. Buyer or the applicable Buyer Designee will continue to
provide (x)
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relocation assistance to those Transferred Employees receiving it as of the
Closing Date and (y) tuition assistance to those Transferred Employees who are
receiving such benefits as of the Closing Date for the current academic session,
in each case as set forth on Schedule 5.4(b). Buyer or the applicable Buyer
Designee will honor the terms and conditions of Seller's international assignee
program, including repatriation upon completion of assignment, completion
bonuses, Tax equalization and Tax return preparation, with respect to
Transferred Employees who are on international assignment as of the Closing
Date, in each case as set forth on Schedule 5.4(b), except that these costs
shall be allocated between the parties based on the portion of the international
assignment occurring before or on the Closing Date (which shall be Seller's or
the applicable Subsidiary's obligation) and after the Closing Date (which shall
be Buyer's or the applicable Buyer Designee's obligation).
(c) Seller intends that the transactions contemplated by this Agreement
shall not constitute a severance of employment of any Transferred Employee prior
to or upon the consummation of the transactions contemplated hereby and that
such employees will have continuous and uninterrupted employment immediately
before and immediately after the Closing Date. Buyer intends that each
Transferred Employee shall be treated as a new employee of Buyer or the
applicable Buyer Designee, subject only to Buyer's commitments hereunder.
Notwithstanding anything to the contrary in this Agreement, Buyer shall provide
severance benefits substantially equivalent to the benefits listed on Schedule
5.4(c) to Transferred Employees whose employment is terminated involuntarily by
Buyer on or before December 31, 2003 other than terminations in circumstances
that would not require payments of severance benefits under Seller's severance
plan.
(d) Buyer agrees that its and its Affiliate's health and welfare plans
shall waive any pre-existing condition exclusion (to the extent such exclusion
was waived under applicable health and welfare plans offered to the Transferred
Employees by Seller or a Subsidiary) and any proof of insurability. Seller or
the applicable Subsidiary shall remain responsible for any benefits payable
under a Benefit Plan with respect to claims incurred by Business Employees prior
to or on the Closing Date. The medical and dental plans maintained by Buyer and
Affiliates of Buyer shall recognize as dependents of the Transferred Employees
any Class 2 dependents recognized by Seller's or the applicable Subsidiary's
medical and dental plans.
(e) As soon as practicable following the Closing Date, Buyer shall
cause one or more defined contribution savings plans intended to qualify under
sections 401(a) and 401(k) of the Code (the "Buyer Savings Plan") to provide for
the receipt of Transferred Employees' lump sum cash distributions, in the form
of an eligible rollover distribution from the Agere Systems Inc. Management
401(k) Plan, provided such rollovers are made at the election of the Transferred
Employees and in accordance with the terms of the Buyer Savings Plan. Seller
shall cause the Agere Systems Inc. Management 401(k) Plan to permit the
Transferred Employees to elect a lump sum cash distribution of benefits accrued
through the Closing Date in accordance with the Code.
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(f) Seller shall make and be responsible for incentive compensation
payments, if any, to Transferred Employees for the period from October 1, 2002
to and including the Closing Date in accordance with its short-term incentive
plan in effect for any such period.
(g) The parties agree to cooperate in good faith to determine whether
any notification may be required under the Worker Adjustment and Retraining
Notification Act (the "WARN Act") as a result of the transactions contemplated
by this Agreement. Seller will be responsible for providing any notification
that may be required under the WARN Act with respect to any of its employees.
Buyer will be responsible for providing any notification that may be required
under the WARN Act with respect to any Transferred Employees terminated after
the Closing Date.
(h) Nothing in this Agreement shall require Buyer or a Buyer Designee
to employ any Business Employees, or to employ any Transferred Employee on
anything other than an at-will basis, terminable at any time with or without
cause. Except with Buyer's express written consent, Seller shall make no
representation to any Business Employees regarding Buyer's or Buyer Designee's
intentions or plans to hire or not hire any Business Employees or to assume or
honor or to not assume or honor any collective bargaining agreement. Seller
shall instruct its management and supervisory employees in the Optoelectronics
Business or involved in negotiating this transaction to refrain from any such
representation.
5.5 Collateral Agreements; Leased Equipment
(a) On or before the Closing Date, Buyer or a Buyer Designee shall
execute and deliver to Seller, and Seller or the applicable Subsidiary shall
execute and deliver to Buyer or a Buyer Designee the Collateral Agreements.
Prior to the Closing Date, Seller and Buyer shall negotiate in good faith the
schedules for the Supply Agreement and the services to be attached to the
Transition Services Agreement.
(b) Prior to the Closing Date, Seller shall provide Buyer with the
costs and other terms applicable to the Leased Equipment and Buyer shall decide
whether such Leased Equipment will (i) transfer to Buyer as of the Closing Date
by Buyer assuming the leases for such equipment in which case such lease
agreement shall be deemed a Contract hereunder, (ii) be acquired by Buyer as of
the Closing Date by Buyer paying for the costs of purchasing such equipment to
the applicable Third Party pursuant to the equipment rentals or leases (the
"Purchased Leased Equipment"), or (iii) remain the property of Seller as of the
Closing Date (the "Excluded Leased Equipment").
5.6 Reasonable Commercial Efforts
(a) Subject to Section 5.6(b), upon the terms and subject to the
conditions set forth in this Agreement, each of the parties agrees to use its
reasonable commercial efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the transactions
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contemplated by this Agreement, including using reasonable commercial efforts to
accomplish the following: (i) the taking of all acts necessary to cause the
conditions to Closing to be satisfied as promptly as practicable, (ii) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Bodies and the making of all necessary registrations
and filings (including filings with Governmental Bodies, if any) and the taking
of all steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by any Governmental Body, (iii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iv) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the Collateral Agreements or the
consummation of the transactions contemplated hereby or thereby, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Body vacated or reversed, and (v) the execution and delivery
of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement and the
Collateral Agreements.
(b) Seller and Buyer shall timely and promptly make all filings which
may be required by each of them in connection with the consummation of the
transactions contemplated hereby under the HSR Act and any state, foreign or
multinational antitrust legislation or by any foreign or multinational
governmental authority, and the parties shall respectively use all reasonable
commercial efforts to cause the prompt termination or expiration of the
applicable waiting period under such laws. Seller and Buyer agree that their
respective initial filings under the HSR Act and in respect of any foreign
antitrust approval shall be made no later than the fifth business day following
the date of this Agreement. Each party shall furnish to the other such necessary
information and assistance as the other party may reasonably request in
connection with the preparation of any necessary filings or submissions by it to
any U.S. federal or state or foreign or multinational governmental agency,
including, without limitation, any filings necessary under the provisions of the
HSR Act. Each party shall provide the other party the opportunity to make copies
of all correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or its representatives, on the one hand,
and the Federal Trade Commission (the "FTC"), the Antitrust Division of the
United States Department of Justice (the "Antitrust Division") or any state,
foreign or multinational governmental agency or members of their respective
staffs, on the other hand, with respect to this Agreement or the transactions
contemplated hereby. Each party agrees to inform promptly the other party of any
communication made by or on behalf of such party to, or received by or on behalf
of such party from, the FTC, the Antitrust Division or any other state, foreign
or multinational governmental authority regarding any of the transactions
contemplated hereby.
5.7 Contacts with Suppliers and Customers
Prior to the Closing, without the prior consent of Seller, Buyer shall
not contact any suppliers to, or customers of, the Optoelectronics Business in
connection with or pertaining to any subject matter of this Agreement or the
Collateral Agreements. In contemplation of the Closing, Seller and Buyer agree
to cooperate in contacting any suppliers to, or customers
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of, the Optoelectronics Business in connection with or pertaining to any subject
matter of this Agreement or the Collateral Agreements.
5.8 Use of Agere Systems' Name
(a) Buyer and Seller agree as follows:
(i) Except as provided below, immediately after the Closing Date,
Buyer and any Buyer Designee shall cease using "Agere," "Agere Systems" or other
similar xxxx (the "Seller Name") and any other trademark, design or logo
previously or currently used by Seller or any of its Affiliates (other than
those that are transferred pursuant to the Intellectual Property Agreement) in
all invoices, letterhead, advertising and promotional materials, office forms or
business cards;
(ii) Except as provided below, within three (3) months after the
Closing Date, Buyer shall (A) remove any other trademark, design or logo
previously or currently used by Seller or any of its Affiliates from all
buildings, signs and vehicles of the Optoelectronics Business; and (B) cease
using the Seller Name and any other trademark, design or logo previously or
currently used by Seller or any of its Affiliates (other than those that are
transferred pursuant to the Intellectual Property Agreement) in electronic
databases, web sites, product instructions, packaging (except as provided below)
and other materials, printed or otherwise. Notwithstanding the foregoing, Buyer
shall not be restricted in using any packaging materials that are in inventory
as of the Closing Date;
(iii) Buyer shall not be required at any time to remove the Seller
Name and any other trademark, design or logo previously or currently used by
Seller or any of its Affiliates from inventory of the Optoelectronics Business
that is in existence as of the Closing Date, nor shall Buyer be required at any
time to remove such Seller Name and any such other trademark, design or logo
from schematics, plans, manuals, drawings, machinery, tooling including hand
tools, and the like of the Optoelectronics Business in existence as of the
Closing Date to the extent that such instrumentalities are used in the ordinary
internal conduct of the Optoelectronics Business and are neither generally
observed by the public nor intended for use as means to effectuate or enhance
sales;
(iv) Notwithstanding the above, Buyer shall have the right to sell
existing inventory and to use existing packaging, labeling, containers,
supplies, advertising materials, technical data sheets and any similar materials
bearing the Seller Name or any other trademark, design or logo previously or
currently used by Seller or any of its Affiliates until the earlier of (A) one
year after the Closing Date or (B) the depletion of existing inventory;
(v) Buyer shall use Reasonable Efforts (as defined below) to remove
the Seller Name and any other trademark, design or logo previously or currently
used by Seller or any of its Affiliates (other than those that are transferred
pursuant to the Intellectual Property Agreement) from those assets of the
Optoelectronics Business (such as, but not limited to, tools, molds, and
machines) used in association with the manufacture of the
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products of the Optoelectronics Business or otherwise reasonably used in the
conduct of the Optoelectronics Business after the Closing. For the purposes of
this Section 5.8(a)(v), "Reasonable Efforts" means Buyer shall remove the Seller
Name from such assets but only at such time when such asset is not operated or
otherwise is taken out of service in the normal course of business due to
regular maintenance or repair (but only for such repairs or maintenance where
such removal could normally be undertaken, for example, repair or maintenance of
a mold cavity) whichever occurs first; provided that, in no event shall Buyer
use the Seller Name after the date which is one (1) year from the Closing Date.
Buyer shall not be required to perform such removal on such assets that are not
or are no longer used to manufacture the products of the Optoelectronics
Business or other parts, or if discontinuance of use of such assets is
reasonably anticipated during such time period, or from assets stored during
that period provided that such marks are removed upon such asset's return to
service or prior to their sale or other disposition.
(vi) Seller hereby grants to Buyer a limited right to use Seller's
Name and associated trademarks, designs and logos as specified in, and during
the periods, if any, specified in clauses (i) - (v) above.
(b) In no event shall Buyer or any Affiliate of Buyer advertise or hold
itself out as Agere or an Affiliate of Agere after the Closing Date.
5.9 Non-Solicitation or Hiring of Transferred Employees
None of Seller, any of its representatives or any of its Affiliates
will at any time prior to one year from the date hereof, directly or indirectly,
solicit the employment of or hire any Transferred Employee without Buyer's prior
written consent. The term "solicit the employment" shall not be deemed to
include generalized searches for employees through media advertisements,
employment firms or otherwise that are not focused on Transferred Employees.
This restriction shall not apply to any employee whose employment is
involuntarily terminated by Buyer, or its successors, after the Closing.
Solicitation of employment shall be deemed to occur if the Persons who perform
such solicitation have knowledge of the existence of this Agreement or if such
Persons have no knowledge of the existence of this Agreement but Seller's
employees with knowledge of the existence of this Agreement have advance
knowledge of any such solicitation.
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5.10 No Negotiation or Solicitation
Prior to the Closing Date, Seller and its Affiliates will not (and
Seller will cause each of its employees, officers and agents not to) directly or
indirectly (a) solicit, initiate, entertain or encourage the submission of any
proposal, offer or any discussions that might reasonably be expected to lead to
or result in any proposal or offer from any Person relating to the direct or
indirect acquisition of the Optoelectronics Business or any portion of the
Purchased Assets (other than purchases of goods or services from the
Optoelectronics Business in the ordinary course of business consistent with past
practice), or (b) participate in any discussions or negotiations regarding the
Optoelectronics Business, furnish any information with respect thereto, or
assist or participate in, or facilitate in any other manner any effort or
attempt by any Person to do or seek any of the foregoing, except as otherwise
agreed herein. Seller will notify Buyer if any Person makes any proposal, offer,
inquiry or contact with respect to any of the foregoing within two Business Days
after receipt of any such offer or proposal.
5.11 Non-Competition
(a) Seller agrees that, as part of the consideration for the payment of
the Purchase Price, for a period of two (2) years immediately following the
Closing Date, neither Seller nor any of its Affiliates will, directly or
indirectly, as a principal, stockholder or otherwise, operate, perform or have
any ownership interest in any business that develops, manufactures, sells,
installs or distributes products in competition with the Optoelectronics
Business, except that Seller may (i) purchase or otherwise acquire by merger,
purchase of assets, stock, controlling interest or otherwise any Person or
business or engage in any similar merger and acquisition activity with any
Person the primary business of which is not in competition with the
Optoelectronics Business, or (ii) invest as a minority shareholder in any
Person. For the purposes of this Section 5.11(a), ownership of securities of a
company whose securities are publicly traded under a recognized securities
exchange not in excess of 15% of any class of such securities shall not be
considered to be competition with the Optoelectronics Business, and a Person
shall not be considered to be in the "primary business" of competing with the
Optoelectronics Business if such Person derives less than 30% of its revenues
from products that compete with the Optoelectronics Business. For the avoidance
of doubt, the parties agree that the agreements and limitations set forth in
this Section 5.11 shall not apply to any entity that acquires all or part of
Seller in any transaction.
(b) Seller acknowledges that the restrictions set forth in Section
5.11(a) constitute a material inducement to Buyer's entering into and performing
this Agreement. Seller further acknowledges, stipulates and agrees that a breach
of such obligation could result in irreparable harm and continuing damage to
Buyer for which there may be no adequate remedy at law and further agrees that
in the event of any breach of said obligation, Buyer may be entitled to
injunctive relief and to such other relief as is proper under the circumstances.
(c) If any provision contained in this Section shall for any reason be
held invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Section 5.11, but this Section 5.11 shall be construed as if
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such invalid, illegal or unenforceable provision had never been contained
herein. It is the intention of the parties that if any of the restrictions or
covenants contained herein is held to cover a geographic area or to be for a
length of time which is not permitted by applicable Law, or in any way construed
to be too broad or to any extent invalid, such provision shall not be construed
to be null, void and of no effect, but to the extent such provision would be
valid or enforceable under applicable Law, a court of competent jurisdiction
shall construe and interpret or reform this Section 5.11 to provide for a
covenant having the maximum enforceable geographic area, time period and other
provisions (not greater than those contained herein) as shall be valid and
enforceable under such applicable Law.
5.11 Future Collaborations
Seller and Buyer both contemplate the potential for future
collaboration in the development and supply of optical systems that will require
capabilities of both parties to address. On request, each party shall identify
to the other its suitable business contacts for exploring that potential.
6. Confidential Nature of Information
6.1 Confidentiality Agreement
Buyer agrees that the Confidentiality Agreement shall apply to (a) all
documents, materials and other information that it shall have obtained regarding
Seller or its Affiliates during the course of the negotiations leading to the
consummation of the transactions contemplated hereby (whether obtained before or
after the date of this Agreement), any investigations made in connection
therewith and the preparation of this Agreement and related documents and (b)
all analyses, reports, compilations, evaluations and other materials prepared by
Buyer or its counsel, accountants or financial advisors that contain or
otherwise reflect or are based upon, in whole or in part, any of the provided
information; provided, however, that subject to Section 6.2(a), the
Confidentiality Agreement shall terminate as of the Closing and shall be of no
further force and effect thereafter with respect to information of Seller or its
Affiliates the ownership of which is transferred to Buyer or a Buyer Designee.
6.2 Seller's Proprietary Information
(a) Except as provided in Section 6.2(b), after the Closing and for a
period of five (5) years following the Closing Date, Buyer agrees that it will
keep confidential all of Seller's and its Affiliates' Proprietary Information
that is received from, or made available by, Seller in the course of the
transactions contemplated hereby, including, for purposes of this Section 6.2,
information about the Optoelectronics Business's business plans and strategies,
marketing ideas and concepts, especially with respect to unannounced products
and services, present and future product plans, pricing, volume estimates,
financial data, product enhancement information, business plans, marketing
plans, sales strategies, customer information (including customers' applications
and environments), market testing
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information, development plans, specifications, customer requirements,
configurations, designs, plans, drawings, apparatus, sketches, software,
hardware, data, prototypes, connecting requirements or other technical and
business information, except for such Proprietary Information the ownership of
which is transferred to Buyer or a Buyer Designee as part of the Purchased
Assets. This clause shall not restrict the use of any licensed assets within the
scope of the license.
(b) Notwithstanding the foregoing, such Proprietary Information shall
not be deemed confidential and Buyer shall have no obligation with respect to
any such Proprietary Information that:
(i) at the time of disclosure was already known to Buyer other than
as a result of this transaction, free of restriction as evidenced by
documentation in Buyer's possession;
(ii) is or becomes publicly known through publication, inspection
of a product, or otherwise, and through no negligence or other wrongful act of
Buyer;
(iii) is received by Buyer from a Third Party without similar
restriction and without breach of any agreement;
(iv) to the extent it is independently developed by Buyer; or
(v) is, subject to Section 6.2(c), required to be disclosed under
applicable Law or judicial process.
(c) If Buyer (or any of its Affiliates) is requested or required (by
oral question, interrogatory, request for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Proprietary
Information, Buyer will promptly notify Seller of such request or requirement
and will cooperate with Seller such that Seller may seek an appropriate
protective order or other appropriate remedy. If, in the absence of a protective
order or the receipt of a waiver hereunder, Buyer (or any of its Affiliates) is
in the opinion of Buyer's counsel compelled to disclose the Proprietary
Information or else stand liable for contempt or suffer other censure or
penalty, Buyer (or its Affiliate) may disclose only so much of the Proprietary
Information to the party compelling disclosure as is required by Law. Buyer will
exercise its (and will cause its Affiliates to exercise their) reasonable
commercial efforts to obtain a protective order or other reliable assurance that
confidential treatment will be accorded to such Proprietary Information.
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6.3 Buyer's Proprietary Information
(a) Except as provided in Section 6.3(b), after the Closing Date and
for a period of five (5) years thereafter, Seller agrees that it will keep
confidential all of Seller's and its Affiliates' Proprietary Information the
ownership of which or exclusive use of which is transferred to Buyer as part of
the Purchased Assets, including, for purposes of this Section 6.3, information
about the Optoelectronics Business's business plans and strategies, marketing
ideas and concepts, especially with respect to unannounced products and
services, present and future product plans, pricing, volume estimates, financial
data, product enhancement information, business plans, marketing plans, sales
strategies, customer information (including customers' applications and
environments), market testing information, development plans, specifications,
customer requirements, configurations, designs, plans, drawings, apparatus,
sketches, software, hardware, data, prototypes, connecting requirements or other
technical and business information.
(b) Notwithstanding the foregoing, such Proprietary Information
regarding the Optoelectronics Business shall not be deemed confidential and
Seller shall have no obligation with respect to any such Proprietary Information
that:
(i) is or becomes publicly known through publication, inspection of
a product, or otherwise, and through no negligence or other wrongful act of
Seller;
(ii) is received by Seller from a Third Party without similar
restriction and without breach of any agreement; or
(iii) is, subject to Section 6.3(c), required to be disclosed under
applicable Law or judicial process.
(c) If Seller (or any of its Affiliates) is requested or required (by
oral question, interrogatory, request for information or documents, subpoena,
civil investigative demand or similar process) to disclose any Proprietary
Information regarding the Optoelectronics Business, Seller will promptly notify
Buyer of such request or requirement and will cooperate with Buyer such that
Buyer may seek an appropriate protective order or other appropriate remedy. If,
in the absence of a protective order or the receipt of a waiver hereunder,
Seller (or any of its Affiliates) is in the opinion of Seller's counsel
compelled to disclose the Proprietary Information or else stand liable for
contempt or suffer other censure or penalty, Seller (or its Affiliate) may
disclose only so much of the Proprietary Information to the party compelling
disclosure as is required by Law. Seller will exercise its (and will cause its
Affiliates to exercise their) reasonable commercial efforts to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded to such Proprietary Information.
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6.4 Confidential Nature of Agreements
Except to the extent that disclosure thereof is required under
accounting, stock exchange or federal securities or labor relations Laws
disclosure obligations, both parties agree that the terms and conditions of this
Agreement, the Collateral Agreements and all Schedules, attachments and
amendments hereto and thereto shall be considered Proprietary Information
protected under this Article 6. Notwithstanding anything in this Article 6 to
the contrary, in the event that any such Proprietary Information is also subject
to a limitation on disclosure or use contained in another written agreement
between Buyer and Seller or either of their respective Affiliates that is more
restrictive than the limitation contained in this Article 6, then the limitation
in such agreement shall supersede this Article 6.
7. Closing
At the Closing, the following transactions shall take place:
7.1 Deliveries by Seller or the Subsidiaries
On the Closing Date, Seller shall, or shall cause a Subsidiary to,
execute and deliver to Buyer or a Buyer Designee the following:
(a) the Collateral Agreements (other than the Real Estate Deed which
shall be delivered on the Real Estate Closing Date);
(b) all consents, waivers or approvals, including, without limitation,
the Required Consents, theretofore required to be obtained by Seller with
respect to the sale of the Purchased Assets, or assignment of the Contracts, or
the consummation of the transactions contemplated by this Agreement or the
Collateral Agreements;
(c) a certificate of an appropriate officer of Seller, dated the
Closing Date, certifying to the best of his or her knowledge the fulfillment of
the conditions set forth in Sections 8.2(a) and (b) and a certificate of an
Assistant Secretary of Seller, dated the Closing Date, in customary form;
(d) all such other bills of sale, assignments and other instruments of
assignment, transfer or conveyance as Buyer or a Buyer Designee may reasonably
request or as may be otherwise necessary to evidence and effect the sale,
transfer, assignment, conveyance and delivery of the Purchased Assets to Buyer
or a Buyer Designee or and to put Buyer or a Buyer Designee in actual possession
or control of the Purchased Assets; and
(e) an affidavit by Seller and each Subsidiary, dated as of the Closing
Date and in a form acceptable to Buyer, stating under penalty of perjury, the
transferor's name, taxpayer identification number, address and that the
transferor is not a foreign person, pursuant to Section 1445(b)(2) of the Code
and the Treasury Regulations thereunder.
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7.2 Deliveries by Buyer or a Buyer Designee
On the Closing Date, Buyer shall, or shall cause a Buyer Designee to,
execute and deliver to Seller or a Subsidiary the following:
(a) the Purchase Price (except for $5,000,000, which is the portion
allocable to the Transferred Premises);
(b) the Collateral Agreements;
(c) a certificate of an appropriate officer of Buyer, dated the Closing
Date, certifying to the best of his or her knowledge the fulfillment of the
conditions set forth in Sections 8.3(a) and (b), and a certificate of an
Assistant Secretary of Buyer, dated the Closing Date, in customary form; and
(d) all such other documents and instruments as Seller or a Subsidiary
may reasonably request or as may be otherwise necessary or desirable to evidence
and effect the assumption by Buyer or a Buyer Designee of the Assumed
Liabilities.
7.3 Closing Date
The Closing shall take place at the offices of Agere, 0000 Xxxxxxxx
Xxxxxxx XX, Xxxxxxxxx, Xxxxxxxxxxxx, at 10:00 a.m. local time within three (3)
Business Days following the date on which the last of the conditions specified
in Article 8 to be satisfied or waived has been satisfied or waived, or at such
other place or time or on such other date as Seller and Buyer may agree upon in
writing (such date and time being referred to herein as the "Closing Date"). The
parties agree that the closing for the transfer of the Transferred Premises (the
"Real Estate Closing") shall occur after the Closing Date upon 30 days notice by
Buyer to Seller, but in no event later than March 31, 2003 (the "Real Estate
Closing Date").
7.4 Contemporaneous Effectiveness
(a) All acts and deliveries prescribed by this Article 7, with respect
to the Closing (but not the Real Estate Closing), regardless of chronological
sequence, will be deemed to occur contemporaneously and simultaneously on the
occurrence of the last act or delivery, and none of such acts or deliveries will
be effective until the last of the same has occurred.
(b) On the Real Estate Closing Date, Seller shall, or shall cause a
Subsidiary to, deliver to Buyer or a Buyer Designee the following:
(i) the executed Real Estate Deed;
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(ii) all consents, waivers or approvals, including, without
limitation, the Required Consents, theretofore required to be obtained by Seller
with respect to the sale of the Transferred Premises;
(iii) a certificate of an appropriate officer of Seller, dated the
Real Estate Closing Date, certifying to the best of his or her knowledge the
fulfillment of the conditions set forth in Sections 8.2(a) and (b) with respect
to the Transferred Premises, and a certificate of an Assistant Secretary of
Seller, dated the Real Estate Closing Date, in customary form;
(iv) all such other bills of sale, assignments and other
instruments of assignment, transfer or conveyance as Buyer or a Buyer Designee
may reasonably request or as may be otherwise necessary to evidence and effect
the sale, transfer, assignment, conveyance and delivery of the Transferred
Premises to Buyer or a Buyer Designee or and to put Buyer or a Buyer Designee in
actual possession or control of the Transferred Premises; and
(v) an affidavit by Seller and each Subsidiary, dated the Real
Estate Closing Date and in a form acceptable to Buyer, stating under penalty of
perjury, the transferor's name, taxpayer identification number, address and that
the transferor is not a foreign person, pursuant to Section 1445(b)(2) of the
Code and the Treasury Regulations thereunder; and
(c) On the Real Estate Closing Date, Buyer shall, or shall cause a
Buyer Designee to, execute and deliver to Seller or a Subsidiary the following:
(i) the portion of the Purchase Price equal to $5,000,000 allocable
to the Transferred Premises; and
(ii) a certificate of an appropriate officer of Buyer, dated the
Real Estate Closing Date, certifying to the best of his or her knowledge the
fulfillment of the conditions set forth in Sections 8.3(a) and (b) with respect
to the Transferred Premises, and a certificate of an Assistant Secretary of
Buyer, dated the Real Estate Closing Date, in customary form.
8. Conditions Precedent to Closing
8.1 General Conditions
The respective obligations of Buyer and Seller to effect the Closing of
the transactions contemplated hereby are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:
(a) Legal Proceedings. No Governmental Body shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, non-appealable
judgment, decree, injunction or other order which is in effect on the Closing
Date and which prohibits,
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restricts or delays consummation of the transactions contemplated by this
Agreement or the Collateral Agreements and there shall be no pending lawsuit,
claim or legal action relating to the transactions contemplated by this
Agreement or any of the Collateral Agreements which, individually or in the
aggregate, has had or could reasonably be expected to have a Seller Material
Adverse Effect.
(b) Antitrust Laws. Any applicable waiting period under the HSR Act or
applicable foreign antitrust law relating to the transactions contemplated by
this Agreement or the Collateral Agreements shall have expired or been
terminated.
8.2 Conditions Precedent to Buyer's Obligations
The obligations of Buyer to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Buyer:
(a) Representations and Warranties of Seller True and Correct at
Closing. The representations and warranties of Seller contained in this
Agreement or in any Schedule, certificate or document delivered pursuant to the
provisions hereof or in connection with the transactions contemplated hereby
shall be true and correct (without regard to any qualifications therein as to
materiality or material adverse effect) at and as of the Closing Date and with
respect to the Transferred Premises, the Real Estate Closing Date, as though
such representations and warranties were made at and as of the Closing Date and
the Real Estate Closing Date, as the case may be, except (i) as affected by the
transactions contemplated hereby and (ii) to the extent that such
representations and warranties are made as of a specified date, in which case
such representations and warranties shall be true and correct as of the
specified date; provided, that this condition shall be deemed satisfied unless
the failure of any such representations and warranties to be true and correct,
individually or in the aggregate, at and as of the Closing Date has not had and
could not reasonably be expected to have a Seller Material Adverse Effect.
(b) Performance by Seller. Seller and/or the applicable Subsidiary
shall have delivered all of the documents required under Section 7.1 and shall
have otherwise performed in all material respects all obligations and agreements
and complied in all material respects with all covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing,
including executing the Collateral Agreements.
(c) Seller Material Adverse Effect. There shall not have occurred a
Seller Material Adverse Effect from the date hereof to the Closing Date.
(d) Designated Consents. Seller shall have obtained all Required
Consents for Closing designated by Buyer and set forth in Schedule 8.2(d).
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(e) SEC Letter. Buyer shall have received a letter from the staff of
the Securities and Exchange Commission staff's concurrence with filing certain
abbreviated financial statements (such financial statements to include audited
statement of revenues and direct operating expenses for the years ended
September 30, 2002, 2001 and 2000 and an audited statement of acquired assets
and liabilities at September 30, 2002) in lieu of the full financial statements
otherwise required by Rule 3-05 of Regulation S-X.
8.3 Conditions Precedent to Seller's Obligations
The obligations of Seller to effect the Closing of the transactions
contemplated hereby are subject to the fulfillment, prior to or at the Closing,
of each of the following conditions, any of which may be waived in writing by
Seller:
(a) Representations and Warranties of Buyer True and Correct at
Closing. The representations and warranties of Buyer contained in this Agreement
or in any Schedule, certificate or document delivered pursuant to the provisions
hereof or in connection with the transactions contemplated hereby shall be true
and correct (without regard to any qualifications therein as to materiality or
material adverse effect) at and as of the Closing Date as though such
representations and warranties were made at and as of the Closing Date, except
to the extent that such representations and warranties are made as of a
specified date, in which case such representations and warranties shall be true
and correct as of the specified date; provided, that this condition shall be
deemed satisfied unless the failure of any such representations and warranties
to be true and correct, individually or in the aggregate, at and as of the
Closing Date has not had and could not reasonably be expected to have a material
adverse effect on Buyer's business taken as a whole or on Buyer's or any Buyer
Designee's ability to consummate the transactions under this Agreement or any of
the Collateral Agreements.
(b) Performance by Buyer. Buyer and/or the applicable Buyer Designee
shall have delivered all of the documents required under Section 7.2 and shall
have otherwise performed in all material respects all obligations and agreements
and complied in all material respects with all covenants required by this
Agreement to be performed or complied with by it prior to or at the Closing,
including executing the Collateral Agreements.
8.4 Conditions Precedent to Real Estate Closing
The obligations of Buyer to effect the Real Estate Closing are subject
to the fulfillment, prior to or at the Real Estate Closing Date, of each of the
following conditions, any of which may be waived in writing by Buyer:
(a) Standard Conditions. Each of the conditions precedent set forth in
Section 8.2 relating to the Transferred Premises or the Real Estate Closing have
been fulfilled when "Closing Date" is understood to mean "Real Estate Closing."
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(b) Condition of Title. Buyer's receipt of a binding commitment from
the title company to issue the title insurance policy upon the Real Estate
Closing.
9. Status of Agreements
The rights and obligations of Buyer and Seller under this Agreement
shall be subject to the following terms and conditions:
9.1 Effect of Breach
In the event of a material breach of any representation, certification
or warranty, or agreement or covenant of Seller under this Agreement that is
discovered by the Buyer prior to Closing and that cannot be or is not cured by
Seller upon prior notice and the passage of a reasonable period of time prior to
Closing, the Buyer may elect not to proceed with the Closing hereunder, which
shall be the Buyer's sole remedy for such breach discovered prior to Closing.
9.2 Survival of Representations and Warranties
The representations and warranties of Buyer and Seller contained in
this Agreement shall survive the Closing solely for purposes of this Article 9
and such representations and warranties shall terminate at the close of business
on the date that is 12 months after the Closing Date; provided, however, that
(i) the representations and warranties in Section 3.7(d) with respect to
environmental matters and the representations and warranties relating to Tax and
ERISA matters shall survive the Closing and shall terminate at the close of
business on the 120th day following the expiration of the applicable statute of
limitations with respect to the environmental, Tax or ERISA liabilities in
question (giving effect to any waiver, mitigation or extension thereof) and (ii)
the representation and warranty in Section 3.5(a) with respect to title matters
shall survive indefinitely. Neither Seller nor Buyer shall have any liability
whatsoever with respect to any such representations or warranties after the
applicable expiration date.
9.3 General Agreement to Indemnify
(a) Seller and Buyer shall indemnify, defend and hold harmless the
other party hereto, and Affiliates thereof, and any director, officer, employee
or agent of such other party or Affiliates thereof (each an "Indemnified Party")
from and against any and all claims, actions, suits, proceedings, liabilities,
obligations, Taxes, losses, and damages, amounts paid in settlement, interest,
costs and expenses (including reasonable attorney's fees, court costs and other
out-of-pocket expenses incurred in investigating, preparing or defending the
foregoing) (collectively, "Losses") incurred or suffered by any Indemnified
Party to the extent that the Losses arise by reason of, or result from (i)
subject to Section 9.2, any breach or any failure of any representation or
warranty of such party contained in this Agreement to have been true when made
and at and as of the Closing Date, or (ii) the breach by such party
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of any covenant or agreement of such party contained in this Agreement to the
extent not waived by the other party.
(b) Seller further agrees to indemnify and hold harmless Buyer and any
Buyer Indemnified Party from and against any Losses incurred by Buyer or any
Buyer Indemnified Party arising out of, resulting from, or relating to: (i) the
Excluded Liabilities; (ii) Buyer's or a Buyer Designee's waiver of any
applicable Bulk Sales Laws; and (iii) any claim, demand or liability relating
to, pertaining to, or arising out of the Optoelectronics Business or the
Purchased Assets for any Pre-Closing Tax Period.
(c) Buyer further agrees to indemnify and hold harmless Seller and any
Seller Indemnified Party from and against any Losses incurred by Seller or any
Seller Indemnified Party arising out of, resulting from, or relating to: (i) any
failure of Buyer to discharge any of the Assumed Liabilities; and (ii) any
medical, health or disability claims of any Transferred Employee or such
Transferred Employee's employment with Buyer accruing after the Closing Date;
and (iii) any claim, demand or liability for Taxes relating to, pertaining to,
or arising out of the Optoelectronics Business or the Purchased Assets for any
Post-Closing Tax Period.
(d) Amounts payable in respect of the parties' indemnification
obligations shall be treated as an adjustment to the Purchase Price. Buyer and
Seller agree to cooperate in the preparation of a supplemental Asset Acquisition
Statement as required by Section 5.3(b) and Treasury Reg. 'SS' 1.1060-1(e) as a
result of any adjustment to the Purchase Price pursuant to the preceding
sentence. Whether or not the Indemnifying Party (as defined below) chooses to
defend or prosecute any Third-Party Claim (as defined below), both parties
hereto shall cooperate in the defense or prosecution thereof and shall furnish
such records, information and testimony, and attend such conferences, discovery
proceedings, hearings, trials and appeals, as may be reasonably requested in
connection therewith or as provided in Section 5.1.
(e) The amount of the Indemnifying Party's liability under this
Agreement shall be net of any applicable insurance proceeds actually received
by, the Indemnified Party and other savings, including Tax savings, that
actually reduce the overall impact of the Losses upon, the Indemnified Party. In
computing the amount of any such Tax savings, the Indemnified Party shall be
deemed to recognize all other items of income, gain, loss, deduction or credit
before recognizing any item arising from the receipt of any indemnity payment
hereunder or the incurrence of any payment of any indemnified Loss. The
indemnification obligations of each party hereto under this Article 9 shall
inure to the benefit of the directors, officers and Affiliates of the other
party hereto on the same terms as are applicable to such other party.
(f) The Indemnifying Party's liability for all claims made under
Section 9.3(a) shall be subject to the following limitations: (i) the
Indemnifying Party shall have no liability for such claims until the aggregate
amount of the Losses incurred shall exceed $1,000,000, in which case the
Indemnifying Party shall be liable only for the portion of the Losses exceeding
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$1,000,000, and (ii) the Indemnifying Party's aggregate liability for all such
claims shall not exceed $10,000,000.
(g) The indemnification provided in this Article 9 shall be the sole
and exclusive remedy after the Closing Date for damages available to the parties
to this Agreement for breach of any of the terms, conditions, representations or
warranties contained herein or any right, claim or action arising from the
transactions contemplated by this Agreement; provided, however, this exclusive
remedy for damages does not preclude a party from bringing an action for (i)
specific performance or other equitable remedy to require a party to perform its
obligations under this Agreement or any Collateral Agreement or (ii) fraud or
intentional misrepresentation.
(h) Notwithstanding anything contained in this Agreement to the
contrary, no party shall be liable to the other party for any indirect, special,
punitive, exemplary or consequential loss or damage (including any loss of
revenue or profit) arising out of this Agreement, provided, however, that the
foregoing shall not be construed to preclude recovery by the Indemnified Party
in respect of Losses directly incurred from Third Party Claims. Both parties
shall mitigate their damages.
(i) The rights to indemnification under this Section 9.3 shall not be
subject to set-off for any claim by the Indemnifying Party against any
Indemnified Party, whether or not arising from the same event giving rise to
such Indemnified Party's claim for indemnification.
9.4 General Procedures for Indemnification
(a) The Indemnified Party seeking indemnification under this Agreement
shall promptly notify the party against whom indemnification is sought (the
"Indemnifying Party") of the assertion of any claim, or the commencement of any
action, suit or proceeding by any Third Party, in respect of which indemnity may
be sought hereunder and shall give the Indemnifying Party such information with
respect thereto as the Indemnifying Party may reasonably request, but failure to
give such notice shall not relieve the Indemnifying Party of any liability
hereunder (unless and to the extent that the Indemnifying Party has suffered
material prejudice by such failure). If the Indemnifying Party acknowledges in
writing its obligation to indemnify the Indemnified Party, then the Indemnifying
Party shall have the right, but not the obligation, exercisable by written
notice to the Indemnified Party within 20 days of receipt of notice from the
Indemnified Party of the commencement of or assertion of any claim, action, suit
or proceeding by a Third Party in respect of which indemnity may be sought
hereunder (a "Third-Party Claim"), to assume the defense and control the
settlement of such Third-Party Claim that (i) involves (and continues to
involve) solely money damages, or (ii) involves (and continues to involve)
claims for both money damages and equitable relief against the Indemnified Party
that cannot be severed, where the claims for money damages are the primary
claims asserted by the Third Party and the claims for equitable relief are
incidental to the claims for money damages. If the Indemnifying Party has not
acknowledged in writing its obligation to indemnify the Indemnified Party, then
the Indemnified Party shall
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have the right to assume and control the defense or the settlement against such
Third Party Claim. In the event that any party exercises its right to undertake
any such defense against any Third Party Claim as provided above, then the other
parties shall cooperate in such defense and make available at such cooperating
party expense all witnesses, pertinent records, materials and information in
such party's possession and control relating thereto as is reasonably required
to by the party conducting the defense.
(b) The Indemnifying Party or the Indemnified Party, as the case may
be, shall have the right to participate in (but not control), at its own
expense, the defense of any Third-Party Claim that the other is defending, as
provided in this Agreement.
(c) The Indemnifying Party, if it has assumed the defense of any
Third-Party Claim as provided in this Agreement, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third-Party
Claim without the Indemnified Party's prior written consent (which consent shall
not be unreasonably withheld, conditioned or delayed) unless such settlement or
judgment relates solely to monetary damages. The Indemnifying Party shall not,
without the Indemnified Party's prior written consent, enter into any compromise
or settlement that (i) commits the Indemnified Party to take, or to forbear to
take, any action, or (ii) does not provide for a complete release by such Third
Party of the Indemnified Party. The Indemnified Party shall have the sole and
exclusive right to settle any Third-Party Claim, on such terms and conditions as
it deems reasonably appropriate, to the extent such Third-Party Claim involves
equitable or other non-monetary relief against the Indemnified Party, and shall
have the right to settle any Third-Party Claim involving money damages for which
the Indemnifying Party has not assumed the defense pursuant to this Section 9.4
with the written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed.
(d) In the event an Indemnified Party shall claim a right to payment
pursuant to this Agreement, such Indemnified Party shall send written notice of
such claim to the Indemnifying Party; but failure to give such notice shall not
relieve the Indemnifying Party of any liability hereunder (unless and to the
extent that the Indemnifying Party has suffered prejudice by such failure). Such
notice shall specify the basis for such claim, the amount thereof, if known, and
the method of computation thereof, all with reasonable particularity and shall
contain a reference to the provisions of this Agreement in respect of which such
a claim shall have been incurred. Such notice shall be given promptly after the
Indemnified Party becomes aware of the basis for each such a claim. The
Indemnifying Party shall, within thirty (30) days after receipt of such notice
of an indemnified Loss, and subject to the limitations set forth in Section 9.3,
(i) pay or cause to be paid to the Indemnified Party the amount of such Loss
specified in such notice which the Indemnifying Party does not contest, or (ii)
notify the Indemnified Party if it wishes to contest the existence or amount of
part or all of such a Loss by stating with particularity the basis upon which it
contests the existence or amount thereof.
10. Miscellaneous Provisions
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10.1 Notices
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given upon receipt if (i) mailed by certified
or registered mail, return receipt requested, (ii) sent by Federal Express or
other express carrier, fee prepaid, (iii) sent via facsimile with receipt
confirmed, or (iv) delivered personally, addressed as follows or to such other
address or addresses of which the respective party shall have notified the
other.
If to Seller, to: Agere Systems Inc.
Attn: Executive Vice President,
Infrastructure Systems
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
With a copy to: Agere Systems Inc.
Attn: Vice President - Law
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
If to Buyer, to: TriQuint Semiconductor, Inc.
Attn: Chief Financial Officer
0000 XX Xxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
With a copy to: Xxxx Xxxxx LLP
Attn: Xxxxxx X. Xxxxxxxxx
000 XX Xxxxxxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Xxxxxx Xxxxxx of America
Facsimile: (000) 000-0000
10.2 Expenses
Except as otherwise provided in this Agreement, each party to this
Agreement will bear all the fees, costs and expenses that are incurred by it in
connection with the transactions contemplated hereby, whether or not such
transactions are consummated.
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10.3 Entire Agreement; Modification
The agreement of the parties, which consists of this Agreement, the
Schedules and Exhibits hereto and the documents referred to herein, sets forth
the entire agreement and understanding between the parties and supersedes any
prior agreement or understanding, written or oral, relating to the subject
matter of this Agreement, including the Confidentiality Agreement. No amendment,
supplement, modification or waiver of this Agreement shall be binding unless
executed in writing by the party to be bound thereby, and in accordance with
Sections 11.3 and 11.4.
10.4 Assignment; Binding Effect; Severability
This Agreement may not be assigned by any party hereto without the
other party's written consent; provided, that Buyer may transfer or assign in
whole or in part to one or more Buyer Designees its the right to purchase all or
a portion of the Purchased Assets, but no such transfer or assignment will
relieve Buyer of its obligations hereunder. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the successors, legal
representatives and permitted assigns of each party hereto. The provisions of
this Agreement are severable, and in the event that any one or more provisions
are deemed illegal or unenforceable the remaining provisions shall remain in
full force and effect unless the deletion of such provision shall cause this
Agreement to become materially adverse to either party, in which event the
parties shall use reasonable commercial efforts to arrive at an accommodation
that best preserves for the parties the benefits and obligations of the
offending provision.
10.5 Governing Law
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
PERFORMED ENTIRELY WITHIN THAT STATE, IRRESPECTIVE OF THE CHOICE OF LAWS
PRINCIPLES OF THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING MATTERS OF
VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND REMEDIES.
10.6 Consent to Jurisdiction
Each of Buyer and Seller irrevocably submits to the exclusive
jurisdiction of (i) the Supreme Court of the State of New York, New York County,
and (ii) the United States District Court for the Southern District of New York,
for the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby (and each agrees that no such
action, suit or proceeding relating to this Agreement or any transaction
contemplated hereby shall be brought by it or any of its Affiliates except in
such courts). Buyer further agrees, and Seller further agrees, that service of
any process, summons, notice or document by U.S. registered mail to such
person's respective address set
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forth above shall be effective service of process for any action, suit or
proceeding in New York with respect to any matters to which it has submitted to
jurisdiction as set forth above in the immediately preceding sentence. Each of
Buyer and Seller irrevocably and unconditionally waives (and agrees not to plead
or claim), any objection to the laying of venue of any action, suit or
proceeding arising out of this Agreement or the transactions contemplated hereby
in (i) the Supreme Court of the State of New York, New York County, or (ii) the
United States District Court for the Southern District of New York or that any
such action, suit or proceeding brought in any such court has been brought in an
inconvenient forum.
10.7 Waiver of Jury Trial
Each party hereby waives, and agrees to cause each of its Affiliates to
waive, to the fullest extent permitted by applicable Law, any right it may have
to a trial by jury in respect of any litigation directly or indirectly arising
out of, under or in connection with this Agreement. Each party (i) certifies
that no representative of any other party has represented, expressly or
otherwise, that such other party would not, in the event of litigation, seek to
enforce the foregoing waiver and (ii) acknowledges that it and the other parties
hereto have been induced to enter into this Agreement by, among other things,
the mutual waivers and certifications in this Section 10.7.
10.8 Execution in Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
10.9 Public Announcement
Prior to the signing of this Agreement, Seller and Buyer shall prepare
a mutually agreeable release announcing the transaction contemplated hereby.
Except for such press release, neither Seller nor Buyer shall, without the
approval of the other, make any press release or other announcement concerning
the existence of this Agreement or the terms of the transactions contemplated by
this Agreement, except as and to the extent that any such party shall be so
obligated by Law, in which case the other party shall be advised and the parties
shall use their reasonable commercial efforts to cause a mutually agreeable
release or announcement to be issued; provided, however, that the foregoing
shall not preclude communications or disclosures necessary to comply with
accounting, stock exchange or federal securities or labor relations Law
disclosure obligations.
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10.10 No Third-Party Beneficiaries
Nothing in this Agreement, express or implied, is intended to or shall
(a) confer on any Person other than the parties hereto and their respective
successors or assigns any rights (including Third-Party beneficiary rights),
remedies, obligations or liabilities under or by reason of this Agreement or (b)
constitute the parties hereto as partners or as participants in a joint venture.
This Agreement shall not provide Third Parties with any remedy, claim,
liability, reimbursement, cause of action or other right in excess of those
existing without reference to the terms of this Agreement. Nothing in this
Agreement shall be construed as giving to any Business Employee, or any other
individual, any right or entitlement to employment or continued employment or
any right or entitlement under any Benefit Plan, policy or procedure maintained
by Seller, except as expressly provided in such Benefit Plan, policy or
procedure. No Third Party shall have any rights under Section 502, 503 or 504 of
ERISA or any regulations thereunder because of this Agreement that would not
otherwise exist without reference to this Agreement. No Third Party shall have
any right, independent of any right that exists irrespective of this Agreement,
under or granted by this Agreement, to bring any suit at law or equity for any
matter governed by or subject to the provisions of this Agreement.
11. Termination and Waiver
11.1 Termination
This Agreement may be terminated at any time prior to the Closing Date
by:
(a) Mutual Consent. The mutual written consent of Buyer and Seller;
(b) Failure of Buyer Condition. Buyer upon written notice to Seller if
any of the conditions to the Closing set forth in Section 8.2 shall have become
incapable of fulfillment and shall not have been waived in writing by Buyer;
(c) Failure of Seller Condition. Seller upon written notice to Buyer if
any of the conditions to the Closing set forth in Section 8.3 shall have become
incapable of fulfillment and shall not have been waived in writing by Seller;
(d) Court or Administrative Order. Buyer or Seller if (i) there shall
be in effect a final, non-appealable order of a court or government
administrative agency of competent jurisdiction prohibiting the consummation of
the transactions contemplated hereby or (ii) if there shall be any Law that
makes consummation of the transactions contemplated hereby illegal or otherwise
prohibited;
(e) Delay. Buyer or Seller if the Closing shall not have occurred by
January 15, 2003;
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provided, however, that the party seeking termination pursuant to clause (b),
(c) or (e) is not then in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this
Agreement.
11.2 Effect of Termination
In the event of the termination of this Agreement in accordance with
Section 11.1, this Agreement shall become void and have no effect, without any
liability on the part of any party or its directors, officers or stockholders,
except for the obligations of the parties hereto as provided in Article 6
relating to the obligations of Buyer and Seller to keep confidential certain
information, Section 10.2 relating to certain expenses, Section 10.9 relating to
publicity and this Section 11.2. Nothing in this Section 11.2 shall be deemed to
release either party from any liability for any willful and material breach of
any obligation or covenant hereunder.
11.3 Waiver of Agreement
Any term or condition hereof may be waived and at any time prior to the
Closing Date by the party hereto which is entitled to the benefits thereof by
action taken by its Board of Directors or its duly authorized officer or
employee, whether before or after the action of such party; provided, however,
that such action shall be evidenced by a written instrument duly executed on
behalf of such party by its duly authorized officer or employee. The failure of
either party to enforce at any time any provision of this Agreement shall not be
construed to be a waiver of such provision nor shall it in any way affect the
validity of this Agreement or the right of such party thereafter to enforce each
and every such provision. No waiver of any breach of this Agreement shall be
held to constitute a waiver of any other or subsequent breach.
11.4 Amendment of Agreement
This Agreement may be amended with respect to any provision contained
herein at any time prior to the Closing Date by action of the parties hereto
taken by their Boards of Directors or by their duly authorized officers or
employees, whether before or after such party's action; provided, however, that
such amendment shall be evidenced by a written instrument duly executed on
behalf of each party by its duly authorized officer or employee.
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IN WITNESS WHEREOF, each party has caused this Agreement to be duly
executed on its behalf by its duly authorized officer as of the date first
written above.
AGERE SYSTEMS INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
TRIQUINT SEMICONDUCTOR, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President & CEO
Agere Systems Proprietary
