Exhibit 99.2
==============================================================================
U.S. ASSET PURCHASE AGREEMENT
DATED AS OF DECEMBER 16, 2001
BY AND BETWEEN
CONEXANT SYSTEMS, INC.,
AND
ALPHA INDUSTRIES, INC.
==============================================================================
TABLE OF CONTENTS
Page No.
--------
ARTICLE I DEFINITIONS.....................................................................1
ARTICLE II SALE AND PURCHASE OF ASSETS.....................................................8
Section 2.1. Purchase and Sale of Assets.....................................................8
Section 2.2. Purchase Price..................................................................8
Section 2.3. No Assumption of Liabilities....................................................9
Section 2.4. Allocation of Purchase Price....................................................9
ARTICLE III SELLER'S REPRESENTATIONS AND WARRANTIES.........................................9
Section 3.1. Corporate Status, Good Standing and Authorization...............................9
Section 3.2. Authority; Enforceability.......................................................9
Section 3.3. Consents; No Conflicts or Violations...........................................10
Section 3.4. Compliance with Laws...........................................................10
Section 3.5. Intellectual Property..........................................................10
Section 3.6. Litigation.....................................................................11
Section 3.7. Employee Matters...............................................................11
Section 3.8. Labor Relations................................................................11
Section 3.9. Tax Matters....................................................................11
Section 3.10. No Brokers.....................................................................12
Section 3.11. Title to Properties............................................................12
Section 3.12. Insurance......................................................................12
ARTICLE IV PURCHASER'S REPRESENTATIONS AND WARRANTIES.....................................12
Section 4.1. Organization of Purchaser......................................................12
Section 4.2. Authority; Enforceability......................................................12
Section 4.3. Consents; No Conflicts or Violations...........................................13
Section 4.4. Litigation.....................................................................13
Section 4.5. No Brokers.....................................................................14
ARTICLE V COVENANTS......................................................................14
Section 5.1. Access.........................................................................14
Section 5.2. Reasonable Best Efforts........................................................15
Section 5.3. Conduct of Business by Seller..................................................17
Section 5.4. Employment Arrangements........................................................18
Section 5.5. Public Announcements...........................................................18
Section 5.6. Supplements to Schedules.......................................................19
i
Page No.
--------
Section 5.7. Insurance......................................................................19
Section 5.8. License of Purchaser Intellectual Property to Seller...........................21
ARTICLE VI CONDITIONS TO SELLER'S AND PURCHASER'S OBLIGATIONS.............................22
ARTICLE VII CLOSING........................................................................22
Section 7.1. Deliveries by Seller...........................................................22
Section 7.2. Deliveries by Purchaser........................................................23
ARTICLE VIII INDEMNIFICATION................................................................23
Section 8.1. Indemnification by Seller......................................................23
Section 8.2. Indemnification by Purchaser...................................................24
Section 8.3. Limitations on Indemnification Obligations.....................................24
Section 8.4. Procedures Relating to Indemnification.........................................25
Section 8.5. Sole and Exclusive Remedy......................................................27
Section 8.6. Termination of Indemnification Obligations.....................................28
Section 8.7. Effect of Investigation........................................................28
ARTICLE IX TAXES..........................................................................28
Section 9.1. Transfer, Sales and Use Taxes..................................................28
Section 9.2. Tax Returns....................................................................28
Section 9.3. Prorations.....................................................................29
Section 9.4. Allocation of Straddle Period Taxes............................................29
ARTICLE X TERMINATION....................................................................29
Section 10.1. Voluntary Termination..........................................................29
Section 10.2. Automatic Termination..........................................................30
Section 10.3. Effect of Termination..........................................................30
ARTICLE XI MISCELLANEOUS..................................................................30
Section 11.1. Assignment.....................................................................30
Section 11.2. Notices........................................................................30
Section 11.3. Choice of Law; Dispute Resolution..............................................32
Section 11.4. Survival of Representations and Warranties and Covenants.......................32
Section 11.5. Limitations on Representations and Warranties..................................33
Section 11.6. Entire Agreement; Waivers......................................................33
Section 11.7. Counterparts...................................................................33
Section 11.8. Severability...................................................................33
Section 11.9. Headings.......................................................................34
Section 11.10. Expenses.......................................................................34
ii
Page No.
--------
Section 11.11. Amendments.....................................................................34
Section 11.12. Parties in Interest............................................................34
Section 11.13. Schedules and Exhibits.........................................................34
Section 11.14. Cooperation Following the Closing..............................................34
iii
Schedules
Schedule 1 Certain Executive Officers of Seller
Schedule 2.1 Assets
Schedule 3.3 Consents Required by Seller
Schedule 3.4 Compliance with Laws
Schedule 3.5 Intellectual Property
Schedule 3.6 Seller Litigation
Schedule 3.7(a) List of Package Design Team Employees
Schedule 3.8 Labor Relations
Schedule 3.9(b) Tax Proceedings
Schedule 4.3 Consents Required by Purchaser
Schedule 4.4 Purchaser Litigation
Exhibits
Exhibit A Terms of Promissory Note
U.S. ASSET PURCHASE AGREEMENT
U.S. ASSET PURCHASE AGREEMENT (this "Agreement"), dated as of
December 16, 2001, by and between Conexant Systems, Inc., a Delaware
corporation ("Seller"), and Alpha Industries, Inc., a Delaware corporation
("Purchaser"). Seller and Purchaser are sometimes hereinafter collectively
referred to as the "Parties" and individually as a "Party."
RECITALS
A. Seller employs certain employees (the "Package Design Team")
at its facilities in Newport Beach, California, who perform certain design
and other functions in support of certain manufacturing and assembly
operations conducted by Seller and its Affiliates (as defined herein) in
Mexicali, Baja California, Mexico;
B. Seller owns certain assets (including certain intellectual
property) in the United States utilized by the Package Design Team, which
it desires to sell to Purchaser; and
C. Purchaser desires to purchase the Assets (as defined herein)
and employ the Package Design Team Employees (as defined herein) pursuant
to the terms set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the representations,
warranties, mutual covenants and promises contained herein and for other
good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the
meanings given those terms in this ARTICLE I or in the Section of this
Agreement referenced in the definition provided for such term:
"Affiliate" of a Person means any other Person that, directly
or indirectly, controls, is controlled by, or is under common control with,
such Person. The term "control" (including, with correlative meaning, the
terms "controlled by" and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agreement" is defined in the first paragraph hereof.
"Assets" means all of Seller's right, title and interest in and
to (i) the equipment specifically set forth on Schedule 2.1, together with
all prepaid expenses paid by Seller with respect to such equipment and all
third party insurance proceeds (if any) in respect of losses, liabilities
or damage with respect to such equipment arising out of insured incidents
occurring after the date hereof and prior to the Closing (to the extent
Seller and its Affiliates have no obligation to reimburse the insurer for
such insurance proceeds), (ii) the Intellectual Property set forth on
Schedule 3.5 and (iii) the Books and Records.
"Books and Records" means all documents, information, computer
data, files, books and records (in each case, in whatever form or media,
including electronic media) that relate exclusively to (i) the Assets or
(ii) the Package Design Team Employees.
"Business Day" means a day other than a Saturday, a Sunday or a
day on which banks are required or authorized to close in the City of New
York.
"Charter Document" means any of the certificate of
incorporation, bylaws, agreement of limited partnership, operating
agreement or other organizational or constitutive document of a Person.
"Claim(s)" means any action, suit, litigation, proceeding,
arbitration or other method of settling disputes or disagreements and any
grievance, complaint, claim, charge, demand, investigation or other similar
matter.
"Claims Made Policies" is defined in Section 5.7(b).
"Closing" means the consummation of the transactions
contemplated by this Agreement on the Closing Date.
"Closing Date" is defined in the first paragraph of ARTICLE
VII.
2
"Code" means the United States Internal Revenue Code of 1986,
as amended.
"Consent(s)" means any and all consents, waivers, approvals,
authorizations, declarations, filings, recordings, registrations or
exemptions.
"Damages" means any and all losses, Liabilities, claims,
damages, deficiencies, obligations, fines, payments, Taxes, Encumbrances,
and costs and expenses, whether matured or unmatured, absolute or
contingent, accrued or unaccrued, liquidated or unliquidated, known or
unknown, whenever arising and whether or not resulting from Third Party
Claims (including the costs and expenses of any and all Claims; all amounts
paid in connection with any demands, assessments, judgments, settlements
and compromises relating thereto; interest and penalties with respect
thereto; out-of-pocket expenses and reasonable attorneys', accountants' and
other experts' fees and expenses reasonably incurred in investigating,
preparing for or defending against any such Claims or in asserting,
preserving or enforcing an Indemnified Party's rights hereunder; and any
losses that may result from the granting of injunctive relief as a result
of any such Claims).
"Dispute" is defined in Section 11.3(b).
"dollars" or "U.S.$" means United States dollars.
"Effective Time" is defined in the Merger Agreement.
"Employee Matters Agreement" means the Employee Matters
Agreement to be entered into by and among Seller, Washington and Purchaser
on or before the Effective Time.
"Encumbrance" means any lien, pledge, easement, security
interest, mortgage, deed of trust, right-of-way, retention of title
agreement or other encumbrance of whatever nature.
"Governmental Authority" means any federal, state or local
governmental authority or regulatory body of any nation, any subdivision,
agency, commission, board or authority or instrumentality thereof, or any
quasi-governmental or private body asserting, exercising or empowered to
assert or exercise any regulatory authority thereunder and any Person,
directly or indirectly, owned by and subject to the control of any of the
foregoing.
"HSR Act" means the Xxxx Xxxxx Xxxxxx Antitrust Improvements
Act of 1976, as amended.
3
"including" means including without limiting the generality of
what precedes that term.
"Income Tax" means (a) any Tax based upon, measured by, or
calculated with respect to (i) net income or profits (including, but not
limited to, any capital gains, minimum Tax and any Tax on items of Tax
preference, but not including sales, use, real or personal property, gross
or net receipts, transfer or similar Taxes) or (ii) multiple bases
(including, but not limited to, corporate franchise, doing business or
occupation Taxes) if one or more of the bases upon which such Tax may be
based, measured by, or calculated with respect to, is described in clause
(i) above, or (b) any U.S. state or local franchise Tax; including in the
case of each of (a) and (b) any related interest and any penalties,
additions to such Tax or additional amounts imposed with respect thereto by
any Tax authority.
"Indemnified Party" is defined in Section 8.3(a).
"Indemnifying Party" is defined in Section 8.3(a).
"Indemnity Reduction Amounts" is defined in Section 8.3(a).
"Information" means all records, books, contracts, instruments,
computer data and other data and information (in each case, in whatever
form or medium, including electronic media).
"Insurance Proceeds" means monies (a) received by an insured
from an insurance carrier, (b) paid by an insurance carrier on behalf of an
insured or (c) received from any third party in the nature of insurance,
contribution or indemnification in respect of any Liability.
"Intellectual Property" means trademarks, service marks, brand
names, certification marks, trade dress and other indications of origin,
the goodwill associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to register, the
foregoing, including any extension, modification or renewal of any such
registration or application; inventions, discoveries and ideas, whether
patentable or not, in any jurisdiction; patents, applications for patents
(including divisions, continuations, continuations in part and renewal
applications), and any renewals, extensions or reissues thereof, in any
jurisdiction; nonpublic information, trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any Person; writings and other works, whether copyrightable or
not, in any jurisdiction; and registrations or applications for
registration of copyrights in any jurisdiction, and any renewals or
extensions thereof; and any other intellectual property or proprietary
rights.
4
"Law" means all laws, principals of common law, statutes,
constitutions, treaties, rules, regulations, ordinances, codes, ruling,
orders and determinations of any Governmental Authority.
"Liabilities" means any and all claims, debts, liabilities,
commitments and obligations of whatever nature, whether fixed, contingent
or absolute, matured or unmatured, liquidated or unliquidated, accrued or
not accrued, known or unknown, due or to become due, whenever or however
arising and whether or not the same would be required by generally accepted
accounting principles to be reflected as a liability in financial
statements or disclosed in the notes thereto.
"Maquiladora" means Conexant Systems, S.A. de C.V., a sociedad
anonima de capital variable organized under the laws of Mexico.
"Material Adverse Change" or "Material Adverse Effect" means
any event, change, circumstance or development that is materially adverse
to (i) the ability of Seller to consummate the transactions contemplated by
this Agreement or (ii) the Assets taken as a whole or the use of the
Assets, taken as a whole, in the manner heretofore used by Seller, other
than, with respect to clause (ii), any event, change, circumstance or
development (A) resulting from any action taken in connection with the
transactions contemplated hereby pursuant to the terms of this Agreement,
(B) relating to the economy or financial markets in general, (C) relating
in general to the industries in which Seller operates and not specifically
relating to Seller or (D) relating to any action or omission of Seller or
any Subsidiary of either of them taken with the express prior written
consent of Purchaser.
"Merger" is defined in the recitals of the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of
Reorganization, dated as of December 16, 2001, by and among Seller,
Washington and Purchaser.
"Mexican Stock and Asset Purchase Agreement" means that certain
Mexican Stock and Asset Purchase Agreement, dated as of December 16, 2001,
by and between Seller and Purchaser.
"Non-Income Tax" means any Tax other than an Income Tax.
"Occurrence Basis Policies" is defined in Section 5.7(b).
"Package Design Team" is defined in Recital A.
"Package Design Team Employee(s)" means the persons employed by
Seller and listed on Schedule 3.7(a).
5
"Party" and "Parties" are defined in the first paragraph of
this Agreement.
"Permits" means licenses, permits, authorizations, consents,
certificates, registrations, variances, franchises and other approvals from
any Governmental Authority, including those relating to environmental
matters.
"Permitted Encumbrance" means (i) Encumbrances for Taxes,
assessments or governmental charges or levies on property not yet due and
payable or which are being contested in good faith and for which
appropriate reserves are maintained, (ii) Encumbrances of landlords,
carriers, warehousemen, mechanics and other Encumbrances imposed by law and
incurred in the ordinary course of business as currently operated, (iii)
Encumbrances for purchase money obligations incurred in the ordinary course
of business consistent with past practice and (iv) Encumbrances incurred in
the ordinary course of business which, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
"Person" means an individual, corporation, limited liability
entity, partnership, association, trust, unincorporated organization, other
entity or group (as defined in the Exchange Act), including any
Governmental Authority.
"Policies" means all insurance policies, insurance contracts
and claim administration contracts of any kind of Seller relating to the
Assets which were or are in effect at any time at or prior to the Closing,
including primary, excess and umbrella, commercial general liability,
fiduciary liability, product liability, automobile, aircraft, property and
casualty, business interruption, directors and officers liability,
employment practices liability, workers' compensation, crime, errors and
omissions, special accident, cargo and employee dishonesty insurance
policies and captive insurance company arrangements, together with all
rights, benefits and privileges thereunder.
"Privileged Information" means, with respect to a Party,
Information regarding the Party, or any of its operations, employees,
assets or Liabilities (whether in documents or stored in any other form or
known to its employees or agents) that is or may be protected from
disclosure pursuant to the attorney-client privilege, the work product
doctrine or other applicable privileges, that a Party has or may come into
possession of or has obtained or may obtain access to pursuant to this
Agreement or otherwise.
"Promissory Note" means a promissory note issued by Purchaser
in favor of Seller in a principal amount equal to the Purchase Price,
substantially on the terms attached hereto as Exhibit "A".
6
"Purchase Price" means the amount allocated to the purchase
price of the Assets being sold hereunder pursuant to the terms of Section
2.5 of the Mexican Stock and Asset Purchase Agreement.
"Purchaser" is defined in the first paragraph of this
Agreement.
"Purchaser Indemnified Parties" is defined in Section 8.1.
"Representative" means, with respect to any Person, any of such
Person's directors, officers, employees, agents, consultants, advisors,
accountants, attorneys and representatives.
"Schedules" means the disclosure schedules contained in this
Agreement which schedules are attached hereto and incorporated by reference
as if specifically set forth herein.
"Seller" is defined in the first paragraph of this Agreement.
"Seller Indemnified Parties" is defined in Section 8.2.
"Seller Spinoff" is defined in Section 5.8(c).
"Subsidiary" when used with respect to any Person means any
corporation or other organization, whether incorporated or unincorporated,
at least a majority of the securities or other interests of which having by
their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization is, directly or indirectly, owned or
controlled by such Person or by any one or more of its Subsidiaries, or by
such Person and one or more of its Subsidiaries.
"Tax" and "Taxes" shall mean all forms of taxation, whenever
created or imposed, and whether of the United States or elsewhere, and
whether imposed by a federal, state, municipal, governmental, territorial,
local, foreign or other body, and without limiting the generality of the
foregoing, shall include net income, gross income, gross receipts, sales,
use, value added, ad valorem, transfer, recording, franchise, profits,
license, lease, service, service use, payroll, wage, withholding,
employment, unemployment insurance, workers compensation, social security,
excise, severance, stamp, business license, business organization,
occupation, premium, property, environmental, windfall profits, customs,
duties, alternative minimum, estimated or other taxes, fees, premiums,
assessments or charges of any kind whatever imposed or collected by any
governmental entity or political subdivision thereof, together with any
related
7
interest and any penalties, additions to such tax or additional amounts imposed
with respect thereto by any Tax authority.
"Tax Proceeding" means any audit, examination, Claim or other
administrative or judicial proceeding relating to Taxes or Tax Returns.
"Tax Return" shall mean any return, filing, questionnaire,
information return, election or other document required or permitted to be
filed, including requests for extensions of time, filings made with respect
to estimated tax payments, claims for refund and amended returns that may
be filed, for any period with any Tax authority (whether domestic or
foreign) in connection with any Tax (whether or not a payment is required
to be made with respect to such filing).
"Third Party Claim" is defined in Section 8.4(a).
"To the knowledge of Seller" or words of similar import with
respect to a fact or matter means the actual knowledge of the executive
officers of Seller listed on Schedule 1 after reasonable inquiry.
"Washington" means Washington Sub, Inc., a Delaware
corporation.
"Washington Business" is defined in the Merger Agreement.
"Washington Participants" is defined in the Employee Matters
Agreement.
ARTICLE II
SALE AND PURCHASE OF ASSETS
---------------------------
Section 2.1. Purchase and Sale of Assets. At the Closing,
Seller shall sell, transfer, convey, assign and deliver to Purchaser, and
Purchaser shall purchase, acquire and accept, the Assets, as the same shall
exist on the Closing Date, free and clear of any Encumbrances other than
Permitted Encumbrances.
Section 2.2. Purchase Price. The Purchase Price to be paid by
Purchaser to Seller in consideration for the Assets shall be payable, at
the election of Purchaser, either (A) by wire transfer of immediately
available funds at the Closing or (B) by delivery of the Promissory Note at
the Closing; provided, however, that if Purchaser shall elect to pay the
Purchase Price pursuant to clause (B), Purchaser shall provide written
notice of such election to Seller no later than thirty (30) days prior to
the Closing Date.
8
Section 2.3. No Assumption of Liabilities. Purchaser shall not
assume hereunder any Liabilities of Seller related to the Assets. This
section shall not affect any other obligation of Purchaser under this
Agreement.
Section 2.4. Allocation of Purchase Price. Purchaser and Seller
mutually agree that the Purchase Price shall be allocated among the Assets
in the manner required by Section 1060 of the Code and Treasury Regulations
promulgated thereunder. Purchaser and Seller shall agree upon such
allocation prior to the Closing and shall file Form 8594 with the United
States Internal Revenue Service reflecting such allocation. Neither Seller
nor Purchaser shall take a position inconsistent with such allocation in
any Tax Proceeding, in any refund claim, in any litigation or investigation
or otherwise. If a competent Government Authority adjusts such allocation
for any reason, the allocation shall be deemed to be amended to conform to
any such adjustments.
ARTICLE III
SELLER'S REPRESENTATIONS AND WARRANTIES
---------------------------------------
Seller hereby represents and warrants to Purchaser as of the
date hereof and as of the Closing Date the following:
Section 3.1. Corporate Status, Good Standing and Authorization.
Seller is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to own the Assets, except where the
failure to have such power and authority, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. Seller
is duly licensed or qualified to do business as a foreign corporation in
all states or jurisdictions in which the nature of Assets or the operations
thereof by the Package Design Team requires such license or qualification,
except where the failure to be so licensed or qualified, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
Section 3.2. Authority; Enforceability. Seller has all
requisite corporate power and authority to enter into this Agreement and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by Seller and the consummation by Seller of
the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Seller. This Agreement has been
duly authorized, executed and delivered by Seller and is a legally valid
and binding obligation of Seller (assuming that this Agreement constitutes
the valid and binding obligation of Purchaser) and is enforceable against
Seller in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization,
9
fraudulent conveyance, moratorium and similar Laws relating to or affecting
creditors generally or by general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Section 3.3. Consents; No Conflicts or Violations. Except for
the Consents set forth on Schedule 3.3 and Consents which if not obtained
and maintained by Seller, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect, there are no
Consents of any Governmental Authority required in connection with (i)
Seller's execution and delivery of this Agreement and the other agreements,
documents and instruments to be executed and delivered by Seller in
connection herewith or (ii) the performance by Seller of its obligations
herein or therein or the consummation by Seller of the transactions
contemplated hereby or thereby. Assuming receipt of all of the Consents set
forth on Schedule 3.3 (including any required HSR Act approval), neither
the execution or delivery by Seller of this Agreement nor the consummation
by Seller of the transactions contemplated hereby will, with or without the
giving of notice or the lapse of time or both, conflict with or result in a
breach or violation of or give rise to a default or right of termination,
amendment, cancellation or acceleration under (i) any provision of Seller's
Charter Documents, (ii) any contract, agreement, note, bond, mortgage,
indenture, lease, license, franchise, permit, concession, instrument or
obligation to which Seller is a party or by which any of its properties or
assets are bound or (iii) any Law or license or other requirement to which
Seller or its properties or assets is subject, except, in the case of items
(ii) and (iii) above only, for those which, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse
Effect.
Section 3.4. Compliance with Laws. Except as disclosed on
Schedule 3.4, Seller is in compliance in all material respects with all
Laws applicable with respect to the Assets, the manner in which the Assets
are used and the Package Design Team, except where the failure to so
comply, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect, and Seller has not received within the
past twelve (12) months any written notice or correspondence from any
Governmental Authority to the effect that it is not in compliance with any
such applicable Laws, except for such violations which, individually or in
the aggregate, would not reasonably be expected to have a Material Adverse
Effect.
Section 3.5. Intellectual Property. Except as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect: (i) Seller owns, or is licensed to use (in each case, free
and clear of any Encumbrances), all Intellectual Property set forth on
Schedule 3.5; (ii) to the knowledge of Seller, the use of any Intellectual
Property set forth on Schedule 3.5 by Seller does not infringe on or
otherwise violate the rights of any Person; (iii) the use of Intellectual
Property set forth on Schedule 3.5 by or on behalf of Seller is in
accordance with any applicable license
10
pursuant to which Seller acquired the right to use any Intellectual Property;
(iv) to the knowledge of Seller, no Person is challenging, infringing on or
otherwise violating any right of Seller with respect to any Intellectual
Property set forth on Schedule 3.5 owned by and/or licensed to Seller; and (v)
Seller does not have any knowledge of any pending claim, order or proceeding
with respect to any use of Intellectual Property set forth on Schedule 3.5 by
Seller and, to the knowledge of Seller, no Intellectual Property set forth on
Schedule 3.5 is being used or enforced in a manner that would reasonably be
expected to result in the abandonment, cancellation or unenforceability of such
Intellectual Property.
Section 3.6. Litigation. Except as set forth on Schedule 3.6,
there is no action, suit or proceeding or regulatory investigation pending
or, to the knowledge of Seller, threatened against Seller or its business
or operations affecting the Package Design Team or any of the Assets or
this Agreement before any court or arbitrator or any governmental body,
agency or official, except for those which, if adversely determined,
individually or in the aggregate, would not reasonably be expected to have
a Material Adverse Effect. Seller is not a party to or subject to any
judgment, order, rule, writ, injunction, or decree of any Governmental
Authority or arbitrator which relates to or affects the Assets or the
Package Design Team, except as, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect.
Section 3.7. Employee Matters.
(a) Package Design Team Employees. Schedule 3.7(a) contains a
list of all current Package Design Team Employees as of the date hereof.
Section 3.8. Labor Relations. Except as stated on Schedule 3.8,
as of the date hereof, Seller is not a signatory to any collective
bargaining agreement with any trade union or labor organization relating to
Package Design Team Employees.
Section 3.9. Tax Matters.
(a) All material Tax Returns required to be filed by Seller
with respect to the Assets have been timely filed. All such Tax Returns are
true, correct and complete, except as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. All
Taxes shown as due and payable by or with respect to such Tax Returns have
been timely paid in full.
(b) Except as set forth on Schedule 3.9(b), there are no Tax
proceedings presently pending with regard to any Non-Income Taxes related
to the Assets, and no notice has been received from any Governmental
Authority of the expected commencement of such a Tax Proceeding.
11
(c) There are no Encumbrances for any Tax on the Assets, except
for Permitted Encumbrances.
(d) None of the Assets is a lease made pursuant to Section
168(f)(8) of the Internal Revenue Code of 1954.
(e) None of the Assets constitute "tax exempt use property"
within the meaning of Section 168(h) of the Code or is "tax exempt bond
financed property" within the meaning of Section 168(g) of the Code.
Section 3.10. No Brokers. Neither this Agreement nor the sale
of the Assets was induced or procured through any Person acting on behalf
of or representing Seller and no commissions or any other payment is due to
any intermediary in connection therewith.
Section 3.11. Title to Properties. Seller has good and valid
title to the Assets, except, in each case, where the failure to have such
good and valid title, or valid leasehold interest, would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
Section 3.12. Insurance. Seller maintains insurance coverage in
respect of the Assets with reputable insurers in such amounts and covering
such risks as is deemed reasonably appropriate for its business (taking
into account the cost and availability of such insurance).
ARTICLE IV
PURCHASER'S REPRESENTATIONS AND WARRANTIES
------------------------------------------
Purchaser hereby represents and warrants to Seller as of the
date hereof and as of the Closing Date the following:
Section 4.1. Organization of Purchaser. Purchaser is a
corporation duly incorporated, validly existing and in good standing under
the laws of its jurisdiction of incorporation.
Section 4.2. Authority; Enforceability. Purchaser has all
requisite corporate power and authority to enter into this Agreement and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of Purchaser. This Agreement
has been duly authorized, executed and delivered by Purchaser and is a
12
legally valid and binding obligation of Purchaser (assuming that this
Agreement constitutes the valid and binding obligation of Seller) and is
enforceable against Purchaser in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and similar Laws relating to or affecting
creditors generally or by general equity principles (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
Section 4.3. Consents; No Conflicts or Violations. Except for
the Consents set forth on Schedule 4.3 and the Consents which if not
obtained and maintained by Purchaser, individually or in the aggregate,
would not reasonably be expected to have a material adverse effect on
Purchaser's ability to consummate the transactions contemplated by this
Agreement, there are no Consents of any Governmental Authorities required
in connection with (i) Purchaser's execution and delivery of this Agreement
and the other agreements, documents and instruments to be executed and
delivered by Purchaser in connection herewith or (ii) the performance by
Purchaser of its obligations herein or therein or the consummation by
Seller of the transactions contemplated hereby or thereby. Assuming receipt
of all of the Consents set forth on Schedule 4.3 (including, any required
HSR Act approval), neither the execution or delivery by Purchaser of this
Agreement nor the consummation by Purchaser of the transactions
contemplated hereby will, with or without the giving of notice or the lapse
of time or both, conflict with or result in a breach or violation of or
give rise to a default or right of termination, amendment, cancellation or
acceleration under (i) any provision of Purchaser's Charter Documents, (ii)
any material contract, agreement, note, bond, mortgage, indenture, lease,
license, franchise, permit, concession, instrument or obligation to which
Purchaser is a party or by which any of its properties or assets are bound
or (iii) any Law or license or other requirement to which Purchaser or its
properties or assets is subject, except, in the case of items (ii) and
(iii) above only, for those which, individually or in the aggregate, would
not reasonably be expected to have a material adverse effect on Purchaser's
ability to consummate the transactions contemplated by this Agreement.
Section 4.4. Litigation. Except as set forth on Schedule 4.4,
there is no action, suit or proceeding or regulatory investigation pending
or, to the knowledge of Purchaser, threatened against Purchaser affecting
this Agreement before any court or arbitrator or any governmental body,
agency or official, except for those which, if adversely determined,
individually or in the aggregate, would not reasonably be expected to have
a material adverse effect on Purchaser's ability to consummate the
transactions contemplated by this Agreement. Purchaser is not a party to or
subject to any judgment, order, writ, injunction, or decree of any
Governmental Authority or arbitrator, except as, individually or in the
aggregate, would not reasonably be expected to have a material
13
adverse effect on Purchaser's ability to consummate the transactions
contemplated by this Agreement.
Section 4.5. No Brokers. Neither this Agreement nor the
purchase of the Assets was induced or procured through any Person acting on
behalf of or representing Purchaser and no commissions or any other payment
is due to any intermediary in connection therewith.
ARTICLE V
COVENANTS
---------
The Parties hereby covenant as follows:
Section 5.1. Access.
(a) Access to Information by Purchaser Prior to Closing. Prior
to Closing, subject to compliance with applicable laws, Seller and
Maquiladora shall, upon reasonable request, afford to Purchaser and its
Representatives reasonable access during normal business hours to all Books
and Records. Purchaser shall coordinate its requests and activities under
this Section 5.1 with Seller's need for security and will assist Seller in
minimizing disruption to Seller's normal business operations.
(b) Access to Information by Purchaser After Closing. From and
after the Closing, Seller will afford to Purchaser and its Representatives
(at Purchaser's expense) reasonable access and duplicating rights during
normal business hours and upon reasonable advance notice to all Books and
Records within Seller's possession or control relating to the Assets,
insofar as such access is reasonably required by Purchaser.
(c) Access to Books and Records by Seller. Purchaser shall,
following the Closing, give Seller and its Representatives such access,
during normal business hours and upon reasonable prior notice, to the Books
and Records and such other documents as shall be reasonably necessary for
Seller in connection with its performance of its obligations hereunder, for
the preparation and filing of Seller's Tax Returns for periods prior to the
Closing Date and for any other reasonable purposes, and Purchaser will
allow Seller and its Representatives to make extracts and copies thereof as
may be necessary for such purposes at Seller's expense. Purchaser shall
preserve and protect the Books and Records in its possession and control
for the period required by the applicable records retention policy of
Seller in effect immediately prior to the Closing. Purchaser shall offer to
deliver the Books and Records to Seller prior to their destruction or other
disposition.
14
(d) Production of Witnesses. Subject to Section 5.1(e), after
the Closing, each Party will make available to the other Party, upon
written request and at the cost and expense of the Party so requesting, its
directors, officers, employees and agents as witnesses to the extent that
any such Person may reasonably be required (giving consideration to
business demands of such directors, officers, employees and agents) in
connection with any Claims or administrative or other proceedings in which
the requesting party may from time to time be involved and relating to the
Assets or the Package Design Team or arising in connection with the
relationship between the Parties on or prior to the Closing Date, provided
that the same shall not unreasonably interfere with the conduct of business
by the Party of which the request is made.
(e) Confidentiality. From and after the Closing, each of Seller
and Purchaser shall hold, and shall use reasonable efforts to cause its
Affiliates and Representatives to hold, in strict confidence all
Information concerning the other Party in its possession or control prior
to the Closing or furnished to it by another Party pursuant to the Merger
and the transactions contemplated thereby and will not release or disclose
such Information to any other Person, except its Affiliates and its and
their Representatives, who will be bound by the provisions of this Section
5.1(e); provided, however, that any Person may disclose such Information to
the extent that (a) disclosure is compelled by judicial or administrative
process or, in the opinion of such Person's counsel, by other requirements
of law (in which case the Party required to make such disclosure will
notify the other Party as soon as practicable of such obligation or
requirement and cooperate with the other Party to limit the Information
required to be disclosed and to obtain a protective order or other
appropriate remedy with respect to the Information ultimately disclosed) or
(b) such Person can show that such Information was (i) available to such
Person on a nonconfidential basis (other than from a Party) prior to its
disclosure by such Person, (ii) in the public domain through no fault of
such Person or (iii) lawfully acquired by such Person from another source
after the time that it was furnished to such Person by the other Party or
its Affiliates, Representatives or Subsidiaries, and not acquired from such
source subject to any confidentiality obligation on the part of such source
known to the acquiror, or on the part of the acquiror. Each Party
acknowledges that it will be liable for any breach of this Section 5.1(e)
by its Affiliates, Representatives and Subsidiaries. Notwithstanding the
foregoing, each Party will be deemed to have satisfied its obligations
under this Section 5.1(e) with respect to any Information (other than
Privileged Information) if it exercises the same care with regard to such
Information as it takes to preserve confidentiality for its own similar
Information.
Section 5.2. Reasonable Best Efforts.
(a) Subject to the terms and conditions of this Agreement, each
Party will use its reasonable best efforts to take, or cause to be taken,
all actions and to do, or
15
cause to be done, and to assist and cooperate with the other Party in doing or
causing to be done, all things necessary, proper or advisable under this
Agreement and applicable laws to consummate the transactions contemplated by
this Agreement as soon as practicable after the date hereof, including (i)
preparing and filing as promptly as practicable all documentation to obtain as
promptly as practicable all Consents set forth on Schedules 3.3 and 4.3 and (ii)
taking all reasonable steps as may be necessary to obtain all Consents set forth
on Schedules 3.3 and 4.3. In furtherance and not in limitation of the foregoing,
each Party hereto agrees to make (i) an appropriate filing (if applicable) of a
Notification and Report Form pursuant to the HSR Act with respect to the
transactions contemplated hereby as promptly as practicable after the date
hereof and (ii) all other necessary filings with other Governmental Authorities
relating to the transactions contemplated herein, and, in each case, to supply
as promptly as practicable any additional information and documentary material
that may be requested pursuant to such applicable laws or by such Governmental
Authorities and to use reasonable best efforts to cause the expiration or
termination of the applicable waiting periods under the HSR Act and the receipt
of the Consents set forth on Schedules 3.3 and 4.3 under such other applicable
laws or from such Governmental Authorities as soon as practicable.
(b) Each of Seller and Purchaser shall, in connection with the
efforts referenced in Section 5.2(a) to obtain all Consents set forth on
Schedules 3.3 and 4.3, use its reasonable best efforts to (i) cooperate in
all respects with each other in connection with any filing or submission
and in connection with any investigation or other inquiry, including any
proceeding initiated by a private party, (ii) promptly inform the other
Party of any communication received by such Party from, or given by such
Party to, the Antitrust Division of the Department of Justice (the "DOJ"),
the Federal Trade Commission (the "FTC") or any other Governmental
Authority and of any material communication received or given in connection
with any proceeding by a private party, in each case regarding any of the
transactions contemplated hereby, and (iii) permit the other Party to
review any communication given by it to, and consult with each other in
advance of any meeting or conference with, the DOJ, the FTC or any such
other Governmental Authority or, in connection with any proceeding by a
private party, with any other Person, and to the extent appropriate or
permitted by the DOJ, the FTC or such other applicable Governmental
Authority or other Person, give the other Party the opportunity to attend
and participate in such meetings and conferences.
(c) In furtherance and not in limitation of the covenants of
the Parties contained in Section 5.2(a) and Section 5.2(b), if any
administrative or judicial action or proceeding, including any proceeding
by a private party, is instituted (or threatened to be instituted)
challenging any transaction contemplated by this Agreement as violative of
any applicable laws, or if any statute, rule, regulation, executive order,
decree, injunction or administrative order is enacted, entered, promulgated
or enforced by a Governmental Authority which would make transactions
contemplated hereby illegal or would
16
otherwise prohibit or materially impair or delay the consummation of the
transactions contemplated hereby, each of the Parties shall cooperate in all
respects with each other and use its respective reasonable best efforts to
contest and resist any such action or proceeding and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order, whether
temporary, preliminary or permanent, that is in effect and that prohibits,
prevents or restricts consummation of the transactions contemplated by this
Agreement and to have such statute, rule, regulation, executive order, decree,
injunction or administrative order repealed, rescinded or made inapplicable so
as to permit the consummation of the transactions contemplated by this
Agreement.
(d) Notwithstanding the foregoing or any other provision of
this Agreement, nothing in this Section 5.2 shall create an obligation by
the Parties to take any action in addition to the actions required to be
taken pursuant to the Merger Agreement to consummate the Merger.
Section 5.3. Conduct of Business by Seller. From the data
hereof until the Closing Date, Seller shall, except as expressly required
or permitted by this Agreement and except as otherwise consented to in
writing by Purchaser:
(i) conduct the operations of the Package Design Team and
employ the Assets in the ordinary course of business consistent
with past practice;
(ii) not grant, create, incur or suffer to exist any
Encumbrance (other than a Permitted Encumbrance granted, created,
incurred or suffered to exist in the ordinary course of business
consistent with past practice) on the Assets;
(iii) not increase in any manner the base compensation
of, or enter into any new bonus or incentive agreement or
arrangement with, any Package Design Team Employees, other than in
the ordinary course of business consistent with past practice;
(iv) not adopt or amend any Benefit Plan with respect to
Package Design Team Employees or to increase the benefits provided
under any Benefit Plan to Package Design Team Employees other than
in the ordinary course of business consistent with past practice;
(v) not grant any license or sublicense or otherwise
transfer, other than in the ordinary course of business consistent
with past practice, any portion of its right, title or interest in
any Intellectual Property included in the Assets; and
(vi) not authorize, or commit or agree to take, any of
the foregoing actions.
17
Section 5.4. Employment Arrangements.
(a) Employment. Purchaser shall offer employment, with
comparable compensation and benefits, commencing as of the Closing Date, to
each of the Package Design Team Employees (including those who are actively
employed or on layoff, leave or short-term or long-term disability or other
permitted absence from employment). Purchaser shall provide to each Package
Design Team Employee (i) employment and a salary or wage level at least
equal to that which such Package Design Team Employee was entitled from
Seller and its Subsidiaries and Affiliates immediately prior to the Closing
Date and (ii) employee benefits comparable in all material respects to and
no less favorable in the aggregate than the employee benefits provided to
each such Package Design Team Employee by Seller and its Subsidiaries and
Affiliates immediately prior to the Closing Date; provided, however, that
after the Closing Date, Purchaser expressly reserves the right to modify
any salary or wage level of any Package Design Team Employee and to amend,
modify or terminate any benefit plan or program established or maintained
by Purchaser for the benefit of Package Design Team Employees in accordance
with the terms of such plan or program and applicable law.
(b) Employee Matters Agreement Terms Applicable. The Parties
agree that all terms and provisions of the Employee Matters Agreement
applicable to Washington Participants (including all Liabilities and
obligations assumed or to be performed by Purchaser or Washington under the
Employee Matters Agreement relating to the Washington Participants) shall,
to the extent applicable, also apply to the Package Design Team Employees,
and that the Package Design Team Employees shall be deemed to be Washington
Participants for all purposes of the Employee Matters Agreement (other than
Section 2.01 thereof). Accordingly, Purchaser hereby assumes, and agrees to
fully perform, pay and discharge, all Liabilities and obligations in
respect of the Package Design Team Employees of the type that were assumed
by or allocated to Purchaser, Washington or any Subsidiary of Washington
under the Employee Matters Agreement in respect of Washington Participants
and to perform, pay and discharge such Liabilities and obligations in the
same manner as provided in the Employee Matters Agreement.
Section 5.5. Public Announcements. The Parties shall use
reasonable best efforts to develop a joint communications plan and each
Party shall use reasonable best efforts (i) to ensure that all press
releases and other public statements with respect to the transactions
contemplated hereby shall be consistent with such joint communications
plan, and (ii) unless otherwise required by applicable laws or by
obligations pursuant to any listing agreement with or rules of any
securities exchange or automated quotation system, to consult with each
other before issuing any press release or, to the extent practicable,
otherwise making any public statement with respect to this Agreement or the
transactions contemplated hereby.
18
Section 5.6. Supplements to Schedules. From time to time up to
the Closing, Seller and Purchaser may supplement or amend the Schedules
after they have been delivered pursuant to this Agreement with respect to
any matter first existing or occurring on or after the date hereof which,
if existing or occurring at or prior to the date hereof, would have been
required to be set forth or described in such Schedules or which is
necessary to correct any information in such Schedules which has been
rendered inaccurate thereby; provided, however, that if any facts that give
rise to such matter existed or occurred on or before the date hereof, no
such supplement or amendment may be made under this Section 5.6 with
respect thereto. Any supplement or amendment to any Schedule shall not,
following Closing, constitute a basis for any Claim for indemnification
pursuant to ARTICLE VIII.
Section 5.7. Insurance.
(a) Coverage. Subject to the provisions of this Section 5.7,
coverage of the Assets under all Policies shall cease as of the Closing.
From and after the Closing, Purchaser will be responsible for obtaining and
maintaining all insurance coverages for the Assets. All Policies will be
retained by Seller and Seller's Subsidiaries, together with all rights,
benefits and privileges thereunder (including the right to receive any and
all return premiums with respect thereto), except that Purchaser will have
the rights in respect of Policies to the extent described in Section
5.7(b).
(b) Rights Under Policies. From and after the Closing,
Purchaser will have no rights with respect to any Policies, except that (i)
Purchaser will have the right to assert claims (and Seller will use
commercially reasonable efforts to assist Purchaser in asserting claims)
for any loss, liability or damage with respect to the Assets under Policies
with third-party insurers which are "occurrence basis" insurance policies
("Occurrence Basis Policies") arising out of insured incidents occurring
from the date coverage thereunder first commenced until the Closing to the
extent that the terms and conditions of any such Occurrence Basis Policies
and agreements relating thereto so allow and (ii) Purchaser will have the
right to continue to prosecute claims with respect to the Assets properly
asserted with an insurer prior to the Closing (and Seller will use
commercially reasonable efforts to assist Purchaser in connection
therewith) under Policies with third-party insurers which are insurance
policies written on a "claims made" basis ("Claims Made Policies") arising
out of insured incidents occurring from the date coverage thereunder first
commenced until the Closing to the extent that the terms and conditions of
any such Claims Made Policies and agreements relating thereto so allow,
provided, that in the case of both clauses (i) and (ii) above, (A) all of
Seller's reasonable out-of-pocket costs and expenses incurred in connection
with the foregoing are promptly paid by Purchaser, (B) Seller may, at any
time, without liability or obligation to Purchaser (other than as set forth
in Section 5.7(c)), amend, commute, terminate, buy-out, extinguish
liability under or otherwise modify any Occurrence Basis Policies or Claims
19
Made Policies (and such claims shall be subject to any such amendments,
commutations, terminations, buy-outs, extinguishments and modifications),
(C) such claims will be subject to (and recovery thereon will be reduced by
the amount of) any applicable deductibles, retentions or self-insurance
provisions, (D) such claims will be subject to (and recovery thereon will
be reduced by the amount of) any payment or reimbursement obligations of
Seller, any of Seller's Subsidiaries or any Affiliate of Seller or any of
Seller's Subsidiaries in respect thereof and (E) such claims will be
subject to exhaustion of existing aggregate limits. Seller's obligation to
use commercially reasonable efforts to assist Purchaser in asserting claims
under applicable Policies will include using commercially reasonable
efforts in assisting Purchaser to establish its right to coverage under
such Policies (so long as all of Seller's reasonable out-of-pocket costs
and expenses in connection therewith are promptly paid by Purchaser). None
of Seller or Seller's Subsidiaries will bear any Liability for the failure
of an insurer to pay any claim under any Policy. It is understood that any
Claims Made Policies will not provide any coverage to Purchaser for
incidents occurring prior to the Closing but which are asserted with the
insurance carrier after the Closing.
(c) Seller Actions. In the event that after the Closing, Seller
proposes to amend, commute, terminate, buy-out, extinguish liability under
or otherwise modify any Policies under which Purchaser has rights to assert
claims pursuant to Section 5.7(b) in a manner that would adversely affect
any such rights of Purchaser, (i) Seller will give Purchaser prior notice
thereof and consult with Purchaser with respect to such action (it being
understood that the decision to take any such action will be in the sole
discretion of Seller) and (ii) Seller will pay to Purchaser its equitable
share (which shall be determined by Seller in good faith based on the
amount of premiums paid by or allocated to Purchaser or the Assets in
respect of the applicable Policy) of any net proceeds actually received by
Seller from the insurer under the applicable Policy as a result of such
action by Seller (after deducting Seller's reasonable costs and expenses
incurred in connection with such action).
(d) Administration. From and after the Closing:
(i) Seller or a Subsidiary of Seller, as appropriate,
will be responsible for the Claims Administration with respect to
claims of Seller and Seller's Subsidiaries under Policies; and
(ii) Purchaser will be responsible for the Claims
Administration with respect to claims of Purchaser under Policies.
(e) Insurance Premiums. From and after the Closing, Seller will
pay all premiums (retrospectively-rated or otherwise) as required under the
terms and conditions of the respective Policies in respect of periods prior
to the Closing, whereupon
20
Purchaser will upon the request of Seller, forthwith reimburse Seller for that
portion of such premiums paid by Seller as are reasonably determined by Seller
to be attributable to the Assets.
(f) Agreement for Waiver of Conflict and Shared Defense. In the
event that a Policy provides coverage for both Seller and/or a Subsidiary
of Seller, on the one hand, and Purchaser, on the other hand, relating to
the same occurrence, Seller and Purchaser agree to defend jointly and to
waive any conflict of interest necessary to the conduct of that joint
defense. Nothing in this Section 5.7(f) will be construed to limit or
otherwise alter in any way the indemnity obligations of the parties to this
Agreement, including those created by this Agreement, by operation of law
or otherwise.
Section 5.8. License of Purchaser Intellectual Property to
Seller.
(a) Effective as of the Closing Date, Purchaser hereby grants
to Seller, its Subsidiaries and its Affiliates, a non-exclusive,
world-wide, irrevocable royalty-free license, without the right to assign
or grant sublicenses, except as provided in Sections 5.8(b) and (c), under
all Intellectual Property constituting Assets (excluding trademarks, trade
names, domain names, service marks, trade dress and any other form of trade
identity), to make, have made, use, sell, offer for sale, import, or
otherwise dispose of semiconductor products and systems in the conduct of
their respective businesses as they are being conducted on the Closing Date
and any related extensions or expansions thereof, and to practice any
process involved in the use or manufacture thereof.
(b) The license granted under Section 5.8(a) is non-assignable
and non-transferable (in insolvency proceedings, by reason of corporate
merger, by acquisition or other change in control or otherwise).
(c) The license granted under Section 5.8(a) does not include
the right to grant sublicenses, except that Seller, its Subsidiaries and
its Affiliates may grant a sublicense (within the scope of such license) to
any entity or business that is a spin-off or other similar divestiture of
all or any part of the businesses of Seller, its Subsidiaries and its
Affiliates (a "Seller Spin-Off") and to any subsequent entity or business
that is a spin-off or other similar divestiture of all or any part of a
Seller Spin-Off; provided, however, that any such sublicense shall be
subject to the same restrictions on assignment and transfer as the original
license granted in this Section 5.8.
(d) In the event that following the Closing, Seller or a Seller
Spin-Off becomes insolvent or is acquired by or merges with a third party,
such license or sublicense shall immediately and automatically terminate
with respect to such Person and its Affiliates effective as of the date of
such insolvency, acquisition or merger, unless
21
Seller and Purchaser otherwise agree; provided that such termination of such
license or sublicense shall not necessarily affect any other license or
sublicense.
ARTICLE VI
CONDITIONS TO
SELLER'S AND PURCHASER'S OBLIGATIONS
------------------------------------
The obligations of Seller and Purchaser to complete the
transactions contemplated by this Agreement are subject to the Closing (as
defined in the Merger Agreement) under the Merger Agreement having been
consummated.
ARTICLE VII
CLOSING
-------
The Closing shall, unless another time and date is agreed to in
writing by the Parties, take place immediately following the Closing (as
defined in the Merger Agreement) under the Merger Agreement and will be
effective immediately following the Effective Time (the time and date of
such Closing being herein called the "Closing Date"). The Closing will take
place at the offices of Xxxxxxxxxx & Xxxxx LLP, 00 Xxxxxxxxxxx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other place as the Parties may agree. On the
Closing Date, the Parties hereto shall deliver the following:
Section 7.1. Deliveries by Seller. At the Closing, Seller shall
deliver to Purchaser the following which in the case of documents, shall be
reasonably satisfactory to Purchaser:
(i) an Assets Xxxx of Sale and Assignment and Assumption
Agreement, duly executed by Seller, in form and substance
reasonably satisfactory to Purchaser;
(ii) the Assets; and
(iii) all documents of title and instruments of
conveyance necessary to transfer record and beneficial ownership
to Purchaser of all Assets which require execution, endorsement or
delivery of such a document under applicable Law in order to vest
record or beneficial ownership thereto in Purchaser.
22
Section 7.2. Deliveries by Purchaser. At the Closing, Purchaser
shall deliver to Seller the following, which in the case of documents shall
be reasonably satisfactory to Seller:
(i) (A) cash payment of the Purchase Price (via wire
transfer of immediately available funds), pursuant to Section 2.3,
or (B) the Promissory Note, duly executed by Purchaser, in form
and substance reasonably satisfactory to Seller, in which case,
the Purchase shall deliver to Seller at Closing, in addition to
the other deliveries required hereby, (I) a security agreement,
duly executed by Purchaser, in form and substance reasonably
satisfactory to Seller and Purchaser and in customary form for
transactions of this nature, granting Seller a first priority
security interest in the security described on Exhibit "A", (II)
such notices, recordings, mortgages, statements, filings,
instruments or other agreements and documents as Seller may
reasonably require to have a perfected first priority security
interest in the security described on Exhibit "A" and (III)
customary opinions of counsel to Purchaser for secured
transactions of this nature reasonably satisfactory to the Parties
and their counsel; and
(ii) an Asset Xxxx of Sale and Assignment and Assumption
Agreement, duly executed by Purchaser, in form and substance
reasonably satisfactory to Seller.
ARTICLE VIII
INDEMNIFICATION
---------------
Section 8.1. Indemnification by Seller. Subject to the
limitations on and procedures for indemnification set forth in this ARTICLE
VIII, Seller shall indemnify, defend and hold harmless Purchaser and its
Representatives and Affiliates and each of the heirs, executors, successors
and assigns of any of the foregoing (collectively, the "Purchaser
Indemnified Parties") from and against, and pay or reimburse, as the case
may be, the Purchaser Indemnified Parties for, any Damages, as incurred,
suffered by any Purchaser Indemnified Parties to the extent based upon,
arising out of or relating to the following:
(i) the breach of any representation or warranty of
Seller contained in this Agreement; or
(ii) the breach by Seller of any covenant or agreement of
Seller contained in this Agreement.
23
Section 8.2. Indemnification by Purchaser. Subject to the
limitations on and procedures for indemnification set forth in this ARTICLE
VIII, Purchaser shall indemnify, defend and hold harmless Seller and its
Representatives and Affiliates and each of the heirs, executors, successors
and assigns of any of the foregoing (collectively, the "Seller Indemnified
Parties") from and against, and pay or reimburse, as the case may be, the
Seller Indemnified Parties for, any Damages, as incurred, suffered by any
Seller Indemnified Parties to the extent based upon, arising out of or
relating to the following:
(i) the breach of any representation or warranty of
Purchaser contained in this Agreement; or
(ii) the breach by Purchaser of any covenant or agreement
of Purchaser contained in this Agreement.
Section 8.3. Limitations on Indemnification Obligations. (a)
The amount which any Party (an "Indemnifying Party") is or may be required
to pay to any Person (an "Indemnified Party") in respect of Damages or
other Liability for which indemnification is provided under this Agreement
shall be reduced by any amounts actually received (including Insurance
Proceeds actually received) by or on behalf of such Indemnified Party (net
of increased insurance premiums and charges to the extent related to
Damages and costs and expenses (including reasonable legal fees and
expenses) incurred by such Indemnified Party in connection with seeking to
collect and collecting such amounts) in respect of such Damages or other
Liability (such net amounts are referred to herein as "Indemnity Reduction
Amounts"). If any Indemnified Party receives any Indemnity Reduction
Amounts in respect of Damages for which indemnification is provided under
this Agreement after the full amount of such Damages has been paid by an
Indemnifying Party or after an Indemnifying Party has made a partial
payment of such Damages and such Indemnity Reduction Amounts exceed the
remaining unpaid balance of such Damages, then the Indemnified Party shall
promptly remit to the Indemnifying Party an amount equal to the excess (if
any) of (A) the amount theretofore paid by the Indemnifying Party in
respect of such Damages, less (B) the amount of the indemnity payment that
would have been due if such Indemnity Reduction Amounts in respect thereof
had been received before the indemnity payment was made.
(b) In determining the amount of any indemnity payment under
this Agreement, such amount shall be (i) reduced to take into account any
net Tax benefit realized by the Indemnified Party and its Affiliates
arising from the incurrence or payment by the Indemnified Party or its
Affiliates of any amount in respect of which such payment is made and (ii)
increased to take into account any net Tax cost incurred by the Indemnified
Party and its Affiliates as a result of the receipt or accrual of payments
hereunder (grossed-up for such increase), in each case determined by
treating the Indemnified Party and its Affiliates as recognizing all other
items of income, gain, loss,
24
deduction or credit before recognizing any item arising from the receipt of
accrual of any payment hereunder. In determining the amount of any such Tax
benefit or Tax cost, the Indemnified Party and its Affiliates shall be deemed to
be subject to the applicable Taxes at the maximum statutory rate then in effect.
It is the intention of the Parties to this Agreement that payments made pursuant
to this Agreement are to be treated as relating back to the Closing Date as a
purchase price adjustment, and the Parties shall not take any position
inconsistent with such intention before any Tax authority, except to the extent
that a final determination (as defined in Section 1313 of the Code) with respect
to the recipient party causes any such payment not to be so treated.
(c) No monetary amount will be payable by Seller to any
Purchaser Indemnified Party with respect to the indemnification of any
claims pursuant to Section 8.1(i) until the aggregate amount of Damages
actually incurred by the Purchaser Indemnified Parties with respect to such
claims shall exceed on a cumulative basis an amount equal to fifty thousand
dollars (U.S.$50,000), in which event Seller shall be responsible only for
the amount of such Damages in excess of fifty thousand dollars
(U.S.$50,000). No monetary amount will be payable by Seller to any
Purchaser Indemnified Party with respect to the indemnification of any
claims pursuant to Section 8.1(i) after the aggregate amount of Damages
actually paid by Seller with respect to such claims shall equal on a
cumulative basis an amount equal to five hundred thousand dollars
(U.S.$500,000).
(d) No monetary amount will be payable by Purchaser to any
Seller Indemnified Party with respect to the indemnification of any claims
pursuant to Section 8.2(i) until the aggregate amount of Damages actually
incurred by the Seller Indemnified Parties with respect to such claims
shall exceed on a cumulative basis an amount equal to fifty thousand
dollars (U.S.$50,000), in which event Purchaser shall be responsible only
for the amount of such Damages in excess of fifty thousand dollars
(U.S.$50,000). No monetary amount will be payable by Purchaser to any
Seller Indemnified Party with respect to the indemnification of any claims
pursuant to Section 8.2(i) after the aggregate amount of Damages actually
paid by Purchaser with respect to such claims shall equal on a cumulative
basis an amount equal to five hundred thousand dollars (U.S.$500,000).
Section 8.4. Procedures Relating to Indemnification. (a) If a
claim or demand is made against an Indemnified Party, or an Indemnified
Party shall otherwise learn of an assertion, by any Person who is not a
party to this Agreement (or an Affiliate thereof) as to which an
Indemnifying Party may be obligated to provide indemnification pursuant to
this Agreement (a "Third Party Claim"), such Indemnified Party will notify
the Indemnifying Party in writing, and in reasonable detail, of the Third
Party Claim reasonably promptly after becoming aware of such Third Party
Claim; provided, however, that failure to give such notification will not
affect the indemnification provided
25
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure. Thereafter, the Indemnified Party will
deliver to the Indemnifying Party, promptly after the Indemnified Party's
receipt thereof, copies of all material notices and documents (including court
papers) received or transmitted by the Indemnified Party relating to the Third
Party Claim.
(b) If a Third Party Claim is made against an Indemnified
Party, the Indemnifying Party will be entitled to participate in or to
assume the defense thereof (in either case, at the expense of the
Indemnifying Party) with counsel selected by the Indemnifying Party and
reasonably satisfactory to the Indemnified Party. Should the Indemnifying
Party so elect to assume the defense of a Third Party Claim, the
Indemnifying Party will not be liable to the Indemnified Party for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof; provided, however, that if in the
Indemnified Party's reasonable judgment a conflict of interest exists in
respect of such claim or if the Indemnifying Party shall have assumed
responsibility for such claim with any reservations or exceptions, such
Indemnified Party will have the right to employ separate counsel reasonably
satisfactory to the Indemnifying Party to represent such Indemnified Party
and in that event the reasonable fees and expenses of such separate counsel
(but not more than one separate counsel for all Indemnified Parties
similarly situated) shall be paid by such Indemnifying Party. If the
Indemnifying Party assumes the defense of any Third Party Claim, the
Indemnified Party will have the right to participate in the defense thereof
and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Party, it being understood that the
Indemnifying Party will control such defense. The Indemnifying Party will
be liable for the reasonable fees and expenses of counsel employed by the
Indemnified Party for any period during which the Indemnifying Party has
failed to assume the defense thereof. If the Indemnifying Party assumes the
defense of any Third Party Claim, the Indemnifying Party will promptly
supply to the Indemnified Party copies of all material correspondence and
documents relating to or in connection with such Third Party Claim and keep
the Indemnified Party fully informed of all material developments relating
to or in connection with such Third Party Claim (including providing to the
Indemnified Party on request updates and summaries as to the status
thereof). If the Indemnifying Party chooses to defend a Third Party Claim,
the Parties will cooperate in the defense thereof (such cooperation to be
at the expense, including reasonable legal fees and expenses, of the
Indemnifying Party), which cooperation shall include the retention in
accordance with this Agreement and (upon the Indemnifying Party's request)
the provision to the Indemnifying Party of records and information which
are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information
and explanation of any material provided hereunder.
26
(c) No Indemnifying Party will consent to any settlement,
compromise or discharge (including the consent to entry of any judgment) of
any Third Party Claim without the Indemnified Party's prior written consent
(which consent will not be unreasonably withheld); provided, however, that
if the Indemnifying Party assumes the defense of any Third Party Claim, the
Indemnified Party will agree to any settlement, compromise or discharge of
such Third Party Claim which the Indemnifying Party may recommend and which
by its terms obligates the Indemnifying Party to pay the full amount of
Damages in connection with such Third Party Claim and unconditionally and
irrevocably releases the Indemnified Party and its Affiliates completely
from all Liability in connection with such Third Party Claim; provided,
however, that the Indemnified Party may refuse to agree to any such
settlement, compromise or discharge (x) that provides for injunctive or
other non-monetary relief affecting the Indemnified Party or any of its
Affiliates or (y) that, in the reasonable opinion of the Indemnified Party,
would otherwise materially adversely affect the Indemnified Party or any of
its Affiliates. Whether or not the Indemnifying Party shall have assumed
the defense of a Third Party Claim, the Indemnified Party will not (unless
required by law) admit any liability with respect to, or settle, compromise
or discharge, such Third Party Claim without the Indemnifying Party's prior
written consent (which consent will not be unreasonably withheld).
(d) Any claim on account of Damages which does not involve a
Third Party Claim will be asserted by reasonably prompt written notice
given by the Indemnified Party to the Indemnifying Party from whom such
indemnification is sought. The failure by any Indemnified Party to so
notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability which it may have to such Indemnified Party under this
Agreement, except to the extent that the Indemnifying Party shall have been
actually prejudiced by such failure.
(e) In the event of payment in full by an Indemnifying Party to
any Indemnified Party in connection with any Third Party Claim, such
Indemnifying Party will be subrogated to and shall stand in the place of
such Indemnified Party as to any events or circumstances in respect of
which such Indemnified Party may have any right or claim relating to such
Third Party Claim against any claimant or plaintiff asserting such Third
Party Claim or against any other Person. Such Indemnified Party will
cooperate with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any subrogated
right or claim.
Section 8.5. Sole and Exclusive Remedy. The indemnities
contained in this ARTICLE VIII shall be the sole and exclusive remedies of
the Parties hereto, their Affiliates, successors and assigns with respect
to any and all claims arising out of or relating to this Agreement, the
transactions contemplated hereby, any provision hereof or the breach or
performance thereof.
27
Section 8.6. Termination of Indemnification Obligations. Except
as set forth in the following sentence, the indemnification obligations of
each of Seller and Purchaser hereunder will survive, including surviving
the sale or other transfer by any party of any assets or businesses or the
assignment by any party of any Liabilities. The obligations of each Party
to indemnify, defend and hold harmless Indemnified Parties (i) pursuant to
Sections 8.1(i) and 8.2(i), shall terminate when the applicable
representation or warranty expires pursuant to Section 11.4 and (ii)
pursuant to Sections 8.1(ii) and 8.2(ii) shall terminate upon the
expiration of all applicable statutes of limitation (giving effect to any
extensions thereof, other than extensions caused by the applicable
Indemnified Party); provided, however, that as to clauses (i) and (ii)
above, such obligations to indemnify, defend and hold harmless shall not
terminate with respect to any individual claim as to which the Indemnified
Party shall have, before the expiration of the applicable period,
previously delivered a notice (stating in reasonable detail the basis of
such claim) to the Indemnifying Party.
Section 8.7. Effect of Investigation. The right to
indemnification pursuant to Sections 8.1(i) and 8.2(i) shall not be
affected by any investigation conducted with respect to, or any knowledge
acquired (or capable of being acquired) at any time, whether before or
after the execution and delivery of this Agreement.
ARTICLE IX
TAXES
-----
Section 9.1. Transfer, Sales and Use Taxes. Notwithstanding
anything to the contrary in this Agreement, all transfer, documentary,
sales, use, stamp, registration, value added and other similar Taxes and
fees (including any penalties and interest) incurred in connection with the
transactions contemplated by this Agreement shall be shared equally by
Seller and Purchaser. Each Party hereto agrees to file all necessary
documentation (including all Tax Returns) with respect to all such Taxes in
a timely manner. On or before the Closing Date, Purchaser shall provide to
Seller a required sales and use tax purchase exemption certificate or
certificates with respect to the Assets to the extent they constitute (i)
exempt tangible personal property held for resale or for incorporation into
goods to be held for resale, (ii) exempt manufacturing and production
equipment, or (iii) otherwise are exempt from the sales and use tax upon
the provision of an appropriate exemption certificate.
Section 9.2. Tax Returns. Seller shall prepare and file or
cause to be prepared and filed all Tax Returns (including amendments
thereto) which are required to be filed in respect of the Assets for any
taxable period ending on or before the Closing Date and any taxable period
that includes (but does not end on) the Closing Date (a
28
"Straddle Period"). Purchaser hereby irrevocably designates, and agrees to cause
each of its Affiliates to designate Seller as its agent to take any and all
actions necessary or incidental to the preparation and filing of such Tax
Returns. All Tax Returns (including amendments thereto) required to be filed in
respect of the Assets for taxable periods beginning after the Closing Date shall
be the responsibility of Purchaser.
Section 9.3. Prorations. Purchaser and Seller agree that Taxes
with respect to the Assets shall be prorated as of the Closing Date, with
Seller liable to the extent such Taxes relate to any time period on or
before the Closing Date, and Purchaser liable to the extent such Taxes
relate to periods commencing after the Closing Date.
Section 9.4. Allocation of Straddle Period Taxes. In the case
of any Straddle Period:
(a) Periodic Taxes. (i) The periodic Taxes with respect to the
Assets that are not based on income or receipts (e.g., property Taxes) for
the portion of any Straddle Period which ends on the Closing Date shall be
computed based on the ratio of the number of days in such portion of the
Straddle Period and the number of days in the entire taxable period, and
(ii) the periodic taxes with respect to the Assets that are not based on
income or receipts for the portion of any Straddle Period beginning on the
day after the Closing Date shall be computed based on the ratio of the
number of days in such portion of the Straddle Period and the number of
days in the entire taxable period.
(b) Non-Periodic Taxes. (i) The Taxes with respect to the
Assets for that portion of any Straddle Period ending on the Closing Date
(other than Taxes described in Section 9.4(a) above), shall be computed on
a "closing-of-the-books" basis as if such taxable period ended as of the
close of business on the Closing Date, and (ii) the Taxes with respect to
the Assets for that portion of any Straddle Period beginning after the
Closing Date (other than Taxes described in Section 9.4(a) above), shall be
computed on a "closing-of-the-books" basis as if such taxable period began
on the day after the Closing Date.
ARTICLE X
TERMINATION
-----------
Section 10.1. Voluntary Termination. This Agreement may be
terminated and the transactions contemplated hereby may be abandoned at any
time prior to the Closing Date by the mutual written consent of Purchaser
and Seller.
29
Section 10.2. Automatic Termination. In the event of a
termination of the Merger Agreement, this Agreement shall automatically and
immediately terminate.
Section 10.3. Effect of Termination. In the event of the
termination of this Agreement, all further obligations of the Parties
hereunder shall terminate, and the transactions contemplated hereby shall
be abandoned without further action or liability by any of the Parties
hereto, except that (i) Section 10.3 ("Effect of Termination"), Section
11.2 ("Notices"), Section 11.3 ("Choice of Law, Dispute Resolution"),
Section 11.6 ("Entire Agreement; Waivers"), Section 11.8 ("Severability"),
Section 11.10 ("Expenses") and Section 11.12 ("Parties in Interest") shall
survive such termination and (ii) nothing shall relieve any Party hereto
from liability for any breach of this Agreement prior to such termination.
ARTICLE XI
MISCELLANEOUS
-------------
Section 11.1. Assignment. No Party to this Agreement will
convey, assign or otherwise transfer any of its rights or obligations under
this Agreement without the prior written consent of the other Party in its
sole and absolute discretion. Notwithstanding the foregoing, any Party may
(without obtaining any consent) assign, delegate or sublicense all or any
portion of its rights and obligations hereunder to (i) the surviving entity
resulting from a merger or consolidation involving such Party, (ii) the
acquiring entity in a sale or other disposition of (A) all or substantially
all of the assets of such Party as a whole or (B) any line of business or
division of such Party, (iii) any other Person that is created as a result
of a spin-off from, or similar reorganization transaction of, such Party or
any line of business or division of such Party, (iv) in the case of
Purchaser, to Maquiladora or (v) an Affiliate. In the event of an
assignment pursuant to (ii) or (iii) above, the non-assigning Party shall,
at the assigning Party's request, use good faith commercially reasonable
efforts to enter into separate agreements with each of the resulting
entities and take such further actions as may be reasonably required to
assure that the rights and obligations under this Agreement are preserved,
in the aggregate, and divided equitably between such resulting entities.
Any conveyance, assignment or transfer requiring the prior written consent
of another Party pursuant to this Section 11.1 which is made without such
consent will be void ab initio. No assignment of this Agreement will
relieve the assigning Party of its obligations hereunder.
Section 11.2. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed duly given (a) on the
date of delivery if delivered personally, (b) upon confirmation of receipt
if delivered by telecopy or telefacsimile, (c) on the first Business Day
following the date of dispatch if delivered by a recognized
30
next-day courier service, or (d) on the fifth Business Day following the date of
mailing if delivered by registered or certified mail, return receipt requested,
postage prepaid. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the Party
to receive such notice:
If to Purchaser, to:
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
Chief Financial Officer
With copies to (not effective for purposes of notice):
Alpha Industries, Inc.
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
General Counsel
or if to Seller, to:
Conexant Systems, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. X'Xxxxxx
Senior Vice President, General
Counsel and Secretary
With a copy to (not effective for purposes of notice):
Xxxxxxxxxx & Xxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
31
Section 11.3. Choice of Law; Dispute Resolution.
(a) Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware (without
giving effect to choice of law principles).
(b) Dispute Resolution. In the event that from and after the
Closing, any dispute, claim or controversy (collectively, a "Dispute")
arises out of or relates to any provision of this Agreement or the breach,
performance, enforcement or validity or invalidity thereof, the designees
of Seller's Chief Executive Officer and Purchaser's Chief Executive Officer
will attempt a good faith resolution of the Dispute within thirty (30) days
after either Party notifies the other Party in writing of the Dispute. If
the Dispute is not resolved within thirty (30) days of the receipt of the
notification, or within such other time as they may agree, the Dispute will
be referred for resolution to Seller's Chief Executive Officer and
Purchaser's Chief Executive Officer. Should they be unable to resolve the
Dispute within thirty (30) days following the referral to them, or within
such other time as they may agree, Seller and Purchaser will then attempt
in good faith to resolve such Dispute by mediation in accordance with the
then-existing CPR Mediation Procedures promulgated by the CPR Institute for
Dispute Resolution, New York City. If such mediation is unsuccessful within
thirty (30) days (or such other period as the Parties may mutually agree)
after the commencement thereof, such Dispute shall be submitted by the
Parties to binding arbitration, initiated and conducted in accordance with
the then-existing American Arbitration Association Commercial Arbitration
Rules, before a single arbitrator selected jointly by Seller and Purchaser,
who shall not be the same person as the mediator appointed pursuant to the
preceding sentence. If Seller and Purchaser cannot agree upon the identity
of an arbitrator within ten (10) days after the arbitration process is
initiated, then the arbitration will be conducted before three arbitrators,
one selected by Seller, one selected by Purchaser and the third selected by
the first two. The arbitration shall be conducted in San Francisco,
California and shall be governed by the United States Arbitration Act, 9
U.S.C. Sections 1-16, and judgment upon the award may be entered by any
court having jurisdiction thereof. The arbitrators shall have case
management authority and shall resolve the Dispute in a final award within
one hundred eighty (180) days from the commencement of the arbitration
action, subject to any extension of time thereof allowed by the arbitrators
upon good cause shown.
Section 11.4. Survival of Representations and Warranties and
Covenants. The respective representations and warranties of the Parties
contained in this Agreement (other than those set forth in the following
sentence) will survive the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the Closing and
will continue in full force and effect until six (6) months after the
Closing Date and will then expire. The representations and warranties of
the Parties
32
contained in Section 3.1, Section 3.2, Section 3.3, Section 3.9, Section 3.11,
Section 4.1, Section 4.2, and Section 4.3 will survive the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the Closing and will continue in full force and effect until all
applicable statutes of limitation (including any extensions thereof) have
expired and will then expire. All covenants of the Parties contained in this
Agreement will remain in full force and effect after, and survive, the Closing
(other than those to be performed at or prior to the Closing).
Section 11.5. Limitations on Representations and Warranties.
Except for the representations and warranties set forth in this Agreement,
the Assets are being sold "AS IS, WHERE IS, AND WITH ALL FAULTS." EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT, SELLER
MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER CONCERNING THE ASSUMED
LIABILITIES, THE ASSETS, OR ANY OTHER MATTER, EXPRESS OR IMPLIED, ORAL, OR
WRITTEN. SELLER HEREBY SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTY OF
MERCHANTABILITY AND THE IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE.
Section 11.6. Entire Agreement; Waivers. This Agreement,
together with all exhibits and Schedules hereto, and the other agreements
and instruments of the Parties delivered in connection herewith constitute
the entire agreement and supersede all prior agreements and understandings
both written and oral, among the Parties with respect to the subject matter
hereof. The failure of any Party to this Agreement to assert any of its
rights under this Agreement or otherwise shall not constitute a waiver of
those rights.
Section 11.7. Counterparts. This Agreement may be executed in
separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement. This Agreement may be executed and delivered by telecopier with
the same force and effect as if it were a manually executed and delivered
counterpart.
Section 11.8. Severability. If any provision of this Agreement
or the application thereof to any Person or circumstance is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to
Persons or circumstances other than those as to which it has been held
invalid or unenforceable, will remain in full force and effect and will in
no way be affected, impaired or invalidated thereby. If the economic or
legal substance of the transactions contemplated hereby is affected in any
manner adverse to any Party as a result thereof, the Parties will negotiate
in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the Parties.
33
Section 11.9. Headings. The headings of the Articles and
Sections herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
Section 11.10. Expenses. Except as otherwise provided in this
Agreement, each of the Parties shall be liable for its own expenses
incurred in connection with the negotiation, preparation, execution and
performance of this Agreement prior to Closing.
Section 11.11. Amendments. This Agreement cannot be amended,
modified or supplemented except by a written agreement executed by Seller
and Purchaser.
Section 11.12. Parties in Interest. This Agreement is binding
upon and is for the benefit of the Parties hereto and their respective
successors and permitted assigns. This Agreement is not made for the
benefit of any Person not a Party hereto, and no Person other than the
Parties hereto or their respective successors and permitted assigns will
acquire or have any benefit, right, remedy or claim under or by reason of
this Agreement, except that the provisions of Sections 8.1 and 8.2 hereof
shall inure to the benefit of the Persons referred to therein.
Section 11.13. Schedules and Exhibits. Inclusion of an item or
matter on any of the Schedules or Exhibits attached hereto shall not be
deemed to be an admission by any Party that such item or matter is required
to be disclosed in such Schedule or Exhibit. Each disclosure on each
Schedule, to the extent specified therein, qualifies the correspondingly
numbered representation and warranty or covenant contained herein and, to
the extent it is apparent on the face of such disclosure that such
disclosure qualifies another representation or warranty contained herein,
such other representation and warranty.
Section 11.14. Cooperation Following the Closing. Following the
Closing, the Parties shall each deliver to the other such further
information and documents and shall execute and deliver to the other such
further instruments and agreements as the other shall reasonably request to
consummate or confirm the transactions provided for in this Agreement, to
accomplish the purpose of this Agreement or to assure to the other the
benefits of this Agreement.
[The remainder of this page is left intentionally blank;
signature page follows]
34
IN WITNESS WHEREOF, each of the Parties listed below has
executed this U.S. Asset Purchase Agreement as of the day and year first
above written.
CONEXANT SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board and Chief
Executive Officer
ALPHA INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive
Officer
35
