EXHIBIT 2.1
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ASSET PURCHASE AGREEMENT
AMONG
EMCORE CORPORATION,
TPS ACQUISITION CORPORATION,
TECSTAR, INC.
AND
TECSTAR POWER SYSTEMS, INC.
DATED AS OF FEBRUARY __, 2002
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TABLE OF CONTENTS
PAGE
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ARTICLE I PURCHASE OF ASSETS................................................2
1.1 Purchase and Sale of Acquired Assets......................2
1.2 Assumed Liabilities.......................................2
1.3 Method of Conveyance......................................3
1.4 Purchase Price............................................3
1.5 Escrow Agreement..........................................3
1.6 Delivery of Closing Cash..................................3
1.7 Allocation of Purchase Price..............................3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLERS....................4
2.1 Corporate Organization, Etc...............................4
2.2 Authorization, Etc........................................4
2.3 No Violation..............................................4
2.4 Financial Statements......................................5
2.5 Employees.................................................6
2.6 Absence of Certain Changes................................6
2.7 Contracts.................................................7
2.8 Government Contracts......................................8
2.9 Title and Related Matters.................................9
2.10 Litigation...............................................10
2.11 Tax Matters..............................................11
2.12 Compliance with Law and Certifications...................11
2.13 Employee Benefit Plans...................................11
2.14 Intellectual Property....................................13
2.15 Customer Warranties......................................16
2.16 Products Liability.......................................16
2.17 Environmental Matters....................................17
2.18 Capital Expenditures and Investments.....................19
2.19 Dealings with Affiliates.................................19
2.20 Insurance................................................19
2.21 Accounts Receivable......................................19
2.22 Inventories..............................................19
2.23 Brokerage................................................19
2.24 Customers and Suppliers..................................20
2.25 Permits..................................................20
2.26 Utilities................................................20
2.27 Improper and Other Payments..............................20
2.28 Compliance With Export Control Laws......................20
2.29 Disclosure...............................................20
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS...............21
3.1 Corporate Organization, Etc..............................21
3.2 Authorization, Etc.......................................21
3.3 No Violation.............................................21
3.4 Financing................................................22
ARTICLE IV COVENANTS OF THE SELLERS........................................22
4.1 Commencement of Chapter 11 Case..........................22
4.2 Operation of Business....................................22
4.3 Interim Financial Information............................23
4.4 Full Access and Disclosure...............................24
4.5 Non-Competition..........................................24
4.6 Confidentiality..........................................25
4.7 Fulfillment of Conditions Precedent......................26
4.8 Exclusivity..............................................26
4.9 No Termination of Obligations by Subsequent Dissolution..27
4.10 Deliveries After Closing.................................27
4.11 Information Technology Access............................27
4.12 Intellectual Property Protection.........................27
4.13 Electronic Data Protection...............................28
4.14 Intellectual Property....................................28
4.15 Books and Records........................................28
4.16 COBRA....................................................29
4.17 Recordation of Memorandum of Lease.......................29
4.18 Notice of Sale...........................................29
4.19 Employee Benefits Plans..................................29
ARTICLE V COVENANTS OF THE PURCHASERS......................................29
5.1 Confidentiality..........................................29
5.2 Non-Solicitation.........................................30
5.3 Charter Amendment........................................30
ARTICLE VI OTHER AGREEMENTS................................................30
6.1 Agreement to Defend......................................30
6.2 Further Assurances.......................................30
6.3 Confidentiality..........................................31
6.4 Public Announcements.....................................31
6.5 Audited Financial Statements.............................31
ARTICLE VII TAX MATTERS....................................................31
7.1 Taxes....................................................31
7.2 Payment of Taxes.........................................32
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ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS...............32
8.1 Bankruptcy Court Approval................................32
8.2 Representations and Warranties; Performance..............32
8.3 No Material Adverse Change...............................33
8.4 No Proceeding or Litigation..............................33
8.5 Condition of Assets......................................33
8.6 Secretary's Certificate..................................33
8.7 Employment Agreements....................................34
8.8 Escrow Agreement.........................................34
8.9 Xxxx of Sale.............................................34
8.10 Intellectual Property Assignment Agreement...............34
8.11 Facility Lease...........................................34
8.12 Leasehold Title Insurance................................34
8.13 Memorandum of Lease......................................34
8.14 Environmental Conditions.................................34
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF THE SELLERS....................35
9.1 Bankruptcy Court Approval................................35
9.2 Representations and Warranties; Performance..............35
9.3 Consents and Approvals...................................35
9.4 No Proceeding or Litigation..............................35
9.5 Secretary's Certificate..................................35
9.6 Escrow Agreement.........................................35
ARTICLE X CLOSING..........................................................35
10.1 Closing..................................................35
10.2 Intervening Litigation...................................36
ARTICLE XI TERMINATION AND ABANDONMENT.....................................36
11.1 Methods of Termination...................................36
11.2 Procedure Upon Termination...............................37
11.3 Effect of Termination....................................38
ARTICLE XII INDEMNIFICATION................................................39
12.1 Survival.................................................39
12.2 Limitations..............................................39
12.3 Indemnification by the Sellers...........................40
12.4 Indemnification by the Purchaser.........................41
12.5 Third-Party Claims.......................................41
12.6 Security for the Indemnification Obligation..............42
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ARTICLE XIII MISCELLANEOUS PROVISIONS......................................43
13.1 Amendment and Modification...............................43
13.2 Waiver of Compliance; Consents...........................43
13.3 Certain Definitions......................................43
13.4 Notices..................................................52
13.5 Assignment...............................................56
13.6 Governing Law, Submission to Jurisdiction................56
13.7 Counterparts.............................................56
13.8 Headings.................................................56
13.9 Entire Agreement.........................................56
13.10 Injunctive Relief........................................57
13.11 Delays or Omissions......................................57
13.12 Severability.............................................57
13.13 Expenses.................................................57
13.14 No Third Party Beneficiaries.............................58
13.15 Schedules................................................58
13.16 No Strict Construction...................................58
13.17 Construction.............................................58
13.18 WAIVER OF JURY TRIAL.....................................58
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SCHEDULES AND EXHIBITS
RESPONSIBILITY
SCHEDULE ("SELLERS" OR "PURCHASERS")
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1.1 Excluded Assets..............................................P
1.2 Assumed Liabilities..........................................P
1.4 Allocation of Purchase Price.................................P/S
2.1(a) Foreign Qualifications of Seller and Business Subsidiaries...S
2.1(b) Charter and Bylaws of Seller and Business Subsidiaries.......S
2.2 Board Resolution.............................................S
2.3 Violations, Notices and Consents.............................S
2.4(a) Financial Statements.........................................S
2.4(b) Indebtedness.................................................S
2.5 Employee Matters.............................................S
2.6 Absence of Certain Change....................................S
2.7(a) Contracts....................................................S
2.7(b) Bids and Proposals...........................................S
2.8 Government Contracts.........................................S
2.9(a) Title Matters................................................S
2.9(b) Leases.......................................................S
2.9(d) Liens and Other Encumbrances.................................S
2.9(e) Improvements.................................................S
2.10 Litigation...................................................S
2.12 Compliance with Law..........................................S
2.13 ERISA Matters List of Plans..................................S
2.14(a) Seller Registered Intellectual Property......................S
2.14(b) Licenses and Transfers.......................................S
2.14(c) Contracts and Licenses.......................................S
2.14(d) Warranties...................................................S
2.14(e) Maintenance..................................................S
2.14(f) Employee IP Agreements.......................................S
2.14(g) Software.....................................................S
2.14(h) Patent Protection............................................S
2.15 Customer Warranties..........................................S
2.16 Products Liability...........................................S
2.17(a) Environmental Matters........................................S
2.17(b) Notice of Non-Compliance.....................................S
2.17(d) Discharges...................................................S
2.17(d) Storage Tanks................................................S
2.17(e) Environmental Audits.........................................S
2.18 Capital Expenditures.........................................S
2.19 Affiliated Transactions......................................S
2.20 Insurance and Claims.........................................S
2.21 Accounts Receivable..........................................S
2.22 Inventory....................................................S
2.24 Significant Customers and Suppliers..........................S
2.25 Permits......................................................S
2.26 Utilities....................................................S
2.27 Improper and Other Payments..................................S
8.3 Material Adverse Change......................................S
8.3(b) Employees....................................................S
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EXHIBIT RESPONSIBILITY
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I TPS Subcontract................................................S
1.2 Form of Assumption Agreement...................................P
1.3(a) Form of Xxxx of Sale...........................................P
1.3(b) Form of Assignment of Lease....................................P
1.3(c) Form of Intellectual Property Assignment Agreement.............P
1.5 Form of Escrow Agreement.......................................P
4.2 DIP Budget.....................................................P
4.8 Form of Sale Motion............................................S
4.17 Form of Memorandum of Lease....................................P
5.3 Form of Trademark License Agreement............................P
8.2 Form of Officer's Certificate - Sellers........................P
8.3 Form of Officer's Certificate - No Material Adverse Change.....P
8.6 Form of Secretary's Certificate - Sellers......................P
8.7 Form of Employment Agreements..................................P
8.11 Form of Facility Lease.........................................P
9.2 Form of Officer's Certificate - Purchasers.....................P
9.5 Form of Secretary's Certificate - Purchasers...................P
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT, dated as of the ____ day of February,
2002, among EMCORE CORPORATION, a New Jersey corporation ("EMCORE"), TPS
ACQUISTION CORPORATION, a Delaware corporation and wholly owned subsidiary of
EMCORE ("ACQUISITION", and together with EMCORE shall be referred to
collectively as, the "PURCHASERS"), TECSTAR, INC., a Delaware corporation (the
"PARENT"), and TECSTAR POWER SYSTEMS, INC., a California corporation and wholly
owned subsidiary of the Parent ("TPS", and together with the Parent shall be
referred to collectively as, the "SELLERS"). Terms used herein and not otherwise
defined shall have the meanings set forth in Section 13.3 hereof.
RECITALS
A. The boards of directors of the Purchasers have determined that it is
in the best interests of the Purchasers that Acquisition (i) acquire certain of
the assets used in or constituting a part of, the business known as the Applied
Solar Division (the "BUSINESS") of the Sellers, including, among other things,
the Sellers' right, title and interest in the solar cell testing and
characterization, cover glass interconnect and solar cell assembly, and solar
panel production operations and assets used in the Business together with the
goodwill of the Business and (ii) assume only those liabilities of the Business
as specifically identified herein.
B. In connection with the acquisition of the Acquired Assets, the
Purchasers have determined to lease certain facilities at which the Sellers
operate the Business.
C. Contemporaneously with the execution of this Agreement, the Sellers
intend to file a voluntary petition for relief under Chapter 11 of Title 11 of
the United States Code (the "BANKRUPTCY CODE") in the United States Bankruptcy
Court for the District of Delaware (the "CHAPTER 11 CASE").
D. The parties hereto have agreed that the Sellers will sell and the
Purchasers will acquire the Acquired Assets free and clear of all Liens, Claims,
Orders, Indebtedness other than the Assumed Liabilities under Section 363(f) of
the Bankruptcy Code.
E. In furtherance of the foregoing, the boards of directors of the
Purchasers have approved this Agreement and the transactions contemplated herby.
F. The boards of directors of the Sellers have determined that it is in
the best interests of the Sellers and their respective shareholders, that the
Sellers sell certain of the assets used by or in connection with the Business
and the goodwill of the Business and to lease certain real property at which the
Business is operated, and in furtherance thereof, and have approved this
Agreement and the transactions contemplated hereby.
G. As an inducement to the Purchasers to enter into this Agreement, the
Boards of Directors of each of the Sellers are delivering concurrently with the
execution hereof, certified copies of board resolutions authorizing this
Agreement and the transactions contemplated hereby attached hereto as SCHEDULE
2.2.
H. As an inducement to the Purchasers to enter into this Agreement, the
Sellers will use their best efforts to cause certain employees of the Sellers to
enter into Employment Agreements containing certain confidentiality and
noncompetition provisions substantially in the form attached hereto as EXHIBIT
8.7 (the "EMPLOYMENT AGREEMENTS"), each of which shall become effective on the
Closing Date.
I. As an inducement to the Purchasers to enter this Agreement,
concurrently with the execution hereof, TPS shall enter into that certain Firm
Fixed Priced Subcontract pursuant to which TPS will provide CICing and paneling
services to EMCORE, a copy of which is attached hereto as EXHIBIT I.
J. As further inducement to the Purchasers and the Sellers to enter
into this Agreement, the Bank Group and Westar have, contemporaneously with the
execution hereof, shall enter into the Forbearance Agreements.
K. The Purchasers and the Sellers desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated by this Agreement.
NOW, THEREFORE, in consideration of the representations and warranties,
covenants and agreements, and subject to the conditions contained herein, the
Sellers, and the Purchasers hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
1.1 PURCHASE AND SALE OF ACQUIRED ASSETS. Subject to the terms and
conditions of this Agreement, the Sellers agree to sell, assign, convey and
transfer to Acquisition, and Acquisition agrees to purchase from the Sellers, at
the Closing the Acquired Assets free and clear of any Liens, Claims, Orders and
Indebtedness (other than the Assumed Liabilities, all as contemplated by Section
363 of the Bankruptcy Code), except for the assets specifically set forth on
SCHEDULE 1.1(A) hereto (collectively, the "EXCLUDED ASSETS"). The Acquired
Assets shall include those assets set forth on SCHEDULE 1.1(B) hereto, among
others.
1.2 ASSUMED LIABILITIES. At the Closing, Acquisition shall assume and
agree to pay, satisfy, perform and discharge as the same shall become due only
those specific liabilities in the amounts set forth on SCHEDULE 1.2 hereto and
those post-Closing liabilities relating to the Assigned Contracts (collectively,
the "ASSUMED LIABILITIES"), all as contemplated by Section 363(f) of the
Bankruptcy Code pursuant to an Assignment and Assumption Agreement substantially
in the form of EXHIBIT 1.2 hereto. The Purchasers will use commercially
reasonable efforts to assume the customer Contracts of the Business as modified
at the discretion of the Purchasers or enter into new Contracts with such
customers. Each of the Contracts assumed hereunder (the "ASSIGNED CONTRACTS") is
independently assumed subject to the representations, warranties, covenants and
conditions made herein as to that Contract. Except as expressly set forth in
this Section 1.2 and SCHEDULE 1.2 hereto, the Purchasers shall not assume or
otherwise be responsible at any time for any liability, obligation,
Indebtedness, Contract or commitment of the Sellers, whether absolute or
contingent, accrued or unaccrued, asserted or unasserted, or
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otherwise, including, but not limited to, (i) any liabilities, obligations,
debts or commitments of the Sellers (a) incident to, arising out of or incurred
with respect to this Agreement and the transactions contemplated hereby, (b)
which otherwise arise or are asserted or incurred by reason of events, acts or
transactions occurring, or the operation of the Business, prior to or on the
Closing Date, (c) relating to or arising under any Employee Benefit Plan, (d)
relating to any employees or former employees of the Sellers or any of their
Subsidiaries who are not employed by the Purchasers on or after the Closing or
otherwise relating to salaries, wages, bonuses, severance or retention pay or
benefits accruing, or relating to employment or termination from employment, on
or prior to the Closing, (e) relating to or arising under any Environmental Law
on or prior to the Closing Date, or (ii) Taxes related to the Business or the
Acquired Assets for all Tax periods (or portions thereof) ending on or prior to
the Closing Date (including any and all Taxes arising out of the transactions
contemplated hereby) (collectively, the "EXCLUDED LIABILITIES"). The Sellers
agree to retain each of the Excluded Liabilities as the same shall become due.
Acquisition's assumption of the Assumed Liabilities shall in no way expand the
rights or remedies of third parties against Acquisition as compared to the
rights and remedies which such parties would have had against the Sellers had
this Agreement not been consummated.
1.3 METHOD OF CONVEYANCE. The sale, transfer, conveyance and assignment
by the Sellers of the Acquired Assets to Acquisition in accordance with Section
1.1 hereof shall be effected on the Closing Date by the execution and delivery
by the Sellers to Acquisition of instruments of transfer including: (a) the xxxx
of sale in substantially the form of EXHIBIT 1.3(A) attached hereto (the "XXXX
OF SALE"), (b) an assignment of the leases used in the Business in substantially
the form of EXHIBIT 1.3(B) attached hereto (the "ASSIGNMENT OF LEASE"), (c)
transfer documents for the certificates of title for all of the vehicles used in
the Business and owned by the Sellers, and (d) assignments of patents and
trademarks for the Intellectual Property to be assigned to Acquisition in
substantially the form of EXHIBIT 1.3(C) attached hereto (the "ASSIGNMENT OF
INTELLECTUAL PROPERTY"). At the Closing, (a) all of the Acquired Assets shall,
pursuant to Bankruptcy Court order be transferred by the Sellers to Acquisition
free and clear of any and all Liens, Claims, Orders and Indebtedness (other than
the Assumed Liabilities), together with any and all consents of third parties
required to transfer such assets to Acquisition and (b) the Sellers shall enter
into the Facility Lease.
1.4 PURCHASE PRICE. In consideration for the conveyance of the Acquired
Assets and in reliance on the representations and warranties, covenants and
agreements of the Sellers and contained herein and the documents contemplated
hereby, on the Closing Date the Purchasers shall (a) assume the Assumed
Liabilities and (b) pay to the Sellers $21.0 million in cash (the "PURCHASE
PRICE"), MINUS (A) the Escrow Funds and (B) all expenses identified in the DIP
Budget as reductions in the Purchase Price, to the extent actually funded by the
proceeds of the DIP Financing (such net amount being referred to as the "CLOSING
CASH"). The Purchase Price shall be allocated in accordance with Section 1.7
hereof.
1.5 ESCROW AGREEMENT. At the Closing, the Purchasers shall wire
transfer $2.0 million (the "ESCROW FUNDS") to the Escrow Agent for deposit as
set forth in the Escrow Agreement to be governed by the terms of the Escrow
Agreement in substantially the form of EXHIBIT 1.5 hereto (the "ESCROW
AGREEMENT"). The Escrow Funds shall be available to compensate the Purchasers,
their respective officers, directors, employees, agents and Affiliates
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for any and all losses (whether or not involving a third-party Claim), as set
forth in Article XII. As provided by the Escrow Agreement, the lien of the Bank
Group is subordinated to the Purchasers' interest in the Escrow Funds.
1.6 DELIVERY OF CLOSING CASH. On the Closing Date, in accordance with
the Sale Order and subject to Bankruptcy Court approval, which approval will be
sought by the Sellers, the Purchasers shall pay the Closing Cash directly to the
Agent Bank for the Bank Group or such Agent Bank's designee.
1.7 ALLOCATION OF PURCHASE PRICE. The Sellers and the Purchasers agree
to allocate the aggregate Purchase Price to be paid for the Acquired Assets in
accordance with Section 1060 of the Code. The Sellers and the Purchasers agree
that the Purchasers shall prepare and provide to the Sellers a draft allocation
of the Purchase Price among the Acquired Assets within ninety (90) days after
the Closing Date. The Sellers shall notify the Purchasers within thirty (30)
days of receipt of such draft allocation of any objection the Sellers may have
thereto. The Sellers and the Purchasers agree to resolve any disagreement with
respect to such allocation in good faith. In addition, the Sellers and the
Purchasers hereby undertake and agree to file timely any information that may be
required to be filed pursuant to Treasury Regulations promulgated under Section
1060(b) of the Code, and shall use the allocation determined pursuant to this
Section 1.7 in connection with the preparation of Internal Revenue Service Form
8594 as such form relates to the transactions contemplated by this Agreement.
Neither the Sellers nor the Purchasers shall file any Tax Return or other
document or otherwise take any position which is inconsistent with the
allocation determined pursuant to this Section 1.7 except as may be adjusted by
subsequent agreement following an audit by the Internal Revenue Service or by
court decision.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
The Sellers jointly and severally represent and warrant to the
Purchasers as of the date hereof and as of the Closing Date:
2.1 CORPORATE ORGANIZATION, ETC. Except as set forth in SCHEDULE 2.1(A)
hereto, each of the Sellers is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation with
full corporate power and authority to carry on its respective business as it is
now being conducted and to own, operate and lease its respective properties and
assets. Except as set forth in SCHEDULE 2.1(A) hereto, each of the Sellers is
duly qualified or licensed to do business and is in corporate good standing in
every jurisdiction in which the conduct of its business or the ownership or
lease of its properties, require it to be so qualified or licensed, except where
the failure to be so qualified, licensed or in good standing would not have a
Material Adverse Effect on such Seller. Such jurisdictions are set forth in
SCHEDULE 2.1(A) hereto. True, complete and correct copies of each of the
Sellers' charter and bylaws as presently in effect are set forth in SCHEDULE
2.1(B) hereto.
2.2 AUTHORIZATION, ETC. Each of the Sellers has full power and
authority to enter into this Agreement and the agreements contemplated hereby to
which it is a party, including the Facility Lease and to consummate the
transactions contemplated hereby and thereby. The
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execution, delivery and performance of this Agreement and all other agreements
and transactions contemplated hereby have been duly authorized by the Boards of
Directors and stockholders of each of the Sellers and no other corporate
proceedings on the part of the Sellers are necessary to authorize this
Agreement, the agreements contemplated hereby and the transactions contemplated
hereby and thereby, and certified copies of such board resolutions are attached
hereto as SCHEDULE 2.2. This Agreement and all other agreements contemplated
hereby to be entered into by the Sellers each constitutes a legal, valid and
binding obligation of the Sellers enforceable against each of them in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws and equitable principles
relating to or limiting creditors' rights generally.
2.3 NO VIOLATION. Except as set forth in SCHEDULE 2.3 hereto, the
execution, delivery and performance by the Sellers of this Agreement, and all
other agreements contemplated hereby, and the fulfillment of and compliance with
the respective terms hereof and thereof by the Sellers, do not and will not upon
the consummation of the transactions contemplated hereby (a) conflict with or
result in a breach of the terms, conditions or provisions of, (b) constitute a
default or event of default under (whether with or without due notice, the
passage of time or both), (c) result in the creation of any Lien, Claim or Order
upon the Acquired Assets or Assumed Liabilities pursuant to, (d) give any third
party the right to modify, terminate or accelerate any obligation under, (e)
result in a violation of, or (f) require any authorization, consent, approval,
exemption or other action by, notice to, or filing with any third party or
Authority pursuant to, the charter or bylaws of any of the Sellers or any
applicable Regulation, Order or material Contract to which any of the Sellers,
the Acquired Assets, the Assumed Liabilities or the Business is subject. The
Sellers have each complied with all applicable Regulations and Orders in
connection with the execution, delivery and performance of this Agreement, the
agreements contemplated hereby and the transactions contemplated hereby and
thereby.
2.4 FINANCIAL STATEMENTS.
(a) Attached as SCHEDULE 2.4(A) hereto is an unaudited fiscal
year-end balance sheet of TPS as of December 31, 2001 and statements of income
and cash flow of TPS for the fiscal year then ended. Except as set forth in
SCHEDULE 2.4(A) hereto, such balance sheet and the notes thereto fairly present
the financial position of the Business at the respective dates thereof in
accordance with GAAP, and such statements of income and cash flow and the notes
thereto fairly present the results of operations for the periods referred to
therein in accordance with GAAP, subject to such deviations from GAAP as
indicated therein. All of the foregoing financial statements were prepared from
the books and records of the Sellers. The percentage of completion "units of
delivery" method of accounting for revenue, income or cost recognition purposes
is used in the Business. Except as set forth in SCHEDULE 2.4(A) hereto, the
Business has not in the past five (5) fiscal years, incurred any reorganization,
restructuring or similar costs or changed the book value of any assets,
liabilities or goodwill. All properties used in the Business operations during
the period covered by the foregoing financial statements are reflected in such
financial statements in accordance with and to the extent required by GAAP. The
foregoing balance sheets and statements of income, stockholders' equity and cash
flow and the notes thereto are herein collectively referred to as the "FINANCIAL
STATEMENTS" and December 31, 2001 is herein referred to as the "FINANCIAL
STATEMENT DATE."
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(b) Except as set forth in SCHEDULE 2.4(B) hereto, the
Business, the Acquired Assets and the Assumed Liabilities do not have any
Indebtedness, obligation or liability (whether accrued, absolute, contingent,
unliquidated or otherwise, known or unknown to the Sellers, whether due or to
become due) arising out of transactions entered into at or prior to the Closing
Date, or any state of facts existing at or prior to the Closing Date, other
than: (i) liabilities set forth in the December 31, 2001 balance sheet of the
Business, or (ii) liabilities and obligations that have arisen after December
31, 2001 in the ordinary course of business (none of which is a liability
resulting from breach of a Contract, Regulation, Order or warranty, tort,
infringement or Claim) and which do not, in the aggregate, exceed $50,000.
(c) There is no Person that has Guaranteed, or provided any
financial accommodation of, any Indebtedness, obligation or liability of the
Business or for the benefit of the Business for the periods covered by the
Financial Statements other than as set forth in the Financial Statements. The
management of the Business has disclosed to the Purchasers' accountants all
facts and circumstances known to them that are material and bear upon the
accuracy of the Financial Statements. The Business' accounting systems and
controls are sufficient to detect fraud and inaccuracies in the financial
reporting processes and reports.
2.5 EMPLOYEES. SCHEDULE 2.5 hereto sets forth a complete and accurate
list of all officers and key employees (meaning those earning more than $75,000
annually) of the Business. Except as set forth on SCHEDULE 2.5 hereto, the
Business has been conducted in material compliance with all Regulations and
Orders affecting employment and employment practices applicable to the Business,
including terms and conditions of employment and the payment of wages and hours.
The Business has no collective bargaining agreements and, since January 1, 1997,
there have been no strikes, work stoppages nor any demands for collective
bargaining by any union, labor organization or other Person. There is no dispute
or controversy with any union or other organization of the Business' employees
and no arbitration proceedings are pending or, to the best knowledge of the
Seller, threatened involving a dispute or controversy with respect to employees
affecting the Business. Except as set forth on SCHEDULE 2.5 hereto, at the
Closing the Business will not have any liability or obligation to any of its
current or former employees, officers or directors working in or for the benefit
of the Business (including unaccrued year end bonuses) other than for the
payment of salaries to be paid in the ordinary course of business. Except as set
forth on SCHEDULE 2.5, upon the consummation of the transactions contemplated
hereby and pursuant to the agreements referred to herein, there will be no
"change in control," bonus or other obligations to any employees, consultants or
other Persons performing services for the Business.
2.6 ABSENCE OF CERTAIN CHANGES. Since the Financial Statement Date, the
Business has not experienced any (a) Material Adverse Change in the business,
operations, properties, assets, condition (financial or otherwise), results,
plans, strategies or prospects except as set forth on SCHEDULE 8.3; (b) damage,
destruction or loss, whether covered by insurance or not, having a cost of
$100,000 or more; (c) increase in the compensation payable to or to become
payable to any officers or employees working in the Business or any adoption of
or increase in any bonus, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with any such officers or employees or
any Affiliate of the Sellers except as set forth on SCHEDULE 2.6; (d) entry into
any material Contract not in the ordinary course of business, including without
limitation, any capital expenditure (except for the capital expenditures set
forth in SCHEDULE
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2.18); (e) change in accounting methods or principles or any write-down, write
up or revaluation of any of the Acquired Assets or Assumed Liabilities except
depreciation accounted for in the ordinary course of business and write-downs of
inventory which reflect the lower of cost or market and which are in the
ordinary course of business and in accordance with GAAP; (f) sale, assignment,
transfer, lease, license or otherwise placement of a Lien on any of the
Business' tangible assets, except in the ordinary course of business consistent
with past practice, or canceled any debts or Claims; (g) sale, assignment,
transfer, lease, license or otherwise placement of a Lien on any of the Seller
Intellectual Property or other intangible assets, disclosure of any confidential
information to any Person (other than the Purchasers) or abandoned or permitted
to lapse any of the Seller Intellectual Property except as set forth in SCHEDULE
2.6 hereto; or (h) agreement, whether orally or in writing, to do any of the
foregoing.
2.7 CONTRACTS.
(a) Except as set forth in SCHEDULE 2.7(A) hereto, neither
Seller is a party to any written or oral: (i) pension, profit sharing, Option,
employee stock purchase, stock appreciation right, phantom stock option or other
plan providing for deferred or other compensation to employees of the Business
or any other employee benefit plan (other than as set forth in SCHEDULE 2.13
hereto), or any Contract with any labor union or labor group; (ii) Contract
relating to the mortgaging, pledging or otherwise placing a Lien on any of the
Acquired Assets; (iii) Guarantee that will be an Assumed Liability; (iv)
Contract pursuant to which the Purchasers will become the lessor of or permits
any third party to hold or operate any property, real or personal, owned or
controlled by the Business; (v) open warranty Contract with respect to its
services rendered or its products sold or leased related to the Business; (vi)
Contract or non-competition provision in any Contract prohibiting such Seller
from freely engaging in any aspect of the Business or competing anywhere in the
world; (vii) open material Contract for the purchase, acquisition or supply of
inventory and other property and assets related to the Business, whether for
resale or otherwise in excess of $25,000; (viii) Contracts related to the
Business with independent agents, brokers, dealers or distributors which provide
for annual payments in excess of $25,000; (ix) employment, consulting, sales,
commissions, advertising or marketing Contracts related to the Business; (x)
Contracts related to the Business providing for "take or pay" or similar
unconditional purchase or payment obligations; (xi) Contracts related to the
Business with Affiliates of either of the Sellers; (xii) Contract that requires
the consent of any Person, or contains any provision that would result in a
modification of any rights or obligation of any Person thereunder or which would
provide any Person any remedy (including rescission or liquidated damages), in
connection with the execution, delivery or performance of this Agreement and the
agreements contemplated hereby and the consummation of the transactions
contemplated hereby and thereby; (xiii) nondisclosure or confidentiality
Contracts related to the Business which are currently in effect; (xiv) power of
attorney or other similar Contract related to the Business or grant of agency;
or (xv) Contract related to the Business which is material to its operations and
business prospects or involves a consideration in excess of $50,000 annually,
excluding any purchase orders in the ordinary course of business, to the extent
not disclosed in (i) through (xiv) above.
(b) Except as set forth on SCHEDULE 2.7(B) hereto, each of the
Sellers has performed all obligations required to be performed by it and is not
in default in any respect under or in breach of nor in receipt of any Claim of
default or breach under any customer Contract
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related to the purchase of solar cell products to which the Sellers are subject
(including without limitation all performance bonds, warranty obligations or
otherwise); except as set forth on SCHEDULE 2.7(B) hereto, no event has occurred
which with the passage of time or the giving of notice or both would result in a
default, breach or event of non-compliance under any customer Contract related
to the Business to which the Sellers are subject (including without limitation
all performance bonds, warranty obligations or otherwise); except as set forth
on SCHEDULE 2.7(B) hereto, the Sellers do not have any present expectation or
intention of not fully performing all such obligations; and, except as set forth
on SCHEDULE 2.7(B) hereto, the Sellers do not have any knowledge of any breach
or anticipated breach by the other Persons to any such customer Contract.
(c) The Sellers have delivered to the Purchasers true and
complete copies of all the Contracts and documents listed in the schedules to
this Agreement.
2.8 GOVERNMENT CONTRACTS. Except as set forth on SCHEDULE 2.8 hereto:
(a) The Business is not subject to any Regulation or Contract
that would result in the termination of any Government Contract or that would
impose any limitation on the Business' ability to perform a Government Contract
or to continue the Business as presently conducted.
(b) No payment has been made by the Business or by any Person
authorized to act on its behalf, to any Person in connection with any Government
Contract related to the Business, in violation of applicable United States or
foreign procurement Regulations, including without limitation any criminal or
civil Regulations relating to bribes or gratuities, or in violation of the
Foreign Corrupt Practices Act.
(c) With respect to each Government Contract related to the
Business: (i) all representations and certifications executed, acknowledged or
set forth in or pertaining to such Government Contract were complete and correct
as of their effective date, and the Business has been operating in material
compliance with all such representations and certifications; (ii) neither the
United States government nor any prime contractor, subcontractor or other Person
has notified the Seller, either orally or in writing, that the Business has been
operated to breach or violate any Regulation, or any certificate,
representation, clause, provision or requirement pertaining to such Government
Contract; and (iii) no termination for convenience or termination for default
has occurred within the last five (5) years and no cure notice or show cause
notice is currently in effect pertaining to such Government Contract.
(d) (i) Neither the Sellers nor any of their respective
directors, officers, employees or stockholders is (or during the last five (5)
years has been) under administrative, civil or criminal investigation or
indictment by any Governmental Entity with respect to any alleged irregularity,
misstatement or omission arising under or relating to any Government Contract
related to the Business; and (ii) during the last five (5) years, none of the
Sellers has conducted or initiated any internal investigation or made a
voluntary disclosure to the United States government related to the same.
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(e) There exist (i) no outstanding Claims against the Sellers,
either by the United States government or by any prime contractor,
subcontractor, vendor or other third party, arising under or relating to any
Government Contract related to the Business; and (ii) no disputes between the
Sellers, and the United States government under the Contract Disputes Act or any
other federal Regulation or between the Sellers and any prime contractor,
subcontractor or vendor arising under or relating to any Government Contract
related to the Business.
(f) Neither the Sellers, nor any of their respective
directors, officers, employees or stockholders is (or during the last five (5)
years has been) suspended or debarred from doing business with the United States
government or other Authority or is (or during such period was) the subject to a
finding of nonresponsibility or ineligibility for United States government
contracting.
(g) SCHEDULE 2.8 hereto sets forth all facility and personnel
security clearances held by the Sellers relating to the Business and all
personnel security clearances held by any officer, director, employee,
consultant or agent thereof relating to the Business. Such security clearances,
if transferred to the Purchaser, are sufficient to allow the Purchasers to
conduct the Business as conducted by the Sellers as of the date of this
agreement. The Sellers have no knowledge of any proposed or threatened
termination of any security clearances.
2.9 TITLE AND RELATED MATTERS.
(a) Except as set forth in SCHEDULE 2.9(A) hereto, each of the
Sellers has good, valid and marketable title to all personal, tangible and
intangible, property and other assets used in the Business or otherwise
reflected in the Financial Statements or acquired after the Financial Statement
Date to the extent constituting Acquired Assets, free and clear of all Liens,
Claims and Orders, except Permitted Liens. All of the Acquired Assets that are
tangible property are in good condition and repair, ordinary wear and tear
excepted and are free from defects and damages. At the Closing, the Sellers
shall convey to Acquisition, pursuant to Bankruptcy Court order acceptable to
the Purchasers, good and marketable title to the Acquired Assets, free and clear
of all Liens and Claims, which Acquired Assets constitute all of the tangible
and intangible assets (other than Contracts not being assumed by the Purchasers)
used in connection with the Business. All properties used in the Business as of
the Financial Statement Date are reflected in the Financial Statements in
accordance with and to the extent required by GAAP, except as to those assets
that are leased. SCHEDULE 2.9(B) hereto sets forth a complete and accurate
summary of all leased assets related to the Business that have annual rental
payments in excess of $50,000 (the "MATERIAL LEASES").
(b) All of the Material Leases are in full force and effect,
and valid and enforceable in accordance with their respective terms. Except
defaults that would result from the Chapter 11 Case, there exists no event of
default or event which constitutes or would constitute (with notice or lapse of
time or both) a default by any of the Sellers or any other Person under any such
Material Lease. All rent and other amounts due and payable with respect to the
leases related to the Business have been paid through the date of this Agreement
and all rent and other amounts due and payable with respect to the leases that
are due and payable on or prior to the Closing Date will have been paid prior to
the Closing Date except as set forth in SCHEDULE 2.9(B) hereto.
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(c) None of the Acquired Assets is or will be on the Closing
Date subject to any (i) Contracts of sale or lease, except Contracts for the
sale of inventory in the ordinary and regular course of business or (ii) Liens.
(d) Except as set forth in SCHEDULE 2.9(D) hereto, the
buildings, structures and improvements included within the real property
(collectively, the "IMPROVEMENTS") comply with all applicable Regulations,
including building and zoning ordinances, and no alteration, repair, improvement
or other work that could give rise to a Lien has been performed in respect to
such Improvements within the last 120 days. Except as set forth in SCHEDULE
2.9(D) hereto, the Improvements and the mechanical systems situated therein,
including without limitation the heating, electrical, air conditioning and
plumbing systems, are in good operating condition and repair, ordinary wear and
tear excepted, and are adequate and suitable for the purposes for which they are
presently being used, and the roof of each Improvement is in satisfactory
condition and is not in need of current repair or replacement. The real property
and its continued use, occupancy and operation as currently used, occupied and
operated in connection with the Business does not constitute a nonconforming use
under any Regulation or Order affecting the real property (other than possible
set-back violations, none of which will have a Material Adverse Effect on such
real property or its continued use, occupancy and operation as currently used,
occupied and operated), and the continued existence, use, occupancy and
operation of each Improvement, and the right and ability to repair and/or
rebuild such Improvements in the event of casualty, is not dependent on any
special Permit, exception, approval or variance. There is no pending, threatened
or proposed proceeding or governmental action to modify the zoning
classification of, or to take by the power of eminent domain (or to purchase in
lieu thereof), or to classify as a landmark, or to impose special assessments
on, or otherwise to take or restrict in any way the right to use, develop or
alter, all or any part of the real property used in connection with the Business
which would have a Material Adverse Effect. There are no encroachments upon any
of the real property used in connection with the Business, and no portion of any
Improvement, encroaches upon any property not included within the real property
used in connection with the Business or upon the area of any easement affecting
such real property. Each Improvement has direct access, adequate for the
operation of the Business in the ordinary course, to a public street adjoining
the real property used in connection with the Business on which such Improvement
is situated, and no existing way of access to any Improvement crosses or
encroaches upon any property or property interest not used in connection with
the Business.
(e) There has not been since the Financial Statement Date, any
sale, lease, or any other disposition or distribution of any of the Acquired
Assets, except for sales of inventory in the ordinary course of business, now or
hereafter owned by the Sellers, except as otherwise consented to by the
Purchaser.
2.10 LITIGATION. SCHEDULE 2.10 hereto sets forth a complete and
accurate list of all Claims and Orders involving the Business for which final
and non-appealable resolutions of such matters have not been reached and/or
which matters have not been fully and completely satisfied. Except as set forth
in SCHEDULE 2.10 hereto, to the knowledge of the Sellers, there is no Claim or
Order threatened against the Business nor is there any reasonable basis
therefor. Except as set forth on SCHEDULE 2.10 hereto, the Sellers are fully
insured with respect to each of the matters set forth on SCHEDULE 2.10 and none
of the Sellers has received any opinion or a memorandum or
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advice from legal counsel to the effect that it is exposed, from a legal
standpoint, to any liability or obligations which could have an adverse effect
in excess of $25,000.
2.11 TAX MATTERS.
(a) TAX RETURNS. Except as set forth on SCHEDULE 2.11(A), the
Sellers have timely filed or caused to be timely filed with the appropriate
taxing authorities all tax returns, statements, forms and reports (including
elections, declarations, disclosures, schedules, estimates and information Tax
returns) for Taxes ("TAX RETURNS") that are required to be filed by, or with
respect to the Business or the Acquired Assets, on or prior to the Closing Date.
Except as set forth on SCHEDULE 2.11 hereto, the Tax Returns have accurately
reflected all liability for Taxes of the Business and the Acquired Assets for
the periods covered thereby. Except as set forth on SCHEDULE 2.11 hereto, all
Taxes and Tax liabilities due by or with respect to the Business and the
Acquired Assets for all taxable years or other taxable periods that end on or
before the Closing Date and, with respect to any taxable year or other taxable
period beginning on or before and ending after the Closing Date, the portion of
such taxable year or period ending on and including the Closing Date
("PRE-CLOSING PERIOD") have been timely paid or will be timely paid in full on
or prior to the Closing Date, accrued and adequately disclosed and fully
provided for on the Financial Statements, or with respect to taxable years or
periods (or portions thereof) beginning on or after January 1, 2001, accrued on
the books and records of the Sellers, in accordance with GAAP.
(b) OTHER TAX MATTERS
(i) Except as set forth on SCHEDULE 2.11 hereto, none
of the Sellers (with respect to the operation of the Business
or the Acquired Assets): (i) has been the subject of an audit
or other examination of Taxes by the tax authorities of any
nation, state or locality; (ii) has received any notices of
such an audit or examination of Taxes; or (iii) has received
any notices from any taxing authority relating to any issue
which could affect the Tax liability of the Sellers, with
respect to the operation of the Business or the Acquired
Assets.
(ii) None of the Sellers, (with respect to the
operation of the Business or the Acquired Assets), as of the
Closing Date, (A) has entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending
any statute of limitations relating to the payment or
collection of Taxes, or (B) is presently contesting the Tax
liability of any of the Sellers, before any court, tribunal or
agency.
(iii) Except as set forth on SCHEDULE 2.11 hereto,
all Taxes which the Sellers (with respect to the operation of
the Business or the Acquired Assets) are (or were) required by
law to withhold or collect in connection with amounts paid or
owing to any employee, independent contractor, creditor,
stockholder or other third party have been duly withheld or
collected, and have been timely paid over to the proper
authorities to the extent due and payable.
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(iv) No claim has ever been made by any taxing
authority in a jurisdiction where any of the Sellers do not
file Tax Returns that the Sellers (with respect to the
operation of the Business or the Acquired Assets) is or may be
subject to taxation by that jurisdiction.
2.12 COMPLIANCE WITH LAW AND CERTIFICATIONS.
(a) Except as set forth on SCHEDULE 2.12 hereto, the Business
has been operated in material compliance with all applicable Regulations and
Orders, including, without limitation, all Regulations relating to the safe
conduct of business, environmental protection, quality and labeling, antitrust,
consumer protection, equal opportunity, discrimination, health, sanitation,
fire, zoning, building and occupational safety. Except as set forth on SCHEDULE
2.12 hereto, there are no Claims pending, or threatened, nor have any of the
Sellers received any written notice, regarding any violations of any Regulations
or Orders enforced by any Authority.
(b) Except as set forth on SCHEDULE 2.12 hereto, the Sellers
hold all material registrations, accreditations and other certifications
required for the conduct of the Business by any Authority or trade group and the
Business has been operated in material compliance with the terms and conditions
of all such registrations, accreditations and certifications. Except as set
forth on SCHEDULE 2.12 hereto, none of the Sellers has received any notice
alleging that it has failed to hold any such registration, accreditation or
other certification.
2.13 EMPLOYEE BENEFIT PLANS. SCHEDULE 2.13 hereto sets forth a complete
and accurate list of each domestic and foreign employee benefit plan (as defined
in Section 3(3) of ERISA) or material fringe benefit plan maintained or
contributed to or required to be contributed to by the Sellers with respect to
any present or former employee of the Sellers ("EMPLOYEE BENEFIT PLANS"). Except
as set forth on SCHEDULE 2.13 hereto, each Employee Benefit Plan (including any
related trust) complies in form with the requirements of all applicable
Regulations including, without limitation, ERISA and the Code, and has at all
times been maintained and operated in substantial compliance with its terms and
the requirements of all applicable Regulations, including, without limitation,
ERISA and the Code. Except as set forth on SCHEDULE 2.13 hereto, none of the
Sellers or any ERISA Affiliate has ever maintained or contributed to, or had any
obligation to contribute to (or borne any liability with respect to) any
"employee pension benefit plan," within the meaning of Section 3(2) of ERISA,
that is a "multiemployer plan," within the meaning of Section 3(37) of ERISA, or
subject to Section 412 of the Code, or Section 302 or Title IV of ERISA. Each
Employee Benefit Plan intended to be qualified under Section 401(a) of the Code,
has, as currently in effect, been determined to be so qualified by the Internal
Revenue Service (or, if such determination has not been made, has been
submitted, or is within the remedial amendment period for submitting an
application for a determination letter with the Internal Revenue Service and is
awaiting receipt of a response), and since the date of each such determination
(if applicable), no event has occurred and no condition or circumstance has
existed that resulted or is likely to result in the revocation of any such
determination (or the refusal of the Internal Revenue Service to issue a
favorable determination). No termination of any employee pension benefit plan
subject to Title IV of ERISA maintained or contributed to or required to be
contributed to by any Seller or any subsidiary thereof, or any employer (whether
or not incorporated) that would be treated together with any Seller or any such
subsidiary as a single employer within the meaning of Section 414 of the Code,
has occurred or is expected to occur.
-12-
Except as set forth on SCHEDULE 2.13 hereto, none of the Sellers has incurred,
and no event has occurred and no condition or circumstance exists that could
result, directly or indirectly, in, any unsatisfied liability (including,
without limitation, any indirect, contingent or secondary liability) of the
Sellers under Title IV of ERISA or Section 412 of the Code or Section 302 of
ERISA arising in connection with any employee pension benefit plan covered or
previously covered by Title IV of ERISA or such sections of the Code or ERISA.
Except as set forth on SCHEDULE 2.13 hereto, no asset or property of the Sellers
is or may be subject to any lien arising under Section 412(n) of the Code or
Section 302(f) or Section 4068 of ERISA. None of the Sellers has been, and does
not expect to be, required to provide any security under Section 307 of ERISA or
Section 401(a)(29) or 412(f) of the Code. The Sellers have complied in all
material respects with the applicable requirements of Part 6 of Subtitle B of
Title I of ERISA and Section 4980B of the Code ("COBRA"). Except as set forth on
SCHEDULE 2.13 hereto, full payment has been made of all amounts which the
Sellers are required under applicable Regulations or under any Employee Benefit
Plan or any agreement relating to any Employee Benefit Plan to have paid as
contributions or premiums thereunder as of the last day of the most recent
fiscal year of such Employee Benefit Plan ended prior to the date hereof. Except
as set forth in Schedule 2.13 hereto, no Claims or disputes are pending or
asserted, or, to the best knowledge of the Sellers, threatened, anticipated or
expected to be asserted with respect to any Employee Benefit Plan or the assets
of any such plan (other than routine claims for benefits arising in the ordinary
course). Except as set forth on SCHEDULE 2.13 hereto, the execution of this
Agreement and the consummation of the transactions contemplated hereby, do not
constitute a triggering event under any Employee Benefit Plan, policy,
arrangement, statement, commitment or agreement which (either alone or upon the
occurrence of any additional or subsequent event) will or may result in any
payment (whether of severance pay or otherwise), "parachute payment" (as such
term is defined in Section 280G of the Code), acceleration, vesting or increase
in benefits to any present or former employee or director of the Sellers. Except
as set forth on SCHEDULE 2.13 hereto, none of the Sellers has any obligation
under any Employee Benefit Plan or otherwise to provide post-employment or
retiree welfare benefits to any former employee or any other person, except as
specifically required by COBRA.
2.14 INTELLECTUAL PROPERTY.
(a) SCHEDULE 2.14(A) hereto sets forth a complete and accurate
list of all Seller Registered Intellectual Property (including all unregistered
trademarks, service marks and trade names that the Sellers have used within the
five (5) year period prior to the date hereof with the intent of creating or
benefiting from any common law rights relating to such marks) and lists any
proceedings or actions pending as of the date hereof before any court or
tribunal (including the U.S. Patent and Trademark Office or equivalent authority
anywhere in the world) or threatened, related to any of the Seller Intellectual
Property.
(b) Except as set forth on SCHEDULE 2.14(B) hereto, the
Sellers have all requisite right, title and interest in or valid and enforceable
rights under the Seller Intellectual Property and/or Contracts or Licenses to
use all Intellectual Property used or proposed to be used in connection with the
Business. Except as set forth in SCHEDULE 2.14(B) hereto, each item of Seller
Intellectual Property of the Sellers, including all Seller Registered
Intellectual Property listed in SCHEDULE 2.14(A) hereto, is owned exclusively by
the Sellers (excluding Intellectual Property licensed to the Sellers under any
License) and is free and clear of any Liens, Claims and
-13-
Orders. Except as set forth on SCHEDULE 2.14(B) hereto, the Sellers (i) own
exclusively all trademarks, service marks and trade names listed on SCHEDULE
2.14(A); PROVIDED, HOWEVER, that the Sellers may use trademarks, service marks
and trade names of third parties which are licensed to the Sellers and (ii) own
exclusively, and have good title to, each copyrighted work that is or comprises
part of a Seller product and each other work of authorship that the Sellers
otherwise purport to own.
(c) To the extent that any Seller Intellectual Property has
been developed or created by any Person other than the Sellers, the Sellers have
a written Contract with such Person with respect thereto (i) under which it
obtained exclusive ownership of such Intellectual Property by valid assignment,
to the extent such Intellectual Property is not exclusively owned by the Sellers
by operation of law or (ii) under which the Sellers have obtained a License
under or to such Intellectual Property.
(d) The Sellers have taken all necessary and appropriate steps
to protect and preserve ownership of the Seller Intellectual Property (excluding
Intellectual Property licensed to the Sellers under any License). The Sellers
have secured valid non-disclosure agreements and written assignments (to the
extent not owned exclusively by the Sellers by operation of law) from all
consultants and employees who contributed to the creation or development of the
Seller Intellectual Property (excluding Intellectual Property licensed to the
Sellers under any License). In the event that the consultant is concurrently
employed by the Sellers and a third party, the Sellers have taken appropriate
steps to ensure that any Seller Intellectual Property developed by such a
consultant does not belong to the third party or conflict with the third party's
employment agreement (such steps include ensuring that all research and
development work performed by such a consultant are performed only on the
facilities of the Sellers and only using the resources of the Sellers). The
Sellers have taken all commercially reasonable steps to protect the confidential
information and trade secrets used in the Business or provided by any other
Person to the Sellers subject to a duty of confidentiality. Without limiting the
generality of the foregoing, there is an enforced policy requiring each
employee, consultant and independent contractor providing services to the
Business to execute proprietary information, confidentiality and invention and
copyright assignment Contracts substantially in the form set forth in SCHEDULE
2.14(d), all current employees and current and former consultants and
independent contractors working for the benefit of the Business have executed
such a Contract, all former employees have signed such a Contract, a similar
Contract or are otherwise similarly bound, and copies of all such Contracts have
been provided to the Purchasers or made available to the Purchasers for review.
(e) Except pursuant to Contracts described on SCHEDULE 2.14(E)
hereto, the Sellers have not transferred ownership of or granted any License of
or other right to use or authorized the retention of any rights to use any
Intellectual Property that is or was Seller Intellectual Property to any other
Person.
(f) The Seller Intellectual Property constitutes all the
Intellectual Property used in and/or to be used in the conduct of the Business
as currently conducted by the Sellers or as reasonably contemplated to be
conducted, including the design, development, distribution, marketing,
manufacture, use, import, license, and sale of the products, technology and
services of the Business (including products, technology or services currently
under development).
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(g) SCHEDULE 2.14(G) hereto sets forth a complete and accurate
list of all Contracts and Licenses (including all inbound Licenses) to which the
Sellers are a party with respect to any Seller Intellectual Property. Except as
set forth on SCHEDULE 2.14(G), all such license fees, royalties and/or recurring
payments that are due and payable have been paid through the date hereof. Except
as set forth on SCHEDULE 2.14(G), no Person other than the Sellers have
ownership rights to improvements made by the Sellers in Seller Intellectual
Property which has been licensed to the Sellers.
(h) SCHEDULE 2.14(H) hereto sets forth a complete and accurate
list of all Contracts and Licenses between any of the Sellers and any other
Person, which are part of the Acquired Assets or the Assumed Liabilities, and
wherein or whereby the Sellers have agreed to, or assumed, any obligation or
duty to warrant, indemnify, reimburse, hold harmless, guaranty or otherwise
assume or incur any obligation or Liability or provide a right of rescission
with respect to the infringement or misappropriation by the Sellers or such
other Person of the Intellectual Property of any Person other than the Sellers.
(i) The Business as currently conducted or as presently
proposed by the Sellers to be conducted, including the design, development, use,
import, manufacture and sale of the products, technology or services (including
products, technology or services currently under development) does not (i)
infringe or misappropriate the Intellectual Property of any Person, except as
set forth in Schedule 2.14(i), (ii) violate any term or provision of any License
or Contract concerning such Intellectual Property (including any provision
required by or imposed pursuant to 35 U.S.C. ss.ss.200-212 in any License or
Contract to which any of the Sellers is a party requiring that products be
manufactured substantially in the United States), (iii) violate the rights of
any Person (including rights to privacy or publicity), or (iv) constitute unfair
competition or an unfair trade practice under any Regulation, and none of the
Sellers has received (except as set forth on SCHEDULE 2.14(I) hereto) notice
from any Person claiming that such operation or any act, product, technology or
service (including products, technology or services currently under development)
of any of the Sellers infringes or misappropriates the Intellectual Property of
any Person or constitutes unfair competition or trade practices under any
Regulation, including notice of third-party patent or other Intellectual
Property rights from a potential licensor of such rights.
(j) Each item of Seller Registered Intellectual Property which
has been registered or issued is valid and subsisting, and all necessary
registration, maintenance, renewal fees, annuity fees and Taxes in connection
with such Registered Intellectual Property have been duly paid and all necessary
documents and certificates in connection with such Registered Intellectual
Property have been filed with the relevant patent, copyright, trademark or other
Authorities in the United States or foreign jurisdictions, as the case may be,
for the purposes of maintaining such Registered Intellectual Property. SCHEDULE
2.14(J) hereto sets forth a complete and accurate list of all actions that must
be taken by any of the Sellers within one hundred eighty (180) days from the
date hereof, including the payment of any registration, maintenance, renewal
fees, annuity fees and Taxes or the filing of any documents, applications or
certificates (including, without limitation, declarations, oaths and assignments
of inventorship) for the purposes of maintaining, perfecting or preserving or
renewing any Seller Registered Intellectual Property. In each case in which any
of the Sellers has acquired ownership of any Intellectual Property rights
relating to the Business from any Person, the Sellers have obtained a valid and
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enforceable assignment sufficient to irrevocably transfer all rights in such
Intellectual Property (including the right to seek past and future damages with
respect to such Intellectual Property) to the Sellers and, to the maximum extent
provided for by and required to protect a Seller's ownership rights in and to
such Intellectual Property in accordance with applicable Regulations, the
Sellers have recorded each such assignment of Registered Intellectual Property
with the relevant governmental or regulatory Authority, including the U.S.
Patent and Trademark Office, the U.S. Copyright Office, or their respective
equivalents in any relevant foreign jurisdiction, as the case may be.
(k) Except as set forth on SCHEDULE 2.14(K) hereto, there are
no Contracts or Licenses between any of the Sellers on the one hand, and any
other Person with respect to Seller Intellectual Property under which there is
any dispute (or, to the Sellers' knowledge, facts that may reasonably lead to a
dispute) regarding the scope of such Contract or License, or performance under
such Contract or License, including with respect to any payments to be made or
received by any of the Sellers.
(l) Except as set forth on SCHEDULE 2.14(L) hereto, to the
knowledge of the Seller, no Person is infringing or misappropriating any Seller
Intellectual Property.
(m) Except as set forth on SCHEDULE 2.14(M) hereto, no Seller
Intellectual Property or product, technology or service of the Sellers is
subject to any Order or Claim or march in rights that restricts, or that is
reasonably expected to restrict in any manner, the use, transfer or licensing of
any Seller Intellectual Property by the Sellers or that may affect the validity,
use or enforceability of such Seller Intellectual Property.
(n) Except as set forth on SCHEDULE 2.14(N) hereto, neither
this Agreement nor any transactions to be accomplished pursuant to this
Agreement (i) will result in either EMCORE's or Acquisition's granting any
rights or Licenses with respect to the Intellectual Property of the Purchasers
(including, without limitation, the Seller Intellectual Property purchased or
licensed by Acquisition) to any Person pursuant to any Contract to which any of
the Sellers are a party or by which any of their respective assets and
properties are bound, or (ii) cause a default or breach by any of the Sellers of
any Contract or License.
(o) SCHEDULE 2.14(O) sets forth a complete and accurate list
of (i) all software which the Sellers have licensed from any third party which
is used by the Sellers in the Business (other than standard off-the-shelf
software) and (ii) a complete and accurate list of all "freeware" and
"shareware" incorporated into any product related to the Business now or
heretofore shipped under a Contract or License by the Sellers. The Sellers have
all rights necessary to the use of such software, "freeware" and "shareware".
(p) The products related to the Business comply with all
applicable standards and with the feature specifications and performance
standards set forth in the applicable product data sheets and specifications
made part of any Contract for the sale of products. There are no outstanding
Claims (or facts that may reasonably lead to a Claim) for breach of warranties
by any of the Sellers in connection with the foregoing. All product performance
comparisons related to the Business heretofore furnished by the Sellers to
customers or the Purchasers are accurate as of the dates so furnished (except
that, in the case of product performance comparisons made as of a specified
earlier date, such comparisons shall be accurate as of such specified earlier
date, and, in the case of product performance
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comparisons superseded by a subsequent product performance comparison furnished
to the customer before the customer's acquisition of a License on the product
covered by the superseded comparison, the superseding comparison shall be
accurate and the superseded comparison shall be disregarded).
(q) Except as set forth in SCHEDULE 2.14(Q) hereto, none of
the Seller Registered Intellectual Property or Seller Intellectual Property
intended to be Seller Registered Intellectual Property is subject to any
statutory bar arising out of any acts or omissions of any of the Sellers or
their respective employees, agents or representatives that would prevent the
grant by the U.S. Patent and Trademark Office of the patent protection sought.
2.15 CUSTOMER WARRANTIES. SCHEDULE 2.15 hereto sets forth a complete
and accurate list of all existing, and to the best knowledge of the Sellers,
potential, Claims under or pursuant to any warranty, whether expressed or
implied, on products or services related to the Business sold prior to the
Closing Date. Such schedule shall identify the nature of the warranty Claim, the
status of the Claim and the approximate dollar value of the Claim. All of the
services rendered by the Business (whether directly or indirectly through
independent contractors) have been performed in conformity with all expressed
warranties and with all applicable contractual commitments, and, except as set
forth on SCHEDULE 2.15, none of the Sellers has nor shall have any material
liability for replacement or repair or for other damages relating to or arising
from any such services. There is no reason to expect an increase in warranty
Claims in the future.
2.16 PRODUCTS LIABILITY. Except as set forth in SCHEDULE 2.16 hereto,
(a) there has been no Claim by or before any Authority against or involving any
of the Sellers or concerning any product manufactured, shipped, sold or
delivered in connection with the Business relating to or resulting from an
alleged defect in design, manufacture, materials or workmanship of any product
manufactured, shipped, sold or delivered in connection with the Business or any
alleged failure to warn, or any alleged breach of implied warranties or
representations, and, to the best knowledge of the Sellers, none has been
threatened nor is there any valid basis for any such Claim; (b) to the best
knowledge of the Sellers, there has not been any Occurrence; (c) there has not
been any Recall conducted with respect to any product manufactured (or to be
manufactured), shipped, sold or delivered by or on behalf of the Business, or
any investigation or consideration of or decision made by any Person or
Authority concerning whether to undertake or not undertake, any Recall; and (d)
to the best knowledge of the Sellers, there have been no material defects in
design, manufacturing, materials or workmanship including, without limitation,
any failure to warn, or any breach of express or implied warranties or
representations, which involve any product manufactured, shipped, sold or
delivered by or on behalf of the Business. All manufacturing standards applied,
testing procedures used, and product specifications disclosed to customers of
the Business have complied with all requirements established by any applicable
Regulation or Order of any Authority.
2.17 ENVIRONMENTAL MATTERS.
(a) Except as set forth in SCHEDULE 2.17(A) hereto, the
Sellers are and have at all times been in full compliance with all Environmental
Laws governing its current and former business(es), operations, properties,
facilities and assets in the City of Industry, California,
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including, without limitation: (i) all requirements relating to the Discharge
and Handling of Hazardous Substances; (ii) all requirements relating to
obtaining and maintaining Environmental Permits for the ownership of its
properties, facilities and assets, and the operation of the Business (or any
part thereof), including payment of all fees, taxes, assessments or charges
issued by any Government Entity as a condition or requirement of the
Environmental Permits; (iii) all requirements relating to notice, record keeping
and reporting, which includes generating, maintaining, and timely filing all
required data, documentation, records, and reports under any Environmental Law
or Environmental Permit with respect to all owned or leased real properties and
facilities of the Sellers; and (iv) all applicable Regulations, Orders, writs,
judgments, settlement agreements, injunctions, governmental communications,
decrees, informational requests, or demands issued (written or oral) pursuant
to, or arising under, Environmental Laws.
(b) Except as set forth in SCHEDULE 2.17(B) hereto, there has
not been and there is no basis for any, non-compliance orders, warning letters,
notices of violation, Claims, suits, injunctions, actions, judgments, penalties,
fines, Liens, citations, directives, summons, or administrative or judicial
investigations of any nature or proceedings pending or threatened against or
involving the Sellers, their business, operations, properties, facilities or
assets in the City of Industry, California, issued (written or oral) by any
Government Entity or third party with respect to any Environmental Laws or
Environmental Permits issued to the Sellers in connection with, related to or
arising out of the ownership by the Sellers of their properties, facilities, or
assets or the operation of its business(es) in the City of Industry, California,
which have not been resolved to the satisfaction of the issuing Government
Entity or third party in a manner that: (i) would not impose any obligation,
burden or continuing liability on the Purchaser in the event that the
transactions contemplated by this Agreement are consummated; and (ii) would not
cause any properties, facilities or assets of the Sellers in the City of
Industry, California to be subject to any restrictions on its ownership,
occupancy, use or transferability under any Environmental Law in the event that
the transactions contemplated by this Agreement are consummated.
(c) Except as set forth in SCHEDULE 2.17(C) hereto, the
Sellers have not Handled or Discharged, nor have the Sellers allowed or arranged
for any third party to Handle or Discharge, Hazardous Substances to, at or upon:
(i) any location other than a site lawfully permitted to receive such Hazardous
Substances at the time of such arrangement for disposal or discharge; (ii) any
parcel of real property now or previously owned or leased by the Sellers in the
City of Industry, California, except in compliance with applicable Environmental
Laws; or (iii) any site which, pursuant to CERCLA, RCRA or any similar state
Regulation (x) has been placed on the National Priorities List, the CERCLIS, the
RCRIS or any state list of sites of environmental concern; or (y) the
Environmental Protection Agency or any relevant state agency has proposed or is
proposing to place on the National Priorities List, the CERCLIS, the RCRIS or
any state list of sites of environmental concern. Except as set forth on
SCHEDULE 2.17(C) hereto, there has not occurred, nor is there presently
occurring, a Discharge, or threatened Discharge, of any Hazardous Substance on,
into or beneath the surface of, or from, any real property owned or leased by
the Sellers in the City of Industry, California, or to the knowledge of the
Sellers, on, into or beneath any real property adjacent thereto.
(d) Except as set forth in SCHEDULE 2.17(D) hereto, (i) the
Sellers do not use, nor have the Sellers used, any Aboveground Storage Tanks or
Underground Storage Tanks; (ii)
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there are not now nor have there ever been any Underground Storage Tanks on any
real property owned or leased by the Sellers in the City of Industry,
California; (iii) there has been no Discharge from or rupture of any such
Aboveground Storage Tanks or Underground Storage Tanks listed on SCHEDULE
2.17(D) hereto; (iv) there are no asbestos containing materials constructed,
placed, deposited, stored, disposed of or located on any real property owned or
leased by the Sellers in the City of Industry, California; (v) there are no
polychlorinated biphenyls (PCBs) or transformers, capacitors, ballasts, or other
equipment that contains dielectric fluid containing PCBs constructed, placed,
deposited, stored, disposed of or located on any real property owned or leased
by the Sellers in the City of Industry, California; (vi) there are no insulating
materials which contain urea formaldehyde constructed, placed, deposited,
stored, disposed of or located on any real property owned or leased by the
Sellers in the City of Industry, California.
(e) SCHEDULE 2.17(E) hereto identifies (i) all environmental
audits, assessments or occupational health studies in the possession or control
of the Sellers, undertaken by the Sellers or any agents or representatives
thereof or, undertaken by any Government Entity, or any third party, relating to
or affecting the Sellers, its business, operations, assets, or any real property
owned or leased by the Sellers in the City of Industry, California; (ii) the
results of any ground water, surface water, soil, air (indoor or outdoor), or
asbestos investigations or monitoring undertaken by the Sellers, or any agents
or representatives thereof or undertaken by any Government Entity or any third
party, relating to or affecting the Sellers, it business, operations, assets, or
any real property owned or leased by the Sellers in the City of Industry,
California; (iii) all formal and informal notices of violation or noncompliance
issued (written or oral) to the Sellers by any Government Entity arising under
or related to Environmental Laws; and (iv) all outstanding citations issued
(written or oral) under OSHA, or similar state or local statutes, laws,
ordinances, codes, rules, regulations, orders, rulings, or decrees, relating to
or affecting the Sellers, its business, operations, assets, or any real property
owned or leased by the Sellers in the City of Industry, California.
2.18 CAPITAL EXPENDITURES AND INVESTMENTS. The Business has outstanding
Contracts and a year 2002 budget for capital expenditures and Investments as set
forth in SCHEDULE 2.18 hereto.
2.19 DEALINGS WITH AFFILIATES. SCHEDULE 2.19 hereto sets forth a
complete and accurate list and description of the economic terms, including the
parties, of all Contracts related to the Business to which any of the Sellers
is, will be or has been a party, at any time from December 31, 1996 to the
Closing Date, and to which any one or more of (a) the Sellers, (b) the Sellers'
Affiliates, or (c) any Person in which any Seller or its Affiliate has, directly
or indirectly, made an Investment, is also a party. Except as set forth in
Schedule 2.19, since December 31, 1996, none of the Sellers has made any
payments, loaned or borrowed any funds or property or made any credit
arrangement or accommodation with any Affiliate or employee of any Seller in
connection with the Business except for the payment of employee salaries and
director compensation in the ordinary course of business.
2.20 INSURANCE. SCHEDULE 2.20 hereto sets forth a complete and accurate
summary of all Policies of the Sellers. Except as set forth on SCHEDULE 2.20,
all Policies of the Seller are
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sufficient for compliance with all Regulations and all customer Contracts to
which the Business is subject.
2.21 ACCOUNTS RECEIVABLE. Except as set forth on SCHEDULE 2.21 hereto,
the accounts receivable of the Business reflected in the Financial Statements
and such additional accounts receivable as are reflected on the books of the
Business on the date hereof are current, good and to the knowledge of the
Sellers, collectible except to the extent reserved against thereon (which
reserves have been determined based upon actual prior experience and GAAP and
are consistent with prior practices). All such accounts receivable, deferred
billing that is not yet invoiced and estimated earnings on uncompleted projects
(except to the extent so reserved against) are valid, genuine and subsisting,
arise out of bona fide sales and deliveries of goods, performance of services or
other business transactions and are not subject to defenses, deductions,
set-offs or counterclaims.
2.22 INVENTORIES. The inventories reflected on the Financial Statements
and held by the Business on the date hereof do not include any items which are
not usable or saleable in the ordinary course of business or are obsolete, slow
moving or discounted items. Such inventories have been reflected on such balance
sheets at the lower of cost or market value (taking into account the usability
or salability thereof) in accordance with GAAP. None of such inventories have
been written up in value or repurchased by, or returned to, the Business at an
increased value. All such inventories are owned free and clear and are not
subject to any Lien, except for a lien in favor of the Bank Group and Westar
which shall be released at the Closing. Except as set forth on SCHEDULE 2.22
hereto, since the Financial Statement Date, inventories of raw materials and
supplies have been purchased by the Business in the ordinary course of business,
consistent with anticipated requirements, and the volumes of purchases thereof
and orders therefor have not been reduced or otherwise changed in anticipation
of the transactions contemplated by this Agreement. Except as set forth in
SCHEDULE 2.22 hereto, none of the Sellers is aware of any adverse conditions
affecting the supply of materials available to the Business, and, to the best
knowledge of the Sellers, the consummation of the transactions contemplated
hereby will not adversely affect any such supply.
2.23 BROKERAGE. There are no Claims for brokerage commissions,
investment banking or finders' fees or expenses or similar compensation in
connection with the transactions contemplated by this Agreement based on any
arrangement or Contract binding upon any of the Sellers, the Acquired Assets or
the Business.
2.24 CUSTOMERS AND SUPPLIERS. SCHEDULE 2.24 hereto sets forth a
complete and accurate list of (a) each customer that accounted for more than
five percent (5%) of the consolidated revenues and/or income of the Business
during the last full fiscal year and the amount of revenues accounted for by
such customer during each such period and (b) each supplier that is the sole or
primary supplier of any significant product or component related to the
Business. No material customer of the Business has advised in writing within the
past year that it will stop, or decrease the rate of, buying materials, products
or services from the Business. Except as set forth on SCHEDULE 2.23, no material
supplier of the Business has advised the Sellers' or any of their respective
Affiliates in writing, or to the Sellers' knowledge orally notified, within the
past year that it will stop, or decrease the rate of, supplying materials, or
change its price or terms of any products, or services to the Business. No
purchase order or commitment of the Business is
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in excess of normal requirements, nor are prices provided therein in excess of
current market prices for the products or services to be provided thereunder.
2.25 PERMITS. The Permits listed on SCHEDULE 2.25 hereto are the only
Permits that have been required for the conduct of the Business in accordance
with applicable Regulations and Orders of any Authority. Except as set forth on
SCHEDULE 2.25 hereto, the Business has duly and validly held all such Permits,
and each such Permit has been in full force and effect and, to the best of the
knowledge of the Sellers, no suspension or cancellation of any such Permit is
threatened and there is no basis for believing that such Permit will not be
renewable upon expiration.
2.26 UTILITIES. The Business has sufficient power, fuel oil, natural
gas and water supplies and adequate sewerage and waste disposal systems for the
operation of the Business as presently conducted, and, to the best of the
Sellers' knowledge, assuming the Purchasers provide $250,000 for the Sellers'
payment of deposits due and owing in accordance with the DIP Financing, all such
supplies and systems will be available after the Closing. Except as disclosed in
SCHEDULE 2.25 hereto, all such systems are in compliance with all Regulations.
2.27 IMPROPER AND OTHER PAYMENTS. Except as set forth on SCHEDULE 2.27
hereto, (a) neither the Sellers nor any of their respective directors, officers,
or key employees, or any agent or representative of the Business nor any Person
acting on behalf of any of them, has made, paid or received any unlawful bribes,
kickbacks or other similar payments to or from any Person or Authority, (b) no
contributions have been made, directly or indirectly, to a domestic or foreign
political party or candidate, (c) no improper foreign payment (as defined in the
Foreign Corrupt Practices Act) has been made, and (d) the internal accounting
controls of the Sellers are adequate to detect any of the foregoing under
current circumstances.
2.28 COMPLIANCE WITH EXPORT CONTROL LAWS. The Business has at all times
been operated in compliance with all Regulations relating to export control and
trade embargoes. No product or service sold by or provided by the Business
during the last five (5) years has been, directly or indirectly, sold to or
performed on behalf of Cuba, Iraq, Iran, Libya or North Korea.
2.29 DISCLOSURE. Neither this Agreement nor any of the schedules,
exhibits, certificates or other items prepared for or supplied to the Purchasers
by or on behalf of the Sellers in connection with the Closing contains any
untrue statement of a material fact or omits a material fact necessary to make
each statement contained herein or therein not misleading. There is no fact
which the Sellers have not disclosed to the Purchasers herein and of which the
Sellers, or any of their respective officers, directors or executive employees
is aware which could reasonably be anticipated to have a Material Adverse Effect
on the Business or the ability of the Purchasers to continue the Business in the
same manner as the Sellers conducted the Business prior to the Closing Date. The
Sellers have disclosed to the Purchasers all material information relating to
the Business or the transactions contemplated by this Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
The Purchasers jointly and severally represent and warrant to the
Sellers as follows as of the date hereof and as of the Closing Date:
3.1 CORPORATE ORGANIZATION, ETC. Each of the Purchasers is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation with full corporate power and authority to
carry on its respective business as it is now being conducted and to own,
operate and lease its respective properties and assets. Each of the Purchasers
is duly qualified or licensed to do business and is in corporate good standing
in every jurisdiction in which the conduct of its business, or the ownership or
lease of its properties, require it to be so qualified or licensed, except where
the failure to be so qualified, licensed or in good standing could not
reasonably be expected to have a Material Adverse Effect on the ability of the
Purchasers to perform their obligations under this Agreement.
3.2 AUTHORIZATION, ETC. Each of the Purchasers has full power and
authority to enter into this Agreement and the agreements contemplated hereby to
which it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and all other
agreements and transactions contemplated hereby have been duly authorized by the
Boards of Directors of the Purchasers and no other corporate proceedings on its
part are necessary to authorize this Agreement and the agreements contemplated
hereby and the transactions contemplated hereby and thereby. This Agreement and
all other agreements contemplated hereby to be entered into by the Purchasers
each constitutes the legal, valid and binding obligation of the Purchasers
enforceable against each of them in accordance with its terms.
3.3 NO VIOLATION. The execution, delivery and performance by the
Purchasers of this Agreement, and all other agreements contemplated hereby, and
the fulfillment of and compliance with the respective terms hereof and thereof
by the Purchasers, do not and will not (a) conflict with or result in a breach
of the terms, conditions or provisions of, (b) constitute a default or event of
default under (whether with or without due notice, the passage of time or both),
(c) result in a violation of, or (d) require any authorization, consent,
approval, exemption or other action by, or notice to, or filing with any third
party or Authority pursuant to, the charters or bylaws of the Purchasers or any
applicable Regulation, Order or Contract to which the Purchasers or its
properties are subject. The Purchasers have each complied in all material
respects with all applicable Regulations and Orders in connection with its
execution, delivery and performance of this Agreement, the agreements
contemplated hereby, and the transactions contemplated hereby and thereby.
3.4 FINANCING. The Purchasers have and on the Closing Date will have
the financial wherewithal to deliver the Purchase Price and to fund the DIP
Financing to be provided by EMCORE or an Affiliate thereof.
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ARTICLE IV
COVENANTS OF THE SELLERS
Until the Closing Date, except as otherwise consented to or approved by
the Purchasers in writing, the Sellers agree that each shall act, or refrain
from acting where required hereinafter, to comply with the following:
4.1 COMMENCEMENT OF CHAPTER 11 CASE. On or prior to February 7, 2002
(the "PETITION DATE"), the Sellers shall commence the Chapter 11 Case. On the
Petition Date, the Sellers shall file a motion (the "SALE MOTION") pursuant to
Sections 363 and 365 of the Bankruptcy Code (i) seeking entry of an order
approving the No-Shop Provisions and Break-Up Fee as soon as possible but no
later than February 11, 2002, (ii) scheduling a hearing to approve this
Agreement and (iii) seeking entry of the Asset Sale Order as soon as possible
but no later than March 5, 2002.
4.2 OPERATION OF BUSINESS. Except as contemplated by this Agreement and
to the extent not inconsistent with the Bankruptcy Code, the operation and
information reporting requirements of the Office of United States Trustee (the
"UST"), and subject to any order or direction of the Bankruptcy Court, during
the period from the date of this Agreement to the Closing, the Sellers shall
operate the Acquired Assets and conduct the Business in the ordinary course of
business consistent with prudent business practices and in compliance with
applicable Regulations, and to the extent consistent therewith so as to preserve
the current value and integrity of the Business and the Acquired Assets, pay all
post-petition Taxes as they become due and payable, maintain inventory, supplies
and spare parts at customary operation levels consistent with past operating
practices, maintain in full force and effect the existence of all Intellectual
Property, maintain insurance on the Acquired Assets (in amounts and types
consistent with past practice), and use their respective reasonable best efforts
to preserve the goodwill and organization of the Business and their
relationships with customers, suppliers and others having business dealings with
them. Without limiting the generality of the foregoing, prior to the Closing and
subject to the requirements of the Bankruptcy Code, the UST, and any Orders
entered by the Bankruptcy Court or as otherwise permitted by the DIP Budget
substantially in the form attached as EXHIBIT 4.2 hereto (the "DIP BUDGET"), the
Sellers shall not, and shall cause each of their Affiliates and the Sellers' and
their Affiliates' officers, directors, shareholders, employees, partners,
representatives and agents not to;
(a) enter into any material Contract which may be included in
the Acquired Assets or make a material change or modification to any existing
material Contract included in the Acquired Assets, except for agreements
relating to sales of inventory and purchase of inventory from suppliers in the
ordinary course of business and consistent with past practices;
(b) sell, lease, dispose of or otherwise distribute any of the
Acquired Assets, except for agreements relating to sales of inventory and
purchase of inventory from suppliers in the ordinary course of business and
consistent with past practices;
(c) mortgage or pledge any of the Acquired Assets or subject
any Acquired Assets to any Lien other than Permitted Liens;
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(d) unless agreed to by the Purchasers, increase in any manner
the salary, bonus, severance or other compensation or benefits of any member of
management or other employee of the Business, except for any annual and usual
increase in salary to any employee of the Business not a member of management of
the Business;
(e) unless agreed to by the Purchasers, enter into any
employment Contract with any employee of the Business, adopt any benefit plan
for such employees or amend or modify any existing Employee Benefit Plan for
such employees, except for such retention arrangements which the Purchasers
shall have no obligations under;
(f) take or omit to take any action that would require
disclosure under Article II, or that would otherwise result in a breach of any
of the representations, warranties or covenants made by the Sellers in this
Agreement or in any of the agreements contemplated hereby;
(g) take any action or omit to take any action which act or
omission would reasonably be anticipated to have a Material Adverse Effect on
the Business or the Acquired Assets;
(h) unless agreed to by the Purchasers, cancel, release, waive
or compromise any debt, Claim or right in its favor having a value in excess of
$5,000 other than in connection with returns of inventory for credit or
replacement in the ordinary cause of business; or
(i) agree in writing or otherwise to take any of the foregoing
actions.
Additionally, from the date of this Agreement to the Closing Date, the Sellers
shall promptly consult with the Purchasers about any material matters concerning
the Acquired Assets or the Business, and (b) if any inquiries or proposals
(whether written or oral) of the type described in section 4.8 below are
received, the Sellers shall promptly notify the Purchasers of such inquiries and
proposals and provide the Purchasers with, among other items or information
requested by the Purchasers, copies of any correspondence evidencing or
regarding such inquiries or proposals, the name(s) of the party or parties
making such inquiries or proposals, the substance of any such inquiries or
proposals and the dates that such inquiries and proposals were made to the
Sellers. The Sellers agree to cooperate and promptly provide the Purchasers with
such other information requested by the Purchasers in connection with any such
inquiries or proposals (whether written or oral).
4.3 INTERIM FINANCIAL INFORMATION. The Sellers shall supply the
Purchasers and the Bank Group with consolidated and consolidating statements of
financial condition of the Sellers within thirty (30) days after the end of each
month ending between the date hereof and the Closing Date and the related
consolidated and consolidating statements of income and retained earnings and
statements of changes in financial position for such month and the elapsed
portion of the fiscal year, in each case setting forth comparative figures for
the related periods in the prior fiscal year, certified by the Sellers' chief
accounting officers, subject to normal year-end adjustments.
4.4 FULL ACCESS AND DISCLOSURE. The Sellers shall afford to the
Purchasers and their counsel, accountants, agents and other authorized
representatives and to financial institutions
-24-
specified by the Purchasers reasonable access during business hours to the
Sellers' plants, properties, books and records in order that the Purchasers may
have full opportunity to make such reasonable investigations as they shall
desire to make of the affairs of the Business. The Sellers shall cause their
respective officers and employees, and shall use their best efforts to cause
their counsel and auditors to furnish such additional financial and operating
data and other information as the Purchasers shall from time to time reasonably
request including, without limitation, any internal control recommendations made
by its independent auditors in connection with any audit of the Sellers or the
Business. From time to time prior to the Closing Date, the Sellers shall
promptly supplement or amend information previously delivered to the Purchasers
with respect to any matter hereafter arising which, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
disclosed herein; provided, however, that such supplemental information shall
not be deemed to be an amendment to any schedule hereto and shall not change the
risk allocation of this Agreement between the Purchasers and the Sellers. The
Sellers shall provide the Purchasers with copies of all pleadings, motions and
applications filed by the Sellers or any third parties in the Chapter 11 Case.
4.5 NON-COMPETITION.
(a) During the Restricted Period, in the Restricted Geographic
Area each of the Sellers, each of their respective affiliates, and Westar (on
behalf of itself and any Person in which Westar has made, or may in the future
make, an Investment or advanced funds to (for so long as such Investment or
advance is outstanding)), agree not to, directly or indirectly, alone or as a
partner, officer, director, employee, consultant, agent, independent contractor,
member or stockholder of any Person, engage in any business activity in the
Restricted Area which is directly or indirectly in competition with or intended
to compete with the products or services of the Business, or which is directly
or indirectly detrimental to the Business; PROVIDED, HOWEVER, that the record or
beneficial ownership by the Sellers as a passive investor of one percent (1%) or
less of the outstanding publicly traded capital stock of any such Person for
investment purposes shall not be deemed to be in violation of this Section 4.5
so long as the Sellers do not breach Section 4.6 and do not provide any services
related to the Business to such Person. The Sellers further agree that, during
the Restricted Period, in the Restricted Geographic Area the Sellers shall not
in any capacity, either separately, jointly or in association with others,
directly or indirectly do any of the following: (a) employ or seek to employ any
Person or agent who is then employed or retained by the Business, the Purchasers
or their Affiliates (or who was so employed or retained at any time within the
two (2) years prior to the date the Sellers employ or seek to employ such
Person); (b) solicit, induce, or influence any proprietor, partner, stockholder,
lender, director, officer, employee, joint venturer, investor, consultant,
agent, lessor, supplier, customer or any other Person which has a business
relationship with the Business, the Purchasers or their Affiliates, at any time
during the Restricted Period, to discontinue or reduce or modify the extent of
such relationship with the Business, the Purchasers or its Affiliates; and (c)
submit, solicit, encourage or discuss any proposal, plan or offer to acquire an
interest in any of the Business', the Purchasers' or their Affiliates'
identified potential acquisition candidates; provided, however, that the
foregoing restrictions shall terminate as to the Purchasers in the event of
either a liquidation of the Sellers or the Business or the cessation of
operations of the Business. Notwithstanding the foregoing, Section 4.5 shall not
bind Westar's limited partner, Xxxxxx X. Xxxxxxx. The "RESTRICTED PERIOD" shall
mean seven (7) years after the date of this Agreement. The "RESTRICTED AREA"
shall mean the design, development, manufacture, marketing,
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distribution or sale or research directed to photovoltaic products used for
space applications, including without limitation that business conducted by the
Sellers prior to the Closing Date. The "RESTRICTED GEOGRAPHIC AREA" shall mean
worldwide.
(b) The Sellers recognize and agree that compliance with the
covenant contained in this Section 4.5 is necessary to protect the Purchasers,
and that a breach by the Sellers of any of the covenants set forth in this
Section 4.5 could cause irreparable harm to the Purchasers, that the Purchasers'
remedies at law in the event of such breach would be inadequate, and that,
accordingly, in the event of such breach, a restraining order or injunction or
both may be issued against the Sellers as the case may be without the
requirement that the Purchasers post a bond, in addition to any other rights and
remedies which are available to the Purchasers. If this Section 4.5 is more
restrictive than permitted by the laws of any jurisdiction in which the
Purchasers seek enforcement hereof, this Section 4.5 shall be limited to the
extent required to permit enforcement under such laws. In particular, the
parties intend that the covenants contained in the preceding portions of this
Section 4.5 shall be construed as a series of separate covenants, one for each
location specified. Except for geographic coverage, each such separate covenant
shall be deemed identical in terms. If, in any judicial proceeding, a court
shall refuse to enforce any of the separate covenants deemed included in this
Section 4.5, then such unenforceable covenant shall be deemed eliminated from
these provisions for the purpose of those proceedings to the extent necessary to
permit the remaining separate covenants to be enforced. If any court of
competent jurisdiction shall determine the foregoing covenant to be
unenforceable with respect to the term or the scope of the subject matter or
geography covered thereby, then such covenant shall nevertheless be enforceable
by such court against the other party upon such shorter term or within such
lesser scope as may be determined by such court to be reasonable and
enforceable.
4.6 CONFIDENTIALITY.
(a) Except as provided in Section 4.6(b), after the Closing
Date, and for a period of five (5) years thereafter, each of the Sellers agrees
that it will keep confidential and shall use its best efforts to cause its
Affiliates, and its and their officers, directors, employees and agents to keep
confidential all of the Purchasers' and their respective Affiliates' proprietary
information that is conveyed to the Purchasers as part of the Acquired Assets or
is assigned as part of the Assumed Liabilities or is otherwise exposed to any of
the Sellers in the course of the transactions contemplated hereby, including,
for purposes of this Section 4.6, information about the Business' business plans
and strategies, marketing ideas and concepts, especially with respect to
unannounced products and services, present and future product plans, pricing,
volume estimates, financial data, product enhancement information, business
plans, marketing plans, sales strategies, customer information (including
customers' applications and environments), market testing information,
development plans, specifications, customer requirements, configurations,
designs, plans, drawings, apparatus, sketches, software, hardware, data,
prototypes, connecting requirements or other technical and business information.
(b) Notwithstanding the foregoing, such proprietary
information shall not be deemed confidential and the Sellers shall have no
obligation with respect to any such proprietary information that, following the
Closing:
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(i) is or becomes publicly known through publication,
inspection of a product, or otherwise, and through no negligence or other
wrongful act of any of the Sellers;
(ii) is received by the Purchasers from a Third Party
without similar restriction and without breach of any agreement; or
(iii) is, subject to Section 4.6(c), required to be
disclosed under applicable Law or judicial process.
(c) If any of the Sellers (or any of their Affiliates or
officers, directors, employees or agents) is requested or required (by oral
question, interrogatory, request for information or documents, subpoena, civil
investigative demand or similar process) to disclose any such proprietary
information, the Sellers will promptly notify the Purchasers of such request or
requirement and will cooperate with the Purchasers such that the Purchasers may
seek an appropriate protective order or other appropriate remedy. If, in the
absence of a protective order or the receipt of a waiver hereunder, the Sellers
(or any of their Affiliates) is in the opinion of the Sellers' counsel compelled
to disclose the proprietary information or else stand liable for contempt or
suffer other censure or significant penalty, the Sellers (or their Affiliate)
may disclose only so much of the proprietary information to the party compelling
disclosure as is required by law. The Sellers will exercise its (and will cause
their Affiliates to exercise their) reasonable commercial efforts to obtain a
protective order or other reliable assurance that confidential treatment will be
accorded to such proprietary information.
4.7 FULFILLMENT OF CONDITIONS PRECEDENT. Each of the Sellers shall use
its best efforts to obtain at its expense all such waivers, Permits, consents,
approvals or other authorizations from third Persons and Authorities, and to do
all things as may be necessary or desirable in connection with transactions
contemplated by this Agreement; provided, however, that the Sellers shall not be
obligated to pay any consideration for such waivers, Permit, consents, approvals
or other authorizations without the consent of the Bank Groups, which shall not
be unreasonably withheld.
4.8 EXCLUSIVITY. From and after the date hereof until the Closing Date,
the Sellers will not, and will cause each of their respective Affiliates and the
Sellers' and their Affiliates' officers, directors, shareholders, employees,
partners, representatives and agents not to enter into any agreement, negotiate
with any other corporation, firm or other person, or solicit, encourage,
entertain, initiate, pursue or consider any inquiries or proposals (whether
written or oral) relating to (i) the possible disposition of all or any portion
of the Acquired Assets or the Business (except inventory disposed of in the
ordinary course of business) or (ii) any merger, consolidation or other business
combination involving any of the Sellers which would be inconsistent with the
transaction contemplated by this Agreement (the "NO SHOP PROVISIONS") except if
the failure to so act would either be a breach of the fiduciary duties of the
Sellers' Boards of Directors or if the Bankruptcy Court orders the Sellers to do
so; provided, however, that the Sellers' actions in compliance with the Sale
Motion attached hereto as EXHIBIT 4.8 shall not be a breach of this Section 4.8.
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4.9 NO TERMINATION OF OBLIGATIONS BY SUBSEQUENT DISSOLUTION. The
Sellers hereby agree that their respective obligations pursuant to this
Agreement shall not be terminated by the commencement of the Chapter 11 Case, by
operation of law or otherwise.
4.10 DELIVERIES AFTER CLOSING. From time to time after the Closing, at
the Purchasers' request and without further consideration from the Purchasers,
the Sellers shall and shall cause any of their respective Subsidiaries, as
applicable, to execute and deliver such other instruments of conveyance and
transfer and take such other action as the Purchasers reasonably may require to
convey, transfer to and vest in Acquisition and to put Acquisition in possession
of any rights or property to be sold, conveyed, transferred and delivered
hereunder.
4.11 INFORMATION TECHNOLOGY ACCESS. Subject in all cases to the
Sellers' obligations of confidentiality with respect to third-party confidential
information, to facilitate prompt integration following the Closing of the
Sellers' information technology ("IT") inventory (e.g., voice and data network
services and software and hardware, Licenses, financial/accounting software, IT
budgets, etc.) with the Purchasers, the Sellers will use its best efforts,
between the date of this Agreement and the Closing Date, to provide the
Purchasers and their representatives with access to the Sellers' IT inventory,
as well as the Sellers' personnel responsible for such IT inventory. The
Purchasers and the Sellers agree to cooperate, between the date of this
Agreement and the Closing Date, with each other to minimize any potential
disruption to Business from the IT integration efforts.
4.12 INTELLECTUAL PROPERTY PROTECTION. During the period from the date
of this Agreement and continuing until the earlier of (x) the termination of
this Agreement and (y) the Closing Date, the Sellers agree to take any and all
actions necessary or reasonably useful to protect the Seller Intellectual
Property, including, without limitation, to:
(a) at its own expense, make timely payment of all
post-issuance or renewal fees required to maintain in force its rights under
each patent, copyright or trademark;
(b) file patent applications in the United States Patent and
Trademark Office (and the equivalent office in any other country where the
failure to obtain patent protection could have a Material Adverse Effect on the
value of the Seller Intellectual Property) within the appropriate time periods
provided under the patent laws of the United States (including, without
limitation, those set forth in 35 U.S.C. Section 102) and such other countries,
with respect to each invention disclosure set forth in SCHEDULE 2.14(A) and with
respect to any other invention which is material to the Seller Intellectual
Property.
(c) diligently prosecute all applications for United States
and foreign patents listed in SCHEDULE 2.14(A) or filed pursuant to subsection
(b) above and not abandon any such application prior to exhaustion of all
administrative and judicial remedies absent written consent of the Purchasers;
(d) use or license the use of any trademarks listed in
SCHEDULE 2.14(A) in interstate commerce and to take all such other actions as
are necessary to preserve such marks as trademarks or service marks under the
laws of the United States and any other relevant countries and, at its own
expense, to diligently process all documents required to maintain trademark
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registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all such trademarks, and pay all fees and disbursements in connection
therewith and not abandon any such filing of affidavit of use or any such
application of renewal prior to the exhaustion of all administrative and
judicial remedies without prior written consent of the Purchasers; and
(e) deliver to the Purchasers, within 30 days of the
acquisition or issuance of a United States or foreign patent, registration of a
copyright, or of filing of an application for a United States or foreign patent
or copyright, a copy of said registration of, or application therefor, as the
case may be.
4.13 ELECTRONIC DATA PROTECTION. During the period between the date of
this Agreement and the Closing Date, the Sellers shall use their best efforts to
take any and all actions necessary to retain all electronic data and records
relating to the Business, including without limitation, that electronic data,
regardless of format, residing on company data servers, individual employee's
personal computer fixed, disk drives, floppy and CD/DVD diskettes on or off-site
data archives or backup sites or disaster recovery locations, in any media.
During this period the Sellers shall use their best efforts to ensure that no
such data is lost or destroyed by either electronic/magnetic or physical
destruction means including intentional loss or destruction by the Sellers'
employees of data files under their control outside the ordinary course of
business or in connection with any employment terminations or employee
departures. The Sellers shall use their best efforts to take such steps to
ensure that files and data in each employee's company e-mail accounts or in
storage on or ancillary to seller-owned or controlled computer or otherwise
located on a Seller e-mail server or document server is archived as of the date
of this Agreement and that such archived data will be stored under secured
conditions to permit ready access and retrieval after the Closing Date and that,
from the date hereof, not archival storage shall be recycled, written over,
destroyed or discarded.
4.14 INTELLECTUAL PROPERTY. The Sellers shall give the Purchasers
prompt notice that any Person shall have (a) commenced, or shall have notified
the Sellers that it intends to commence, a Claim or (b) provided the Sellers
with notice, in either case which allege(s) that any of the Intellectual
Property, including the Seller Intellectual Property, presently embodied, or
proposed to be embodied, in the Business' products or utilized in any
development tools (including standard cells) or design environments designed or
modified by the Business infringes or otherwise violates the intellectual
property rights of such Person, is available for licensing from a potential
licensor providing the notice or otherwise alleges that the Sellers do not
otherwise own or have the right to exploit such Intellectual Property, including
the Seller Intellectual Property.
4.15 BOOKS AND RECORDS. Until the seventh anniversary of the Closing
Date, the Sellers will, to the extent necessary in connection with any Taxes
(including, without limitation, the tax basis of any Asset) or other matter
relating to the Acquired Assets for any period ending at or prior to the
Closing, and without charge to Purchaser, (i) retain and, as the Purchasers may
reasonably request, permit the Purchasers and its agents to inspect and copy all
original books, records and other documents and all electronically archived data
not deliverable to the Purchasers at Closing related to the Acquired Assets and
(ii) make reasonably available to the Purchasers the officers, directors,
employees and agents of the Sellers and their respective affiliates. Prior to
the seventh anniversary of the Closing Date, the Purchasers may request in
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writing that the Sellers deliver such books and records, and if such request is
made and the Sellers would otherwise destroy or dispose of such books and
records, the Sellers shall not destroy or dispose of or allow the destruction of
or disposition of such books and records and records and within ninety (90) days
after receipt of the Purchasers' request, the Sellers shall deliver books and
records to the Purchasers.
4.16 COBRA. The Sellers shall be solely responsible for compliance with
the requirements of COBRA, including, without limitation, the provision of
continuation coverage, with respect to all employees or former employees of the
Sellers or its Subsidiaries and their qualified beneficiaries for whom a
qualifying event occurs prior to or in connection with the transactions
contemplated by this Agreement. The terms "continuation coverage," "qualified
beneficiaries," and "qualifying event" are used herein with the meanings
ascribed to them in COBRA.
4.17 RECORDATION OF MEMORANDUM OF LEASE. The Parent shall execute and
record a memorandum of lease in the form of EXHIBIT 4.17 hereto with respect to
the Facility Lease contemporaneously with the Closing.
4.18 NOTICE OF SALE. Notice of this Agreement and notice of the Sale
Motion and Sale Order and the hearings therefor shall be duly and properly given
by publication notice and by actual notice to all known creditors and known
parties in interest in the Chapter 11 Case, including but not limited to, any
known parties holding consensual or nonconsensual Liens on the Acquired Assets,
the lessors on the material leases, the non-Seller parties to the Assigned
Contracts being assumed pursuant to this Agreement, the employees of the
Business, and applicable taxing and governmental Authorities.
4.19 EMPLOYEE BENEFITS PLANS. During the period from the date of this
Agreement to the Closing Date, the Sellers shall not terminate any employee
pension benefit plan subject to Title IV of ERISA maintained or contributed to
or required to be contributed to by any Seller or any subsidiary thereof, or any
employer (whether or not incorporated) that would be treated together with any
Seller or any such subsidiary as a single employer within the meaning of Section
414 of the Code.
ARTICLE V
COVENANTS OF THE PURCHASERS
The Purchasers hereby covenant and agree with the Sellers that:
5.1 CONFIDENTIALITY. Except as may be required by lawful Order of an
Authority of competent jurisdiction, the Purchasers agree that unless and until
the transactions contemplated hereby have been consummated, each of the
Purchasers and its respective representatives and Affiliates and their
representatives and advisors will hold in strict confidence all data and
information obtained from the Sellers in connection with the transactions
contemplated hereby, except any of the same which (a) was, is now, or becomes
generally available to the public (but not as a result of a breach of any duty
of confidentiality by which each of the Purchasers and its respective
representatives and advisors are bound); (b) was known to the Purchasers prior
to its
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disclosure to the Purchasers as demonstrated by the Purchasers' records; or (c)
is disclosed to any of the Purchasers by a third party not known by the
Purchasers to be subject to any duty of confidentiality to the Sellers prior to
its disclosure to the Purchasers by the Sellers. The Purchasers will use such
data and information solely for the specific purpose of evaluating the
transactions contemplated hereby. If this Agreement is properly terminated, the
Purchasers and their respective Affiliates and their representatives and
advisors will promptly return to the Sellers or destroy all such data,
information and other written material (including all copies thereof) which has
been obtained by the Purchasers, and the Purchasers will make no further use
whatsoever of any of such or the information and knowledge contained therein or
derived therefrom.
5.2 NON-SOLICITATION. If this Agreement is terminated, the Purchasers'
agree that during the period commencing on the date hereof and continuing
through April 12, 2002, they shall not induce any of the employees of the
Sellers to leave their employment with the Sellers, or employ or otherwise
contract for the services of any person who is employed by the Sellers on the
date hereof. Notwithstanding anything contained in the foregoing to the
contrary, the Purchasers may hire or cause to be hired any person employed by
the Sellers (i) responding to any newspaper advertisement or the like which is
directed at a broad audience and does not mention the Purchasers by name, or
(ii) who initiates a solicitation for hire by the Purchasers; PROVIDED, HOWEVER,
the Purchaser may solicit for employment any employee of the Sellers either (i)
whose employment was terminated by the Seller or (ii) who was not employed by
the Sellers for at least 30 days prior to such solicitation. Additionally,
notwithstanding anything contained in this Section 5.2, the Purchasers may hire
or cause to be hired any person employed by the Sellers in the event of either a
liquidation of the Sellers or the Business or the cessation of operations of the
Business.
5.3 CHARTER AMENDMENT. On or prior to the Closing Date, each of the
Sellers shall amend their respective charters for purposes of changing their
names to any corporate name not including the name "Tecstar." Additionally, each
of the Sellers shall, as of the Closing Date, cease doing business under the
names "Tecstar" and "Tecstar Power Systems" or any variations thereof; provided,
however, that Tecstar Electro Systems, Inc., a wholly owned subsidiary of TPS
may use the name "Tecstar" pursuant to that certain Trademark License Agreement
in the form of EXHIBIT 5.3 hereto.
ARTICLE VI
OTHER AGREEMENTS
The parties further agree as follows:
6.1 AGREEMENT TO DEFEND. In the event any action, suit, proceeding or
investigation of the nature specified in Section 8.4 or Section 9.4 hereof is
commenced, whether before or after the Closing Date, all the parties hereto
agree to cooperate and use their best efforts to defend against and respond
thereto.
6.2 FURTHER ASSURANCES. Subject to the terms and conditions of this
Agreement, the parties hereto shall use their best efforts to take, or cause to
be taken, all action, and to do, or
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cause to be done, all things necessary, proper or advisable under applicable
Regulations and Orders to consummate and make effective as promptly as possible
the transactions contemplated by this Agreement and the agreements contemplated
hereby, and to cooperate with each other in connection with the foregoing,
including without limitation using their best efforts (a) to obtain all
necessary waivers, consents, and approvals from other parties to loan
agreements, leases, mortgages and other Contracts; (b) to obtain all necessary
Permits, consents, approvals and authorizations as are required to be obtained
under any Regulation or Order; (c) to lift or rescind any injunction or
restraining order or other Order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby; (d) to effect all necessary
registrations and filings; and (e) to fulfill all conditions to the obligations
of the parties under this Agreement. Each of the Purchasers and the Sellers
further covenants and agrees that it shall use its respective best efforts to
prevent, with respect to a threatened or pending preliminary or permanent
injunction or other Regulation or Order the entry, enactment or promulgation
thereof, as the case may be.
6.3 CONFIDENTIALITY. The parties acknowledge that the Purchasers and
the Sellers have previously executed a Confidentiality Agreement dated as of
July 15, 1999 (the "CONFIDENTIALITY AGREEMENT"), which Confidentiality Agreement
shall continue in full force and effect in accordance with its terms. Without
limiting the foregoing, all information furnished to the Purchasers and their
officers, employees, accountants and counsel by the Sellers, and all information
furnished to the Sellers by the Purchasers and their officers, employees,
accountants and counsel, shall be covered by the Confidentiality Agreement,
mutatis mutandis, and the Purchasers and the Sellers shall be fully liable and
responsible under the Confidentiality Agreement for any breach of the terms and
conditions thereof by their respective Subsidiaries, officers, employees,
accountants, counsel and other representatives.
6.4 PUBLIC ANNOUNCEMENTS. Neither the Sellers nor any Affiliate,
representative or stockholder of the Sellers, shall disclose any of the terms of
this Agreement to any third party without the Purchasers' prior written consent.
The form, content and timing of all press releases, public announcements or
publicity statements with respect to this Agreement and transactions
contemplated hereby shall be subject to the prior consent and approval of the
Purchasers, which approval shall not be unreasonably withheld. No press
releases, public announcements or publicity statements shall be released by the
Sellers without such prior consent.
6.5 AUDITED FINANCIAL STATEMENTS. The Sellers shall cooperate with the
Purchasers and their representatives in the preparation of the audited year end
balance sheet of the Business as of December 31, 2001 and related statements of
income and cash flows of the Business for the year then ended (the "2001 AUDITED
FINANCIAL STATEMENTS"). The Sellers shall use their respective best efforts to
respond to the requests of the Purchasers and their representatives in
connection with the preparation of the 2001 Audited Financial Statements.
ARTICLE VII
TAX MATTERS
The parties agree as follows:
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7.1 TAXES. Prior to the Closing, the Sellers shall not permit the
Business, without the prior written consent of Purchasers (which consent shall
not be unreasonably withheld or delayed) to: (i) file or file or cause to be
filed any amended Tax Returns or claims for refund; (ii) fail to prepare all Tax
Returns in a manner which is consistent with the past practices of the Sellers
with respect to the treatment of items on such Tax Returns except to the extent
that any inconsistency (x) would not materially increase the Purchaser's
liability for Taxes for any period or (y) is required by law; (iii) incur any
material liability for Taxes other than in the ordinary course of business; or
(iv) enter into any settlement or closing agreement with a taxing authority that
materially increases or may materially increase the Tax liability of the Sellers
for any period.
7.2 PAYMENT OF TAXES.
(a) The Sellers shall be responsible and liable for the timely
payment of any and all Taxes imposed on or with respect to the Business or the
Acquired Assets for all Pre-Closing Periods, including the portion of the
taxable period ending on or prior to the Closing Date and ending after the
Closing date (the "OVERLAP PERIOD") up to and including the Closing Date. For
purposes of this Agreement, all Taxes and Tax liabilities with respect to the
income, property or operations of the Business or the Acquired Assets that
relate to the Overlap Period shall be apportioned between the Sellers and the
Purchasers as follows: (i) in the case of Taxes other than income, sales and use
and withholding Taxes, on a per diem basis, and (ii) in the case of income,
sales and use and withholding Taxes, as determined from the books and records of
the Sellers, as though the taxable year of the Sellers, terminated at the close
of business on the Closing Date.
(b) All stamp, transfer, documentary, sales and use, value
added, registration, and other such taxes and fees (including any penalties and
interest) incurred in connection with this Agreement or any transaction
contemplated hereby (collectively, the "TRANSFER TAXES") shall be paid by the
Sellers, and the Sellers shall, at their own expense, properly file on a timely
basis all necessary Tax Returns, reports, forms, and other documentation with
respect to any Transfer Tax and provide to the Purchasers evidence of payment of
all Transfer Taxes.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF THE PURCHASERS
Each and every obligation of the Purchasers under this Agreement shall
be subject to the satisfaction, on or before the Closing Date, of each of the
following conditions unless waived in writing by the Purchasers:
8.1 BANKRUPTCY COURT APPROVAL.
(a) The Bankruptcy Court shall have entered orders
satisfactory to the Purchasers and the Bank Group, approving the Break-Up Fee
and the No-Shop Provisions as contemplated by this Agreement, the sale of the
Acquired Assets by the Sellers to the Purchasers, the assumption and assignment
by the Sellers of the Assigned Contracts to the Purchasers and such orders shall
have become Final Orders. Concurrently with the entry of the Asset Sale
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Order, the Bankruptcy Court shall have entered an order (which shall be part of
the Asset Sale Order) approving the Facility Lease and authorizing the Sellers
to execute and perform their respective obligations thereunder.
(b) The Sellers shall have obtained Bankruptcy Court approval
of post-petition financing satisfactory to the Purchasers, to fund the operation
of the Business through the Closing Date.
8.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties of the Sellers contained in Article II and elsewhere in this
Agreement and all information contained in any exhibit or schedule hereto
delivered by, or on behalf of, the Sellers, to the Purchasers, shall be true and
correct when made. Furthermore, the representations and warranties of the
Sellers contained in Article II and elsewhere in this Agreement and all
information contained in any exhibit or schedule hereto delivered by, or on
behalf of, the Sellers, to the Purchasers, with respect to the Business (other
than the MOCVD operations and solar cell processing, "fabrication," operations)
and Acquired Assets, but with the exception of the Sellers' representations set
forth in Section 2.21 hereto, shall be true and correct in all material respects
on the Closing Date as though then made except for those representations and
warranties which are qualified by materiality, which shall be true and correct
(the "BRING DOWN"). Solely for the purpose of materiality in the Bring Down, a
representation or warranty will be deemed not to be true in all material
respects if, as a result of any change or condition arising between the date of
signing this Agreement and the Closing Date, the Business (other than the MOCVD
operations and solar cell processing, "fabrication," operations) cannot be
operated in the normal course and/or there is an interruption in the operations
of the Business (other than the MOCVD operations and solar cell processing,
"fabrication," operations) which is reasonably expected to last in excess of
fifteen (15) days. The Sellers acknowledge and agree that the partial exclusion
of the representation of the Sellers in Section 2.21 from this condition and the
definition of materiality in the preceding sentence in no way affects the
Purchasers' rights pursuant to Article XII hereto. The Sellers shall have
performed and complied in all material respects with all agreements, covenants
and conditions required by this Agreement to be performed and complied with by
it prior to the Closing Date. The most senior executive officer other than the
chief accounting officer and the chief accounting officer of each of the Sellers
shall have delivered to the Purchasers a certificate dated the Closing Date, in
substantially the form of EXHIBIT 8.2 attached hereto, certifying to the
foregoing.
8.3 NO MATERIAL ADVERSE CHANGE. There shall have been no Material
Adverse Change in the Business (other than the MOCVD operations and solar cell
processing, "fabrication," operations) or Acquired Assets (other than the
commencement of the Chapter 11 Case and Material Adverse Changes as set forth in
SCHEDULE 8.3 hereto). The Purchasers shall have received certificates dated the
Closing Date, of the most senior executive officer other than the chief
accounting officer and the chief accounting officer of each of the Sellers, in
substantially the form of EXHIBIT 8.3 attached hereto, certifying to the
foregoing.
8.4 NO PROCEEDING OR LITIGATION. No preliminary or permanent injunction
or other Order issued by a court of competent jurisdiction or by any Authority,
or any Regulation or Order promulgated or enacted by any Authority shall be in
effect which would prohibit, prevent or restrict the consummation of the
transactions contemplated hereby.
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8.5 CONDITION OF ASSETS. None of the Acquired Assets shall have been
damaged or destroyed, prior to the Closing Date, by fire or other casualty,
whether or not fully covered by insurance, such that the Business (other than
the MOCVD operations and solar cell processing, "fabrication," operations)
cannot be operated in the normal course and/or there is an interruption in the
operations of the Business (other than the MOCVD operations and solar cell
processing, "fabrication," operations) which is reasonably expected to last in
excess of fifteen (15) days.
8.6 SECRETARY'S CERTIFICATE. The Purchasers shall have received
certificates, by the secretary of each of the Sellers, as to the charter and
bylaws of each of the Sellers, the resolutions adopted by the board of directors
of each of the Sellers in connection with this Agreement, the incumbency of
certain officers of each of the Sellers and the jurisdictions in which each of
the Sellers are qualified to conduct business in substantially the form of
EXHIBIT 8.6 attached hereto.
8.7 EMPLOYMENT AGREEMENTS. The key employees designated in the letter
from Emcore and acknowledged by TPS dated as of the date hereof (the "EMPLOYEE
SIDE LETTER") shall have each executed and delivered employment agreements in
substantially the form of EXHIBIT 8.7 attached hereto providing for the
continued employment of such Persons with EMCORE or its Subsidiaries and
containing certain noncompetition provisions.
8.8 ESCROW AGREEMENT. The Sellers shall have executed the Escrow
Agreement substantially in the form of EXHIBIT 1.5 attached hereto.
8.9 XXXX OF SALE. The Sellers each shall have executed a Xxxx of Sale
in the form of EXHIBIT 1.3(A) hereto.
8.10 INTELLECTUAL PROPERTY ASSIGNMENT AGREEMENT. The Sellers each shall
have executed Intellectual Property Assignment Agreements substantially in the
form of EXHIBIT 1.3(C) hereto.
8.11 FACILITY LEASE. The Parent shall have executed the Facility Lease
in the form of EXHIBIT 8.13 hereto. Among other things, the Facility Lease shall
provide that the Lessor's interest in the Lease shall be subject to a lien in
favor of the Bank Group.
8.12 LEASEHOLD TITLE INSURANCE. The Sellers shall have delivered at the
Purchasers' expense, a leasehold title insurance policy naming Acquisition as
the insured.
8.13 MEMORANDUM OF LEASE. The Parent shall have executed and delivered
a memorandum of lease in the form of EXHIBIT 4.17 hereto.
8.14 ENVIRONMENTAL CONDITIONS.
(a) The Purchasers shall have received copies of all prior
environmental reports, investigations, studies, audits, assessments, reviews or
other analyses conducted by, or which are in the possession of, the Sellers in
relation to any of its owned or leases properties or facilities.
(b) Notwithstanding any other provision of this Agreement, it
is expressly understood and agreed that prior to February 28, 2002 the
Purchasers will conduct a Phase I
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environmental site assessment and/or Phase II environmental site assessment in
accordance with ASTM standards at any of the properties or facilities owned or
leased by the Sellers, and the results of such Phase II environmental site
assessment do not indicate that EMCORE or its Affiliates would incur liability
as an operator on such site or indicate that the Business (other than the MOCVD
operations and solar cell processing, "fabrications," operations) operations
would be restricted without remediation efforts costs exceeding $100,000. The
Purchasers shall not conduct any additional environmental site assessments
beyond a Phase II environmental site assessment beyond the scope previously
disclosed to the Sellers prior to the Closing Date, except with the prior
written or oral consent of the Sellers, which will not be unreasonably withheld
and will be deemed given if not given or withheld within four days after the
Purchasers' written or oral request for such consent is given to the Sellers.
ARTICLE IX
CONDITIONS TO THE OBLIGATIONS OF THE SELLERS
Each and every obligation of the Sellers under this Agreement shall be
subject to the satisfaction, on or before the Closing Date, of each of the
following conditions unless waived in writing by the Sellers:
9.1 BANKRUPTCY COURT APPROVAL. The Bankruptcy Court shall have entered
orders approving the sale of the Acquired Assets, the assignment by the Sellers
of the Assigned Contracts to the Purchasers and the assumption by the Purchasers
of the Assumed Liabilities.
9.2 REPRESENTATIONS AND WARRANTIES; PERFORMANCE. The representations
and warranties of the Purchasers contained in Article III and elsewhere in this
Agreement and all information contained in any exhibit or schedule hereto
delivered by, or on behalf of, the Purchasers to the Seller, shall be true and
correct when made and on the Closing Date as though then made, except as
expressly provided herein. The Purchasers shall have performed and complied with
all agreements, covenants and conditions required by this Agreement to be
performed and complied with by it prior to the Closing Date. The president of
each of the Purchasers shall have delivered to the Sellers a certificate, dated
the Closing Date, in the form attached as EXHIBIT 9.2 hereto, certifying to the
foregoing.
9.3 CONSENTS AND APPROVALS. The Purchasers shall have obtained any and
all material consents, approvals, Orders, Permits or other authorizations,
required by all applicable Regulations or Orders involving the Sellers, with
respect to the execution, delivery and performance of the Agreement, and the
consummation of the transactions contemplated hereby.
9.4 NO PROCEEDING OR LITIGATION. No preliminary or permanent injunction
or other Order issued by a court of competent jurisdiction or by any Authority,
or any Regulation or Order promulgated or enacted by any Authority shall be in
effect which would prohibit, prevent or restrict the consummation of the
transactions contemplated hereby.
9.5 SECRETARY'S CERTIFICATE. The Sellers shall have received a
certificate, by the secretary of each of the Purchasers, dated the Closing Date,
as to the charter and bylaws of each of the Purchasers, the resolutions adopted
by the directors of each of the Purchasers in
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connection with this Agreement, the incumbency of certain officers of the
Purchasers and the jurisdictions in which the Purchasers are qualified to
conduct business in substantially the form of EXHIBIT 9.5 attached hereto.
9.6 ESCROW AGREEMENT. The Purchasers shall have executed the Escrow
Agreement in substantially the form of EXHIBIT 1.5 attached hereto.
ARTICLE X
CLOSING
10.1 CLOSING. Unless this Agreement shall have been terminated or
abandoned pursuant to the provisions of Article XI hereof, a closing of the
transactions contemplated by this Agreement (the "CLOSING") shall be held two
(2) business days after the date on which (i) the Asset Sale Order becomes a
Final Order and (ii) all conditions precedent to the obligations of the parties
have been satisfied or waived, but in no event later than March 15, 2002, or on
such other date (the "CLOSING DATE") agreed to by the Sellers, the Purchasers,
the Bank Group and Westar. On the Closing Date, in accordance with the Sale
Order and subject to Bankruptcy Court approval, which approval will be sought by
the Sellers, the Purchasers shall pay the Closing Cash directly to the Agent
Bank for the Bank Group or such Agent Bank's designee.
10.2 INTERVENING LITIGATION. If prior to the Closing Date any
preliminary or permanent injunction or other Order issued by a court of
competent jurisdiction or by any other Authority shall restrain or prohibit this
Agreement or the consummation of the transactions contemplated hereby for a
period of fifteen (15) days or longer, the Closing shall be adjourned at the
option of either party for a period of not more than thirty (30) days. If at the
end of such thirty (30) day period such injunction or Order shall not have been
favorably resolved, either party may, by written notice thereof to the other,
terminate this Agreement, without liability or further obligation hereunder.
ARTICLE XI
TERMINATION AND ABANDONMENT
11.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions herein contemplated may be abandoned at any time:
(a) by mutual consent of the Purchasers and the Sellers;
(b) by the Purchasers if the Bankruptcy Court does not enter
an order approving the No-Shop Provisions and the Break-Up Fee on or prior to
February 11, 2002 or such order as entered does not become a Final Order;
(c) by the Purchaser or the Sellers if (i) an interim order
approving post-petition financing under Section 364 of the Bankruptcy Code (the
"INTERIM DIP ORDER") shall not have been entered by the Bankruptcy Court on or
prior to February 11, 2002 or (ii) the Interim DIP Order as entered does not
remain in full force and effect or shall have been stayed, reversed, amended, or
modified in any respect;
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(d) by the Purchasers if (i) not later than twenty (20) days
after entry of the Interim DIP Order, an order in form and substance
satisfactory to the Purchasers in their sole and absolute discretion,
authorizing additional borrowings under the Sellers' post-petition financing
under Section 364 of the Bankruptcy Code shall not have been entered by the
Bankruptcy Court (the "FINAL DIP ORDER") or (ii) such Final DIP Order does not
become a Final Order;
(e) by the Purchasers if the Sellers have breached the terms
of or a Default or Event of Default (as such terms are defined in the DIP
Financing) exists under the DIP Financing, which breach or default is not cured
or the DIP Financing is not fully repaid within five (5) days from the date on
which the Purchasers have provided the Sellers and the Bank Group with notice of
such breach or Default or Event of Default;
(f) by the Purchasers if (i) at any time the representations
and warranties of the Sellers in Article II (with the exception of the Sellers'
representations set forth in Section 2.21 hereto, and with the exception of the
Sellers' representations with respect to the MOCVD operations and solar cell
processing, "fabrication," operations), shall not be true and correct in all
material respects, except for representations and warranties which are qualified
by materiality which shall be true and correct (for the purpose of materiality
in this Section 11.1(f), a representation or warranty will be deemed not to be
true in all material respects if, as a result of any change or condition arising
between the date of signing this Agreement and the Closing Date, the Business
(other than the MOCVD operations and solar cell processing, "fabrication,"
operations) cannot be operated in the normal course and/or there is an
interruption in the operations of the Business (other than the MOCVD operations
and solar cell processing, "fabrication," operations) which is reasonably
expected to last in excess of fifteen (15) days)), or (ii) if as of the Closing
Date any of the conditions specified in Article VIII hereof have not been
satisfied or if any Sellers are otherwise in default under this Agreement;
(g) by the Sellers if as of the Closing Date any of the
conditions specified in Article IX hereof have not been satisfied or if any of
the Purchasers is otherwise in default under this Agreement;
(h) by the Purchasers if the Sellers enter into an Alternative
Transaction;
(i) by the Purchasers if any of the Bank Group or Westar
breaches the terms and conditions of the Forbearance Agreements;
(j) by the Purchasers or the Sellers if a motion to dismiss
the Chapter 11 Case or a motion to convert the Chapter 11 Case or appoint a
trustee or examiner has been granted in the Chapter 11 Case;
(k) by the Purchasers or the Sellers if the Asset Sale Order
is not entered by the Bankruptcy Court on or prior to March 5, 2002 or such
order does not become a Final Order;
(l) by the Purchasers or the Sellers if the transactions
contemplated pursuant to this Agreement are not consummated on or before March
15, 2002; PROVIDED THAT if any party has breached or defaulted with respect to
its obligations under this Agreement on or before such date, such party may not
terminate this Agreement pursuant to this Section 10.1(b), and each other party
to this Agreement may at its option enforce its rights against such breaching or
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defaulting party and seek any remedies against such party, in either case as
provided hereunder and by applicable Regulation; or
(m) by either the Purchasers or the Sellers if there shall be
in effect a stay pending appeal or other order restraining, enjoining or
otherwise prohibiting the consummation of the transactions contemplated herein.
11.2 PROCEDURE UPON TERMINATION. If this Agreement is terminated under
Section 11.1, written notice thereof will forthwith be given to the other party
and this Agreement will thereafter become void and have no further force and
effect and, except for those provisions that expressly survive the termination
of this Agreement, all further obligations of the Sellers and the Purchasers to
one another under this Agreement will terminate without further obligation or
liability of the Sellers or the Purchasers to the other (other than with respect
to breaches, if any of this Agreement prior to such termination). If this
Agreement is terminated as provided herein:
(a) each party shall either destroy or redeliver all documents
and other material of any other party relating to the transactions contemplated
hereby, whether obtained before or after the execution hereof, to the party
furnishing the same;
(b) all information received by any party hereto with respect
to the business of any other party (other than information which is a matter of
public knowledge or which has heretofore been or is hereafter published in any
publication for public distribution or filed as public information with any
governmental authority) shall not at any time be used for the advantage of, or
disclosed to third parties by, such party to the detriment of the party
furnishing such information; and
(c) other than as provided in Sections 11.3 and 13.13 no non
breaching party hereto shall have any liability or further obligation to any
other party to this Agreement.
11.3 EFFECT OF TERMINATION.
(a) If the Closing does not occur by reason of any Seller
consummating an Alternative Transaction, the Sellers shall, jointly and
severally, on the closing date of the consummation of such Alternative
Transaction, pay to the Purchasers in immediately available funds an amount
equal to the sum of (i) $1.5 million, (ii) the Purchasers' actual costs and
expenses (including legal fees) in connection with the negotiation, preparation,
execution and delivery of this Agreement and the related instruments and
agreements, PLUS (iii) the amount then outstanding under the DIP Financing (the
"BREAK-UP FEE").
(b) If this Agreement is terminated (other than as a result of
a breach by the Purchasers), the Purchasers' actual costs and expenses
(including legal fees) in connection with the negotiation, preparation,
execution and delivery of this Agreement and the related instruments and
agreements shall be deemed superpriority administrative expenses and promptly
paid by the Seller.
(c) The Break-Up Fee shall be entitled to a superpriority
administrative claim status pursuant to Sections 105, 503 and 507(b) of the
Bankruptcy Code, senior to all other superpriority administrative expense
claims. Additionally, the Break-Up Fee shall be, and the
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Bank Group and Westar will be provided notice that the Break-Up Fee will be, in
all instances (including, without limitation, in the Chapter 11 Case or in the
event the Chapter 11 Case is dismissed or converted to Chapter 7 of the
Bankruptcy Code) senior to all of the Sellers' secured pre-petition Indebtedness
and any Liens related thereto. The Break-Up Fee shall be, and the Bank Group
will be provided notice that the Break-Up Fee will be, in all instances
(including without limitation, in the Chapter 11 Case or in the event the
Chapter 11 Case are dismissed or converted to Chapter 7 of the Bankruptcy Code)
senior to the Bank Group's and Westar's Liens and shall only be paid from the
proceeds of the closing of an Alternative Transaction.
(d) If the Purchasers terminate this Agreement,
notwithstanding that the Sellers are willing and able to perform their
respective obligations hereunder, have satisfied each and every one of the
Purchasers' conditions to closing, and the Sellers are not otherwise in breach
of any of the terms or conditions hereof, repayment of that portion of the DIP
Financing (other than professional fees set forth in the DIP Budget and actually
funded by the DIP Financing which shall not be subordinated) shall be
subordinated to all amounts owed by the Sellers to the Bank Group, which
subordination shall be deemed liquidated damages in lieu of any and all amounts,
Claims and any other damages that may be asserted by the Sellers, Westar or the
Bank Group.
(e) In the event of a default by the Sellers under this
Agreement after entry of the Asset Sale Order by the Bankruptcy Court, the
Purchasers shall be entitled to all of their remedies at law and in equity.
ARTICLE XII
INDEMNIFICATION
12.1 SURVIVAL. All of the terms and conditions of this Agreement,
together with the representations, warranties and covenants contained herein or
in any instrument or document delivered or to be delivered pursuant to this
Agreement, shall survive the execution of this Agreement and the Closing Date
until all obligations set forth therein shall have been performed and satisfied
notwithstanding any investigation heretofore or hereafter made by or on behalf
of any party hereto as follows: (a) the representations and warranties in
Section 2.11 (Tax Matters) and Section 2.13 (ERISA and Related Matters) and
their related schedules and the covenants contained in this Agreement shall
survive until sixty (60) days after the date as of which the applicable statutes
of limitations with respect to such matters expire (after giving effect to any
extensions or waivers thereof); (b) the representations and warranties in
Section 2.17 (Environmental) and Section 2.12 (Compliance with Law and
Certifications) and their related schedules shall terminate on the sixth
anniversary of the Closing Date; (c) the representations and warranties in
Section 2.2 (Authorization), Section 2.9 (Title) and Section 2.22 (Brokerage)
and their related schedules shall survive indefinitely and not terminate; and
(d) all other representations and warranties in this Agreement and their related
schedules or in any of the written statements, certificates or other items
prepared and delivered hereunder or to induce the consummation of any of the
transactions contemplated hereby, shall terminate upon the twelve (12) month
anniversary of the Closing Date; PROVIDED that the representations, warranties
and indemnities for which an indemnification Claim shall be pending as of the
end of the applicable period referred to herein shall survive with respect to
such Claim until the final disposition
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thereof. The representations and warranties in this Agreement and the schedules
attached hereto or in any writing delivered in connection herewith shall in no
event be affected by any investigation, inquiry or examination made for or on
behalf of any party or be affected by the knowledge of any officer, director,
stockholder, employee, partner or agent of any party seeking indemnification
hereunder or by the acceptance of any certificate or opinion from any third
party. In addition, in no event will any disclosure of any event or circumstance
made after the date hereof and prior to the Closing serve to amend any
representation or warranty for any purpose of this Agreement.
12.2 LIMITATIONS.
(a) In the absence of fraud, no party shall be required to
indemnify the other party under Sections 12.3(a) and 12.4(a) until the
indemnifiable damages, individually or in the aggregate, exceed $200,000 (the
"HURDLE RATE"), at which point such indemnifying party shall be responsible for
all indemnifiable damages that may arise, irrespective of the Hurdle Rate; and
provided that indemnifiable damages shall accumulate until such time as they
exceed the Hurdle Rate, whereupon the party to be indemnified shall be entitled
to seek indemnification for the full amount of such damages.
(b) In the absence of fraud, after the Closing, the aggregate
amount of indemnifiable damages (other than for intentional misrepresentations
or breaches of covenants and agreements) shall not exceed $2.0 million.
12.3 INDEMNIFICATION BY THE SELLERS. Subject to Section 12.1 and
Section 12.2, the Sellers agree to, and shall, jointly and severally, indemnify
the Business, the Purchasers and their respective officers, directors,
employees, stockholders, representatives and agents on an after-tax basis and
hold each of them harmless, against and in respect of any and all damage, loss,
deficiency, liability, obligation, commitment, cost or expense (including the
fees and expenses of counsel) resulting from, or in respect of, any of the
following:
(a) Any misrepresentation, breach of warranty, or
non-fulfillment of any obligation on the part of any of the Sellers under this
Agreement, the Facility Lease, any document relating hereto or thereto or
contained in any schedule to this Agreement or from any misrepresentation in or
omission from any certificate, schedule, other Contract or instrument delivered
by any of the Sellers hereunder or the failure of any representation or warranty
made in this Agreement to be true and correct as of the Closing Date.
(b) Any and all Excluded Liabilities.
(c) All products liability Claims arising against or involving
the Business or concerning any product manufactured, shipped, sold or delivered
by or on behalf of the Business on or prior to the Closing Date related to or
resulting from an alleged defect in design, manufacture, materials or
workmanship of any product manufactured, shipped, sold or delivered by or on
behalf of the Seller or any alleged failure to warn, or any alleged breach of
express or implied warranties or representations.
(d) Warranty Claims relating to products manufactured or
shipped prior to the Closing Date.
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(e) All environmental liability of the Sellers, including
federal, state and local environmental liability, together with any interest or
penalties thereon or related thereto, that arises or accrues on or prior to the
Closing Date.
(f) Any failure of the Sellers to have good, valid and
marketable title to the Acquired Assets, free and clear of all Liens, Claims and
Orders.
(g) Any Claim for transaction costs and expenses.
(h) Any failure by the Sellers to comply with applicable bulk
sales laws.
(i) Any Claims brought by third parties arising from the
operation of the Business prior to the Closing Date.
(j) Any successor or vicarious liability of the Sellers.
(k) All demands, assessments, judgments, costs and reasonable
legal and other expenses arising from, or in connection with, any action, suit,
proceeding or Claim incident to any of the foregoing.
12.4 INDEMNIFICATION BY THE PURCHASER. Subject to Section 12.1 and
12.2, the Purchasers agree to, and shall, indemnify the Sellers and their
respective officers, directors, employees, stockholders, representatives and
agents and hold each harmless, against and in respect of any and all damage,
loss, deficiency, liability, obligation, commitment, cost or expense (including
the fees and expenses of counsel) resulting from, or in respect of, any of the
following:
(a) Any misrepresentation, breach of warranty or
non-fulfillment of any obligation on the part of the Purchasers under this
Agreement, any document relating hereto or thereto or contained in any schedule
to this Agreement or from any misrepresentation in or omission from any
certificate, schedule, other Contract or instrument delivered by the Purchasers
hereunder.
(b) The Assumed Liabilities; PROVIDED, HOWEVER, Assumed
Liabilities do not include liabilities resulting from penalties and liabilities
relating to transactions occurring prior to the Closing Date under the customer
Contracts assumed as modified.
(c) All demands, assessments, judgments, costs and reasonable
legal and other expenses arising from, or in connection with, any action, suit,
proceeding or Claim incident to any of the foregoing.
12.5 THIRD-PARTY CLAIMS.
(a) The following procedures shall be applicable with respect
to indemnification for third-party Claims. Promptly after receipt by the party
seeking indemnification hereunder (hereinafter referred to as the "INDEMNITEE")
of notice of the commencement of any (i) Tax audit or proceeding for the
assessment of Tax by any Taxing Authority or any other proceeding likely to
result in the imposition of a Tax liability or
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obligation or (ii) any action or the assertion of any Claim, liability or
obligation by a third party (whether by legal process or otherwise), against
which Claim, liability or obligation the other party to this Agreement
(hereinafter the "INDEMNITOR") is, or may be, required under this Agreement to
indemnify such Indemnitee, the Indemnitee shall, if a Claim thereon is to be, or
may be, made against the Indemnitor, notify the Indemnitor in writing of the
commencement or assertion thereof and give the Indemnitor a copy of such Claim,
process and all legal pleadings. The Indemnitor shall have the right to (i)
participate in the defense of such action with counsel of reputable standing and
(ii) assume the defense of such action by agreeing to assume such defense within
ten (10) days of transmittal of the notice of the Claim by the Indemnitee, in
writing unless such Claim (A) may result in criminal proceedings, injunctions or
other equitable remedies in respect of the Indemnitee or its business; (B) may
result in liabilities which, taken with other then existing Claims under this
Article XII, would not be fully indemnified hereunder; (C) may have a Material
Adverse Effect on the business or financial condition of the Indemnitee after
the Closing Date (including an effect on the Tax liabilities, earnings or
ongoing business relationships of the Indemnitee); (D) is for an alleged amount
of less than $25,000; (E) upon petition by the Indemnitee, if an appropriate
court rules that the Indemnitor failed or is failing to vigorously prosecute or
defend such Claim, in which events the Indemnitee shall assume the defense; or
(F) also involves the Indemnitor or its Affiliate as a party and counsel to the
Indemnitee determines in good faith that joint representation would give rise to
a conflict of interest.
(b) The Indemnitor and the Indemnitee shall cooperate in the
defense of any third-party Claims. In the event that the Indemnitor assumes or
participates in the defense of such third-party Claim as provided herein, the
Indemnitee shall make available to the Indemnitor all relevant records and take
such other action and sign such documents as are reasonable necessary to defend
such third-party Claim in a timely manner. If the Indemnitee shall be required
by judgment or a settlement agreement to pay any amount in respect of any
obligation or liability against which the Indemnitor has agreed to indemnify the
Indemnitee under this Agreement, the Indemnitor shall promptly reimburse the
Indemnitee in an amount equal to the amount of such payment plus all expenses
(including legal fees and expenses) incurred by such Indemnitee in connection
with such obligation or liability subject to this Article XII. No Indemnitor, in
the defense of any such Claim, shall, except with the consent of the Indemnitee,
consent to entry of any judgment or enter into any settlement which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnitee of a release from all liability with respect to such Claim.
In addition, with respect to a Claim for Taxes, the Indemnitor shall not enter
into any settlement or arrangement with any taxing authority without the prior
written consent of the Indemnitee, such consent not to be unreasonably withheld
or delayed. In the event that the Indemnitor does not accept the defense of any
matter for which it is entitled to assume as provided above, the Indemnitee
shall have the full right to defend such Claim.
(c) Prior to paying or settling any Claim against which an
Indemnitor is, or may be, obligated under this Agreement to indemnify an
Indemnitee, the Indemnitee must first supply the Indemnitor with a copy of a
final court judgment or decree holding the Indemnitee liable on such Claim or
failing such judgment or decree, must first receive the written approval of the
terms and conditions of such settlement from the Indemnitor, which shall not be
unreasonably withheld; provided however, that no written approval is required
from the
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Indemnitor as to any third party Claim (i) that results solely in injunctions or
other equitable remedies in respect of the Indemnitee or its business; (ii) that
settles liabilities, or portions thereof, that are not subject to
indemnification hereunder; or (iii) is for an amount of less than $25,000.
(d) An Indemnitee shall have the right to employ its own
counsel in any case and the fees and expenses of such counsel shall be at the
expense of the Indemnitee unless (i) the employment of such counsel shall have
been authorized in writing by the Indemnitor in connection with the defense of
such Claim; (ii) the Indemnitor shall not have employed counsel in the defense
of such Claim after ten (10) days notice; or (iii) such Indemnitee shall have
reasonably concluded that there may be defenses available to it which are
contrary to, or inconsistent with, those available to the Indemnitor; in any of
the foregoing events such fees and expenses shall be borne by the Indemnitor.
12.6 SECURITY FOR THE INDEMNIFICATION OBLIGATION.
(a) The parties hereby agrees that, subject to the following
provisions of this Section 12.6, any Claims for indemnification by the
Purchasers against the Sellers hereunder shall be satisfied by the Purchasers
solely by recourse against the Escrow Funds pursuant to the terms of the Escrow
Agreement. All payments for indemnifiable damages made pursuant to this Article
XII shall be treated as adjustments to the Purchase Price.
(b) Each Indemnitor shall pay the indemnification amount
claimed by the Indemnitee in immediately available funds promptly within ten
(10) days after the Indemnitee provides the Indemnitor with written notice of a
Claim hereunder unless the Indemnitor in good faith disputes such Claim. If the
Indemnitor disputes such Claim in good faith, then promptly after the resolution
of such dispute, the amount finally determined to be due shall be paid by the
Indemnitor to the Indemnitee in immediately available funds within ten (10) days
of such dispute resolution. In the event the Indemnitor fails to pay the
Indemnitee the amount of such indemnification Claim within such ten (10) day
period the Indemnitor shall pay the Indemnitee interest on the amount of such
indemnification Claim at a rate of ten percent (10%) per annum, compounded
monthly from the date of the original written notice of such indemnification
Claim until the indemnification Claim is paid in full.
(c) If any Indemnitor fails to comply with its obligations to
make cash payments to an Indemnitee in an aggregate amount sufficient to
reimburse the Indemnitee for all losses resulting from an indemnified Claim, the
Indemnitee may pursue any and all rights and remedies against the Indemnitor
available in law or in equity, subject only to the limitations set forth in
Section 12.2 above and shall be entitled to payment of its reasonable attorneys'
fees.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.1 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified and supplemented only by written agreement of all the parties hereto
with respect to any of the terms contained herein; PROVIDED, HOWEVER, no such
amendment, modification or supplement shall be
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effective unless consented to by the Bank Group, which consent shall not be
unreasonably withheld. No course of dealing between or among the parties shall
be deemed effective to modify, amend, waive or discharge any part of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.
13.2 WAIVER OF COMPLIANCE; CONSENTS. Any failure of any party hereto to
comply with any obligation, covenant, agreement or condition herein may be
waived in writing by the other parties hereto, but such waiver or failure to
insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure. Whenever this Agreement requires or permits consent
by or on behalf of any party hereto, such consent shall be given in writing to
be effective.
13.3 CERTAIN DEFINITIONS.
"2001 AUDITED FINANCIAL STATEMENTS" shall have the meaning set
forth in Section 6.5.
"ABOVEGROUND STORAGE TANK" means any one or combination of
stationary storage tanks located more than 10 per centum above the surface of
the ground or above the surface of the floor in an underground area (including
integral piping, dispensers, dispenser lines, fill ports, fill lines, liquid
traps, sumps, well cellars and other liquid traps connected thereto), and which
is used to contain an accumulation of Hazardous Substances as defined by any
Environmental Law.
"AFFILIATE" means, with regard to any Person, (a) any Person,
directly or indirectly, controlled by, under common control of, or controlling
such Person; (b) any Person, directly or indirectly, in which such Person holds,
of record or beneficially, five percent (5%) or more of the equity or voting
securities; (c) any Person that holds, of record or beneficially, five percent
(5%) or more of the equity or voting securities of such Person; (d) any Person
that, through Contract, relationship or otherwise, exerts a substantial
influence on the management of such Person's affairs; (e) any Person that,
through Contract, relationship or otherwise, is influenced substantially in the
management of its affairs by such Person; (f) any director, officer, partner or
individual holding a similar position in respect of such Person; or (g) as to
any natural Person, any Person related by blood, marriage or adoption and any
Person owned by such Persons, including without limitation, any spouse, parent,
grandparent, aunt, uncle, child, grandchild, sibling, cousin or in-law of such
Person.
"ACQUIRED ASSETS" means all right, title, and interest in and
to those assets used in, or constituting a part of, the Business, including all
of its (a) current assets of the Business, (b) all tangible personal property,
including, the CICing and panel laydown machinery and equipment, inventories of
raw materials and supplies, manufactured and purchased parts, goods in process
and finished goods, furniture, fixtures, motor vehicles, computers, data and
telephone equipment, and books and records, (c) all intangible assets, including
all Intellectual Property used in the Business, know how and trade secrets,
drawings, customer lists and specifications, proprietary information, patents,
patent applications, trademarks, trade names, software, telephone and facsimile
numbers, internet addresses and domain names, goodwill associated therewith,
licenses and sublicenses granted and obtained with respect thereto, and rights
thereunder, remedies against infringements thereof, and rights to protection of
interests therein
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under the laws of all jurisdictions, (d) all licenses, permits, consents and
certificates of any regulatory, administrative or other governmental agency or
body issued to or held by any of the Sellers, (e) all leases, Contracts and
other rights of any of the Sellers, (f) all goodwill and going concern value of
the Business, (g) accounts, notes, and other receivables, (h) Claims, deposits
including any deposits made prior to or during the Chapter 11 Case, including
any utility deposits, prepayments, refunds, causes of action, chooses in action,
rights of recovery, rights of set off, and rights of recoupments (including any
such item relating to the payment of Taxes) relating to the Business, (i)
franchises, Permits, Orders, variances, and similar rights obtained from any
Government Entity or Authority relating to the Business, (j) books, records,
ledgers, files, documents, correspondence, lists, plats, architectural plans,
drawings, and specifications, creative materials, advertising and promotional
materials, studies, reports, and other printed or written materials relating to
the Business, and (k) working capital including, without limitation, the
Acquired Assets set forth on SCHEDULE 1.1(B) hereto; PROVIDED, HOWEVER, that the
Acquired Assets shall not include (i) the corporate charter, qualifications to
conduct business as a foreign corporation, arrangements with registered agents
relating to foreign qualifications, taxpayer, and other identification numbers,
seals, minute books, stock transfer books, blank stock certificates, and other
documents relating to the organization, maintenance, and existence of any of the
Sellers as a corporation, (ii) any of the rights of the Sellers under this
Agreement (or under any side agreement between the Sellers on the one hand and
the Purchasers on the other hand entered into on or after the date of this
Agreement) and (iii) the Excluded Assets.
"ACQUISITION" shall have the meaning set forth in the
Preamble.
"AGENT BANK" means Union Bank of California N.A.
"ALTERNATIVE TRANSACTION" means an agreement entered into by
any of the Sellers pursuant to which the Seller(s) will sell all or
substantially all of the Acquired Assets or the Business to a third-party other
than the Purchaser.
"ASSET SALE ORDER" means a Final Order approving the Asset
Sale satisfactory to the Purchasers, which Asset Sale Order shall, among other
things, (i)(a) approve this Agreement and the transactions contemplated hereby,
and (b) authorize and direct the Sellers to execute and deliver such documents
and take all other actions as may be necessary to consummate the transaction,
(ii) provide that the Acquired Assets are being sold to Acquisition free and
clear of all Liens, Claims, Orders and Indebtedness pursuant to and to the
extent permitted by section 363(f) of the Bankruptcy Code except for Permitted
Liens, (iii) approve the assumption and assignment to Acquisition of the
Assigned Contracts, (iv) provide that the assignment of the Assigned Contracts
will not be taxed under any laws imposing stamp, sales, use or other similar
Taxes pursuant to Section 1146(c) of the Bankruptcy Code, (v) provide that none
of the Purchasers shall be subject to any successor or vicarious liability as a
result of the consummation of the transactions contemplated by this Agreement,
(vi) provide that each of the Purchasers constitutes a good faith purchaser
entitled to all of the protections under Section 363(m) of the Bankruptcy Code,
(vii) provide that all Persons are enjoined from instituting any action or
proceeding against the Purchasers or their officers, directors, employees,
Affiliates and their agent, or any of their respective assets including, without
limitation the Assets, with respect to any action, or failure to take action, by
the Sellers or to enforce or collect any claim, cause of action, right or remedy
against the Sellers or any of their Subsidiaries, except, in each case, with
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respect the Assumed Liabilities, and (viii) provide that the Bankruptcy Court
shall retain jurisdiction to enforce the terms and conditions of the Asset Sale
Order.
"ASSIGNED CONTRACTS" shall have the meaning set forth in
Section 1.2.
"ASSIGNMENT OF INTELLECTUAL PROPERTY" shall have the meaning
set forth in Section 1.3.
"ASSIGNMENT OF LEASE" shall have the meaning set forth in
Section 1.3.
"ASSUMED LIABILITIES" shall have the meaning set forth in
Section 1.2.
"AUTHORITY" means any governmental, regulatory or
administrative body, agency, commission, board, arbitrator or authority, any
court or judicial authority, any public, private or industry regulatory
authority, whether international, national, federal, state or local.
"BANK GROUP" means Union Bank of California, N.A. and U.S.
Bank National Association.
"BANKRUPTCY CODE" shall have the meaning set forth in the
Recitals.
"XXXX OF SALE" shall have the meaning set forth in Section
1.3.
"BREAK-UP FEE" shall have the meaning set forth in Section
11.3(a).
"BRING DOWN" shall have the meaning set forth in Section 8.2.
"BUSINESS" shall have the meaning set forth in the Recitals.
"CERCLA" means Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, and the Regulations
thereunder.
"CERCLIS" means Comprehensive Environmental Response,
Compensation, and Liability Information System.
"CHAPTER 11 CASE" shall have the meaning set forth in the
Recitals.
"CLAIM" means any action, claim, lawsuit, demand, suit,
inquiry, hearing, investigation, notice of a violation or noncompliance,
litigation, proceeding, arbitration, appeals or other dispute, whether civil,
criminal, administrative or otherwise.
"CLOSING" shall have the meaning set forth in Section 10.1.
"CLOSING CASH" shall have the meaning set forth in Section
1.4.
"CLOSING DATE" shall have the meaning set forth in Section
10.1.
"COBRA" shall have the meaning set forth in Section 2.13.
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"CODE" means the Internal Revenue Code of 1986, as amended,
and the Regulations thereunder.
"CONFIDENTIALITY AGREEMENT" shall have the meaning set forth
in Section 6.3.
"CONTRACT" means any agreement, contract, commitment,
instrument, document, certificate or other binding arrangement or understanding,
whether written or oral.
"DIP BUDGET" shall have the meaning set forth in Section 4.2.
"DIP FINANCING" means post-petition financing provided to the
Sellers pursuant to Section 364 of the Bankruptcy Code under that certain Credit
and Guaranty Agreement dated as of the date hereof among the Sellers and EMCORE
together with orders of the Bankruptcy Court approving such post-petition
financing.
"DISCHARGE" means any manner of spilling, leaking, dumping,
discharging, releasing, pumping, injecting, pouring, emptying, escaping,
leaching, seeping, migrating or emitting, as any of such terms may further be
defined in any Environmental Law, into or through any medium including, without
limitation, ground water, surface water, land, soil or air.
"EMCORE" shall have the meaning set forth in the Preamble.
"EMPLOYEE BENEFIT PLAN" shall have the meaning set forth in
Section 2.13.
"EMPLOYEE SIDE LETTER" shall have the meaning set forth in
Section 8.7.
"EMPLOYMENT AGREEMENTS" shall have the meaning set forth in
the Recitals.
"ENVIRONMENTAL LAWS" means all federal, state, regional or
local statutes, laws, rules, regulations, codes, ordinances, orders, plans,
injunctions, decrees, rulings, licenses, rule of common law, and changes thereto
or judicial or administrative interpretations thereof, or similar laws of
foreign jurisdictions where the Sellers conduct business, any of which govern or
relate to pollution, protection of the environment, public health and safety,
air emissions, water discharges, waste disposal, hazardous or toxic substances,
solid or hazardous waste, petroleum or petroleum products or occupational health
and safety, as any of these terms are or may be defined in such statutes, laws,
rules, regulations, codes, orders, ordinances, plans, injunctions, decrees,
rulings, licenses and changes thereto or judicial or administrative
interpretations thereof, including, without limitation: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended by the Superfund Amendment and Reauthorization Act of 1986 ("XXXX"), 42
U.S.C.ss.9601, ET SEQ.; the Solid Waste Disposal Act, as amended by the Resource
Conversation and Recovery Act of 1976 and subsequent Hazardous and Solid Waste
Amendments of 1984, 42 U.S.C.ss.6901 ET SEQ. (herein, collectively "RCRA"); the
Hazardous Materials Transportation Act, as amended, 49 U.S.C.ss.1801, ET SEQ.;
the Clean Water Act, as amended, 33 U.S.C.ss.1311, ET SEQ.; the Clean Air Act,
as amended, 42 U.S.C.ss.7401-7642; the Safe Drinking Water Act, as amended, 42
U.S.C.ss.300f, ET SEQ.; the Toxic Substances Control Act, as amended ("TSCA"),
15 U.S.C.ss.2601 ET seq.; the Federal Insecticide, Fungicide, and Rodenticide
Act as amended ("FIFRA"), 7 U.S.C.ss.136-136y; the Emergency Planning and
Community Right-to-Know Act of l986, as amended ("EPCRA"), 42 U.S.C.
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ss.11001, ET SEQ. (Title III of XXXX); the Endangered Species Act, as amended
("ESA"), 7 U.S.C.ss.136, 16 U.S.C.ss.460, ET SEQ.; and the Occupational Safety
and Health Act of 1970 ("OSHA"), as amended, 29 U.S.C.ss.651, ET SEQ.
"ENVIRONMENTAL PERMIT" means Permits, certificates, approvals,
licenses, decrees, consents, Orders and other authorizations relating to or
required by Environmental Law and necessary or desirable for the Seller's
business.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the Regulations issued thereunder.
"ERISA AFFILIATE" means each person (as defined in Section
3(9) of ERISA) which together with the Sellers or their respective subsidiaries
would be deemed to be a "single employer" within the meaning of Section 414 of
the Code.
"ESCROW AGENT" means Wilmington Trust FSB and its successors
and assigns, as provided in the Escrow Agreement.
"ESCROW AGREEMENT" shall have the meaning set forth in Section
1.5.
"ESCROW FUNDS" shall have the meaning set forth in Section
1.5.
"EXCLUDED ASSETS" shall have the meaning set forth in Section
1.1.
"EXCLUDED LIABILITIES" shall have the meaning set forth in
Section 1.2.
"FACILITY LEASE" shall have the meaning set forth in Section
8.13.
"FINAL DIP ORDER" shall have the meaning set forth in Section
11.1(d).
"FINAL ORDER" means an order or judgment of the Bankruptcy
Court or any other court or adjudicative body as to which (a) the time to
appeal, petition for certiorari, or move for reargument or rehearing has expired
and as to which no appeal, petition for certiorari, or other proceedings for
reargument or rehearing shall then be pending or, (b) in the event that an
appeal, writ of certiorari, reargument, or rehearing thereof has been sought,
such order of the Bankruptcy Court or any other court or adjudicative body shall
have been affirmed by the highest court to which such order was appealed, or
certiorari has been denied, or from which reargument or rehearing was sought,
and the time to take any further appeal, petition for certiorari or move for
reargument or rehearing shall have expired; PROVIDED, that no order shall fail
to be a Final Order solely because of the possibility that a motion pursuant to
Rule 60 of the Federal Rules of Civil Procedure or Rule 7024 of the Federal
Rules of Bankruptcy Procedure may be filed with respect to such order.
"FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 2.4.
"FINANCIAL STATEMENT DATE" shall have the meaning set forth in
Section 2.4.
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"FORBEARANCE AGREEMENTS" means all forbearance and standstill
agreements entered into among the Bank Group and Westar from time to time with
respect to any of the Sellers in the form satisfactory to the Purchasers.
"GAAP" means U.S. generally accepted accounting principles,
consistently applied, as in existence at the date hereof.
"GOVERNMENT CONTRACT" means any bid, quotation, proposal,
Contract, work authorization, lease, commitment or sale or purchase order of the
Seller that is with the United States government, any Authority or Government
Entity, including, without limitation, all Contracts and work authorizations to
supply goods and services to the United States government or any state, local or
foreign Authority.
"GOVERNMENT ENTITY" means a federal, state, provincial, local,
county or municipal government, governmental, regulatory or administrative
agency, department, court or judicial entity, commission, board, bureau,
industry regulatory authority or other Authority or instrumentality, domestic or
foreign.
"GROUP" means two or more Persons or entities (or a
combination thereof) acting as a partnership, limited partnership, syndicate or
other form for any purpose.
"GUARANTEE" means any guarantee or other contingent liability
(other than any endorsement for collection or deposit in the ordinary course of
business), direct or indirect with respect to any obligations of another Person,
through a Contract or otherwise, including, without limitation, (a) any
endorsement or discount with recourse or undertaking substantially equivalent to
or having economic effect similar to a guarantee in respect of any such
obligations and (b) any Contract (i) to purchase, or to advance or supply funds
for the payment or purchase of, any such obligations, (ii) to purchase, sell or
lease property, products, materials or supplies, or transportation or services,
in respect of enabling such other Person to pay any such obligation or to assure
the owner thereof against loss regardless of the delivery or nondelivery of the
property, products, materials or supplies or transportation or services or (iii)
to make any loan, advance or capital contribution to or other Investment in, or
to otherwise provide funds to or for, such other Person in respect of enabling
such Person to satisfy an obligation (including any liability for a dividend,
stock liquidation payment or expense) or to assure a minimum equity, working
capital or other balance sheet condition in respect of any such obligation.
"HANDLE" means any manner of generating, accumulating,
storing, treating, disposing of, arranging, transporting, transferring,
labeling, handling, manufacturing, refining, burying or using, as any of such
terms may further be defined in any Environmental Law.
"HAZARDOUS SUBSTANCES" shall be construed broadly to include
any toxic or hazardous substance, material, or waste, any petroleum or petroleum
products or motor oil, pesticides, explosive or radioactive materials, asbestos
in any form that has or threatens to become friable, urea formaldehyde foam
insulation, dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas, any chemicals, materials or substances, including raw products or raw
materials, defined or included in the definition of "hazardous materials,"
"hazardous substances," "hazardous wastes," "restricted hazardous wastes,"
"toxic substances,"
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"toxic pollutants," or words of similar import, under any applicable
Environmental Laws, any other chemical, material, substance, mixture or
by-product, exposure to which is prohibited, limited, or regulated by any
Government Entity and any other contaminant, pollutant or constituent thereof,
whether liquid, solid, semi-solid, sludge and/or gaseous, the presence of which
requires investigation or remediation under any Environmental Law or which are
regulated, listed or controlled by, under or pursuant to any Environmental Law,
or which has been or shall be determined or interpreted at any time by any
Government Entity to be a hazardous or toxic substance regulated under any other
Regulation or Order, or which causes or poses a threat to cause contamination or
a nuisance on the premises or any adjacent premises or a hazard to the
environment or to the health or safety of persons, flora, or fauna on the
premises.
"HURDLE RATE" shall have the meaning set forth in Section
12.2(a).
"IMPROVEMENTS" shall have the meaning set forth in Section
2.9(d).
"INDEBTEDNESS" with respect to any Person means (a) any
obligation of such Person for borrowed money, including, without limitation: (i)
any obligation or liabilities incurred for all or any part of the purchase price
of property or other assets or for the cost of property or other assets
constructed or of improvements thereto, other than accounts payable included in
current liabilities and incurred in respect of property purchased in the
ordinary course of business, (whether or not such Person has assumed or become
liable for the payment of such obligation) (whether accrued, absolute,
contingent, unliquidated or otherwise, known or unknown, whether due or to
become due); (ii) the face amount of all letters of credit issued for the
account of such Person and all drafts drawn thereunder; (iii) obligations
incurred for all or any part of the purchase price of property or other assets
or for the cost of property or other assets constructed or of improvements
thereto, other than accounts payable included in current liabilities and
incurred in respect of property purchased in the ordinary course of business
(whether or not such Person has assumed or become liable for the payment of such
obligation) secured by Liens; (iv) capitalized lease obligations; and (v) all
Guarantees of such Person; (b) accounts payable of such Person that have not
been paid within sixty (60) days of their due date and are not being contested;
(c) annual employee bonus obligations that are not accrued on the Financial
Statements; and (d) retroactive insurance premium obligations.
"INDEMNITEE" shall have the meaning set forth in Section 12.5.
"INDEMNITOR" shall have the meaning set forth in Section 12.5.
"INTELLECTUAL PROPERTY" means all foreign and domestic,
registered and unregistered trademarks, trade names, service marks, service
names, patents and patent rights, utility models and utility model rights,
registered and unregistered copyrights, mask works, brand names, trade dress,
product designs, product packaging, business and product names, logos, slogans,
rights of publicity, trade secrets, inventions (whether or not patentable or
reduced to practice), invention disclosures, improvements, processes, formulae,
industrial models, designs, specifications, technology, methodologies, computer
software (including all source code and object code), firmware, development
tools, flow charts, annotations, all Web addresses, sites and domain names, all
data bases and data collections and all rights therein, any other confidential
and proprietary right or information, whether or not subject to statutory
registration,
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and all related technical information, manufacturing, engineering and technical
drawings, know-how, the goodwill associated with any of the foregoing, and all
pending applications for and registrations of patents, utility models,
trademarks, service marks and copyrights, and the right to xxx for past
infringement, if any, in connection with any of the foregoing, and all
documents, disks, records, lab notebooks, files and other media on which any of
the foregoing is stored.
"INTERIM DIP ORDER" shall have the meaning set forth in
Section 11.1(c).
"INVESTMENT" means (a) any direct or indirect ownership,
purchase or other acquisition by a Person of any notes, obligations,
instruments, capital stock, Options, securities or ownership interests
(including partnership interests and joint venture interests) of any other
Person; and (b) any capital contribution or similar obligation by a Person to
any other Person.
"IT" shall have the meaning set forth in Section 4.11.
"KNOWLEDGE" or "knowledge" or any similar phrase when used in
reference to the Sellers shall mean the knowledge of each of Xxxxx Xxxxxxxx, Xxx
Xxxxxxx, Xxxxxxx Xxxxx, Xxxxx Xxxxxx and Xxxxx Xx, whether actual or the
knowledge that a reasonably prudent business person in their respective
positions would have in the course of performing their respective duties.
"LICENSES" means any and all licenses and/or permits issued by
an Authority or other third party relating to the operation of any of the
Acquired Assets or conduct of the Business.
"LIEN" means any (a) security interest, lien, mortgage,
pledge, hypothecation, encumbrance, Claim, easement, charge, restriction on
transfer or otherwise, or interest of another Person of any kind or nature,
including any conditional sale or other title retention Contract or lease in the
nature thereof; (b) any filing or agreement to file a financing statement as
debtor under the Uniform Commercial Code or any similar statute; and (c) any
subordination arrangement in favor of another Person.
"MATERIAL ADVERSE CHANGE" means any developments or changes
which would have a Material Adverse Effect.
"MATERIAL ADVERSE EFFECT" means any circumstances, state of
facts or matters which have, or which might reasonably be expected to have, a
material adverse effect in respect of the Business or its operations,
properties, assets, liabilities, affairs, condition (financial or otherwise),
results, plans, strategies or prospects, other than (i) as set forth in SCHEDULE
8.3 hereto; provided that such condition as set forth on SCHEDULE 8.3 does not
materially worsen prior to the Closing Date such that the materially worsened
condition would itself be considered a Material Adverse Effect, (ii) changes
generally affecting the Sellers' industry and not affecting the Business
disproportionately, (iii) changes in general economy or regulatory conditions,
and (iv) adverse effects resulting solely from the filing of the Chapter 11
Case. Without limiting the generality of the foregoing each of the following
shall be deemed to have a Material Adverse Effect, (i) the loss of any five (5)
or more of the employees listed in the Employee Side Letter, or (ii) any Claim
that the products sold by the Business infringe or require a license under the
Intellectual Property of a third party.
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"MATERIAL LEASES" shall have the meaning set forth in Section
2.9(a).
"NO-SHOP PROVISIONS" shall have the meaning set forth in
Section 4.8.
"OCCURRENCE" means any accident, happening or event which
occurs or has occurred at any time prior to the Closing Date that is caused or
allegedly caused by any hazard or defect in manufacture, design, materials or
workmanship including, without limitation, any failure or alleged failure to
warn or any breach or alleged breach of express or implied warranties or
representations with respect to a product manufactured, shipped, sold or
delivered by or on behalf of the Seller which results or is alleged to have
resulted in injury or death to any person or damage to or destruction of
property (including damage to or destruction of the product itself) or other
consequential damages, at any time.
"OPTION" means any subscription, option, warrant, right,
security, Contract, commitment, understanding, stock appreciation right, phantom
stock option, profit participation or arrangement by which the Seller is bound
to issue any additional shares of its capital stock or an interest in the equity
or equity appreciation of the Seller or rights pursuant to which any Person has
a right to purchase shares of the Seller's capital stock or an interest in the
equity or equity appreciation of the Seller.
"ORDER" means any writ, decree, order, judgment, injunction,
rule, ruling, Lien, voting right, consent of or by a Government Entity.
"OVERLAP PERIOD" shall have the meaning set forth in Section
7.2(a).
"PARENT" shall have the meaning set forth in the Preamble.
"PERMITS" means all permits, licenses, registrations,
certificates, Orders, qualifications or approvals required by any Authority or
other Person.
"PERMITTED LIENS" means (a) statutory Liens not yet delinquent
and immaterial in amount; (b) Liens specifically enumerated in the Financial
Statements or the notes thereto; (c) the rights of customers of the Seller with
respect to inventory or work in progress under purchase orders or Contracts
entered into by the Seller in the ordinary course of business; (d) mechanics',
carriers', workers', repairmen's, warehousemen's, or other similar Liens arising
in the ordinary course of business in respect of obligations not overdue and
immaterial in amount or which are being contested in good faith and covered by a
bond in an amount at least equal to the amount of the Lien; and (e) deposits or
pledges to secure workmen's compensation, unemployment insurance, old age
benefits or other social security obligations in connection with, or to secure
the performance of, bids, tenders, trade Contracts not for the payment of money
or leases, or to secure statutory obligations or surety or appeal bonds or other
pledges or deposits for purposes of like nature in the ordinary course of
business and immaterial in amount.
"PERSON" means any corporation, partnership, joint venture,
limited liability company, organization, entity, Authority or natural person.
"PETITION DATE" shall have the meaning set forth in Section
4.1.
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"POLICIES" means all Contracts that insure (a) the Sellers' or
any of their Subsidiaries, properties, plant and equipment for loss or damage;
and (b) the Sellers or any of their Subsidiaries or their officers, directors,
employees or agents against any liabilities, losses or damages (or lost profits)
for any reason or purpose.
"PRE-CLOSING PERIOD" shall have the meaning set forth in
Section 2.11(a).
"PURCHASE PRICE" shall have the meaning set forth in Section
1.4.
"PURCHASERS" shall have the meaning set forth in the Preamble.
"RCRA" means the Resource Conservation and Recovery Act, as
amended, and the Regulations thereunder.
"RCRIS" means the Resource Conservation and Recovery
Information System.
"RECALLS" means product recall, rework or post-sale warning or
similar action.
"REGISTERED INTELLECTUAL PROPERTY" means all United States,
international and foreign: (a) patents and patent applications (including
provisional applications); (b) registered trademarks and servicemarks,
applications to register trademarks and servicemarks, intent-to-use
applications, other registrations or applications to trademarks or servicemarks,
or trademarks or servicemarks in which common law rights are owned or otherwise
controlled; (c) registered copyrights and applications for copyright
registration; (d) any mask work registrations and applications to register mask
works; and (e) any other Intellectual Property that is the subject of an
application, certificate, filing, registration or other document issued by,
filed with, or recorded by, any state, government or other public legal
authority.
"REGULATION" means any rule, law, code, statute, regulation,
ordinance, requirement, announcement, policy, guideline, rule of common law or
other binding action of or by a Governmental Entity and any judicial
interpretation thereof.
"RESTRICTED AREA" shall have the meaning set forth in Section
4.5(a).
"RESTRICTED GEOGRAPHIC AREA" shall have the meaning set forth
in Section 4.5(a).
"RESTRICTED PERIOD" shall have the meaning set forth in
Section 4.5(a).
"SALE MOTION" shall have the meaning set forth in Section 4.1.
"SELLER INTELLECTUAL PROPERTY" means any Intellectual Property
that (a) is owned by; (b) is licensed to; (c) was developed or created by or for
the Seller or any of its Subsidiaries AND is used in or useful for the conduct
of the Business as presently or heretofore conducted or as proposed to be
conducted, including any Intellectual Property created by any of the Seller's or
its Subsidiaries' respective founders, employees, independent contractors or
consultants for or on behalf of the Seller or any of its Subsidiaries which is
currently used or reasonably usable in the Business (except to the extent owned
by a third party under "work for hire" or similar doctrines)
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created by any of the Seller's founders prior to the creation of the Seller or
any of its Subsidiaries.
"SELLER REGISTERED INTELLECTUAL PROPERTY" means all Registered
Intellectual Property owned by, held by another for the benefit of filed in the
name of, assigned to or applied for by, or held by a third party for the benefit
of, the Seller related to the Business.
"SELLERS" shall have the meaning set forth in the Preamble.
"SUBSIDIARY" or "SUBSIDIARIES" means any Person in which the
Seller has (a) an Investment; (b) advanced funds or provided financial
accommodations to which, in each case, is secured by an Investment; or (c) has
an Option to acquire an Investment in such Person.
"TAX RETURNS" shall have the meaning set forth in Section
2.11(a).
"TAX" or "TAXES" means all taxes, assessments, charges,
duties, fees, levies or other governmental charges, including, without
limitation, all Federal, state, local, foreign and other income, franchise,
profits, gross receipts, capital gains, capital stock, transfer, property,
sales, use, value-added, occupation, property, excise, severance, windfall
profits, stamp, license, payroll, social security, withholding and other taxes,
assessments, charges, duties, fees, levies or other governmental charges of any
kind whatsoever, including any fees or charges due under any Environmental
Permits or Environmental Laws (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), all estimated taxes,
deficiency assessments, additions to tax, penalties and interest and shall
include any liability for such amounts as a result either of being a member of a
combined, consolidated, unitary or affiliated group or of a contractual
obligation to indemnify any person or other entity.
"TAXING AUTHORITIES" means Internal Revenue Service and any
other Federal, state, or local Authority which has the right to impose Taxes on
the Seller or the Sellers.
"TPS" shall have the meaning set forth in the Preamble.
"TRANSFER TAXES" shall have the meaning set forth in Section
7.2(b).
"UNDERGROUND STORAGE TANK" shall have the meaning ascribed to
such term in Section 6901 ET SEQ., as amended, of RCRA, or any applicable
Regulation, Order governing underground storage tanks (including all integral
piping, dispensers, dispenser lines, fill ports, fill lines, liquid traps,
sumps, well cellars and other liquid traps connected to an underground storage
tank).
"UST" shall have the meaning set forth in Section 4.2.
"WESTAR" means Westar Capital II, LLC.
13.4 NOTICES. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission against
facsimile confirmation or mailed by internationally
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recognized overnight courier prepaid, to the parties at the following addresses
or facsimile numbers:
(a) If to the Sellers, to:
Tecstar, Inc.
00000 Xxx Xxxxxx Xxxx
Xxxx xx Xxxxxxxx, Xxxxxxxxxx
Facsimile: (000) 000-0000
Attn: President
with a copy to (which shall not constitute notice to the Seller):
O'Melveny & Xxxxx LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxx, Esq.
and
Irell & Xxxxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxx Xxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
and
U.S. Bank, National Association
U.S. Bank Place
EP-MN-MZ5L
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxxxx
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and
Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Brunette, Jr., Esq.
and
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxx Xxxxxxx
and
Pillsbury Winthrop LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile; (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxx, Esq.
or to such other Person or address as the Sellers shall furnish by notice to the
Purchasers in writing.
(b) If to the Purchasers, to:
EMCORE Corporation
000 Xxxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
General Counsel
with a copy to (which shall not constitute notice to the
Purchasers):
White & Case LLP
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
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and
U.S. Bank, National Association
U.S. Bank Place
EP-MN-MZ5L
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx Xxxxxxx
and
Sheppard, Mullin, Xxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Brunette, Jr., Esq.
and
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxx Xxxxxxx
and
Pillsbury Winthrop LLP
000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile; (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxx Xxxxxxx, Esq.
or to such other Person or address as the Purchasers shall furnish by notice to
the Sellers in writing.
If to the Escrow Agent:
Wilmington Trust FSB
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxx X. Xxxxx
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All such notices, requests and other communications will (a) if
delivered personally to the address as provided in this Section 13.4, be deemed
given upon delivery, (b) if delivered by facsimile transmission to the facsimile
number as provided for in this Section 13.4, be deemed given upon facsimile
confirmation, and (c) if delivered by overnight courier to the address as
provided in this Section 13.4, be deemed given on the earlier of the first
business day following the date sent by such overnight courier or upon receipt
(in each case regardless of whether such notice, request or other communication
is received by any other Person to whom a copy of such notice is to be delivered
pursuant to this Section 13.4). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
13.5 ASSIGNMENT. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any of
the parties hereto without the prior written consent of the other parties,
except that the Purchasers may, without the prior approval of the Sellers, but
with the consent of the Bank Group which shall not be unreasonably withheld,
assign its rights, interests and obligations hereunder to any Affiliate, and may
grant Liens in respect of its rights and interests hereunder to its lenders (and
any agent for the lenders), and the parties hereto consent to any exercise by
such lenders (and such agent) of their rights and remedies with respect to such
collateral.
13.6 GOVERNING LAW, SUBMISSION TO JURISDICTION. Except as and to the
extent required to consummate the transactions contemplated by this Agreement
under California and Delaware law, this Agreement, any ancillary agreements and
any other closing documents shall be governed by and construed in accordance
with the laws of the State of New York as applied to Contracts entered into by
New York residents and performed entirely in New York, without giving effect to
its principles or rules regarding conflicts of laws, other than such principles
directing application of the laws of New York. Each party hereto irrevocably
agrees that any legal action or proceeding with respect to this Agreement or for
recognition and enforcement of any judgment in respect hereof brought by another
party hereto or its successors or assigns may be brought and determined by
either a state court or federal court sitting in the District of Delaware and
each party hereto hereby irrevocably submits with regard to any such action or
proceeding for itself and in respect to its property, generally and
unconditionally, to the nonexclusive jurisdiction of the aforesaid courts. Each
party hereto hereby irrevocably waives, and agrees not to assert, by way of
motion, as a defense, counterclaim or otherwise, in any action or proceeding
with respect to this Agreement, (a) any Claim that it is not personally subject
to the jurisdiction of the above-named courts for any reason other than the
failure to serve process in accordance with this Section 13.6, (b) that it or
its property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise), and (c) to the fullest extent permitted by
applicable law, that (i) the suit, action or proceeding in any such court is
brought in an inconvenient forum, (ii) the venue of such suit, action or
proceeding is improper and (iii) this Agreement, or the subject matter hereof,
may not be enforced in or by such courts.
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13.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts (including by means of telecopied signature pages), each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument. Counterpart signatures need not be on the same page and
shall be deemed effective upon receipt.
13.8 HEADINGS. The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
13.9 ENTIRE AGREEMENT. This Agreement, including the schedules and
exhibits hereto and the contracts, documents, certificates and instruments
referred to herein, embodies the entire agreement and understanding of the
parties hereto in respect of the transactions contemplated by this Agreement and
supersedes all prior contracts, representations, warranties, promises,
covenants, arrangements, communications and understandings, oral or written,
express or implied, between the parties with respect to such transactions. There
are no contracts, representations, warranties, promises, covenants, arrangements
or understandings between the parties with respect to the transactions
contemplated hereby, other than those expressly set forth or referred to herein.
13.10 INJUNCTIVE RELIEF. The parties hereto agree that in the event of
a breach of any provision of this Agreement or a failure by a party to perform
in accordance with the specific terms herein, the aggrieved party or parties may
be damaged irreparably and without an adequate remedy at law. The parties
therefore agree that in the event of a breach of any provision of this
Agreement, the aggrieved party or parties may elect to institute and prosecute
proceedings in any court of competent jurisdiction to enforce specific
performance or to enjoin the continuing breach of such provision without the
requirement of posting a bond, as well as to obtain damages for breach of this
Agreement. By seeking or obtaining any such relief, the aggrieved party shall
not be precluded from seeking or obtaining any other relief to which it may be
entitled.
13.11 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party hereto, upon any breach or default of any
other party under this Agreement, shall impair any such right, power or remedy
of such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or character on
the part of any party hereto of any breach or default under this Agreement, or
any waiver on the part of any party of any provisions or conditions of this
Agreement must be made in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
13.12 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable Regulations, but if any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be held to
be prohibited by, illegal or unenforceable under applicable law in any respect
by a court of competent jurisdiction, such provision shall be ineffective only
to the
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extent of such prohibition or illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
13.13 EXPENSES. Except as set forth in Section 11.3, the Purchasers
shall bear their own expenses, including without limitation, legal fees and
expenses, with respect to this Agreement and the transactions contemplated
hereby. Except as set forth in Section 11.3, the Sellers shall bear their own
expenses, including without limitation, brokerage or investment banking,
accounting and legal fees and expenses, with respect to this Agreement and the
transactions contemplated hereby. If any legal action or other proceeding
relating to this Agreement, the agreements contemplated hereby, the transactions
contemplated hereby or thereby or the enforcement of any provision of this
Agreement or the agreements contemplated hereby is brought against any party,
the prevailing party in such action or proceeding shall be entitled to recover
all reasonable expenses relating thereto (including attorney's fees and
expenses) from the party against which such action or proceeding is brought in
addition to any other relief to which such prevailing party may be entitled.
13.14 NO THIRD PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the parties and their permitted successors and assigns and nothing
herein express or implied shall be construed to give any person, other than the
parties of such permitted successors and assigns and the Bank Group, any legal
or equitable rights hereunder.
13.15 SCHEDULES. No exceptions to any representations or warranties
disclosed on one schedule shall constitute an exception to any other
representation or warranties made in this Agreement unless the substance of such
exception is disclosed as provided herein on each such applicable schedule or a
specific cross reference to a disclosure on another schedule is made. All
schedules and exhibits attached hereto or referred to herein are hereby
incorporated in and made a part of this Agreement as if set forth in full
herein.
13.16 NO STRICT CONSTRUCTION. The parties have participated jointly in
the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties, and no presumption or burden of proof
shall arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement.
13.17 CONSTRUCTION. Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender and the neuter, (ii)
words using the singular or plural number also include the plural or singular
number, respectively, (iii) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement as a whole and not to
any particular Article, Section or other subdivision, (iv) the terms "Article"
or "Section" or other subdivision refer to the specified Article, Section or
other subdivision of the body of this Agreement, (v) the phrases "ordinary
course of business" and "ordinary course of business consistent with past
practice" refer to the business and practice of the Sellers and the Business,
(vi) the words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation," and (vii) when a reference is made
in this Agreement to exhibits, such reference shall be to an exhibit to this
Agreement unless otherwise indicated. All accounting terms used herein and not
expressly defined herein shall have the meanings given to them under GAAP. When
used herein, the terms "party" or "parties" refer to the Sellers, on the
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one hand, and the Purchaser, on the other, and the terms "third party" or "third
parties" refers to Persons other than the Sellers or the Purchaser.
13.18 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS AGREEMENT OR ANY SCHEDULE OR EXHIBIT HERETO, OR ANY COURSE
OF CONDUCT, COURSE OF DEALING OR STATEMENTS (WHETHER VERBAL OR WRITTEN) RELATING
TO THE FOREGOING. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO
TO ENTER INTO THIS AGREEMENT.
* * *
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Asset Purchase Agreement the date first hereinabove set forth.
EMCORE CORPORATION
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Title:
-----------------------------------
TPS ACQUISITION CORPORATION
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Title:
-----------------------------------
TECSTAR, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Title:
-----------------------------------
TECSTAR POWER SYSTEMS, INC.
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Title:
-----------------------------------
Solely for purposes of Section 4.5 of this Agreement, the following shareholder
of Parent has executed this Agreement as of the date first hereinabove set forth
and agrees to be bound by the provisions thereof.
SHAREHOLDER:
WESTAR CAPITAL II, LLC
By: /s/ Xxxx Xxxxx
-------------------------------------
Title:
-----------------------------------
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