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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
dated as of
July 2, 1999,
by and among
ALIGN-RITE INTERNATIONAL, INC.,
a California corporation,
ALIGN-RITE, INC.,
a Florida corporation,
AND
XXXXXX CORPORATION,
a Delaware corporation
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TABLE OF CONTENTS
PAGE
ARTICLE I
RULES OF CONSTRUCTION AND DEFINITIONS
1.1 Rules of Construction..................................................1
1.2 Definitions............................................................2
ARTICLE II
SALE OF PURCHASED ASSETS, ASSUMPTION OF ASSUMED CONTRACTS
AND ASSUMED LIABILITIES AND RELATED TRANSACTIONS
2.1 Purchase and Sale of Purchased Assets..................................9
(a) Purchased Assets..............................................9
(b) Excluded Assets..............................................10
(c) Nonassignable Contracts......................................10
2.2 Assumption of Liabilities.............................................11
(a) Liabilities Not Assumed......................................11
(b) Assumed Liabilities..........................................11
(c) Buyer's Obligation to Replace Photomasks.....................11
2.3 Purchase Price........................................................12
(a) Purchase Price...............................................12
(b) Allocation...................................................12
(c) Payment......................................................12
ARTICLE III
CLOSING
3.1 Closing Date..........................................................12
3.2 Items to be Delivered at the Closing By Seller........................12
3.3 Items to be Delivered at the Closing by Buyer.........................13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
4.1 Organization and Related Matters......................................13
4.2 Financial Statements; Changes; Contingencies..........................14
(a) Audited Financial Statements.................................14
(b) Unaudited Interim Financial Statements.......................14
(c) No Material Adverse Changes..................................14
4.3 Material Contracts....................................................14
4.4 Condition of Property.................................................15
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4.5 Intangible Property...................................................16
4.6 Authorization; No Conflicts...........................................16
4.7 Legal Proceedings.....................................................17
4.8 Permits...............................................................17
4.9 Compliance with Law...................................................17
4.10 Employee Benefits.....................................................18
(a) Employee Benefit Plans, and Employment Agreements,
and Similar Arrangements.....................................18
(b) Qualified Plans..............................................19
(c) Title IV Plans...............................................19
(d) Union Contracts..............................................19
(e) Health Plans.................................................19
(f) Fines and Penalties..........................................19
4.11 No Brokers or Finders.................................................20
4.12 Accuracy of Information...............................................20
4.13 Inventories...........................................................20
4.14 Customers and Suppliers...............................................20
4.15 Environmental Compliance..............................................21
(a) Environmental Reports........................................21
(b) Compliance with Environmental Laws; Permits..................21
(c) Environmental Conditions; Action by Governmental Agency......21
(d) Treatment, Storage or Disposal Sites.........................21
4.16 Powers of Attorney....................................................22
4.17 Year 2000.............................................................22
4.18 Labor and Employment..................................................22
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Organization and Related Matters......................................23
5.2 Authorization.........................................................23
5.3 Legal Proceedings.....................................................24
5.4 No Conflicts..........................................................24
5.5 No Brokers or Finders.................................................24
5.6 Governmental Authorizations and Consents..............................24
5.7 Litigation............................................................25
5.8 Access................................................................25
5.9 Employee Records......................................................25
5.10 Financial Capacity....................................................25
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ARTICLE VI
COVENANTS AND REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO CONDUCT OF SELLER PRIOR TO CLOSING
6.1 Access................................................................25
6.2 Material Adverse Changes..............................................26
6.3 Conduct of Photomask Business.........................................26
6.4 Notification of Certain Matters.......................................27
6.5 Permits and Approvals; Third Party Consents...........................28
6.6 Preservation of Photomask Business Prior to Closing Date..............28
6.7 Certain Filings.......................................................28
ARTICLE VII
ADDITIONAL CONTINUING COVENANTS
7.1 Noncompetition........................................................29
(a) Restrictions on Competitive Activities.......................29
(b) Exceptions...................................................29
(c) Restrictions on Soliciting Employees by Seller...............29
(d) Restrictions on Soliciting Employees by Buyer................29
(e) Special Remedies and Enforcement.............................30
7.2 Nondisclosure of Proprietary Data.....................................30
7.3 Maintenance of Books and Records......................................31
7.4 Employment Matters....................................................31
(a) Employees....................................................31
(b) Proration of Employee Benefits...............................32
(c) Severance Obligations........................................32
(e) No Third Party Beneficiaries.................................33
7.5 Buyer's Rights in Intellectual Property...............................33
(a) Assignment of Intellectual Property Rights...................33
(b) Assignment of Software Licenses..............................33
(c) Transfer of Tangible Software and Technology.................34
7.6 Representations Regarding Software....................................34
7.7 Sales and Transfer Taxes; Other Fees..................................34
ARTICLE VIII
CONDITIONS OF PURCHASE
8.1 General Conditions....................................................35
(a) No Orders; Legal Proceedings.................................35
(b) Approvals....................................................35
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8.2 Conditions to Obligations of Buyer....................................35
(a) Representations and Warranties and Covenants of Seller.......35
(b) No Material Adverse Change...................................35
(c) Opinions of Counsel..........................................36
(d) Consents.....................................................36
(e) Changes in Law...............................................36
(f) Employees....................................................36
(g) Facility Lease Agreement.....................................36
(h) Photomask Supply and Strategic Alliance Agreement............36
(i) Seller Certificate...........................................36
(j) Site Services Agreement......................................36
8.3 Conditions to Obligations of Seller...................................37
(a) Representations and Warranties and Covenants of Buyer........37
(b) Opinion of Counsel...........................................37
(c) Facility Lease Agreement.....................................37
(d) Photomask Supply and Strategic Alliance Agreement............37
(e) Site Services Agreement......................................37
ARTICLE IX
TERMINATION OF OBLIGATIONS; SURVIVAL
9.1 Termination of Agreement..............................................37
(a) Mutual Consent...............................................37
(b) Conditions to Buyer's Performance Not Met....................37
(c) Conditions to Seller's Performance Not Met...................38
(d) Xxxx-Xxxxx-Xxxxxx............................................38
(e) Material Breach..............................................38
9.2 Effect of Termination.................................................38
9.3 Survival of Representations and Warranties............................38
ARTICLE X
INDEMNIFICATION
10.1 Obligations of Seller.................................................39
10.2 Obligations of Buyer..................................................40
(a) General......................................................40
(b) With Respect to Environmental Conditions.....................40
10.3 Procedure and Other Matters...........................................41
(a) Procedure....................................................41
(b) Other Matters................................................41
(c) Cooperation in Defending Claims..............................42
10.4 Survival..............................................................42
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10.5 Notice by Seller......................................................42
10.6 Exclusive Remedy......................................................42
10.7 No Offsets............................................................42
ARTICLE XI
GENERAL
11.1 Amendments;Waivers....................................................43
11.2 Schedules; Exhibits; Integration......................................43
11.3 Commercially Reasonable Efforts; Further Assurances...................43
(a) Commitment to Commercially Reasonable Efforts................43
(b) Limitation...................................................43
11.4 Governing Law; Choice of Forum; Consent to Personal Jurisdiction......44
11.5 No Assignment.........................................................44
11.6 Headings..............................................................44
11.7 Counterparts..........................................................44
11.8 Publicity and Reports.................................................44
11.9 Confidentiality.......................................................45
11.10 Parties in Interest...................................................45
11.11 Notices...............................................................45
11.12 Expenses..............................................................47
11.13 Remedies; Waiver......................................................47
11.14 Attorneys' Fees.......................................................47
11.15 Knowledge Convention..................................................47
11.16 Representation By Counsel and Other Advisors; Interpretation..........48
11.17 Specific Performance..................................................48
11.18 Severability..........................................................48
11.19 Dispute Resolution and Arbitration....................................48
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is entered into as of the close
of business on July 2, 1999, by and among Align-Rite International, Inc., a
California corporation ("PARENT"), Align-Rite, Inc., a Florida corporation
("SUB," and together with Parent, "BUYER"), on the one hand, and Xxxxxx
Corporation, a Delaware corporation ("SELLER"), acting through its Semiconductor
Business Unit, on the other.
R E C I T A L S
WHEREAS, Seller is engaged in the photomask manufacturing
business as a portion of its primary business of designing, developing,
manufacturing, assembling, testing, selling and disposing of semiconductor
devices.
WHEREAS, Seller desires to sell, and Buyer desires to purchase
certain assets used in connection with Seller's photomask manufacturing business
together with Buyer's assumption of certain Assumed Contracts (as defined
herein) and the Assumed Liabilities (as defined herein), on the terms and
conditions set forth in this Agreement.
A G R E E M E N T
In consideration of the premises and the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties hereby agree as follows:
ARTICLE I
RULES OF CONSTRUCTION AND DEFINITIONS
1.1 RULES OF CONSTRUCTION
For all purposes of this Agreement, except as otherwise
expressly provided:
(a) the terms defined in this Agreement have the meanings
assigned to them in this Agreement and shall include, as appropriate, the plural
as well as the singular,
(b) all accounting terms not otherwise defined herein have the
meanings assigned under generally accepted accounting principles in the United
States, as in effect from time to time as applied on a consistent basis (i.e.
GAAP),
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(c) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of the body of this Agreement,
(d) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms, and
(e) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.
1.2 DEFINITIONS
As used in this Agreement and the Exhibits and Schedules
delivered pursuant to this Agreement, the following definitions shall apply:
"ACTION" means any action, complaint, investigation, petition,
suit or other proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or Governmental Entity.
"AFFILIATE" means a Person that directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
common control with, a specified Person.
"AGREEMENT" means this Asset Purchase Agreement by and between
Buyer and Seller as amended or supplemented together with all Exhibits and
Schedules attached hereto.
"APPROVAL" means any approval, authorization, consent,
qualification or registration, or any waiver of any of the foregoing, required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to, any Governmental Entity or any other Person.
"ASSUMED CONTRACTS" has the meaning specified in Section
2.1(a)(v).
"ASSUMED LIABILITIES" has the meaning specified in Section
2.2(b).
"BUSINESS TECHNOLOGY" means Technology owned by Seller and in
the possession of the Photomask Business as of the Closing Date that is specific
to operation of the Photomask Business. Business Technology does not include
Seller's Product Mask Information.
"BUYER" means Align-Rite International, Inc. and any
subsidiary corporation through which Align-Rite International, Inc. will take
possession of the Purchased Assets.
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"BUYER'S AUDITORS" means Pricewaterhouse Coopers LLP,
independent public accountants to Buyer.
"BUYER PARTIES" has the meaning specified in Section 10.1.
"CLAIMANT" has the meaning specified in Section 11.19.
"CLOSING" means the consummation of the transactions
contemplated by this Agreement.
"CLOSING DATE" means the date of the Closing.
"CODE" means the Internal Revenue Code of 1986, as amended,
and the related regulations and published interpretations.
"CONTRACT" means any agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"COPYRIGHTS" means rights in any and all United States and
foreign copyright registrations and applications therefor and unregistered
copyrights owned by Seller.
"DISPUTE NOTICE" has the meaning specified in Section 11.19.
"ENCUMBRANCE" means any claim, charge, lease, covenant,
easement, encumbrance, security interest, lien, option, pledge, rights of
others, or restriction (whether on voting, sale, transfer, disposition or
otherwise), whether imposed by agreement, understanding, law, equity or
otherwise, except for any restrictions on transfer generally arising under any
applicable federal or state securities law and Permitted Encumbrances.
"ENVIRONMENTAL CONDITION" means the presence in, on, under or
about the real property currently or formerly used, owned or operated in
connection with the operation of the Photomask Business or the assets of Seller
used in the Photomask Business of any Hazardous Substance which, if the presence
of such Hazardous Substance was known, would be reportable under any
Environmental Law, or which could reasonably be anticipated to require
investigation or remediation pursuant to any Environmental Law.
"ENVIRONMENTAL LAWS" means all applicable Laws pertaining to
the safety of employees or the environment including: (x) all requirements
pertaining to reporting, licensing, permitting, controlling, investigating or
remediating emissions, discharges, releases or threatened releases of Hazardous
Substances, chemical substances, pollutants, contaminants or toxic substances,
materials or wastes, whether solid, liquid or gaseous in nature, into the air,
surface water, groundwater or land, or relating to the
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manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances, chemical substances, pollutants,
contaminants or toxic substances, materials or wastes, whether solid, liquid or
gaseous in nature; and (y) all requirements pertaining to the protection of the
safety of employees or the public.
"EQUITY SECURITIES" means any capital stock or other equity
interest or any securities convertible into or exchangeable for capital stock or
any other rights, warrants or options to acquire any of the foregoing
securities.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the related regulations and published interpretations.
"ERISA AFFILIATE" means (i) any corporation which is a member
of a group of corporations of which Seller is a member and which is a controlled
group of corporations within the meaning of Section 414(b) of the Code; (ii) any
trade or business (whether or not incorporated) which is a member of a group of
trades or businesses under common control within the meaning of Section 414(c)
of the Code of which Seller is a member; and (iii) a member of an affiliated
service group within the meaning of Section 414(m) or (o) of the Code of which
Seller, any corporation described in clause (i) above or any trade or business
described in clause (ii) above are members.
"EXCLUDED ASSETS" has the meaning specified in Section 2.1(b).
"FACILITY LEASE AGREEMENT" has the meaning specified in
Section 8.2.
"GAAP" means generally accepted accounting principles in the
United States, as in effect from time to time, as applied on a consistent basis.
"GOODWILL" means the expectation of patronage from customers
of the Photomask Business and the consumer identification and favorable
consideration shown by customers of the Photomask Business to the goods or
services known to emminate from the Photomask Business.
"GOVERNMENTAL ENTITY" means any government or any agency,
bureau, board, commission, court, department, official, political subdivision,
tribunal or other instrumentality of any government, whether federal, state or
local, domestic or foreign.
"XXXXXX PATENTS" means and refers to all Patents owned by
Xxxxxx as of the Closing Date and covering activities performed in the course of
business by the Photomask Business prior to the Closing Date.
"XXXX-XXXXX-XXXXXX ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended, and the related regulations and published
interpretations.
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"HAZARDOUS SUBSTANCE" means (but shall not be limited to)
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable Laws as "hazardous substances," "hazardous materials," "hazardous
wastes" or "toxic substances," or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as ignitibility,
corrosivity, reactivity, radioactivity, carcinogenicity, reproductive toxicity
or "EP toxicity," and petroleum and drilling fluids, produced waters and other
wastes associated with the exploration, development, or production of crude oil,
natural gas or geothermal energy.
"INDEMNIFIABLE CLAIM" means any Loss for or against which any
Person is entitled to indemnification under this Agreement.
"INDEMNIFIED PARTY" means the party entitled to indemnity
hereunder.
"INDEMNIFYING PARTY" means the party obligated to provide
indemnification hereunder.
"INTANGIBLE PROPERTY" means any permits or other property
other than personal property, real property or Intellectual Property used in or
pertaining to the Photomask Business.
"INTELLECTUAL PROPERTY" means intellectual property covered by
Copyrights, Xxxxxx Patents or Trade Secret Rights as defined herein.
"INTELLECTUAL PROPERTY RIGHTS" means rights in Copyrights and
Xxxxxx Patents and Trade Secret Rights which (a) are owned by the Seller, (b)
exist under laws respecting Patents, Copyrights or Trade secrets, but not
trademarks and (c) cover the use of Business Technology.
"INVENTORY" has the meaning specified in Section 2.1(a)(iv).
"IRS" means the United States Internal Revenue Service or any
successor entity.
"LAW" means any constitutional provision, statute or other
law, rule, regulation, or interpretation of any Governmental Entity and any
Order, whether federal, state or local, domestic or foreign.
"LOSS" means any action, cost, damage, disbursement, expense,
liability, loss, deficiency, diminution in value, obligation, penalty or
settlement of any kind or nature, whether foreseeable or unforeseeable,
including but not limited to, interest or other carrying costs, penalties, and
reasonable legal, accounting and other professional fees and expenses incurred
in the investigation, collection, prosecution and defense of claims and amounts
paid in settlement, that is imposed on or otherwise incurred or suffered by the
specified Person.
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"MATERIAL ADVERSE CHANGE" or "MATERIAL ADVERSE EFFECT" means,
when used in connection with Seller, the Photomask Business, the Purchased
Assets, the Assumed Contracts and the Assumed Liabilities, any change, event or
effect (or any development that insofar as can reasonably be foreseen, is likely
to result in any change or effect) that, individually or in the aggregate, is
materially adverse to the business, assets, financial condition or results of
operations of the Photomask Business taken as a whole.
"MATERIAL CONTRACT" means any Contract material to the
Photomask Business as of or after the effective date of this Agreement as
described in Schedule 4.3.
"ORDER" means any decree, injunction, judgment, order, ruling,
assessment or writ.
"PARENT" means Align-Rite International, Inc.
"PATENTS" means issued patents, including United States and
foreign patents and applications therefor, xxxxx patents, patents of
importation, and divisions, reissues, continuations, continuations-in-part,
renewals and extensions of any of the foregoing; certificates of addition and
utility models and utility model applications; but does not include License
Agreements.
"PBGC" means the United States Pension Benefit Guaranty
Corporation or any successor thereto.
"PERMIT" means any license, permit, franchise, certificate of
authority, or order, or any waiver of the foregoing, required to be issued by
any Governmental Entity.
"PERMITTED ENCUMBRANCES" means (i) tax liens for taxes not yet
payable, or for taxes presently payable, but being contested by Seller in good
faith and in accordance with the procedures established in the jurisdiction
imposing the tax, (ii) liens relating to obligations to be paid prior to or
concurrent with the Closing, (iii) liens of carriers, warehousemen, mechanics,
laborers and materialmen and other similar liens incurred in the ordinary course
of business for sums not yet due or being contested in good faith, if such
reserve or appropriate provision, if any, as shall be required by GAAP shall
have been made therefor, (iv) real property liens of record, and (v) liens on
assets other than Purchased Assets.
"PERSON" means an association, a corporation, an individual, a
partnership, a limited liability company, a trust or any other entity or
organization, including a Governmental Entity.
"PHOTOMASK BUSINESS" means the manufacture and sale of
photomask products and related photomask services by Seller regardless of the
name under which any such activity is conducted, and shall be deemed to include
the Purchased Assets, the rights and assets transferred pursuant to Section 7.5
hereof, revenues and income,
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Assumed Liabilities, Assumed Contracts, exclusive of cash, cash equivalents,
accounts receivable, accounts payable and any elements of the Retained Business
or Excluded Assets.
"PHOTOMASK SUPPLY AND STRATEGIC ALLIANCE AGREEMENT" has the
meaning set forth in Section 8.2.
"PREPAID EXPENSES" has the meaning specified in Section
2.1(a)(vi).
"PURCHASE PRICE" has the meaning set forth in Section 2.3(a).
"PURCHASED ASSETS" has the meaning set forth in Section
2.1(a).
"REAL PROPERTY" means the real property located within the
complex of buildings known as the Semiconductor Sector located at 0000 Xxxx Xxx
Xxxx, XX, Xxxx Xxx, Xxxxxxx 00000 and known as Building 60 and a portion of
Building 56 used in the Photomask Business, appurtenances thereto, rights in
connection therewith, and the leasehold estates created as part of the
transaction contemplated by this Agreement.
"REPRESENTATIVES" shall be deemed to include the independent
accountants and counsel of the applicable party hereto.
"RESPONDENT" has the meaning set forth in Section 11.19.
"RETAINED BUSINESS" means the business of the Semiconductor
Business Unit of Xxxxxx Corporation except for the Photomask Business which is
the subject of this Agreement.
"SEC" means the United States Securities and Exchange
Commission or any successor entity.
"SELLER" has the meaning specified in the preamble to this
Agreement.
"SELLER'S PRODUCT MASK INFORMATION" means the product design
data of Seller for products designed or manufactured by or on behalf of Seller's
Semiconductor Business Unit from which photomasks are made, whether such data is
in electronic pattern media or Photomask tooling, and not otherwise used in the
operation of the Photomask Business.
"SITE SERVICES AGREEMENT" has the meaning set forth in Section
8.2.
"SOFTWARE" means the manifestation of computer programs and
databases in tangible or physical form, including, but not limited to magnetic
media, firmware, and documentation in the form of source code, object code or
microcode; Software includes, but is not limited to management information
systems, computer aided design and/or engineering programs, computer aided
manufacturing programs, CADBUS programs, machinery control programs, and
personal computer programs, in each case that is owned
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by or licensed to Seller and relevant to the Photomask Business. Software does
not include any Technology or any Intangible Property Rights.
"SOFTWARE LICENSES" means agreements concerning Software
(other than Systems Software) used in or on behalf of the Photomask Business
including the agreements identified on Schedule 7.6.
"SOFTWARE TYPE 1" means Software for which the Seller is sole
owner of all right title and interest and which is specific to the Photomask
Business. Software Type 1 does not include Systems Software.
"SOFTWARE TYPE 2" means Software owned in whole or in part by
the Seller and licensable by Seller on a non-exclusive basis to Buyer, and which
is not specific to, but is used in, the operations of the Photomask Business.
Software Type 2 does not include Systems Software.
"SYSTEMS SOFTWARE" means software not specific to the
Photomask Business and not specific to an individual personal computer.
"SUB" means the subsidiary of Align-Rite International, Inc.
through which Align-Rite International, Inc. will take possession of the
Purchased Assets.
"TAX" means any foreign, federal, state, county or local
income, sales and use, excise, franchise, real and personal property, transfer,
gross receipt, capital stock, production, business and occupation, disability,
employment, payroll, severance or withholding tax or charge imposed by any
Governmental Entity, any interest and penalties (civil or criminal) related
thereto or to the nonpayment thereof.
"TAX RETURN" means a report, return or other information
required to be supplied to or filed with a Governmental Entity with respect to
Taxes including, where permitted or required, combined or consolidated returns
for any group of entities that includes any subsidiary.
"TECHNOLOGY" means the manifestation in tangible or physical
form of all types of technical information and data including, but not limited
to, know-how; product definitions and designs; research and development,
engineering, manufacturing, assembly, process, test, quality control,
procurement, and service specifications, procedures, standards, and reports;
maskworks; blueprints; drawings; materials specifications, procedures,
standards, and lists; catalogs; technical information and data relating to
marketing and sales activity; and formulae, in each case that is owned by or
licensed to Seller and relevant to routine operation of the Photomask Business.
Technology does not include any Software or any Intangible Property Rights.
"TERMINATION DATE" means the specific date first set forth in
Section 9.1.
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"TRADE SECRET RIGHTS" means any and all rights in trade
secrets owned by Seller and comprising Technology used in the operation of the
Photomask Business.
"Y2K PROBLEM" has the meaning set forth in Section 4.17.
ARTICLE II
SALE OF PURCHASED ASSETS,
ASSUMPTION OF ASSUMED CONTRACTS AND ASSUMED
LIABILITIES AND RELATED TRANSACTIONS
2.1 PURCHASE AND SALE OF PURCHASED ASSETS
(a) Purchased Assets. Upon the terms and subject to the
conditions set forth in this Agreement, on the Closing Date, Seller shall sell,
convey, assign, transfer and deliver to Sub, and Sub shall purchase, acquire and
accept from Seller, Seller's right, title and interest in and to the assets
specifically described in this Section 2.1 (a) (the "PURCHASED ASSETS").
(i) All machinery, tools, supplies, apparatus, furniture
and fixtures, supplies, and computer hardware located at and used
solely by the Photomask Business and other equipment of every type as
identified on Schedule 2.1(a)(i) hereto;
(ii) The cleanroom located within Building 60, including
fixtures and improvements attached thereto as set forth in Schedule
2.1(a)(ii);
(iii) All other fixtures and improvements attached to the
Real Property used primarily in connection with the Photomask Business
as specified in Schedule 2.1(a)(iii);
(iv) All inventory of usable goods, including all
merchandise, photomasks, raw materials, work in progress, finished
products and other tangible personal property held for sale or used in
connection with the Photomask Business as of the date hereof (the
"INVENTORY"), together with any additions thereto and subject to any
reductions therefrom received or incurred by Seller in operating the
Photomask Business in the ordinary course and in compliance with
Section 6.3 hereof after the date hereof and through the Closing Date
all as set forth in Schedule 2.1(a)(iv);
All of Seller's rights and interests arising under or
in connection with the Contracts to which Seller is a party specified
on Schedule 2.1(a)(v) and which Buyer assumes (the "ASSUMED CONTRACTS")
including but not limited to obligations to complete work on order from
customers; provided, however, that except as otherwise specified
herein, Buyer shall not assume any of
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the obligations or liabilities of the Assumed Contracts arising prior
to the Closing or based on actions or inactions of Seller prior to the
Closing;
(vi) Prepaid expenses and deposits as of the date hereof
(the "PREPAID EXPENSES") as set forth in Schedule 2.1(a)(vi), together
with any additions thereto and subject to any reductions therefrom made
or accrued by Seller in operating the Photomask Business in the
ordinary course and in compliance with Section 6.3 hereof after the
date hereof and through the Closing Date;
(vii) Sales data and information, customer lists,
information relating to customers, suppliers' names, catalogs, sales
literature, promotional materials, advertising matter and all rights
thereto relating specifically to the Photomask Business;
(viii) Intangible Property; the Goodwill associated with
the Photomask Business; all of Seller's books, records, files,
documents, pay history papers and agreements (including, but not
limited to, those contained in computerized storage media) used solely
in the Photomask Business and related to its employees, except for
those employee records consisting of field folders, medical records and
former employee actions brought against the Seller, which actions have
been settled or adjudicated and the order of the court performed; all
transferable Permits used in the Photomask Business; unemployment
compensation, workers' compensation and other credits, reserves or
deposits with applicable Governmental Entities relating to Seller's
employees of the Photomask Business who become Employees of Buyer.
(b) Excluded Assets. No rights, properties or assets of Seller
shall be included in the Purchased Assets except to the extent specified in
Section 2.1 (a). As an example, no cash, receivables or Contracts not expressly
assumed hereunder by the Buyer are included as Purchased Assets. Buyer shall not
acquire under the terms of this Agreement any title to or interest in the name
"Xxxxxx" or "Xxxxxx Semiconductor" or Seller's monograms, logos, trademarks, or
any variations or combinations thereof or Seller's Product Mask Information.
Buyer, however, shall be entitled to use all of Seller's Product Mask
Information solely for the purpose of making Photomasks for Seller. Buyer shall
use reasonable care in storing and maintaining Seller's Product Mask
Information. Seller acknowledges that Seller's Product Mask Information is
Seller's property and that Buyer shall have no liability for damages or loss
related thereto; provided, however, that Buyer shall be liable for damages
arising from Buyer's negligence or willful misconduct.
(c) Nonassignable Contracts. Notwithstanding other terms set
forth in this Section 2.1, to the extent that any Software contracts to be
assigned pursuant to this Agreement are not capable of being assigned without
the consent, approval or waiver of a third person or entity, nothing in this
Agreement will constitute an assignment or require the assignment thereof.
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2.2 ASSUMPTION OF LIABILITIES
(a) Liabilities Not Assumed. Except as expressly provided in
Section 2.2(b), Buyer shall not assume, shall not take subject to and shall not
be liable for, any liabilities or obligations of any kind or nature, whether
absolute, contingent, accrued, known or unknown, of Seller or any Affiliate of
Seller, including, but not limited to the following:
(i) The liabilities set forth in the financial statements
identified in Sections 4.2(a) and (b) and the contracts set forth on
Schedule 4.3;
(ii) Any liabilities or obligations incurred arising from
or out of or in connection with Seller's operations, the condition of
its assets or places of business, its ownership of the Purchased
Assets, or the issuance, sale, repayment or repurchase of any of its
securities;
(iii) Any liabilities or obligations incurred, arising
from or out of, in connection with or as a result of claims made by or
against Seller whether before or after the Closing Date that arise out
of events prior to the Closing Date; and
(iv) Any product liability claims for Photomasks
manufactured and delivered to customers on or prior to the Closing
Date, except, as provided in Section 2.2(b).
(b) Assumed Liabilities. Notwithstanding Section 2.2(a), on
the Closing Date, Buyer shall assume only the obligations of Seller under the
Assumed Contracts to the extent such obligations are to be performed on and
after the Closing Date (but excluding any liability or obligation to a third
party arising from a breach of such Assumed Contract before the Closing or based
on actions or inactions of Seller prior to the Closing or arising out of
Seller's failure to obtain a required Consent to the assignment of an Assumed
Contract to Buyer), obligations for employee wages, salaries and benefits as
provided in Section 7.4, and Buyer's responsibility to replace Photomasks as set
forth in Section 2.2(c) below (the "ASSUMED LIABILITIES").
(c) Buyer's Obligation to Replace Photomasks. Buyer shall
replace Photomask products manufactured by Xxxxxx after January 1, 1999 and
through the Closing Date so long as such Photomask products are returned for
non-compliance with applicable customer specification within one hundred eighty
(180) days of the date on which such products were shipped to such customers by
Seller. In no event shall Buyer's liability under this Section 2.2(c) exceed in
the aggregate $25,000, which amount shall be calculated by reference to the
original invoice for such products. Seller acknowledges and agrees that Buyer's
liability hereunder shall be limited to the replacement of such products
described above and that in no event shall Buyer be liable for any other damages
arising from such products, including, without limitation, damages arising from
the use of such products.
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2.3 PURCHASE PRICE
(a) Purchase Price. The aggregate purchase price to be paid to
Seller by Buyer for the Purchased Assets shall be Thirteen Million Two Hundred
Fifty Thousand Dollars ($13,250,000) (the "PURCHASE PRICE").
(b) Allocation. Buyer shall provide Seller with a draft of IRS
Form 8594 sixty (60) days prior to the date on which such filing is due with the
IRS.
(c) Payment. At the Closing, at 12:00 p.m. Eastern Daylight
Time on July 2, 1999, Buyer shall pay the Purchase Price to Seller by wire
transfer of immediately available funds to Chase Manhattan Bank - New York, ABA
Routing #:000000000, Account Name: Xxxxxx Corporation Master Account, Account
Number: 144046155.
ARTICLE III
CLOSING
3.1 CLOSING DATE
Upon the terms and subject to the conditions set forth in this
Agreement, the signing and Closing of the transaction shall take place
simultaneously at the offices of Xxxxxx Corporation, 0000 XXXX Xxxxxxxxx,
Xxxxxxxxx, Xxxxxxx 00000, at 12:00 p.m. Eastern Daylight Time, on July 2, 1999.
3.2 ITEMS TO BE DELIVERED AT THE CLOSING BY SELLER
At the Closing, Seller shall deliver or cause to be delivered
to Buyer:
(a) A Xxxx of Sale and Assignment, in substantially the form
of Exhibit A;
(b) All documentation required to exempt Seller from the
withholding requirement of Section 1445 of the Code, consisting of (i) an
affidavit from Seller to Buyer stating under penalty of perjury that Seller is
not a foreign person and providing Seller's U.S. taxpayer identification
numbers, or (ii) a sworn affidavit of Seller that it is not "U.S. real property
holding corporations," as defined in Section 897 of the Code or (iii) a
"qualifying statement" obtained by Seller from the Internal Revenue Service;
(c) The opinions, certificates, consents and other documents
referred to herein, including in Section 8.2, as then deliverable by Seller.
(d) The key to all locks located on or in the Purchased Assets
(and any and all cards, devices or things necessary to access any Purchased
Assets).
(e) The Facility Lease Agreement in substantially the form of
Exhibit B.
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(f) The Photomask Supply and Strategic Alliance Agreement in
substantially the form of Exhibit C.
(g) The Site Services Agreement in substantially the form of
Exhibit D.
3.3 ITEMS TO BE DELIVERED AT THE CLOSING BY BUYER
At the Closing, Buyer shall deliver to Seller:
(a) The Purchase Price;
(b) An Assumption Agreement, in substantially the form of
Exhibit E;
(c) The opinions, certificates, consents and other documents
referred to herein, including in Section 8.3, as then deliverable by Buyer;
(d) The Facility Lease Agreement in substantially the form of
Exhibit B;
(e) The Photomask Supply and Strategic Alliance Agreement in
substantially the form of Exhibit C; and
(e) The Site Services Agreement in substantially the form of
Exhibit D.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
As of the date hereof and as of the Closing, Seller represents
and warrants to Buyer, and agrees with Buyer, as follows:
4.1 ORGANIZATION AND RELATED MATTERS
Seller is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware. Seller has all
requisite corporate power and authority to execute, deliver and perform this
Agreement, the Facility Lease Agreement, the Photomask Supply and Strategic
Alliance Agreement, the Site Services Agreement and any other related agreements
to which it is a party Seller is required to be and is qualified to do business
as a foreign corporation in the State of Florida. Seller has all requisite
corporate power and authority to own the Purchased Assets and to carry on the
Photomask Business as now conducted and is duly qualified or licensed to do
business as foreign corporations in good standing in all jurisdictions in which
the character or the location of the Purchased Assets owned or leased by it or
the nature of the Photomask Business requires licensing or qualification. True,
correct and complete copies of the charter documents of Seller as in effect on
the date hereof have been delivered to Buyer.
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4.2 FINANCIAL STATEMENTS; CHANGES; CONTINGENCIES
(a) Audited Financial Statements. Seller has delivered to
Buyer consolidated and consolidating balance sheets for the Seller at June 27,
1997 and July 2, 1998. All such financial statements of Seller have been
examined by the auditors whose reports thereon are included with such financial
statements and which have been prepared in conformity with GAAP. Such statements
of operations and cash flow present fairly in all material respects the results
of operations and cash flows of Seller for the respective periods covered, and
the balance sheets present fairly in all material respects the financial
condition of Seller as of their respective dates. Since April 2, 1999, there has
been no change in any of the significant accounting policies, practices or
procedures of Seller.
(b) Unaudited Interim Financial Statements. Seller has
delivered to Buyer balance sheets and income statements for the Photomask
Business at April 30, 1999, and May 28, 1999 and for the ten month and eleven
month periods ended April 30, 1999 and May 28, 1999, respectively. The internal
interim financial statements present fairly the results of operations of the
Photomask Business for the respective periods covered. All such interim
financial statements reflect all adjustments (which consist only of normal
recurring adjustments not material in amount and include but are not limited to
estimated provisions for year-end adjustments) necessary for a fair
presentation.
(c) No Material Adverse Changes. Except as disclosed on
Schedule 4.2(c), since April 26, 1999, whether or not in the ordinary course of
business, there has not been, occurred or arisen:
(i) any change in or event affecting the Photomask
Business, the Purchased Assets, the Assumed Liabilities, that has had
or may reasonably be expected to have a Material Adverse Effect on the
Photomask Business, the Purchased Assets, or the Assumed Liabilities,
or
(ii) any agreement, condition, action or omission which
would be proscribed by (or require consent under) Section 6.3 had it
existed, occurred or arisen after the date of this Agreement, or
(iii) any strike or other labor dispute, or
(iv) any casualty, loss, damage or destruction (whether or
not covered by insurance) of any of the Purchased Assets that is
material.
4.3 MATERIAL CONTRACTS
Schedule 4.3 lists each Contract to which the Photomask
Business, or Seller (relating to the Photomask Business) is a party or to which
Seller or any of its respective properties on the date hereof is subject or by
which any thereof is bound that is deemed a Material Contract under this
Agreement. Unless otherwise so noted in Schedule 4.3, each such Contract was
entered into in the ordinary course of business.
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Each such Contract that (a) after April 2, 1999 obligates Seller (with respect
to the Photomask Business) to pay an amount of $25,000 or more, (b) has an
unexpired term as of April 2, 1999 in excess of six (6) months, (c) contains a
covenant not to compete or otherwise significantly restricts business
activities, (d) provides for the extension of credit other than consistent with
normal credit terms, (e) limits the ability of Seller to conduct its business,
including as to manner or place, (f) provides for a guaranty or indemnity by
Seller, (g) grants a power of attorney, agency or similar authority to another
person or entity, (h) contains a right of first refusal, (i) contains a right or
obligation of or to any Affiliate, officer or director or any Associate, of
Seller, (j) represents a Contract upon which the Photomask Business is
substantially dependent or a Contract which is material to the Photomask
Business, (k) requires Seller to buy or sell goods or services with respect to
which there will be material losses or will be costs and expenses materially in
excess of expected receipts (other than as provided for or otherwise reserved
against on the most recent of the balance sheets referred to in Section 4.2) or
(l) was not made in the ordinary course of business, shall be deemed to be a
Material Contract. True, correct and complete copies of the Material Contracts
appearing on Schedule 4.3, including all amendments and supplements, have been
delivered to Buyer. Each Material Contract is valid and subsisting; Seller has
duly performed all its respective obligations thereunder to the extent that such
obligations to perform have accrued; and no breach or default, or to Seller's
knowledge alleged breach or default, or event which would (with the passage of
time, notice or both) constitute a breach or default thereunder by Seller (or,
to the best knowledge of Seller, any other party or obligor with respect
thereto), has occurred or as a result of this Agreement or its performance will
occur. Except as set forth in Schedule 4.3, consummation of the transactions
contemplated by this Agreement shall not (and shall not give any Person a right
to) terminate or modify any rights of, or accelerate or augment any obligation,
of Seller with respect to the Material Contracts.
4.4 CONDITION OF PROPERTY
(a) All Purchased Assets used in connection with the Photomask
Business are owned by Seller, except as indicated on Schedule 4.4(a). Seller has
good and marketable title to the Purchased Assets, free and clear of any
Encumbrances, except for Permitted Encumbrances. Seller has all rights, power
and authority to sell, convey, assign, transfer and deliver the Purchased Assets
to Buyer in accordance with the terms of this Agreement. At the Closing, Seller
shall deliver the Purchased Assets to Buyer, free and clear of any Encumbrances,
except for Permitted Encumbrances and except for encumbrances created by Buyer.
The Purchased Assets are in a good state of maintenance and repair, have been
regularly and appropriately maintained, repaired and replaced, and are presently
being used in their existing condition to conduct the Photomask Business.
(b) Except as set forth on Schedule 4.4(b) all water, sewer,
gas, electric, telephone, and drainage facilities and all other utilities
required by Law for the present use and operation of the Real Property in which
Buyer will obtain a leasehold interest under the Facility Lease Agreement are
installed across public property or valid
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easements to the boundary lines of such Real Property, and are connected
pursuant to existing Permits, and such facilities are the existing connections
presently servicing the Real Property and are in good operating condition,
normal wear and tear excepted. Seller holds good title to the Real Property, has
not leased or otherwise encumbered, except for Permitted Encumbrances, the Real
Property, and shall deliver possession of the Real Property to Buyer at the
Closing. The Real Property may be used for the operation of the Photomask
Business.
4.5 INTANGIBLE PROPERTY
Schedule 4.5 lists all items of Intangible Property in which
Seller, as relates to the Photomask Business other than the Excluded Assets, and
the Photomask Business has an interest and the nature of such interest. Such
assets include all Permits or other rights with respect to any of the foregoing.
Seller has complete rights to and ownership of all Intangible Property required
or desirable for use in connection with the Photomask Business. Seller does not
use any Intangible Property by consent of any other Person nor is required to
and makes any payments to others with respect thereto. The Intangible Property
of Seller is fully assignable free and clear of any Encumbrances, other than
Permitted Encumbrances. Seller has in all material respects performed all
obligations required to be performed by it, and is not in default in any
material respect, under any Contract relating to any of the foregoing. Seller
has not received any notice to the effect (or is otherwise aware) that the
Intangible Property or any use by Seller of any such property conflicts with or
infringes (or allegedly conflicts with or infringes) the rights of any Person.
4.6 AUTHORIZATION; NO CONFLICTS
The execution, delivery and performance of this Agreement, the
Facility Lease, Photomask Supply and Strategic Alliance Agreement and any other
related agreements by Seller has been duly and validly authorized by the Board
of Directors of Seller and by all other necessary corporate action on the part
of Seller. This Agreement has been and the Facility Lease Agreement, Photomask
Supply and Strategic Alliance Agreement and any related agreements to which
Seller is a party shall, prior to or simultaneously with the Closing, be duly
executed and delivered by Seller and constitute the legally valid and binding
obligations of Seller, enforceable against Seller in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors rights generally. The execution,
delivery and performance of this Agreement, the Facility Lease Agreement, the
Photomask Supply and Strategic Alliance Agreement and the Strategic Alliance
Agreement by Seller and the execution, delivery and performance of any related
agreements or contemplated transactions by Seller shall not violate, or
constitute a breach or default (whether upon lapse of time and/or the occurrence
of any act or event or otherwise) under, the charter documents or by-laws of
Seller or any Material Contract of Seller, result in the imposition of any
Encumbrance against any of the Purchased Assets, or violate any Law.
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Schedule 4.6 lists all Permits, Approvals and consents required to be obtained
by Seller to consummate the transactions contemplated by this Agreement. Except
for matters identified in Schedule 4.6 as requiring that certain actions be
taken by or with respect to a third party or Governmental Entity, the execution
and delivery of this Agreement by Seller and the performance of this Agreement
and any related or contemplated transactions by Seller will not require filing
or registration with, or the issuance of any Permit by, any other third party or
Governmental Entity.
4.7 LEGAL PROCEEDINGS
There is no Order or Action pending, or, to the knowledge of
Seller, threatened, against or affecting Seller or any of their respective
properties or assets that individually or when aggregated with one or more other
Orders or Actions has or if determined adversely might reasonably be expected to
have a Material Adverse Effect on the Photomask Business, or the Purchased
Assets (or the use, operation or value thereof), the Assumed Liabilities,
Seller's ability to perform this Agreement, or any aspect of the transactions
contemplated by this Agreement. Schedule 4.7 lists each Order and each Action
that involves a claim or potential claim of aggregate liability in excess of
$10,000 against, or that enjoins or seeks to enjoin, any activity by Seller with
respect to the Photomask Business other than any Order or Action concerning
Environmental Conditions disclosed in Schedule 4.15.
4.8 PERMITS
Seller holds all Permits that to Seller's knowledge are
required by any Governmental Entity to permit it to conduct the Photomask
Business as now conducted and operate the Purchased Assets as well as all other
assets material to the Photomask Business, and all such Permits are valid and in
full force and effect, except where the failure to be in compliance would not
reasonably be expected to result in a Material Adverse Effect on the Photomask
Business, and where in effect, shall remain in full force and effect for the
benefit of Buyer upon consummation of the transactions contemplated by this
Agreement, except for those Permits identified on Schedule 4.8 as not
transferable to Buyer. To Seller's Knowledge no suspension, cancellation or
termination of any of such Permits is threatened or imminent.
4.9 COMPLIANCE WITH LAW
(a) Seller has conducted the Photomask Business in accordance
with applicable Laws, and the forms, procedures and practices of Seller are in
material compliance with all such Laws, to the extent applicable.
(b) The use and operation of the Purchased Assets are in
compliance with all applicable Laws, building codes, environmental, zoning,
subdivision, and land use laws, and other local, state and federal laws and
regulations, and there are no material violations of any such Laws.
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4.10 EMPLOYEE BENEFITS
(a) Employee Benefit Plans, and Employment Agreements, and
Similar Arrangements.
(i) Schedule 4.10(a) lists (by entity subject thereto or
bound thereby) all employee benefit plans, employment or severance
agreements and other similar arrangements to which Seller (only insofar
as applicable to the employees of Seller dedicated to the Photomask
Business) is or has been bound for the last five (5) years, legally or
otherwise, including, without limitation, (a) any profit-sharing,
deferred compensation, bonus, stock option, stock purchase, pension,
retainer, consulting, retirement, severance, welfare or incentive plan,
agreement or arrangement, (b) any plan, agreement or arrangement
providing for "fringe benefits" or perquisites to employees, or agents,
including but not limited to benefits relating to company automobiles,
clubs, vacation, child care, parenting, sabbatical, sick leave,
medical, dental, hospitalization, life insurance and other types of
insurance, (c) any employment agreement not terminable on thirty (30)
days (or less) written notice, or (d) any other "employee benefit plan"
(within the meaning of Section 3(3) of ERISA).
(ii) Seller has made available to Buyer true and complete
copies of all documents and summary plan descriptions with respect to
such plans, agreements and arrangements, or summary descriptions of any
such plans, agreements or arrangements not otherwise in writing.
(iii) There are no negotiations, demands or proposals that
are pending or have been made which concern matters now covered, or
that would be covered, by plans, agreements or arrangements of the type
described in this section.
(iv) Seller is in compliance in all material respects with
the applicable provisions of ERISA (as amended through the date of this
Agreement), the regulations and published authorities thereunder, and
all other Laws applicable with respect to all such employee benefit
plans, agreements and arrangements. Seller has performed in all
material respects all of its respective obligations under all such
plans, agreements and arrangements and all such plans, agreements and
arrangements have been operated in compliance with their terms. To the
knowledge of Seller, there are no Actions (other than routine claims
for benefits) pending or threatened against such plans or their assets,
or arising out of such plans, agreements or arrangements, and, to the
knowledge of Seller, no facts exist which could give rise to any such
Actions (other than routine claims for benefits).
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(b) Qualified Plans.
(i) Schedule 4.10(b) lists all "employee pension benefit
plans" (within the meaning of Section 3(2) of ERISA) in Schedule
4.10(a) which are also stock bonus, pension or profit-sharing plans
within the meaning of Section 401(a) of the Code.
(ii) Each such plan has been duly authorized by the board
of directors of Seller. Each such plan is qualified in form and
operation under Section 401(a) of the Code and each trust under each
such plan is exempt from tax under Section 501(a) of the Code. To the
knowledge of Seller no event has occurred that shall or could give rise
to disqualification or loss of tax-exempt status of any such plan or
trust under such sections. To the knowledge of Seller no event has
occurred that shall or could subject any such plans to tax under
Section 511 of the Code. No prohibited transaction (within the meaning
of Section 4975 of the Code) or party-in-interest transaction (within
the meaning of Section 406 of ERISA) has occurred with respect to any
of such plans.
(iii) Seller has made available to Buyer for each such
plan copies of the following documents: (i) the Form 5500 filed in each
of the most recent three plan years, including but not limited to all
schedules thereto and financial statements with attached opinions of
independent accountants, (ii) the most recent determination letter from
the IRS, (iii) the consolidated statement of assets and liabilities of
such plan as of its most recent valuation date, and (iv) the statement
of changes in fund balance and in financial position or the statement
of changes in net assets available for benefits under such plan for the
most recently ended plan year. The financial statements so delivered
fairly present the financial condition and the results or operations of
each of such plans as of such dates, in accordance with GAAP.
(c) Title IV Plans. No plan listed in Schedules 4.10(a) or (b)
is a plan subject to Title IV of ERISA.
(d) Union Contracts. Seller is not a party to any collective
bargaining or other agreements with labor unions, the members of which are
employed by Seller, in connection with the Photomask Business.
(e) Health Plans. All group health plans of Seller have been
operated in all material respects in compliance with the group health plan
continuation coverage requirements of Section 162(k) and Section 4980B of the
Code to the extent such requirements are applicable.
(f) Fines and Penalties. There has been no act or omission by
Seller that has given rise to or may give rise to fines, penalties, taxes or
related charges under Section 502(c) or (i) or Section 4701 of ERISA of Chapter
43 of the Code.
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4.11 NO BROKERS OR FINDERS
No agent, broker, finder, or investment or commercial banker,
or other Person or firm engaged by or acting on behalf of Seller or any of its
respective Affiliates in connection with the negotiation, execution or
performance of this Agreement or the transactions contemplated by this
Agreement, is or will be entitled to any brokerage or finder's or similar fee or
other commission as a result of this Agreement or such transactions.
4.12 ACCURACY OF INFORMATION
All information furnished by or on behalf of Seller to Buyer,
its agents or representatives in connection with the Purchased Assets, the
Assumed Liabilities and this Purchase Asset Agreement is true and correct in all
material respects and does not contain any untrue statement of material fact or
omit to state a material fact necessary to make any statement herein not
misleading.
4.13 INVENTORIES
All inventories of Seller are of good and merchantable
quality, are carried at cost (with respect to raw materials), standard cost
(with respect to work in process and finished goods) or expensed (with respect
to spares), and are currently useable or saleable in the ordinary course of
business. The value of obsolete, damaged or excess inventory and of inventory
below standard quality has been written down on the most recent balance sheet
delivered to Buyer pursuant to Section 4.2 or, with respect to inventories
purchased since the balance sheet date, on the books and records of Seller, to
ascertainable market value, or adequate reserves described on such balance sheet
have been provided therefor, and the value at which inventories are carried
reflects the customary inventory valuation policy of Seller (which fairly
reflects the value of obsolete, spoiled or excess inventory) for stating
inventory.
4.14 CUSTOMERS AND SUPPLIERS
Schedule 4.14 lists the names of and describes all Assumed
Contracts with and the appropriate percentage of Photomask Business attributable
to, the ten largest captive users/customers of the Photomask Business, the ten
largest merchant customers of the Photomask Business and the ten most
significant suppliers of the Photomask Business as of the first six (6) months
of the current fiscal year, and any sole-source suppliers of significant goods
or services (other than electricity, gas, telephone or water) to the Photomask
Business with respect to which alternative sources of supply are not readily
available on comparable terms and conditions. To Seller's Knowledge no existing
customer has threatened to transfer business to a third Person on account of the
transactions contemplated by this Agreement.
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4.15 ENVIRONMENTAL COMPLIANCE
(a) Environmental Reports. Schedule 4.15(a) contains a list of
each current report, study or filing, of which Seller is aware, and which
relates to the use of Hazardous Substances upon the Real Property in which Buyer
will obtain a leasehold interest under this Agreement, the Facility Lease
Agreement, or the transactions contemplated hereby, or upon real property
currently or formerly used, owned or operated in connection with the operation
of the Photomask Business of Seller, any Environmental Condition existing upon
the real property currently or formerly used, owned or operated in connection
with the operation of the Photomask Business of Seller or the compliance of the
Photomask Business of Seller, or any real property in which Buyer will obtain an
interest under this Agreement, the Facility Lease Agreement, or the transactions
contemplated hereby, currently or formerly used, owned or operated in connection
with the operation of the Photomask Business of Seller with any Environmental
Laws. A copy of each item listed in Schedule 4.15(a) has been made available to
Buyer.
(b) Compliance with Environmental Laws; Permits. Except as
disclosed in Schedule 4.15(b), the Photomask Business of Seller and all real
property and personal property currently or formerly used, owned or operated in
connection with the operation of the Photomask Business of Seller is, and at all
times in the past has been, used or operated in all material respect in
compliance with all Environmental Laws. Seller has obtained and presently
maintains all Permits and other governmental authorizations required to operate
the Photomask Business of Seller in compliance with all Environmental Laws.
(c) Environmental Conditions; Action by Governmental Agency.
Except as disclosed in Schedule 4.15(c), no Environmental Condition exists upon
the real property in which Buyer will obtain an interest under this Agreement,
the Facility Lease Agreement, or the transactions contemplated hereby, currently
or formerly used, owned or operated in connection with the operation of the
Photomask Business of Seller and no investigation, inquiry or other proceeding
is pending or, to the knowledge of Seller, threatened by any governmental entity
with respect to the real property in which Buyer will obtain a leasehold
interest under this Agreement or the transactions contemplated hereby, currently
or formerly used, owned or operated in connection with the operation of the
Photomask Business of Seller and relating to any actual or alleged Environmental
Condition or failure to comply with any Environmental Law.
(d) Treatment, Storage or Disposal Sites. Schedule 4.15(d)
contains a list of all Hazardous Substance or waste treatment, storage or
disposal sites currently used in the operation of the Photomask Business of
Seller, which list identifies the type of Hazardous Substances or wastes that
are treated, stored or disposed of at each site and estimates of the annual
amount of Hazardous Substances or waste sent to each site. To the knowledge of
Seller none of the sites listed is the subject of federal, state, or local
enforcement action or other investigation that may lead to claims against Seller
for
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cleanup costs, remedial action, damages to natural resources for personal injury
or property damage. Schedule 4.15(d) contains a list of all parties currently
engaged to transport Hazardous Substances or wastes to such treatment, storage
or disposal sites.
4.16 POWERS OF ATTORNEY
Except as set forth on Schedule 4.16, Seller has not given any
power of attorney (irrevocable or otherwise) to any Person for any purpose
relating to the Photomask Business, Purchased Assets, Assumed Liabilities, or
the material assets of the Photomask Business, other than powers of attorney
given to Governmental Authority in connection with routine qualifications to do
business.
4.17 YEAR 2000
The Xxxxxx Semiconductor Sector (a) has conducted an
assessment of its information system technologies, automated manufacturing,
billing and other operations for the purpose of identifying, (b) has shared this
assessment with Buyer, and (c) is engaged in an effort to mitigate (which effort
is continuing in the ordinary course of business) any significant disruption in
operations that it anticipates as a consequence with of the Y2K Problem. Except
as set forth on Schedule 4.17, to the Seller's knowledge, assuming the efforts
to mitigate as set forth in the assessment are continued, with respect to the
Purchased Assets, by Buyer in the ordinary course of business after the Closing
Date, the Purchased Assets will not experience any disruption in operations as a
consequence of the Y2K problem that could reasonably be expected to have a
Material Adverse Effect on the Photomask Business. As used in this Section 4.17,
the "Y2K PROBLEM" means a date-handling problem relating to the Year 2000 date
change that would cause a computer system, software or equipment to fail to
correctly perform, process, and handle date-related data for the dates within
and between the twentieth and twenty-first centuries and all other centuries.
4.18 LABOR AND EMPLOYMENT
Except as set forth on Schedule 4.18, Seller does not have
unfair labor practice charges or complaints pending or to the Seller's knowledge
threatened against the Semiconductor Business Unit relating to the Photomask
Business before the National Labor Relations Board or any equivalent foreign
Governmental Entity. Seller has not at any time during the last three years had,
nor to the knowledge of Seller is there now threatened, any walkout, strike,
union activity, picketing, work stoppage, work slowdown or any other similar
occurrence relating to the Photomask Business which Materially Adversely Affects
or is reasonably likely to Materially Adversely Affect the Photomask Business,
or any attempt to organize or represent the labor force of the Photomask
Business. Seller has not had a plant closing or mass layoff relating to the
Photomask Business, as such terms are defined in the Worker Adjustment and
Retraining Notification Act, or if such has occurred, Seller has given all
required notifications required in connection with such Plant Closing and/or
Mass Layoff. All products manufactured by Seller (as it relates to the Photomask
Business) are manufactured and
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distributed in all material respects in compliance with all foreign, federal,
state and local laws regarding the use of labor, including, but not limited to,
all laws regulating wages, hours, immigration and working conditions. Seller (as
it relates to the Photomask Business) is in all material respects in compliance
with applicable workers' compensation insurance laws. Seller (as it relates to
the Photomask Business) has in all material respects complied with all laws,
regulations and executive orders to which they are subject because of any
agreement or contract with any foreign, federal or state Governmental Entity.
Seller has taken no actions to encourage any employee of the Photomask Business
to leave the Seller's employ before the Closing, or discourage any employee of
the Photomask Business from accepting the offer of employment of Buyer.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
As of the date hereof and as of the Closing, Buyer represents
and warrants to Seller and agrees with Seller as follows:
5.1 ORGANIZATION AND RELATED MATTERS
Parent is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of California. Sub is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Florida. Buyer has all requisite corporate power and
authority to execute, deliver and perform this Agreement, the Facility Lease
Agreement, the Photomask Supply and Strategic Alliance Agreement, the Site
Services Agreement and any other related agreements to which it is a party. On
the Closing Date, Parent or Sub shall be duly qualified or licensed to do
business as a foreign corporation in good standing in the State of Florida.
Buyer has all necessary corporate power and authority to carry on its business
as now being conducted.
5.2 AUTHORIZATION
The execution, delivery and performance of this Agreement, the
Facility Lease Agreement, the Photomask Supply and Strategic Alliance Agreement,
the Site Services Agreement and other related agreements by Buyer has been duly
and validly authorized by the Board of Directors of Buyer, respectively, and by
all other necessary corporate action on the part of Buyer. This Agreement, the
Facility Lease, the Photomask Supply and Strategic Alliance Agreement and any
other related agreements to which Buyer is a party, shall, prior to or
simultaneously with the Closing, be duly executed and delivered by Buyer and
constitute the legally valid and binding obligations of Buyer, enforceable
against Buyer in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors rights generally.
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5.3 LEGAL PROCEEDINGS
There is no Order or Action pending, or, to the knowledge of
Buyer, threatened, against or affecting Buyer or any of its respective
properties or assets that individually or when aggregated with one or more other
Orders or Actions has or if determined adversely might reasonably be expected to
have a Material Adverse Effect on Buyer's ability to perform this Agreement or
any other aspect of the transactions contemplated by this Agreement.
5.4 NO CONFLICTS
The execution, delivery and performance of this Agreement, the
Facility Lease Agreement, the Photomask Supply and Strategic Alliance Agreement,
the Site Services Agreement and any related agreements by Buyer will not violate
the provisions of, or constitute a breach or default whether upon lapse of time
and/or the occurrence of any act or event or otherwise under (a) the charter
documents or bylaws of Buyer, (b) any Law to which Buyer is subject or (c) any
Contract to which Buyer is a party that is material to the financial condition,
results of operations or conduct of the business of Buyer, provided that the
appropriate regulatory approvals are received as contemplated by Section 8.1 and
specified consents, if any, are secured.
5.5 NO BROKERS OR FINDERS
No agent, broker, finder or investment or commercial banker,
or other Person or firms engaged by or acting on behalf of Buyer or its
Affiliates in connection with the negotiation, execution or performance of this
Agreement or the transactions contemplated by this Agreement, is or shall be
entitled to any broker's or finder's or similar fees or other commissions as a
result of this Agreement or such transactions.
5.6 GOVERNMENTAL AUTHORIZATIONS AND CONSENTS
Except as set forth on Schedule 5.6, no consents, licenses,
approvals, or authorizations of, or registrations or declarations with, any
Governmental Authority, bureau, agency or commission, or any third party, are
required to be obtained or made by Buyer in connection with the execution,
delivery, performance, validity and enforceability of this Agreement, or the
Facility Lease Agreement, the Photomask Supply and Strategic Alliance Agreement,
the Site Services Agreement or any related agreements, other than (a) a filing
with the Federal Trade Commission and the Department of Justice under the Xxxx
Xxxxx Xxxxxx Act and (b) other consents, licenses, approvals, authorizations,
registrations or declarations, where the failure to obtain such would not have a
Material Adverse Effect on Buyer. Buyer is not currently engaged in, or
contemplating, any business transaction that would be reasonably expected to
hinder or delay the authorizations and consents referred to in this Section 5.6.
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5.7 LITIGATION
As of the date of this Asset Purchase Agreement, no action,
suit proceeding or governmental investigation is pending or to the knowledge of
Buyer, threatened, against Buyer or its properties, at law or in equity or
before any Governmental Authority that seeks to question, delay or prevent the
consummation of the transactions contemplated hereby.
5.8 ACCESS
Buyer has received and reviewed the Financial Statements and
is acquainted with the Photomask Business. Buyer has had an opportunity to
review the assets, books, records and contracts of the Photomask Business, and
has been given the opportunity to meet with officers and other representatives
of Seller's Semiconductor Business Unit for the purpose of investigating and
obtaining information regarding the Photomask Business operations and its
financial and legal affairs.
5.9 EMPLOYEE RECORDS
Buyer and Seller acknowledge that Buyer is entitled to inspect
and copy the personnel and related employment files of any of the current
employees, except for those employee records consisting of field folders,
medical records and former employee actions brought against the Seller, of the
Photomask Business who are offered employment by Buyer. Buyer acknowledges that
some of this information is considered to be confidential under state and/or
Federal law. Buyer agrees that it will keep all information obtained from Seller
strictly confidential and that it will be maintained (and disclosed, if at all)
in strict compliance with applicable state and Federal Laws.
5.10 FINANCIAL CAPACITY
Buyer has the financial capacity to consummate the
transactions contemplated by this Agreement, the Facility Lease Agreement, the
Photomask Supply and Strategic Alliance Agreement, the Site Services and related
agreements. Buyer has heretofore provided to Seller an accurate written
explanation of the means by which Buyer plans to finance the transactions
contemplated by this Agreement.
ARTICLE VI
COVENANTS AND REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO CONDUCT OF SELLER PRIOR TO CLOSING
6.1 ACCESS
Prior to the Closing Date, upon reasonable notice from Buyer
to Seller, Seller shall authorize and permit Buyer and its Representatives to
have reasonable access
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during normal business hours, upon reasonable notice and in such manner as shall
not unreasonably interfere with the conduct of their respective businesses, to
the employees, Purchased Asset, the Real Property, and the books, records,
operating instructions and procedures of Seller, so as to afford Buyer full
opportunity to make such review, examination and investigation of the Photomask
Business as Buyer determines are reasonably necessary in connection with the
consummation of the transactions contemplated hereby. Buyer will be permitted to
make extracts from or copies of such books, records and other documents of the
Photomask Business as may be reasonably necessary in connection with and to
discuss their respective business with such third Persons, including without
limitations, their respective directors, officers, employees, accountants,
suppliers, customers, and creditors as Buyer considers necessary or appropriate
for the purposes of familiarizing itself with the Photomask Business, the
Purchased Assets and the Assumed Liabilities, obtaining any necessary Approvals
of or Permits for the transactions contemplated by this Agreement and conducting
an evaluation of the organization and Photomask Business of Seller. The access
provided by this Section 6.1 shall be subject to the obligations of
confidentiality and return of information obligations set forth in Section 11.9
hereof.
6.2 MATERIAL ADVERSE CHANGES
From the date hereof to the earlier of the Closing Date or the
Termination Date, Seller shall promptly notify Buyer of, and set forth in
Schedule 4.2(c), any event of which Seller obtains knowledge which has had a
Material Adverse Effect on the Photomask Business or any of the Purchased Assets
or Assumed Liabilities or which if known as of the date hereof would have been
required to be disclosed to Buyer.
6.3 CONDUCT OF PHOTOMASK BUSINESS
Seller hereby agrees that, with respect to the Photomask
Business, from the date hereof to the earlier of the Closing Date or the
Termination Date, Seller shall not without the prior consent in writing of Buyer
(such consent not to be unreasonably withheld or delayed):
(a) conduct the Photomask Business except in the ordinary
course; or
(b) except as required by its terms, amend, terminate,
renew/fail to renew or renegotiate any Material Contract or default (or take or
omit to take any action that with or without the giving of notice or passage of
time or both, would constitute a default) in any of its obligations under any
Material Contract or any Lease or enter into any new Material Contract or any
Lease to the extent such event is adverse to the interest of the Photomask
Business; or
(c) terminate, amend or fail to renew or preserve any Permits;
or
(d) incur or agree to incur any obligation or liability
(absolute or contingent), except for normal and customary trade payables
incurred in the ordinary
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course of business, that individually calls for payment by Seller of more than
$50,000 in any specific case or $150,000 in the aggregate; or
(e) except for normal scheduled salary increases as set forth
on Schedule 6.3(e), grant any general or uniform increase in the rates of pay or
benefits to employees of the Photomask Business (or a class thereof) or any
increase in salary or benefits of any employee of the Photomask Business or
agent or pay any bonus to any person, or enter into any new employment,
collective bargaining or severance agreement, or hire any Person at an annual
salary in excess of $50,000; or
(f) sell, transfer, mortgage, encumber or otherwise dispose of
any Purchased Assets (other than Inventory sold in the ordinary course of
business and replacements of equipment in the ordinary course); or
(g) make any capital expenditures or commitments on behalf of
the Photomask Business aggregating more than $50,000; or
(h) make any material investment, by purchase, contribution to
capital, property transfer, or otherwise, on behalf of the Photomask Business in
any other Person; or
(i) dispose of or permitted to lapse any Intellectual Property
related solely to the Photomask Business or any rights to its use; or
(j) fail to maintain or repair any Purchased Asset in
accordance with normal operating procedures and consistent with past practices
of the Semiconductor Business Unit of Seller; or
(k) quote for sale or enter into any sales transactions with
any customer on terms inconsistent with past practice; or
(l) enter into sales transactions with payment terms in excess
of sixty (60) days; or
(m) agree to or make any commitment to take any action that is
or would have been prohibited by this Section 6.3.
6.4 NOTIFICATION OF CERTAIN MATTERS
From the date hereof to the earlier of the Closing Date or the
Termination Date, Seller shall give prompt notice to Buyer, and Buyer shall give
prompt notice to Seller, of (i) the occurrence, or failure to occur, of any
event that would be likely to cause any of its representations or warranties,
contained in this Agreement to be untrue or inaccurate in any material respect
at any time from the date of this Agreement to the Closing Date and (ii) any
failure on its part to comply with or satisfy, in any material
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respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement.
6.5 PERMITS AND APPROVALS; THIRD PARTY CONSENTS
(a) From the date hereof to the earlier of the Closing Date
and the Termination Date, Seller and Buyer each agree to cooperate and use their
commercially reasonable efforts to obtain (and shall immediately prepare all
registrations, filings and applications, requests and notices preliminary to
obtaining all) Approvals and Permits that may be necessary or that may be
reasonably requested by Buyer to consummate the transactions contemplated by
this Agreement.
(b) To the extent that the Approval of a third party with
respect to any Assumed Contract is required in connection with the transactions
contemplated by this Agreement, Seller shall use its commercially reasonable
efforts to obtain such Approval, prior to the Closing Date and in the event that
any such Approval is not obtained (but without limitation on Buyer's rights
under Section 8.2), Seller shall cooperate with Buyer to ensure that Buyer
obtains the benefits of each such Assumed Contract.
6.6 PRESERVATION OF PHOTOMASK BUSINESS PRIOR TO CLOSING DATE
During the period beginning on the date hereof and ending on
the earlier of the Closing Date and the Termination Date, (a) Seller shall use
their commercially reasonable efforts to preserve the Photomask Business and to
preserve the goodwill of customers, suppliers and others having business
relations with Seller relating to the Photomask Business and (b) Seller and
Buyer shall consult with each other concerning, and Seller shall cooperate to
keep available to Buyer, the services of the employees of Seller engaged in the
Photomask Business. Nothing in this Section 6.6 shall obligate Buyer after the
Closing to retain or offer employment to any officer or employee of Seller
except as provided in Section 7.4.
6.7 CERTAIN FILINGS
From the date hereof until the earlier of the Closing Date and
the Termination Date, Buyer and Seller shall make any and all filings required
to be made on their respective parts or the part of Persons controlling such
entities under the Xxxx-Xxxxx-Xxxxxx Act. Seller and Buyer shall furnish each
other such necessary information and reasonable assistance as the other may
request in connection with its preparation of necessary filings or submissions
under the provisions of such laws. Seller and Buyer shall supply each other with
copies of all correspondence, filings or communications, including file
memoranda evidencing telephonic conferences, with representatives of any
Governmental Entity or member of its staff, with respect to the transactions
contemplated by this Agreement and any related or contemplated or inconsistent
transactions.
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ARTICLE VII
ADDITIONAL CONTINUING COVENANTS
7.1 NONCOMPETITION
(a) Restrictions on Competitive Activities. Seller agrees
that, after the Closing, Buyer shall be entitled to the Goodwill and going
concern value of the Photomask Business and to protect and preserve the same to
the maximum extent permitted by law. Seller also acknowledges that its
management contribution to the Photomask Business have been uniquely valuable
and involve proprietary information that would be competitively unfair to make
available to any competitor of the Photomask Business. For these and other
reasons and as an inducement to Buyer to enter into this Agreement, Seller
agrees that for a period of five (5) years after the date hereof, Seller, its
subsidiaries and any purchaser of the Xxxxxx Semiconductor Business Unit and its
subsidiaries (excluding the other portfolio companies of Sterling Holding) shall
not, directly or indirectly, for their own benefit or as agent for another,
carry on or participate in the ownership, management or control of, or the
financing of, or allow their name, reputation or knowledge to be used in or by
any other present or future business enterprise that competes with Buyer, or any
subsidiary of Buyer, in activities similar to the Photomask Business as of the
Closing Date in the United States and Europe using technology generally
available as of the Closing Date or derived from technology generally available
as of the Closing Date for so long as Buyer or any person entitled to or
acquiring ownership of the Goodwill of the Photomask Business or the Purchased
Assets through Buyer conducts a like business therein.
(b) Exceptions. Nothing contained herein shall preclude Seller
from (i) owning an equity interest of five percent or less of any publicly
traded company listed on a national stock exchange or on the Nasdaq national
market system or (ii) acquiring the capital stock or assets of any business that
derives less than 10% of its consolidated revenues from an activity prohibited
by Section 7.1(a) above, so long as the Seller makes a commercially reasonable
effort to divest that portion of the acquired business that is engaged in said
prohibited acts within 12 months following such acquisition.
(c) Restrictions on Soliciting Employees by Seller. In
addition, to protect Buyer against any efforts by Seller, its Subsidiaries or
Affiliates to cause employees of the Photomask Business to terminate their
employment, Seller agrees that for a period of three (3) years following the
Closing Date, neither Seller, nor the Semiconductor Business Unit of Seller
shall directly or indirectly solicit for employment any employee of the
Photomask Business to leave Buyer, or to accept any other employment or
position. Nor shall Seller nor Seller's Semiconductor Business Unit permit any
employee of Buyer to participate in Seller's job opportunity posting system.
(d) Restrictions on Soliciting Employees by Buyer. In
addition, to protect Seller and Seller's Semiconductor Business Unit against any
efforts by Buyer, its Subsidiaries or Affiliates to cause employees of the
Semiconductor Business Unit to
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terminate their employment, Buyer agrees that for a period of three (3) years
following the Closing Date, Buyer, shall not directly or indirectly solicit for
employment any employee of the Semiconductor Business Unit to leave Seller or
Seller's Semiconductor Business Unit, or to accept any other employment or
position with Buyer.
(e) Special Remedies and Enforcement. Seller recognizes and
agrees that a breach by Seller of any of the covenants set forth in this Section
7.1 could cause irreparable harm to Buyer, that Buyer's remedies at law in the
event of such breach would be inadequate, and that, accordingly, in the event of
such breach a restraining order or injunction or both may be issued against
Seller, in addition to any other rights and remedies which are available to
Buyer. If this Section 7.1 is more restrictive than permitted by the Laws of any
jurisdiction in which Buyer seeks enforcement hereof, this Section 7.1 shall be
limited to the extent required to permit enforcement under such Laws. In
particular, the parties intend that the covenants contained in the preceding
portions of this Section 7.1 shall be construed as a series of separate
covenants, one for each county and city or other location in which Seller
conducts business as of the Closing Date. Except for geographic coverage, each
such separate covenant shall be deemed identical in terms. If, in any judicial
proceeding, a court shall refuse to enforce any of the separate covenants deemed
included in this paragraph, then such unenforceable covenant shall be deemed
eliminated from these provisions for the purpose of those proceedings to the
extent necessary to permit the remaining separate covenants to be enforced.
7.2 NONDISCLOSURE OF PROPRIETARY DATA
(a) After the Closing, subject to the limitations in Section
11.9 neither Seller nor any of its representatives shall, at any time, make use
of, divulge or otherwise disclose, directly or indirectly, any trade secret or
other proprietary data (including, but not limited to, any customer list, record
or financial information) concerning the Photomask Business or the business or
policies of Seller related to the Photomask Business that Seller or any
representative of Seller may have learned as an owner or a shareholder,
employee, officer or director of the Photomask Business. In addition, neither
Seller nor any of its representatives shall make use of, divulge or otherwise
disclose, directly or indirectly, to Persons other than Buyer, any confidential
information concerning the conduct of the Photomask Business that may have been
learned in any such capacity. This Section 7.2 shall not apply to any such
information of the Photomask Business which becomes part of the public domain
through no fault of Seller. Nor shall this Section 7.2 apply to any confidential
information of Seller related to Seller's conducting its primary business of
designing, developing, manufacturing, assembling, testing, selling, leasing, and
disposing of semiconductor devices and integrated circuits.
(b) After the Closing, subject to the limitations in Section
11.9 neither Buyer nor any of its representatives shall, at any time, make use
of (other than in connection with the manufacture of photomasks on behalf of
Seller and the Semiconductor Business Unit), divulge or otherwise disclose,
directly or indirectly, any trade secret or other proprietary information of
Seller or Seller's Product Mask
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Information that Buyer or any representative of Buyer may have learned as the
purchaser or employee of the Photomask Business. In addition, neither Buyer nor
any of its representatives shall make use of, divulge or otherwise disclose,
directly or indirectly, to Persons other than Seller, any confidential
information concerning Seller's semiconductor products that Buyer may learn in
any capacity through the purchase of the Photomask Business. This Section 7.2
shall not apply to any such information which becomes part of the public domain
through no fault of Buyer.
7.3 MAINTENANCE OF BOOKS AND RECORDS
Each of Seller and Buyer shall preserve until the seventh
anniversary of the Closing Date all records possessed by such party relating to
the Purchased Assets, Assumed Liabilities or operations of the Photomask
Business prior to the Closing Date. After the Closing Date, where there is a
legitimate purpose, such party shall provide the other party with access, upon
prior reasonable written request specifying the need therefor, during normal
business hours, to (i) the relevant officers and employees of such party and
(ii) the books of account and records of such party, but, in each case, only to
the extent relating to the Purchased Assets, Assumed Liabilities and operations
of the Photomask Business prior to the Closing Date, and the other party and its
representatives shall have the right to make copies of such books and records;
provided, however, that the foregoing right of access shall not be exercisable
in such manner as to interfere unreasonably with the normal operations and
business of such party; and further provided that, as to so much of such
information as constitutes trade secrets or confidential business information of
such party, the requesting party and its representatives will use due care to
not disclose such information except (x) as required by Law, (y) with the prior
consent of such party, which consent shall not be unreasonably withheld, or (z)
where such information becomes available to the public generally, or becomes
generally known to competitors of such party, through sources other than the
requesting party and its representatives. Such records may nevertheless be
destroyed by a party if such party sends the other party written notice of its
intent to destroy records, specifying with particularity the contents of the
records to be destroyed. Such records may then be destroyed after the 30th day
following delivery of such notice unless the other party objects to the
destruction, in which case the party seeking to destroy the records shall either
agree to retain such records or deliver such records to the objecting party at
the objecting party's expense.
7.4 EMPLOYMENT MATTERS
(a) Employees. Except as to individuals set forth on Schedule
7.4, as of the close of business on the Closing Date, Seller shall cease to
employ, and Buyer shall offer employment to, all existing employees of the
Photomask Business, excluding the employee on ninety (90) day general leave of
absence due back on July, 9, 1999. The terms and conditions of the employment of
the employees who accept employment with Buyer shall as of the Closing Date be
substantially similar, in the aggregate, to the terms and conditions of their
employment with Seller. Seller shall use its commercially
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reasonable efforts to assist Buyer in hiring such employees of the Photomask
Business. Seller shall not take any action, directly or indirectly, to prevent
or discourage any such employee of the Photomask Business from being employed by
Buyer as of the Closing Date and shall not solicit, invite, induce or entice any
such employee of the Photomask Business to remain in the employ of Seller or
otherwise attempt to retain the services of any such employee, except with the
prior written consent of Buyer. Seller agrees to consult with Buyer on all
material oral or written communications or meetings primarily regarding future
employment with such employees.
(b) Proration of Employee Benefits. All obligations for
compensation, wages, bonuses, vacation time, pay in lieu of vacation, leaves of
absence, and similar employee benefits provided by Seller or the Photomask
Business and due, earned or accrued in accordance with GAAP, prior to the
Closing Date shall be paid by Seller either directly to the employees or to
Buyer on behalf of the employees as set forth in Schedule 7.4(b). Seller shall
reimburse its former employees of the Photomask Business the value of employee
education reimbursements earned by any such employee enrolled in a qualified
education class on the Closing Date, who completes said course work after the
Closing Date in accordance with Seller's policy on educational reimbursements
and the Buyer shall have no liability in connection therewith.
(c) Severance Obligations. Seller shall be solely responsible
for liabilities and obligations, if any, for severance pay owed to employees of
the Photomask Business prior to the Closing, including, but not limited any such
liabilities and obligations arising from the events described in the first
sentence of Section 7.4(a) hereto. Buyer shall be solely responsible for any
liabilities or obligations for severance pay for employees of the Photomask
Business who become employees of Buyer. Buyer acknowledges that it has not
informed Seller of any planned or contemplated decisions or actions by Buyer or
one of its subsidiaries that would require service of notice under the WARN Act,
Buyer agrees that neither it nor any of its subsidiaries will take any action
which will cause the notice provisions of the WARN Act to become applicable to
the transactions contemplated by this Agreement.
(d) Buyer and its subsidiaries will credit employees of the
Photomask Business who become employees of Buyer with service with Seller (and
predecessors of Seller) for purposes of (i) vesting for and eligibility to
participate a 401(k) plan, but not for benefit accruals; (ii) any waiting
periods, eligibility or pre-existing condition limitations for employee welfare
benefit plans (as defined in Section 3(1) of ERISA); and (iii) eligibility and
benefit computations for vacation and flexible holiday; provided , however, that
with respect to vacation and flexible holiday plans for the remainder of
calendar year 1999 only, Buyer shall maintain vacation and flexible holiday
plans equivalent to, and in lieu of, Seller's vacation and flexible holiday
plans covering the employees of the Photomask Business immediately prior to the
Closing Date (offset by vacation time and flexible holiday time used under
Seller's vacation plans as of the Closing Date). Seller shall pay to employees
of the Photomask Business immediately prior to the Closing any amount of
flexible holiday pay credited to employees in excess
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of thirty-two (32) hours after offsetting any flexible holiday time previously
used in calendar year 1999 as set forth on Schedule 7.4(b). Buyer shall credit
said employees with any amounts paid prior to the Closing Date under any Welfare
Plan that is a health plan toward the satisfaction of deductible amounts and
copayment minimums under the Buyer's corresponding welfare benefit plans.]
(e) No Third Party Beneficiaries. Notwithstanding any possible
inferences to the contrary, neither Seller nor Buyer intends for this Section
7.4 to create any rights or obligations except as between Seller and Buyer, and
no past, present or future employees of Seller or Buyer shall be treated as
third-party beneficiaries of this Section 7.4.
7.5 BUYER'S RIGHTS IN INTELLECTUAL PROPERTY
(a) Assignment of Intellectual Property Rights.
(i) Seller hereby assigns to the Buyer its entire
ownership, right, title and interest in and to Business Technology.
(ii) Seller hereby grants to Buyer (and each of its
present or future wholly-owned subsidiaries for so long as they are
subsidiaries) a royalty-free, non-exclusive, worldwide license to use
the Technology under the Intellectual Property Rights in activities
similar to activities undertaken by the Photomask Business as of the
Closing Date in the locations in the United States and Europe. This
license may not be sublicensed and may be assigned only to any person
entitled to or acquiring ownership of the Goodwill of the Photomask
Business or substantially all of the Purchased Assets through Buyer for
the purpose of conducting a like business therein.
(iii) Assignment of Software Type 1. Seller hereby assigns
to Buyer all of its right, title and interest in and to the Software
Type 1 identified on Schedule 7.5(a) (iii).
(iv) License of Software Type 2. Seller hereby grants to
Buyer a royalty-free, non-exclusive, worldwide license to use Software
Type 2 identified on Schedule 7.5(a)(iv) in the Photomask Business as
of the Closing Date.
(b) Assignment of Software Licenses. To the extent assignable
by Seller to Buyer, Seller hereby assigns all of its right, title, and interest
in and to Software Licenses specific to the Photomask Business and listed on
Schedule 7.5(b). To the extent any Software License listed on Schedule 7.5(b) is
not assignable to Buyer, but is both specific to and used in the operation of
the Photomask Business, Seller will use commercially reasonable efforts as
requested by Buyer in writing to provide at Buyer's expense the economic benefit
of such Software License Agreement to Buyer, and upon doing such, shall be
deemed to have satisfied any and all obligations of Buyer regarding assignment
or transfer of each such Software License Agreement.
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(c) Transfer of Tangible Software and Technology. Seller
hereby tenders and Buyer hereby accepts delivery of all Technology and Software
Licenses assigned to Seller under this Section 7.5
7.6 REPRESENTATIONS REGARDING SOFTWARE
Seller represents that to the Seller's Knowledge:
(a) Schedule 7.6(a) identifies all Software Licenses used in
or on behalf of the Photomask Business on the Closing Date and during the five
(5) calendar days prior thereto;
(b) Schedule 7.5(a)(iii) identifies all Software Type 1 used
in or on behalf of the Photomask Business on the Closing Date and during the
five (5) calendar days prior thereto;
(c) Schedule 7.5(a)(iv) identifies all Software Type 2 used in
or on behalf of the Photomask Business on the Closing Date and during the five
(5) calendar days prior thereto.
If it is later determined after the Closing Date that any Software
should have been, but was not, identified on any of the Schedules 7.6(a),
7.5(a)(iii) or 7.5(a)(iv), then as the sole remedy of Buyer to Seller's failure
to identify such Software, Seller shall consent to assign or license and effect
delivery of such Software in accord with the provisions of Section 7.5.
7.7 SALES AND TRANSFER TAXES; OTHER FEES
To Seller's Knowledge pursuant to applicable Florida
Department of Revenue regulations and interpretations thereof, no sales/use tax
will be due on the sale of the machinery, equipment, supplies, or other tangible
personal property (other than inventory) used in the Photomask Business, and
none of the Assets consist of motor vehicles, aircraft, boats, mobile homes or
salvage, surplus or obsolete property on which sales/use tax would be due.
However, Buyer shall pay all real and personal property transfer taxes, if any,
and all sales, use and other similar taxes that may be imposed as a result of
Buyer's failure to supply a Resale Exemption Certificate, if any, imposed on or
in connection with the purchase, sale or transfer of the Purchased Assets to,
and the assumption of the Assumed Liabilities by, Buyer pursuant to this
Agreement or on the use thereof by Buyer after the Closing Date. Buyer shall
furnish Seller with a Resale Exemption Certificate for all inventory purchased
from Seller. Buyer shall pay all fees incurred in connection with the transfer
of the Purchased Assets and Assumed Contracts, including, but not limited to,
any applicable fees which may be due in connection with the transfer of Seller's
ETEC Systems.
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ARTICLE VIII
CONDITIONS OF PURCHASE
8.1 GENERAL CONDITIONS
The obligations of the parties to effect the Closing shall be
subject to the following conditions unless waived in writing by the parties to
the Agreement:
(a) No Orders; Legal Proceedings. No Law or Order shall have
been enacted, entered, issued, promulgated or enforced by any Governmental
Entity, nor shall any Action have been instituted and remain pending or, to the
knowledge of Seller or Buyer, have been threatened and remain so by any
Governmental Entity at what would otherwise be the Closing Date, that prohibits
or restricts or would (if successful) prohibit or restrict the transactions
contemplated by this Agreement. No Governmental Entity shall have notified any
party to this Agreement that consummation of the transactions contemplated by
this Agreement would constitute a violation of any Laws of any jurisdiction or
that it intends to commence proceedings to restrain or prohibit such
transactions or force divestiture or rescission, unless such Governmental Entity
shall have withdrawn such notice and abandoned any such proceedings prior to the
scheduled Closing, unless nationally recognized counsel known to have expertise
as to such matters on behalf of the party against whom such action or proceeding
was or would be instituted renders to the parties a favorable opinion that such
action or proceeding is or would be without merit.
(b) Approvals. To the extent required by applicable Law, all
Permits and Approvals required to be obtained from any Governmental Entity,
shall have been received or obtained on or prior to the Closing Date without the
imposition of any burdens or conditions materially adverse to the party or
parties entitled to the benefit thereof and any applicable waiting period under
the Xxxx-Xxxxx-Xxxxxx Act shall have expired or been terminated.
8.2 CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer to effect the Closing shall be
subject to the following conditions except to the extent waived in writing by
Buyer:
(a) Representations and Warranties and Covenants of Seller.
The representations and warranties of Seller herein contained shall be true in
all material respects at the Closing Date with the same effect as though made at
such time; Seller shall have performed all obligations and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by Seller at or prior to the Closing Date.
(b) No Material Adverse Change. There shall not have been any
Material Adverse Change in or affecting the Photomask Business subsequent to
April 2, 1999.
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(c) Opinions of Counsel. Buyer shall receive at the Closing
from Xxxxxx X. Xxxxxxx, counsel to Seller, opinions dated the Closing Date, in
form and substance substantially as set forth in Exhibit F
(d) Consents. Seller shall have obtained and provided to Buyer
evidence of the receipt of all required Approvals and Permits listed on Schedule
4.6 and Buyer shall have obtained all Approvals and Permits required by Law or
referred to in Section 5.2, each in form and substance reasonably satisfactory
to Buyer.
(e) Changes in Law. No Law or Order shall have been enacted,
entered, issued, promulgated or enforced by any Governmental Entity, nor shall
any Action have been instituted and remain pending or, to the best knowledge of
Seller, have been threatened and remain so by any Governmental Entity at what
would otherwise be the Closing Date which would not permit the Photomask
Business as presently conducted to be continued by Buyer unimpaired following
the Closing Date.
(f) Employees. Buyer shall have determined to its satisfaction
in its sole discretion that (i) each of the persons identified by Buyer on
Schedule 8.2(f) hereto as key employees of the Photomask Business have agreed to
become an employee of Buyer upon Closing, and (ii) a satisfactory number of
other employees of the Photomask Business have agreed to become employees of
Buyer upon Closing.
(g) Facility Lease Agreement. Seller shall have executed and
delivered to Buyer a Lease covering the facilities used in the operation of the
Photomask Business (the "FACILITY LEASE AGREEMENT") substantially in the form
attached hereto as Exhibit B.
(h) Photomask Supply and Strategic Alliance Agreement. Seller
shall have executed and delivered to Buyer a photomask product supply agreement
(the "PHOTOMASK SUPPLY AND STRATEGIC ALLIANCE AGREEMENT"), in form and substance
substantially as set forth in Exhibit C.
(i) Seller Certificate. An Officer of Seller shall execute a
Certificate as of the Closing Date in form and substance substantially as set
forth in Exhibit G.
(j) Site Services Agreement. Seller shall have executed and
delivered to Buyer a Site Services Agreement pursuant to which, during the term
of the Facility Lease, Seller shall provide at a commercially reasonable price
to Buyer electricity, cooling water, D.I. water, compressed air, and nitrogen,
building, clean room and environmental chamber maintenance and repair services,
security services, parking, administrative and management information systems
services at its then current prices for such services (the "SITE SERVICES
AGREEMENT") at a commercially reasonable price. The Site Services Agreement
shall be in form and substance substantially as set forth in Exhibit D.
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8.3 CONDITIONS TO OBLIGATIONS OF SELLER
The obligations of Seller to effect the Closing shall be
subject to the following conditions, except to the extent waived in writing by
Seller:
(a) Representations and Warranties and Covenants of Buyer. The
representations and warranties of Buyer herein contained shall be true in all
material respects at the Closing Date with the same effect as though made at
such time; Buyer shall have in all material respects performed all obligations
and complied with all covenants and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date, and Buyer
shall have delivered to Seller certificates of Buyer in form and substance
reasonably satisfactory to Seller, dated the Closing Date and signed by the
chief executive officer of Buyer, to such effect.
(b) Opinion of Counsel. Seller shall receive at the Closing
from O'Melveny & Xxxxx LLP, counsel to Buyer, opinions dated the Closing Date,
in form and substance substantially as set forth in Exhibit H.
(c) Facility Lease Agreement. Buyer shall have executed and
delivered to Seller the Facility Lease Agreement, substantially in the form of
Exhibit B.
(d) Photomask Supply and Strategic Alliance Agreement. Buyer
shall have executed and delivered to Seller the Photomask Supply and Strategic
Alliance Agreement, substantially in the form of Exhibit C.
(e) Site Services Agreement. Buyer shall have executed and
delivered to Seller the Site Services Agreement, substantially in the form of
Exhibit D.
ARTICLE IX
TERMINATION OF OBLIGATIONS; SURVIVAL
9.1 TERMINATION OF AGREEMENT
Anything herein to the contrary notwithstanding, this
Agreement and the transactions contemplated by this Agreement shall terminate at
the close of business on July 5, 1999 (the "TERMINATION DATE") unless extended
by mutual consent in writing of Buyer and Seller and may otherwise be terminated
at any time before the Closing as follows and in no other manner:
(a) Mutual Consent. By mutual consent in writing of Buyer and
Seller.
(b) Conditions to Buyer's Performance Not Met. By Buyer upon
written notice to Seller if any event occurs which would render impossible the
satisfaction of one or more conditions to the obligations of Buyer to consummate
the transactions
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contemplated by this Agreement as set forth in Section 8.1 or 8.2 and the Seller
cannot or will not take action to cure the deficiency within thirty days of the
event.
(c) Conditions to Seller's Performance Not Met. By Seller upon
written notice to Buyer if any event occurs which would render impossible the
satisfaction of one or more conditions to the obligation of Seller to consummate
the transactions contemplated by this Agreement as set forth in Section 8.1 or
8.3 and the Buyer cannot or will not take action to cure the deficiency within
thirty days of the event.
(d) Xxxx-Xxxxx-Xxxxxx. By Buyer if Buyer shall receive a
request for further information under the Xxxx-Xxxxx-Xxxxxx Act with respect to
its filing thereunder from either the FTC or Department of Justice (provided
Buyer exercises its right to terminate this Agreement at any time prior to
making a responsive filing to such request) by delivering written notice of such
termination to Seller.
(e) Material Breach. By Buyer or Seller if there has been a
material misrepresentation or material breach on the part of the other party in
its representations, warranties or covenants set forth herein; provided,
however, that if such breach or misrepresentation is susceptible to cure, Seller
or Buyer, as the case may be, shall have 10 business days after receipt of
notice from the other party of its intention to terminate this Agreement
pursuant to this Section 9.1(f) if such misrepresentation or breach continues in
which to cure such breach or misrepresentation before the other party may so
terminate this Agreement.
9.2 EFFECT OF TERMINATION
In the event that this Agreement shall be terminated pursuant
to Section 9.1, all further obligations of the parties under this Agreement
shall terminate without further liability of any party to another; provided,
that, the obligations of the parties contained in Section 11.9 and Section 11.12
shall survive any such termination. A termination under Section 9.1 shall not
relieve any party of any liability for a breach of, or for any misrepresentation
under this Agreement, or be deemed to constitute a waiver of any available
remedy (including specific performance if available) for any such breach or
misrepresentation.
9.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
(a) The representations and warranties set forth in this
Agreement shall survive the Closing Date and the consummation of the
transactions contemplated hereby for a period of 18 months from the Closing
Date; provided, however, that (i) the representations and warranties set forth
in Section 4.15 respecting environmental compliance and Seller's obligations set
forth in Section 10.1(d),(e), (f) and (g) shall survive until the expiration of
the applicable statute of limitations, and (ii) the second and fourth sentences
of Section 4.4(a) and the second sentence of Section 4.4(b) shall survive
indefinitely. The rights to indemnification set forth in this Agreement based on
the representations, warranties, covenants and obligations set forth herein
shall not be
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affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or after the
execution and delivery of this Agreement or the Closing Date, with respect to
the accuracy or inaccuracy of or compliance with, any such representation,
warranty, covenant or obligation.
(b) No claim for the recovery of indemnifiable damages based
upon the inaccuracy of such representations and warranties may be asserted by a
party after such representations and warranties have expired; provided, however,
that claims first asserted in reasonable detail in writing to the other party
within the applicable period shall not thereafter be barred.
(c) This Section 9.3 shall not limit actions with respect to
any covenant or agreement of the parties hereto which by its terms contemplates
performance after the Closing Date, other than the indemnity obligations of the
parties set forth in Article X, hereof.
ARTICLE X
INDEMNIFICATION
10.1 OBLIGATIONS OF SELLER
During the time periods set forth in Section 9.3, the Seller,
agrees to indemnify and hold harmless Buyer and its respective directors,
officers, shareholders, employees, affiliates, agents and assigns (the "BUYER
Parties") in respect of any and all claims, actions, suits or other proceedings
and any and all Losses, incurred by, imposed on or borne by Buyer, directly or
indirectly, as a result of, or based upon or arising from:
(a) any inaccuracy in or breach or nonperformance of any of
the representations, warranties, covenants or agreements made by Seller in this
Agreement whether or not of a material nature; or
(b) any other matter as to which Seller in other provisions of
this Agreement has agreed to indemnify Buyer; or
(c) any liability or obligation of Seller or any of their
Affiliates related to Seller (including the Photomask Business) not expressly
assumed by Buyer pursuant to Section 2.2(b) hereof; or
(d) any claim by a current or former employee of Seller the
facts upon which such claim is based occurred prior to the Closing Date,
including but not limited to, claims alleging wrongful discharge, employment
discrimination and wage and hour violations; or
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(e) the alleged or actual violation of any law, rule or
regulation, prior to the Closing, by Seller, including, without limitation, any
Environmental Law or any conditions existing at the Closing that constitutes a
violation of Environmental Laws; or
(f) the generation, use, transportation, treatment, storage,
release or disposal, before the Closing, of Hazardous Substances by Seller at,
on or under the real property currently or formerly used, owned or operated in
connection with the operation of the business of Seller; or
(g) the presence of Hazardous Substances or the existence of
an Environmental Condition at the real property currently or formerly used,
owned or operated in connection with the operation of the business of Seller
which was present at such property or facility at any time on or prior to the
Closing.
Notwithstanding the foregoing, in no event shall the aggregate
liability of Seller hereunder with respect to any Losses of the Buyer Parties
exceed Five Million Dollars ($5,000,000), except with respect to Losses
resulting from Seller's fraudulent actions or inactions, in which case the
aggregate liability of Seller hereunder shall be without limit.
10.2 OBLIGATIONS OF BUYER
(a) General. During the time periods set forth in Section 9.3,
Buyer agrees to indemnify and hold harmless, Seller and their respective
directors, officers, shareholders, employees, affiliates, agents and assigns in
respect of any and all claims, actions, suits or other proceedings, and any and
all Losses incurred by, imposed on or borne by Seller, directly or indirectly,
as a result of, or based upon or arising from, any inaccuracy in or breach or
nonperformance of any of the Assumed Contracts, Assumed Liabilities and
post-Closing obligations of the Photomask Business, the representations,
warranties, covenants or agreements made by Buyer in or pursuant to this
Agreement.
(b) With Respect to Environmental Conditions. Buyer agrees to
indemnify and hold Seller and its Subsidiaries and Affiliates harmless from and
against and in respect of any of the following, including any damage, expense,
loss, claims, incidental and consequential damages (including attorney and
expert fees) and any such amounts related to, arising from or caused by the
following:
(i) All liabilities of any nature, whether accrued,
absolute, contingent or otherwise, arising from or caused by any act or
omission by Buyer after the Closing Date including the storage, use,
manufacture, transportation, disposal, release, discharge or emission
by Buyer of any Hazardous Substance while operating the Photomask
Business; and
(ii) the exposure to any Hazardous Substance after the
Closing Date of any person engaged in activities on the Real Property,
provided the
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presence of such Hazardous Substance is not the result of any act or
omission of Seller or Seller's employees on, after or prior to the
Closing Date;
(iii) any disposal after the Closing Date into any
landfill or other disposal facility of a Hazardous Substance by Buyer
or by any person to whom Hazardous Substances have been directly or
indirectly delivered in connection with the operation by Buyer of the
Photomask Business.
10.3 PROCEDURE AND OTHER MATTERS
(a) Procedure. If a claim by a third party is made against an
indemnified party (the "INDEMNIFIED PARTY"), and if such party intends to seek
indemnity with respect thereto under this Agreement from the other party (the
"INDEMNIFYING PARTY"), the Indemnified Party shall promptly, but in any event,
within ten (10) business days, notify the Indemnifying Party in writing of such
claims setting forth such claims in reasonable detail. The failure to give such
notice shall not relieve the Indemnifying Party of any liability hereunder
except to the extent that the Indemnifying Party is actually prejudiced thereby.
The Indemnifying Party shall have thirty (30) days after receipt of such notice
to undertake, conduct and control, through counsel of its own choosing and at
its own expense, the settlement or defense thereof (except in such instances
where the settlement includes other than strictly the payment of money, in which
case such settlement shall not be entered into without the written consent of
the Indemnified Party, which consent shall not be unreasonably withheld or
delayed). An Indemnifying Party's undertaking to conduct and control the
settlement and defense of such a claim shall constitute an acknowledgement of
such Indemnifying Party's obligation hereunder to indemnify the Indemnified
Party against such claim. The Indemnified Party may participate in (but not
control) such settlement or defense through counsel chosen by such Indemnified
Party; provided, that, the fees and expenses of such counsel shall be borne by
such Indemnified Party. If the Indemnifying Party does not notify the
Indemnified Party in writing within thirty (30) days after the receipt of the
Indemnified Party's notice of a claim of indemnity hereunder that it elects to
undertake the defense thereof, the Indemnified Party shall have the right to
contest, settle or compromise the claim but shall not thereby waive any right to
indemnity therefor pursuant to this Agreement.
(b) Other Matters. The provisions of this Article X are
subject to the rights of any Indemnified Party's insurer which may be defending
any such claim. If the Indemnifying Party makes any payment hereunder of a Loss,
the Indemnifying Party shall be subrogated, to the extent of such payment, to
the rights of the Indemnified Party against any insurer or third party with
respect to such Loss. Nothing in this Section 10.3 shall be deemed to obligate
any Person to maintain any insurance or to pursue any claim against any insurer
or third party.
Notwithstanding anything to the contrary contained in this
Agreement, (i) any indemnification owed under this Agreement shall be reduced by
the amount of any reimbursement actually received by an Indemnified Party from
any insurance carriers or from third parties; (ii) the amount of any payment to
Buyer by Seller
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on account of indemnification for Losses relating to taxes shall be reduced or
increased, as appropriate, by the amount of any corresponding federal, state,
local, foreign or other income tax benefit or income tax cost actually received
or paid by Buyer from payment of the liability upon which the claim for
indemnification is based or from payment to Buyer of the amount of the indemnity
payment.
(c) Cooperation in Defending Claims. Each party to this
Agreement shall cooperate in every reasonable way with the party or parties
assuming responsibility for the defense and disposition of any claim of
indemnity hereunder, including making available to the defending party
reasonable access during normal business hours, upon reasonable notice and in
such a manner as shall not unreasonably interfere with the conduct of the other
party's business, all books, records, operating instructions and procedures, and
other information as the defending party may from time to time reasonably
request in order to defend such claim, including the right to make copies of
such books, records and other documents and to discuss with such third Persons,
including, without limitation, the directors, officers, employees, accountants,
counsel, suppliers, customers and creditors, of the other parties, as the
defending party considers necessary or appropriate for the purpose of defending
such claim. The access provided by this Section 10.3(c) shall be subjection to
the obligations of confidentiality and return of information obligations set
forth in Section 11.9 hereof.
10.4 SURVIVAL
Subject to Section 9.3, this Article X shall survive any
termination of this Agreement.
10.5 NOTICE BY SELLER
Seller agrees to notify Buyer of any liabilities, claims or
misrepresentations, breaches or other matters covered by this Article X upon
discovery or receipt of notice thereof (other than from Buyer), whether before
or after Closing.
10.6 EXCLUSIVE REMEDY
To the extent permitted by Law, the indemnity provisions of
this Article X shall be the sole and exclusive remedy of the parties with
respect to any breach of the representations and warranties contained in this
Agreement that is asserted subsequent to Closing, provided that the foregoing
shall not prohibit any party from seeking an injunction or any other equitable
remedy in respect thereof.
10.7 NO OFFSETS
Nothing herein shall be construed so as to permit either party
to offset the amount of any unresolved claim which may arise under this
Agreement from any payments due the other party under this Agreement.
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ARTICLE XI
GENERAL
11.1 AMENDMENTS; WAIVERS
This Agreement and any schedule or exhibit attached hereto may
be amended only by agreement in writing of the parties to the Agreement. No
waiver of any provision nor consent to any exception to the terms of this
Agreement or any agreement contemplated hereby shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
11.2 SCHEDULES; EXHIBITS; INTEGRATION
Each Schedule and Exhibit delivered pursuant to the terms of
this Agreement shall be in writing and shall constitute a part of this
Agreement, although Schedules need not be attached to each copy of this
Agreement. This Agreement, together with such Schedules and Exhibits,
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements and understandings of the
parties in connection therewith, including, but not limited to, the letter of
intent dated April, 20, 1999, between Buyer and Seller.
11.3 COMMERCIALLY REASONABLE EFFORTS; FURTHER ASSURANCES
(a) Commitment to Commercially Reasonable Efforts. Each party
shall use its commercially reasonable efforts to cause all conditions to its and
the other parties' obligations to be timely satisfied and to perform and fulfill
all obligations on its part to be performed and fulfilled under this Agreement,
to the end that the transactions contemplated by this Agreement shall be
effected substantially in accordance with its terms as soon as reasonably
practicable. The parties shall cooperate with each other in such actions and in
securing requisite Approvals. Each party shall execute and deliver both before
and after the Closing such further certificates, agreements and other documents
and take such other actions, including obtaining third party consents, as the
other party may reasonably request to consummate or implement the transactions
contemplated hereby or to evidence such events or matters including the
assignment of the Insurance Claims.
(b) Limitation. As used in this Agreement, the term
"commercially reasonable efforts" shall not mean efforts which require the
performing party to do any act that is unreasonable under the circumstances or
to expend any funds other than in payment of reasonable out-of-pocket expenses
incurred in satisfying obligations hereunder, including but not limited to the
fees, expenses and disbursements of its accountants, actuaries, counsel and
other professional advisers.
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11.4 GOVERNING LAW; CHOICE OF FORUM; CONSENT TO PERSONAL
JURISDICTION
This Agreement and the legal relations between the parties
shall be governed by and construed in accordance with the laws of the State of
Florida except to the extent that certain matters are preempted by federal law
or are governed by the law of the jurisdiction of organization/incorporation of
the respective parties.
11.5 NO ASSIGNMENT
Neither this Agreement (nor related agreements pursuant to
this Agreement) nor any rights or obligations under any of them are assignable,
except that Buyer may assign its rights hereunder and under any related
agreement entered into in connection herewith (including but not limited to its
rights under Article X) to any wholly-owned subsidiary or Affiliate of Buyer or
to any post-Closing purchaser(s) of all of the capital stock of Buyer or of
substantially all of the Purchased Assets, and except that Seller may assign its
rights hereunder and under any related agreement entered into in connection
herewith (including but not limited to its rights under Article X) to any
wholly-owned subsidiary or Affiliate of Seller or to any post-Closing
purchaser(s) of substantially all of the Semiconductor Business Unit of the
Seller.
11.6 HEADINGS
The descriptive headings of the articles, sections and
subsections of this Agreement are for convenience only and do not constitute a
part of this Agreement.
11.7 COUNTERPARTS
This Agreement and any amendment hereto or any other agreement
(or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document) and
shall become effective (unless otherwise therein provided) when one or more
counterparts have been signed by each party and delivered to the other party.
11.8 PUBLICITY AND REPORTS
Seller and Buyer shall coordinate all publicity relating to
the transactions contemplated by this Agreement, and no party shall issue any
press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without obtaining
the prior consent of Seller and Buyer except to the extent that independent
legal counsel to Seller or Buyer, as the case may be, shall advise the other
party to the effect that a particular action is required by applicable Law.
Buyer and Seller shall obtain the prior consent of the other party to the form
and content of any application or report made to any Governmental Entity that
relates or refers to this Agreement.
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11.9 CONFIDENTIALITY
All information disclosed in writing and designated in writing
as confidential by any party (or its representatives) whether before or after
the date hereof, in connection with the transactions contemplated by, or the
discussions and negotiations preceding, this Agreement to any other party (or
its representatives) shall be kept confidential by such other party and its
representatives and shall not be used by any Persons other than as contemplated
by this Agreement, except to the extent that such information (i) was known by
the recipient when received and was not covered by any other obligation of
confidentiality, whether contained elsewhere in this Agreement, or in a separate
agreement, (ii) it is or hereafter becomes lawfully obtainable from other
sources, (iii) is necessary or appropriate to disclose to a Governmental Entity
having jurisdiction over the parties, (iv) as may otherwise be required by law
or (v) to the extent such duty as to confidentiality is waived in writing by the
other party. If this Agreement is terminated, each party shall use all
reasonable efforts to return upon written request from the other party all
documents (and reproductions thereof) received by it or its representatives from
such other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include information not within the exceptions
contained in the first sentence of this Section 11.9, unless the recipients
provide reasonable written assurances satisfactory to the requesting party that
such documents have been destroyed and no originals or copies of such documents
have been retained for any purpose. Upon consummation of the Closing, this
Section 11.9 shall not, however, limit Buyer's use of information provided to it
in connection with the operation of the Photomask Business except with respect
to Seller's Product Mask Information which may not be used in manufacturing
Photomasks for third parties but may be used in manufacturing Photomasks for
Seller and its Affiliates.
11.10 PARTIES IN INTEREST
This Agreement shall be binding upon and inure to the benefit
of each party, and nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights or remedies of any nature whatsoever
under or by reason of this Agreement. Nothing in this Agreement is intended to
relieve or discharge the obligation of any third person to, or to confer any
right of subrogation or action over against, any party to this Agreement.
11.11 NOTICES
Any notice or other communication hereunder must be given in
writing and either (a) delivered in person, (b) transmitted by telex, facsimile
or telecommunications mechanism provided that any notice so given is also mailed
as provided in clause (c), or (c) mailed by certified or registered mail,
postage prepaid, as follows:
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IF TO BUYER, ADDRESSED TO:
Align-Rite International, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. XxxXxxxxx
Chairman of the Board and Chief Executive Officer
WITH A COPY TO:
J. Xxx Xxxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
O'Melveny & Xxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
IF TO SELLER, ADDRESSED TO:
Xxxxxx Corporation
Semiconductor Sector
Attention: Xxxxxxx X. Xxxxxxxx
0000 Xxxx Xxx Xxxx X.X.
Mail Stop 00-000
Xxxx Xxx, XX 00000
WITH A COPY TO:
Xxxxxx Corporation
Xxxxxxx X. Xxxxxxxxxx
Vice President, General Counsel and Secretary
0000 X. XXXX Xxxxxxxxx
Xxxxxxxxx, Xx 00000
Fax: (000)000-0000
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 11.11 and an appropriate confirmation is received, (ii) if given by
certified mail, postage prepaid, return receipt requested, three days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iii) if given by any other means, when actually
delivered at such address.
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11.12 EXPENSES
Except as provided in Section 2.3 hereof, each of Seller and
Buyer shall pay its own expenses incident to the negotiation, preparation and
performance of this Agreement and the transactions contemplated hereby,
including but not limited to the fees, expenses and disbursements of its
investment bankers, accountants and counsel and of securing third party consents
and approvals required to be obtained by it except as otherwise expressly
provided in this Section 11.12. Seller agrees to pay one-half of Buyer's fees
and expenses related to compliance with the Xxxx-Xxxxx-Xxxxxx Act, in an amount
not to exceed $25,000, within thirty (30) days of the Closing Date.
Buyer shall pay (i) any documentary transfer tax, real
property transfer or gains tax, document recording fees and charges, and any
income, franchise or revenue tax or excise tax (and any surtax thereon) due in
connection with the consummation of the transactions contemplated by this
Agreement.
11.13 REMEDIES; WAIVER
Except to the extent this Section 11.13 is inconsistent with
any other provision in this Agreement or applicable law, all rights and remedies
existing under this Agreement and any related agreements or documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available
under applicable Law. No failure on the part of any party to exercise or delay
in exercising any right hereunder shall be deemed a waiver thereof, nor shall
any single or partial exercise preclude any further or other exercise of such or
any other right.
11.14 ATTORNEYS' FEES
In the event of any Action for the breach of this Agreement or
misrepresentation by any party, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and expenses incurred in such Action.
Attorneys' fees incurred in enforcing any judgment in respect
of this Agreement are recoverable as a separate item. The preceding sentence is
intended to be severable from the other provisions of this Agreement and to
survive any judgment and, to the maximum extent permitted by law, shall not be
deemed merged into any such judgment.
11.15 KNOWLEDGE CONVENTION
Whenever any statement herein or in any schedule, exhibit,
certificate or other documents delivered to any party pursuant to this Agreement
is made "to the knowledge of" or words of similar intent or effect of any party
or its representative, such statement shall refer to the knowledge of such
Person, and such Person shall make such statement only after conducting a
reasonable inquiry concerning the subject matter thereof, and each statement
shall be deemed to include a representation that such
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investigation has been conducted; provided, however, that with respect to
Seller, such phrases shall mean the knowledge of Xxx Xxxx, Xxxxxxx Xxxxx, Xxx
Xxxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxxx and Xxxxx Xxxxxxxxx.
11.16 REPRESENTATION BY COUNSEL AND OTHER ADVISORS;
INTERPRETATION
Seller and Buyer each acknowledge that each party to this
Agreement has been represented by counsel, financial, technical or other experts
it deems necessary or desirable before entering into this Agreement. and the
transactions contemplated by this Agreement. Each party represents and warrants
that it has read, knows, understands and agrees with the terms and conditions of
the Agreement. Neither party has relied upon any oral representation of the
other party in entering this Agreement. All discussions, estimates or
projections developed by a party during the course of negotiating the terms and
conditions of this Agreement are by way of illustration only, and are not
binding or enforceable against the other party in law or in equity. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intent of Buyer and Seller.
11.17 SPECIFIC PERFORMANCE
Seller and Buyer each acknowledge that, in view of the
uniqueness of the Photomask Business and the transactions contemplated by this
Agreement, the other party would not have an adequate remedy at law for money
damages in the event that this Agreement has not been performed in accordance
with its terms. Each party therefore agrees that the other party shall be
entitled to specific enforcement of the terms hereof in addition to any other
remedy to which it may be entitled, at law or in equity.
11.18 SEVERABILITY
If any provision of this Agreement is determined to be
invalid, illegal or unenforceable by any Governmental Entity, the remaining
provisions of this Agreement shall remain in full force and effect provided that
the economic and legal substance of the transactions contemplated is not
affected in any manner materially adverse to any party. In the event of any such
determination, the parties agree to negotiate in good faith to modify this
Agreement to fulfill as closely as possible the original intents and purposes
hereof. To the extent permitted by Law, the parties hereby to the same extent
waive any provision of Law that renders any provision hereof prohibited or
unenforceable in any respect.
11.19 DISPUTE RESOLUTION AND ARBITRATION
In the event that any dispute arises among the parties
pertaining to the subject matter of this Agreement, and the parties, through the
Buyer's senior management and the Seller's senior management, are unable to
resolve such dispute within a reasonable time through negotiations and mediation
efforts by senior executives of both parties, such dispute shall be resolved as
set forth in this Section 11.19
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(a) The procedures of this Section 11.19 may be initiated by a
written notice ("DISPUTE NOTICE") given by one party ("CLAIMANT") to the other,
but not before 30 days have passed during which the parties have been unable to
reach a resolution as described above. The Dispute Notice shall be accompanied
by (i) a statement of the Claimant describing the dispute in reasonable detail
and (ii) documentation, if any, supporting the Claimant's position on the
dispute. Within twenty (20) days after the other party's ("RESPONDENT") receipt
of the Dispute Notice and accompanying materials, the parties shall submit the
dispute to mediation in the Orlando, Florida area under the rules of the
American Arbitration Association. All negotiations and mediation procedures
pursuant to this paragraph (a) shall be confidential and treated as compromise
and settlement negotiations and shall not be admissible in any arbitration or
other proceeding.
(b) If the dispute is not resolved as provided in paragraph
(a) within sixty (60) days after the Respondent's receipt of the Dispute Notice,
the dispute shall be resolved by binding arbitration. Within the sixty-day
period referred to in the immediately preceding sentence, the parties shall
agree on a single arbitrator to resolve the dispute. If the parties fail to
agree on the designation of an arbitrator within said sixty-day period, the
American Arbitration Association in the Orlando, Florida area shall be requested
to designate the single arbitrator. If the arbitrator becomes disabled, resigns
or is otherwise unable to discharge the arbitrator's duties, the arbitrator's
successor shall be appointed in the same manner as the arbitrator was appointed.
(c) Except as otherwise provided in this Section 11.19, the
arbitration shall be conducted in accordance with the Commercial Rules of the
American Arbitration Association, which shall be governed by the United States
Arbitration Act.
(d) Any resolution reached through mediation and any award
arising out of arbitration (i) shall be binding and conclusive upon the parties;
(ii) shall be limited to a holding for or against a party, and affording such
monetary remedy as is deemed equitable, just and within the scope of this
Agreement; (iii) may not include special, incidental, consequential or punitive
damages; (iv) may in appropriate circumstances include injunctive relief; and
(v) may be entered in court in accordance with the United States Arbitration
Act.
(e) Arbitration shall not be deemed a waiver of any right of
termination under this Agreement, and the arbitrator is not empowered to act or
make any award other than based solely on the rights and obligations of the
parties prior to termination in accordance with this Agreement.
(f) The arbitrator may not limit, expand or otherwise modify
the terms of this Agreement.
(g) The laws of the State of Florida shall apply to any
mediation, arbitration, or litigation arising under this Agreement.
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(h) Each party shall bear its own expenses incurred in any
mediation, arbitration or litigation, but any expenses related to the
compensation and the costs of any mediator or arbitrator shall be borne equally
by the parties to the dispute.
(i) A request by a party to a court for interim measures
necessary to preserve a party's rights and remedies for resolution pursuant to
this Section 11.19 shall not be deemed a waiver of the obligation to mediate or
of the agreement to arbitrate.
(j) The parties, their representatives, other participants and
the mediator or arbitrator shall hold the existence, content and result of
mediation or arbitration in confidence.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by a duly authorized officer as of the day and year
first above written.
ALIGN-RITE INTERNATIONAL, INC.,
A CALIFORNIA CORPORATION
By: ____________________________________
Xxxxx XxxXxxxxx
Chairman of the Board and
Chief Executive Officer
ALIGN-RITE, INC.,
A FLORIDA CORPORATION
By: ____________________________________
Xxxxx XxxXxxxxx
Chairman of the Board
XXXXXX CORPORATION,
A DELAWARE CORPORATION
By: ____________________________________
X.X. Xxxxxx
Vice President-General Manager Operations
