1
EXHIBIT 2.06
ASSET PURCHASE AGREEMENT
BY AND AMONG
INTERSIL CORPORATION
INTERSIL (PENNSYLVANIA) LLC
AND
XXXXXXXXX SEMICONDUCTOR CORPORATION
DATED AS OF JANUARY 20, 2001
2
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND TERMS...................................................................................1
Section 1.1. Definitions............................................................................1
Section 1.2. Other Definitional Provisions..........................................................9
ARTICLE II PURCHASE AND SALE.....................................................................................10
Section 2.1. Purchase and Sale of Assets of the Business...........................................10
Section 2.2. Nonassignment of Assets...............................................................11
Section 2.3. Excluded Assets of the Business.......................................................12
Section 2.4. Assumption of Certain Obligations of the Business.....................................14
Section 2.5. Retained Liabilities of the Business..................................................15
Section 2.6. Purchase Price........................................................................17
Section 2.7. Allocation of Purchase Price..........................................................18
Section 2.8. Apportionment at Closing and Related Matters..........................................19
ARTICLE III CLOSING..............................................................................................19
Section 3.1. Closing...............................................................................19
ARTICLE IV CONDITIONS TO CLOSING.................................................................................21
Section 4.1. Conditions to the Obligations of Purchaser and Seller.................................21
Section 4.2. Conditions to the Obligations of Purchaser............................................21
Section 4.3. Conditions to the Obligations of Seller...............................................22
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER...............................................................23
Section 5.1. Organization and Qualification........................................................23
Section 5.2. Authorization.........................................................................23
Section 5.3. Binding Effect........................................................................24
Section 5.4. Non-Contravention.....................................................................24
Section 5.5. Seller Consents and Approvals.........................................................24
Section 5.6. Absence of Material Changes...........................................................24
Section 5.7. No Litigation.........................................................................25
Section 5.8. Compliance with Laws..................................................................25
Section 5.9. Environmental Matters.................................................................26
Section 5.10. Material Contracts....................................................................26
Section 5.11. Intellectual Property.................................................................28
Section 5.12. Real Property.........................................................................28
Section 5.13. Assets................................................................................29
Section 5.14. Inventory.............................................................................29
Section 5.15. Financial Information.................................................................29
Section 5.16. Taxes.................................................................................30
Section 5.17. Employee Benefits.....................................................................30
Section 5.18. Undisclosed Liabilities...............................................................31
i
3
PAGE
Section 5.19. Brokers...............................................................................31
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PURCHASER...........................................................32
Section 6.1. Organization and Qualification........................................................32
Section 6.2. Corporate Authorization...............................................................32
Section 6.3. Binding Effect........................................................................32
Section 6.4. Non-Contravention.....................................................................32
Section 6.5. Purchaser Consents and Approvals......................................................32
Section 6.6. No Litigation.........................................................................32
Section 6.7. Financial Capability..................................................................33
Section 6.8. Condition of Conveyed Assets..........................................................33
Section 6.9. Brokers...............................................................................34
ARTICLE VII COVENANTS............................................................................................34
Section 7.1. Information and Documents; Access to Employees........................................34
Section 7.2. Conduct of Business...................................................................34
Section 7.3. Reasonable Best Efforts; Certain Governmental Matters.................................35
Section 7.4. Employees and Employee Benefits.......................................................37
Section 7.5. Bulk Transfer Laws....................................................................42
Section 7.6. Compliance with WARN, Etc.............................................................42
Section 7.7. Insurance.............................................................................43
Section 7.8. Names and Logo........................................................................43
Section 7.9. Covenant Not to Compete; Confidentiality..............................................43
Section 7.10. Further Assurances....................................................................44
Section 7.11. Books and Records.....................................................................44
Section 7.12. Accounts Receivable and Accounts Payable..............................................44
Section 7.13. Supply Agreement......................................................................44
Section 7.14. Cooperation and Exchange of Information...............................................45
Section 7.15. Conveyance Taxes......................................................................45
Section 7.16. Mountaintop Lease.....................................................................46
ARTICLE VIII SURVIVAL AND INDEMNIFICATION........................................................................46
Section 8.1. Survival; Knowledge of Breach.........................................................46
Section 8.2. Indemnification.......................................................................46
Section 8.3. Method of Asserting Claims, etc.......................................................47
Section 8.4. Indemnification Amounts...............................................................49
Section 8.5. Losses Net of Insurance, Etc..........................................................49
Section 8.6. Sole Remedy/Waiver....................................................................50
Section 8.7. No Punitive Damages...................................................................50
Section 8.8. Scope of Damages......................................................................50
Section 8.9. No Set-Off............................................................................50
ARTICLE IX TERMINATION...........................................................................................50
Section 9.1 Termination...........................................................................50
ii
4
Section 9.2. Effect of Termination.................................................................51
ARTICLE X MISCELLANEOUS..........................................................................................51
Section 10.1. Notices...............................................................................51
Section 10.2. Amendment; Waiver.....................................................................52
Section 10.3. Assignment............................................................................52
Section 10.4. Entire Agreement......................................................................52
Section 10.5. Fulfillment of Obligations............................................................52
Section 10.6. Parties in Interest...................................................................52
Section 10.7. Public Disclosure.....................................................................53
Section 10.8. Return of Information.................................................................53
Section 10.9. Expenses..............................................................................53
Section 10.10. Schedules.............................................................................53
Section 10.11. Governing Law.........................................................................53
Section 10.12. Counterparts..........................................................................53
Section 10.13. Headings..............................................................................54
Section 10.14. Severability..........................................................................54
iii
5
List of Schedules
1.1(a) "Knowledge of Purchaser" Individuals
1.1(b) "Knowledge of Seller" Individuals
1.1(c) Permitted Encumbrances
2.1(e) Patents
2.3(q) Excluded Assets
2.4(a) Indebtedness of the Business
3.1(b)(ix) Seller's Closing Consents and Approvals
5.5 Seller Consents and Approvals
5.6 Material Changes
5.7 Seller Litigation
5.8(a) Compliance with Laws
5.8(b) Permits and Licenses Necessary at Mountaintop Facility
5.9 Environmental Matters
5.10 Material Contracts
5.11 Intellectual Property
5.12 Real Property
5.13(a) Sufficiency of Assets
5.13(b) Fixed Assets Listing
5.15 Financial Information
5.16 Taxes
5.17 Seller Plans
5.19 Seller Brokers
6.5 Purchaser Consents and Approvals
6.6 Purchaser Litigation
6.9 Purchaser Brokers
7.2 Conduct of Business
7.4(a)(1) Employees
7.4(a)(2) Affected Employees
7.4(j) Collective Bargaining Agreements
[In accordance with paragraph (b)(2) of Item 601 of Regulation S-K, copies of
the above schedules are not filed herewith. The registrant agrees to furnish
supplementally a copy of any such schedule to the Securities and Exchange
Commission upon request.]
iv
6
List of Exhibits
3.1(b)(ii) Deed
3.1(b)(iii) Xxxx of Sale
3.1(b)(iv) Assignment and Assumption Agreement
3.1(b)(v) Partial Assignment and Assumption of the ChipPAC Agreement
3.1(b)(vi) IP Agreement
3.1(b)(vii) Transition Services Agreement
3.1(b)(viii) Supply Agreement
4.2(f) Union Letter
[In accordance with paragraph (b)(2) of Item 601 of Regulation S-K, copies of
the above exhibits are not filed herewith. The registrant agrees to furnish
supplementally a copy of any such exhibit to the Securities and Exchange
Commission upon request.]
v
7
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made and entered into as of
the 20th day of January, 2001 by and among Intersil Corporation, a Delaware
corporation ("Intersil") and Intersil (Pennsylvania) LLC, a Delaware limited
liability company (jointly and severally, the "Seller"), and Xxxxxxxxx
Semiconductor Corporation, a Delaware corporation ("Purchaser"). Seller and
Purchaser are individually referred to as a "Party" and collectively as the
"Parties."
Background
A. Seller is engaged in the Business (as defined below).
B. Seller and its Affiliates own the Conveyed Assets (as
defined below).
C. The Parties desire that Seller and its Affiliates shall
sell and transfer to Purchaser and Purchaser shall purchase from Seller and its
Affiliates all of the Conveyed Assets and assume all of the Assumed Liabilities
(as defined below), upon the terms and conditions set forth herein.
In consideration of the premises and the mutual covenants and
undertakings contained herein, subject to and on the terms and conditions herein
set forth, and intending to be legally bound hereby, the Parties agree as
follows:
ARTICLE I
DEFINITIONS AND TERMS
Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the meanings set forth or as referenced below:
"Accounts Receivable" shall mean all of the Business's trade
and other accounts receivable as of the Closing Date.
"Affected Employee" shall mean an Employee who shall accept an
offer of employment or offer of continuation of employment by Purchaser on or
prior to the Closing Date pursuant to Section 7.4 hereof (or with respect to an
Employee subject to Section 7.4(f), after the Closing Date).
"Affiliate" shall mean, with respect to any Person, any other
person directly or indirectly controlling, controlled by, or under common
control with, such Person at any time during the period for which the
determination of affiliation is being made; provided, however, that "Affiliate"
shall not include any shareholder of Purchaser or Seller or any Person who would
be an Affiliate of Purchaser or Seller solely because such Person is an
Affiliate of such shareholder.
"Agreement" shall mean this Agreement, as the same may be
amended or supplemented from time to time in accordance with the terms hereof.
"Allocation" shall have the meaning set forth in Section 2.7
hereof.
8
"Asset Allocation Statements" shall have the meaning set forth
in Section 2.7 hereof.
"Assignment and Assumption" shall have the meaning set forth
in Section 3.1(b)(iv) hereof.
"Assumed Contracts" shall have the meaning set forth in
Section 2.1(c) hereof.
"Assumed Liabilities" shall have the meaning set forth in
Section 2.4 hereof.
"Basket Amount" shall have the meaning set forth in Section
8.4 hereof.
"Xxxx of Sale" shall have the meaning set forth in Section
3.1(b)(iii) hereof.
"Business" shall mean Seller's Discrete Power Products
semiconductor business, including, without limitation, as conducted by Seller
from the Mountaintop Facility and related warehouses and sales offices, wherever
located.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banks in New York City are authorized or obligated by
law or executive order to close.
"Buyer Indemnitees" shall have the meaning set forth in
Section 8.2(a) hereof.
"Cap" shall have the meaning set forth in Section 8.4 hereof.
"Cash Equivalents" shall mean checks, money orders, marketable
or other securities, short-term instruments and other cash equivalents, demand
deposits or similar accounts, and any evidence of indebtedness issued or
guaranteed by any United States Governmental Authority.
"Claim Notice" shall have the meaning set forth in Section
8.3(a) hereof.
"Closing" shall mean the closing of the transactions
contemplated by this Agreement.
"Closing Balance Sheet" shall have the meaning set forth in
Section 2.6(d) hereof.
"Closing Date" shall have the meaning set forth in Section
3.1(a) hereof.
"Closing Date Liabilities" shall mean the amount of the
absolute value of those Assumed Liabilities as would be set forth on a balance
sheet of the Business as of the Closing Date prepared in accordance with GAAP.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Competing Business" shall have the meaning set forth in
Section 7.9(a) hereof.
"Confidential Information" shall have the meaning set forth in
Section 7.9(b) hereof.
-2-
9
"Confidentiality Agreement" shall mean the Confidentiality
Agreement, dated October 30, 2000, between Seller and Purchaser.
"Conveyance Tax" or "Conveyance Taxes" shall have the meaning
set forth in Section 7.15 hereof.
"Conveyed Assets" shall have the meaning set forth in Section
2.1 hereof, it being understood that the Conveyed Assets do not include the
Excluded Assets.
"Deed" shall have the meaning set forth in Section 3.1(b)(ii).
"Discrete Devices" shall mean "Semiconductor Products"
characterized as "Discretes" in the "Product Definitions for Xxxxxxxx" section
(the "Definition Section") of the World Semiconductor Trade Statistics
Participant Manual for the year 2001, dated January 14, 2001, to the extent that
such characterization does not conflict with those semiconductor products
characterized as "Integrated Circuits" in the Definition Section, provided
however that nothing in this definition shall be interpreted to prevent Seller
and its Subsidiaries from making, using, selling, offering for sale, or
importing multi-chip modules using both "Discretes" and "Integrated Circuits"
technology as defined or characterized in the Definition Section.
"Drop-Dead Date" shall have the meaning set forth in Section
9.1(b) hereof.
"Employee" shall mean any individual who as of the Closing
Date, (i) shall be (or in the case of clause (ii)(C) below, is scheduled to
become) an employee of Seller who primarily performs (or will, on commencing
work, primarily perform) services on behalf of the Business and (ii) either (A)
shall have been employed and at work on the Closing Date, or (B) shall have been
absent on the Closing Date because of illness or on short-term disability
(including maternity disability), workers' compensation, layoff, vacation,
parental leave of absence, or other absence or leave of absence consistent with
Seller's policies, practices and procedures in effect at the time such absence
or leave commenced (such Employees under this clause (B), "Inactive Employees"),
or (C) shall have received an offer of employment with the Business in the
ordinary course of business on or prior to the Closing Date, but shall have not
yet commenced work as of the Closing Date.
"Environmental Law" shall mean any applicable federal, state
or local law, statute, ordinance, rule, regulation, code, order, judgment,
decree or injunction relating to the protection of the environment (including,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface or subsurface land) and/or to the Management, Release, or threat
of Release of Hazardous Substances, in each case as in effect as of the Closing
Date.
"Environmental Losses" shall mean the amount of all claims,
losses, settlements, fines, liabilities, damages, deficiencies, costs, and
expenses, including, without limitation, losses resulting from defense,
settlement and/or compromise of a claim and/or demand and/or assessment,
reasonable attorneys', accountants', and expert witnesses' fees, interest,
penalties, costs and expenses of investigation, and the costs and expenses of
enforcing the indemnification provided by Section 8.2(a) of this Agreement for
Environmental Losses suffered, sustained, asserted against, incurred or required
to be paid by law by any of Buyer Indemnitees and whether
-3-
10
known or unknown, foreseen or unforeseen, contingent or otherwise, fixed
or absolute, present or future.
"Environmental Permits" shall mean a permit held by or for the
benefit of Seller pursuant to an Environmental Law and required to carry on the
Business as conducted as of the date of this Agreement.
"Environmental Site Assessments" shall have the meaning set
forth in Section 5.9 hereof.
"Equipment" shall have the meaning set forth in Section 2.1(b)
hereof.
"Equipment Leases" shall have the meaning set forth in Section
2.1(b) hereof.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA Affiliate" shall have the meaning set forth in Section
5.17(d) hereof.
"Excluded Assets" shall have the meaning set forth in Section
2.3 hereof.
"Excluded Contract" shall have the meaning set forth in
Section 2.3(r) hereof.
"Financial Information" shall have the meaning set forth in
Section 5.15 hereof.
"GAAP" shall mean generally accepted accounting principles and
practices in effect in the United States of America from time to time, as
consistently applied by Seller.
"Governmental Authority" shall mean any supranational,
national, federal, state or local judicial, legislative, executive or regulatory
authority.
"Governmental Authorizations" shall mean all licenses,
permits, certificates and other authorizations and approvals required to carry
on the Business as conducted as of the date of this Agreement under the
applicable laws, ordinances or regulations of any Governmental Authority.
"Xxxxxx" shall mean Xxxxxx Corporation, a Delaware
corporation.
"Xxxxxx Agreement" shall mean that certain Amended and
Restated Master Transaction Agreement among Intersil Holding Corporation,
Intersil Corporation and Xxxxxx, dated June 2, 1999.
"Hazardous Substances" shall mean any hazardous, toxic or
polluting substances, materials or wastes (including those substances within the
meaning of Section 101(14) of the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C.Section 9601 et. seq.), and
any petroleum and petroleum products.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
-4-
11
"Indemnified Party" shall mean any party entitled to
indemnification pursuant to Article VIII hereof.
"Indemnifying Party" shall mean any party required to
indemnify another party pursuant to Article VIII hereof.
"Intellectual Property" shall mean (i) inventions, whether or
not patentable, reduced to practice or made the subject of one or more pending
patent applications, and whether or not under design or development, (ii)
national and multinational statutory invention registrations, Patents , all
improvements to the inventions disclosed in each such registration, or Patent,
(iii) trademarks, service marks, trade dress, logos, slogans, domain names,
trade names and corporate names (whether or not registered) in the United States
and all other nations throughout the world, including all variations,
derivations, combinations, registrations and applications for registration or
renewals of the foregoing and all goodwill associated therewith, (iv) copyrights
(whether or not registered) and registrations and applications for registration
or renewals thereof in the United States and all other nations throughout the
world, including all derivative works, moral rights, renewals, extensions,
reversions or restorations associated with such copyrights, now or hereafter
provided by law, regardless of the medium of fixation or means of expression,
(v) mask works and registrations and applications for registration or renewals
thereof in the United States and all other nations throughout the world, (vi)
computer software (including source code, object code, firmware, operating
systems and specifications), (vii) trade secrets and, whether or not
confidential, business information (including pricing and cost information,
business and marketing plans and customer and supplier lists) and know-how
(including manufacturing and production processes and techniques and research
and development information), (viii) industrial designs (whether or not
registered), (ix) databases and data collections, (x) copies and tangible
embodiments of any of the foregoing, in whatever form or medium (including
electronic media), (xi) all rights to obtain and rights to apply for Patents,
and to register trademarks and copyrights, (xii) all rights in all of the
foregoing provided by treaties, conventions and common law, (xiii) all rights to
xxx or recover and retain damages and costs and attorneys' fees for past,
present and future infringement or misappropriation of any of the foregoing, and
(xiv) licenses of any of the foregoing.
"Intersil" shall mean Intersil Corporation, a Delaware
corporation.
"Inventories" shall mean all inventory of the Business held
for resale by the Business and all raw materials, work in process, finished
products, shipments in transit, wrapping and supply and packaging items
primarily used or held for use in the Business, including, without limitation,
consigned inventory and inventory of the Business held by customers of the
Business, wherever located.
"IP Agreement" shall have the meaning set forth in Section
3.1(b)(vi) hereof.
"IRS" shall mean the Internal Revenue Service of the United
States or any successor agency.
"Knowledge of Purchaser" shall mean the actual knowledge,
following due inquiry, of the persons set forth on Schedule 1.1(a).
-5-
12
"Knowledge of Seller" shall mean the actual knowledge,
following due inquiry, of the persons set forth on Schedule 1.1(b).
"Laws" shall include any federal, state, foreign or local law,
statute, ordinance, rule, regulation, order, injunction, judgment or decree.
"Liabilities" shall mean any and all debts, liabilities and
obligations, whether accrued or fixed, known or unknown, absolute or contingent,
matured or unmatured or determined or determinable.
"Liens" shall mean any lien, security interest, mortgage,
charge or similar encumbrance.
"LLC" shall mean Intersil (Pennsylvania) LLC, a Delaware
limited liability company.
"Loss" or "Losses" shall have the meaning set forth in Section
8.2(a) hereof.
"Manage" or "Management" means to use, recycle, possess,
generate, treat, manufacture, process, handle, store, transport or dispose of
Hazardous Substances.
"Material Adverse Effect" shall mean an effect that is
materially adverse to the business results, operations or financial condition of
the Business taken as a whole, but shall exclude any effect resulting from (i)
general economic conditions or any occurrence or condition affecting the
semiconductor industry generally and (ii) any materially adverse change in the
Business or Conveyed Assets which is cured (including by payment of money) to
Purchaser's reasonable satisfaction before the earlier of the Closing Date or
termination of this Agreement.
"Material Contracts" shall have the meaning set forth in
Section 5.10 hereof.
"Minimum Cleanup Standard" shall have the meaning set forth in
Section 8.3(b) hereof.
"Mortgage to be Released" shall have the meaning set forth in
Section 5.12(e).
"Mountaintop Facility" shall mean any or all of Seller's
manufacturing facility and other operations located at 000 Xxxxxxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxxxxxxx.
"Mountaintop Lease" shall have the meaning set forth in
Section 7.16 hereof.
"National Labor Relations Act" shall have the meaning set
forth in Section 7.4(f) hereof.
"Non-Mountaintop Employees" shall have the meaning set forth
in Section 7.4(a) hereof.
"Notice Period" shall have the meaning set forth in Section
8.3(a) hereof.
-6-
13
"Partial Assignment" shall have the meaning set forth in
Section 3.1(b)(v) hereof.
"Party" or "Parties" shall have the meaning set forth in the
heading of this Agreement.
"Patents" shall mean U.S. and non-U.S. patents, patent
applications and industrial design registrations, together with any
continuations, continuations-in-part or divisional applications thereof, all
patents and industrial design registrations issuing thereon, and all patents,
industrial design registrations and applications claiming priority therefrom
(including reissues, renewals and reexaminations of the foregoing).
"Permitted Designee" shall have the meaning set forth in
Section 8.3(a) hereof.
"Permitted Encumbrances" shall mean (i) all liens, security
interests, mortgages, charges or encumbrances approved in writing by Purchaser,
(ii) statutory liens, security interests, mortgages, licenses or other rights
granted on Intellectual Property, including the license agreements identified in
Schedule 2.3(q), charges or encumbrances arising out of operation of Law with
respect to a Liability incurred in the ordinary course of business and which is
not delinquent, (iii) such imperfections of title as do not materially adversely
affect the value or impair the use of the property subject thereto, (iv) liens
for Taxes not yet subject to penalties for nonpayment or which are being
actively contested in good faith by appropriate proceedings, (v) mechanics',
materialmen's, carriers', workmen's, warehousemen's, repairmen's, landlords' or
other like liens and security obligations that are not delinquent, (vi) zoning,
building and other similar governmental restrictions and liens imposed by
operation of law, or (vii) such liens, security interests, mortgages, charges or
encumbrances and other imperfections of title scheduled on Schedule 1.1(c).
"Person" shall mean an individual, a corporation, a
partnership, an association, a joint venture, a limited liability company, a
trust or other entity or organization.
"Plan" shall mean any material employee benefit plan as
defined in Section 3(3) of ERISA sponsored by Seller, for the benefit of any
Employee.
"Pre-Closing Environmental Liability" or "Pre-Closing
Environmental Liabilities" means, regardless of whether any of the following are
contained in any disclosure schedule to this Agreement or otherwise disclosed to
Purchaser prior to Closing, any and all Environmental Losses arising out of or
related to (a) the presence, Release, threat of Release, Management or exposure
to the extent occurring prior to the Closing Date (and the migration thereof,
regardless of when such migration occurs, and the post-Closing consequences of
such presence, Release, threatened Release, Management, or exposure) of or to
Hazardous Substances at, on, in or under any of the Conveyed Assets, the
Excluded Assets, or any property previously owned, operated, or leased by Seller
or any of its Affiliates or predecessors or in connection with the operation of
the Business, on-site or off-site; (b) arising from the pre-Closing off-site
transportation, storage, treatment, recycling, or Release (including disposal)
of Hazardous Substances Managed or Released by Seller or any of its Affiliates
or predecessors or in connection with the operation of the Business; or (c) any
violation of any Environmental Law to the extent existing as of the Closing Date
or related to conditions existing as of the Closing Date
-7-
14
(including, without limitation, (1) the wastewater discharge from the Site
having a pH of less than 5.0 identified in the letter from the United States
Environmental Protection Agency, dated December 1, 2000, (2) the treatment in
the wastewater treatment plant of fluoride in the wastewater to the extent
required to comply with Environmental Laws as such laws are in effect as of the
Closing Date, (3) the treatment of suspended solids in wastewater to the extent
required under Environmental Laws and required to be undertaken in connection
with the letter, dated December 5, 2000, from the Mountaintop Area Joint
Sanitary Authority to Seller, and (4) any other post-Closing consequences and
costs and expenses for pollution control equipment required to bring the
Conveyed Assets or the Business into compliance with Environmental Laws and
fines, penalties and defense costs incurred for such reasonable time after the
Closing as it takes Purchaser to come into compliance).
"Purchase Price" shall have the meaning set forth in Section
2.6(a) hereof.
"Purchase Price Adjustment" shall have the meaning set forth
in Section 2.6(b) hereof.
"Purchaser" shall have the meaning set forth in the heading of
this Agreement.
"Purchaser Plan" shall mean any material employee benefit plan
as defined in Section 3(3) of ERISA sponsored by Purchaser, for the benefit of
any employee of Purchaser.
"Purchaser Savings Plan" shall have the meaning set forth in
Section 7.4(b)(ii) hereof.
"Real Property" shall have the meaning set forth in Section
5.12 hereof.
"Reference Amount" shall have the meaning set forth in Section
2.6(b) hereof.
"Release" means any spill, leaking, pumping, pouring,
emitting, emptying, dumping, injection, deposit, disposal, discharge, dispersal,
leaching, or allowing the escape, of any Hazardous Substance, or threat thereof,
into surface water, soil, sediment, air or groundwater at or from any property.
"Remedial Action" shall mean any action required by applicable
Environmental Laws or a Governmental Authority to remediate soil, surface water,
groundwater or sediments in response to a Release of Hazardous Substances,
including, but not limited to, any associated action taken to investigate,
monitor, assess and evaluate the extent and severity of any such Release and
post-remediation monitoring of any such Release, and the costs of documenting,
reporting, negotiating or resolving the above.
"Retained Liabilities" shall have the meaning set forth in
Section 2.5 hereof.
"Selected Accountants" shall have the meaning set forth in
Section 2.6(c) hereof.
"Seller" shall have the meaning set forth in the heading of
this Agreement.
"Seller LTD Plan" shall have the meaning set forth in Section
7.4(g) hereof.
-8-
15
"Seller Savings Plan" shall have the meaning set forth in
Section 7.4(b)(ii) hereof.
"Site" means the parcel of approximately eighty (80) acres
which is located at 000 Xxxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxx Xxxxxx,
Xxxxxxxxxxxx as identified in the Deed.
"Special Representations" shall have the meaning set forth in
Section 8.1(a).
"Subsidiary" shall mean an entity as to which Seller or
Purchaser or any other relevant entity, as the case may be, owns directly or
indirectly 50% or more of the voting power or other similar interests. Any
Person which comes within this definition as of the date of this Agreement but
thereafter fails to meet such definition shall from and after such time not be
deemed to be a Subsidiary of Seller or Purchaser, as the case may be. Similarly,
any Person which does not come within such definition as of the date of this
Agreement but which thereafter meets such definition shall from and after such
time be deemed to be a Subsidiary of Seller or Purchaser, as the case may be,
until such time as it no longer qualifies as a subsidiary under the first
sentence of this definition.
"Supply Agreement" shall have the meaning set forth in Section
3.1(b)(viii) hereof.
"Tax" or "Taxes" shall mean all taxes, duties or other similar
assessments, including but not limited to, income, excise, property, sales,
value added, profits, license, withholding (with respect to compensation or
otherwise), payroll, employment, net worth, capital gains, transfer, stamp,
social security, and franchise taxes, imposed by any Governmental Authority, and
including any interest, penalties and additions attributable thereto.
"Tax Return" or "Tax Returns" shall mean any return, report,
declaration, information return, statement or other document filed or required
to be filed with any Governmental Authority, in connection with the
determination, assessment or collection of any Tax or the administration of any
Laws relating to any Tax.
"Title Commitment" shall have the meaning set forth in Section
7.3(b) hereof.
"Title Company" shall have the meaning set forth in Section
4.2(g) hereof.
"Transition Services Agreement" shall have the meaning set
forth in Section 3.1(b)(vii) hereof.
"WARN Act" shall mean the Worker Adjustment and Retraining
Notification Act, as amended.
Section 1.2 Other Definitional Provisions.
(a) The words "hereof", "herein", "hereto" and "hereunder"
and words of similar import, when used in this Agreement, shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
-19-
16
(b) The terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
ARTICLE II
PURCHASE AND SALE
Section 2.1. Purchase and Sale of Assets of the Business. Upon
the terms and subject to the conditions set forth herein, at the Closing, Seller
shall, or shall cause its Affiliates to, sell, convey, assign and transfer to
Purchaser and Purchaser shall purchase, acquire and accept from Seller and such
Affiliates, free and clear of all Liens, other than Permitted Encumbrances
(except for the Mortgage to be Released), all right, title and interest of
Seller and its Affiliates in the assets, properties and rights owned or held by
Seller or its Affiliates on the date hereof (i) constituting or located within
the Mountaintop Facility or (ii) relating primarily to the Business, wherever
located (except in any case for Excluded Assets and subject to any decreases or
dispositions thereof not inconsistent with the terms of this Agreement)
(collectively, the "Conveyed Assets"). Without limiting the foregoing, the
Conveyed Assets shall include, without limitation all rights, title and interest
of Seller and its Affiliates in and to, those certain assets, properties and
rights described in the following clauses (a) through (m):
(a) the Real Property;
(b) the furniture, equipment, machinery, supplies, vehicles,
spare parts, tools, personal property and other tangible property owned, leased
or licensed by Seller either (i) within or located at the Mountaintop Facility
or (ii) primarily used by the Business, wherever located (the "Equipment"),
including without limitation a certain ISMECA tester sorter consigned to
ChipPAC, Incorporated and any other equipment primarily related to the Business
and consigned to subcontractors, and leases relating to such Equipment so leased
by Seller (the "Equipment Leases"), together with any rights or claims arising
out of the breach of any express or implied warranty by the manufacturers or
sellers of any such Equipment or any component thereof;
(c) subject to Section 2.2 hereof, except for the Excluded
Contracts, the contracts, leases, licenses, agreements and commitments relating
primarily to the Business, including, but not limited to, those set forth on
Schedule 5.10 and those not required to be disclosed on such Schedule because
they do not meet the thresholds set forth in Section 5.10 (excluding contracts,
leases, licenses, agreements and commitments relating to the Excluded Assets)
(collectively with the Equipment Leases described in clause (b) above and the
Intellectual Property licenses transferred pursuant to the IP Agreement, the
"Assumed Contracts");
(d) the Inventories of the Business;
(e) Intellectual Property assigned in accordance with the IP
Agreement. Except as expressly set forth in the IP Agreement, Purchaser
expressly understands that Seller is not assigning or transferring to Purchaser
any right, title or interest in or to the name "INTERSIL" or any derivation
thereof, as well as any related or similar name, or any other
-10-
17
related trade names, trademarks, service marks, corporate names and logos or any
part, derivation, colorable imitation or combination thereof;
(f) transferable Governmental Authorizations and Environmental
Permits held by or issued to Seller relating to the Mountaintop Facility or
primarily to the Business;
(g) all customer and vendor lists to the extent relating to
the Business, and all files and documents (including credit information) to the
extent relating to customers and vendors of the Business, and other business and
financial records, files, books and documents (whether in hard copy or computer
format) to the extent relating to the Business;
(h) all rights of Seller under express or implied warranties
from vendors related to the Conveyed Assets;
(i) all goodwill related to the Business;
(j) any and all causes of action against third parties to the
extent relating to the Conveyed Assets or Assumed Liabilities, including any
claims for refunds, prepayments, offsets, recoupment, insurance proceeds,
condemnation awards, judgments, and the like, whether received as payment or
credit against future liabilities or otherwise;
(k) all product efficacy data, advertising materials,
marketing plans, distribution programs, cost and pricing information, customer
lists and other similar information primarily used or held for use in the
Business;
(l) all agreements between Seller and any third party
regarding confidentiality or non-disclosure of any information related to the
Business, the Conveyed Assets or Assumed Liabilities; and
(m) any books, ledgers, files, reports, plans, payroll and
personnel records and operating records to the extent related to or maintained
by, the Business, except those in the possession of Seller's independent public
accountants (including the workpapers of such independent public accountants).
Notwithstanding anything to the contrary contained in this
Agreement, Seller may retain copies of any contracts, books, ledgers, files,
reports, plans, operating records, or any other document or materials (i) which
also relate to the other businesses of Seller which do not constitute part of
the Business or (ii) which it must retain pursuant to any applicable statute,
rule, regulation or ordinance or for financial reporting purposes, tax purposes
or in connection with the Retained Liabilities, so long as in either case Seller
keeps such materials relating to the Business confidential pursuant to Section
7.9(b) hereof.
Section 2.2. Nonassignment of Assets.
(a) Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the sale, assignment, lease, sublease, transfer,
conveyance or delivery, or attempted sale, lease, sublease, assignment,
transfer, conveyance or delivery, to
-11-
18
Purchaser of any Environmental Permits or any asset that would be a Conveyed
Asset or any claim or right or any benefit arising thereunder or resulting
therefrom is prohibited by any Law or would require any authorization, approval,
consent or waiver by any Governmental Authority or Person, and such
authorization, approval, consent or waiver shall not have been obtained prior to
the Closing, the Closing shall proceed, subject to Article IV, without the sale,
assignment, lease, sublease, transfer, conveyance or delivery of such asset (and
the failure to obtain such authorization, approval, consent or waiver and the
failure to sell, assign, convey or deliver such assets shall not constitute a
breach of this Agreement by Seller), and this Agreement shall not constitute a
sale, assignment, sublease, transfer, conveyance or delivery of such asset or an
attempt thereof. In the event that the Closing proceeds without the transfer,
sublease or assignment of any such asset, then following the Closing, the
Parties shall use reasonable efforts and cooperate with each other to obtain
promptly such authorizations, approvals, consents or waivers; provided, however,
that Seller shall not compromise any rights not otherwise required by this
Agreement to be compromised for any such authorization, approval, consent or
waiver. Pending such authorization, approval, consent or waiver, the Parties
shall cooperate with each other in any mutually agreeable, reasonable and lawful
arrangements designed to provide to Purchaser the benefits of use of such asset
and to Seller the benefits, including any indemnities, that it would have
obtained had the asset been conveyed to Purchaser at the Closing. To the extent
that Purchaser is provided the benefits pursuant to this Section 2.2 of any
contract, Purchaser shall perform for the benefit of the other Persons that are
parties thereto the obligations of Seller thereunder and pay, discharge and
satisfy any related liabilities that, but for the lack of an authorization,
approval, consent or waiver to assign such liabilities to Purchaser, would be
Assumed Liabilities. Once authorization, approval, consent or waiver for the
sale, assignment, lease, sublease, transfer, conveyance or delivery of any such
asset not sold, assigned, leased, subleased, transferred, conveyed or delivered
at the Closing is obtained, Seller shall assign, lease, sublease, transfer,
convey or deliver such asset to Purchaser at no additional cost to Purchaser. To
the extent that any such asset cannot be transferred or the full benefits of use
of any such asset cannot be provided to Purchaser following the Closing pursuant
to this Section 2.2, then Seller and Purchaser shall enter into such
arrangements (including leasing, subleasing, sublicensing or subcontracting) to
provide to the Parties the economic (taking into account Tax costs and benefits)
and operational equivalent, to the extent permitted, of obtaining such
authorization, approval, consent or waiver and the performance by Purchaser of
the obligations thereunder. Seller shall pay to Purchaser promptly upon receipt
thereof, all income, proceeds and other monies received by Seller in connection
with its use of any asset (net of any Taxes and any other costs imposed upon
Seller) in connection with the arrangements under this Section 2.2.
(b) To the extent that any Material Contract constitutes an
Excluded Contract solely as a result of the failure of such Material Contract to
be included on Schedule 5.10, Purchaser shall cooperate with Seller to assist
Seller in fulfilling Seller's obligations under such Material Contract.
Section 2.3. Excluded Assets of the Business. Notwithstanding any
provision in this Agreement, Seller shall retain, with respect to the Business,
the following (the "Excluded Assets"):
(a) Accounts Receivable, cash, Cash Equivalents and all
prepaid expenses and other assets of the character that would be included in the
line item "Assets--
-12-
19
Other" on a balance sheet of the Business as of the Closing Date prepared on a
basis consistent with the Business's practice as of September 30, 2000;
(b) certificates of deposit, shares of stock, securities,
bonds, debentures, evidences of indebtedness, and interests in any Person;
(c) any and all of Seller's rights in any contract or
arrangement representing an intercompany transaction between Seller and any
Affiliate of Seller, whether or not such transaction relates to the provision of
goods and services, payment arrangements, intercompany charges or balances, or
the like;
(d) all Tax Returns and all losses, loss carry forwards and
rights to receive refunds, credits and credit carry forwards with respect to any
and all Taxes, including, without limitation, interest thereon, whether or not
the foregoing are derived from the Business;
(e) the minute books, stock transfer books, corporate seal and
other similar books and records of Seller and its Affiliates;
(f) all current and prior insurance policies and all rights of
any nature with respect thereto, including all insurance recoveries thereunder
and rights to assert claims with respect to any such insurance recoveries;
(g) except as expressly set forth herein, all assets of any
employee benefit plan;
(h) except for the limited transitional rights provided in the
IP Agreement, all rights, title and interests in or to the name "INTERSIL," or
any derivation thereof, as well as any related or similar name, and any other
related trade names, trademarks, service marks, corporate names and logos or any
part, derivation, colorable imitation or combination thereof;
(i) any and all causes of action against third parties to the
extent relating to Excluded Assets or Retained Liabilities or not relating to
the Business or any of the Conveyed Assets or Assumed Liabilities, including any
claims for refunds, prepayments, offsets, recoupment, insurance proceeds,
condemnation awards, judgments, and the like, whether received as payment or
credit against future liabilities or otherwise;
(j) all real property, other than the Real Property;
(k) any governmental licenses, permits and approvals
(including Environmental Permits) issued to Seller, to the extent their transfer
is not permitted by law;
(l) any rights in, to and under all contracts, arrangements,
permits or licenses of any nature, of which the obligations of Seller thereunder
are not expressly assumed by Purchaser hereunder;
(m) any books, ledgers, files, reports, plans and operating
records that Seller or any of its Affiliates are required to retain pursuant to
any applicable statute, rule,
-13-
20
regulation or ordinance (copies of which will be made available to Purchaser to
the extent permitted by law) or which relate to the Excluded Assets or the
Retained Liabilities;
(n) all assets not related primarily to the Business;
(o) any Intellectual Property not assigned under the IP
Agreement;
(p) all of Seller's rights under this Agreement and any
agreement or other written instrument entered into in connection with the
transactions contemplated hereby;
(q) those assets listed in Schedule 2.3(q) hereto;
(r) any contracts, agreements or arrangements with
distributors or independent sales representatives (in either case whether or not
relating to the Business), any real property leases, equipment and maintenance
agreements with respect to any leased real property, those contracts, agreements
or arrangements designated with a notation on Schedule 5.10 hereto, any contract
required to be disclosed in Schedule 5.10 hereto but not so disclosed and any
other contracts, agreements or arrangements that relate both to the Business and
the other businesses of Seller and its Affiliates (any of the foregoing, an
"Excluded Contract");
(s) any packaging and test equipment located at Seller's Palm
Bay, Florida facility;
(t) all assets relating to any and all employee benefit plans,
policies, programs and practices maintained or contributed to by Seller or its
Affiliates, except as provided in Section 7.4;
(u) any equipment located at any location of Seller other than
the Mountaintop Facility; and
(v) Seller's disaster recovery system located at the
Mountaintop Facility.
Section 2.4. Assumption of Certain Obligations of the Business. Upon
the terms and subject to the conditions of this Agreement, Purchaser agrees,
effective at the Closing, to assume all Liabilities of Seller to the extent
relating to the Conveyed Assets or the Business and arising in the ordinary
course of business, other than the Retained Liabilities, whether accrued or
fixed, known or unknown, absolute or contingent, matured or unmatured or
determined or determinable as of the Closing Date, (all of the foregoing
liabilities and obligations being herein collectively called the "Assumed
Liabilities"). Assumed Liabilities shall include, without limitation, the
following:
(a) the indebtedness of the Business evidenced by the
agreements listed on Schedule 2.4(a);
(b) product warranty obligations limited to, at Purchaser's
option, repair, replace or provide product purchase price credit to customers
and contractual obligations with distributors for price adjustments or product
repurchase, in each case arising from the
-14-
21
manufacture, distribution or sale of any products of the Business prior to, on
or after the Closing Date, provided that in no event shall Purchaser's
obligations under this Section 2.4(b) be deemed to constitute the assignment of
any contract, agreement or arrangement with any distributor or independent sales
representative or of any rights thereunder, or the assumption by Purchaser of
any obligations or duties under any such contract, agreement or arrangement
except as expressly provided in this Section 2.4(b) or Section 2.4(f);
(c) any Tax that may be imposed by any Federal, State or local
government on the ownership, sale, operation or use of the Conveyed Assets after
the Closing Date, except for any income taxes attributable to income received by
Seller;
(d) all Liabilities of the Business arising and to be
performed after the Closing Date under or relating to the Assumed Contracts (but
specifically excluding breaches by Seller or any of Seller's Affiliates of any
contracts relating to the Business or as a result of the transactions
contemplated by this Agreement);
(e) all Liabilities with respect to Employees who are Affected
Employees or are otherwise employed by Purchaser after the Closing Date
(including, without limitation, any Liabilities relating to the hiring,
employment or termination of employment by Purchaser of any Employee or other
individual, or with respect to vacation accruals or sick leave (in each case to
the extent accrued in Closing Date Liabilities) and holiday accruals (whether or
not accrued in the Closing Date Liabilities) consistent with Seller's policies
as historically applied); and
(f) all Liabilities for commissions due to independent sales
representatives with respect to orders placed prior to Closing and for which the
customer has not yet been billed, provided the revenues associated with such
order are recognized by Purchaser, regardless of whether Purchaser assumes any
agreement with such sales representative.
Purchaser's obligations under this Section 2.4 will not be
subject to offset or reduction by reason of any actual or alleged breach of any
representation, warranty or covenant contained in this Agreement or any Schedule
or Exhibit hereto, or any closing or other document contemplated by this
Agreement or any Schedule or Exhibit hereto, any right or alleged right of
indemnification hereunder, or for any other reason.
Section 2.5. Retained Liabilities of the Business. Notwithstanding any
provision in this Agreement, Purchaser shall not assume or in any way be
responsible for, and Seller shall retain and be responsible for the following
debts, claims, commitments, liabilities and obligations of Seller and the
Business (the "Retained Liabilities"):
(a) Liabilities for which Seller expressly has responsibility
pursuant to the terms of this Agreement or any of the agreements entered into in
connection with the transactions contemplated hereby;
(b) Liabilities to the extent arising out of or relating to
the Excluded Assets;
-15-
22
(c) Liabilities of Seller and its Affiliates to any of its
employees, including, without limitation, former employees and retirees, and
their statutory bargaining representatives, including, without limitation,
Liabilities for payroll, withholdings, social security or similar disability
related taxes, claims for workers' compensation, harassment, wrongful
termination/discharge, employment discrimination, severance or under any benefit
plan or collective bargaining agreement or for any retention or stay-on bonuses,
except as expressly provided herein, including in Section 7.4 (whether or not
any such employee is a member of a union and whether or not any such employee is
an Affected Employee);
(d) the accounts payable of Seller (including accounts payable
relating exclusively to the Business existing as of the Closing Date);
(e) all Liabilities for commissions owed to independent sales
representatives in respect of the Accounts Receivable;
(f) all liabilities relating to any and all employee benefit
plans, policies, programs and practices maintained or contributed to by Seller
or its Affiliates with respect to any and all Employees except as provided in
Section 7.4;
(g) all intercompany Liabilities or Liabilities to Seller's
Affiliates;
(h) all Liabilities relating to Excluded Contracts, except to
the extent expressly assumed pursuant to Section 2.4(b) or (f);
(i) any and all Liabilities for Taxes related to the Business
or the Conveyed Assets for taxable periods prior to and including the Closing
Date, except that Seller's sole liability for Conveyance Taxes is limited as set
forth in Section 7.15;
(j) all Pre-Closing Environmental Liabilities;
(k) all Liabilities of Seller or any Seller Affiliate to the
extent arising out of or relating to the conduct of any business other than the
Business;
(l) all Liabilities of Seller or any Seller Affiliate arising
out of matters occurring, or obligations incurred, after the Closing;
(m) (i) all Liabilities for indebtedness for money borrowed
other than under the agreements listed on Schedule 2.4(a), (ii) guaranties of
liabilities that would not constitute Assumed Liabilities and (iii) liens other
than the Permitted Encumbrances (except for the Mortgage to be Released);
(n) all Liabilities of Seller or any Seller Affiliate for
indemnification of, or advancement of expenses or payment of insurance proceeds
to, any present or former director or officer of (or other person serving in a
fiduciary capacity at the request of) Seller or any Seller Affiliate based upon
an actual or alleged breach of fiduciary duty of such person prior to Closing;
-16-
23
(o) Liabilities of Seller or any Seller Affiliate for any
professional, financial advisory or consulting fees and expenses incident to or
arising out of the negotiation, preparation, approval or authorization of this
Agreement or any of the agreements or transactions contemplated hereby, or any
other proposed transaction for the sale of the Business, including without
limitation the fees, expenses and disbursements of Seller's counsel, accountants
(except as may be specifically agreed separately in writing by Purchaser) and
financial advisors;
(p) Liabilities to which Purchaser, any Conveyed Assets or the
Business become subject arising solely out of a failure to comply with bulk
sales laws or any similar laws;
(q) all Liabilities arising out of, resulting from or relating
to claims, whether founded upon contract, negligence, strict liability,
Intellectual Property infringement, in tort or other similar legal theory,
seeking compensation or recovery for or relating to Losses, injury to person or
damage to property arising out of the conduct of the Business prior to the
Closing Date, in any case whether or not disclosed in any Schedule hereto;
(r) Liabilities of the Business arising during or related to
periods prior to the Closing Date to the extent the amount of such Liability or
obligation is covered by a policy of insurance or other indemnity agreement
maintained for the benefit of the Business, unless the rights under any such
indemnity agreement have been assigned to Purchaser;
(s) all liabilities in respect of customer returns and
allowances and product warranty claims (except Liabilities expressly assumed by
Purchaser under Section 2.4(b)) including without limitation warranty claims for
rework costs or equipment repair costs;
(t) any Liability or obligation arising out of, or related to,
any business or product line formerly owned or operated by Seller or any Seller
Affiliate or predecessor thereof but not presently so operated;
(u) any Liability or other obligation arising out of, or
related to any indemnification or other provision under any contract or other
agreement pursuant to which any sale or disposition was made of any business or
product line formerly owned or operated by Seller or any Seller Affiliate or any
predecessor thereof but not presently so owned or operated; and
(v) Liabilities for which Seller has any claim against Xxxxxx,
its successors or Affiliates.
Section 2.6 . Purchase Price.
(a) In consideration of the sale and transfer of the Conveyed
Assets, Purchaser shall (i) pay to Seller for the benefit of Seller or for
appropriate Affiliates thereof, if any, who shall have sold assets under this
Agreement pursuant to Section 2.1 an aggregate amount of $338,000,000 (the
"Purchase Price"), in immediately available funds, by wire transfer in
accordance with written instructions given by Seller to Purchaser not less than
two (2) Business Days prior to the Closing, which consideration shall be
adjusted pursuant to Section 2.6(b) below and allocated as described in Section
2.7; and (ii) assume the Assumed Liabilities.
-17-
24
(b) Notwithstanding any other provision of this Agreement, the
Purchase Price shall be adjusted upward or downward on a dollar-for-dollar
basis, by the amount by which Closing Date Liabilities, as reflected in the
Closing Balance Sheet to be agreed pursuant to Section 2.6(c) below, is greater
than or less than $7,800,000 (the "Reference Amount") (as finally determined
pursuant to Section 2.6(c) and (d), the "Purchase Price Adjustment").
(c) Within thirty (30) days after the Closing Date, Seller
shall submit to Purchaser for Purchaser's review a balance sheet of the Business
as of the Closing Date and Seller's calculation of the actual amount of the
Closing Date Liabilities and, in this connection, each party reasonably shall
make available to the other all relevant books and records. In the event that
Seller and Purchaser are unable to agree with respect to any determination of
the Closing Date Liabilities within twenty (20) days after the delivery by
Seller of the proposed balance sheet, Seller and Purchaser hereby agree that
such determination shall be referred to Xxxxxx Xxxxxxxx LLP (the "Selected
Accountants"), which shall promptly make a determination. The determination of
the Selected Accountants shall be conclusive and binding on each party. During
the review by the Selected Accountants, Purchaser and Seller will each make
available to the Selected Accountants such individuals and such information,
books and records as may be reasonably required by the Selected Accountants to
make their final determination. One-half of the fees of the Selected Accountants
shall be borne by Seller, and one-half shall be borne by Purchaser.
(d) The balance sheet reflecting the Closing Date Liabilities
as agreed by the Parties or as determined by the Selected Accountants in
accordance with Section 2.6(c) shall be deemed the "Closing Balance Sheet." Upon
the final determination of the Closing Balance Sheet, if the Closing Date
Liabilities reflected therein as of the Closing Date are greater than the
Reference Amount, Seller shall pay to Purchaser the Purchase Price Adjustment
and if the Closing Date Liabilities reflected therein as of the Closing Date are
less than the Reference Amount, Purchaser shall pay to Seller the Purchase Price
Adjustment, in either case within five (5) Business Days by wire transfer of
immediately available funds.
Section 2.7 Allocation of Purchase Price. Seller and Purchaser
recognize their mutual obligations pursuant to Section 1060 of the Code (and any
comparable provisions of any other Tax law) to timely file IRS Form 8594 (or
comparable form) and subsequent Forms 8594 (or comparable forms), if any are
required, with each of their respective Tax Returns (the "Asset Allocation
Statements"). Accordingly, Seller and Purchaser agree to cooperate in the
preparation of any Asset Allocation Statements. Seller and Purchaser shall agree
that Purchaser shall direct KPMG LLP (a) to perform an appraisal of the fair
market value of the Conveyed Assets and allocate the Purchase Price among the
Conveyed Assets in a manner that is reasonably acceptable to Purchaser's outside
auditors (the "Allocation") and (b) to complete the appraisal and Allocation of
the Real Estate prior to the Closing Date and of everything else prior to the
later of the Closing Date or March 31, 2001. The cost of the appraisal shall be
borne by Purchaser. Each of Seller and Purchaser shall (i) be bound by the
Allocation for purposes of determining any Taxes, (ii) prepare and file, and
cause its Affiliates to prepare and file, its Tax Returns on a basis consistent
with the Allocation, and (iii) take no position, and cause its Affiliates to
take no position, inconsistent with the Allocation on any applicable Tax Return
or in any proceeding before any taxing authority or otherwise. In the event that
the Allocation is
-18-
25
disputed by any taxing authority, the Party receiving notice of the dispute
shall promptly notify the other Party hereto concerning resolution of the
dispute. Seller and Purchaser agree that the Allocation shall be made in
accordance with the provisions of Section 1060 of the Code and the Treasury
Regulations thereunder.
Section 2.8. Apportionment at Closing and Related Matters.
(a) At the Closing, the Parties shall make the usual
adjustments relating to the Business as of the Closing Date (except that
Purchaser shall be fully responsible for those items contained in the Closing
Balance Sheet constituting Assumed Liabilities), including prepaid lease
payments, security deposits, rents, real estate taxes, local improvements
charges, assessments (special and ordinary), sewer impost charges, utility
charges, water rents, monthly maintenance charges, rebates and royalties,
deposits and prepaid expenses with any public utility or any municipal,
governmental or other public authority, wages and any other ongoing charges, if
any, and all such payments, taxes and charges shall be apportioned and adjusted
as of the Closing Date, and at the Closing the net amount thereof shall be pro
rata paid by Seller to Purchaser or paid by Purchaser to Seller, as the case may
be. Any such apportionments and adjustments shall be subject to correction for
any errors or omissions that subsequently may be discovered provided that the
Party discovering such error or omission provides written notice of same to the
other Party. Such other Party shall, within 30 days after receipt of such
notice, reimburse the Party delivering such notice for the full amount of such
error or omission.
(b) If at any time after the Closing Date (i) Seller shall
come into possession of any of the Assumed Liabilities or Conveyed Assets,
Seller shall immediately transfer such assets or liabilities to Purchaser or
(ii) Purchaser shall come into possession of any of the Retained Liabilities or
Excluded Assets, Purchaser shall immediately transfer such assets or liabilities
to Seller.
ARTICLE III
CLOSING
Section 3.1. Closing. (a) The Closing shall take place at the offices
of Dechert, 4000 Xxxx Atlantic Tower, 0000 Xxxx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx at 10:00 A.M., eastern standard time, on the later of (i) March 21,
2001, or (ii) the third (3rd) Business Day following the satisfaction or waiver
of the conditions precedent specified in Article IV (other than the conditions
to be satisfied on the Closing Date, but subject to the waiver or satisfaction
of such conditions), or at such other times and places as the Parties may
mutually agree; provided, however, that the Closing shall not occur later than
the date specified in Section 9.1(b) of this Agreement. The date on which the
Closing occurs is called the "Closing Date." The Closing shall be deemed to
occur and be effective as of the close of business on the Closing Date.
(b) At the Closing, Seller shall deliver or cause to be
delivered to Purchaser the following:
(i) the certificate referred to in Section 4.2(c)
hereof;
-19-
26
(ii) a deed substantially in the form set forth in
Exhibit 3.1(b)(ii) for the Owned Real Property (the "Deed") executed by the LLC;
(iii) a Xxxx of Sale or Bills of Sale substantially
in the form set forth in Exhibit 3.1(b)(iii) (the "Xxxx of Sale") executed by
Seller;
(iv) an Assignment and Assumption Agreement
substantially in the form set forth in Exhibit 3.1(b)(iv) (the "Assignment and
Assumption") executed by Seller;
(v) a Partial Assignment and Assumption of the
ChipPAC Agreement substantially in the form set forth in Exhibit 3.1(b)(v) (the
"Partial Assignment") executed by Seller and ChipPAC;
(vi) an Intellectual Property Assignment and License
Agreement substantially in the form set forth in Exhibit 3.1(b)(vi) (the "IP
Agreement") executed by Seller;
(vii) a Transition Services Agreement substantially
in the form set forth in Exhibit 3.1(b)(vii) (the "Transition Services
Agreement") executed by Seller;
(viii) a Supply Agreement substantially in the form
set forth in Exhibit 3.1(b)(viii) (the "Supply Agreement") executed by Seller;
(ix) all other instruments and documents required on
Seller's part to effectuate and consummate the transactions contemplated hereby
in a form and substance reasonably satisfactory to Purchaser and its counsel,
including those consents and approvals listed on Schedule 3.1(b)(ix); and
(x) an opinion of Dechert, counsel for Seller/Xxxxxxx
X. Xxxxx, general counsel for Seller, in a form reasonably satisfactory to
Purchaser and Xxxx Xxxxx LLP, counsel for Purchaser.
(c) At the Closing, Purchaser shall deliver to Seller the
following:
(i) the sum of the Purchase Price by wire transfer in
immediately available funds to up to three accounts specified in writing by
Seller at least two (2) days prior to the Closing Date;
(ii) the certificate referred to in Section 4.3(c)
hereof;
(iii) the Xxxx of Sale executed by Purchaser;
(iv) the Assignment and Assumption executed by
Purchaser;
(v) the Partial Assignment and Assumption executed by
Purchaser and ChipPAC;
(vi) the IP Agreement executed by Purchaser;
-20-
27
(vii) the Transition Services Agreement executed by
Purchaser;
(viii) the Supply Agreement executed by Purchaser;
(ix) all other instruments and documents required on
Purchaser's part to effectuate and consummate the transactions contemplated
hereby in a form and substance reasonably satisfactory to Seller and its
counsel, and
(x) an opinion of Xxxx Xxxxx LLP, counsel for
Purchaser/Xxxxxx X. Xxxxx, general counsel for Purchaser in a form reasonably
satisfactory to Purchaser and Dechert, counsel for Seller.
ARTICLE IV
CONDITIONS TO CLOSING
Section 4.1. Conditions to the Obligations of Purchaser and Seller. The
respective obligations of each of the Parties to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction of the
following conditions precedent:
(a) there shall not (i) be in effect any statute, regulation,
order, decree or judgment which makes illegal or enjoins or prevents in any
respect the consummation of the transactions contemplated by this Agreement, or
(ii) have been commenced, and shall be continuing, any action or proceeding by
any Governmental Authority which seeks to prevent or enjoin in any respect the
transactions contemplated by this Agreement;
(b) the waiting period required under the HSR Act, including
any extensions thereof, shall have expired or have been terminated, and any
investigations relating to the sale hereunder that may have been opened by
either the Department of Justice or the Federal Trade Commission by means of a
request for additional information or otherwise shall have terminated and no
other waiting period (including any extensions thereof) or any investigation by
a Governmental Authority relating to the transactions contemplated hereby shall
be unexpired or pending which investigation, in the reasonable opinion of
counsel, is likely to result in an action or proceeding seeking to enjoin the
entire transaction contemplated herein; and
(c) any approvals or actions of any Governmental Authority
having jurisdiction necessary lawfully to consummate the transactions
contemplated hereby shall have been given or taken and Seller shall have
obtained all those consents and approvals listed on Schedule 3.1(b)(xi).
Section 4.2. Conditions to the Obligations of Purchaser. The obligation
of Purchaser to consummate the transactions contemplated by this Agreement shall
be subject to the satisfaction of the following conditions precedent:
(a) Seller shall have performed in all material respects its
agreements and obligations contained in this Agreement required to be performed
by it at or before the Closing, and shall have complied in all material respects
with each covenant to be performed and complied with hereunder at or before the
Closing (other than Seller's covenants with respect to delivery of documents at
the Closing which shall be performed in all respects); provided,
-21-
28
however, that those agreements, obligations and covenants which are qualified by
materiality or absence of Material Adverse Effect shall have been complied with
in all respects;
(b) the representations and warranties of Seller contained
herein that are qualified by materiality limitations shall be true and correct
and those that are not qualified by materiality limitations shall be true and
correct in all material respects, in each case as of the time of Closing with
the same force and effect as though such representations and warranties had been
made on, as of and with reference to such time, except those representations and
warranties that address matters only as of a particular date which, if qualified
by materiality limitations, shall be true and correct and, if not qualified by
materiality limitations, shall be true and correct in all material respects as
of that date;
(c) Purchaser shall have received a certificate of Seller,
dated as of the Closing Date and validly executed by an officer of Seller,
certifying as to the fulfillment of the matters set forth in paragraphs (a) and
(b) of this Section 4.2;
(d) Seller shall have received all authorizations and
approvals from Governmental Authorities, to the extent required to be obtained
prior to Closing for the operation of the Business after Closing and such other
consents, authorizations, and approvals listed on Schedule 3(b)(ix);
(e) Seller shall have made or caused to be made delivery to
Purchaser of the items required by Section 3.1(b);
(f) Purchaser shall have received a letter from Local Union
No. 177, International Union of Electronic, Electrical, Salaried, Machine and
Furniture Workers, AFL-CIO substantially in the form set forth in Exhibit
4.2(f); and
(g) Purchaser shall have obtained, at Purchaser's sole cost
and expense, from Lawyers Title Insurance Company (the "Title Company"), ALTA
owner's policies of title insurance, covering the Real Property, which shall be
free and clear of all Liens, easements, rights-of-way, encroachments, and other
encumbrances except for the Permitted Encumbrances (except for the Mortgage to
be Released).
Section 4.3. Conditions to the Obligations of Seller. The obligation of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions precedent:
(a) Purchaser shall have performed in all material respects
its agreements and obligations contained in this Agreement required to be
performed by it at or before the Closing, and shall have complied in all
material respects with each covenant to be performed and complied with hereunder
at or before the Closing (other than Purchaser's covenants with respect to
delivery of documents at the Closing which shall be performed in all respects);
provided, however, that those agreements, obligations and covenants which are
qualified by materiality or absence of material adverse effect shall have been
complied with in all respects;
-22-
29
(b) the representations and warranties of Purchaser contained
herein that are qualified by materiality limitations shall be true and correct
and those that are not qualified by materiality limitations shall be true and
correct in all material respects, in each case as of the time of Closing with
the same force and effect as though such representations and warranties had been
made on, as of and with reference to such time, except those representations and
warranties that address matters only as of a particular date which, if qualified
by materiality limitations, shall be true and correct and, if not qualified by
materiality limitations, shall be true and correct in all material respects as
of that date;
(c) Seller shall have received a certificate of Purchaser,
dated as of the Closing Date and validly executed by an officer of Purchaser,
certifying as to the fulfillment of the matters set forth in paragraphs (a) and
(b) of this Section 4.3; and
(d) Purchaser shall have made or caused to be made delivery to
Seller of the items required by Section 3.1(c).
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Purchaser as follows:
Section 5.1. Organization and Qualification. Intersil is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. LLC is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
Intersil and LLC is qualified to do business as a foreign corporation or foreign
limited liability company, as the case may be, and is in good standing under the
laws of each jurisdiction in which the nature of the property owned or leased by
it in the conduct of the Business requires it to be so qualified, except where
the failure to be so qualified and in good standing, would not be reasonably
expected to have a Material Adverse Effect.
Section 5.2. Authorization.
(a) Intersil has all requisite corporate power and corporate
authority to carry on its business as it is now being conducted and to execute
and deliver this Agreement and the documents contemplated hereby and to perform
its obligations hereunder and thereunder. The execution and delivery by Intersil
of this Agreement and the documents contemplated hereby, and the performance by
Intersil of its obligations hereunder and thereunder, have been duly authorized
by all requisite corporate action, including but not limited to shareholder
consent, if necessary, and no other corporate proceedings are required by
Intersil in connection with the execution, delivery and performance of this
Agreement and the documents contemplated hereby.
(b) LLC has all requisite limited liability company power and
authority to carry on its business as it is now being conducted and to execute
and deliver this Agreement and the documents contemplated hereby and to perform
its obligations hereunder and thereunder. The execution and delivery by LLC of
this Agreement and the documents contemplated hereby, and the performance by LLC
of its obligations hereunder and thereunder, have been duly authorized by all
requisite action, including but not limited to member consent, if
-23-
30
necessary, and no other proceedings are required by LLC in connection with the
execution, delivery and performance of this Agreement and the documents
contemplated hereby.
Section 5.3. Binding Effect. Each of this Agreement and the documents
contemplated hereby constitutes a valid and binding obligation of Seller,
enforceable against it in accordance with its terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally or by general
principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or law).
Section 5.4. Non-Contravention. The execution, delivery and performance
of this Agreement and the documents contemplated hereby by Seller and the
consummation of the transactions contemplated hereby and thereby does not and
will not (i) violate any provision of the certificate of incorporation or bylaws
of Intersil, (ii) violate any provision of the Certificate of Formation or
Operating Agreement of LLC, (iii) subject to obtaining the consents referred to
in Schedule 5.5, conflict with, or result in the breach of, or constitute a
default under, or result in the termination, cancellation or acceleration
(whether after the giving of notice or the lapse of time or both) of any right
or obligation of Seller with respect to, or to a loss of any benefit of the
Business to which Seller is entitled with respect to, the Conveyed Assets, (iv)
assuming compliance with the matters set forth in Sections 5.5 and 6.5, violate
or result in a breach of or constitute a default under any Law or other
restriction of any court or Governmental Authority to which Seller is subject,
except, with respect to clauses (iii) and (iv), for any violations, conflicts,
defaults, terminations, cancellations or accelerations as will not, individually
or in the aggregate, be material to the Business as a whole.
Section 5.5. Seller Consents and Approvals. Other than as set forth in
Schedule 5.5, the execution, delivery and performance of this Agreement and the
documents contemplated hereby by Seller do not require any consent or approval
of any Governmental Authority or any Person, except (i) for consents or
approvals, the failure of which to obtain, will not have a Material Adverse
Effect individually or in the aggregate, (ii) for the notification requirements
of the HSR Act, (iii) where the failure to obtain such consent, approval,
authorization or action, or to make such filing or notification, would not be
material to the Business as a whole, and (iv) as may be necessary as a result of
facts or circumstances relating solely to Purchaser.
Section 5.6. Absence of Material Changes. Since December 29, 2000,
except to the extent as set forth in Schedule 5.6, there has not been, with
respect to the Business, any:
(a) adverse change (or series of related changes) in the
Business, financial condition, assets, liabilities or results of operations
that, individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect;
(b) damage, destruction, condemnation or loss of any material
asset of Seller related to the Business (whether or not covered by insurance) or
event that would reasonably be expected to have a Material Adverse Effect;
(c) sale, lease, license, abandonment or other disposition by
Seller of any material assets, except in the ordinary course of business;
-24-
31
(d) material strike, walkout, or other work stoppage or any
union organizing effort by or respecting the Employees;
(e) increase in the salaries or other compensation or benefits
payable or to become payable to Employees (except increases in the ordinary
course of business, consistent with past practice) or advance or loan to any
officer of the Business or any Employee (except advances of ordinary business
expenses or otherwise in the ordinary course of business, consistent with past
practice);
(f) termination of (other than by expiration) or material
amendment to any Material Contract or any relinquishment of any material rights
under any Material Contract;
(g) liens or encumbrances granted or incurred in respect of
any Conveyed Asset (other than Permitted Encumbrances);
(h) material Liability incurred which would otherwise be an
Assumed Liability, other than those incurred in the ordinary course of business;
(i) oral or written notice received by Seller from a material
customer of or supplier to the Business that such customer or supplier has
breached its obligations to Seller or has or intends to discontinue its
relationship with the Business;
(j) resignation or termination of employment of any of the key
officers or employees of the Business, or oral or written notice received of any
impending or threatened resignation or resignations or termination or
terminations of employment that would reasonably be expected to have a Material
Adverse Effect;
(k) material revaluations by Seller of any of the Conveyed
Assets; or
(l) change in Seller's accounting methods or practices with
respect to the condition, operations, properties, assets or Liabilities of the
Business.
Section 5.7. No Litigation. Except as may be set forth on Schedule 5.7,
there are no claims, actions, suits, orders or investigations, either at law or
in equity, or any proceedings by or before any court or Governmental Authority
or arbitrator pending, or to the Knowledge of Seller, threatened against Seller
that (i) if asserted and decided adversely to Seller or any Affiliate, could
materially and adversely affect the operations of the Business, or (ii)
questions the validity of this Agreement, or (iii) seeks to delay, prohibit or
restrict the consummation by Seller of the transactions contemplated by this
Agreement.
Section 5.8. Compliance with Laws.
(a) Except with respect to Environmental Laws (which are the
subject of Section 5.9) and except as set forth in Schedule 5.8(a), Seller is in
compliance in all material respects with all Laws applicable to the ownership or
operation of the Conveyed Assets or the Business; and
-25-
32
(b) All permits, licenses and authorizations issued by
Governmental Authorities and necessary for the conduct of the Business at the
Mountaintop Facility are listed on Schedule 5.8(b) and each such permit, license
and authorization is in full force and effect and for the benefit of Seller.
Section 5.9. Environmental Matters. To the Knowledge of Seller, and
except as set forth in Schedule 5.9, the environmental site assessments and
other documentation and correspondence provided to Purchaser by Seller
(collectively, the "Environmental Site Assessments"):
(a) To the Knowledge of Seller, and except as set forth in
Schedule 5.9(a) and the Environmental Site Assessments, the Conveyed Assets (i)
are in substantial compliance with Environmental Laws and/or Environmental
Permits, and (ii) none of the Conveyed Assets is undergoing, nor has Seller
received notice that it is subject to, Remedial Action or enforcement actions
under any or all applicable Environmental Laws and/or Environmental Permits;
(b) To the Knowledge of Seller, the Business has obtained all
Environmental Permits required under all applicable Environmental Laws in
relation to the Conveyed Assets, except for such failures that are not
reasonably likely to have a Material Adverse Effect;
(c) Seller has not received from any Person or Governmental
Authority, and is not as of the date of this Agreement subject to, any claim,
demand, complaint, order, consent decree, request for information, or written
notice of violation which asserts that Seller is or may be in violation of any
Environmental Law or that Seller is responsible for a Pre-Closing Environmental
Liability at any of the Conveyed Assets;
(d) Section 5.9 and Section 5.8(b) to the extent relating to
Environmental Permits contain the only and exclusive representations and
warranties related to environmental matters made by Seller in this Agreement;
and
(e) Seller has provided to Purchaser true and complete copies
of all correspondence between Seller and any Person or Governmental Authority
which constitutes or relates to an environmental claim against Xxxxxx and all
correspondence between Seller and Xxxxxx with respect to all environmental
indemnification claims made by Seller relating to the Site pursuant to the
Xxxxxx Agreement. Seller has provided to Purchaser true and complete copies of
the Xxxxxx Agreement and all schedules to the Xxxxxx Agreement relating to
environmental conditions with respect to the Site.
Section 5.10. Material Contracts. Except (i) for agreements entered
into after the date hereof, (ii) for open purchase orders with customers entered
into in the ordinary course of business consistent with past practices or (iii)
as set forth on Schedule 5.10, Seller is not a party to or bound by (the
following being referred to as the "Material Contracts"):
(a) any contract, agreement or other arrangement for the
purchase of Inventories, or other personal property with any supplier or for the
furnishing of services to the Business the terms of which provide for financial
commitments in excess of $250,000;
-26-
33
(b) any contract, agreement and other arrangement for the sale
of Inventories or other personal property or for the furnishing of services by
the Business with firm commitments in excess of one year from the date hereof;
(c) any broker, distributor, dealer, manufacturer's
representative, franchise or agency agreements relating primarily to the
Business the terms of which provide for financial commitments in excess of
$250,000;
(d) any contracts and agreements relating to indebtedness for
borrowed money, factoring arrangements, sale and leaseback transactions,
deferred purchase price of property and other similar financing transactions
relating primarily to the Business with respect to which Seller is an obligor in
excess of $250,000 or which are secured by any Conveyed Asset;
(e) any agreements entered into since December 29, 2000,
providing for the acquisition or disposition of any Conveyed Assets and having
an individual value in excess of $150,000, or an aggregate value in excess of
$250,000, other than the sale of Inventories in the ordinary course of business
consistent with past practice or the sale of obsolete equipment;
(f) any consulting, employment, severance, retention,
separation, collective bargaining or similar agreements relating to the Business
with respect to which Seller is an obligor in excess of $250,000;
(g) any material technology, product or process development
agreement or joint venture agreement primarily relating to the Business;
(h) any agreements materially limiting the freedom of Seller
to conduct the Business in any geographical area and all confidentiality
agreements to which Seller is a party primarily related to the Business, the
Conveyed Assets or Assumed Liabilities, other than those agreements entered into
by Seller in connection with its proposed disposition of the Business;
(i) agreements, arrangements or understandings with any
Affiliate of Seller primarily related to the Business;
(j) real property leases relating to the Mountaintop Facility;
and
(k) any other agreement which is material to the Business and
which is not otherwise disclosed in response to items (a) through (j) above.
Each Assumed Contract that constitutes a Material Contract is
valid, in full force and effect and enforceable against Seller and to the
Knowledge of Seller the other parties thereto in accordance with the terms of
such Assumed Contract that constitutes a Material Contract, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles. Except as set forth in Schedule 5.10, there is
no material current default or claim of material current default under any
Assumed Contract that constitutes a Material Contract and, to
-27-
34
the Knowledge of Seller, no event has occurred that, with the passage of time or
the giving of notice or both, would constitute a material current default by
Seller or any party thereto under any Assumed Contract that constitutes a
Material Contract, or would permit material modification, acceleration or
termination of any Assumed Contract that constitutes a Material Contract, or
result in the creation of a Lien on any of the Conveyed Assets other than
Permitted Encumbrances.
Section 5.11. Intellectual Property. Schedule 5.11 sets forth a true
and complete list of each of the material Intellectual Property included in the
Conveyed Assets, subject to the IP Agreement, (excluding software that may be
purchased over-the-counter) and all agreements related to such Intellectual
Property.
(a) Seller has taken reasonable steps in accordance with
normal industry practice to maintain the confidentiality of all confidential
Intellectual Property assigned or licensed to Purchaser under the IP Agreement.
(b) With respect to pending applications and applications for
registration of Intellectual Property that is material to the Business, Seller
has advanced the prosecution of these applications as it does in the ordinary
course of business.
Section 5.12. Real Property. Schedule 5.12 sets forth all of the real
property which is owned in fee by the LLC (the "Real Property") and used
primarily in connection with the Business. Schedule 5.12 sets forth a
description of the title insurance policy and survey obtained by the Seller in
connection with its acquisition of the Business. The Real Property is owned by
the LLC free and clear of any and all Liens, other than Permitted Encumbrances.
(a) Seller has delivered to Purchaser (i) a copy of each deed
or lease by which the LLC acquired title to or its interest in the Real Property
described in Schedule 5.12, (ii) a copy of the title insurance policy Seller has
for the Real Property described in Schedule 5.12, and (iii) a copy of the survey
Seller has for the Real Property described in Schedule 5.12.
(b) All of the buildings and improvements situated upon the
Real Property are operable and in normal condition and repair, subject to
ordinary wear and tear, except as set forth on Schedule 5.12.
(c) Seller has not received any written notice from any
Governmental Authority alleging violations of any applicable zoning building or
other codes, laws, rules and regulations governing the ownership or use of any
of the Real Property. To the Knowledge of Seller, the Real Property and Seller's
use thereof complies with all such codes, laws, rules and regulations, except
where failure to so comply would not have, individually or in the aggregate, a
Material Adverse Effect.
(d) Seller has received no written notices from any
Governmental Authority of any pending or threatened condemnation or
appropriation proceedings against any portion of the Real Property that would
create a Material Adverse Effect.
(e) Notwithstanding anything in this Section 5.12 or elsewhere
in this Agreement to the contrary, the LLC hereby covenants and agrees and
represents and warrants
-28-
35
that the Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Financing Statement made by the LLC (formerly known as Xxxxxx Semiconductor
(Pennsylvania), LLC in favor of Credit Suisse First Boston dated as of August
13, 1999 and listed as item number 25 on Schedule 1.1(c) hereto (the "Mortgage
to be Released") shall be discharged and released of record prior to or at the
Closing, and in no event shall such Mortgage to be Released be listed or
excepted on the Deed as a "Permitted Exception."
Section 5.13. Assets.
(a) Other than Permitted Encumbrances or as otherwise provided
in this Agreement, Seller owns, leases or has the legal right to use all of the
Conveyed Assets (other than Intellectual Property and Real Property, which are
the subjects of Sections 5.11 and 5.12, respectively) and has good title to (or
in the case of leased Conveyed Assets, valid leasehold interests in) all
Conveyed Assets (other than Intellectual Property and Real Property, which are
the subjects of Sections 5.11 and 5.12, respectively), in either case except for
Permitted Encumbrances. Except as set forth in Schedule 5.13(a) and for the
Excluded Assets, the Conveyed Assets (other than Intellectual Property and Real
Property, which are the subjects of Sections 5.11 and 5.12, respectively)
together with Purchaser's rights under the Partial Assignment, the IP Agreement,
the Transition Services Agreement and the Supply Agreement, are sufficient to
operate the Business following the Closing as presently conducted by Seller.
Schedule 5.13(b) lists all of the fixed assets included among the Conveyed
Assets as of December 29, 2000, specifying, as to each, its inventory tag or
similar tracking number, type, location and net book value as reflected in
Seller's books of account.
(b) The Equipment included in the Conveyed Assets includes all
manufacturing equipment (except for the packaging and test equipment) necessary
to operate the Business following the Closing as presently conducted by Seller.
Section 5.14. Inventory. The Inventory is in good condition, suitable
for its intended use, consists of a quality and quantity useable and saleable in
the ordinary course of business and is valued at the lower of standard cost,
which approximates actual costs determined on a first-in-first-out basis, or
market, except for obsolete or slow-moving items or items of below-standard
quality, all of which have been written off, written down to net realizable
value or reserved against in the books and records of the Business. All such
non-excepted items of Inventory consist of items of a quality and quantity
useable or salable in the ordinary course of business within a reasonable period
of time at normal profit margins and such Inventories can be expected to be
consumed in the ordinary course of business within a reasonable period of time.
Section 5.15. Financial Information. Seller has previously delivered to
Purchaser unaudited statements of certain assets and certain liabilities of the
Business as of December 31, 1999 and December 29, 2000, together with the
related statements of revenues less certain expenses to EBITDA (collectively the
"Financial Information"). The Financial Information was derived from the
internal books and records of Seller and has been prepared in a manner
consistent with Seller's current accounting practices with respect to the
Business. Except as set forth in Schedule 5.15, the Financial Information is
complete and accurate, is presented in accordance with GAAP and presents fairly,
in all material respects, the financial position and the results of operations
of the Business for the periods indicated (exclusive of the Excluded Assets
-29-
36
and the Retained Liabilities), except for the omission of certain information
required to be included in footnotes to the Financial Information, which
footnotes have not been prepared by Seller. Seller makes no other
representations with regard to the Financial Information. Without limiting any
of the foregoing, Purchaser acknowledges that the Financial Information was
prepared solely for the purpose of this Agreement and that the Business was not
conducted on a stand-alone basis as a separate entity during the periods
indicated in the Financial Information.
Section 5.16. Taxes.
(a) Except as set forth in Schedule 5.16, all material Tax
Returns that are required to be filed on or before the date hereof with respect
to any Tax by or on behalf of Seller have been filed, such material Tax Returns
are true and complete in all material respects, and all Taxes shown to be due
and payable on such material Tax Returns have been paid except where such Tax is
being contested in good faith by appropriate proceedings or where the failure to
so file or pay would not be reasonably likely to create a Material Adverse
Effect. To the Knowledge of Seller, there are no Liens for Taxes upon any of the
Conveyed Assets, except for Liens for Taxes not yet due and payable or being
contested in good faith by appropriate proceedings or which are Permitted
Encumbrances.
(b) Seller does not have any Liability for Taxes of any Person
as a Member of a consolidated group, as transferee or successor, by contract or
otherwise which would have a Material Adverse Effect on the Business, the
Conveyed Assets or Purchaser following Closing.
(c) To the Knowledge of Seller, there is no pending or
threatened action that if determined adversely to Seller would result in the
assertion of any deficiency for any tax, interest or penalties in connection
therewith which would have a Material Adverse Effect on the Business, the
Conveyed Assets or Purchaser following Closing.
Section 5.17. Employee Benefits.
(a) Set forth on Schedule 5.17 is a list of each Plan in
effect as of the date of this Agreement.
(b) As applicable with respect to each Plan, Seller has made
or will make available to Purchaser copies of (i) each Plan and any related
trust or other funding instrument, including all amendments thereto, (ii) the
current summary plan description and each summary of material modifications
thereto, and (iii) for the Seller Savings Plans (the only Plans intended to be
tax qualified under Section 401(a) of the Code), the most recent IRS
determination letters.
(c) None of the Conveyed Assets is subject to any lien under
Code Section 401(a)(29), ERISA Section 302(f) or Code Section 412(n), ERISA
Section 4068 or arising out of any action filed under ERISA Section 4301(b).
(d) Neither Seller nor any other employer (an "ERISA
Affiliate") that is, or was at any relevant time, together with Seller, treated
as a "single employer" under section
-30-
37
414(b), 414(c) or 414(m) of the Code, has incurred any liability which could
reasonably be expected to subject Purchaser or any Conveyed Asset to liability
under Title IV of ERISA.
(e) Neither Seller nor any ERISA Affiliate, while an ERISA
Affiliate, has incurred any withdrawal liability, within the meaning of Section
4201 of ERISA, or any contingent withdrawal liability under Section 4204 of
ERISA, to any multiemployer pension plan, which could reasonably be expected to
subject Purchaser or any of the Conveyed Assets to liability under Title IV of
ERISA.
(f) The Seller Savings Plans have been administered
substantially in accordance with their terms (and with applicable law to the
extent not yet required to be reflected in the terms of such Plans)in all
material respects; no prohibited transactions or reportable events have occurred
with respect to any such Seller Savings Plan within the meaning of Title I of
ERISA; no breach of fiduciary duty has occurred in any respect material to any
such Seller Savings Plan; and no material liability has been incurred or is
accruing for any late, incomplete, inaccurate or unfiled notice or report that
is required to be given with respect to any Seller Savings Plan to any
participant, beneficiary or governmental agency pursuant to applicable reporting
or disclosure provisions of ERISA or the Code.
(g) The Seller Savings Plans are both tax-qualified under Code
Section 401(a) as of the Closing and have remained tax-qualified since their
inception. All contributions due to the Seller Savings Plans for any period
prior to and including the Closing Date have been made in full or will be made
in the ordinary course before the transfers described in Section 7.4(b).
(h) No complaints or disputes, government audits or
investigations, or compliance correction procedures (including CAP, VCR and
self-corrections) are known to be imminent, pending or needed with respect to
any Seller Savings Plan.
(i) Seller does not maintain, provide or have any obligation
to provide, any medical or other health coverage for any retirees or their
spouses, dependents and surviving beneficiaries, except as required by the
continuation of coverage provisions of ERISA section 601 and Code section 4980 B
or as otherwise disclosed to Purchaser on Schedule 5.17.
Section 5.18. Undisclosed Liabilities. Except for the Assumed
Liabilities, the Business has no liabilities or obligations that individually or
in the aggregate would reasonably be expected to have a Material Adverse Effect.
Section 5.19. Brokers. Except as set forth on Schedule 5.19, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller.
-31-
38
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Section 6.1. Organization and Qualification. Purchaser is a corporation
duly organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation.
Section 6.2. Corporate Authorization. Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and the
documents contemplated hereby, and to perform its obligations hereunder and
thereunder. The execution, delivery and performance by Purchaser of this
Agreement and the documents contemplated hereby have been duly authorized by all
requisite corporate action on the part of Purchaser and no other corporate
proceedings on the part of Purchaser are required in connection with the
execution, delivery and performance by Purchaser of this Agreement and the
documents contemplated hereby.
Section 6.3. Binding Effect. Each of this Agreement and the documents
contemplated hereby constitutes a valid and legally binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or similar laws affecting creditors' rights generally or
by general principles of equity (regardless or whether enforcement is sought in
a proceeding in equity or law).
Section 6.4. Non-Contravention. The execution, delivery and performance
by Purchaser of this Agreement and the documents contemplated hereby, and the
consummation of the transactions contemplated hereby and thereby, do not and
will not (i) violate any provision of the certificate of incorporation, bylaws
or other organizational documents of Purchaser, (ii) subject to obtaining the
consents referred to in Schedule 6.5, violate, conflict with, or result in the
breach of, or constitute a default under, or result in the termination,
cancellation or acceleration (whether after the giving of notice or the lapse of
time or both) of any right or obligation of Purchaser under any agreement,
contract or other instrument to which Purchaser is a party or to which its
assets are subject which would prevent Purchaser from completing the
transactions contemplated by this Agreement or (iii) assuming compliance with
the matters set forth in Sections 5.5 and 6.5, violate or result in a breach of
or constitute a default under any Law or other restriction of any court or
Governmental Authority to which Purchaser is subject which would prevent
Purchaser from completing the transactions contemplated by this Agreement.
Section 6.5. Purchaser Consents and Approvals. Except as set forth in
Schedule 6.5, the execution, delivery and performance of this Agreement and the
documents contemplated hereby by Purchaser do not and will not require any
consent or approval of any Governmental Authority or any Person, except for (i)
the notification requirements of the HSR Act and (ii) as may be necessary as a
result of facts or circumstances relating solely to Seller.
Section 6.6. No Litigation. Except as may be set forth on Schedule 6.6,
no litigation, investigation or proceeding by or before any court or
Governmental Authority or arbitrator is
-32-
39
pending against or, to the Knowledge of Purchaser, threatened against Purchaser,
which will have a material adverse effect on the ability of Purchaser to perform
its obligations hereunder.
Section 6.7. Financial Capability. On the Closing Date, Purchaser will
have sufficient funds to pay the Purchase Price on the terms and conditions
contemplated by this Agreement.
Section 6.8. Condition of Conveyed Assets. Purchaser and its
representatives and agents have had and exercised, prior to the date hereof, the
right to enter upon the Real Property and to make all inspections and
investigations of the Business and the Conveyed Assets deemed necessary or
desirable by Purchaser, provided that no knowledge acquired or capable of being
acquired by Purchaser or its representatives in the course of such inspections
and investigations shall waive or otherwise limit any representation or warranty
of Seller herein or limit any right or remedy of Purchaser, whether based upon
any inaccuracy or breach of any such representation or warranty hereunder or
otherwise. Purchaser is purchasing the Conveyed Assets based solely on the
results of its inspections and investigations, and not on any representation or
warranty of Seller other than as set forth in this Agreement. In light of these
inspections and investigations and the representations and warranties made to
Purchaser by Seller in Article V hereof, Purchaser is relinquishing any right to
any claim based on any representations and warranties other than those
specifically included in this Agreement. PURCHASER REPRESENTS THAT NEITHER
SELLER NOR ANY OTHER PERSON HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE ACCURACY OR COMPLETENESS OF ANY INFORMATION REGARDING ANY OF
SELLER, THE BUSINESS, THE CONVEYED ASSETS OR THE ASSUMED LIABILITIES NOT
EXPRESSLY SET FORTH IN THIS AGREEMENT, AND NEITHER SELLER NOR ANY OTHER PERSON
WILL HAVE OR BE SUBJECT TO ANY LIABILITY TO PURCHASER OR ANY OTHER PERSON
RESULTING FROM THE DISTRIBUTION TO PURCHASER OR ITS REPRESENTATIVES OR
PURCHASER'S USE OF, ANY SUCH INFORMATION RELATING TO THE BUSINESS, ANY OFFERING
MEMORANDUM OR OTHER PUBLICATION PROVIDED TO PURCHASER OR ITS REPRESENTATIVES, OR
ANY OTHER DOCUMENT OR INFORMATION PROVIDED TO PURCHASER OR ITS REPRESENTATIVES
IN CONNECTION WITH THE SALE OF THE BUSINESS OTHER THAN AS SET FORTH IN THIS
AGREEMENT. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT IT HAS HAD AN
OPPORTUNITY TO DISCUSS THE ENVIRONMENTAL CONDITION OF THE CONVEYED ASSETS WITH
VARIOUS EMPLOYEES, AGENTS AND/OR REPRESENTATIVES OF SELLER, BUT NO KNOWLEDGE
ACQUIRED OR CAPABLE OF BEING ACQUIRED BY PURCHASER THEREBY SHALL WAIVE OR
OTHERWISE LIMIT ANY REPRESENTATION OR WARRANTY OF SELLER HEREIN RELATING
THERETO. PURCHASER HAS INVESTIGATED AND HAS KNOWLEDGE OF OPERATIVE OR PROPOSED
GOVERNMENTAL LAWS AND REGULATIONS INCLUDING, BUT NOT LIMITED TO, ENVIRONMENTAL
AND LAND USE LAWS AND REGULATIONS TO WHICH THE CONVEYED ASSETS ARE OR MAY BE
SUBJECT AND PURCHASER IS PURCHASING THE CONVEYED ASSETS UPON THE BASIS OF ITS
REVIEW AND DETERMINATION OF THE APPLICABILITY AND EFFECT OF SUCH LAWS AND
REGULATIONS, AND THE REPRESENTATIONS AND WARRANTIES REGARDING SUCH MATTERS SET
FORTH HEREIN, AND PROVIDED THAT ANY RIGHT OF PURCHASER HEREUNDER BASED UPON THE
BREACH OF ANY SUCH REPRESENTATION OR WARRANTY, OR
-33-
40
ANY COVENANT OF SELLER HEREIN, WILL NOT BE AFFECTED BY ANY SUCH INVESTIGATION OR
KNOWLEDGE ACQUIRED (OR CAPABLE OF BEING ACQUIRED) BY PURCHASER AT ANY TIME,
WHETHER BEFORE OR AFTER THE EXECUTION OF THIS AGREEMENT OR THE CLOSING DATE.
Section 6.9. Brokers. Except as set forth on Schedule 6.9, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Purchaser.
ARTICLE VII
COVENANTS
Section 7.1. Information and Documents; Access to Employees.
(a) From and after the date hereof and pending the Closing,
upon reasonable advance notice, Seller shall permit Purchaser and its
representatives to have reasonable access, during regular business hours to the
assets, employees (including for purposes of discussions relating to significant
developments, transactions and proposals relating to the Business), books and
records of Seller relating to the Business, and shall furnish, or cause to be
furnished, to Purchaser, such financial, tax and operating data and other
available information with respect to the Business as Purchaser shall from time
to time reasonably request; provided, that no such access shall unreasonably
interfere with Seller's operation of its business, including, without
limitation, the Business; and Purchaser and its representatives shall not be
permitted to perform any intrusive investigations (including, without
limitation, soil, ground water, sediment, building material, surface water or
air sampling) without Seller's consent, which may be withheld in its sole
discretion; provided further, that all information received by Purchaser and
given by or on behalf of Seller in connection with this Agreement and the
transactions contemplated hereby will be held by Purchaser and its agents and
representatives as Proprietary Information, as defined in, and pursuant to the
terms of, the Confidentiality Agreement.
(b) From and after the date hereof, each of Purchaser and
Seller shall cooperate with the other in its defense or prosecution of any claim
relating to a Retained Liability or an Assumed Liability, as the case may be,
involving a third party, 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. Such
cooperation shall include, but not be limited to, making Employees available on
a mutually convenient basis (at the reasonable cost and expense of the
requesting party) in connection with the other party's compliance with the
provisions of this Section 7.1(b).
Section 7.2. Conduct of Business. From and after the date hereof and to
the Closing, except as otherwise contemplated by this Agreement, for the actions
set forth on Schedule 7.2, or as Purchaser shall otherwise consent in writing,
which consent shall not be unreasonably withheld, Seller shall conduct the
Business, and will cause the Business to be conducted, in the ordinary and usual
course consistent with past practice, and use commercially reasonable efforts to
preserve intact the Business and related relationships with customers, suppliers
and other third parties. From and after the date hereof and to Closing, except
as otherwise contemplated by this
-34-
41
Agreement, for the actions set forth on Schedule 7.2, or as Purchaser shall
otherwise consent in writing, which consent shall not be unreasonably withheld,
or as may be necessary to remove or preserve the Excluded Assets, Seller
covenants and agrees that it shall:
(a) maintain insurance coverage at levels consistent with
presently existing levels;
(b) not incur, create or assume any Lien with respect to any
Conveyed Asset other than Permitted Encumbrances;
(c) not dispose of any of the Conveyed Assets except for (i)
dispositions of Inventories in the ordinary course of business consistent with
past practice and (ii) dispositions of assets (other than Inventories and the
Patents listed on Schedules 2.1(e) and 2.3(q)) with an aggregate value not in
excess of $100,000.
(d) not enter into any new or otherwise amend any term of, or
waive any right under, any existing Material Contract outside of the ordinary
course of business consistent with past practice;
(e) not acquire any Conveyed Asset or make any new commitment
or increase any previous commitment to acquire any Conveyed Asset, except for
(i) acquisitions of Inventories in the ordinary course of business consistent
with past practice, (ii) capital expenditures for the Business with an aggregate
value not in excess of $2,000,000 and (iii) other non-capitalized assets (other
than Inventories) with an aggregate value not in excess of $100,000;
(f) not increase compensation and benefits to Employees,
except in the ordinary course of business consistent with past practice;
(g) not settle any litigation or dispute relating to the
Conveyed Assets, or any Assumed Liability or Employee for an amount in excess of
$500,000;
(h) collect the accounts receivable and pay the accounts
payable of the Business in the ordinary course of business consistent with past
practice; and
(i) not agree to take any of the foregoing actions (except in
subsections (a) and (h).
Nothing in this Agreement shall diminish Seller's sole title
to the Business or shall be construed to limit Seller's discretion to operate
the Business in the ordinary course (subject to the limitations set forth above
in this Section 7.2), or shall give Purchaser any ownership rights to the
Conveyed Assets, before the Closing Date.
Section 7.3. Reasonable Best Efforts; Certain Governmental Matters.
(a) Upon the terms and subject to the conditions herein
provided (including, without limitation, Section 2.2 hereof), each of the
Parties hereto agrees to use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary
for it to do under applicable laws and regulations to consummate and
-35-
42
make effective the transactions contemplated by this Agreement and to cause the
satisfaction of the conditions set forth in Article IV, including the execution
and delivery of any further instruments or documents which are reasonably
requested by the other Party or its counsel in order to evidence or facilitate
the consummation of the transactions contemplated hereby.
(b) Seller shall cooperate with Purchaser in obtaining, at
Purchaser's cost, (i) a good and valid, irrevocable ALTA title insurance
commitment (the "Title Commitment"), in final form, from the Title Company,
irrevocably committing the Title Company (subject only to the satisfaction of
any industry standard requirements contained in the Title Commitment and
reasonably acceptable to Purchaser) to issuing ALTA form of title insurance
policies insuring good, valid, indefeasible fee simple title to the Owned Real
Property in the amount requested by Purchaser and reasonably acceptable to
Seller prior to Closing, subject to no other encumbrances or other exceptions to
title other than the Permitted Encumbrances (except for the Mortgage to be
Released).
(c) Not later than five business days after the date hereof
and pursuant to the applicable requirements of the HSR Act and the rules and
regulations thereunder, the Parties shall cause to be filed with the Federal
Trade Commission and the Antitrust Division of the Department of Justice all
requisite documents and notifications in connection with the transactions
contemplated by this Agreement. Each Party shall inform the other Party of any
material communication such Party has with the Federal Trade Communication or
the Antitrust Division of the Department of Justice. Each Party shall use its
commercially reasonable best efforts to obtain an early termination of the
applicable waiting period. Purchaser and Seller shall use their commercially
reasonable best efforts to resolve diligently and expeditiously any objections
that may be asserted by the Federal Trade Commission or the Antitrust Division
of the Department of Justice with respect to the transactions contemplated by
this Agreement and shall cooperate fully and in good faith in connection with
overcoming any such objections and in expeditiously providing additional
information or documentation pursuant to a request for additional information.
Purchaser shall have no obligation to enter into any agreement or accept any
order requiring it to divest any assets or business and shall have no obligation
to contest any order, ruling or other action conditioning approval of the
consummation of the transactions contemplated by this Agreement on such
divestiture or any conditions affecting Purchaser's operation of its existing
businesses or the Business after Closing.
(d) The Parties shall cooperate with one another (i) in
determining whether any other action by or in respect of, or filing with, any
Governmental Authority is required, or any actions, consents, approvals or
waivers are required to be obtained from parties to any Material Contracts, in
connection with the consummation of the transactions contemplated by this
Agreement, and (ii) in taking such actions or making any such filings, in
furnishing such information as may be required in connection therewith, and in
seeking timely to obtain any such actions, consents, approvals or waivers.
(e) Seller and Purchaser shall keep the other reasonably
apprised of the status of matters relating to the completion of the transactions
contemplated hereby and work cooperatively in connection with obtaining all
required approvals or consents of any Governmental Authority. In that regard,
each party shall without limitation (to the extent permitted by applicable law):
(i) promptly notify the other of, and if in writing, furnish the other
-36-
43
with copies of (or, in the case of material oral communications, advise the
other orally of) any communications from or with any Governmental Authority with
respect to the transactions contemplated by this Agreement, (ii) permit the
other to review and discuss in advance, and consider in good faith the views of
the other in connection with, any proposed written (or any material proposed
oral) communication with any such Governmental Authority, (iii) not participate
in any meeting with any such Governmental Authority unless it notifies and, to
the extent reasonably practicable, consults with the other in advance and, to
the extent permitted by such Governmental Authority, gives the other the
opportunity to attend and participate thereat, (iv) furnish the other with
copies of all material correspondence, filing and communications (and memoranda
setting forth the substance thereof) between it and any such Governmental
Authority with respect to this Agreement, and (v) furnish the other with such
necessary information and reasonable assistance as Seller or Purchaser may
reasonably request in connection with its preparation of necessary filings or
submissions of information to any such Governmental Authority. Seller and
Purchaser may, as each deems advisable and necessary, reasonably designate any
competitively sensitive material provided to the other under this Section as
"outside counsel only." Such materials and the information contained therein
shall be given only to the outside legal counsel of the recipient and will not
be disclosed by such outside counsel to employees, officers, or directors of the
recipient unless express permission is obtained in advance from the source of
the materials (Seller or Purchaser, as the case may be) or their or its legal
counsel.
(f) Seller shall comply with and file all necessary notices
and filings under Title 72, Section 1403 of the Pennsylvania Statutes (72 P.S.
1403) in due course.
Section 7.4. Employees and Employee Benefits.
(a) Employees - Offer of Employment; Continued Employment;
Severance. Purchaser shall offer employment as of 12:01 a.m. on the day
immediately following the Closing Date to (i) each Employee at the Mountaintop
Facility and (ii) those other Employees listed on Schedule 7.4(a)(1) (the
"Non-Mountaintop Employees"), at the same or comparable position and at a rate
of pay at least equal to the Employee's rate of pay in effect on the Closing
Date and with benefits which shall be comparable to the employee benefits
provided to Purchaser's similarly situated Employees as of the Closing Date,
provided, however, that offers of employment to Inactive Employees shall,
subject to Section 7.4(e), not be made until such time as such Employee returns
to active status and provided, further, that as to those Non-Mountaintop
Employees designated as "Conditional" on Schedule 7.4(a)(1), such offers shall
be conditioned upon such Employee's agreement to relocate, at Purchaser's
expense in accordance with Purchaser's relocation policy, to a Purchaser work
location if requested by Purchaser. Seller shall use its commercially reasonable
best efforts to assist Purchaser in hiring those Employees to whom Purchaser
extends an offer of employment. For purposes of this Section 7.4, references to
"pay" shall include base pay plus any commission, bonus or incentive pay, but
exclude retention and retention/performance allowances. With respect to Affected
Employees at the Mountaintop Facility only, such employment shall be at a
location within a 25-mile radius of the Affected Employee's location of
employment as of the Closing Date. Schedule 7.4(a)(2) (which shall be updated by
Seller on the Closing Date) shall set forth the name of each Employee, and his
or her current rate of pay, position and date of hire. Purchaser shall have no
obligation whatsoever with regard to (i) former employees of the Business who
are retired, or
-37-
44
who are not or shall have ceased to be Employees as of the Closing Date, (ii)
Employees who do not accept the offer of employment or continuation of
employment given by Purchaser in accordance with this Section 7.4(a) or (iii)
formerly active Employees of the Business who are on inactive status for any
reason as of the Closing Date; except that Purchaser shall be obligated to offer
employment to those inactive Employees referenced in (iii) if and when they
cease inactive status in accordance with Section 7.4(f) below. Purchaser shall
be solely responsible for all wages and other compensation (including bonuses,
incentive payments and commissions) accruing after the Closing Date with respect
to the Affected Employees, as well as compliance with all legal duties owed to
such Employees or their statutory bargaining representatives following the
Closing Date. Purchaser may, at its discretion but subject to any existing
collective bargaining agreements, change the conditions of employment after the
Closing Date except for (i) the location requirement described in this Section
7.4(a) and (ii) the pay and benefits comparability requirements described in
this Section 7.4(a). To the extent allowed by law, each Employee hired by
Purchaser in connection with this transaction shall be provided credit, under
each Purchaser Plan (including any severance plan) for which such Employee is or
becomes eligible, for all service with Seller and its Affiliates to the same
extent as such service was credited for the same respective benefits purposes as
of the Closing Date by Seller and its Affiliates, but nothing in this sentence
shall entitle any such Employee to commence participation in any Purchaser Plan
as of any date prior to the Closing Date or to have any contribution made on his
or her behalf to any Purchaser Plan with respect to any service credited for any
period prior to the Closing Date, or to duplicate any benefit provided under
Seller's Benefit Plans.
(b) Savings Plans. Effective as of 12:01 a.m. on the day
immediately following the Closing Date, each participant in the Seller Savings
Plans (as defined in Section 7.4(b)(i) below) who is hired by Purchaser
immediately in connection with this transaction shall (i) cease to be an active
participant under each such Seller Savings Plan and (ii) become fully vested in
such Seller Savings Plans. Each such employee may become eligible to participate
in Purchaser's 401(k) plan after the Closing Date in accordance with the terms
of said plan, taking into account any pre-Closing service credited under Section
7.4(a) above. Seller shall deliver, or cause to be delivered, to Purchaser such
records and data concerning participants in Seller Savings Plans as shall be
reasonably satisfactory to Purchaser for purposes of administering its 401(k)
plan with respect to Employees whom Purchaser employs after the Closing.
(i) As soon as practicable after the Closing Date,
Seller and Purchaser shall, if necessary, file IRS Form 5310-A for each of their
respective tax qualified 401(k) plans, giving 30 days advance notice of a
transfer of assets from the Intersil Corporation Retirement Plans (the "Seller
Savings Plans") to the Purchaser Savings Plans which are 401(k) plans (the
"Purchaser Savings Plans"). As soon as practicable after the 30-day periods from
the dates of filing of the IRS Forms 5310-A have been completed, or if such
filings are unnecessary, as soon as practicable, but in no event more than 180
days after Closing, Seller shall cause the Seller Savings Plans to transfer the
account balances of all Affected Employees to the Purchaser Savings Plans. The
assets of the account balances to be transferred shall consist of cash,
including the proceeds of any necessary liquidation of shares held in the Xxxxxx
Stock Fund under Seller Savings Plans, notes reflecting loans from Seller
Savings Plans to the Affected Employees held in those accounts, and such other
assets as the trustee(s) of Purchaser Savings Plans shall agree to accept.
Purchaser, on the one hand, and Seller, on the other hand, each agree to use its
-38-
45
reasonable efforts and to cooperate with the other to effect as promptly as
possible the transfers of assets contemplated under this Section 7.4(b)(ii),
subject to Seller's receipt of satisfactory evidence that the Purchaser Savings
Plans are in compliance with all relevant Tax and labor Laws; such evidence
shall include, but not be limited to, a current determination letter from the
IRS, if available, and satisfactory representations from the administrators of
the Purchaser Savings Plans concerning Tax qualifications under Section 401 of
the Code. If a current determination letter has not been obtained, Purchaser
shall provide an opinion of legal counsel that the Purchaser Savings Plans are
reasonably believed to be qualified under Section 401(a) of the Code, together
with a copy of the latest IRS determination letter (if such a letter was ever
received), and a representation that a timely application for a determination
letter will be filed or is pending and that Purchaser will take all reasonable
steps necessary to secure a determination letter. Prior to any transfer of
assets from the Seller Savings Plans to the Purchaser Savings Plans, Seller
shall provide Purchaser with satisfactory evidence that the Seller Savings Plans
are in compliance with all relevant Tax and Labor Laws; such evidence shall
include, but not be limited to a current determination letter from the IRS and
satisfactory representations from the administrators of the Seller Savings Plans
concerning tax qualification of those Plans under Code Section 401(a). If a
current determination letter is not available, then Seller shall provide an
opinion of legal counsel that the Seller Savings Plans are reasonably believed
to be tax-qualified under Section 401(a) of the Code, together with a copy of
the latest IRS determination letter for each such Plan (if such a letter was
ever received) and a representation that a timely application for a
determination letter will be filed, or is pending, and that Seller will take all
reasonable steps necessary to secure a determination letter.
(ii) Seller will give Purchaser reasonable access to
and at Purchaser's request a copy of the records of Seller necessary to
administer the retirement benefits of Affected Employees transferred to the
Purchaser Savings Plans. The Affected Employees initially shall be enrolled
(automatically, if feasible) in the appropriate Purchaser Savings Plan at the
same salary deferral contribution level in effect at the Closing Date for that
participant under the Seller Savings Plans, subject to the Affected Employees'
right to change that contribution level after his or her enrollment in the
Purchaser Savings Plan according to the terms of that Plan. The Purchaser
Savings Plans also shall honor (to the extent feasible) any beneficiary
designations and other administrative elections in effect under the Seller
Savings Plans for Affected Employees as of the Closing Date, but such elections
shall be administered according to the terms of the Purchaser Savings Plans
thereafter. Purchaser shall amend the Purchaser Savings Plans as needed to
preserve any benefit rights from the Seller Savings Plans that must be protected
in accordance with Code Section 411(d)(6) with respect to each Affected
Employee' transferred account, and to vest the transferred accounts to the same
respective extent they were vested under the Sellers Savings Plans.
(c) Accrued Entitlements. Purchaser shall be responsible for
all accrued entitlements to the extent and up to the amounts reflected on the
Closing Balance Sheet, including, but not limited to, vacation days, for
Affected Employees as of the Closing Date, consistent with Seller's policy in
respect thereof. Seller shall give Purchaser reasonable access to and a copy of
the records of Seller necessary to determine and administer the vacation and
other accrued entitlements of Affected Employees as reflected on the Closing
Balance Sheet.
-39-
46
(d) Success Sharing and Leadership Incentive Plans. At or
reasonably promptly after Closing, Seller shall pay to the Affected Employees
any Success Sharing, Leadership Incentive or Deferred Profit Sharing payments
due, but unpaid, to any such affected Employees with respect to the year 2000.
In addition, Seller will also pay to those Affected Employees who would
reasonably have expected to receive Success Sharing or Leadership Incentive Plan
payments for 2001 a pro rata portion of those bonuses. That pro rata portion
will be the portion of the reasonably expected bonuses, as calculated by Seller
in accordance with its applicable plans, multiplied by a fraction, the numerator
of which is the number of days beginning January 1, 2001 and ending on the
Closing Date and the denominator of which is 365. Purchaser shall have no
obligation to provide for the Affected Employees any benefits comparable to the
Success Sharing, Leadership Incentive or Deferred Profit Sharing benefits
maintained by Seller. However, to the extent any Affected Employees would be
eligible, by virtue of job position, salary level or other plan eligibility
criteria, to participate in any similar type of incentive plan currently
maintained by Purchaser, after pre-Closing service is credited under Section
7.4(a), then such Affected Employees' participation in such Purchaser's
incentive or similar plan shall not be precluded due to the Employee's job
location or prior affiliation with Seller; provided, however, that to avoid
duplication no benefit shall be paid to such Affected Employees under any such
Purchaser Plan based on any part of year 2001 for which the Employee received a
benefit from Seller in accordance with this Section 7.4(d).
(e) Medical and Welfare Plan Obligations. (i) Any Employees
of Seller or its Affiliates who are hired by Purchaser immediately after the
Closing, shall become eligible for such medical and welfare benefit plans as
Purchaser then maintains in accordance with the terms of each such respective
plan, taking into account for eligibility purposes any pre-Closing service
credited to such employees under Section 7.4(a) above. Purchaser shall have no
obligation to provide welfare benefit coverage for any Employees of Seller or
its Affiliates other than as provided in this Section 7.4(e) and shall not
assume any liabilities arising under or with respect to any medical or other
welfare benefit plans maintained by Seller or its Affiliates and attributable to
matters arising before or existing at Closing or arising in connection with this
transaction. Seller shall deliver, or cause to be delivered, to Purchaser such
records and data concerning participants in Seller's medical and other welfare
benefits plans as shall be reasonably satisfactory to Purchaser for purposes of
administering its medical and welfare benefits plans with respect to Employees
whom Purchaser employs after the Closing.
(i) Purchaser shall use reasonable efforts to contract
with the two existing HMO's that cover Affected Employees at the Mountaintop
Facility to provide uninterrupted medical coverage (as a new coverage option
under Purchaser's group medical plan) to those Affected Employees immediately
after the Closing Date on substantially the same terms and conditions as
coverage had been provided as of the Closing Date. Affected Employees for whom
such uninterrupted HMO coverage is arranged shall continue such coverage after
the Closing Date, without the need to re-enroll (if feasible), subject to any
future change of enrollment rights under Purchaser's group medical plan. Any
Affected Employees who are not covered by either of those two HMOs as of the
Closing Date shall be eligible to enroll in any applicable coverage options
available under Purchaser's group medical plan, subject to the terms of such
coverage options. Coverage under Purchaser's existing CIGNA group medical
insurance policy shall be the automatic default coverage option for any Affected
Employees who are not eligible for continuing uninterrupted coverage immediately
after the Closing Date under one of
-40-
47
Seller's two HMOs referenced above, subject to such Employee having sufficient
eligibility service after crediting pre-Closing service under Section 7.4(a).
Affected Employees shall be credited under Purchaser's group medical plan for
the year 2001 with any deductibles and co-payments they have made and satisfied
under Seller's group medical plan as of the Closing Date. Dental coverage for
Affected Employees shall be handled the same as group medical coverage under
this Section 7.4(e).
(ii) Purchaser shall not assume or have any liability
or responsibility for providing or funding health coverage for any individual
who retired from employment with Seller on or prior to the Closing Date.
(f) Inactive Employees - Offer of Employment; Continued
Employment; Severance. When an Inactive Employee seeks to return to active
employment within any deadline imposed by Seller, Purchaser or applicable Law,
Purchaser shall offer immediate employment to such Employee in the same or a
comparable position to that which the Employee occupied before such absence but
only at such time that the Employee is capable of performing the essential
functions of the position occupied immediately before such absence. In addition,
immediate employment in the same (or, where permissible under the statute to
which leave was taken, comparable) positions will be offered to those Employees
returning from authorized leaves of absence such as parental, family and
medical, and military leaves or other leaves where return to work is subject to
statutory requirements. Such Employees shall be deemed Affected Employees upon
their commencement of employment with Purchaser and, from the date of their
employment with Purchaser, will be subject to the same pay, benefits, severance
and all other policies, plans, programs and arrangements as stipulated in this
Section 7.4 for similarly situated Employees. Purchaser shall have no obligation
or liability to provide any pay, work or benefits for any such Inactive
Employees with respect to any period prior to the time such Inactive Employee
actually commences employment with Purchaser under this Section 7.4(f).
(g) Inactive Employees on Short Term Disability. Any
Inactive Employee, as described in Section 7.4(f) above, who is on short term
disability leave on the Closing Date, and who subsequently, without having again
become capable of performing the essential functions of the position held by
such employee immediately prior to such leave, so as to be entitled to an offer
of employment from Purchaser under Section 7.4(f), qualifies for long term
disability benefits in accordance with the applicable terms of Seller's Long
Term Disability Benefit Plan ("Seller LTD Plan") shall be entitled to such
benefits under, and in accordance with the terms of, the Seller LTD Plan.
(h) Stock Purchase Plan. Contributions by Affected Employees
to Seller's Employee Stock Purchase Plan shall be frozen as of the Closing Date.
Any such contributions not applied, as of the Closing Date, to the purchase of
Seller stock under that Plan will be so applied at the end of the Plan's
purchase period that includes the Closing Date and, as soon as practicable
thereafter, in accordance with the terms of Seller's Employee Stock Purchase
Plan, all shares of Seller stock so purchased, and any remaining contributions
by the Affected Employees, will be distributed to those Affected Employees.
Purchaser shall have no obligation to offer or maintain any stock purchase plan
for any Affected Employees after the Closing Date.
-41-
48
(i) Employee Loans. Effective upon Closing, Seller will
forgive those unpaid loans, made to Affected Employees in 1988, in the amount of
one 1988 week's pay. With respect to the amount of the forgiven loan, Seller
will effect any legally required tax withholding and either (1) Seller will
include the amount of the forgiven loan in the final Form W-2 (and any
equivalent state or local reports) issued to such Affected Employees by Seller,
or (2) if the parties elect the application of the Alternate Procedure set forth
in Rev. Proc. 96-60, 1996-2 C.B. 399, Purchaser will include such amount in all
such required reports.
(j) Assumption of Labor Contracts. Purchaser shall, as of
the Closing Date, assume, be solely responsible for, and hold Seller harmless
(pursuant to Section 8.2 hereof) from, all liabilities arising under the
collective bargaining agreements listed on Schedule 7.4(j) hereto; provided,
however, that it is acknowledged and understood that subject to the results of
any negotiations or collective bargaining with applicable bargaining
representatives over changes in benefits for bargaining unit members in
connection with the assumption by Purchaser of the aforesaid collective
bargaining agreements, Purchaser shall make all reasonable efforts to provide,
immediately following the Closing, comparable employee benefits for bargaining
unit members hired by Purchaser. Purchaser shall execute such agreements with
the labor organizations listed as signatories to such agreements listed on
Schedule 7.4(j) to effect the assumption of such labor agreements pursuant to
the National Labor Relations Act and in accordance with this Section 7.4(h).
Purchaser shall recognize and bargain with such labor organizations as required
by the National Labor Relations Act and/or any other applicable law.
(k) No Third Party Beneficiaries. Nothing contained herein,
expressed or implied, is intended to confer upon any Employee of Seller any
benefits under any benefit plans, programs, policies or other arrangements,
including, but not limited to, severance benefits or right to employment or
continued employment with Purchaser for any period by reason of this Agreement.
In addition, the provisions of this Agreement, in particular this Section 7.4,
are for the sole benefit of the Parties to this Agreement and are not for the
benefit of any third party.
Section 7.5. Bulk Transfer Laws. Purchaser acknowledges that Seller has
not taken, and does not intend to take, any action required to comply with any
applicable bulk sale or bulk transfer laws or similar laws.
Section 7.6. Compliance with WARN, Etc. Purchaser shall be solely
responsible for compliance with any notice obligations under the Worker
Adjustment and Retraining Notification Act ("WARN Act"), 29 U.S.C. Section 2101
et seq. (and all state and local analogues of said Act) arising from its failure
to hire and retain any of the Employees that it is required to hire pursuant to
Section 7.4 hereof; and Purchaser shall indemnify and hold Seller harmless,
pursuant to Section 8.2 hereof, for any claims arising from its failure to hire
any of the Employees that Purchaser is obligated to hire hereunder or arising
from any action resulting in employment loss of any such Employees after the
Closing Date. Seller shall be solely responsible for compliance with any notice
obligations under the WARN Act (and all state and local analogues of said Act)
arising from any action resulting in employment loss of any Employees prior to
or on the Closing Date; and Seller shall indemnify and hold Purchaser harmless,
pursuant to Section 8.2 hereof, for any claims arising from any action resulting
in employment loss of any Employees prior to or on the Closing Date or arising
from any action resulting in employment loss prior to or on the Closing Date of
any Employee that Purchaser is not required to hire hereunder.
-42-
49
Section 7.7. Insurance. As of the Closing Date, the coverage under all
insurance policies related to the Business shall continue in force only for the
benefit of Seller and its Affiliates and not for the benefit of Purchaser.
Purchaser agrees to arrange for its own insurance policies with respect to the
Business covering all periods and agrees not to seek, through any means, to
benefit from any of Seller's or its Affiliates' insurance policies which may
provide coverage for claims relating in any way to the Business on or prior to
the Closing Date.
Section 7.8. Names and Logo. Except as provided in the IP Agreement, as
soon as reasonably practicable after the Closing Date, Purchaser shall, or shall
cause its Subsidiaries to, revise product literature, change signage and
stationery, and discontinue the use of any name or logo set forth in Section
2.3(h).
Section 7.9. Covenant Not to Compete; Confidentiality.
(a) Seller agrees that, during the four year period
immediately following the Closing, Seller and its Subsidiaries shall not,
directly or indirectly, engage in, or have any financial or other interest in,
or manage or operate, or provide or arrange any financing for any Person or
business (whether as director, officer, employee, agent, representative,
security holder, equity owner, partner, member, consultant or otherwise)
involving or engaged in any firm, corporation, partnership, proprietorship or
other business entity that engages in the business of manufacturing, selling or
distributing Discrete Devices as being conducted by Seller on the date hereof (a
"Competing Business"); provided, however, that it shall not be a violation of
this Section 7.9 for Seller or any of its Affiliates (i) to own, directly or
indirectly, solely as an investment, securities of any Person that are traded on
a national securities exchange or the Nasdaq Stock Market (or a recognized
securities exchange outside the United States) if Seller or any of its
Affiliates (x) is not a controlling Person or a member of a group that controls
such Person and (y) does not, directly or indirectly, own more than 7.5% or more
of the voting securities of such Person, (ii) to directly or indirectly acquire
any Person, provided that not more than 25% of the revenues of such acquired
Person for the twelve months preceding the acquisition were derived from the
Competing Business and provided that Seller disposes of such Competing Business
within eighteen months after the closing date of such acquisition, (iii) to
continue operating existing lines of business, other than the Business, or any
of the Excluded Assets or (iv) any business permitted to be engaged in by Seller
pursuant to the terms of the IP Agreement.
(b) Seller acknowledges and agrees that, to the extent the
Conveyed Assets include information concerning the Business which had been
previously delivered by Seller to Purchaser prior to the Closing ("Confidential
Information"), such Confidential Information effective at the Closing will be
acquired by Purchaser and will become the property of Purchaser. Effective upon
the Closing, at no time from the Closing Date to the tenth anniversary thereof
shall Seller or any Affiliate of Seller disclose any Confidential Information to
any person or entity for any reason or purpose whatsoever other than to
Purchaser, nor shall any Seller or any Affiliate of Seller make use of any
Confidential Information for its own benefit or for the benefit of any other
Person or entity unless the prior written consent to such disclosure or use is
obtained from Purchaser. The foregoing restriction shall not apply to any
disclosure of Confidential Information at any time after the Closing to the
extent that (i) such Confidential Information subsequently becomes publicly
available without breach of any obligation of
-43-
50
confidentiality; (ii) such Confidential Information becomes available to Seller
or its Affiliates on a non-confidential basis from a third party that is, to the
Knowledge of Seller or its Affiliates, not bound by a confidentiality agreement
with or subject to any obligation or duty of confidentiality; (iii) disclosure
of Confidential Information is required to Xxxxxx Corporation, a governmental
authority or any other party in connection with a claim for environmental
indemnification by Purchaser, including any claim for environmental
indemnification made by Seller against Xxxxxx Corporation under the Xxxxxx
Agreement; or (iv) such disclosure is required by applicable law or any rule,
regulation or order of any Governmental Authority, provided that Seller or its
Affiliates shall provide Purchaser with prompt notice of any such order prior to
disclosure so that appropriate protective orders may be sought.
Section 7.10. Further Assurances. At any time after the date hereof,
Seller and Purchaser shall promptly execute, acknowledge and deliver any other
assurances or documents reasonably requested by Seller or Purchaser, as the case
may be, and necessary for Seller or Purchaser, as the case may be, to satisfy
its obligations hereunder.
Section 7.11. Books and Records. Seller and Purchaser agree that from and
after the Closing, each Party shall make available to the other Party (at such
other Party's expense), during normal business hours and upon reasonable notice,
and subject to any applicable privileges, the Party's respective books and
records, but only to the extent that such books and records pertain to (a) any
Taxes owed to a taxing authority or information necessary to complete a Tax
Return; (b) compliance with reporting, filing or other requirements related to
the conduct of the business imposed on such Party by the Government Authority or
taxing authority; or (c) the assertion or defense of any claims or allegations
in any arbitration or in any administrative or legal proceeding related to the
conduct of the Business other than claims or allegations which one Party to the
Agreement has asserted against the other.
Section 7.12. Accounts Receivable and Accounts Payable. After the Closing
Date, Seller shall collect the Accounts Receivable and shall pay its trade
payables relating to the Business (to the extent not included in the Assumed
Liabilities) in the ordinary course of business consistent with past practice.
Section 7.13. Supply Agreement. Purchaser and Intersil shall negotiate in
good faith the terms of a supply agreement pursuant to which Purchaser will
supply to Intersil after the Closing MOSFET die. Such supply agreement shall be
in substantially the form of the Supply Agreement to the extent applicable.
Section 7.14. Cooperation and Exchange of Information. Seller and
Purchaser will provide each other with such cooperation and information as
either of them may reasonably request of the other in preparing and filing any
Tax Return, amended Tax Return or claim for refund, determining or contesting a
liability for Taxes or a right to a refund of Taxes, or participating in or
conducting any audit or other proceeding in respect of Taxes. Seller and
Purchaser shall make their respective officers, employees, agents and
representatives available on a basis mutually convenient to Purchaser and Seller
to provide explanations of any documents or information provided hereunder.
Seller and Purchaser shall retain all Tax Returns, schedules and work papers,
records and other documents in its possession relating to Tax matters with
regard to the Conveyed Assets for each taxable period first ending after the
Closing Date and for
-44-
51
all prior taxable periods until the later of (i) the expiration of the statute
of limitations of the taxable periods to which such Tax Returns and other
documents relate, without regard to extensions except to the extent notified by
the other party in writing of such extensions for the respective Tax periods, or
(ii) six years following the due date (without extension) for such Tax Returns.
Section 7.15. Conveyance Taxes. Purchaser and Seller shall be responsible
and liable for and shall indemnify and hold the other harmless against one-half
of any realty transfer, sales, use, transfer, value added and other similar
Taxes, and any transfer, recording, registration and other fees which become
payable in connection with or by reason of the transactions contemplated by this
Agreement ("Conveyance Taxes"). Purchaser, after reasonable review and consent
by Seller, shall file such applications and documents as shall permit any such
Tax to be assessed and paid on or prior to the Closing Date in accordance with
any available pre-sale filing procedure. Seller shall execute and deliver all
instruments and certificates reasonably necessary to enable Purchaser to comply
with the foregoing. Purchaser shall timely complete and execute any available
resale or other exemption certificates with respect to the inventory or other
items sold hereunder, and shall provide Seller with executed copies thereof.
Notwithstanding the foregoing, (a) Seller shall not be responsible for more than
$250,000 of Pennsylvania state and local realty transfer tax imposed in
connection with the transfer of the Real Property to Purchaser (as well as any
interest and/or penalties relating thereto) and if the Pennsylvania state and
local realty transfer tax (and interest and/or penalties, if any) exceeds
$500,000, Purchaser shall pay 100 percent of such excess and (b) to the extent
that Purchaser is entitled to receive a credit of or a refund of any of the
foregoing Conveyance Taxes upon Purchaser's disposition of the property upon
which such tax was imposed, Purchaser shall pay 100 percent of any such tax. No
tax for which Seller may be liable hereunder shall be paid without first
obtaining Seller's consent, which consent shall not be unreasonably withheld.
Notwithstanding anything to the contrary set forth herein, Seller will not be
liable for any state sales or use tax if Purchaser could have supplied an
appropriate exemption form thereto. Purchaser and Seller shall agree prior to
the Closing Date as to any amount (or reasonable estimate thereof) for which
Purchaser is and is not entitled to receive a credit or refund, such agreement
not to be unreasonably withheld. Additionally, where appropriate and required to
minimize or eliminate any Conveyance Tax, the Parties shall provide to each
other certificates or other documents such as sale for resale certificates.
Section 7.16. Mountaintop Lease. Seller and Purchaser covenant and agree
that prior to the Closing, the Commercial Lease from Intersil (PA), LLC
(successor by merger to Xxxxxx Semiconductor (PA), Inc.) to Intersil, Inc. (as
assignee of Xxxxxx Corporation acting through its semiconductor sector) dated as
of April 7, 1998, as heretofore amended (as so amended, the "Mountaintop Lease")
shall be either (i) terminated, or (ii) amended to provide that the rents due
thereunder during any renewal term thereof would be at current fair market rents
determined at the time such renewal/extension option is exercised.
-45-
52
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
Section 8.1. Survival; Knowledge of Breach.
(a) (i) The representations and warranties contained in this
Agreement, other than those contained in Section 5.9 (Environmental), Section
5.11 (Intellectual Property), the first sentence of Section 5.13 (Assets),
Section 5.16 (Taxes), Section 5.19 and Section 6.9 (Brokers) (such
representations and warranties hereinafter referred to as the "Special
Representations"), shall survive the Closing until the date that is eighteen
(18) months after the Closing Date; (ii) the representations and warranties
contained in Section 5.11 (Intellectual Property) shall survive the Closing
until the date which is three (3) years after the Closing Date; (iii) the
representations and warranties contained in Section 5.16 (Taxes) shall survive
until 60 days following the expiration of the applicable statute of limitations;
(iv) the representations and warranties contained in the first sentence of
Section 5.13 (Assets), and Sections 5.19 and 6.9 (Brokers) shall survive the
Closing indefinitely; (v) the representations and warranties contained in
Section 5.9 (Environmental Matters) shall survive the Closing until the date
which is five (5) years after the Closing Date; and (vi) the covenants contained
in this Agreement shall survive the Closing indefinitely except the covenant set
forth in Section 7.2 (Conduct of Business) which shall survive the Closing until
the date that is eighteen (18) months after the Closing Date.
(b) The right to indemnification, payment of damages or
other remedy based on the representations, warranties, covenants and obligations
in this Agreement will not be affected by any investigation conducted with
respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement or
the Closing Date, with respect to the accuracy or inaccuracy or compliance with,
any such representation, warranty, covenant or obligation. The waiver of any
condition based on the accuracy of any representation or warranty, or on the
performance of or compliance with any covenant or obligation, will not affect
the right to indemnification, payment of damages or other remedy based on such
representation, warranties, covenants or obligations.
Section 8.2. Indemnification.
(a) From and after the Closing Date and subject to Sections
8.1 and 8.4, Seller agrees to indemnify, defend and hold harmless Purchaser and
its Affiliates, officers, directors, employees, representatives, agents and
stockholders (collectively, "Buyer Indemnitees") against and in respect of any
and all Environmental Losses resulting or arising from or relating to any
Pre-Closing Environmental Liabilities or the failure to have obtained any
authorization, consent, order, approval, or notification required under
Environmental Laws prior to the Closing. In addition, Seller agrees to
indemnify, defend and hold harmless the Buyer Indemnities against and in respect
of any and all losses, claims, damages, liabilities, reasonable costs and
expenses, including reasonable legal fees and expenses, but excluding any amount
that was included in the Closing Date Liabilities as finally determined pursuant
to Section 2.6 ("Losses"), resulting or arising from or otherwise relating to
(i) any breaches of Seller's representations and warranties set forth in this
Agreement, or in the certificates contemplated by Section 4.2(c), (ii) any
nonfulfillment of or failure to comply with any covenant set forth in this
Agreement by Seller or (iii) any Retained Liability.
-46-
53
(b) From and after the Closing Date and subject to Sections
8.1 and 8.4, Purchaser shall indemnify, defend and hold harmless Seller and
Seller's respective Affiliates, officers, directors, employees, representatives,
agents and stockholders against and in respect of any and all Losses resulting
or arising from or otherwise relating to (i) any breaches of Purchaser's
representations and warranties set forth in this Agreement, or in the
certificate contemplated by Section 4.3(c), (ii) any nonfulfillment of or
failure to comply with any covenant set forth in this Agreement by Purchaser,
(iii) the operation of the Business or the Conveyed Assets or actions relating
thereto taken by or on behalf of Purchaser after the Closing, or (iv) any
Assumed Liability.
(c) Any payments pursuant to this Article VIII shall be
treated as an adjustment to the Purchase Price.
Section 8.3. Method of Asserting Claims, etc. All claims for
indemnification by any Indemnified Party hereunder shall be asserted and
resolved as set forth in this Section 8.3.
(a) In the event that an Indemnified Party obtains knowledge
of any claim as to which recovery may be sought against Indemnifying Party
pursuant to the indemnity provided for in Section 8.2, or of the commencement of
any legal proceedings against an Indemnified Party by any third party as to
which such recovery may be sought under Section 8.2, the Indemnified Party shall
promptly, but in no event later than 15 days after obtaining such knowledge,
give notice to the Indemnifying Party of such claim or proceedings, including
the amount or the estimated amount thereof to the extent then feasible (which
estimate shall not be conclusive of the final amount of such claim and demand)
(the "Claim Notice"). Failure to give the Claim Notice in accordance with the
foregoing terms shall relieve Indemnifying Party of any liability hereunder only
to the extent that Indemnifying Party has suffered actual prejudice thereby. The
Indemnifying Party shall have 30 days from the personal delivery or mailing of
the Claim Notice (the "Notice Period") to notify the Indemnified Party whether
or not it desires to defend (or permit any of its predecessors (a "Permitted
Designee") to defend) the Indemnified Party against such claim or demand.
Failure by the Indemnifying Party to notify the Indemnified Party of its
election to defend the Indemnified Party within the Notice Period shall be
deemed a waiver by Indemnifying Party of its right to defend such action. An
election to assume the defense of such claim or demand shall be deemed to be an
admission that the claim or demand relating thereto is within the scope of
indemnification hereunder. The Indemnified Party shall permit the Indemnifying
Party to assume the defense of any such claim or proceedings or litigation
resulting therefrom only so long as (i) the Indemnifying Party is represented by
counsel reasonably satisfactory to the Indemnified Party and (ii) such claim is
solely for monetary damages (except with respect to Remedial Actions, as set
forth below). All costs and expenses incurred by the Indemnifying Party in
defending such claim or demand shall be a liability of, and shall be paid by,
the Indemnifying Party; provided, however, that the amount of such expenses
shall be a liability of the Indemnifying Party hereunder, subject to the
limitations set forth in this Article VIII. In the event that the Indemnifying
Party notifies the Indemnified Party within the Notice Period that it desires to
defend or permit a Permitted Designee to defend or conduct Remedial Action for,
as the case may be, the Indemnified Party against such claim or demand, except
as hereinafter provided, the Indemnifying Party shall have the right to defend
the Indemnified Party by appropriate proceedings. If Indemnifying Party
undertakes a Remedial Action at the Site, such actions shall be taken in a
manner which minimizes any adverse impact
-47-
54
to the operations of Purchaser's business at the Site. If any Indemnified Party
desires to participate in any such defense or settlement for which the
Indemnifying Party has elected, pursuant to the prior sentence to defend, or
permit its Permitted Designee to defend or conduct Remedial Action for, as the
case may be, the Indemnified Party may do so at its sole cost and expense. The
Indemnified Party shall not settle a claim or demand without the consent of the
Indemnifying Party, which shall not be unreasonably withheld. The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party,
which shall not be unreasonably withheld, settle, compromise or offer to settle
or compromise any such claim or demand on a basis which would result in the
imposition of a consent order, injunction or decree that would restrict the
future activity or conduct of the Indemnified Party or any Subsidiary or
Affiliate thereof. If the Indemnifying Party elects not to defend the
Indemnified Party against a claim or demand for which the Indemnifying Party has
an indemnification obligation hereunder, whether by not giving the Indemnified
Party timely notice as provided above or otherwise, then the amount of any such
claim or demand, or, if the same shall be contested by the Indemnified Party,
then that portion thereof as to which such contest is unsuccessful (and the
reasonable costs and expenses pertaining to such contest) shall be the liability
of the Indemnifying Party hereunder, subject to the limitations set forth in
this Article VIII. To the extent the Indemnifying Party shall control or
participate in the defense or settlement of any third party claim or demand, the
Indemnified Party will give the Indemnifying Party, its counsel and any
Permitted Designee (with respect to any liability for which the Indemnifying
Party may have an indemnity claim pursuant to any agreement it had made with
such Permitted Designee as in effect as of the date hereof), access to, during
normal business hours, the property and relevant business records and other
documents, and shall permit them to consult with the employees and counsel of
the Indemnified Party. The Indemnified Party shall use its best efforts in the
defense of all such claims. Any notice of a claim by reason of any of the
representations, warranties or covenants contained in this Agreement shall state
specifically the representation, warranty, or covenant with respect to which the
claim is made, the facts giving rise to an alleged basis for the claim, and the
amount of the liability asserted against the Indemnifying Party by reason of the
claim.
(b) With respect to any Loss for which any Indemnified Party
is indemnified under Section 8.2 of this Agreement, the resolution of which
involves Remedial Action, the Indemnifying Party shall have the right, upon
timely written notice, to conduct or control the Remedial Action, or permit
their Permitted Designee to conduct or control such Remedial Action (if the
Indemnifying Party is required to permit such Permitted Designee to assume and
control such Remedial Action pursuant to any agreement it has made with such
Permitted Designee as in effect as of the date hereof), and any such Remedial
Action shall only be required to meet the "Minimum Cleanup Standard." For
purposes of this Agreement, the "Minimum Cleanup Standard" shall mean the least
stringent standard acceptable under applicable Environmental Laws. Seller shall
not be responsible for Losses with respect to Pre-Closing Environmental
Liabilities as a result of the aggravation or exacerbation of any Pre-Closing
Environmental Liability resulting from any negligence of the Purchaser, any
agent or invitee after the Closing Date. It is intended that the scope of the
indemnity for Pre-Closing Environmental Liabilities with respect to the time
period prior to the Seller's acquisition of the Business from Xxxxxx Corporation
shall be no greater than the indemnity given by Xxxxxx Corporation to Seller in
the Xxxxxx Agreement; provided however that any failure of Xxxxxx to pay or
failure of Xxxxxx to agree to their responsibility with respect to a claim
between Seller and Xxxxxx shall not be dispositive of any claim under this
Agreement. Notwithstanding any other
-48-
55
provision of this Section 8.3(b) or of the Agreement, and notwithstanding any
response which Xxxxxx may give Seller regarding Seller's claims against Xxxxxx
under the Xxxxxx Agreement, it is understood that Purchaser shall be entitled
under Section 8.2 of the Agreement to indemnification from Seller for any and
all costs to negotiate or to document with a Governmental Authority a response
to the requirements of any Governmental Authority to address, or to obtain,
install or modify, but not operate, any equipment needed to comply with the
requirements of any Governmental Authority to address: (1) wastewater discharges
having pH of less than 5.0 as described in a December 1, 2000 letter from the
United States Environmental Protection Agency to Seller; (2) treatment in the
wastewater treatment plant of fluoride in the wastewater; or (3) treatment of
suspended solids in wastewater as described in a December 5, 2000 letter from
the Mountaintop Area Joint Sanitary Authority to Seller.
Section 8.4. Indemnification Amounts. No Indemnifying Party shall have
liability under Sections 8.2(a)(i) or 8.2(b)(i) until the aggregate amount of
Losses to an Indemnified Party exceeds $2,625,000 (the "Basket Amount"), in
which case the Indemnified Party shall be entitled to Losses in an amount up to
25% of the Purchase Price (the "Cap") in the aggregate; provided, however, that
the Indemnifying Party shall be liable only for the amount by which all Losses
exceed the Basket Amount and provided, further that the Cap shall be unlimited
in respect of all claims for indemnification hereunder other than those under
Section 8.2(a)(i) or 8.2(b)(i). Notwithstanding the foregoing, the Basket Amount
shall be zero ($0) and the Cap shall equal the Purchase Price with respect to an
Indemnifying Party's obligations to indemnify an Indemnified Party under
Sections 8.2(a)(i) and 8.2(b)(i) solely with respect to the Special
Representations made by the Indemnifying Party.
Section 8.5. Losses Net of Insurance, Etc. The amount of any Losses or
Environmental Losses for which indemnification is provided under this Agreement
shall be net of any amounts actually recovered by the Indemnified Party from
third parties (including amounts actually recovered under insurance policies,
but only to the extent any recovered insurance proceeds exceed costs of
collecting such proceeds and premium increases, whether retrospective or
prospective, that are certified by the underwriter to result from the claim for
such proceeds) with respect to such Losses. Any Indemnifying Party hereunder
shall be subrogated to the rights of the Indemnified Party upon payment in full
of the amount of the relevant indemnifiable loss. An insurer who would otherwise
be obligated to pay any claim shall not be relieved of the responsibility with
respect thereto or, solely by virtue of the indemnification provision hereof,
have any subrogation rights with respect thereto. If any Indemnified Party
recovers an amount from a third-party in respect of an indemnifiable loss for
which indemnification is provided in this Agreement after the full amount of
such indemnifiable loss has been paid by an Indemnifying Party or after an
Indemnifying Party has made a partial payment of such indemnifiable loss and the
amount received from the third-party exceeds the remaining unpaid balance of
such indemnifiable loss, then the Indemnified Party shall promptly remit to the
Indemnifying Party the excess of (A) the sum of the amount theretofore paid by
such Indemnifying Party in respect of such indemnifiable loss plus the amount
received from the third-party in respect thereof, less (B) the full amount of
such Losses.
Section 8.6. Sole Remedy/Waiver. The Parties hereto acknowledge and agree
that the remedies provided for in this Agreement shall be the Parties' sole and
exclusive remedy with respect to the subject matter of this Agreement.
-49-
56
Section 8.7. No Punitive Damages. Notwithstanding anything to the contrary
contained herein, no Indemnifying Party shall be liable to or otherwise
responsible to any Indemnified Party for punitive damages that arise out of or
relate to this Agreement or the performance or breach thereof or any liability
retained or assumed hereunder.
Section 8.8. Scope of Damages. The Indemnified Party shall use its
reasonable business judgment in minimizing any Loss upon becoming aware of any
event that would reasonably be expected to, or does, give rise thereto.
Section 8.9. No Set-Off. Neither Seller nor Purchaser shall have any right
to set-off any Losses against any payments to be made by either of them pursuant
to this Agreement or otherwise.
ARTICLE IX
TERMINATION
Section 9.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by written agreement of Seller and Purchaser;
(b) by either Seller or Purchaser, by giving written notice
of such termination to the other Party, if the Closing shall not have occurred
on or prior to March 21, 2001 (the "Drop Dead Date") (unless the failure to
consummate the Closing by such date shall be due to the failure of the Party
seeking to terminate this Agreement to have fulfilled any of its obligations
under this Agreement); provided, however, if any consent required from a
Governmental Authority has not been obtained on or prior to the Drop Dead Date,
the Drop Dead Date shall be automatically extended to the third Business Day
after all such consents have been obtained but in no event shall the Drop Dead
Date be extended beyond July 19, 2001;
(c) by either Seller or Purchaser if any court of competent
jurisdiction or other competent Governmental Authority shall have issued a
statute, rule, regulation, order, decree or injunction or taken any other action
permanently restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement and such statute, rule, regulation, order, decree
or injunction or other action shall have become final and nonappealable; and
(d) by the non-breaching Party, by giving written notice of
such termination to the other Party, if there has been a material breach by such
other Party of any representation, warranty, covenant or agreement in this
Agreement and such breach is not cured by the earlier of the Closing Date and
fifteen Business Days after the breaching Party's receipt of written notice of
such breach.
Section 9.2. Effect of Termination. In the event of the termination of
this Agreement in accordance with Section 9.1 hereof, this Agreement shall
thereafter become void and have no effect, and no Party hereto shall have any
liability to the other Party hereto or their respective Affiliates, directors,
officers or employees, except for the obligations of the Parties hereto
contained in this Section 9.2 and in Sections 10.7, 10.8, 10.9 and 10.11 hereof,
and except that nothing herein will relieve any Party from liability for any
breach of any covenant set forth in
-50-
57
this Agreement prior to such termination, including liability for attorneys'
fees reasonably incurred by the terminating Party in connection with the
transactions contemplated hereby.
ARTICLE X
MISCELLANEOUS
Section 10.1. Notices. All notices or other communications hereunder shall
be deemed to have been duly given and made if in writing and if served by
personal delivery upon the Party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by a national courier
service, or if sent by fax, provided that the fax is promptly confirmed by
telephone confirmation thereof, to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:
To Seller:
Intersil Corporation
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Phone: 000.000.0000 (Xxxxxxxx)
949.341.7040 (Xxxxx)
Fax: 000.000.0000
Attn: Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx, Esq.
with a copy to:
Dechert
4000 Xxxx Atlantic Tower
0000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
Attn: G. Xxxxxx X'Xxxxxxx, Esq.
To Purchaser:
Xxxxxxxxx Semiconductor Corporation
00 Xxxxxxx Xxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
Attn: General Counsel
-51-
58
with a copy to:
Xxxx Xxxxx LLP
2500 One Liberty Place
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
Phone: 000.000.0000
Fax: 000.000.0000
Attn: Xxxx X. Xxxxxx, Esq.
Section 10.2. Amendment; Waiver. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Seller and Purchaser, or in the case of
a waiver, by the Party against whom the waiver is to be effective. No failure or
delay by any Party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
Section 10.3. Assignment. No Party to this Agreement may assign any of its
rights or obligations under this Agreement including by sale of stock, operation
of law in connection with a merger or sale of substantially all the assets of
such Party, without the prior written consent of the other Party hereto. Any
attempted assignment in contravention hereof shall be null and void.
Notwithstanding the foregoing, Purchaser may assign this Agreement in whole or
in part to a Subsidiary, so long as Purchaser agrees to remain directly liable
to Seller for all of Purchaser's obligations hereunder.
Section 10.4. Entire Agreement. This Agreement (including all Schedules
and Exhibits hereto) and the Confidentiality Agreement contain the entire
agreement between the Parties hereto with respect to the subject matter hereof
and supersede all prior agreements and understandings, oral or written, with
respect to such matters other than any written agreement of the Parties that
expressly provides that it is not superseded by this Agreement.
Section 10.5. Fulfillment of Obligations. Any obligation of any Party to
any other Party under this Agreement, which obligation is performed, satisfied
or fulfilled by an Affiliate of such Party, shall be deemed to have been
performed, satisfied or fulfilled by such Party.
Section 10.6. Parties in Interest. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective
successors and permitted assigns. Nothing in this Agreement, express or implied,
is intended to confer upon any Person other than Seller, Purchaser, or their
successors or permitted assigns, any rights or remedies under or by reason of
this Agreement.
Section 10.7. Public Disclosure. Notwithstanding anything herein to the
contrary, each of the Parties to this Agreement hereby agrees with the other
Party hereto that, except as may be required to comply with the requirements of
any applicable Laws, and the rules and regulations of each stock exchange upon
which the securities of one of the Parties is listed, if any, no press release
or similar public announcement or communication shall, if prior to the Closing,
be made
-52-
59
or caused to be made concerning the execution or performance of this Agreement
unless the Parties shall have consulted in advance with respect thereto.
Section 10.8. Return of Information. If for any reason whatsoever the
transactions contemplated by this Agreement are not consummated, Purchaser shall
promptly return to Seller all books and records furnished by Seller, any of its
Affiliates or any of their respective agents, employees, or representatives
(including all copies, summaries and abstracts, if any, thereof) in accordance
with the terms of the Confidentiality Agreement.
Section 10.9. Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated by this Agreement are
consummated, all costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be borne by the Party incurring
such expenses. Notwithstanding the foregoing, (i) all Taxes relating to the
transfer of the Conveyed Assets shall be paid by Purchaser, except as set forth
in Section 7.15 and (ii) Seller shall be responsible for all filing, recordation
and software transfer fees and any other payments required to obtain any consent
required to convey any Environmental Permits or any Conveyed Assets, whether
incurred prior to or subsequent to the Closing. In the event that the amount of
such fees and payments is less than $3 million, Seller shall pay to Purchaser
one-half of the amount by which it is less than $3 million. Fees under the HSR
Act shall be paid by each Party in respect of its filings thereunder.
Section 10.10. Schedules. The disclosure of any matter in any Schedule to
this Agreement, as may be amended or supplemented prior to the Closing, shall be
deemed to be a disclosure for all purposes of this Agreement where disclosure is
apparent on its face, but shall expressly not be deemed to constitute an
admission by Seller or Purchaser, or to otherwise imply, that any such matter is
material for the purposes of this Agreement.
Section 10.11. Governing Law. THE AGREEMENT SHALL BE GOVERNED BY THE LAWS
OF THE COMMONWEALTH OF PENNSYLVANIA, ITS RULES OF CONFLICT OF LAWS
NOTWITHSTANDING. Seller and Purchaser hereby agree and consent to be subject,
non-exclusively, to the jurisdiction of the United States District Court for the
Eastern District of Pennsylvania and in the absence of such Federal
jurisdiction, the Parties consent to be subject, non-exclusively, to the
jurisdiction of the Court of Common Pleas of the Commonwealth of Pennsylvania,
County of Philadelphia.
Section 10.12. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same agreement.
Section 10.13. Headings. The heading references herein and the table of
contents hereto are for convenience purposes only, do not constitute a part of
this Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
Section 10.14. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may
-53-
60
be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other Persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
-54-
61
IN WITNESS WHEREOF, the Parties have executed or caused this
Agreement to be executed as of the date first written above.
INTERSIL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
INTERSIL (PENNSYLVANIA) LLC
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
XXXXXXXXX SEMICONDUCTOR
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
Chief Financial Officer
-55-
62
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
This is Amendment No. 1 by and among Intersil Corporation, a
Delaware corporation ("Intersil"), Intersil (PA) LLC, a Delaware limited
liability company ("Intersil PA" and, together with Intersil, the "Sellers") and
Xxxxxxxxx Semiconductor Corporation, a Delaware corporation ("Fairchild"), dated
as of March 16, 2001 (the "Amendment") to the Agreement.
Background
Intersil, Intersil PA and Fairchild have entered into an Asset
Purchase Agreement, dated as of January 20, 2001 (the "Agreement"), providing
for the sale to Fairchild by Sellers of certain assets relating to the Business.
Capitalized terms used but not otherwise defined herein shall have the meanings
ascribed to them in the Agreement. The parties desire to amend the Agreement as
more particularly set forth herein.
Terms
In consideration of the premises and of the mutual covenants and
agreements contained herein and intending to be legally bound, the parties
hereto hereby agree as follows:
(a) Schedule 1.1(c) to the Agreement shall be superseded and
replaced in its entirety by Schedule 1.1(c) attached hereto.
(b) Schedule 2.2(c) referred to in Section 17 below is attached
hereto as Schedule 2.2(c).
(c) Schedule 2.3(q) to the Agreement shall be superseded and
replaced in its entirety by Schedule 2.3(q) attached hereto.
(d) Schedule 2.4(a) to the Agreement shall be superseded and
replaced in its entirety by Schedule 2.4(a) attached hereto.
(e) Schedule 3.1(b)(ix) to the Agreement shall be superseded and
replaced in its entirety by Schedule 3.1(b)(ix) attached hereto.
(f) Schedule 5.5 to the Agreement shall be superseded and replaced
in its entirety by Schedule 5.5 attached hereto.
(g) Schedule 5.10 to the Agreement shall be superseded and replaced
in its entirety by Schedule 5.10 attached hereto.
(h) Schedule 5.11 to the Agreement shall be superseded and replaced
in its entirety by Schedule 5.11 attached hereto.
(i) Schedule 7.4(a)(2) to the Agreement shall be superseded and
replaced in its entirety by Schedule 7.4(a)(2) attached hereto.
63
(j) Exhibit 3.1(b)(vi) to the Agreement (the IP Agreement) shall be
superseded and replaced in its entirety by Exhibit 3.1(b)(vi) hereto.
(k) Exhibit 3.1(b)(vii) to the Agreement (the Transition Services
Agreement) shall be superseded and replaced in its entirety by Exhibit
3.1(b)(vii) hereto.
(l) Exhibit 3.1(b)(viii) to the Agreement (the Supply Agreement)
shall be superseded and replaced in its entirety by Exhibit 3.1(b)(viii) hereto.
(m) Exhibit 7.13 attached hereto shall be deemed to satisfy the
requirements of Section 7.13 of the Agreement.
(n) Seller represents and warrants to Purchaser that:
(i) Intersil Europe Sarl ("Swiss Sub") is a corporation duly
organized, validly existing and in good standing under the laws of
Switzerland. Swiss Sub is qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction in
which the nature of the property owned or leased by it in the conduct of
the Business requires it to be so qualified, except where the failure to
be so qualified and in good standing, would not be reasonably expected to
have a Material Adverse Effect.
(ii) Swiss Sub has all requisite corporate power and corporate
authority to carry on its business as it is now being conducted and to
execute and deliver the Partial Assignment and to perform its obligations
thereunder. The execution and delivery by Swiss Sub of the Partial
Assignment and the documents contemplated thereby, and the performance by
Swiss Sub of its obligations thereunder, have been duly authorized by all
requisite corporate action, including but not limited to shareholder
consent, if necessary, and no other corporate proceedings are required by
Swiss Sub in connection with the execution, delivery and performance of
the Partial Assignment and the documents contemplated thereby.
(iii) The Partial Assignment and the documents contemplated thereby
constitutes a valid and binding obligation of Swiss Sub, enforceable
against it in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally or by
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or law).
(iv) The execution, delivery and performance of the Partial
Assignment and the documents contemplated thereby by Swiss Sub and the
consummation of the transactions contemplated thereby does not and will
not (i) violate any provision of the governing documents of Swiss Sub,
(ii) subject to obtaining the consent of ChipPAC, conflict with, or result
in the breach of, or constitute a default under, or result in the
termination, cancellation or acceleration (whether after the giving of
notice or the lapse of time or both) of any right or obligation of Swiss
Sub with respect to, or to a loss of any benefit of the Business to which
Seller or Swiss Sub is entitled with respect to, the Conveyed Assets,
(iii) assuming compliance with the matters set forth in Sections 5.5 and
6.5 of the Agreement, violate or result in a breach of or constitute a
default under any Law or other
-2-
64
restriction of any court or Governmental Authority to which Swiss Sub is
subject, except, with respect to clauses (ii) and (iii), for any
violations, conflicts, defaults, terminations, cancellations or
accelerations as will not, individually or in the aggregate, be material
to the Business as a whole.
(o) Notwithstanding anything in the Agreement to the contrary, with
respect to any Material Contract designated on Schedule 5.10 of the Agreement,
as amended hereby, as not being transferred to the Purchaser (except for the
Credit Agreement among Intersil, Intersil Holding Corporation, the Lenders named
therein and Credit Suisse First Boston, dated August 13, 1999), and which
designated Material Contract has not by its terms expired prior to the Closing
Date, Sellers shall, to the extent permitted to do so and as requested by
Purchaser, purchase on behalf of Purchaser the goods and services represented by
such Material Contracts on the same terms and conditions as those available to
Intersil at the time of any such purchase until the first anniversary of the
Closing Date. Purchaser shall reimburse Sellers for any costs related to such
benefits (in accordance with the terms of the applicable Material Contract)
received by Purchaser under such Material Contracts (or shall pay such amounts
directly to the third party provider). Notwithstanding the foregoing, Sellers
represent and warrant to Purchaser that, to the extent Sellers are not permitted
to purchase on behalf of Purchaser the goods and services represented by such
Material Contracts, the failure to purchase such goods and services shall not
materially affect Purchaser's ability to run the Business.
(p) All references in the Agreement to "Intersil (Pennsylvania) LLC"
shall be changed to "Intersil (PA) LLC".
(q) Section 2.2 of the Agreement is hereby amended by adding the
following Section 2.2(c):
"(c) In the event that the Closing proceeds without Purchaser receiving
substantially similar rights to those represented by the software-related
agreements set forth on Schedule 2.2(c) hereto as are currently being received
by the Business (the "Software Agreements"), then following the Closing, Seller
shall obtain promptly such rights for Purchaser at Seller's expense, either by
the transfer with applicable licensor's consent, of seats and/or rights under
existing Seller licenses to existing Purchaser licenses, or by the purchase of a
new license on Purchaser's behalf; provided, however, that Seller shall not
compromise any rights not otherwise required by this Agreement to be compromised
for obtaining such rights under the Software Agreements. The Parties shall
cooperate with each other in all such transfers or license purchases. Until such
time as Purchaser shall receive such rights, the Parties shall cooperate with
each other in any mutually agreeable, reasonable and lawful arrangements
designed to provide to Purchaser the benefits of use of the Software Agreements
(to the extent Seller is permitted by the terms of such agreements to do so). To
the extent that Purchaser is provided the benefits pursuant to this Section
2.2(c) of any Software Agreement, Purchaser shall perform for the benefit of the
other Persons that are parties thereto the obligations of Seller thereunder and
pay, discharge and satisfy any related liabilities that relate to the rights,
other than any fees relating to the transfer or purchase of such rights as
provided hereunder."
(r) Section 3.1(b)(iii) shall be amended and replaced in its
entirety by the following Section 3.1(b)(iii):
-3-
65
"(iii) (A) a Xxxx of Sale in favor of Purchaser, (B) a Xxxx of Sale in favor of
Xxxxxxxxx Semiconductor Limited, (C) a Xxxx of Sale in favor of Xxxxxxxxx
Semiconductor Hong Kong Limited, (D) a Xxxx of Sale in favor of Xxxxxxxxx
Semiconductor SAS, (E) a Xxxx of Sale in favor of Xxxxxxxxx Semiconductor Srl,
and (F) a Xxxx of Sale in favor of Xxxxxxxxx Semiconductor GmbH, each
substantially in the form set forth in Exhibit 3.1(b)(iii) (the "Xxxx of Sale")
executed by Seller.
(s) Section 4.1 of the Agreement is hereby amended by (i) deleting
the "and" as the last word of Section 4.1(b), (ii) replacing the period (".") at
the end of Section 4.1(c) with a semicolon (";") and adding the word "and"
immediately thereafter and (iii) adding the following Section 4.1(d):
"(d) both parties shall have entered into the Sales Services
Agreement substantially in the form of Exhibit 4.1(d) hereto."
(t) The second sentence of Section 10.9 is hereby amended and
replaced in its entirety by the following sentence:
"Notwithstanding the foregoing, (i) all Taxes relating to the transfer of the
Conveyed Assets shall be paid by Purchaser, except as set forth in Section 7.15,
(ii) Seller shall be responsible for all filing, recordation and software
transfer fees and any other payments required to obtain any consent required to
convey any Environmental Permits or any Conveyed Assets and (iii) Seller shall
be responsible for all software transfer fees and any other payments required to
obtain the rights for Purchaser under the Software Agreements, in the case of
any of the foregoing, whether incurred prior to or subsequent to the Closing."
(u) (a) Section 2.4 of the Agreement is hereby amended by (i)
deleting the "and" as the last word of Section 2.4(e), (ii) replacing the period
(".") at the end of Section 2.4(f) with a semicolon (";") and (iii) adding the
following:
"(g) Pension Liabilities to Affected Employees located in Germany
arising by operation of German law (the "German Pension
Liabilities"); and
(h) Certain bonus payments to Affected Employees in Kuala Lumpur,
Malaysia (the "KL Bonuses")."
(b) Section 2.5(c) is hereby amended by adding, at the beginning, the
phrase "Except as provided in Sections 2.4(g) and 2.4(h),".
(c) The definition of Closing Date Liabilities in Section 1.1 is hereby
amended and replaced in its entirety by the following:
" "Closing Date Liabilities" shall mean (i) the amount of the
absolute value of those Assumed Liabilities as would be set forth on
a balance sheet of the Business as of the Closing Date prepared in
accordance with GAAP, other than the German Pension Liabilities and
accrued KL Bonuses, plus (ii) the amount of German Pension
Liabilities as of the Closing Date to the extent required to be
-4-
66
recorded under applicable German law, plus (iii) half the amount by
which the projected actual amount of German Pension Liabilities, as
determined in accordance with FAS 87, exceeds the amount determined
under clause (ii) above."
(v) Section 2.5 of the Agreement is hereby amended by (i) deleting
the "and" as the last word of Section 2.5(u), (ii) replacing the period (".") at
the end of Section 2.5(v) with a semicolon (";") and adding the word "and"
immediately thereafter and (iii) adding the following:
"(w) all Losses of Purchaser, whether or not incurred or relating to
periods prior to or after the Closing, relating to that certain claim of
infringement by Fortrend Engineering Corp. against Asyst Technologies, Inc.
("Asyst") with respect to certain Asyst equipment which are included as Conveyed
Assets as more fully set forth in that certain letter dated February 7, 2001
from Niro, Scavone, Xxxxxx & Niro to Xx. Xxx Xxxx, Plant Manager of the
Mountaintop Facility (the "Fortrend Claims"). For purposes of Section 18(j) of
the IP Agreement, all Losses with respect to the Fortrend Claims shall not be
deemed "Seller Expenses"."
(w) All Losses incurred by either party to the Agreement resulting
from (i) the Closing taking place and (ii) all Governmental Authority consents
in the Republic of China (Taiwan) not having been obtained prior thereto shall
be shared equally by the Intersil and Purchaser. Intersil and Purchaser agree to
indemnify and hold harmless each other to the extent that either party bears
Losses in excess of half of all the Losses related thereto
(x) Section 7.1(b) of the Agreement is hereby amended and replaced
in its entirety by the following Section 7.1(b):
"(b) From and after the Closing, Sellers and Purchaser will
provide to each other and to their respective officers, employees, counsel and
other representatives, upon request (subject to any limitations that are
reasonably required to preserve any applicable attorney-client privilege)
reasonable access to their respective officers and employees and reasonable
access for inspection and copying of all records and any other information
existing at the Closing Date and relating to the conduct of the Business, will
furnish such testimony and attend such conferences, discovery proceedings,
hearings, trials and appeals, and will make their respective officers and
employees available, to the extent such availability does not unreasonably
interfere with the conduct of the Business by Purchaser, or the conduct of its
business by Sellers, as the case may be, as is reasonably necessary to enable
the party requesting such information to: (i) comply with reporting, filing or
other requirements related to the conduct of the Business and imposed on such
party by any local, state or federal court, agency or regulatory body or taxing
authority; (ii) assert or defend any claims or allegations in any arbitration or
in any administrative or legal proceeding related to the conduct of the Business
other than claims or allegations which one party to this Agreement has asserted
against the other; (iii) comply with any of its requirements or exercise any of
its rights with respect to the Excluded Assets or the Retained Liabilities or
the Conveyed Assets or the Assumed Liabilities, as the case may be, or (iv)
subject to clause (ii) above, perform its obligations under this Agreement.
Sellers and Purchaser shall each maintain all of the foregoing information in
accordance with their normal document retention policies and if either party
desires to destroy or dispose of any of the foregoing which are material to the
other party at any time prior to the fifth anniversary of the Closing, such
party will offer first in writing
-5-
67
at least 60 days prior to such destruction or disposition to surrender them to
the other party. The party requesting the information and assistance provided in
this Section 7.1(b) shall reimburse the other party for all out-of-pocket costs
and expenses incurred by such party in providing such information and in
rendering such assistance. The access to files, books and records contemplated
by this Section 7.1(b) shall be during normal business hours and upon not less
than two Business Days prior written request 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."
(y) Except as expressly modified by this Amendment, the provisions
of the Agreement shall remain in full force and effect. Execution and delivery
of this Amendment shall not constitute or be deemed to be a waiver by either
party of any rights that such party may have under the Agreement or an agreement
by either party that any of the conditions to such party's obligations under the
Agreement have been satisfied or waived. This Amendment may be executed in any
number of counterparts with the same effect as if the signatures thereto were
upon one instrument. This Amendment shall be governed by and construed and
enforced in accordance with the internal laws (as opposed to the conflicts of
laws provisions) of the Commonwealth of Pennsylvania.
-6-
68
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered on the day and year first above written.
INTERSIL CORPORATION
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
INTERSIL (PA) LLC
By: /s/ Xxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
XXXXXXXXX SEMICONDUCTOR
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
Chief Financial Officer
-7-
