Exhibit 2.4
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of May 7, 2002, by and between
MICROSEMI RF PRODUCTS, INC., a Delaware corporation (the "Seller"), a
wholly-owned subsidiary of Microsemi Corporation, a Delaware corporation
("Microsemi") and RF ACQUISITION SUB, INC. (the "Purchaser"), a Delaware
corporation and a wholly-owned subsidiary of Advanced Power Technology, Inc., a
Delaware corporation ("APT").
RECITAL:
WHEREAS, the Seller desires to sell and transfer to the Purchaser, and
the Purchaser desires to purchase and assume from the Seller, certain assets and
liabilities, all as more specifically provided herein;
AGREEMENT:
NOW, THEREFORE, for good and valuable considerations, receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:
ARTICLE 1
Definitions
Section 1 Certain Definitions. As used in this Agreement, the
following terms have the respective meanings set forth below.
Section 1.1 "Affiliate" means, with respect to any Person, any
other Person who directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such Person. The
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlled" and "controlling" have meanings correlative thereto.
Section 1.2 "Agreement" means this Asset Purchase Agreement.
Section 1.3 "Assigned Contracts" has the meaning ascribed to it
in Section 1.33(ix).
Section 1.4 "Assumed Liabilities" means:
(i) the obligation to fill Sales Orders from
customers of the Seller received and entered by the Seller in the Backlog as of
the Closing Date which are assigned to the Purchaser at the Closing;
(ii) the obligation to pay suppliers for goods or
services received by the Purchaser after the Closing Date pursuant to Purchase
Orders placed by the Seller prior to the Closing Date specifically listed on
Schedule 1.33(viii) to this Agreement as updated to the Closing Date;
(iii) the obligations of the Seller and its
successors under Assigned Contracts, other than Purchase Orders, assigned to and
assumed by the Purchaser which are listed on Schedule 1.33(ix) to this
Agreement;
(iv) product liability for Purchased Inventory;
(v) all ongoing utility obligations (telephone,
power, gas, water, and the like) prorated as of the Closing Date; and
(vi) each of the other liabilities and obligations
of the Seller set forth in Schedule 1.4(vi).
Section 1.5 "Authorizations" has the meaning ascribed to such
term in Section 5.11.
Section 1.6 "Backlog" means certain agreed upon backlog as listed
on Schedule 1.33(vi) with an estimated value as set forth on such Schedule, as
updated to the Closing Date.
Section 1.7 "Business Day" means a day, other than a Saturday or
Sunday, on which commercial banks in New York are open for the general
transaction of business.
Section 1.8 "Closing" has the meaning ascribed to such term in
Section 4.4.
Section 1.9 "Closing Date" has the meaning ascribed to such term
in Section 4.4.
Section 1.10 "Code" means the Internal Revenue Code of 1986, as
amended.
Section 1.11 "Encumbrances" means each lien, claim, charge,
mortgage, security interest, equity or other encumbrance.
Section 1.12 "Environmental Claims" means (a) any judicial or
administrative enforcement actions, proceedings, claims, orders (including
consent orders and decrees), directives, notices (including notices of
inspection, notices of abatement, notices of non-compliance or violation and
notices to comply), requests for information or investigation instituted or
threatened by any governmental authority pursuant to any Environmental Law; or
(b) any suits, arbitrations, legal proceedings, actions or claims instituted,
made or threatened that relate to any damage, contribution, cost recovery,
compensation, loss or injury resulting from the Release or threatened Release
(whether sudden or non-sudden or accidental or non-accidental) of, or exposure
to, any Regulated Substances, or the violation or alleged violation of any
Environmental Law, or the generation, manufacture, use, storage, transportation,
treatment, or disposal of Regulated Substances.
Section 1.13 "Environmental Condition" shall mean each of the
following:
(i) any environmental or other condition within
the jurisdiction of, or regulated by, any Environmental Law or which could form
the basis of an Environmental Claim, that has existed or exists as of the
Closing Date on account of actions or omissions occurring on or prior to the
Closing Date;
(ii) the generation, use, manufacture, treatment,
storage, transportation, or disposal of Regulated Substances on or prior to the
Closing Date;
(iii) the Release of Regulated Substances on or
prior to the Closing Date on account of actions or omissions occurring on or
prior to the Closing Date; or
(iv) any violation of any Environmental Law
based, in whole or in part, on the acts or omissions of Seller or any
predecessor operator or owner of the Facility at any time on or prior to the
Closing Date or the operation of the Facilities on or prior to the Closing Date;
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in, at, on, to, from, under, above or related to or otherwise in connection with
the Facilities and whether or not such conditions, claims, actions, inactions,
occurrences, or matters have been previously disclosed to the Purchaser or are
described, listed or referred to in any Schedule attached hereto.
Section 1.14 "Environmental Laws" means any and all federal, state
and local laws, statutes, orders, ordinances, rules, regulations, plans,
policies or decrees and the like relating to (i) environmental matters,
including without limitation those relating to fines, injunctions, penalties,
damages, contribution, cost recovery compensation, losses or injuries resulting
from the unlawful Release or threatened Release of Regulated Substances, (ii)
the generation, use, storage, transportation, treatment, or disposal of
Regulated Substances, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal, health or
welfare, in any manner applicable to Seller, the Business or the Facilities,
including without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. (S)9601 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. (S)1801 et seq.), the Resource
Conservation and Recovery Act (42 X.X.X (X)0000 et seq.), the Federal Water
Pollution Control Act (33 U.S.Css.1251 et seq.), the Clean Air Act (42
U.S.C. (S)7401 et seq.), the Toxic Substances Control Act (15 U.S.C. (S)2601 et
seq.), the Occupational Safety and Health Act (29 U.S.C.ss.651 et seq.) and the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. (S)11001 et seq.),
each as amended or supplemented from time to time, and any analogous local,
state or federal statutes and regulations, and all rules and regulations
promulgated under each of the foregoing, as they are enacted and in effect on or
prior to the Closing Date.
Section 1.15 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
Section 1.16 "Excluded Assets" is defined as follows:
(i) Seller's cash, cash equivalents, deposit
accounts and similar accounts;
(ii) Seller's corporate entity, corporate name,
corporate minute books, stock books and
corporate seal;
(iii) Seller's books of account, tax returns,
accounting and personnel records;
(iv) Seller's rights or interests in customer
relationship management software programs
provided on networks hosted by Microsemi;
and
(v) The name "Microsemi," and all other
trademarks, trade names, service marks,
logos, and trade dress used by Seller in
connection with the Products or the
Business.
Section 1.17 "Excluded Liabilities" means any and all liabilities
or obligations of Seller or its Affiliates to a third party arising by reason of
the Seller's business or operations, other than the Assumed Liabilities.
Section 1.18 "Execution Date" is defined as the date first set
forth in this Agreement.
Section 1.19 "Facilities" means any and all real property
(including without limitation, all soil, groundwater or surface water,
buildings, fixtures or other improvements located thereon, under or adjacent to
the properties and buildings thereon) previously or now owned, leased or
operated by Seller or any prior owner, lessee or operator of real property at
the location commonly known as 000 Xxxxxxxx Xxxxx, in
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Montgomeryville Industrial Center (Plan in Plan Book A-9 page 49), situated in
the Township of Xxxxxxxxxx, County of Xxxxxxxxxx, Commonwealth of Pennsylvania.
Section 1.20 "Governmental Authority" means any national, federal,
state, provincial, county, municipal or local government, foreign or domestic,
or the government of any political subdivision of any of the foregoing, or any
entity, authority, agency, ministry or other similar body exercising executive,
legislative, judicial, regulatory or administrative authority or functions of or
pertaining to government, including any authority or other quasi-governmental
entity established to perform any of such functions.
Section 1.21 "Knowledge" of either Party means actual knowledge of
the senior management of the Party after reasonable inquiry in the ordinary
course of the Seller's business.
Section 1.22 "Licensed Proprietary Rights" means Seller's (a)
patents, patent registrations, and patent applications set forth in Schedule
1.22, together with (b) copyrights, copyright registrations, and copyright
applications set forth in Schedule 1.22 in the manufacture of the Products, and
(c) technology, inventions, derivative products, enhancements, product drawings,
trade secrets, know-how, customer lists, manufacturing processes, process data,
product designs, bills of materials and other proprietary information or rights
to the extent derived from or used in the manufacture of the Products and listed
in Schedule 1.22; and permits, licenses or other agreements to or from third
parties regarding the foregoing and listed on Schedule 1.22 hereof.
Section 1.23 "Manufacturers" means the contract manufacturers
utilized by Seller identified on Schedule 1.23.
Section 1.24 "Material Adverse Effect" means an adverse effect on
the business, financial condition, or operations or prospects of the Seller,
each respectively taken as a whole, and each in excess of $100,000.
Section 1.25 "Non-Disclosure Agreement" is defined in Section 7.1.
Section 1.26 "Operative Documents" means (i) in the case of the
Seller, the Xxxx of Sale, the License, the deed, assignment, and all instruments
and other documents to be executed and delivered by the Seller necessary for the
conveyance of the Purchased Assets to the Purchaser or which this Agreement
expressly provides are to be executed and delivered by the Seller and (ii) in
the case of the Purchaser, the documents which this Agreement expressly provides
are to be executed and delivered by the Purchaser.
Section 1.27 "PADEP" shall mean the Pennsylvania Department of
Environmental Protection or any successor Governmental Agency having
jurisdiction or regulatory oversight authority over the Facilities.
Section 1.28 "Party" means each of the Seller or the Purchaser
individually, and "Parties" means the Seller and the Purchaser, collectively.
Section 1.29 "Person" means an individual, partnership,
corporation, joint stock company, unincorporated organization or association,
trust or joint venture, or a governmental agency or political subdivision
thereof.
Section 1.30 "Products" are defined as the radio frequency
semiconductor products listed on Schedule 1.30.
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Section 1.31 "Purchase Orders" means all outstanding purchase
orders issued by Seller or for Seller to suppliers of the Seller listed in
Schedule 1.33(viii); provided, however, that the term "Purchase Orders" shall
not include any purchase order approved or issued by the Seller for goods
received prior to the Closing Date.
Section 1.32 "Purchase Price" shall mean the purchase price
payable to Seller at the Closing as described in Section 4.1.
Section 1.33 "Purchased Assets" means all right, title and
interest in and to the following property which is specified below (except for
any portions thereof that are Excluded Assets):
(i) the Facilities presently owned by Seller as
identified in Schedule 1.33(i);
(ii) all machinery and equipment (including spare
parts) and business machines, forklift trucks, and other vehicles, furniture,
fixtures, supplies, capital improvements in process, die cast, molds, tools and
all other tangible personal property employed in the manufacture of the Products
and reflected on Schedule 1.33(ii) hereof;
(iii) all easements, rights of way, servitudes,
leases, permits, licenses or options related to the Facilities used or held by
the Seller, if any, reflected on Schedule 1.33(iii) hereto;
(iv) all Purchased Inventory identified on
Schedule 1.33(iv), subject to sale in the ordinary course of business consistent
with past practice to and including the Closing Date;
(v) all Purchased Proprietary Rights identified
on Schedule 1.33(v);
(vi) all Backlog identified on Schedule 1.33(vi);
(vii) all authorizations, consents, approvals,
licenses, orders, permits, exemptions of, filings or registrations with, any
Governmental Authority (to the extent assignable), and all correspondence
relating thereto including those shown on Schedule 1.33(vii);
(viii) all rights under any Purchase Orders to the
extent specifically listed on Schedule 1.33(viii);
(ix) all of the contracts listed in
Schedule 1.33(ix) ("Assigned Contracts");
(x) all employment restrictive covenants and
obligations, to the extent related to the Products or the Purchased Assets and
assignable, of (i) present and former employees of the Seller employed at any
time within one year before the Closing Date, and (ii) agents, representatives,
and independent contractors of the Seller;
(xi) copies of all records, files and
correspondence, relating to the Purchased Assets or Assumed Liabilities to the
extent available;
(xii) copies of all operating and training
manuals, catalogs, quotations, bids, sales and promotional materials,
correspondence, research and development records, prototypes, lists of present
and former customers and suppliers, customer information including a 5-year
sales history, to the extent available relating to the Products; and
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(xiii) (with the consent of such employees) copies
of the personnel, employment and other records of the employees hired by the
Purchaser and listed on Schedule 5.15(i); and
(xiv) the accounts receivable identified on
Schedule 1.33(xiv), subject to normal collection in the ordinary course of
business from the date and time of gathering information for such Schedule to
the Closing Date.
Section 1.34 "Proprietary Rights" means the combination of all
Licensed Proprietary Rights and all Purchased Proprietary Rights.
Section 1.35 "Purchased Inventory" means Inventory of the Products
located in the Facilities or at facilities of the Manufacturers as of the
Closing Date. "Inventory" means any and all inventory, including raw material
inventories, warehouse stock, parts, inventories, material, supplies,
work-in-progress and finished products, packaging and shipping materials of the
Seller.
Section 1.36 "Purchased Proprietary Rights" shall mean Seller's
(a) patents, patent registrations, and patent applications set forth in Schedule
1.33(v), together with (b) copyrights, copyright registrations, and copyright
applications set forth in Schedule 1.33(v) used any time prior to the Closing in
the manufacture of the Products, (c) technology, inventions, product drawings,
trade secrets, know-how, customer lists, manufacturing processes, process data,
product designs, bills of materials and other proprietary information or rights
to the extent derived from or used in the manufacture of the Products prior to
the Closing identified in Schedule 1.33(v); and permits, licenses or other
agreements to or from third parties regarding the foregoing and listed on
Schedule 1.33(v); and (d) all mask sets of the Products.
Section 1.37 "Regulated Substances" means (i) any chemical,
material or substance now defined as or included in the definition of "hazardous
substance," "hazardous waste," "hazardous material," "extremely hazardous
waste," "restricted hazardous waste," "infectious waste," "toxic substance," or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity or other words of similar
import under any applicable Environmental Laws or publications promulgated
pursuant thereto, and any other chemical, material or substance, exposure to
which is prohibited or regulated by any governmental authority or Environmental
Law, or which is reasonably likely to pose a hazard to the health and safety of
the owners, occupants or any other persons in the vicinity of the Facilities,
(ii) any oil, petroleum or petroleum derived substance, (iii) any drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources,
(iv) any radioactive materials, (v) asbestos in any form which is or could
become friable, (vi) urea formaldehyde foam insulation, (vii) polychlorinated
biphenyls, or (viii) pesticides.
Section 1.38 "Release" means any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching, or migration of Regulated Substances into the
indoor or outdoor environment (including without limitation, the abandonment or
disposal of any storage tanks, barrels, containers or other closed receptacles
containing any Regulated Substance), or into or out of the Facilities, including
the movement of any Regulated Substances through the air, soil, surface water,
or groundwater of the Facilities.
Section 1.39 "Sales Order" means all agreements, commitments, accepted
purchase orders, sale confirmations or other similar agreements for the sale by
the Seller of Products.
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ARTICLE 2
Purchase and Sale of Assets
Section 2.1 Assets Acquired. Subject to the terms and conditions
of this Agreement, the Seller agrees to sell, assign, convey, transfer and
deliver to the Purchaser on the Closing Date, and the Purchaser agrees to
purchase and acquire from the Seller on the Closing Date, all of the Purchased
Assets, and the Seller and the Purchaser agree to execute an Assignment of
License Agreement in the form of Exhibit A for Seller to transfer a license to
the Purchaser to use on and after the Closing Date all of the Licensed
Proprietary Rights.
Section 2.2 Assets Excluded. Notwithstanding anything to the
contrary contained in this Agreement, the Purchaser will not purchase and
acquire or obtain any right or license to, any of the Excluded Assets, and the
Excluded Assets are specifically excluded from the assets to be sold, assigned,
licensed and/or transferred to the Purchaser pursuant to this Agreement.
ARTICLE 3
Assumption of Liabilities and Limitation
Section 3.1 Liabilities Assumed. The Purchaser agrees to assume
the Assumed Liabilities from the Seller as of the Closing.
Section 3.2 Limitations. EXCEPT FOR THE OBLIGATIONS ASSUMED AS SET
FORTH IN SECTION 3.1, THE PURCHASER SHALL NOT ASSUME OR DISCHARGE ANY DEBTS,
OBLIGATIONS, LIABILITIES OR COMMITMENTS OF THE SELLER WHETHER ACCRUED NOW OR
HEREAFTER, WHETHER FIXED OR CONTINGENT, AND WHETHER KNOWN OR UNKNOWN.
ARTICLE 4
Purchase Price; Method of Payment; Allocation
Section 4.1 Purchase Price. The Purchase Price shall be Twelve
Million Two Hundred Thousand Dollars ($12,200,000). The Purchase Price shall be
paid on the Closing Date by one or more wire transfers of immediately available
funds to one or more bank accounts as designated by Seller in writing prior to
the Closing.
Section 4.2 Bulk Sales Compliance. The Purchaser waives any
compliance with the provisions and procedures of Article 6 of the Uniform
Commercial Code as currently enacted in Pennsylvania (the "Bulk Sales Law"), and
any similar laws applicable to the transactions contemplated hereby, but the
Seller nevertheless represents and warrants that the Purchased Assets will be
transferred to the Purchaser free and clear of any Encumbrances or transferee
liability that may be imposed by the Bulk Sales Law or such similar laws.
Section 4.3 Allocation of the Purchase Price. The Parties shall
negotiate and agree upon an allocation of the Purchase Price between the date of
execution of this Agreement and the Closing Date, and such allocation shall be
set forth in Exhibit B. The Purchase Price and all other capitalizable costs
shall be allocated as shall be set forth in Exhibit B hereto for all purposes,
including financial accounting and tax purposes. The Purchaser and the Seller
shall use such allocation in filing their respective Internal Revenue Service
Forms 8594.
Section 4.4 Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place by fax (with originals to follow by
overnight delivery) among the Seller, Purchaser, and their
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respective representatives on one or more days from May 8, 2002 through May 31,
2002, or at such other time and place as is mutually agreed by the Purchaser and
the Seller, subject to satisfaction of the conditions set forth in Article 8.
The time and date of the Closing is herein called the "Closing Date."
ARTICLE 5
Representations and Warranties of the Seller
The Seller represents and warrants to the Purchaser as follows, except
as set forth in the disclosure schedule accompanying this Agreement and
initialed by the Parties (the "Disclosure Schedule"), which is arranged in
paragraphs corresponding to the numbered paragraphs contained in this Article 5:
Section 5.1 Organization and Qualification of the Seller. The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, with full power and authority to own or
lease its properties and assets and to carry on the business of the Seller as
presently conducted, and is duly qualified to do business as a foreign
corporation and is in good standing in the Commonwealth of Pennsylvania and in
each jurisdiction where the failure to be so qualified would have a Material
Adverse Effect. The Seller does not and has never owned or controlled any
subsidiary corporation or other entity or joint venture.
Section 5.2 Authorization. The Seller has full corporate power and
authority to execute and deliver this Agreement and each of the other Operative
Documents to be executed and delivered by it and to perform its obligations
hereunder and thereunder, all of which have been duly authorized by all
requisite corporate action on the part of the Seller. Each of this Agreement and
each of the other Operative Documents to be executed and delivered by the Seller
has been or, at the time of delivery will be, duly authorized, executed and
delivered by the Seller and constitutes or, at the time of delivery will
constitute, a valid and binding agreement of the Seller, enforceable against the
Seller in accordance with its terms.
Section 5.3 Non-contravention. Neither the execution and delivery
by the Seller of this Agreement and each of the other Operative Documents to be
executed and delivered by it, nor the performance by the Seller of its
obligations hereunder and thereunder, will (i) contravene any provision
contained in the Seller's Certificate of Incorporation or by-laws, (ii) violate
or result in a breach (with or without the lapse of time, the giving of notice
or both) of or constitute a default under (A) any contract, agreement,
commitment, indenture, mortgage, lease, pledge, note, license, permit or other
instrument or obligation or (B) any judgment, order, decree, law, rule or
regulation or other restriction of any Governmental Authority, in each case to
which the Seller is a party or by which it is bound or to which any of the
Purchased Assets is subject, (iii) result in the creation or imposition of any
lien, claim, charge, encumbrance, equity, restriction or right on or affecting
any of the Purchased Assets, or (iv) result in the acceleration of, or permit
any Person to accelerate or declare due and payable prior to its stated
maturity, any Assumed Liability.
Section 5.4 No Consents. Except as set forth in Schedule 5.4, no
notice to, filing with, or authorization, registration, consent or approval of,
any Governmental Authority or other Person is necessary for the execution,
delivery or performance by the Seller of this Agreement or any of the other
Operative Documents or the consummation by the Seller of the transactions
contemplated hereby or thereby.
Section 5.5 The Purchased Assets. The Purchased Assets constitute
all of the rights properties and assets (tangible or intangible) which were
necessary for the manufacture of the Products by the Seller prior to the Closing
Date. No third party owns or has any interest by lease, license or otherwise in
any of the Purchased Assets other than Assumed Liabilities and the Encumbrances
permitted pursuant to Section 5.7. The documents of transfer to be executed and
delivered by the Seller at the Closing will be sufficient to
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convey good title to the Purchased Assets to the Purchaser, free and clear of
all Encumbrances, other than Assumed Liabilities.
Section 5.6 Personal Property. The Seller has good title to (or valid
leasehold or contractual interests in) all personal property comprising the
Purchased Assets, free and clear of any Encumbrances, other than Assumed
Liabilities.
Section 5.7 Real Property. Schedule 5.7 to this Agreement contains a
complete and accurate legal description of the real property portion of the
Facilities owned by Seller and a description of all buildings, fixtures and
other improvements of the Facilities owned by Seller. The zoning of the
Facilities permits Seller to manufacture the Products. To the Seller's
Knowledge, the Facilities are in good operating condition and fit for their
present use in the ordinary course of business (subject to normal wear and tear)
with no known structural or other defects that could interfere with the conduct
of normal operations of such facilities and are suitable for the purposes for
which they are currently being used by Seller. There are no Encumbrances on the
Facilities other than (1) the lien, if any, of current real property taxes,
payment of which is not delinquent; (2) existing rights, easements and customary
exclusions listed in the title insurance policy delivered to the Purchaser at
the Closing; and (3) any other exceptions noted in title insurance policy
commitment approved by the Purchaser.
Section 5.8 No Condemnation. Neither the whole nor any part of the real
property or the improvements thereon is subject to any governmental decree or
order to be sold nor have any proceedings for the condemnation, expropriation or
other taking of all or any portion of such real property or improvements been
instituted or, to the Seller's best Knowledge, threatened by any Governmental
Authority, with or without payment therefor.
Section 5.9 Inventory. Schedule 1.33(iv) sets forth a true and complete
listing of all Purchased Inventory. The Purchased Inventory consists of items
which are good and merchantable and of a quantity and quality usable in the
regular and ordinary course of the business of Seller consistent with past
practices. At the Closing, the value of the Purchased Inventory, on a cost
basis, will not be less than $2,000,000.
Section 5.10 Absence of Certain Developments. To the Seller's
Knowledge, since September 30, 2001, the Seller has conducted the business of
the Seller in the ordinary and usual course consistent with past practices and
has not (i) sold, leased, transferred or otherwise disposed of any of the
Inventory (other than dispositions in the ordinary course of business consistent
with past practices), including without limitation any distribution stocking
order, (ii) terminated or amended in any material respect any contract or lease
to which the Seller is a party or to which it is bound or to which Purchased
Assets are subject, (iii) suffered any material loss, damage or destruction of
Purchased Assets whether or not covered by insurance, (iv) incurred any
liabilities (other than in the ordinary course of business, none of which,
individually or in the aggregate, are material), (v) incurred, created or
suffered to exist any Encumbrances on the Purchased Assets other than as
identified in the title insurance commitment as to the Facilities or as created
in the ordinary course of business and that are not, individually or in the
aggregate, material, (vi) increased, directly or indirectly the compensation to
become payable by Purchaser after the Closing Date to any of the officers or
employees listed in Schedule 5.15(i), (vii) suffered any labor dispute, strike
or other work stoppage, (viii) except as contemplated in this Agreement, made or
obligated itself to make any capital expenditures affecting the Seller in excess
of $100,000 individually or in the aggregate, (ix) entered into any contract or
other agreement affecting the Seller requiring the Seller to make payments in
excess of $100,000 per annum, individually or in the aggregate, other than in
the ordinary course of business consistent with past practices, or (x) suffered
any other event, fact or circumstance which has resulted or is reasonably likely
to result in a Material Adverse Effect.
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Section 5.11 Governmental Authorizations; Compliance with Laws,
Licenses, Etc. To the Seller's Knowledge, after appropriate inquiry, the Seller
has been operated in compliance with all applicable laws, rules, regulations,
codes, ordinances, orders, policies and guidelines of any applicable
Governmental Authorities, including but not limited to, those related to fire,
safety, labeling of products, pricing, sales or distribution of products,
antitrust, trade regulation, trade practices, sanitation, land use, employment
or employment practices, energy and similar laws and all laws, rules,
regulations and guidelines administered or promulgated by PADEP, except for
violations which, individually or in the aggregate, would not have a Material
Adverse Effect. To the Seller's Knowledge, there are no facts, which with notice
or lapse of time or both, would constitute a violation by Seller of any law or
permit or approval applicable to Seller, except for violations which,
individually or in the aggregate, would not have a Material Adverse Effect. To
the Seller's Knowledge, after appropriate inquiry, the Seller has and as of the
Closing Date will have all permits, licenses, approvals, certificates and other
authorizations, and has made all notifications, registrations, certifications
and filings with all Governmental Authorities, necessary or advisable for the
operation of the Seller as currently conducted by the Seller, except for those
which, individually or in the aggregate would not have a Material Adverse
Effect. To the Seller's Knowledge, after appropriate inquiry, there is no
action, case or proceeding pending or threatened by any Governmental Authority
with respect to (i) any alleged violation by the Seller or its predecessors or
agents of any law, rule, regulation, code, ordinance, order, policy or guideline
of any Governmental Authority, or (ii) any alleged failure by the Seller or its
predecessors or agents to have any permit, license, approval, certification or
other authorization required in connection with the operation of the Seller. To
the Seller's Knowledge, after appropriate inquiry, no notice of any violation of
such laws has been received by the Seller or any of the directors, officers,
employees or other agents of the Seller, and the Seller has not received any
notice that the Products are not in compliance with, or do not meet the
standards of, all applicable laws. Schedule 5.11 sets forth a true and complete
list of all permits, licenses, approvals, certificates, registrations and other
authorizations relating to the Seller (the "Authorizations") including without
limitation in respect of the Products. Such Authorizations are in full force and
effect and the Seller has received no notification of the suspension or
cancellation of any thereof. The Seller has no grounds to believe that any of
the Authorizations listed on Schedule 5.11 will not be transferable to the
Purchaser. Schedule 5.11 includes a true and complete list of all Standard
Industrial Classification (SIC) Codes applicable to the Seller or the Purchased
Assets.
Section 5.12 Litigation. There are no lawsuits, actions,
proceedings, claims, orders or investigations by or before any Governmental
Authority pending or, to Seller's Knowledge, threatened against the Seller
relating to the Seller, the Purchased Assets, the Assumed Liabilities or any
product alleged to have been manufactured or sold by the Seller or seeking to
enjoin the transactions contemplated hereby, and there are no facts or
circumstances known to the Seller that could result in a claim for damages or
equitable relief which, if decided adversely, could, individually or in the
aggregate, have a Material Adverse Effect.
Section 5.13 Taxes. To the Seller's Knowledge, all federal, state,
county, local and foreign tax returns and reports of the Seller required to be
filed which relate to or affect the Seller or the Purchased Assets have been
duly filed. All federal, state, county, local, foreign and any other taxes
(including all income, withholding and employment taxes), assessments (including
interest and penalties), fees and other governmental charges with respect to the
employees, properties, assets, income or franchises of the Seller as they relate
to or affect the Seller or the Purchased Assets have been paid or duly provided
for, or are being contested in good faith by appropriate proceedings. Any such
taxes, fees or governmental charges that are being contested are set forth in
Schedule 5.13 and shall be deemed Excluded Liabilities.
Section 5.14 Environmental Matters. Except as disclosed in
Schedule 5.14 or the Environmental reports described in Schedule 5.14, to the
Seller's Knowledge, after a review of all applicable laws, available records and
backup documents, and due inquiry as to any investigations, studies or audits
that the Seller knows about but does not have copies of, (i) the Facilities are
being and have been
10
operated by the Seller in compliance with all Environmental Laws, (ii) since the
Facilities were acquired by Seller, the Facilities did not contain any Regulated
Substance other than as permitted under applicable Environmental Laws, (iii) the
Seller has, and at all times has had, all permits, licenses and other approvals
and authorizations required under applicable Environmental Laws for its
operation of the Facilities, (iv) the Seller has not received any notice from
any Governmental Authority that the Seller or any of its Affiliates may be a
potentially responsible party in connection with any waste disposal site or
facility used, directly or indirectly, by or otherwise related to the
Facilities, (v) no reports have been filed, or have been required to be filed,
by the Seller concerning the release of any Regulated Substance or the violation
of any Environmental Law on or at the Facilities, (vi) no Regulated Substance
has been unlawfully disposed of, transferred, released or transported from the
Facilities since the facilities were acquired by Seller, other than as permitted
under applicable Environmental Law pursuant to appropriate regulations, permits
or authorizations, (vii) there have been no environmental investigations,
studies, audits, tests, reviews, or other analyses conducted by or which are in
the possession of the Seller or any Affiliate of the Seller relating to the
Facilities, except to the extent that true and correct copies thereof have been
delivered to the Purchaser prior to the date hereof, (viii) there are no
underground storage tanks on, in or under any of the Facilities and no
underground storage tanks have been closed or removed from such Facilities, (ix)
the Seller has not presently incurred, and the Facilities are not presently
subject to, any liabilities (fixed or contingent) relating to any Environmental
Claim in connection with the Facilities, (x) all documents filed by or on behalf
of the Seller with any Governmental Authority pursuant to any Environmental Law
in connection with the Facilities were, when filed, true, correct and complete
and did not omit to state any fact required to be stated therein or necessary to
make the statements therein not misleading, (xi) all Environmental Laws in
existence at the time the Facilities were acquired by Seller have been complied
with since that time by Seller and no condition of the Facilities or action by
Seller is likely to or be or is in violation of any Environmental Laws, and
(xii) there are no civil, criminal or administrative actions, suits, demands,
claims, hearings, investigations or other proceedings pending or threatened
against the Seller or any predecessor or Affiliate of the Seller with respect to
the Facilities relating to any Environmental Claim, and neither the Seller nor
any predecessor or Affiliate of the Seller has received any notices, demand
letters or requests for information, arising out of, in connection with, or
resulting from, a violation, or alleged violation, of any Environmental Law.
This Agreement contains the sole and exclusive representations and warranties of
the Seller with respect to any environmental, health, or safety matters,
including without limitation any arising under any Environmental Laws. Any other
representations and warranties of the Seller with respect to any environmental,
health, or safety matters, including without limitation any arising under any
Environmental Laws, are hereby disclaimed.
Section 5.15 Employee Matters. Schedule 5.15(i) contains a true
and correct list of the employees currently employed by the Seller in the
conduct of the business of the Seller and a description of the rate and nature
of all current compensation payable by the Seller to each employee. The Seller
has not entered into any collective bargaining agreements with respect to the
above-mentioned employees. There are no written personnel policies applicable to
such employees generally, other than a policy manual and employee manuals, which
are identified on Schedule 5.15(ii). The disclosed employee benefit plans of the
employees of the Seller have been administered in accordance with ERISA, if
applicable, and there are no employee benefit plans of the employees of the
Seller not disclosed in Schedule 5.15(ii). There is no labor strike, dispute,
slowdown or work stoppage or lockout pending or, to the best of the Seller's
Knowledge, threatened against or affecting the Seller and during the past three
years there has been no such action. To the Seller's Knowledge, no union
organization campaign is in progress with respect to any of such employees, and
no question concerning representation exists respecting such employees. There is
no unfair labor practice charge or complaint applicable to such employees
pending or, to the Seller's best Knowledge, threatened against the Seller.
Except for the covenant provided in Section 7.3(e) of this Agreement, the Seller
has not entered into any agreement, arrangement or understanding restricting its
ability to terminate the employment of any or all of such employees at any time,
for any lawful or no reason, without penalty or liability.
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Section 5.16 Proprietary Rights.
(a) The Seller owns and possesses, and upon consummation
of the transactions contemplated hereby, the Purchaser will hold, a valid and
enforceable license for, all of the Licensed Proprietary Rights. Upon the
Closing, the Licensed Proprietary Rights are transferable to the Purchaser, and
the transactions contemplated hereby will have no Material Adverse Effect on the
Purchaser's right, title and interest in the Licensed Proprietary Rights under
licenses or other agreements relating to the Licensed Proprietary Rights.
(b) The Seller owns and possesses, and upon consummation
of the transactions contemplated hereby, the Purchaser will hold, right, title
and interest in the Purchased Proprietary Rights, free and clear of all
Encumbrances.
(c) The Seller has taken all reasonably necessary action
to protect the Proprietary Rights, and the transactions contemplated by this
Agreement. No claim by any third party contesting the validity, enforceability,
use or ownership by the Seller of any Proprietary Right has been made, is
currently pending or, to the Seller's Knowledge, is threatened, against the
Seller. To the Seller's Knowledge, no claim by any third party contesting the
validity, enforceability, use or ownership of any Proprietary Right has been
made, is currently pending or is threatened against the Seller's licensor of any
Licensed Proprietary Rights. The Seller has not received any notice of, nor is
it aware of any fact that indicates a likelihood of, any infringement or
misappropriation by, or conflict with, any third party with respect to any of
the Proprietary Rights. The Seller has not infringed, misappropriated or
otherwise conflicted with any rights of any third parties which would have a
Material Adverse Effect. The Proprietary Rights constitute all of the patents,
copyrights, technology, inventions, product drawings, trade secrets, know-how,
customer lists, manufacturing processes, process data, product designs, bills of
materials and other proprietary information or rights necessary for the
manufacture of the Products.
Section 5.17 Contracts.
(a) To the Seller's Knowledge, Schedule 5.17 describes
all material contracts, agreements, leases, commitments, instruments, plans,
permits or licenses, whether written or oral, with respect to the Seller to
which the Seller is a party or is otherwise bound, of the types described below
to the extent that they relate to the operation of the Seller (the "Seller's
Contracts"):
(i) all agreements, commitments, purchase
orders, sale confirmations or other similar agreements for the purchase by the
Seller of raw materials, machinery, equipment or other personal property,
products or services, other than those that are for amounts of less than $5,000;
(ii) all agreements, commitments, purchase
orders, sale confirmations or other similar agreements for the sale by the
Seller of Products;
(iii) all capitalized leases, pledges, conditional
sale or title retention agreements concerning the Purchased Assets;
(iv) all employment agreements and commitments
and all consulting or severance agreements or arrangements concerning the
employees of Seller;
(v) all agreements relating to the consignment
or lease of personal property (whether the Seller is lessee, sublessee, lessor
or sublessor), other than such agreements that provide for annual payments of
less than $5,000;
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(vi) all agreements (other than the agreements as
contained herein) prohibiting or restricting the Seller from freely engaging in
the business of the Seller in any geographic area;
(vii) all agreements to provide rebates to
customers of the Seller;
(viii) all distribution, sales agency and other
similar agreements relating to the marketing, sale or distribution of Products
by the Seller; and
(ix) all warranties that Seller has given to
customers concerning the Products.
(b) To the Seller's Knowledge, all of the Assigned
Contracts which are intended to be assigned to the Purchaser hereunder are fully
assignable to the Purchaser by the Seller without the consent of any third
party. All consents of third parties required for the assignment of such
Assigned Contracts have been obtained or will have been obtained prior to or on
the Closing Date.
(c) To the Seller's Knowledge, the Seller is not in
default, nor has the Seller given or received notice of any default or claimed,
purported or alleged default, or facts that, with notice or lapse of time, or
both, would constitute a default (or give rise to a termination right) on the
part of any party in the performance of any obligation to be performed under any
of the Seller's Contracts which would have a Material Adverse Effect on Seller's
operations.
(d) To the Seller's Knowledge, the Seller has not
violated the Truth in Negotiations Act or the False Claims Act or any other law
regulating government contracts or failed to comply with the applicable
requirements of the Federal Cost Accounting Standards with respect thereto which
would have a Material Adverse Effect.
(e) True and complete copies of all written Assigned
Contracts, including any amendments thereto, have been delivered to the
Purchaser and such documents constitute the legal, valid and binding obligation
of the Seller and, to the best of the Seller's Knowledge after due inquiry, each
other party purportedly obligated thereunder.
(f) Other than the warranties set forth or described in
Schedule 5.17(a)(ix) the Seller has not given or made any express warranties to
third parties with respect to any products sold or services performed by it.
Seller does not have any knowledge of any fact or of the occurrence of any event
forming the basis of any present or future claim against Seller, whether or not
fully covered by insurance, for liability on account of products liability or on
account of any express or implied product warranty, except for warranty
obligations described in Schedule 5.17(a)(ix) and product returns in the
ordinary course of business.
(g) None of the Sales Orders being assumed by the
Purchaser has been prepaid, and the Seller has not treated any such
unfilled Sales Orders as accounts receivable.
Section 5.18 Customers and Suppliers. Schedule 1.33(vi) sets forth
a complete list of the Backlog. Schedule 5.18 sets forth a list of (a) the
fifteen (15) largest customers currently of the Seller in terms of gross sales
and (b) the fifteen (15) largest suppliers of the Seller in terms of purchases,
in each case during approximately the 18-month period ending within a reasonable
time prior to the Execution Date. Since September 30, 2001 (a) no customer has
notified or otherwise indicated to the Seller that it will stop, or decrease the
rate of, its purchases of materials, products or services from the Seller, and
no customer has ceased or materially decreased its purchases of any such
materials, products or services from the Seller; and (b) no supplier of the
Seller has notified or otherwise indicated to the Seller that it will stop, or
decrease the
13
rate of or, other than publicly announced generally applicable price increases,
materially increase the cost of, its supply of materials, products or services
used by the Seller, and no supplier has ceased, materially decreased the rate
of, or materially raised the cost of, any such materials, products or services.
The Seller is not a party to any material contract or commitment to purchase
products from any supplier, other than contracts or commitments that are
terminable at will by the Seller in its sole discretion, without cost or
penalty.
Section 5.19 Equipment. To the Knowledge of the Seller, all
machinery, equipment, furniture, fixtures and other personal property used in
the business of Seller is in good operating condition and fit for operation in
the ordinary course of business used in the way the Seller had used the same
(subject to normal wear and tear) with no known material defects that have
interfered with the conduct by the Seller of normal operations of such
equipment, furniture, fixtures and other personal property.
Section 5.20 Brokers. The Seller has not retained any broker,
finder, investment banker or financial advisor in connection with this Agreement
or any of the transactions contemplated hereby that would be entitled to make
any claim against the Purchaser or its Affiliates for a broker's, finder's,
investment banker's, financial adviser's or similar fee payable in connection
herewith.
Section 5.21 Financial Statements.
(a) Seller has furnished to Purchaser copies of (i)
unaudited balance sheets of Seller and unaudited statements of income for each
of the three (3) fiscal years ended on or about September 30, 1999, 2000, and
2001 (collectively, the "Annual Financial Statements"), and (ii) an unaudited
balance sheet of Seller as of March 31, 2002, and unaudited statements of income
for the three (3) month period then ended (the "Interim Financial Statements")
(the financial statements in clauses (i) and (ii) being collectively referred to
herein as the "Financial Statements").
(b) The Annual Financial Statements (i) have been
prepared in general conformity with GAAP applied on a consistent basis from year
to year (except as noted otherwise therein), subject to normal recurring year-
end and consolidating adjustments (the effect of which will not, individually or
in the aggregate, be material) and the absence of notes (which, if presented,
would not differ materially from those included in the Microsemi consolidated
audited financial statements); and (ii) assuming Seller will continue as a going
concern, are true and correct and present fairly in all material respects the
financial condition of Seller and the results of operations of Seller for the
periods to which each relates, except for matters which, individually or in the
aggregate, would not have a Material Adverse Effect.
(c) To the Knowledge of Seller, the Interim Financial
Statements (i) have been prepared in general conformity with GAAP applied on a
consistent basis from year to year (except as noted otherwise therein), subject
to normal recurring year-end adjustments (the effect of which will not,
individually or in the aggregate, be material) and the absence of notes, and
(ii) assuming Seller will continue as a going concern, are true and correct and
present fairly in all material respects the financial condition of Seller and
the results of operations of Seller for the periods to which each relates,
except for matters which, individually or in the aggregate, would not have a
Material Adverse Effect.
(d) Except as set forth on Schedule 5.21(d) attached
hereto, as of the date of the Interim Financial Statements, Seller had no
material liability of any nature (matured or unmatured, fixed or contingent)
which was not (i) provided for or disclosed on the Interim Financial Statements,
or (ii) incurred in the ordinary course of business, consistent with past
practice. As of the date of the Interim Financial Statements, there were no
material loss contingencies (as such term is used in the Statement of Financial
Accounting Standard No. 5 issued by the Financial Accounting Standards Board in
March, 1975) that were not adequately provided for or disclosed on the Financial
Statements.
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(e) The Seller's accounts receivable which are collectible
within ninety (90) days currently exceed, and at Closing will exceed, the
aggregate Assumed Liabilities.
Section 5.22 DISCLAIMER OF OTHER REPRESENTATIONS AND WARRANTIES. EXCEPT
AS EXPRESSLY SET FORTH IN THIS ARTICLE 5, THE SELLER MAKES NO REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN RESPECT OF ANY OF ITS
ASSETS (INCLUDING, WITHOUT LIMITATION, THE PURCHASED ASSETS), LIABILITIES OR
OPERATIONS, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY SUCH OTHER REPRESENTATIONS OR
WARRANTIES ARE HEREBY EXPRESSLY DISCLAIMED. THE PURCHASER HEREBY ACKNOWLEDGES
AND AGREES THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN THIS ARTICLE 5,
THE PURCHASER IS PURCHASING THE PURCHASED ASSETS ON AN "AS-IS, WHERE-IS" BASIS.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE SELLER DISCLAIMS ANY
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY AS TO
THE PURCHASED ASSETS THAT ARE EQUIPMENT, GOODS OR OTHER ASSETS THAT ARE SUBJECT
TO ARTICLE 2 OF THE PENNSYLVANIA UNIFORM COMMERCIAL CODE, AND THE PURCHASER
EXPRESSLY ACKNOWLEDGES THAT SUCH EQUIPMENT AND GOODS OR OTHER ASSETS ARE
PURCHASED AND SOLD "AS IS" AND "WHERE IS" AND WITHOUT WARRANTY EXCEPT AS
EXPRESSLY CONTAINED IN THIS AGREEMENT. THE SELLER MAKES NO REPRESENTATION OR
WARRANTY REGARDING ANY ASSETS OTHER THAN THE PURCHASED ASSETS OR ANY LIABILITIES
OTHER THAN THE ASSUMED LIABILITIES, AND NONE SHALL BE IMPLIED AT LAW OR IN
EQUITY.
ARTICLE 6
Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Seller as follows:
Section 6.1 Organization and Qualification of the Purchaser. The
Purchaser shall be as of the Closing a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and shall
have as of the Closing full corporate power and authority to own or lease its
property and assets and to carry on its business as presently conducted and as
of the Closing shall be duly qualified to do business as a foreign corporation
in good standing in the Commonwealth of Pennsylvania.
Section 6.2 Authorization. The Purchaser has full corporate power
and authority to execute and deliver this Agreement and each of the other
Operative Documents to be executed and delivered by it and to perform its
obligations hereunder and thereunder, all of which have been duly authorized by
all requisite corporate action on the part of the Purchaser. This Agreement and
each of the other Operative Documents to be executed and delivered by the
Purchaser has been or, at the time of delivery will be, duly authorized,
executed and delivered by the Purchaser and constitutes or, at the time of
delivery will constitute, a valid and binding agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
Section 6.3 Non-contravention. Neither the execution and delivery
of this Agreement and each of the other Operative Documents to be executed and
delivered by it, nor the performance by the Purchaser of its obligations
hereunder and thereunder, will (i) contravene any provision contained in the
Purchaser's Certificate of Incorporation or by-laws, (ii) violate or result in a
breach (with or without the lapse of time, the giving of notice or both) of or
constitute a default under (A) any contract, agreement, commitment, indenture,
mortgage, lease, pledge, note, license, permit or other instrument or obligation
or (B) any judgment, order, decree, law, rule or regulation or other restriction
of any Governmental Authority, in each
15
case to which the Purchaser is a party or by which it is bound or to which any
of its assets as of the Execution Date are subject, (iii) result in the creation
or imposition of any lien, claim, charge, encumbrance, equity, restriction or
right on or affecting any of its assets as of the Execution Date, or (iv) result
in the acceleration of, or permit any Person to accelerate or declare due and
payable prior to its stated maturity, any material liability of the Purchaser.
Section 6.4 No Consents. Except as set forth on the Purchaser's
disclosure schedule attached hereto, no notice to, filing with, or
authorization, registration, consent or approval of any Governmental Authority
or other Person is necessary for the execution, delivery or performance by the
Purchaser of this Agreement and the other Operative Documents to be executed and
delivered by it or the consummation of the transactions contemplated hereby and
thereby by the Purchaser.
Section 6.5 Litigation. There are no lawsuits, actions,
proceedings, claims, orders or investigations by or before any Governmental
Authority pending or, to Purchaser's Knowledge, threatened against the Purchaser
relating to it or seeking to enjoin the transactions contemplated hereby, and
there are no facts or circumstances known to the Purchaser that could result in
a claim for damages or equitable relief which, if decided adversely, could,
individually or in the aggregate, have a Material Adverse Effect on the
Purchaser.
Section 6.6 Brokers. The Purchaser has not retained any broker,
finder, investment banker or financial advisor in connection with this Agreement
or any of the transactions contemplated hereby that would be entitled to make
any claim against the Seller or its Affiliates for a broker's, finder's,
investment banker's, financial adviser's or similar fee payable in connection
herewith.
ARTICLE 7
Covenants and Agreements
Section 7.1 Access and Information. Prior to the Closing, the
Purchaser has made and shall be entitled to make or cause to be made such
investigations of the Seller, and the financial and legal condition of the
Purchased Assets, as the Purchaser deems necessary or advisable, and the Seller
has cooperated and shall cooperate with any such investigations. Without
limiting the generality of any other terms and provisions of this Section 7.1,
(a) the Seller has provided a copy of the preliminary title report on the real
property with respect to the real property comprising part of the Facilities and
the Purchased Assets; (b) APT has audited and shall be entitled to audit and
confirm further the status of the finished inventory, parts, work-in-process,
and purchase orders of the Seller, to review the Seller's standard warranty and
warranty claims history and expense, to correlate between the list of assets to
be purchased and the assets physically present at the Facilities, and to check
the assignability of contracts that are material to Seller's business and which
are part of the Purchased Assets; and (c) the Seller has provided a list of
Proprietary Rights to APT. In furtherance of the foregoing, but not in
limitation thereof, prior to the Closing Date the Seller shall permit the
Purchaser and its agents and representatives or cause them to be permitted to
have full and complete access to the premises, books and records of the Seller
upon reasonable notice during regular business hours and shall furnish such
existing financial and operating data, projections, forecasts, and other data
relating to the Seller as the Purchaser shall reasonably request from time to
time relating to the truth of representations or warranties, and/or performance
of covenants or conditions provided in this Agreement. Prior to the Closing, the
Purchaser shall not use any information obtained pursuant to this Section 7.1
for any purpose unrelated to the consummation of the transactions contemplated
by this Agreement and, if such transactions are not consummated, it will hold
all information and documents obtained pursuant to this Section 7.1 in
confidence in accordance with the Non-Disclosure Agreement dated December 14,
2001 between Microsemi and APT ("Non-Disclosure Agreement"), unless and until
such time as such information or documents otherwise become publicly available
or as it is advised by legal counsel that any such information or document is
required by law to be disclosed. In the event that this Agreement is terminated,
16
the Purchaser will deliver to the Seller all documents so obtained by it and any
copies thereof in possession of the Purchaser or its agents and representatives
or, at the option of the Purchaser, the Purchaser shall cause all of such
documents and all of such copies to be destroyed and shall certify the
destruction thereof to the Seller. Upon the Closing, the Non-Disclosure
Agreement shall be terminated automatically pursuant to this Section 7.1.
Section 7.2 Affirmative Covenants. Prior to the Closing, except
as otherwise expressly provided herein,
(f) the Seller shall:
(i) conduct the business of the Seller only in
the ordinary and regular course of business consistent with past practices;
(ii) keep in full force and effect its corporate
existence;
(iii) use its reasonable efforts to retain those
employees listed in Schedule 5.15(i) and preserve its present relationships with
customers, suppliers, contractors, distributors and such employees, and continue
to compensate such employees consistent with past practices;
(iv) maintain the Proprietary Rights so as not to
affect adversely the validity or enforcement thereof; maintain the other
Purchased Assets in customary repair, order and condition and maintain insurance
reasonably comparable to that in effect on the Execution Date; and in the event
of any casualty, loss or damage to any of the Purchased Assets, either repair or
replace such assets with assets of comparable quality or, in the Seller's
discretion, transfer consideration to the Purchaser at Closing equal to the full
repair cost or replacement cost of such assets;
(v) maintain the books, accounts and records
related to the Seller consistent with past practices;
(vi) use its reasonable efforts to obtain all
authorizations, consents, waivers, approvals or other actions necessary or
desirable to consummate the transactions contemplated hereby and to cause the
other conditions to the Purchaser's obligation to close to be satisfied; and
(vii) promptly inform the Purchaser in writing of
any material breach of or change in the representations and warranties contained
in Article 5 hereof which become known to the Seller (without obligation to
investigate) in the ordinary course of its business; and
(g) the Purchaser shall:
(i) review the operation of the Seller through
its authorized representatives, who shall be resident at the Facility, during
normal business hours prior to the Closing. Purchaser's resident representative
shall be advised on and requested to approve in writing all operational
management decisions concerning the Seller outside the ordinary course of
operations;
(ii) keep in full force and effect its corporate
existence;
(iii) use its reasonable efforts to obtain
authorizations, consents, waivers, approvals or take other actions as described
in this Agreement as necessary to consummate the transactions contemplated
hereby and to cause the other conditions to the Seller's obligation to close to
be satisfied; and
17
(iv) promptly inform the Seller in writing of any
material breach of or change in the representations and warranties contained in
Article 6 hereof which become known to the authorized representative mentioned
above (without obligation to investigate) in the ordinary course of his or her
responsibilities.
Section 7.3 Negative Covenants. Prior to the Closing, without the
prior written consent of the Purchaser, which shall not be unreasonably
withheld, or as otherwise expressly provided herein, the Seller will not:
(a) enter into any contract, agreement or commitment
which, if entered into prior to the date of this Agreement, could reasonably be
expected to cause any representation or warranty of the Seller to be untrue or
be required to be disclosed on one or more Schedules referred to in Article 5;
or
(b) take or omit to be taken any action, or permit its
Affiliates to take or to omit to take any action, which could reasonably be
expected to have a Material Adverse Effect;
(c) make any changes in the terms or conditions of
employment of any of those employees listed in Schedule5.15(i);
(d) enter into any new employee compensation plans,
employee benefit plans or employment agreements or materially modify any
existing such plans or agreements respecting any of those employees listed in
Schedule 5.15(i);
(e) terminate any of those employees listed in Schedule
5.15(i) other than in the ordinary course of business;
(f) sell any Inventory other than in the ordinary course
of business; or
(g) amend its certificate of incorporation or bylaws.
Section 7.4 Notice of Developments. The Seller may elect at any
time to notify the Purchaser in writing of any development unknown to Seller on
the date of its execution of this Agreement causing a breach of any of its
representations and warranties in Article 5. Unless the Purchaser has the right
to terminate this Agreement pursuant to Article 9 by reason of the development
and exercises that right within the time referred to in Article 9, the written
notice pursuant to this Section 7.4 will be deemed to have amended the
Disclosure Schedule, to have qualified the representations and warranties
contained in Article 5, and to have cured any misrepresentation or breach of
warranty that otherwise might have existed hereunder by reason of the
development.
Section 7.5 Closing Documents. The Seller shall, prior to or on
the Closing Date, execute and deliver, or cause to be executed and delivered to
the Purchaser, the documents or instruments described in Section 8.2. The
Purchaser shall, prior to or on the Closing Date, execute and deliver, or cause
to be executed and delivered, to the Seller, the documents or instruments
described in Section 8.3.
Section 7.6 Post Closing Access and Assistance; Product Warranty
Work.
(a) After the Closing, upon request the Seller and its
representatives shall be permitted reasonable access, during normal business
hours, to make inspection of the books and records of the Seller (if any)
transferred to the Purchaser hereunder so long as such records are maintained by
the Purchaser in accordance with its customary records retention policy and to
make copies thereof as is reasonably
18
necessary (but excluding attorney work product or other privileged
communications). The Seller shall pay the Purchaser's out-of-pocket costs and
expenses in connection with satisfying such requests.
(b) After the Closing, upon request the Purchaser and its
representatives shall be permitted reasonable access, during normal business
hours, to make inspection of the books and records (if any) of the Seller which
may be retained by the Seller relating to the Purchased Assets so long as such
records are retained by Seller in accordance with its customary records
retention policy and to make copies thereof as is reasonably necessary (but
excluding attorney work product or other privileged communications). The
Purchaser shall pay the Seller's out-of-pocket costs and expenses in connection
with satisfying such requests.
(c) The Seller, as assignor, and the Purchaser, as
assignee and licensee, shall cooperate in effectuating the Assignment of License
Agreement, which shall govern the relationship between the Parties and with the
licensor regarding the license of the Licensed Proprietary Rights. The Seller
shall cooperate with the Purchaser in preparing and providing instruments and
related documents necessary or reasonably requested by the Purchaser to register
the Proprietary Rights in all countries of the world where Seller has such
protection and the transfer thereof is permitted or required, which instruments
shall be in registrable form in such countries in which any rights included
within the Proprietary Rights are registered or under application as of the
Closing Date. The Purchaser shall be responsible for filing and recordation of
such instruments and documents and for paying any fees or other charges in
connection therewith. Except to the extent otherwise provided in the License
Agreement, the Seller shall be responsible following the Closing for paying all
of the costs and expenses in accordance with the License Agreement in preparing,
filing, registering, prosecuting, defending and maintaining all such Proprietary
Rights and the rights and interests associated therewith. The Purchaser shall
use reasonable efforts to cooperate with the Seller and the licensor in
connection therewith.
(d) The Purchaser shall perform repair and/or replacement
warranty work on behalf of Seller in accordance with the terms and conditions of
the Seller's warranties as set forth in Schedule 5.17(a)(ix) with respect to
Products manufactured and/or sold by the Seller prior to the Closing. In the
event that direct material and labor costs and expenses incurred by the
Purchaser in the aggregate for such repair and/or replacement warranty work
under the terms and conditions of the Seller's warranties exceeds the sum of
$25,000.00, the Seller shall reimburse the Purchaser for one hundred percent
(100%) of direct material and labor costs and expenses incurred by the Purchaser
promptly within ten (10) business days of the Seller's receipt of the
Purchaser's invoices therefor. Any warranty obligations or product liabilities
with respect to Products manufactured and/or sold by the Seller prior to the
Closing shall be deemed Excluded Liabilities.
(e) The Seller shall provide reasonable assistance after
the Closing Date to Purchaser and its outside accountants in the transition of
Seller's accounting records and systems to Purchaser, and in Purchaser's
production of audited financial statements to include the financial results of
the business constituting the Purchased Assets.
Section 7.7 Transfer and Property Taxes.
(a) The Seller and the Purchaser shall each pay one-half
of any real property sales tax, motor vehicles sales tax and any personal
property sales tax arising from the transfer from the Seller to the Purchaser of
the Purchased Assets. As of the Closing, the Purchaser shall hold a Pennsylvania
resale certificate in order to exempt the transfer of Purchased Inventory from
sales or use taxes. The party responsible under law shall prepare and file the
required tax returns and other required documents with respect to such taxes and
fees and shall promptly provide the other party with evidence of the payment of
such taxes and fees. The party not responsible under law for filing tax returns
and payment, absent this
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Agreement, shall promptly pay or advance to the responsible party its share of
such taxes or fees pursuant to this Section 7.7(a). Without limiting the
foregoing, each of the Parties shall promptly provide the other Party with a
copy of its Internal Revenue Service Form 8594 filed in connection with this
transaction.
(b) The Seller shall (i) prepare and file all tax returns
reporting the income attributable to the Purchased Assets or the operation of
the business of Seller for all periods ending prior to or on the Closing Date,
(ii) prepare and file all income tax returns reporting the income of the Seller
arising on the Closing Date from the sale to the Purchaser of the Purchased
Assets and the assumption by the Purchaser of the Assumed Liabilities, (iii) be
responsible for the conduct of all tax examinations relating to the tax returns
referred to in (i) and (ii) above, and (iv) pay all taxes attributable to the
Purchased Assets or the operation of the business of Seller due with respect to
the tax returns referred to in (i) and (ii) above. The Purchaser shall prepare
and file all tax returns reporting the income attributable to the ownership of
the Purchased Assets and the operation of the business of Seller for all periods
beginning on or after the Closing and shall be liable for and pay all taxes due
in respect of such tax returns.
(c) All personal property, real property, motor vehicle
(including road use) and ad valorem taxes, and all other taxes, charges or
assessments levied or imposed upon the Purchased Assets by any Governmental
Authority, for the taxable year beginning before and ending on or after the
Closing Date shall be apportioned and pro rated on a per diem basis between the
Purchaser and the Seller as of 11:59 p.m. on the Closing Date (the "Adjustment
Time"). The Seller shall pay or cause to be paid, on or prior to the due date,
all ad valorem taxes and any other taxes and assessments against the Purchased
Assets for all periods ending on or prior to the Closing Date. The Purchaser
shall pay all ad valorem taxes and any other taxes and assessments against the
Purchased Assets for all periods beginning on or after the first calendar day
following the Closing Date. If the Closing Date shall occur before the tax rate
for the year of Closing is fixed by the appropriate taxing authority, the
apportionment of any such taxes shall be upon the basis of the tax rate for the
preceding year applied to the latest assessed valuation and shall be readjusted
promptly after such tax rates are known. Such obligation to readjust shall
survive the Closing.
Section 7.8 Use of the Seller's Name and Logo.
(a) The Purchaser shall be permitted to continue to use
all purchased packaging materials (e.g., boxes) regardless of whether such
materials bear the Seller's name and/or logo, but only until such materials have
been used.
(b) As to any finished goods Purchased Inventory bearing
Seller's logo manufactured by the Seller, the Purchased Inventory may be resold
by the Purchaser bearing Seller's logo, and Purchaser may indicate that such
Purchased Inventory was manufactured by the Seller, but only until the earlier
of either the fourth anniversary of the Closing or until the Purchased Inventory
is sold.
Section 7.9 Confidentiality Agreement. For a period of three (3)
years after the Closing Date, neither the Seller nor its Affiliates (including
but not limited to Microsemi), will, directly or indirectly, use for its own
benefit or divulge or convey to any third party, any Confidential Information
(as hereinafter defined) except in the defense or assertion of any claims
related thereto or as required by applicable laws, rules and regulations. For
purposes of this Agreement, Confidential Information consists of all
information, knowledge or data currently held by the Seller or its Affiliates
and relating exclusively to the Seller, the Products or the Purchased Assets
including, without limitation, customer and supplier lists, formulae, know-how,
processes, trade secrets, consultant contracts, pricing information, marketing
plans and product development plans to the extent not in the public domain or
otherwise publicly available or used by the Seller or its Affiliates in their
own businesses and which relate to products other than those of the Seller.
Information which enters the public domain or is publicly available loses its
confidential status hereunder so long as neither the Seller nor its Affiliates
directly or indirectly wrongfully causes such information to enter
20
the public domain following the Closing Date. Without limiting the generality of
Section 11.4, the provisions of this Section 7.9 shall inure to the benefit of
any permissible subsequent transferee of the Purchaser or any substantial
portion of the business purchased from Seller, provided that this Agreement is
assigned to such transferee by written agreement, which shall have been first
approved by the Seller and such transferee continues to conduct the business of
the Seller as acquired hereunder and as the same develops in the normal course
of business. In the event that the Seller merges, consolidates or otherwise
combines with an unaffiliated party or if the Seller transfers, sells or
disposes of all or any substantial portion of its remaining assets to an
unaffiliated party, whether in one transaction or a series of related
transactions, the Seller or the Affiliate party to such transaction, as the case
may be, shall use reasonable efforts to procure from any purchaser or other
transferee of all or any substantial portion of its remaining assets, as the
case may be, a written agreement to comply with the provisions of this Section
7.9, as if such successor, purchaser or other transferee were a party hereto.
Notwithstanding any term or provision herein or elsewhere, this Section 7.9
shall not apply to or restrict any successor or transferee of the Seller in the
conduct of any business conducted by such successor or transferee prior to
becoming a successor or transferee of the Seller or an Affiliate of the Seller
or any business acquired from any unrelated party by such successor or
transferee at any time after such entity became a successor or transferee of the
Seller or an Affiliate of the Seller.
Section 7.10 Efforts; Further Assurances. Subject to the terms and
conditions hereof, each of the Parties hereto shall use its reasonable efforts
to take, or cause to be taken, all action, and to do, or cause to be done, all
things reasonably necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. Each of the Seller and the Purchaser will use their respective
best efforts to obtain consents of all Governmental Authorities and third
parties necessary to the consummation of the transactions contemplated by this
Agreement. In the event that at any time after Closing any further action is
necessary to carry out the purposes of this Agreement, the Seller or the proper
directors or officers of the Seller or the Purchaser, as the case may be, shall
take all such action without any further consideration therefor.
Section 7.11 Employment of the Seller's Employees.
(a) The Purchaser shall offer employment to all those
employees currently employed by Seller and employed by Seller as of immediately
prior to the Closing and listed on Schedule 5.15(i), at the present rate of cash
compensation of such employees as disclosed in Schedule 5.15(i) hereto and as
represented and warranted by Seller in Section 5.15 or, in the Purchaser's sole
discretion and judgment in any instance, a better rate of cash compensation as
such employees are presently employed under, provided such employees are still
employed by the Seller through the Closing Date. The Seller shall continue to
bear sole responsibility for the payment of all salaries and other benefits of
any kind earned or accrued (whether or not vested or deemed vested at such time)
by such employees prior to the Closing Date. The Seller shall terminate all such
employees at the Closing Date, and the Purchaser shall engage as of the
following Business Day such of those employees who accept the Purchaser's offer
of employment. The Purchaser shall be under no obligation to establish or
continue, under the same or different terms or conditions, any employee benefit
arrangement for any of the Seller's employees, whether or not disclosed in
Schedule 5.15(i) hereto, or as to which all benefits prior to the termination by
Seller are not fully paid or provided for by Seller. The terms of such
employment (other than the starting rate of cash compensation) shall be in the
Purchaser's sole discretion. The Seller shall not be responsible for providing
any notice that may be required in accordance with 29 U.S.C. 2102.
Section 7.12 Non-Competition Agreement. For a period of three (3)
years immediately following the Closing Date, Microsemi and its subsidiaries
shall not, directly or indirectly, anywhere in the world, engage in the design,
development, assembly, marketing, distribution or sale of the Products or
derivative products within the same product family or products addressing the
same sockets or applications
21
in which the Products are currently used. Without limiting the generality of
Section 11.4, the provisions of this Section 7.12 shall inure to the benefit of
any successors and assigns of the Purchaser of the business as acquired
hereunder and as the same develops in the normal course of business, provided
that this non-competition agreement is assigned to such transferee by written
agreement, which shall have been first submitted by APT to Microsemi and
approved by Microsemi, which approval shall not be withheld unreasonably, and
such transferee continues to conduct the business acquired hereunder. In the
event that the Seller or Microsemi merges, consolidates or otherwise combines
with, transfers, sells or disposes of substantially all of its assets to,
another person, whether in one transaction or a series of related transactions,
the Seller and Microsemi shall use reasonable efforts to procure from any
successor, purchaser or other transferee, as the case may be, a written
agreement to comply with the provisions of this Section 7.12, as if such
successor, purchaser or other transferee were a party hereto. Notwithstanding
any term or provision herein or elsewhere, this Section 7.12 shall not apply to
or restrict any successor or transferee of Microsemi in the conduct of any
business conducted by such successor or transferee prior to becoming a successor
or transferee of Microsemi or acquired from any unrelated party by such
successor or transferee at any time after such entity became a successor or
transferee of the Seller or Microsemi.
ARTICLE 8
Conditions to Closing
Section 8.1 Mutual Conditions. The respective obligations of each
Party to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment at or prior to Closing of the conditions that (a) no
Governmental Authority of competent jurisdiction shall have (i) enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, judgment,
decree, injunction or other order which is in effect; or (ii) commenced or
threatened any action or proceeding, which in either case would prohibit
consummation of the transactions contemplated by this Agreement, and (b) no suit
or other action or procedure shall have been initiated seeking to prevent or
delay the consummation of the transactions contemplated hereby or by the other
Operative Documents.
Section 8.2 Conditions to the Purchaser's Obligations. The
obligations of the Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment prior to or at Closing of each of
the following conditions:
(a) All representations and warranties made by the Seller
in this Agreement and the Schedules delivered by the Seller to the Purchaser
pursuant hereto shall be true, correct and complete in all material respects on
the date hereof and as of the Closing Date as though such representations and
warranties were made as of the Closing Date, and the Seller shall have duly
performed or complied with all of the covenants, obligations and conditions to
be performed or complied with by it under the terms of this Agreement on or
prior to or at Closing.
(b) There shall have been no material damage, destruction
or loss to, or any other material or adverse change in, the Purchased Assets,
regardless of insurance coverage, that have not been repaired or replaced by
Seller. For avoidance of doubt, in the event of any damage to the facility or
equipment that takes it out of production for a material period of time,
Purchaser may terminate this agreement upon written notice in accordance with
Article 9, notwithstanding payment of replacement cost in accordance with
Section 7.2(a)(iv).
(c) All authorizations, consents, waivers, approvals or
other actions legally required in connection with the execution, delivery and
performance of this Agreement and each of the other Operative Documents, by the
Seller and the consummation by the Seller of the transactions contemplated
hereby and thereby shall have been obtained and shall be in full force and
effect; the Seller shall have obtained any authorizations, consents, waivers,
approvals or other actions required to prevent a material breach or default
22
by the Seller under any contract to which the Seller is a party or for the
continuation of any agreement to which the Seller is a party and which relates
and is material to the Purchased Assets or the Seller, and all authorizations,
consents, waivers, approvals or other actions necessary to permit the Purchaser
to operate the business of the Seller in compliance with all applicable laws
immediately after the Closing shall have been obtained and shall be in full
force and effect.
(d) Purchaser shall be reasonably satisfied that the
Environmental Condition of the Facilities is as represented hereunder.
(e) Prior to or at Closing, the Seller shall have
delivered to the Purchaser all instruments of assignment, transfer and
conveyance identified herein and such other closing documents as shall be
reasonably requested by the Purchaser in order to consummate the transactions
contemplated herein that are in form and substance reasonably acceptable to the
Purchaser's legal counsel, including the following:
(i) such instruments of sale, transfer,
assignment, conveyance and delivery (including all vehicle titles), in form and
substance reasonably satisfactory to counsel for the Purchaser, including
without limitation the Xxxx of Sale and Assignment and Assumption Agreement
substantially as set forth as Exhibit C, the Warranty Deed substantially as set
forth as Exhibit D, and the Assignment of License Agreement as set forth as
Exhibit A, as are required in order to transfer to the Purchaser good and
marketable title to the Purchased Assets, free and clear of all Encumbrances
except as provided herein, and a valid perpetual fully-paid license for all of
the Licensed Proprietary Rights;
(ii) a title insurance policy, dated as of the
Closing Date, issued at Seller's expense, insuring the fee simple title of the
Purchaser to all the real property of the Facilities, subject only to (1) the
lien, if any, of current real property taxes, payment of which is not
delinquent; (2) objections and exceptions noted in these title insurance
policies that have been approved in writing by the Purchaser; and (3) existing
rights, easements and customary exclusions listed in the title policy as of the
Closing Date that have been approved in writing by the Purchaser (Liability
coverage under those title insurance policies shall be at least equal to
$700,000);
(iii) a certificate of the Seller over the
signature of the President or a Vice President of the Seller, dated the Closing
Date, to the effect that (1) the person signing such certificate is familiar
with the Agreement and (2) the conditions specified in Section 8.2(a), (b) and
(c) have been satisfied;
(iv) a certificate of the Secretary or Assistant
Secretary of the Seller, dated the Closing Date, as to the incumbency of any
officer of the Seller executing this Agreement, each other Operative Document
and each other document related thereto and covering such other matters as the
Purchaser may reasonably request;
(v) a certified copy of (1) the Certificate of
Incorporation and by-laws of the Seller and all amendments thereto and (2) the
resolutions of the Seller's Board of Directors authorizing the execution,
delivery and consummation of this Agreement and each other Operative Document
and the transactions contemplated hereby and thereby;
(vi) resolutions of the Seller demonstrating that
the transactions contemplated by this Agreement have been approved by the Board
of Directors and the sole stockholder of the Seller; and
(vii) such other documents or instruments as the
Purchaser reasonably requests to effect the transactions contemplated hereby.
23
(f) If, in good faith, the Purchaser or APT engages an
investment banking firm acceptable to the Seller of national or regional
reputation to render, at the Purchaser's or APT's sole cost and expense, an
opinion to the Purchaser or APT as to the fairness to the Purchaser of the
consideration to be received by the Purchaser in this transaction, the Purchaser
or APT shall have received a favorable fairness opinion. Provided, however, that
if such opinion is unfavorable, such investment banker shall identify the price
that it would consider fair and the Seller shall have the right to reduce the
Purchase Price to such amount, which shall be considered to fully satisfy this
condition.
Section 8.3 Conditions to the Seller's Obligations. The obligations of
the Seller to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to the Closing of each of the
following conditions:
(a) All representations and warranties made by the
Purchaser in this Agreement shall be true, correct and complete in all material
respects on the date hereof and as of the Closing Date as though such
representations and warranties were made as of the Closing Date, and the
Purchaser shall have duly performed or complied with all of the covenants,
objections and conditions to be performed or complied with by it under the terms
of this Agreement on or prior to or at Closing.
(b) All authorizations or approvals or other action
required in connection with the execution, delivery and performance of this
Agreement, and each of the other Operative Documents by the Purchaser of the
transactions contemplated hereby and thereby shall have been obtained and shall
be in full force and effect.
(c) Prior to or at Closing, the Purchaser shall have
delivered to the Seller such closing documents as shall be reasonably requested
by the Seller in order to consummate the transactions contemplated herein that
are in form and substance reasonably acceptable to the Seller's legal counsel,
including the following:
(i) a certificate of the Purchaser over the
signature of its President or a Vice President of the Purchaser, dated the
Closing Date, to the effect that (1) the person signing such certificate is
familiar with this Agreement and (2) the conditions specified in Section 8.3(a)
and (b) have been satisfied;
(ii) a certificate of the Secretary or Assistant
Secretary of the Purchaser dated the Closing Date, as to the incumbency of any
officer of the Purchaser executing this Agreement or any document related
thereto and covering such other matters as the Seller may reasonably request;
(iii) a certified copy of (1) the Certificate of
Incorporation and by-laws of the Purchaser and all amendments thereto and (2)
the resolutions of the Purchaser's Board of Directors authorizing the execution,
delivery and consummation of this Agreement and the transactions contemplated
hereby;
(iv) the Purchase Price, as set forth in
Section 4.1; and
(v) such other documents or instruments as the
Seller reasonably requests to effect or evidence the transactions contemplated
hereby.
24
ARTICLE 9
Termination
Section 9.1 Termination. This Agreement may be terminated at any
time prior to Closing as follows:
(a) by mutual written consent of the Seller and the
Purchaser;
(b) by the Purchaser or the Seller, by giving notice to
the other in writing, if any authorization, consent, waiver or approval required
of a non-Party (exclusive of the terminating Party's Board, stockholders,
creditors or Affiliates) for the consummation of the transactions contemplated
hereby shall impose any condition or requirement that the Party terminating this
Agreement determines, in its good faith judgment, to be materially burdensome to
it or to deny it in any material respect the benefits intended to be obtained by
it pursuant to the transactions contemplated by this Agreement;
(c) by the Purchaser by giving notice in writing to the
Seller in the event (A) the Seller has within the then previous 10 business days
given the Purchaser any notice pursuant to Section 7.4 and (B) the development
that is the subject of the notice has had or could have a Material Adverse
Effect;
(d) by the Purchaser by giving notice in writing to the
Seller (A) in the event the Seller has breached any material representation,
warranty, or covenant contained in this Agreement in any material respect, the
Purchaser has notified the Seller of the breach, and the breach has continued
without cure for a period of 10 business days after the notice of breach or (B)
if the Closing shall not have occurred on or before June 1, 2002, by reason of
the failure of any condition precedent under Section 8.2 (unless the failure
results primarily from the Purchaser itself breaching any representation,
warranty, or covenant contained in this Agreement);
(e) by the Seller by giving notice in writing to the
Purchaser (A) in the event the Purchaser has breached any material
representation, warranty, or covenant contained in this Agreement in any
material respect, the Seller has notified the Purchaser of the breach, and the
breach has continued without cure for a period of 10 business days after the
notice of breach or (B) if the Closing shall not have occurred on or before June
1, 2002, by reason of the failure of any condition precedent under Section 8.3
hereof (unless the failure results primarily from the Seller itself breaching
any representation, warranty, or covenant contained in this Agreement).
(f) by either Party by giving notice in writing to the
other if the transactions contemplated by this Agreement shall not have been
consummated on or before June 15, 2002 (or such later date as may be mutually
agreed upon in writing by the Parties hereto).
(g) by Purchaser as provided in Section 8.2(b) hereof.
Section 9.2 Effect of Termination. The obligations of the Parties
in Sections 7.1, 11.2 and 11.9 and the Non-Disclosure Agreement shall survive
any termination of this Agreement. Subject to the foregoing sentence, if this
Agreement is terminated pursuant to Section 9.1, all rights and obligations of
the Seller and the Purchaser hereunder shall terminate and no Party shall have
any liability to the other Party.
ARTICLE 10
Survival of Representations and Warranties; Indemnification
Section 10.1 Survival of Representations and Warranties. No
investigation by the Purchaser or any of its agents or representatives
heretofore or hereafter made shall modify or otherwise affect any
25
representations and warranties of the Seller, which shall survive any such
investigation and the consummation of the transactions contemplated hereby. The
representations and warranties provided for in this Agreement shall survive the
Closing and remain in full force and effect, subject to the following terms:
(a) Sections 5.1; 5.2; 5.3; 5.4; 5.20; 6.1; 6.2; 6.3, 6.4
and 6.6 shall survive without limit (subject to any applicable statutes of
limitations).
(b) Sections 5.5; 5.6; 5.7; 5.8; 5.10; 5.11; 5.12; 5.13;
5.14; 5.15; 5.16; 5.17; 5.18; 5.21; 5.22; and 6.5 shall survive until June 30,
2003.
(c) Sections 5.9 and 5.19 shall not survive after the
Closing.
(d) Notwithstanding the foregoing, if and to the extent
that the damaged Party knew or had reason to know of any misrepresentation or
breach of warranty at the time of Closing, such representation or warranty shall
expire on the Closing.
Section 10.2 Indemnification.
(a) The Seller and Microsemi, jointly and severally,
shall indemnify and hold harmless the Purchaser, APT, its respective Affiliates,
officers, directors, employees, agents and representatives, and any Person
claiming by or through any of them, against and in respect of any and all
claims, costs, expenses, damages, liabilities, losses or deficiencies
(including, without limitation, legal counsel's fees and other costs and
expenses incident to any suit, action or proceeding) (collectively, the
"Damages") arising out of, resulting from or incurred in connection with (i) any
inaccuracy in any representation or the breach of any warranty made by the
Seller in this Agreement, (ii) the breach by the Seller of any covenant or
agreement to be performed by it hereunder, (iii) any Excluded Liability, and
(iv) any acts or omissions occurring prior to or on the Closing Date by reason
of the Seller's business or operations and which is not an Assumed Liability.
(b) The Purchaser and APT, jointly and severally, shall
indemnify and hold harmless the Seller, Microsemi, its respective Affiliates,
officers, directors, employees, agents and representatives, and any Person
claiming by or through any of them, against and in respect of any and Damages
arising out of, resulting from or incurred in connection with (i) any inaccuracy
in any representation or the breach of any warranty made by the Purchaser in
this Agreement, (ii) the breach by the Purchaser of any covenant or agreement to
be performed by it hereunder, (iii) any Assumed Liability, and (iv) any acts or
omissions occurring after the Closing Date by reason of the Purchaser's business
or operations and which is not an Excluded Liability.
(c) Any Person providing indemnification pursuant to the
provisions of this Section 10.2 is hereinafter referred to as an "Indemnifying
Party" and any Person entitled to be indemnified pursuant to the provisions of
this Section 10.2 is hereinafter referred to as an "Indemnified Party."
(d) Any claim made under this Agreement shall be made
only pursuant and subject to this Article 10:
(i) Except for payment of the Purchase Price
under Section 4.1 and the assumption of the Assumed Liabilities, no
claim shall be made except to the extent that the aggregate of all
claims suffered by a Party exceeds $300,000;
(ii) No claim shall be made based on a particular
representation or warranty after the expiration thereof in accordance
with this Article 10;
26
(iii) Except for payment of the Purchase Price under
Section 4.1 and the assumption of the Assumed Liabilities, Damages
shall be limited to $2,000,000 for all such claims in the aggregate;
(iv) The foregoing indemnification provisions in
this Article 10 shall be the exclusive remedy with respect to the
transactions contemplated by this Agreement; and
(v) No claim may be made of consequential or
incidental damages except to the extent such damages comprise a portion
of a claim by a third party to be indemnified against.
Section 10.3 Procedures for Claims. In the case of any claim for
indemnification arising from a claim of a third party, an Indemnified Party
shall give prompt written notice, in no event more than 10 days following such
Indemnified Party's receipt of such claim or demand, to the Indemnifying Party
of any claim or demand which such Indemnified Party has knowledge and as to
which it may request indemnification hereunder; provided, however, that the
Indemnifying Party shall not be relieved of its indemnification obligations
pursuant to this sentence except only to the extent that the Indemnified Party's
delay in giving such notice impairs the ability of the Indemnifying Party to
defend against the claim or demand. Notwithstanding the immediately preceding
sentence, all notices asserting a claim for indemnification based on a
representation or warranty, to be effective, must be given in writing to the
Indemnifying Party before the expiration of such representation or warranty
pursuant to Section 10.1 and in accordance with Section 10.2(d)(ii). The
Indemnifying Party shall have the right to defend and to direct the defense
against any such claim or demand, in its name or in the name of the Indemnified
Party, as the case may be, at the expense of the Indemnifying Party, and with
legal counsel selected by the Indemnifying Party unless (i) such claim or demand
seeks an order, injunction or other equitable relief against the Indemnified
Party, or (ii) the Indemnified Party shall have reasonably concluded that (x)
there is a conflict of interest between the Indemnified Party and the
Indemnifying Party in the conduct of the defense of such claim or demand or (y)
the Indemnified Party has one or more defenses not available to the Indemnifying
Party. Notwithstanding anything in this Agreement to the contrary, the
Indemnified Party shall, at the expense of the Indemnifying Party, cooperate
with the Indemnifying Party, and keep the Indemnifying Party fully informed, in
the defense of such claim or demand. The Indemnified Party shall have the right
to participate in the defense of any claim or demand with legal counsel employed
at its own expense; provided, however, that, in the case of any claim or demand
described in clause (i) or (ii) of the second preceding sentence or as to which
the Indemnifying Party shall not in fact have employed legal counsel to assume
the defense of such claim or demand, the reasonable fees and disbursements of
such counsel shall be at the expense of the Indemnifying Party. The Indemnifying
Party shall have no indemnification obligations with respect to any such claim
or demand which shall be settled by the Indemnified Party without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
ARTICLE 11
Miscellaneous
Section 11.1 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
facsimile, with confirmed delivery, or sent by certified, registered or express
air mail, postage prepaid, and shall be deemed given when so delivered
personally, or by facsimile, or if mailed, five days after the date of mailing,
as follows:
If to the Purchaser: RF Acquisition Sub, Inc.
c/o Advanced Power Technology, Inc.
000 X.X. Xxxxxxxx Xxxxxx
Xxxx, Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile:
Copy to: Xxxxx X. Xxxx
Xxxxx Xxxxxx Xxxxxxxx LLP
Suite 2300
0000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Seller: Microsemi RF Products, Inc.
c/o Microsemi Corporation
0000 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Copy to: Xxxxxxxx X. Xxxxx
Yocca Patch & Yocca LLP
00000 XxxXxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Section 11.2 Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated, except as otherwise provided expressly
herein, each Party hereto shall pay its own expenses incident to this Agreement
and the transactions contemplated herein.
Section 11.3 Governing Law; Consent to Jurisdiction; Waiver of Jury
Trial. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT GIVING EFFECT TO THE
CHOICE OF LAW PRINCIPLES THEREOF. THE SELLER AND MICROSEMI, ON THE XXX XXXX, XXX
XXX XXXXXXXXX XXX XXX, XX THE OTHER HAND, EACH IRREVOCABLY SUBMITS TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIA OR THE UNITED
STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA, SANTA XXX
DIVISION, FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT RELATING
TO OR ARISING OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY
INSTITUTED BY THE PURCHASER OR APT OR ANY OF ITS AFFILIATES. THE PURCHASER AND
APT, ON THE ONE HAND, AND THE SELLER AND MICROSEMI, ON THE OTHER HAND, EACH
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
OREGON OR THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON, FOR THE
PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT RELATING TO OR ARISING OUT
OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY INSTITUTED BY THE
SELLER OR MICROSEMI OR ANY OF ITS AFFILIATES. EACH OF THE PARTIES HERETO
28
IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT,
ACTION OR PROCEEDING AND TO THE LAYING OF VENUE IN SUCH COURTS. EACH PARTY
HERETO IRREVOCABLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH COURTS AND IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW
THAT CANNOT BE WAIVED, EACH OF THE PARTIES HEREBY WAIVES, AND COVENANTS THAT
WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR
CAUSE OF ACTION ARISING OUT OF OR PASSED UPON BY THIS AGREEMENT OR THE SUBJECT
MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN
TORT, CONTRACT, OR OTHERWISE. THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT WILL
BE NEGOTIATED AND PERFORMED IN MATERIAL PART IN ORANGE COUNTY, THE STATE OF
CALIFORNIA AND IN OREGON.
Section 11.4 Assignment; Successors and Assigns; No Third Party
Rights. Except as otherwise provided herein, this Agreement may not be assigned
by operation of law or otherwise without the prior written consent of the other
Party, which shall not be unreasonably withheld, and any attempted assignment
without such consent shall be null and void. If the Purchaser merges,
consolidates, or combines, or transfers, sells, or disposes of substantially all
of the Purchased Assets, the Purchaser can assign its rights in this Agreement
to such transferee or successor that assumes this Agreement in writing. If the
Seller merges, consolidates, or combines, or transfers, sells, or disposes of
substantially all of its assets, the Seller can assign its rights in this
Agreement to such transferee or successor that assumes this Agreement in
writing. This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns, except as may
otherwise expressly be provided in Section 7.8. This Agreement shall be for the
sole benefit of the Parties to this Agreement and Microsemi and APT, and their
respective successors, assigns and Affiliates, and is not intended, nor shall be
construed, to give any other Person any legal or equitable right, remedy or
claim hereunder.
Section 11.5 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original agreement, but all
of which together shall constitute one and the same instrument.
Section 11.6 Titles and Headings. The headings and table of contents
in this Agreement are for reference purposes only, and shall not in any way
affect the meaning or interpretation of this Agreement.
Section 11.7 Entire Agreement. This Agreement, including the
Schedules and Exhibits attached thereto, and the Non-Disclosure Agreement,
constitute the entire agreement among the Parties with respect to the matters
covered hereby and supersedes all previous written, oral or implied
understandings among them with respect to such matters.
Section 11.8 Amendment and Modification. This Agreement may only be
amended or modified in writing signed by the Party against whom enforcement of
such amendment or modification is sought.
Section 11.9 Public Announcement. Except as may be required by
applicable laws or regulations or the rules of any securities exchange or
association binding on the Purchaser or the Seller, as the case may be, or their
respective Affiliates, in the judgment of either Party after considering advice
of legal counsel, neither the Seller, on the one hand, nor the Purchaser, on the
other hand, nor its respective Affiliates, shall issue any press release or
otherwise publicly disclose this Agreement or the transactions contemplated
hereby or any dealings between the Parties in connection with the subject matter
hereof
without the prior approval of the other, which shall not be unreasonably
withheld. In the event that any such press release or other public disclosure
shall be required of a Party or its respective Affiliates, the Party required to
issue such release or other disclosure shall consult in good faith with the
other Party hereto with respect to the form and substance of such release or
other disclosure prior to the public dissemination thereof. Neither Party shall
disclose privately this Agreement or the transactions contemplated hereby or any
dealings between the Parties in connection with the subject matter hereof,
except to the extent as may be, in the judgment of either Party after
considering advice of legal counsel, required to obtain consents and approvals
from banks or financial institutions or any of the parties to agreements to be
assigned to the Purchaser, provided that the receiving party agrees to keep any
material information confidential, including being subject to a professional
obligation of confidentiality, until such time as the Parties or their
Affiliates publicly release such information.
Section 11.10 Waiver. Any of the terms or conditions of this
Agreement may be waived at any time by the Party or Parties entitled to the
benefit thereof, but only by a writing signed by the Party or Parties waiving
such terms or conditions.
Section 11.11 Severability. The invalidity of any portion hereof
shall not affect the validity, force or effect of the remaining portions hereof.
If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, such restriction shall be
enforced to the maximum extent permitted by law.
Section 11.12 Interpretation. Unless otherwise indicated to the
contrary herein by the context or use thereof: (i) the words, "herein,"
"hereto," "hereof" and words of similar import refer to this Agreement as a
whole and not to any particular Section or paragraph hereof; (ii) words
importing the masculine gender shall also include the feminine and neutral
genders, and vice versa; and (iii) words importing the singular shall also
include the plural, and vice versa.
Section 11.13 No Strict Construction. Each of the Purchaser and
the Seller acknowledge that this Agreement has been prepared jointly by the
Parties hereto, and shall not be strictly construed against either Party.
Section 11.14 Risk of Loss. Prior to the Closing, the risk of
loss with respect to the Purchased Assets shall remain with the Seller.
IN WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase
Agreement to be duly executed as of the day and year first above written.
MICROSEMI RF PRODUCTS, INC.,
a Delaware Corporation
By: /s/ Xxxxx X. Xxxxxxx
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief
Financial Officer, Treasurer and Secretary
RF ACQUISITION SUB, INC.,
a Delaware Corporation
By: /s/ Xxxxxxx Xxxxxx
------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President
PARENT AGREEMENT
WHEREAS, each of the undersigned is a stockholder of a Party to the
foregoing Asset Purchase Agreement dated as of May 7, 2002 (the "Purchase
Agreement"), by and between MICROSEMI RF PRODUCTS, INC., a Delaware corporation
(the "Seller"), a wholly-owned subsidiary of Microsemi Corporation, a Delaware
corporation ("Microsemi") and RF Acquisition Sub, Inc. (the "Purchaser"), a
Delaware corporation and a wholly-owned subsidiary of Advanced Power Technology,
Inc., a Delaware corporation ("APT").
NOW THEREFORE, FOR GOOD AND VALUABLE CONSIDERATIONS, receipt and
sufficiency of which are hereby acknowledged:
Effective on and after the Closing Date, as defined in the Purchase
Agreement, each of the undersigned shall perform its respective express
obligations provided in Section 7.12 and Section 10 of the Purchase Agreement.
All terms and provisions of Article 11 of the Purchase Agreement
shall likewise be applied to this Parent Agreement (as if applicable to the
parties to this agreement) and shall be binding on Microsemi and ATP for all
purposes under this Parent Agreement.
This Parent Agreement shall be for the sole benefit of the
undersigned parties to this Parent Agreement and their respective successors and
assigns, and the Parties to the Purchase Agreement and their respective
successors and assigns, and is not intended, nor shall be construed, to give any
other person any legal or equitable right, remedy or claim hereunder.
IN WITNESS WHEREOF, the undersigned hereto have caused this Parent
Agreement to be duly executed as of the date first set forth above.
MICROSEMI CORPORATION,
a Delaware Corporation
By:/s/ Xxxxx X. Xxxxxxx
------------------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
ADVANCED POWER TECHNOLOGY, INC.,
a Delaware Corporation
By:/s/ Xxxxxxx Xxxxxx
------------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: President and CEO
LIST OF EXHIBITS AND SCHEDULES
Exhibits:
--------
Exhibit A Assignment of License Agreement
Exhibit B Allocation of the Purchase Price
Exhibit C Xxxx of Sale and Assignment and Assumption Agreement
Exhibit D Warranty Deed
Schedules:
---------
1.4(vi) Other Assumed Liabilities
1.22 Licensed Proprietary Rights
1.23 Manufacturers
1.30 Products
1.33 Purchased Assets
1.33(i) Facilities
1.33(ii) Other Tangible Property
1.33(iii) Easements, Servitudes, Permits and Licenses
1.33(iv) Purchased Inventory
1.33(v) Purchased Proprietary Rights
1.33(vi) Backlog
1.33(vii) Authorizations, Licenses, Permits and Registrations
1.33(viii) All Rights and Obligations under Purchase Orders
1.33(ix) Assigned Contracts
1.33(xiv) Accounts Receivable
5.1 Organization and Qualification of the Seller
5.2 Authorization
5.3 Non-contravention
5.4 Necessary Consents
5.5 The Purchased Assets
5.6 Personal Property
5.7 Real Property
5.8 No Condemnation
5.9 Inventory
5.10 Absence of Certain Developments
5.11 Governmental Authorizations
5.12 Litigation
5.13 Taxes
5.14 Environmental Matters
5.15 Employee Matters
5.15(i) List of Employees and Compensation
5.15(ii) Policy and Employee Manuals
5.16 Proprietary Rights
5.17 Seller's Contracts
5.17(a)(ix) Warranties
5.18 Customers and Suppliers
5.19 Equipment
5.20 Brokers
5.21 Financial Statements
5.21(d) Material Liabilities
Purchaser's Schedule
--------------------
6.4 Necessary Consents
